RULES & REGS: LETTINGS LAWS AND LEGISLATION

Did you know that there are more than 140 laws and 400 pieces of legislation covering rental property in the UK?

There was a time when lettings was seen as the easier side of estate agency, with sales having the image of more experienced or skilled people. But with the increase in rules and regulations around property rentals, the status of lettings has been completely transformed. Now, landlords and agents need to be thoroughly on top of exactly what is required of them, with hefty penalties for those who fall short.

The extra legislation has helped to improve the quality of rental property and to reduce unsavoury practices within the rental sector. While most landlords take a natural pride in the quality of their rental investments, there was relatively little in place until fairly recently to legally ensure that rented properties were actually habitable. But the declining trend in home ownership among people in their 30s and 40s has resulted in higher tenancy levels and consequently more attention.

Obviously we can't go into every rule and regulation here. Many are common sense and dealt with in standard tenancy agreements, but these are the five areas you'll most likely to encounter as a landlord and that are essential to understand to give your tenancies a good beginning, middle and end.

GAS SAFETY

Most landlords are familiar with current gas safety regulations as they've been around since the 1990s and have remained fairly constant, but there's no harm in reiterating their requirements.

Every rental property with a gas supply must have a Gas Safety Check every year carried out by a Gas Safe registered engineer which covers all gas appliances, pipework and flues supplied by the landlord. That includes the boiler, the oven and/or hob, and tightness testing for gas meters.

The inspection can be carried out up to two months early and the new certificate can be pre-dated to commence at the end of the existing one.

The certificate must be available for the tenants to view and it's illegal for a property with gas to be let without a safety certificate. Doing that could lead to a criminal prosecution.

ELECTRICAL SAFETY

Despite the Government withdrawing its latest tweaks to the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020, the law itself will still come into force.

ARLA Propertymark - the Association of Residential Letting Agents - felt there were too many inconsistencies in the Government's latest wording, leaving too much open to interpretation and little clarity among landlords and letting agents over what the amendments actually meant.

Nonetheless, all new tenancies that begin after 1st July 2020 must have a valid EICR (Electrical Installation Condition Report), and all existing tenancies must have an EICR by 1st April 2021. The reports are valid for a maximum of 5 years and every property must have a valid report for the duration of the tenancy.

Many older homes may not have had their wiring tested for a long time which means that, given all remedial works must be carried out by a certified electrician by the time a tenancy begins, it's wise to have the inspection booked in as soon as you know an existing tenancy is ending.

As yet, failing to comply is not a criminal offence, but it is costly, with fines up to £30,000.

PROPERTY INSURANCE

You may find this surprising, but landlords are not legally required to have buildings insurance in place for their rental properties. However, it would be crazy not to have it and, for any property where you have a mortgage, it will certainly be a condition from your lender that buildings insurance is in place and they may well require sight of the policy. Standard Assured Shorthold Tenancy agreements will also state that buildings insurance is in place, so you'd be going against accepted practice - and probably raising alarm! - by asking for that clause to be removed.

It's also sensible to insure your contents against an unforeseen loss that isn't a tenant's wrongdoing (a leak; an electrical fault; theft). Even an unfurnished property will have a bathroom and kitchen where something might need replacing, or that may require rehousing your tenant while repairs are carried out. While your tenant would still be liable for paying their rent to you, you are responsible for the costs of rehousing the tenant, although only up to the value of the rent (they'd need to pay the extra if they fancied a few nights at the The Ritz!)

The deepest level of insurance goes on to cover non-payment of rent.

GIVING NOTICE

Although you're allowed to give notice at the beginning of a tenancy to vacate at the end of the term, doing so means you can't then exercise any break clause if you wanted to serve an earlier Section 21 notice (one that requires no reason). So we don't recommend it.

The Coronavirus Act means that landlords currently need to give three months’ notice to end a tenancy instead of the usual two, and this will be the case until at least the end of August 2020. Depending on the next review, it's very possible the increased notice period will be extended. This means you should start thinking about your approach to renewals around four months before the end of a tenancy.

The tenant eviction ban has also been extended to the end of August 2020, which means that Section 8 notices (for which the menu contains no less than 14 grounds, including things like rent arrears of two months or more, illegal activities, and being a nuisance) are also on hold.

DEPOSITS & DISPUTES

Most tenancies end quite amicably with minimal or zero deductions. Tenants generally look after their home, and landlords generally don't look forward to the prospect of repairs.

However, in the event that you do wish to retain any or all of the security deposit, there are timescales and procedures to follow. It must be said that without preparing a full inventory and having it signed by the tenants at the start of a tenancy, a landlord's life will be much more difficult with the chances of claiming successfully reduced to almost zero.

You must advise your tenants within ten working days of the end of tenancy that you wish to make a claim. For claims less than the full security deposit, the undisputed sum should be returned within twenty eight working days of the end of the tenancy.

We always look to negotiate direct with the tenant before going to arbitration, mainly because it's usually possible to find agreement, even if it takes a bit of work! But it's also worth noting that, once you agree to arbitration, you instantly remove the possibility of going to court.

For a dispute to go to arbitration, both the landlord and tenant must agree to it. The landlord then has fourteen days to supply quotes and make their case, after which the tenant has fourteen days to respond. The arbitration service will come to a decision, and their ruling is final.

We hope you've found this article useful. If you'd like to read more about current lettings legislation, you can visit the Government's official website at https://www.gov.uk/browse/housing-local-services.

Or you could contact us for a chat about your rental property, or to talk about becoming a landlord. Wherever you're at, we'd love to help.