Keeping up to date with the latest legislation is critical for landlords. Not only should landlords know what they must do today, but they also need to keep an eye out for future planned legislation so that they can make the necessary preparations.
Gordon & Co keeps up to date with all the latest legislation and makes sure that its landlords comply. Its customers rely on being advised which requirements they must meet, and the team at Gordon & Co stringently check each property and contract to make sure it adheres to the law.
Landlord Legislation Today
There are several pieces of legislation that have been implemented in the last three years with which landlords or agents now need to comply.
Some of these are checks on the property, while others govern the relationship between landlord and tenant or between landlord and agent.
Since April 2021, it has been compulsory for landlords to have an Electrical Installation Condition Report (EICR) which must be supplied to all tenants. These new regulations mean that landlords must have the electrical installations in their properties tested and inspected at least every five years.
There is a fine of up to £30,000 for non-adherence and local authorities can impose an order for remedial works if landlords don’t meet the requirements.
Right to Rent Status
Landlords are now obligated to check the immigration status of tenants and find out whether they are legally allowed to rent a property in the UK. There is a digital home office check which must be completed to validate the status of the tenant. Gordon & Co carries out these checks on behalf of its landlords to ensure that they can let to the selected tenant.
Tenant Fees Act
The Tenant Fees Act came into effect in 2019 and prevents the charging of administrative fees to tenants, restricts security deposits to 5 weeks rent and caps a variety of other costs. Its purpose was to reduce up front costs for tenants seeking a new tenancy and remove numerous barriers to entry for renters.
Breathing Space Regulations
The Debt Respite scheme, more commonly known as “the Breathing Space Regulations”, came into effect in May 2021. This piece of legislation isn’t solely applicable to property debt, but landlords will be subject to these regulations if chasing overdue rent. Landlords should be aware that if they are notified that a tenant is subject to the breathing space regulations, they cannot take action to recover moneys owed until expiry of the breathing space period.
There are two types of breathing space, a standard breathing space and a mental health crisis breathing space. The standard breathing space provides debtors with 60 days of legal protection and prohibit any enforcement action from creditors; the mental health breathing space applies to those undergoing mental health treatment for the entire duration of their treatment plus 30 days. An individual must be assessed by a debt advice provider to be eligible for the Breathing Space Regulations.
Fundamentally, this means that if a tenant is eligible for Breathing Space Regulations, the landlord and its agents must not seek to collect or take enforcement action against the tenant during the breathing space period. If action is taking during this period, the landlord can become liable for its tenants’ costs and any action taken will be deemed void.
Client Money Protection
One new piece of legislation that really benefits landlords came into effect in 2019 and all estate agents had to adhere to the requirements by April of this year. The Client Money Protection scheme protects money that agents hold on behalf of landlords and tenants through subscription to a membership scheme. Landlords should always check that their estate agent is a member of a Client Money Protection scheme.
Gordon & Co are a member of NAEA PropertyMark ensuring that any landlord funds held by us are fully protected.
Future Landlord Legislation
As well as ensuring that they are compliant with existing law, landlords should be mindful of new legislation already passed into law and due to come into effect as well as legislation passing through parliament that is expected to apply in the future. Some of the legislation that will impact landlords in the near future can be found below:
Digital Tax Regulations
As part of the governments Making Tax Digital (MTD) scheme, if turnover from your rental property exceeds £85,000 at some juncture in 2021, you will need to register and start using the MTD system. In 2022, registration will be compulsory regardless of turnover.
Renters Reform Bill
After delays owing to Covid, the Renters Reform Bill remains on the agenda. This bill is expected to significantly alter the landlord tenant relationship. The key elements of the proposed reform package include:
- Abolition of Section 21 – this will mean that landlords must provide a reason to the tenants for ending the tenancy and ‘no-fault’ evictions will no longer be applicable. On the other hand, tenants will be able to end the tenancy by serving the appropriate notice period.
- Strengthening the Section 8 process for seeking possession of a property.
- Creating a new “Lifetime” tenancy deposit model
- Requiring membership of a redress scheme by landlords to improve the standard of rented accommodation • Reforming the enforcement system to make it more effective
- Creating a more efficient possession process in the courts
The Renters Reform Bill consultation results are due to be published this Autumn and Gordon & Co will undertake a thorough exploration of the consultation when it is published.
Pet Protection Bill
Many landlords prefer not to accept tenants with pets for obvious reasons, but 2021 is set to see the passing of the Pet Protection Bill. This bill will provide tenants with a Responsible Animal Guardianship certificate with an automatic right to keep a pet. Landlords can apply for a certificate of exemption if the landlord or other resident has religious or medical reasons not to encounter a pet or if the accommodation is unsuitable for the animal; but these are the only permitted reasons for refusal. The standard tenancy agreement will now include the right for tenants to home a pet as a standard clause.
There is some relief for landlords however, as tenants will have a legal duty to cover the costs for any damage caused by pets. Watch this space for updates and announcements on new legislation and landlord regulations as they come into effect.
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Disclaimer: This blog post is produced for general guidance only, and professional advice should be sought before any decision is made. Nothing in this post should be construed as the giving of advice. Individual circumstances can vary and therefore no responsibility can be accepted by the contributors or the publisher, Gordon & Co, for any action taken, or any decision made to refrain from action, by any readers of this post.