North East Landlords – Legal Update for the Buy To Let Sector

At another successful North East Landlords event held on Wednesday 23^rd November 2022, Sweeney Miller Law’s Managing Partner, Surbhi Vedhara delivered a legal update focused on the Buy To Let sector.

Housing Disrepair

The tragic death of 2 year old Awaab Ishak whose death was attributed at a recent Coroner’s Inquest to mould in his rental home is a reminder to all landlords to check the state of repair of their rental properties and to record any requests made by tenants for any repair issues.

Section 11 of the LTA 1985 provides an absolute and non-excludable obligation on landlords to carry out basic repairs. Generally, until the landlord has knowledge or notice of the disrepair and has had a reasonable opportunity to carry out any remedial works, it will not be in breach of its obligation to repair. However, the landlord’s knowledge is what is important and the landlord could be accountable even if no notice was served by the tenant.

It is always good practice for landlords is to inspect the property periodically to check for disrepair, rather than relying upon the tenant to give notice.

Capital Gains Tax

If a landlord is looking to sell rental properties then they need to be aware of the reduced CGT allowance from April 2023. For any transaction it is important to seek specific tax advice, including in relation to the most appropriate corporate structure.

Levelling Up – Where are we?

There is still no further official guidance on the Section 21 ban but there is discussion about an effective date in May 2023.

Welsh BTLS

The law relating to residential property lettings and licences in Wales is facing reform through the introduction of a new form of rental agreement known as an ‘occupation contract’. If a landlord has any properties in Wales, they need to be aware of this from 1^st December 2022.

Assured tenancies (including ASTs) can no longer exist in Wales (section 239, RHWA 2016).

Subject to certain criteria being met:

• Existing residential lettings and licences convert into occupation contracts on 1^st December 2022 (known as converted contracts).


• Residential lettings and licences granted on or after 1^st December 2022 are occupation contracts.

Bills inclusive tenancies

Sweeney Miller Law’s Landlord and Tenant team has received a number of enquiries about properties let on bills included ASTs, given the steep increase in utility prices. This is especially an issue for student houses. Bills are covered under EPG until April but what will happen after this date?

New regulations also recently came in force placing landlords under an obligation to pass on the £400 energy rebate to tenants. For further details visit the Government’s guidance on how this is to apply and remedies for the tenant where the landlord fails to do this. The resources include a useful template letter that can be adapted.

The Energy Bills Support Scheme and Energy Price Guarantee Pass-Through Requirement Regulations 2022 (the Regulations) came into force on 1^st November 2022 and make clear that landlords charging rent inclusive of energy bills must pass-on the benefit of the schemes to a tenants.

The Regulations stipulate that a “just and reasonable proportion of the benefit must be passed-on in a “just and reasonable way”.

Landlords receiving the benefit of energy support schemes must have contacted their tenants by 30^th  November, or within 30 days of receiving the benefit and inform them about the requirements, the amount to be passed on and other key information.

However, the Government’s website states that landlords are “encouraged to come to an agreement with you on the discount in line with the arrangement in your tenancy agreement”.

It also adds: “The landlord’s fixed charge may already provide you with similar protection from the impact of the energy price increase.” The end user may bring civil proceedings and may seek to recover sums due as a civil debt, however, there are no fines for intermediaries in such cases.

Rent increases on ASTs

Rent reviews in ASTs are not prohibited but contractual rent reviews during the fixed term of the AST are generally uncommon for the following reasons:

1. By nature AST’s tend to be short term tenancies, thereby usually removing the need or the desire for a review.

1. In some circumstances, a tenant can apply for a reasonable rent to be determined by the Property Tribunal (section 22 of the Housing Act 1988). This can undermine any fixed increase pre-agreed at the outset of the tenancy

So, what are options?

1. Get the tenant to sign up to a new tenancy? The tenant may not be willing to do so.


2. If the tenancy is a statutory periodic, using Section 13 of the Housing Act 1988 (notice of increase in limited circumstances).


3. Using Section 6 of the Housing Act 1988 (variation of terms for statutory periodic tenancies, in limited circumstances).

The most common notice used to increase rent is a Section 13 notice, which is in a prescribed form – Form 4. If the prescribed form is not used, the rental increase will be ineffective.

The use of a Section 13 notice is subject to limitations:

1. A notice of increase can be served during the fixed term of an AST but the rent increase must take effect after the:
   a. Tenancy has become statutory periodic; and
   b. The minimum period following the service of the notice has expired.


2. Section 13 Notices can only be used to increase the rent once every 12 months. The 52 weeks run from the start of the tenancy, including any fixed term.


3. Section 13 cannot be used to increase the rent for a contractual periodic tenancy that contains a rent review clause.


4. Where a statutory periodic tenancy arises at the end of a fixed-term tenancy, a rent review clause no longer has effect. To increase the rent the landlord must use the section 13 procedure or obtain the tenant’s agreement.


5. For a monthly, weekly or fortnightly tenancy one months’ notice of the increase in rent is required.


6. For a yearly tenancy, a period of six months’ notice is required before the increase can be put into effect.


7. On expiry of the notice period the increased rent will take effect unless the:
   a. Tenant refers the notice of increase to the Tribunal, or
   b. Landlord and tenant agree to a different rent

Section 6 procedure – notice of variation of the tenancy

This procedure can only be used in the first 12 months of the statutory periodic tenancy. It is not available to landlords of contractual periodic tenants. The landlord or the tenant may serve a notice proposing a variation in the terms of the tenancy. This must be done on a prescribed Form 1. The notice will take effect three months from its date of service, unless it is referred to the Tribunal.

This procedure is meant to be used by landlords who need to change the terms of a tenancy because it has become statutory after the expiry of a fixed term. If the changes in the terms of the agreement merit a change in the rent then this can be proposed by the landlord or the tenant at the same time.

Under section 22 of the Housing Act 1988 an assured shorthold tenant might be able to refer the rent to the First-tier Tribunal (Property Chamber) for an assessment as to whether it is excessive. All of the relevant forms can be found here.

Please note that this information is for general guidance only. If you have any specific queries regarding landlord and tenant matters, then please get in touch with a member of the Landlord and Tenant team on 0345 900 5401 or email enquiries@sweeneymiller.co.uk. For details about future North East Landlords (NEL) events please check the Sweeney Miller Law website and social media, as well as NEL’s Facebook page, here.