Legislation changes in the rentals market
9th June 2017
9th June 2017
There have been so many legislative changes in the rentals market over the last few years we thought it might be prudent to give an overview on those which have come in to force and those expected shortly.
Right to Rent
The Right to Rent scheme requires landlords or agents to check ID of all prospective adult occupiers in England as from 1 February 2016. Where an adult occupier has a time-limited right to remain, landlords and letting agents, will need to conduct follow-up checks. These need to be made 12 months from the initial check or at the expiry of the individual’s right to be in the UK, whichever is the later. Our fee for follow-up checks is £35.00 plus VAT.
It is the landlord/rentals agents’ responsibility to check if a renewal has been applied for and if not they must notify the home office.
From 1 December 2016, landlords could be charged with a criminal offence if they know, or have reasonable cause to believe, that they are letting to an illegal migrant.
From 1 December 2016 landlords will be able to obtain a notice from the Home Office to end tenancies for occupants with no Right to Rent.
Energy Efficiency Improvements
1st April 2016 tenants will be able to request consent from their landlords to carry out energy efficiency improvements to privately rented properties. The landlord will not be able to unreasonably refuse consent. It will, however, be the responsibility of the tenants to ensure that the works are funded and the intention is that no upfront costs should fall on the landlord, unless the landlord agrees to contribute.
Smoke and Carbon Monoxide Alarms
Private sector landlords are required from 1 October 2015 to have at least one smoke alarm installed on every storey of their properties and a carbon monoxide alarm in any room containing a solid fuel burning appliance (eg a coal fire, wood burning stove) even if it is excluded from the tenancy agreement. After that, the landlord must make sure the alarms are in working order at the start of each new tenancy.
The requirements will be enforced by local authorities who can impose a fine of up to £5,000 where a landlord fails to comply with a remedial notice.
The regulations require landlords to ensure alarms are installed in their properties with effect from 1 October 2015. After that the landlord (or someone acting on behalf of the landlord) must ensure all alarms are in working order at the start of each new tenancy.
Deregulation Act 2015 and The Assured Shorthold Tenancy Changes
In October 2015 there were a raft of changes which were a combination of the Deregulation Act and The Shorthold Tenancy Notices and Prescribed Requirements.
In the main this covered the scrapping of serving Section 21’s at the beginning of a new tenancy agreement and 2 months’ notice period.
Landlords will not be able to serve Section 21s unless the tenant has been provided with
•EPC (energy performance certificate)
•Each new tenancy requires the tenant to be given a How to Rent guide https://www.gov.uk/government/publications/how-to-rent
As of 1st October 2015, if a tenant reports a repair in writing and the landlord fails to respond with an action plan within 14 days then landlords can potentially lose their rights to serve Section 21s. It is likely to become a common defense against Section 21s that the tenant has reported a repair to the landlord and they have subsequently served a Section 21 in retaliation. Landlords need to be prepared for this because judges can use their general case management powers to adjourn hearings, particularly where they think an improvement notice may be incoming.
Legionnaires’ Disease Assessments
The bacterium Legionella pneumophila and related bacteria are common in natural water sources such as rivers, lakes and reservoirs, but usually in low numbers. They may also be found in purpose-built water systems such as cooling towers, evaporative condensers, hot and cold water systems and spa pools.
Health and safety legislation requires that landlords carry out risk assessments for the Legionella bacteria which cause Legionnaires' Disease and thereafter maintain control measures to minimise the risk.
There is a legal duty for landlords to assess and control the risk of exposure to legionella bacteria, but Health and Safety law does not require landlords to produce or obtain, nor does HSE recognise, a 'Legionnaires testing certificate'.
Housing and Planning Act 2016 which is due to be enacted in 2017
The Housing and Planning Act 2016 became law in May 2016 and is due to be enacted in 2017. It covers four crucial points for landlords: electrical safety, client money protection, banning orders and rent repayment.
Experts believe regulations will make Portable Appliance Tests and electrical safety checks on wiring mandatory, with penalties for non-compliance. Parliament is currently looking at the issue of client money protection and legislation stating landlords or their agents must use an accredited scheme for holding client money is expected. Similarly, rules permitting 12-month bans for rogue landlords are anticipated and those landlords who let a property illegally could also face having to repay up to 12 months’ rent to tenants under the Rent Repayment Orders act.
Minimum Energy Efficiency Standards – Expected April 2018
As from the 1st April 2018 there will be a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). The regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches. This guidance summarises the regulations.
Proposed Scrapping of Tenants Fees
In the 2016 autumn statement it was announced that all tenant’s fees would be banned. Whilst this is still in the consultation phase at present many industry bodies are suggesting that instead of an outright ban on fees, that capping is introduced instead. We eagerly await the outcome.
As always, please do not hesitate to get in contact should you wish to discuss your situation or the possibility of a managed service for your portfolio.