When the Renters Reform Bill was published on 17 May 2023, Michael Gove was quoted in the press release as saying: “Our new laws introduced to Parliament today will support the vast majority of responsible landlords who provide quality homes to their tenants”.
The term “responsible landlord” crops up regularly, and seems to be the latest buzz word, like the opposite of “rogue landlord”.
But what does “responsible landlord” actually mean? Are landlords considered “responsible” if they merely comply with the law? Or does it mean more than that?
From a legal perspective, landlords either comply with the law, or they don’t. There’s no concept of a landlord needing to be “responsible” in law, beyond complying with their many legal responsibilities.
However, putting the law to once side, how does the concept of being “responsible” in a wider sense add to our understanding of what it means to be a landlord?
In the absence of a definition anywhere, I’ve come up with what I think are the 5 hallmarks of responsible landlord. In short, I believe responsible landlords have a sense of social responsibility, and balance the needs of the tenants with the fact that being a private landlord is a business and not the provision of publicly-funded social housing.
Is this a useful concept? Or should we just stick to the black letter of the law? Let me know what you think in the comments.
Quick Links: 5 Hallmarks of Responsible Landlords
1. Compliance with the spirit and intent of the law
The entry level requirement for being a responsible landlord is, in my view, goes beyond mere compliance with the black letter of law. It’s complying with the spirit and intent of the law.
This means not trying to wriggle out of things or cut corners on a technicality. The law is the minimum standard, and responsible landlords shouldn’t stop there. Instead, they should try and do the right thing, even if it means going further than the law.
Bushra Mohammed, a solicitor specialising in auctions who is also a landlord, agrees that it’s not just a question of complying with the law. Instead, it’s someone who can also “be flexible to cater for their tenants’ needs”. I like that description.
Let’s take a concrete example. It’s a legal requirement to get a gas safety certificate done every year. However, a responsible landlord takes care to look after their properties and the welfare of the people who live in them. This means getting the boiler serviced at the same time as that is the right way to look after the safety of their tenants. It also prolongs the life of the boiler, which will be less likely to break down. This means that doing the responsible thing is good business sense as well.
2. Being tenant-centric
What does being tenant-centric mean?
Successful businesses usually become successful because they put the needs of their customers at the heart of decision-making.
Some companies use Bain Consulting’s Net Promoter Score as a key performance indicator. If you’ve not heard of NPS, you’ll have been exposed to it every time someone has asked you to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague. Bain certainly believe that having the interests of customers at the heart of the business is key to success. They describe it as “the business equivalent of the Golden Rule: Treat others as you would have them treat you”. Running a property business is no different.
Responsible landlords have the interests of their customers, ie renters, at the heart of decision-making. It’s part of taking taking into account environmental, social and governance (ESG) factors into account when running a property business. Click here for my blog post on why ESG is important to the private landlord.
Jane Scroggs of Beam agrees with this approach, and says that a responsible landlord is one who “recognises their duty of care towards their tenants”. By this, she means that a responsible landlord is proactive and responsive with repairs and maintenance, and takes into account the wellbeing of their tenants.
Part of being tenant-centric is being reliable, and doing what you say you’ll do, when you say you’ll do it. It also means treating your renters with respect and courtesy. Keep the tone of messages and emails professional, and respond promptly to their messages.
However, being tenant-centric doesn’t mean being a push-over, and agreeing to everything the renters ask for. Sometimes they will make unreasonable requests, eg to make costly structural changes to the property where there are no safety concerns. However, it’s best to chat through issues amicably to come up with a way forward.
Being a responsible landlord does not mean you ignore rent arrears. Far from it. If renters do fall into arrears, process is your friend. Send professional reminders by text and then by email before starting a formal debt recovery process, and recommend they obtain support eg from Citizens Advice. The NRLA has excellent templates for managing rental arrears.
Finally, it’s a good idea to let renters know how you operate, and what your policies are. An easy way to do this is by creating a website which houses FAQs and, say, your Pet Policy. I also create a password protected page for each property which serves as a mini portal and house manual. Here’s a link to a genericised template of my mini portal for renters on my own website for renters. It’s helpf for renters and having a website also makes it easy to have a professional branded email.
>> Related Post: How to choose good tenants
>> Related Post: How to create an effective website for renters
3. Responsible landlords recognise that housing is different
Housing is unlike other “asset classes” and “revenue streams”, as it’s where people live. Responsible landlords recognise this.
Maslow’s hierarchy of needs explains that our most basic physiological needs such as safety, food, shelter, warmth and clothing need to be fulfilled before we can satisfy our “higher needs”. What this means is that having somewhere safe and warm to live is fundamental to human existence. It’s not a nice to have.
Writing in the NRLA Property Magazine in July 2023, Michael Gove refers to rental properties being “at the same time a home and an investment, a valued asset and precious security, a shelter and haven”, and the necessity of balancing these different interests.
Elise Hickey of Arty Property agrees it’s important for landlords to care about the needs and well-being of renters. During refurbs, for instance, landlords should consider carefully how the space will be used, and for HMOs, they should think about the communal areas. She also advises to get to the bottom of damp and see to repairs straightaway.
4. Having a long-term perspective
Being a responsible landlord involves having a long-term perspective, and building a sustainable business.
After all, being a landlord is a business and shouldn’t be seen as a side hustle. It involves investing a substantial amount of money to buy a property, usually taking on debt, in the hope it’ll generate a fair income and capital growth for many years to come. It’s not the same as buying shares in a listed company.
Property isn’t something you can buy and forget about, even if you have managing agents. Property needs looking after and maintaining. Fixing things promptly and properly. And managing agents need supervising – you can’t wash your hands of it and leave it to them.
Part of having a sustainable approach is investing in the properties to make them more energy efficient. According to government data, 61% of private rented properties do not have a rating of EPC Band C. (Click here for the gov.uk source).
Although it’s expensive upgrading the energy efficiency of older properties, I believe it’s the duty of landlords to invest in improvements, even if the law still only requires an EPC E. (The Minimum Energy Performance of Buildings (No. 2) Bill which was due to make EPC Cs compulsory by 2025 has been delayed, without explanation).
To read more on improving the energy efficiency of properties, take a look at my blog post What landlords need to know about energy efficiency and EPCs.
5. Responsible landlords are fair and reasonable
Above all, it’s important for landlords to act fairly and reasonably, in the particular circumstances.
For instance, if you know you’re planning to sell your property, give the tenants plenty of notice, and more than the strict two months that is required under Section 21, even if it’s just informally.
It also means being reasonable when putting up the rent. It’s not reasonable to put up the rent by 20% all in one go, when wage inflation is 6.9%. (Source: ONS July 2023). If a landlord knows they need to increase the rent to meet stress tests for refinancing, they should give tenants as much notice as possible, and agree to phase it. Click here for a guide on how to go about increasing the rent.
Landlords should look at the bigger picture and think what’s fair and reasonable. Say you’ve had good tenants for 10 years who’ve looked after the property and have paid their rent on time. When they leave, don’t take out the cost of filling a few picture-hook holes in the wall out of their deposit. Although you’re within your rights to do this, it doesn’t mean that’s the right thing to do.
Another example is a landlord’s pet policy. Only 7% of rental properties advertised in the UK state that suitable pets are welcome. If a single let property is suitable, there are no issues of allergies, and the pet is appropriate, a good landlord should consider allowing the pet. In any event, tenants will have an implied right to reasonable pets when the Renters Reform Bill comes into effect. Here’s my blog post on what the Renters Reform Bill says about pets.
When making decisions, take into account the wider context, and be generous. This also means taking into account your renters’ mental wellbeing when making decisions.
For instance, I had a tenant who asked to be released from a 12 month fixed term 5 months early, which I agreed to. (I know I didn’t need to, but I thought it was the right thing to do). However, I had no qualms about charging for a professional clean when she left the oven I’d installed only six months earlier in a dreadful state.
It’s a question of balance: give and take. By and large, good landlords and good renters go hand in hand. It’s a virtuous circle.
Although the term “responsible landlord” doesn’t mean anything legally, beyond complying with the law, I believe that the concept of being responsible is useful for landlords.
Each time landlords make a decision, they should ask themselves what the responsible thing is to do. To borrow from Bain, it’s part of embedding the Golden Rule into the way landlords make decisions and treat their customers, ie their tenants.