Opportunities for agents under the new Renters’ Rights Bill
No one likes change, but it’s about to flood our industry. The Renters‘ Rights Bill has been revealed ahead of its second reading in Parliament and no doubt landlords will be fretting, although they don’t need to be.
Let’s not forget we’ve been here before. The arrears moratorium during the COVID-19 pandemic had some worried it would sink the sector, and the Tenant Fees Act, which limited the fees agents could charge tenants and therefore reduce agency income, was predicted to mark the end of letting agencies as we knew it. As an industry, we adapted and overcame, and we will do so again with the right engagement from the government and our collective eye for opportunity.
Instead of dwelling on the negatives, agents should grasp the opportunities the new bill provides. New revenue streams can be generated from various new services such as careful compliance monitoring on behalf of landlords; managing the enhanced Section 13 rent increase process so that it doesn’t end in tribunal; and eviction assistance on the basis of complex Section 8 grounds. This could assure the future for your agency. And if there’s any negotiation over fees, the risk landlords face of rent repayment orders and £40,000 fines can be used as a defence.
In addition, the bill could be a chance for businesses to grow. Many landlords either manage their own properties or only use agents to find tenants, but in a more complex regulatory space, they will want to use all the professional help they can get.
Let’s break down some key areas where you can grasp these upcoming opportunities by offering expert assistance with the new rules that will be introduced by the Renters’ Rights Bill.
Evictions
With the abolition of Section 21 ‘no-fault evictions’, agencies’ mediation skills will become vital. The news would’ve sent landlords into a panic about extended legal processes, but if communications lines are kept open between them and their tenants, any issues can be resolved or even avoided.
If evictions do take place, the Renters’ Rights Bill requires them to be via Section 8. This process typically takes longer than a Section 21 eviction and landlords will need guidance through complex legal grounds and court proceedings. Although, in order to sell your support, letting agencies will need to install systems that track every interaction landlords have with tenants – payment schedules, conversations about arrears, maintenance reports, noise complaints, etc.
If tenants should, lawfully, be evicted using a Section 8 under a specific ground such as antisocial behaviour, all of the information listed above could be used as crucial evidence in court.
Arrears management
Tenants’ ability to afford rent can change over time, particularly with wage inflation in some industries not keeping pace with rising prices. To help with this, landlords should engage in proactive conversations about any of their tenants that may be struggling financially. For example, referring at-risk tenants to organisations such as Citizens Advice can help combat winter hardships and further rent arrears – a major problem that infects this time of year.
Rent increases
The Bill limits rent increases to once per year, and only up to market rates. If you’re not already familiar with Section 13 notices, now’s the time to get up to speed because serving them will be the only way to increase the rent for a sitting tenant. It is something you should charge for or include in a fully managed service.
Why charge when it’s just filling out a form? Because the form is only a small part of the work. When serving a Section 13 notice, the best thing you can do for your landlords is to provide tenants with comparative data to help demonstrate that any rent increases are in line with market rates.
And you’ll need to justify it, as tenants can dispute any rent increase at the First-tier Tribunal. An adjudication process is likely to delay any rent hikes, so your ability to show that the rent increase is in line with market rates will be key to avoiding disputes and lengthy waits for a tribunal date.
Decent Homes Standard and Awaab’s Law
If you’re not already the person your landlords turn to when something goes wrong with their property, you’ll be missing out on a prime opportunity.
The Bill extends the Decent Homes Standard to the private rented sector and introduces tighter rules around damp and mould. Awaab’s Law will set strict timelines on how quickly maintenance and repair requests will need to be acted on to keep properties safe and free from hazards.
As an agent, building strong relationships with local contractors is something that will help sell a fully managed service, as it will be critical to handle maintenance issues swiftly. This ability will help landlords avoid penalties and rent repayment orders that could come with delayed maintenance. Likewise, friendly relationships with contractors can also assist any landlords purchasing new properties by getting them up to the right standard before tenants move in.
Bidding wars and discrimination
Pricing a property can be a challenge. There are so many variables and everyone, especially the landlord, will have an opinion. But with the Renters’ Rights Bill outlawing bidding wars – where prospective tenants outbid each other for rental properties – getting the price right the first time will be crucial to landlord confidence of securing that management contract.
This is where agencies’ knowledge of local market trends becomes invaluable. Use expertise to ensure properties are neither undervalued nor overvalued, as this will help prevent offers over the asking price – which, if accepted, could land companies or clients in hot water.
Additionally, letting companies may need to guide landlords through tougher anti-discrimination laws to ensure they comply with regulations protecting tenants on benefits and those with children from discrimination when seeking placement.
Private Rented Sector Database requirements
Data entry isn’t the most fun task for letting agencies, but thanks to the Bill it’ll become a vital skill they can charge for. The new Private Rented Sector Database requires landlords to register their properties and upload key documents such as gas and electrical safety certificates – agents can take on the task on their behalf.
Managing these important compliance tasks is a great way to onboard a new landlord and demonstrate your compliance knowledge. Organising and scheduling the necessary tests while ensuring all certificates are up to date and uploaded to the database is a chargeable service that takes a weight off Landlords minds.
Fines and rent repayment orders
With the Bill introducing fines of up to £40,000 and broadening the scope of rent repayment orders, landlords will understandably be nervous about falling foul of the laws. But these increased penalties are also agencies’ chance to justify fees.
Against this backdrop, organisational skills within an agency will be more critical than ever. Whether handling paperwork or tracking repairs and legal requirements, savvy agents will be able to show that clear, compliant lettings processes can protect landlords from significant financial penalties.
No stone left unturned
The Renters‘ Rights Bill represents a pivotal shift in the private rented sector, but we’ve been here before, and we’ve adapted and thrived. For letting agents, it’s a chance to stand out and secure new landlords with your much-needed expertise and professional support. By understanding the legislation and putting systems in place to monitor compliance, landlords can stay on the right side of the law.
Steve Richmond is the general manager UK & Ireland of end-to-end business technology provider, Reapit.
Images: Steve Richmond, kreatikar and image4you
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