Legal expert raises fresh concerns over amendments to Renters’ Rights Bill
A proposed ban on paying rent in advance is one of several issues worrying landlords, according to Excello’s leading property disputes lawyer Sarah Taylor.
Some MPs are calling for the Renters’ Rights Bill to go further and want to introduce amendments which include the introduction of rent controls, a ban on landlords from asking for rent in advance and compensation for tenants when they are evicted through no fault of their own.
There were already concerns over the capacity of the courts and tribunals system, and resources available for local authority enforcement but as the Bill gets its final reading today, it will become clearer which, if any of those controversial amendments will make it into the bill.
Biggest concern
Taylor, says: “The amendment that is causing most concern amongst landlords and agents is the proposed prohibition of obtaining rent in advance. This can leave landlords at risk of unpaid rent.
“However, it is onerous and potentially discriminatory to require large payments of rent upfront. Tenants may be able to pay their rent regularly but may not be able to save up a significant amount of rent to pay upfront.
It highlights the difficulties in trying to balance the interests of landlords and tenants in the legislation”.
“This proposal should assist in making rental accommodation accessible. It highlights the difficulties in trying to balance the interests of landlords and tenants in the legislation.
Other proposed amendments include limiting the guarantor’s liability for rent following the death of the tenant. This will put the onus on the landlord to recover possession and re-let thereby avoiding a void for the landlord, whilst ensuring that housing stock is available for tenants.
Taylor adds: “There is also a proposal to introduce a new ground for possession of alternative accommodation provided during redevelopment. It will be interesting to see how this is dealt with practically if the amendment is agreed.”
Following the Third Reading and Report Stage, the Renters Rights Bill will move to the House of Lords.
Without income of 2.5 times the annual rent and no option to pay rent in advance the tenant will need to prove savings of 2.5 times the annual rent. This is the equivalent in savings of paying 2.5 years rent in advance. The national average rent in England is currently £1,327 pcm requiring savings of £39,810 held in a bank account for not less than 3 months to pass referencing.
Well, this just means almost no one will pass referencing, so landlords will just force the referencing organisations to loosen their rules. Who set this 2.5 X annual rent rule anyway?
And are BTL mortgage providers going to start demanding proof of these multiples, otherwise the landlord is in breach of their mortgage contract?
If tenants are prohibited from paying in advance it will also be bad for tenants. Sometimes tenants don’t pass referencing but can pay , say six months in advance. Those tenants can then be accepted. So many of the proposals haven’t been properly thought through and wil damage tenants as well as landlords.