THE VALUATION
We will be happy to advise you on the current market rental value for the property. Please note that normally the tenant is responsible for outgoings such as gas, electricity, water (including sewerage and environmental charges), telephone, other fuel and council tax, and you will be responsible for outgoings such as service charges and ground rent.
PREPARING YOUR PROPERTY FOR LETTING
There may be steps you could take to improve the prospect of a successful letting and to increase the rent. Ideally, the property should appear in good order externally and inside, be thoroughly cleaned and any necessary refurbishment and repairs carried out before prospective tenants are shown the property. We recommend neutral colour schemes and professional cleaning.
CONSENTS TO LET YOUR PROPERTY
If your property is subject to a mortgage, or is held by you on lease, you may be required under the terms of the mortgage or lease to ask the mortgage company or the freeholder (or head lessor) for permission to let the property. If you are unsure about your position or how to go about asking for permission then it is advisable to speak to a solicitor.
LICENCE AND/OR PLANNING PERMISSION REQUIREMENTS
Licensing and/or planning permission requirements are unlikely for the letting of a normal residential property to one occupant or family but if you have any doubt about the permitted occupancy of your property you should seek professional advice. Where you are letting in circumstances where the property will be a ‘house in multiple occupation’ (HMO) then many local authorities require registration of the landlord and licensing of the property. We can advise you whether the property is likely to qualify as an HMO and whether any registration or licence is required. There are numerous other legislative and regulatory requirements, some with significant penalties, for a landlord of residential property.
THE RIGHT TENANT
We carry out a number of thorough checks on your prospective new tenants such as references, credit check and right to rent checks. All tenants are reviewed and approved by a senior member of staff prior to occupation.
THE TENANCY AGREEMENT
For a residential letting the agreement used is normally an ‘assured shorthold tenancy’ (AST). The tenancy agreement is of course a contract binding on you and your tenant and you should ensure you are familiar with its terms. It is very important to use an up-to-date and properly drafted tenancy agreement and to ensure that the form used is relevant to your particular let. We will provide a form of agreement which is regularly reviewed and updated by specialist lawyers.
We cannot accept responsibility for a tenancy agreement (or for any other documents) introduced by another party (e.g. by you, a tenant, a relocation company, or a solicitor) and which we have not prepared.
You will need to decide on the term of the tenancy, our recommended initial term is for twelve months. The longer the term the longer the period for which you can rely on the rental income (assuming the tenant does not default.
Our lettings agreement provides authority for us to sign the tenancy agreement on your behalf although we will not do so until we have your written instructions that you are happy with the prospective tenant.
TENANT DEPOSITS
The Tenant Fees Act 2019 restricts the deposit that can be taken to 5 weeks rent, (6 weeks if rent exceeds £50,000 p.a.), and when an existing tenancy is renewed the deposit should also not exceed 5 weeks with any excess refunded to the tenant.
If you do not want us to protect the deposit on your behalf, it will be your responsibility to protect it as required by law. We will not hand over the deposit until you have provided us proof of protection. If you have not provided us this proof after 21 days we automatically protect the deposit with MyDeposits (www.MyDeposits.com) and you will be charged at the rate indicated in our lettings agreement.
WHERE THERE IS NO DISPUTE ABOUT THE DEPOSIT AT THE END OF THE TENANCY
At the end of the tenancy (AST), we will liaise with you to ascertain what (if any) deductions you propose to make from the deposit or have already agreed with the tenant. Where you have selected our Full Management service we will help you to try and resolve any areas of dispute within a reasonable time (including obtaining quotations, estimates or arranging contractors on your behalf in accordance with your instructions). Where you have selected our Rent Collection or Tenant Find service, and we hold the deposit, then you need to agree with your tenant what deductions, if any, are appropriate and once agreed we require confirmation in writing from you and the tenant before we can release the deposit accordingly
WHERE THERE IS A DISPUTE ABOUT THE DEPOSIT AT THE END OF THE TENANCY
You must use reasonable efforts to reach a sensible resolution to the dispute as soon as practicable after the tenancy ends. The landlord must agree to the prompt release of any part that does not need to be held back to cover breaches of the tenancy agreement. We will take your instructions at the time regarding the amount to withheld. However this process must be completed within ten days of the tenancy end date.
RENT PROCESSING DURING TENANCY
The following information applies where you have selected our Full Management or Rent Collection service. After collecting the initial rent payment, we will continue to process the rents received from your tenant throughout the tenancy. We will deduct any fees or expenses due, and electronically forward any balance due to you to your nominated bank account. We will endeavour to action all payments within two working days of the rent due date and being notified that the funds have cleared into our account. A full statement of account will be emailed to you.
Where we are processing the rent and rent payments are late, we will issue reminder letters to your tenant(s) as follows: 7-9 and 14-16 working days after the due date. After 28-30 working days, a final reminder is sent advising the tenant that legal action may be taken. At this time, we will contact you and ask for your instructions. You may wish to deal with the matter yourself or consult a solicitor. Please understand it will always be your responsibility to take legal action, instruct a solicitor or protect your position. We can suggest a suitable firm of solicitors on request. Should you choose to deal with the matter yourself, we will assist you where possible, but once a solicitor has been instructed we will take no further action other than assist where appropriate. Please note we will not be held responsible if your tenant fails to pay the contractual rent. If you have taken out Rent and Legal Protection insurance you may have a claim on the insurance against your loss of rent and legal expenses subject to time limits and the terms and conditions of the policy.
INCOME TAX
Resident landlords under current UK tax legislation you have an obligation to declare all rental income received on any property in the UK to H M Revenue & Customs (HMRC). Under the Finance Act 2011, paragraph 18 of schedule 23, we have a legal obligation to inform HMRC of all rent collected on behalf of landlords by tax year.
NON-RESIDENT LANDLORDS
A letting agent for a non UK resident landlord (or the tenant where there is no letting agent and the rent is more than £100.00 a week) must deduct tax at the basic rate from the landlord’s rental income unless HMRC permits payment without deduction.
ONLINE NON-RESIDENT LANDLORD FORMS
Under the Non-Resident Landlords Scheme (NRL), landlords can apply directly to HMRC - Charity, Assets & Residence – Residency Dept. - for approval to receive the rent without tax being deducted, by completing an online NRL form. NRL1i for individuals, NRL2i for companies, NRL3i for trustees. These online forms are available on the HMRC website www.hmrc.gov.uk/international/nr-landlords.htm.
Separate applications have to be made by each owner of a property, including husbands and wives. Applications can be made any time, including before you leave the UK, or before the tenancy has started. If HMRC grants an approval they will write directly to us and issue us with an approval number for you – this is the only way we can stop retaining tax. Where approval is granted, this does not mean that the income is exempt from UK tax, only that tax does not have to be deducted prior to payment. The approval is not transferable and must be in the name of the current letting agent handling the rent
Where HMRC has issued an Approval to a Non-Resident Landlord, we are required to submit an annual return to HMRC, and we will make an annual charge for this submission
INVENTORY/CHECK IN/OUT PROCEDURE AND CLEANING
We strongly recommend that an inventory of contents and schedule of condition is prepared before a tenancy starts. This provides vital evidence in the event that the tenant is found to have caused any damage or removed any items and for that reason it is best to employ a professional inventory clerk. Without a credible inventory it may be very difficult to make any court claim against the tenant for damage or theft and the landlord’s attempt to claim against the tenant deposit may be rejected. However please note that normally the inventory does not include the testing of appliances, testing the central heating system, or moving furniture.
We can recommend and instruct an inventory company to provide you with the best possible service. You would first be asked to approve the cost which varies depending on the size of the property. The landlord pays for the preparation of the inventory (a copy of which should be provided to and if possible agreed with the tenant) and the cost of checking the inventory at the beginning and end of the tenancy.
We strongly recommend that the property is professionally cleaned prior to the commencement of the tenancy, so that this can be noted in the schedule of condition. Without this it is becoming increasingly difficult to make any claim against a tenant’s deposit for cleaning at the end of a tenancy. We also recommend that the receipted invoice for any pre tenancy cleaning is retained as additional proof. This will set the required standard of cleanliness for the property on the termination of the tenancy, subject of course to wear and tear.
COUNCIL TAX AND UTILITY SUPPLIERS
Council tax will normally be paid by the tenant, however, please note that you will remain liable for payment of council tax where you retain any part of the assessed property for your own use or where the letting is categorised as a house in multiple occupation (HMO). In such cases it is important that the tenancy agreement provides for appropriate contributions to be recovered from the tenant(s). This also applies if the property is not the sole or main residence of the tenant.
The law does not permit a landlord to require a tenant to use any particular utility supplier. We will supply you with meter readings (where applicable) as long as the inventory clerk has been able to access the relevant meters at the time of the check in and/or out.
Under the Water Act 2003 a landlord cannot refuse a tenant’s request to install a water meter to the property. Once a meter has been installed, it is not possible to revert to the previous rated system. Section 45 of The Flood and Water Management Act 2010 places an obligation on the landlord to provide the tenant’s contact details to the water company. We will only do this on your behalf where you have selected our Full Management service
VISITING THE PROPERTY
It is very important that the landlord visits the property from time to time to check that it appears to be in good condition and to ensure there are no obvious signs of damage by the tenant or of other unsatisfactory tenant behaviour. The tenancy agreement will provide for the landlord to be permitted to view inside the property at stated intervals on reasonable notice. If you have selected our Full Management and Rent Collection services we will make such visits The aim is to assess the general condition and decorative state of the property (excluding lofts, garages, outbuildings and basements - unless classed as formal living accommodation under Building Regulations). These are not surveys, do not cover latent inherent or structural problems, and do not form part of an inventory check.
REPAIRS AND MAINTENANCE
Where you have chosen our Full Management service we will instruct contractors on your behalf. We act as your agent so that the contract will be directly between you and the contractor. Any recourse in relation to the works or to payment for the works will be between you and the contractor. We cannot accept responsibility for commissioning repairs or maintenance if we are holding insufficient funds. We will not commission major works, such as re-roofing or replacement of a boiler, without your first approving the estimate but we do not accept responsibility for the quality of the work. In the case of minor work required to meet your responsibilities under the tenancy agreement, we will, on your behalf, authorise contractors to carry out work up to £250 (ex VAT). If practicable, for example if there is no urgency, we will obtain your prior consent to incur any greater expenditure. You should arrange for any boilers, stoves and any other appliances using solid fuel, gas or oil to be serviced annually by a qualified contractor in order to ensure they are working efficiently and safely. Should you require us to arrange this please confirm in writing.
Where you have a warranty for a newly built property, or a repair/maintenance/service agreement for the property or for a boiler or other goods, then you must advise us if these include a requirement to employ a named contractor or to obtain prior authority for repairs. If we are not aware of this then we cannot accept liability if your warranty or service agreement is invalidated. We do not accept responsibility for the quality of the works or any other default of a contractor.
WHEN A TENANCY EXPIRES
The tenant may leave the property on the expiry of the tenancy without the requirement to give prior notice to the landlord. The law provides that, even where the term of a tenancy has expired, the tenant may remain in the property on the same terms unless a notice to terminate is served on behalf of the landlord. Such notice will take effect on a date not less than two months after it has been served and not before the expiry of the tenancy term. This notice is known as a Section 21 notice and must be in writing in a prescribed form. Notwithstanding COVID-19 changes to Notice Periods you need to allow a minimum of two months after service for this to take effect before possession proceedings can be commenced should the tenant not leave the property. If the landlord serves a valid notice to terminate the tenant’s right to occupation and the tenant remains in occupation, then the tenant may not be evicted without an order of the Court (and any form of physical interference with the tenant or with the tenant’s peaceful occupation of the property is unlawful). We strongly recommend that in such circumstances you take specialist legal advice. Where instructed we will look to renew the tenancy and apply a suitable rent review. Where the tenant vacates the property by agreement, or in accordance with a court order, it will be necessary for the deposit to be returned to the tenant unless the landlord files a claim (which may be for outstanding rent or damage to the property or its contents) more details are set out below. Major repairs or other works A landlord should advise the tenant of any major repairs, construction or maintenance works due to be carried out to the property, or to adjoining properties, as these could breach the tenant’s right to “Quiet Enjoyment”. Should you be aware or deemed to be aware, this might give your tenant grounds to take action against you for breach of contract.
IF A TENANT DEFAULTS
Where a tenant is in breach of the terms of the tenancy agreement (for example by failing to pay the rent or persistently paying late, by damaging the property or contents, or by making unlawful use of the property or creating a nuisance to others) the landlord is entitled to serve a formal legal notice requiring the tenant to correct the situation within two weeks. If the tenant fails to respond adequately within that time then possession proceedings can be commenced. If the tenant remains in occupation after any court order takes effect then eviction is only possible using a duly authorised bailiff and in accordance with the order. You should be aware that the courts do not always grant possession orders promptly and in some cases will allow the tenant to remain in occupation if arrears of rent are paid. The court may also
take a less serious view about damage to property or contents than the landlord expects. It is also often the case that a tenant who is in default will submit a defence or counterclaim to the court which may, for example, allege defects in the property or lack of maintenance or repairs. Consequently possession proceedings can become complicated, protracted and expensive. The landlord may then be prejudiced by the delay in being unable to re-let the property, or to recover arrears or the cost of repairs from a tenant (who may be unable to pay or difficult to trace irrespective of the court order). For possession proceedings you will need to seek independent legal advice. We will not be responsible for any legal action that may ensue between you and your tenant at any stage during or following the tenancy. Nothing in this guide should be taken as constituting legal advice and we strongly advise landlords to seek specialist legal advice in relation to obtaining possession and recovering arrears of rent and cost of repairs. We can also arrange insurance cover towards loss of rent and legal expenses, and for buildings and contents.
RENT & LEGAL PROTECTION INSURANCE
Where we are managing your property or providing a rent collection service a monthly Rent & Legal Protection Insurance policy can be arranged, which is designed to meet the demands and needs of landlords. Rent & Legal Protection is available when your tenant(s) have been referenced by us in accordance with our criteria and when we have recommended them as suitable. If you have selected the Tenant Introduction service, though there may be alternative policies available.
BUILDINGS AND/OR CONTENTS INSURANCE INFORMATION
It is important to ensure that your property and contents are properly protected. We may be able to arrange buildings and/ or contents insurance for your rental property. The policy is designed to provide cover for many of the perils faced by landlords in respect of their property and contents. It is possible to have just contents insurance or just buildings insurance, depending on your requirements.
SAFETY AND COMPLIANCE
It is important that you understand your legal requirements. Ignoring these responsibilities can not only endanger life but also incur you severe penalties. It may mean you are unable to regain possession of your property.
THE FURNITURE AND FURNISHING (FIRE) (SAFETY) REGULATIONS 1988 AS AMENDED
These regulations apply to soft furnishing such as mattresses, padded headboards, bed bases, sofas, sofa-beds, armchairs, cushions, pillows, furniture with loose or fitted covers, children’s furniture, garden furniture which may be used indoors, etc. All such items are required to meet certain minimum fire safety standards and to display approved labels.
Exemptions: furniture/furnishings manufactured or reupholstered before 1950 and after 1989. When you instruct us to market your property to let, you give us authority to remove, at your expense, any item that does not comply or does not have an approved fire label attached.
GAS SAFETY (INSTALLATION AND USE) REGULATIONS 1998
It is a criminal offence to let a property with gas appliances, installations and pipe-work that have not been checked by a properly qualified and registered engineer. You will need to provide us with a copy of a current Gas Safety Record before the tenancy commences or we can arrange this for you. The tenant must be given a copy of the report within 28 days of the inspection being carried out and in the case of a new tenancy the tenant must be given a copy of the report at the time they take occupation. If you are found guilty of noncompliance, you will have a criminal record and also face a fine or imprisonment, or both. It is important that you check the report when receiving it from the contractor to ensure that all gas appliances are listed on the report and that they have been passed as safe. Any recommended remedial works should be carried out before the start of the tenancy.
We cannot put a tenancy in place unless you have provided us with a current safety check or you have instructed us to arrange this on your behalf. If you do not provide us with a new check before the last one expires we will instruct a test on your behalf with one of our recommended contractors without further reference to you and make any necessary deduction from your account
Landlords can obtain a Gas Safety Record up to two months before the current certificate expires and keep the same expiry date, so not losing the unexpired balance of the previous Gas Safety Record.
ELECTRICAL EQUIPMENT (SAFETY) REGULATIONS 1994
Any person supplying electrical equipment with a rented property must ensure that it is safe, will not cause danger and satisfies the requirements of the regulations. All electrical equipment must be safe and constructed with good engineering practice. The landlord is responsible for providing an instruction booklet for each item of electrical equipment.
PORTABLE APPLIANCE TESTING
ll electrical appliances should be Portable Appliance Tested (PAT) before the commencement of a tenancy and regularly thereafter as directed by the electrical engineer. Electrical Installation Condition Report for Houses In Multiple Occupation (HMO)
THE ELECTRICAL SAFETY STANDARDS IN THE PRIVATE RENTED SECTOR (ENGLAND) REGULATIONS 2020.
Under the above regulations, all let property in England must have a fixed wiring test, and any remedial works undertaken. Tests must be carried out every 5 years and the regulations state that properties must meet the 2018 edition of the IET Wiring Regulations (BS 7671.2018).
This applied from July 2020 to all new Tenancies, any tenancy renewal or where a tenancy turns periodic after that date. Thereafter all existing tenanted property had to have a fixed wiring test in place by 1st April 2021. No new tenancy can start without the test undertaken and remedial work completed.
The electrical safety check report must be provided to the tenant before the new tenancy starts, so needs to be put in hand well before the intended letting is to start. We advise commissioning an electrical check as soon as the decision is made to market the property.
The most common form of electrical test in use is the Electrical Installation Condition Report (EICR). These are only valid for 5 years. An Electrical Installation Certificate for the whole property is acceptable, but not if only for part of the property. Please note these Electrical Installation Certificates are now only valid under these Regulations for 5 years, even if the Certificate states a longer period.
In cases where remedial works are required, these must be carried out within 28 days of the inspection. Once carried out the remedial works need to be certified and this confirmation certification and the original EICR must be provided to each tenant and to the Local Housing Authority within 28 days of completion.
A Local Housing Authority can request a copy of an EICR report and this must be provided within 7 days. Failure to comply could result in the Local Authority issuing a Civic Penalty notice against the landlord of up to £30,000
ELECTRICAL INSTALLATION CONDITION REPORT FOR HOUSES IN MULTIPLE OCCUPATION (HMO)
It is mandatory for any property designated as an HMO, whether or not it requires a licence, to have a current satisfactory Electrical Installation Condition Reports (EICR). A new satisfactory report must be obtained when the current one expires.
Please note: If the property is in our opinion an HMO (whether or not it requires a licence), we will on your behalf instruct a qualified electrician to carry out a new EICR when necessary if you have not notified us that you are arranging this or you do not provide the new EICR in time
BUILDING REGULATIONS PART P (ELECTRICAL SAFETY IN DWELLINGS)
Works, repairs, maintenance, etc. on ‘electrical installations’ in certain areas of a property are known as ‘notifiable works’ and as such must only be completed by a ‘competent person’. Failure to comply with these regulations is a criminal offence, which could result in a fine and/or imprisonment.
BUILDING REGULATIONS (SMOKE ALARM) 1991
It is mandatory to fit mains-powered smoke alarms in new residential buildings constructed after June 1992 - one on each floor.
A mains-powered alarm is not a requirement in older properties, but since October 2015 it is mandatory to have at least one alarm installed on each storey where there is a room wholly or partially used as living accommodation, which must be tested at the start of every tenancy. If the smoke alarm is battery operated you should make sure the batteries are working and the alarm is fully functional at the start of the tenancy. By signing our ‘Agreement for Lettings Services’ you acknowledge that you are aware of your responsibility for providing smoke alarms.
WOOD AND SOLID FUEL BURNING APPLIANCES
Landlords are advised that any fuel burning appliance installed after October 2010 must comply with appropriate Building Regulations. This means that any such appliance must either have been installed by a HETAS approved engineer, who can then self-certificate, or specific Building Regulation Consent should have been obtained.
Under these regulations a carbon monoxide detector will also have to be installed in the room where the stove is located. The landlord will then be responsible for the ongoing maintenance and repair of the stove and the detector whilst it is in the property. You should ensure the chimneys are swept at least once in every twelve month period.
For appliances installed before October 2010 this there is no specific requirement for certification, however landlords must check that they are safe before and during each letting, and as part of this we strongly advise that the chimneys are swept every year.
Since October 2015 there is a legal requirement that carbon monoxide detectors must be installed in any room where there is a solid fuel heater and tested at the start of each tenancy.
LEGIONNAIRES DISEASE
The Health and Safety Executives have issued a new Code of Practice for assessing the risks of Legionella in residential property. We recommended that as a landlord you should carry out a risk assessment of your property prior to any letting especially if there are open water tanks, redundant pipes, cooling systems or a swimming pool. We request that a copy of any written risk assessment is provided upon instruction. By signing our ‘Agreement for Letting Services’ you acknowledge that you are aware of your responsibility for the safety of the tenant at the property and confirm that you have considered all risks regarding Legionnaires Disease. Should you want us to arrange a Legionella Risk Assessment on your behalf please confirm this in writing, the cost of this is set out under ‘Additional Charges’ in the ‘Agreement for Letting Services’. Further information is available at http://www.hse.gov.uk/legionnaires/symptoms.htm.
General safety
It is your responsibility to ensure that the property you are offering for letting is safe and meets the requirements of the Housing Health and Safety Rating System, and if you are not certain whether your property complies then you should seek independent professional advice from a Health and Safety expert.
OTHER RELEVANT LAW AND REGULATION
HOMES (FITNESS FOR HUMAN HABITATION) ACT 2019
In England this Act now gives tenants the right to take direct legal action against their landlord if their property is in such poor condition that it is `not fit for human habitation’ at the beginning and throughout the duration of a tenancy, they can seek damages plus request that the property is brought up to a good state of repair.
The Act sets out what will be considered under this legislation, namely Repair; Stability; Freedom from damp; Internal arrangement; Natural lighting; Facilities for preparation and cooking of food; Water supply; Drainage and sanitary conveniences; Ventilation; and facilities for the disposal of waste water, plus any of the 29 hazards covered in a Housing Health and Safety Rating Assessment.
Landlords are well advised to ensure their property is in a good state of repair and that any issues with heating, hot water, damp, condensation and ventilation are identified and remedied. Defending a tenant’s claim could prove to be expensive with having to instruct lawyers and expert witnesses, therefore we recommend any issues of disrepair are investigated immediately and rectified.
HOUSES IN MULTIPLE OCCUPATION (HMO)
Broadly an HMO will exist when one building (e.g. a house) or part of a building, (e.g. a flat), is lived in by two or more individuals who do not live together as a single household and who share one or more basic amenities. It can also apply in certain circumstances to a building, or part of a building, which consists of self-contained flats but which was not converted to the standards set by the 1991 Building Regulations and still does not comply with those regulations. It is a statutory requirement that an EICR is obtained for such properties. This report must be renewed every five years and will involve the inspection of all existing electrical installations.
MANDATORY LICENSING
Some HMOs are subject to mandatory licensing, and if your property is affected by this you must supply us with a copy of the licence to enable a tenancy to proceed. An HMO is subject to a mandatory licence if all of the following apply:
a. The building or part of the building (see above) is classed as an HMO, and
b. It is occupied by five or more people, who form two of more households, who are sharing one or more basic amenity.
Where you have let out your property to five or more people, who form two or more households, or propose such a letting you must have obtained a license or risk prosecution and a significant penalty.
WASTE STORAGE AND DISPOSAL FOR HMOS
In England landlords are required to provide adequate waste storage facilities in line with their local authority’s rules. If they fail to do so they could face a fine
ADDITIONAL LICENSING
Local authorities have the power to introduce additional licensing for HMO properties and are permitted to set different criteria to those for mandatory licensing. Typically, these criteria will be more stringent and will differ from one local authority to another.
It is the owner/landlord’s responsibility to apply for any required HMO licence and comply with the HMO legislation as detailed in the Housing Act 2004 and the Management of HMOs (England Regulations 2006). This includes obtaining an EICR and the need to carry out a fire safety assessment of the property and keep a log of the findings.
Smoke alarms must be checked and maintained in full working order, all necessary fire safety equipment should be provided and means of escape clearly indicated and kept free of obstruction. It is a landlord’s responsibility to ensure that any fire extinguisher provided to the property is serviced on an annual basis and a record kept of this. In order to be issued with an HMO licence both the landlord and any managing agent will have to meet the ‘fit and proper person’ requirements.
A licence may not be transferred to another person. The cost of an HMO licence is subject to local housing authority discretion.
PENALTIES FOR NON-COMPLIANCE WITH THE HMO REGULATIONS
There are potentially significant penalties that can be imposed for either breaching (management or occupancy) conditions of the licence or for operating an HMO without a licence:
a. Financial penalties up to £20,000
b. Civic Penalty Notice of up to £30,000 per offence.
c. A Section 21 Notice is invalid until a licence is obtained.
d. In extreme cases, a tribunal can additionally order that rent be repaid to tenants
Some local councils may require all HMOs to have planning consent for change of use from “family” use to “HMO” use. For further information and to clarify if your property requires a licence/planning consent please contact your local housing authority.
SELECTIVE LICENSING
In certain parts of the country local authorities now require every let residential property within a selected area to be licensed whether or not it is an HMO. Before introducing additional licensing, a local authority must demonstrate that there is a particular market need to justify such a scheme as part of its overall local housing strategy. As with other licensing schemes local authorities can charge a fee for issuing a licence and failure to comply with the licence conditions can lead to a penalty being imposed on a landlord.
HOUSING HEALTH AND SAFETY RATING SYSTEM (HHSRS)
The Housing Act 2004 introduced this system for local authorities to assess housing conditions in England and Wales and it is the owner/landlord’s responsibility to ensure that properties are let in a suitable condition. This is a “health and safety risk assessment” method of inspecting and approving rental accommodation.
This legislation is complex and covers 29 different areas of risk and hazard, which will be weighted and graded, depending on how serious they are. This considerably extends the 9-point Housing Fitness System of the Housing Act 1985 used previously.
The system provides a method of grading the severity of threats to health and safety in a dwelling, working on the assumption that a dwelling should provide a safe and healthy environment.
For this purpose there are four groupings of housing profiles,
a. Physiological requirements - damp and mould growth, excess cold, excess heat, pollutants
b. Psychological requirements - space/crowding, security, lighting, noise
c. Protection against infection - domestic hygiene, food safety, pests/refuse, personal hygiene, sanitation/drainage, water supply
d. Protection against accidents - falls (e.g. associated with baths, between levels, stairs, handrails), electrical hazards, fire, structural collapse, entrapment.
The assessment process considers the severity of each hazard by reference to those people who, based on age, would be most vulnerable to that hazard - even though those people may not actually be living in the property at the time, as the Act also considers any potential visitors to the property. For further information please contact your local housing authority
MINIMUM ENERGY EFFICIENCY STANDARDS (MEES)
Under The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, from 1 April 2018 it will be unlawful for landlords to grant new tenancies, extend or renew a tenancy for a property that has an energy efficiency rating of F and G on its EPC. This would include a tenancy moving from a fixed term to a statutory periodic tenancy.
From 1 April 2020, all existing properties with an EPC rating of F or G will be classed as “unrentable”, Including those already rented out and will need to be brought up to a minimum E rating.
The landlord will need to make improvements to the energy efficiency of the property, in order to achieve this an assessment needs to be carried out to firstly ascertain what works have been carried out since the EPC was produced which would raise the rating and secondly, what improvements are required to raise the EPC band to a minimum level of E. There is some funding available for the recommended improvements, which can be one or a combination of the following:
• A Green Deal Plan;
• Energy Company Obligation;
• Funding provided by government, local authority or third party at no cost to the landlord; Where funding is available to cover the cost of the recommended improvements the landlord will be required to undertake them.
The “no cost to the landlord” exemption is no longer available.
Under the rules’ landlords will be expected to contribute up to £3,500 (inc. VAT) per property to make energy efficiency improvements to raise a property’s EPC rating to a minimum of an E.
If the cost to achieve an EPC E exceeds £3,500, landlords will be able to register a `high-cost’ exemption on the PRS Exemptions Register providing that they submit three separate quotes from different installers that evidences a higher cost.
These regulations come with some fairly heavy fines for noncompliance, £2,000 if the breach is for less than 3 months rising to £4,000 if the breach has been going on for 3 months or more.
Further information is available from The Energy Efficiency (Private Rented Property) (England and Wales ) Regulations 2015: www.legislation.gov.uk/uksi/2015/contents/made. Landlords are advised to check their property’s EPC rating and if it’s an F or G then seek professional advice to work through any assessment, identity works required, sources of funding and what exemptions (if any) could apply. We would be happy to discuss and explain this with you in greater detail.
DEREGULATION ACT 2015
Under the Deregulation Act 2015, where a tenant has reported a repair then this needs to be adequately responded to and addressed within 14 days otherwise the tenant can escalate this to the local authority. The local authority can take action and serve a Relevant Notice, at which point a Section 21 notice cannot be served for 6 months. It should be noted that a Section 21 cannot be relied upon if served before the Local Authority take action and they subsequently do so. N.B. This applies in England only, not in Wales.
In addition under this Act where a property is located in England you will have a legal requirement to provide your tenant before the tenancy starts with a current valid EPC, Gas Safety Record (if applicable) and a copy of the Government’s “How to Rent” Document, an EPC has a 10 year shelf life so will need to be renewed and provided to your tenant if it expires before the tenancy ends. Failure to do so will result in your being unable to serve a Section 21 notice to regain possession. Where on initial letting you instruct us to provide our tenancy agreement, we will supply the required documentation to your tenant.
Finally if there is anything you are unsure or would like any advice then we are always here to help you.