Monday, July 7, 2025
Rent to rent is where an individual or company rents a property from an owner landlord, then lets that property to occupiers and manages it day to day. In return, the owner landlord receives a fixed or guaranteed rent.
This model can work well when it is set up properly. But it also creates extra risk. In many cases, the rent to rent operator is not just acting as an agent. They may also take on legal duties as the occupier’s landlord.
The Renters’ Rights Act changes key parts of the legal framework in England. If you offer rent to rent or guaranteed rent, you should review your agreements, compliance processes and property standards now.
In a standard rent to rent arrangement:
This can look simple on paper. In practice, it creates a chain of legal relationships that must be managed carefully.
If you are offering rent to rent or guaranteed rent to a landlord, the agreement with the owner landlord should usually be set up as a commercial lease or similar commercial arrangement.
It should not usually be created as a residential tenancy where you do not live in the property yourself.
Your agreement with the owner landlord should clearly state:
If these points are unclear, disputes are far more likely.
In many rent to rent arrangements, the operator becomes the immediate landlord of the tenant or sub-tenant. That matters because the legal duties owed to the occupier may sit with the operator, not the owner landlord.
This can include duties linked to:
You should not assume that calling the arrangement “guaranteed rent” removes landlord responsibilities.
The Renters’ Rights Act changes the tenancy system for private rented homes in England.
Key changes include:
Under the new system, tenants will generally remain in the property until:
This matters for rent to rent because your agreement with the owner landlord may have a fixed commercial term, while the occupier’s tenancy will follow the new residential tenancy rules.
Agents and operators should review:
The key point is simple. The end of your agreement with the owner landlord does not automatically end the occupier’s rights. If a tenant remains in lawful occupation, possession must still be dealt with properly and lawfully.
In a typical rent to rent model:
Whether rent received is treated as client money will depend on the legal structure and the wording of the agreement. Agents should make sure their accounting treatment, disclosures and internal controls are accurate.
A house in multiple occupation, or HMO, may exist where:
Many rent to rent models involve room lets, so HMO rules are often relevant.
Some properties must be licensed. This may include:
Many rent to rent models involve room lets, so HMO rules are often relevant.
Before the property is marketed or let, check:
The owner landlord should confirm that their mortgage lender allows this kind of arrangement. Consent should be obtained in writing where needed.
The owner landlord should also confirm that their insurance policy covers rent to rent or guaranteed rent arrangements, including subletting where relevant.
If the property is leasehold, review the lease carefully. Some leases restrict subletting or require consent from the freeholder or superior landlord.
If you take a tenancy deposit from an occupier, that deposit must still be protected where the law requires it.
A deposit taken from a tenant should be protected in a government-authorised tenancy deposit protection scheme, such as mydeposits, within the legal deadline. The required prescribed information must also be served correctly.
A deposit paid by the operator to the owner landlord under a commercial agreement is different. That is not usually a tenancy deposit.
The Renters’ Rights Act does not remove deposit protection duties.
If you take a deposit from a tenant and fail to protect it properly, the consequences can be serious. These can include:
Agents should be clear on:
Clear processes reduce avoidable claims and confusion.
The Renters’ Rights Act introduces a new Private Rented Sector Landlord Ombudsman in England.
All private landlords with assured or regulated tenancies will be required to join, including landlords involved in rent to rent arrangements where they are the legal landlord of the occupier.
The ombudsman will provide tenants with a route to raise complaints about a landlord’s actions, inaction or behaviour. It will offer a quicker route to resolution than court in many cases, and decisions will be binding.
The ombudsman may require a landlord to:
In a rent to rent setup, it is vital to identify who the occupier’s landlord is in law. That party may need to join the ombudsman service.
You should review:
Local councils will have powers to act where landlords fail to join the ombudsman service or continue to operate outside the rules.
Penalties can include:
The Renters’ Rights Act applies the Decent Homes Standard to the private rented sector.
This means privately rented properties, including those used in rent to rent arrangements, will need to meet the required standard when the relevant provisions are in force.
While the detail will be supported by regulations, the direction is clear. Properties must be safe, in a reasonable state of repair and suitable for occupation.
For agents and operators, this means there should be clear systems for:
If a rent to rent property is in poor condition, it is not enough to assume responsibility sits elsewhere. The agreement should make duties clear, but day to day management also needs to match those duties.
Awaab’s Law is being extended to the private rented sector.
This will introduce legal requirements around the investigation and resolution of serious hazards such as damp and mould within set timeframes once the detailed rules are brought into force.
This is a major issue for rent to rent properties, especially where:
Agents should have a clear process to:
Delays create legal risk. They can also lead to complaints, enforcement action and claims for compensation.
The Renters’ Rights Act strengthens local authority enforcement powers.
Councils will have broader powers to investigate and act against non-compliance. This includes powers to require information and, in some cases, powers of entry.
For agents operating rent to rent, this means stronger scrutiny of:
The new framework allows councils to impose:
In some cases, criminal prosecution may also be available.
The Act also strengthens rent repayment orders. These can be an important enforcement tool where certain offences have been committed.
That makes compliance even more important for rent-to-rent operators, particularly where there are complex ownership and management arrangements.
Rent to rent complaints can be more complex than standard agency complaints because there may be more than one legal relationship involved.
Depending on the facts, complaints may involve:
This makes good complaint handling essential. Keep records, respond promptly and make sure tenants know where to direct complaints.
If you operate a rent to rent or guaranteed rent model, review your setup now.
Check:
A clear agreement, strong compliance process and prompt handling of property issues will reduce risk for you, the owner landlord and the tenant.
Rent to rent can still work, but it needs tighter control than many operators expect. The Renters’ Rights Act raises the standard for complaint handling, property conditions and compliance, and requires a strong approach to day to day management.
If you are offering this model, now is the time to review your documents, confirm your legal role and make sure your processes are fit for the new rules.
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