‘Ask the expert’ – lettings advice from Julie Ford

Julie Ford, HF Assist Advisor and senior mediator at the Property Redress Scheme Tenancy Mediation Service is a specialist adviser to the private rented sector. With over 25 years’ experience in lettings, there’s not much that Julie doesn’t know about supporting landlords, agents and tenants through tricky tenancies and the ever-changing legislative landscape of the private rented sector.

Here, Julie shares her answers to some of the most asked questions by agents calling HF Assist’s helpline, on the topics of right to rent, increasing the rent, and taking over management of an existing tenancy.

 

Right to rent FAQs

Q “We have potential tenants who are UK citizens, do we need to carry out right to rent checks on them?”

A- Yes, everyone aged 18 or over who is moving into a property must be checked to make sure they have the right to rent in the UK, even if they are resident UK citizens.

 

Q “A potential tenant only has a biometric residency card as ID, is this ok?”

A- No, From 6  April 2022, you cannot accept a biometric residency permit (BRP) or biometric residency card (BRC) or Frontier Worker permit (FWP), as physical documents to prove right to rent, it must be done electronically.

From April 2022, you cannot do a right to rent check using a physical BRP card. You will need to get a share code.

 

Q “We have a tenancy due for renewal with foreign tenants, do we need to carry out right to rent checks again and for each renewal?”

A- No, tenants with unlimited right to remain will not need to have their right to rent checked again.

However, if tenants who have time limited right to rent are coming up to renewal, and their time-limited right to rent was going to run out next month, then it would be practical to do their right to rent check before their renewal. But if a tenant’s right to rent has got another six or eight months to run, then just do the renewal and do the right to rent check in 12 months’ time.

 

Q “How long after a tenancy has ended and the tenant vacated, do we have to keep the right to rent documentation?”

A- The right to rent regulations require agents and landlords to retain the documents for one year after the tenancy has ended and the person has vacated.

 

Agents should be aware that the Government updated its code of practice for landlords in January 2024 to reflect the higher penalties that will apply from 13 February 2024, where a landlord or agent breaches the right to rent requirements by renting their property to an individual without lawful immigration status. The penalties will increase dramatically, from £80 per lodger and £1,000 per occupier for a first breach to up to £5,000 per lodger and £10,000 per occupier.  

Repeat breaches could cost up to £10,000 per lodger, up from £500, and a maximum of £20,000 per occupier, up from £3,000. As well as facing a heavy fine, landlords could also face potential imprisonment for failure to check the occupier's right to rent status.

For more information on right to rent, read our insurance partner, Total Landlord’s ‘Ultimate guide to right to rent checks’.

 

Increasing the rent FAQs

Q “How often can the rent be increased?”

A- Under Section 13 of the Housing Act 1988, the rent can only be increased once every 364 days - so once a year. But if a tenant is happy to agree to an increase sooner then you can do this.

 

Q “Can rent be increased at a six-month break clause?”

A- No, the break clause is only there to allow either party to end the tenancy early. If the break clause isn’t activated then the tenancy fixed term continues as normal and the rent is fixed for the term.

 

Q “Do I issue a Section 13 notice for all rent increases?”

A- No, a Section 13 notice is only to be used when a tenancy is a statutory periodic. If you have a contractual periodic which has a rent increase clause, then you can only increase rent in line with those terms.

Also, if the tenant has mutually agreed to an increase, you do not need to issue a Section 13 notice and the rent increase can be drawn up by addendum to the existing contract.

 

Q “Can a tenant refuse a rent increase?”

A- Yes, in most cases a tenant doesn’t have to accept a rent increase. If a Section 13 has been issued, the tenant can appeal the increase to the First Tier Property Tribunal before the date when the new rent is due to take effect. If a Section 13 was not issued and the tenant doesn’t agree a proposed rent increase, then negotiation is key, but ultimately the tenant is at risk of eviction under Section 21.

 

Read our insurance partner, Total Landlord’s guide, ‘How to legally increase rents to align with the market level’, for more advice.

 

Taking over management of an existing tenancy FAQs

Q “Do we need to issue a new tenancy agreement when we take over the management from another agent?”

A- No, the AST is between the tenant and the landlord, not the tenant and the agent. The tenancy remains the same, the only thing that is different is that the landlord has a new agent, so the only new contract to be signed is terms of business between agent and landlord.

Q “How do we inform a tenant that we are the new agent?”

A- Best practice would be for the current agent to write to the tenant to advise that after a set date they will no longer be the managing agent and advise that agent XX will be their new point of contact. The new agent would then write to the tenant introducing themselves and their processes. Included in this letter should be a Section 48 notice to advise of the new address for service of notice and a detailed explanation of how and where rent payments are now to be paid to.

Q “What happens to the tenant’s deposit when we take over management?”

A- The former managing agent needs to transfer the deposit to you or directly to your deposit account, you will then have 30 days from receiving the funds to protect it and provide the tenant with the necessary prescribed information.

 

The HF Assist helpline provides practical expert guidance and information from call handlers who have both legal and lettings experience, making sure you are informed and prepared for the day-to-day challenges of running your business. Upgrading to an HF Assist Premium subscription provides a 24/7 helpline covering all types of legal issues relating to a letting agent’s business, as well as access to a resources library with useful guides, documents and legal templates. For more information visit the HF Assist website.