Changes to landlord and tenant law always generate a lot of column inches about the landlords and the tenants – but what about the agents? So much of the relationship between landlord and tenant depends on an efficient, well-informed agent. That is truer than ever when regulatory changes are on the horizon.
Renters' Rights
The Renters' Rights Bill is currently making its way through the House of Lords. It aims to provide greater certainty and security for private rental tenants and mitigate some of the worst effects of the housing crisis. Unscrupulous landlords will find it much harder to take financial advantage of the mismatch between supply and demand of rental properties.
The focus of the Bill (and most of the press coverage) is understandably on the positive impact it will have on tenants. ‘No fault' evictions will be banned and tenants will have the right to ask to keep a pet, for instance. But the Bill has implications for everyone in the rental market, and particularly estate and letting agents.
How will agents' responsibilities change?
When it becomes law, the Bill will impose a much heavier compliance burden on landlords and agents. There are numerous pitfalls to which even the most reputable and responsible agents might succumb, if they are not well prepared and well advised.
The reasons for which eviction notices can be served on tenants is significantly narrowed by the Bill. Letting agents will have to be certain that any request from a landlord to remove a tenant is for a permissible reason – and assure themselves that that reason is genuine.
The Bill also changes the ways in which rent can be increased. Landlords and letting agents will no longer be able to rely on a rent increase clause in a tenancy. Instead, a s13 notice must be served on the tenant, proposing a new rent. In practice, much of this burden will fall on the agents who manage let properties.
Be prepared!
Although the Bill isn't yet law, this period offers a real opportunity for agents to get ahead. Agents who have considered the effects of the proposed changes can make sure they're in the best possible position when the legislation comes into effect. It's in everyone's interests – tenants, landlords and letting agents – to be abreast of the upcoming changes.
And it isn't just letting agents. Selling agents will need to work hand in glove with their lettings colleagues to ensure that the process of selling rental properties is as straightforward as possible. The Bill introduces new rules about how soon a property can be re-let if tenants have been evicted because of a proposed sale, for instance. We all know how often sales fall through. Careful guidance from selling agents will be vital to preventing properties standing empty but un-lettable and unprofitable. For landlords looking to sell their rental properties, sound guidance from agents at the start of the process will be vital.
What next?
Once the Bill has become law, familiar ASTs will be a thing of the past. Landlords will often look to agents to prepare tenancy documents, as a more cost-effective solution than asking a solicitor. It's vital that agents start considering now what those new periodic tenancy documents might look like. Bigger agencies will of course have their in-house legal teams squirrelling away in the background. But smaller agencies would also be wise to speak to trusted lawyers, to ensure that their new tenancy documents are up to scratch and ready to go.
The changes that the Bill introduces will be significant for everyone in the private rental sector. Agents' hearts might sink at the thought of more compliance hoops to jump through. But if agents can prepare now – by working closely with property lawyers and ensuring they understand all the proposed changes – the Renters' Rights Bill might offer an opportunity to make a letting system that is better suited to the realities of 21st century renting. Well-informed letting agents will be at the heart of that.
Originally published by Estate Agent Today.
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