Following on from last week’s bitesize blog where we have started our series to look at the various changes regarding the Renters Rights Act in a bit more depth and what it means to you as a Landlord.

Renters Rights Bill – Existing Tenancy Conversion

This week we are looking at the change from Assured Shorthold Tenancies to an Assured Tenancies. The main difference between the two types of tenancy agreement is that under an Assured Shorthold Tenancy a Landlord has the legal right to seek possession of the property after the end of the fixed term whereas under an Assured Tenancy the tenant has a right to stay in the property until such time as they give notice or they break one of the grounds that is listed in the Housing Act 1988 and then the Landlord can seek possession, or possession is sought by the Landlord because they either wish to sell the property or they wish for themselves or a family member to move in to it.

Existing and New Tenancies

From the commencement date of the act all existing tenancies will convert from being Assured Shorthold Tenancies into Assured Tenancies, this will happen effectively overnight and new tenancies will be in the form of Assured Tenancies under the Housing Act 1988. There are a couple of exceptions, but we will detail those shortly. This overnight conversion means:

All tenancies become periodic Assured Tenancies and Section 21 notices under the Housing Act 1988 will no longer be applicable.
There will no longer be any fixed terms under the Assured Tenancy, so effectively all tenancies continue until either the Landlord or the Tenant gives notice. If possession of a property is sought, for any reason, then that can only be achieved via the new extended Section 8 notices.
The Housing Minister has intimated that a Landlord or their agent will need to serve a prescribed notice to the tenant informing them of the changes to their tenancy agreement status within 28 days of the commencement date. This form of notice will be available before the commencement date. Presently there will not be a requirement to issue any new tenancy agreements, however, the Housing Minister has suggested that in time all old tenancy agreements will need to be replaced but he hasn’t given a timescale for that yet.
Following the transition, all other terms of the existing tenancy agreements remain except for those changed by the act – those that are changed include the term of tenancy, any clauses that detail the tenancy going into either a statutory periodic basis or a contractual basis after the expiry of the fixed term, notice periods, use of prescribed forms, rent review clauses and pet clauses etc where they are at odds with the new Act provisions.
Individual tenants will have the right to give notice independent of any other tenants, whereas previously if they were joint tenants,(two tenants or more), the notice had to be given jointly. Once one tenant gives notice that will bring the whole tenancy to an end no matter if the other tenant/s want to stay. That has an advantage in so far as a new rent can be asked for, as part of the new tenancy, irrespective to when the last rent increase was.
Rents will only be able to be increased once per annum and must not be more than market value. Tenant’s will have the right to appeal any rent increases through the first-tier tribunal, but we will come on to that in a later blog.
The tenancies that remain unaffected by these changes are corporate tenancies, those where the tenant is a Company. All existing terms and conditions of these tenancies remain as is once the Renters Rights Act commences.
There are different changes specifically aimed at student accommodation, either purpose built or shared houses. You don’t have any of those with us, but if you do have them elsewhere, please let me know and I will be happy to share those changes with you.

First Month’s Rent Payment

There are major changes happening to the way a Landlord or agent can collect the first month’s rent prior to the execution of the tenancy.

A Landlord or agent cannot collect the first month’s rent before the tenancy has been executed. This means that the first month’s rent cannot be paid until the tenancy agreement has been signed by both parties and dated which legally binds both parties into the tenancy.
Legally a tenant could sign the agreement, have it executed and move in without paying the first month’s rent, However, there are mitigations for this:
- A Landlord will still be able to insist on the security deposit (up to 5 weeks’ worth of rent) being paid prior to the tenancy being executed.
- Normally we would take 1 weeks rent as being a holding deposit to enable the tenant to be referenced etc, this can still be done in addition to the security deposit.
- Presently under the legislation a tenant is only allowed to pay 1 month’s rent at the start of the tenancy rather than 6 months or other amounts of rent if they want to or if referencing necessitates further monies up front. However, once the tenancy has started a tenant can pay whatever rent they wish upfront, just not before the first month’s rent has been paid and not before the start date of the tenancy.
- If a Landlord has taken multiple rent payments upfront before the commencement date of the Act they will be able to retain that rent payment in advance.

Therefore, although the tenancy agreement will be signed and executed prior to the start date and prior to the first month’s rent collection a Landlord or agent will be able to request and to receive/hold both the deposit and the holding deposit (effectively 5-6 weeks’ worth of rent) before the tenancy agreement is signed and executed which gives some degree of surety of the first month’s rent being paid on the start date of the tenancy.

Existing Section 21 Notices

Existing Section 21 notices for possession of a property which have been issued before the commencement date of the Act and haven’t yet reached the point where a court application can be made (I.E. they haven’t yet reached the 2 month notice period) will be valid for another two months only after the commencement date. If a Section 21 notices reaches the end of its 6-month validity period less than 2 months after the commencement date, then it is limited by the 6-month validity period of the original notice.

Again, as we have always said, these changes will impact private rental Landlords and agents but we at Taylored Propman Ltd will continue to guide you through this process and ensure that you always remain compliant with the new legislation.

If you have good tenants and a good quality property, and good agents there is nothing to be nervous about the changes coming.

Next week we will discuss the new Section 8 Notices and grounds for possession.

Please contact us so that we can offer advice and help you through these changes

Email us: office@tayloredpropman.co.uk