Landlord FAQs – a legal expert answers your top questions

Whether it’s tenancy law, tax allowances, or managing relationships with renters, being a landlord can be complicated and sometimes confusing.

With this in mind, we recently asked subscribers for their burning buy-to-let questions. Now we’ve teamed up with Corey Evans, a Legal Adviser at legal dispute specialists DAS Law, to answer your common queries about letting a property.

Read on for useful information on:

rent increases
inventories
deposits for joint tenants

How to notify tenants of a rent increase

Q: I’ve had the same tenants for the past eight years and I haven’t increased the rent for the last two years. The tenants renew and re-sign an ‘AST extension agreement’ every 12 months.

How do I notify them of a possible increase of the monthly rental (is there a legal letter/form template I should issue)? And is there a notice period applicable to any letter/form with any new letting laws?

Cookie, South East England

A: During the fixed term, it’s not usually possible to increase rent unless there’s a rent review clause contained in the tenancy agreement. If there’s a rent review clause, you’d usually increase the rent in line with the clause and in line with the method advised in the tenancy agreement.

The other option during the fixed term is to get an agreement from the tenant in writing.

If you’re looking to increase the rent when the fixed term ends, there are three options to increase the rent:

Agree a rent increase with the tenant in writing
Issue a notice proposing new rent under the Housing Act 1988 Section 13 (2)
Agree a new fixed term tenancy with a new proposed rent amount

If you choose the second option, you can download the relevant form from the government website under the section titled ‘Form 4’. Alternatively, Simply Business legal expenses insurance customers can use DAS Businesslaw to quickly draft duplicate and e-sign a Section 13 Notice, as well as a letter informing tenant of rental increase.

The notice period for proposing a new rent under Section 13 of the Housing Act is one calendar month in line with the rental period.

This article isn’t advice, please use it only as a guide and speak to a professional if you’d like more information.

Do inventories need to be updated if tenants redecorate?

Q: If a tenant is allowed to make changes to the property (paint walls, change carpets, or add locks) how does that affect the inventory and condition report signed at the start of the tenancy? Does it need to be redone or should an addendum be created?

Eva, Scotland

A: If a tenant is allowed to make changes to the property, this shouldn’t affect the inventory or condition report signed at the start of the tenancy.

The checkout inventory should be used to establish if the tenant has caused any damage to the property beyond reasonable wear and tear.

Any damages to the property should be deducted from the deposit in the first instance. Any damages above and beyond the deposit amount will need to be pursued directly against the tenant.

If the tenant has made unreasonable changes that weren’t allowed, you could potentially look to hold the tenant liable for the costs to put the property back to its previous state.

Who owns the deposit when a joint tenant moves out?

Q: My tenants are splitting up and are out of their six-month tie-in period. One of the tenants wants to keep the property on, but between them they have rent arrears which aren’t as much as the deposit. Who does the deposit belong to legally and how do we legally deal with the arrears and the bond whilst continuing the tenancy agreement?

Brandon, North East England

A: Firstly, you’ll need to check the current state of the tenancy and whether it’s fixed or periodic.

If the tenancy is fixed, you’ll need to make sure there’s a break clause to end the tenancy early. If there’s no break clause, the tenants won’t be able to end the tenancy early unless the landlord agrees to an early termination.

If the tenancy is in a periodic state, the tenants will need to provide one month’s notice in line with the rental agreement to end the tenancy.

If it’s possible to end the tenancy, this will need to be done with the agreement of all parties to the tenancy agreement.

It’s better to end the tenancy with all the tenants/parties and start a new tenancy agreement with the new sole occupier. This will avoid any problems later when serving notices.

The landlord will need to receive a new deposit from the sole occupier, re-protect the deposit, and re-issue all relevant documents as moving forward this will be treated as a brand new tenancy with the sole occupier.

In terms of the deposit amount, any rent owed will be deducted from the deposit and the remaining deposit amount will be returned to the tenants. When it comes to who owns the deposit, you’d normally return it to the person that paid it or the original payment method. If in doubt, get clarity from the tenants.

Get the support you need with legal expenses insurance

If you have legal expenses insurance as part of your Simply Business policy, you have access to a number of useful services through DAS Businesslaw (you’ll just need your voucher code found in your policy documents to register).

DAS has a legal advice helpline, available whether you’re facing a serious legal issue or just want to check something with an adviser. They also offer a range of legal templates and guides to help you with managing tenancies. Watch this short video to see how DAS Businesslaw can help you to edit templates for legally binding documents.

Do you have any other tenancy questions that you’d like answered? Let us know in the comments below.

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