Jungle Property Blog

What is it?

The document How to rent: The checklist for renting in England (more commonly known as the How to Rent Guide) is published by the Department for Communities and Local Government (DCLG). The latest version is available free to download here

The How to Rent Guide is a ‘Guide for people who are about to rent a house or flat.’

When is it used?

The Guide forms what is known as the ‘prescribed information’ for purposes of The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 and should be provided to a tenant at the time of granting a new tenancy.

The regulations only apply where an assured shorthold tenancy is granted for a dwelling-house in England on or after 1 October 2015 including a written renewal on or after that date. The regulations do not apply where an assured shorthold tenancy becomes a statutory periodic tenancy on or after 1 October 2015 where the original fixed term tenancy was granted before the 1 October 2015.

There is a three year transition applying where all tenancies are caught (even those granted prior to 1 October 2015). However, the prescribed information is only ever required on a new tenancy and never needs to be supplied to an older tenancy even from 1 October 2018 onwards.

If the Guide changes during the tenancy, the new version is not required to be provided.

Where a written renewal is agreed between the same landlord and tenant for substantially the same property, another copy of the Guide only needs to be provided if the Guide has changed since the previous tenancy and previous version supplied to the tenant. Therefore, if agreeing written renewals, landlords and agents will need to check and compare versions with what was given to the tenant previously and provide the new version if necessary.

If the tenancy goes ‘statutory periodic’ at the end of the fixed term and the Guide has changed on that day, the updated one must be provided.

The legislation does not provide any time limit to supply the information however a section 21 notice may not be given at a time when the landlord is in breach of the requirement to give the Guide. The ideal time to provide the Guide is at the same time as granting the tenancy and that would appear to be the intention of the legislation. The requirement is that it be given “under that tenancy”.

How should it be provided?

The Guide may be provided to the tenant:

1. In hard copy; or

2. where the tenant has notified the landlord, or agent, of an e-mail address at which the tenant is content to accept service of notices and other documents given under or in connection with the tenancy, by e-mail.

Changing the rent day for a tenancy very often causes confusion for parties to the agreement so here is a quick guide to explain how it works.

The day rent falls due, commonly referred to as the rent day, is part of the tenancy agreement. For a typical Assured Shorthold Tenancy (AST) the agreement will be that rent is paid in advance and the rent day is the first day of the period which is a calendar month. For example for a tenancy starting on 23rd July, rent will be payable in advance on 23rd July and will cover the period 23rd July to 22nd August inclusive. For the next period, the rent day will be 23rd August and will cover 23rd August to 22nd September inclusive. The period of the tenancy (23rd-22nd) remains the same for the life of the tenancy regardless of the number of days in a period which will vary slightly as the number of days in calendar months vary.

There will be occasions when the landlord or tenant wish to change the rent day, before the commencement of a tenancy or during a tenancy. For example the landlord may wish to change the rent day to align with the day mortgage payments are made. Likewise the tenant may wish to change the rent day to align with pay day.

Changing the rent day does not change the period of the tenancy

One of the confusing points for landlords and tenants is that changing the rent day does not change the period of the tenancy. In the example above, changing the rent day to say the 1st of each month does not change the period of the tenancy (23rd-22nd). In this example above the fixed term of the tenancy ends on the 22nd of a month and so it follows that the periods of the tenancy are the same as those for which rent was last paid I.e. from 23rd to 22nd of each month. Why is this significant? Any subsequent notice requiring possession or notice of termination should expire on the 22nd of a month and not the day before the rent was due in this example the 1st)

How rent is calculated

Where it is agreed the rent day is to be changed, this will change the number of days for which rent is due and therefore the amount of rent payable at the first (or next) rent day. The correct way to apportion rent is always on a yearly basis from the Apportionment Act 1870 Calculate a full year’s rent; then divide by 365 for the daily rate. £950 p.m. x 12 = £11400 PA or £31.24 per day.

To assess how many days rent are due, ignore the day of the month rent is paid; what counts is the day of the month rent is payable.

Using the example tenancy above consider the following scenarios:

From the start of the tenancy the tenant wants to pay rent on the 1st of each month – To align the rent day with the period of the tenancy after the fixed term expires, make the fixed term of the tenancy from 23rd July to 30th January. This way when the fixed term expires, the rent day will be at the start of each (monthly) period. The rent payable at the first rent day will be for the period 23rd July to 31st August inclusive I.e. 40 days at £31.24 per day which equates to £1249.60. Each subsequent rent will be £950 payable on the 1st of every calendar month.

From the start of the tenancy the landlord wants rent to be paid on the 15th of each month – To align the rent day with the period of the tenancy after the fixed term expires, make the fixed term of the tenancy from 23rd July to 14th February. That way when the fixed term expires, the rent day will be at the start of each (monthly) period. The rent payable at the first rent day will be for the period 23rd July to 14th August inclusive I.e. 23 days at £31.24 per day which equates to £718.52. Each subsequent rent will be £950 payable on the 15th of every calendar month.

During a periodic tenancy the tenant wants to change the rent day to the 1st of each month – In this scenario assume the example tenancy above was for a 6 month fixed term and the change of rent day is agreed on 10th March – The rent payable at the next rent day after this is agreed will be for the period 23rd March to 30th April Inclusive i.e. 39 days at £31.24 per day which equates to £1218.36. Each subsequent rent will be £950 payable on the 1st of every calendar month. Alternatively the landlord may agree to accept a smaller amount at the next rent day to cover the period 23rd March to 31st March I.e. 9 days at £31.24 per day which equates to £281.16 with the next rent payment of £950 due on 1st April.

Declared Value

The total cost to rebuild the property including:

* Foundations
* Walls
* Roof
* Partitions
* Doors and windows
* Any applied finishes and decorations
* Built-in fittings including fitted wardrobes and kitchens
* The installation for heating, hot and cold water, gas, electricity, lighting (excluding decorative light fittings), ventilation, sanitation and disposal, all sanitary fittings
* Car parks that are part of the property
* Pavements that are part of the property

It also includes an allowance for professional fees and debris removal costs.

Most importantly, the Declared Value is not the value of the property as you would see in an estate agents window.

The Declared Value is the cost of rebuilding the property insured on the first day (Day One) of each period of insurance. As long as this figure is adequate on that day any claims will be free of average. If it is inadequate it is possible that average could be applied meaning that any valid claim payout would be proportionally reduced by the amount that the property is deemed underinsured.

Sum Insured

The insurance broker/underwriter automatically adds a Day One Uplift (sometimes called an Inflation Provision) to the Declared Value to cover inflation during the insurance year and during the subsequent period required for designing, planning, tendering and actual reconstruction, however long that might take. This is usually 30% of the Declared Value. This new enhanced value is called the Sum Insured.