October and Time to Think About Winter Issues

Whether we offer “all-inclusive” rent (usually HMO rooms) or our tenants pay for their own heating we need to recognise that winter energy bills will have an impact on our rentals. The dreaded damp and mould season is about to begin and it’s important that we do our best to avoid the health risks and damage to our properties as much as possible:

A New Government Guide has Been Issued on Damp and Mould

Guidance:

“Understanding and addressing the health risks of damp and mould in the home

“The tragic death of 2-year-old Awaab Ishak in 2020, due to mould in his family home, should never happen to another family.

The Coroner’s report into Awaab’s death describes a catalogue of failures and a housing provider that abdicated its responsibilities to his family and hid behind legal processes.

This guidance is a direct response to the Coroner’s report and has been developed with a multidisciplinary group of experts in housing and health. Members of the government’s expert Committee on the Medical Effects of Air Pollutants were also consulted. It makes sure that social and private sector landlords have a thorough understanding of their legal responsibilities, and of the serious health risks that dampness and mould pose.

Landlords must ensure that the accommodation they provide is free from serious hazards, including dampness and mould, and that homes are fit for habitation. They must treat cases of dampness and mould with the utmost seriousness and act promptly to protect their tenants’ health.

As this guidance also makes clear, tenants should not be blamed for damp and mould. Damp and mould in the home are not the result of ‘lifestyle choices’, and it is the responsibility of landlords to identify and address the underlying causes of the problem, such as structural issues or inadequate ventilation.”

Awaab Ishak lived in a flat in a social housing estate in Rochdale.In 2020 he died age only two and the coroner ruled that his death was caused by prolonged exposure to black mould. As a result of this tragic loss the law related to social housing was changed this is known as Awaabs Law”

Government to deliver Awaab’s Law – GOV.UK (www.gov.uk)

This does not apply to private landlords at the moment but there are calls for it to do so and it’s a useful guide.

I don’t agree with the statement that “it is not the result of lifestyle choices” because it so often is caused by the misunderstanding that a home must be kept both heated and aired in order to reduce the moisture in the air and prevent condensation which often causes mould rather than a fault in the building or water ingress from the outside. I have seen air vents blocked or covered with cling film, trickle vents in windows closed and covered and every possible nook and cranny where air might trickle in closed and then washing being dried indoors on airers or worse on radiators where the moisture drying from the clothes evaporates into the air and condenses on the first cold surface.

The death or ill health of even one child is unacceptable if it can be prevented and therefore, we should take every opportunity to educate our tenants. Unfortunately, the government guide is not a suitable document to share with tenants because there is not enough “guide” and too much blame although one section does concede:

“Condensation damp

Condensation damp happens when moisture generated inside the home cools and condenses onto colder parts of the buildings (for example window frames, corners and low points on walls behind sofas or wardrobes). This is the most common form of damp.”

It’s unhelpful to then ignore that fact and concentrate on those times when it is caused by faults in the property because tenants may focus only on that and not take responsibility for the moisture-lack of ventilation & heat-condensation cycle which is about to begin again.

The full guide is here:

Damp and mould: understanding and addressing the health risks for rented housing providers – GOV.UK (www.gov.uk)

In March 2021 I wrote an article “How to Keep Tenants Warm and Cosy and Properties Mould Free”

Please take the time to read this and share the information with your tenants:

Although this article was written long before the horrific increases in fuel costs, I maintain that this is the most cost-effective way to keep a property comfortable and safe and importantly mould free. I am already seeing posts from landlords who let “all inclusive” HMO rooms where they are worrying about the cost of this winter on top of the increased cost of borrowing and some are planning to do things which, as I explain in the article above, are unlawful.

In my Facebook group, which is a help group for both landlords and tenants I am reading stories like this one:

“The Landlord installed pre-meters without proper notice (notice said this is only for monitoring purposes) and expects me to top up. He admitted wrong letter has been sent. I’m out of fixed period of AST, periodic. My tenancy agreement states all bills are included in rent, including electricity. The pre-meters had no credit on them, so in result my electricity was cut and I had to dispose all perishable goods from the fridge. The landlord topped up all the pre-meters by few pounds after my telephone. The landlord states I’m the only one to complain and everybody else accepted the meters, there is no evidence of that though. Some people have not noticed the meters for few weeks until their electricity was cut out. Entire thing looks like not following any procedures, breach of tenancy agreement and harassment. I was told if I don’t accept the meters I can move out. I did not had much problems with the landlord so far, but I cannot believe how he can downplay this situation. Any advise how to proceed?”

This landlord has broken so many laws I am not going to go into it other than to say that many landlords are panicking about the viability of their rentals at the moment but that doesn’t mean that we can break the law nor disrespect tenants who are not to blame.

One of the most basic management tools for “all inclusive” rentals is a Fair Usage Clause but when I say this I am met with, “how do you enforce it” “Does that mean a lot more admin” …

When you’ve finished reading this article go here and check out how to make your life easier while managing your properties better:

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In the meantime, I will give you a brief overview of how a Fair Usage Clause should work.

The first thing to say is that you cannot take a tenant based on “all-inclusive” and then add a fair usage clause to their contract, in fact, unless you intend to be an endless money pit you should not offer “all-inclusive” at all, use the term “inclusive in line with fair usage”. Now you have been honest in your advertising and applicants know not to expect to pay a fixed monthly rent and nothing extra regardless of charging their electric cars, doing their friends laundry etc.

• The clause must be balanced and not favour you nor the tenant, therefore it should state that any usage over the cap will be charged on an equal share basis among all tenants (in an HMO) and any usage below the cap will be refunded on the same basis.
• Use quantity not amount of money, this clause is to encourage tenants to be “fair” and responsible in their usage, it is not a blank cheque to cover us against rising costs that cannot happen and we need to price our rents accordingly.
• If you have let the property for at least 12 months you will know the quantity of gas and electricity that is normally used every month. If you haven’t got that information go to a local landlord’s meeting or a Facebook group and ask the question.
• Obviously, the usage will vary according to the month of the year and this should be reflected in the clause.
• You could do a monthly account/running total but it is much better to keep a record for 3 months or so, depending on your tenant type and how often they come and go. Send the readings to all the tenants along with the running total usage so that they can see at any given time whether they are likely to need to pay extra or can expect a refund. This has the effect of controlling anyone who is not being fair and you shouldn’t need to become involved unless you have a report of abuse that needs your intervention.
• If there is a big spike this is a red flag and you need to investigate further. This may be caused by one tenant using power in their room where other sharers are unaware of it, electric heaters are a favourite. It may also be something like partners staying over and using facilities. Whatever the cause you need to know who to charge because it is rarely something that everyone is doing and tenants will be pleased that you are managing fairly.
• If a tenancy ends and there is an outstanding bill this can be claimed from the tenant’s deposit by showing the clause in your contract and your ongoing communications with the running total. If there is an underspend you should refund the outgoing tenant accordingly.

I am not going to provide the wording for the clause because I am not legally qualified to advise on the wording in a contract.

A winter guide for landlords

Winter is Coming

Preparing your properties for winter ahead of time will help keep them in good condition. In this guide you’ll learn how best landlords can prepare for winter.

Download Free

New How to Rent Guide Published on 2^nd October 2023

This version will update pages 15 and 17, to give information on the new Housing Loss Prevention Advice Service. (HLPA) which I wrote about last month:

It is important to make sure that you always give a new tenant a copy of this by email or hard copy – not a link – and that it is the latest version because this is one of the qualifying documents which enable us to serve a valid section 21. It is also a really helpful little guide for both landlords and tenants because it is constantly updated and gives simple information about important changes. Landlords should read every new version to keep up to date with the basics of our business. So many times landlords come onto the Facebook group to ask some very basic questions, it’s a rule of the group not to make rude comments to other members but sometimes I have to delete several comments from other landlords who cannot believe that people are letting property and haven’t taken the time to learn about the legislation and regulation around our business. Often people are hoping for solutions but there aren’t any because they have made, often small, expensive mistakes.

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GOOD NEWS regarding MEES

In September Rushi Sunak announced:

“Under revised plans, the Government will:

– Scrap policies to force landlords to upgrade the energy efficiency of their properties, but instead continue to encourage households to do so where they can.”

There had been a lot of speculation about the plan to make C the minimum EPC level from 2025 but this announcement has taken this off the table and we can continue to let properties which have an E or above or are on the Exempt Register. The original plan also had a cap of £10,000 to be spent before a landlord could claim that the property could not achieve a higher EPC rating. £10,000 a property would have been a massive additional burden for landlords.

This is good news in terms of taking some of the financial pressure off landlords, particularly those with older properties, but we need to remember that a good EPC rating usually means a property which is less expensive to keep warm and therefore less likely to suffer from damp and mould because tenants can afford to pay for the heating.

It is not all doom and gloom for landlords Zoopla’s recent report gives us reason to hope for a better 2024:

Report on Rental Market from Zoopla

“UK Rental Market Report Research and Insight September 2023

• +10.5% Annual rental inflation for new lets
• UK +12.7% Scottish rental growth
• highest in UK 28.4% Rent as % earnings
• highest for a decade Executive summary
• Rents for new lets are up 10.5% over the year (12.2% a year ago)
• Rental inflation has been in double digits for 18 months
• The average renter has seen costs rise £2,800 over the last 3 years
• Scotland recording the fastest growth in rents at 12.7% where rent controls are forcing landlords to maximise rents for new lets
• The UK rented sector remains stuck in a period of low supply and high demand. Affordability is the key influence on rental growth
• Rents continue to outpace earnings and rental affordability is now the worst for over a decade
• Rents for new lets are expected to increase by 9% in 2023 then slow to 5-6% in 2024”

UK Rental Market (zoopla.co.uk)

The first thing that jumps out at me is the huge rent growth in Scotland, 12.7% where there has been rent control since what is known as Rent Pressure Zones were introduced in 2016. Rent increases during a tenancy were originally capped at 3% until 30^th September 2023 but in June Scottish First Minister Humza Yousaf announced:

“We’ve now laid legislation to ensure those measures will remain in place until 31st March next year.”

He also said that there would be a new housing bill which would deliver the Scottish National Party’s New Deal for Tenants – sounds familiar!

One of the problems with rent controls is that landlords, who may not be thinking of increasing rents, take the opportunity to keep up with current levels because we fear that the Caps will be reduced thus leaving us well below a normal market rate and making it unaffordable to continue, as is the case for many landlords at the moment because they are struggling with tax and interest rate increases. This is obviously what’s happened in Scotland to have caused “the fastest growth in rents” But it seems they have not learned from this and think it’s a good idea to continue this failing strategy for a further 6 months.

We can only hope that the long-awaited Renters Reform Bill does not change to include rent controls because they have learned from Scotland.