Landlord Legislation 2020 – Everything you need to know about becoming legally compliant
Are you confident that you are complying with ever increasing landlord legislation?
As a responsible landlord, you need to ensure that your tenant is living in a safe and secure environment. Failure to comply could not only result in the loss of your rights to serve an eviction notice, but also hefty fines, banning orders and even imprisonment in some cases.
This article has been written to bring landlords up to speed with the more prevalent lettings legislation in 2020. We’ve also included a FREE checklist for landlords to download at the end of the article. Feel free to use this as a means of checking that you are doing things correctly.
Consent to Let
If a property is mortgaged on a normal residential product then landlords must obtain ‘Consent to Let’ from their lender. Failure to do so could mean they are in breach of the mortgage Terms & Conditions. Be mindful that not all lenders offer this facility unless the product is a buy to let mortgage in the first place. Those lenders that do grant permission normally only do so for a certain period of time and will often also impose conditions on what type of tenant(s) the property is let to.
It’s important to ensure that this is confirmed in writing as failure to obtain consent could result in the full mortgage amount being claimed back by the lender.
The Gas Safety (Installation and Use) Regulations 1998 dictate that landlords have a duty to ensure all gas appliances, fittings and flues/chimneys are safe. It is imperative that all gas equipment is maintained by a Gas Safe (previously CORGI) registered engineer. Landlords must also ensure that an annual check is carried out on each appliance and flue. Following the check, a record should be provided to the existing tenant(s) within 28 days of completion. New tenant(s) must also be provided with a copy of the gas safety certificate on the start date of their tenancy.
Landlords need to keep copies of gas safety certificates for a minimum of 2 years. However we would advise these are kept hold of throughout the duration of owning the property.
Note: Legally, landlords are not able to move a tenant into a property without having an up to date gas certificate.
We would also recommend showing your tenants how to turn the gas on/off in case of a gas emergency.
Electrical Safety Certificates
Landlords must ensure that the electrical installation within a rental property is safe. This includes all circuits, sockets, light fittings, cookers, kettles and other appliances. As of 1st July 2020, landlords have a duty to ensure that 5 year electrical installation condition reports (EICRs) are carried out for all new tenancies. The regulations will then apply to all existing tenancies from 1st April 2021. Whilst prior to this, and at the time of writing, there is currently no specific legislation pointing to a duty to carry out electrical safety tests (unless the property is a HMO), there are still obligations under the Landlord and Tenant Act 1985 – and other pieces of landlord legislation – to ensure that a property is safe from the outset.
What this means is that landlords can still currently be prosecuted if it is proven that an electrical installation within a rental property is unsafe.
Unsafe electrical systems contribute toward approximately 10% of house fires. They can also cause problems with electric shocks, burns, and even explosions in some cases. Are you prepared to run that risk?
Portable Appliance Testing (PAT)
The majority of electric shocks in the home are caused as a result of faulty appliances. Although there is currently no specific legislation to carry out PAT testing (unless the property is a HMO) it is still a landlords responsibility to ensure that electrical appliances supplied within the property are safe.
The Grenfell Tower fire was thought to have been caused as a result of a faulty fridge, and faulty appliances have often been proven to have contributed towards other injury in the home.
Energy Performance Certificate (EPC)
An Energy Performance certificate (EPC) is required for all properties when being constructed, sold or let. An EPC is a document providing details on the energy performance rating of a property. It relates to boiler efficiency, insulation standards, efficiency of doors/windows and a number of other factors. It also highlights what can be done to improve the energy efficiency rating of the property.
Once completed an EPC will cover a 10 year period and all valid EPC’s be can be located on the national EPC register here. In April 2018 the Minimum Energy Efficiency Standards (MEES) made it unlawful to let a property with an energy efficiency rating of ‘F’ or less. The rules were further extended on 1st April 2020 and now apply to all existing tenancies too. In other words, landlords with properties which are not energy efficient are likely to face the costs of upgrading before being able to let or continue with the tenancy compliantly.
Furniture and Furnishings (Fire) Safety
Furniture and furnishings supplied in rental accommodation must comply with The Furniture and Furnishings (Fire) (Safety) Regulations 1988. Some materials used to fill or cover furniture have been known to cause a fire risk. This is particularly common in older and second hand furniture.
In order to comply, any furniture provided as part of the letting must carry a permanent and non-detachable fire safety label.
Legionella Risk Assessment
Guidance from the Health and Safety Executive outlines a need for Landlords to combat Legionnaires’ Disease in rental properties. This may involve carrying out risk assessments of the hot and cold water temperature and plumbing systems. Dependent on the level of risk, control measures may need to be put into place to prevent the possibility of harmful bacteria forming.
Note: Legionella is more commonly discovered in properties which have been empty for longer periods of time.
Inventory / Schedule of Condition
Whilst not necessarily a legal requirement, an Inventory is a vital part of the puzzle when letting a property. Also known as a Schedule of Condition, this is a document used to detail the full condition of a property when a new tenancy commences. It is signed by all parties as an agreed ‘snapshot’ of the property at that time.
At the end of the tenancy, the schedule of condition is used to identify any damages caused and to then determine deductions from the security deposit. Whilst many landlords believe that an inventory is not necessary, we’ve found that this couldn’t be further from the truth.
If there is a dispute at the end of a Tenancy then the landlord will need to be able to provide proof of the condition of the property at the start of the letting. This is imperative if a tenant disagrees with the funds that the landlord is trying to claim.
Hint: Ensure that the inventory document includes photographs and as much other detail as possible. We even go as far as documenting smoke detectors, meter locations, keys and instruction manuals!
Fire Safety / Carbon Monoxide (CO) Detectors
The Smoke and Carbon Monoxide (England) Regulations 2015 require all rental properties to have at least one working smoke detector fitted on each habitable storey. In addition, landlords are also required to install and maintain a working carbon monoxide alarm in any room where solid fuels are burned. In other words, rooms with wood burners & coal fires will also require a carbon monoxide alarm.
They key thing to consider here is that it is the landlord’s responsibility to prove that this regulation has been adhered to. We are often asked what happens if the tenants take the smoke detector down or don’t replace the batteries? Our response is that as a landlord you should always do whatever possible to safeguard yourself from a legal standpoint. To that end, we always produce a written and photographic record of smoke detection during our tenancy set up, inventories and property inspections.
Depending on the location and/or type of rental property a licence may be required in order to issue a tenancy agreement. There are three types of licence as follows:
- Selective Licence
- Mandatory Licence
- Additional Licence
Selective licensing is a form of licensing imposed by some local authorities and often only covering certain areas within a certain borough. Licensing periods often last for 5 years and can be renewed upon expiry. The idea behind selective licensing is to improve property standards and the management of tenancies by imposing strict guidelines upon the landlord or agent. Nottingham City Council introduced a licensing scheme covering some 30,000+ properties in August 2018, with licences costing up to £890.00.
Mandatory Licensing relates to properties shared by five or more people from 2 or more separate households, otherwise referred to as Houses in Multiple Occupation (HMO’s). A mandatory license must be obtained when letting properties on this basis. The licence imposes a number of conditions on the landlord in relation to maintenance, fire safety, anti-social behaviour and other requirements. A mandatory licence typically lasts 5 years and costs vary dependent on the local authority.
Additional Licensing has been imposed by some local authorities as a means of trying to further regulate certain rental properties. This often applies to homes shared by three or more people forming two or more households. An additional licence is somewhat similar to a mandatory licence in terms of the requirements placed on the landlord.
Failure to obtain a licence (where required) can result in serious fines or prison sentences and so it is important that landlords are aware of the regulations in their chosen location. Find out more about this here.
Housing Health and Safety Rating System (HHSRS)
The Housing Act 2004 places an obligation on landlords to identify risks and hazards within rental properties. As a result, The Housing Health and Safety Rating System (HHSRS) was introduced. This is a risk-based evaluation tool used to make sure that rental properties are safe for the people who live within them. Local authorities often refer to the HHSRS when inspecting properties for possible hazards to health and safety.
A scoring system is used and covers a wide range of areas within the property. This includes structural integrity, fire safety, trip hazards, excess cold and even the potential for noise disturbance. A report can then be created to outline any required remedial works.
The local authority may decide to do an inspection if the tenants have requested one to or if they have other reasons to believe that the rental property may be hazardous. Upon completion, the local authority may impose sanctions on the landlord to carry out works dependant on each risk category.
For many years, landlords in England have had to adhere to certain requirements to ensure all rental properties are fit for human habitation. On Wednesday 20thMarch 2019, the Homes (Fitness for Human Habitation) Act legislation came into force. This is an amendment to the Landlord and Tenant Act 1985, which has subsequently been introduced to further protect tenants in a rental property.
Local authorities use this framework to determine the feasibility of a property for human habitation. The Act gives tenants the opportunity to take their landlord to court if specific requirements are not met. Landlords can also be sued for damages covering the entire length of the contract.
Responsible landlords should consider increasing the frequency of their property inspections to minimise the risk of issues arising. Landlords should also ensure that any outstanding maintenance issues are fixed within a reasonable timeframe. An audit trail should then be kept as a record of all maintenance and condition reports. Click here to find out more.
Right to Rent Checks
Sanctions imposed as part of the Immigration Act 2014 mean that landlords must check that a tenant can legally rent their property before commencing with a tenancy. Unlimited penalties and even prison sentences can be issued to those found not adhering to the requirements.
Initial checks must be carried out and original identity documents must be verified by the landlord. Specific identification documents should be obtained to prove that the applicant is able to legally rent the property. These must adhere to specific government right to rent criteria which can be viewed here.
Landlords are also responsible for conducting follow up checks (where applicable) and ensuring that copies of original documents are held for at least 12 months following a tenancy.
General Data Protection Regulations (GDPR)
Under the General Data Protection Regulation (GDPR) landlords are required to follow specific processes when obtaining and processing tenant(s) data. This involves registering with the Information Commissioners Office (ICO) and paying a yearly fee for doing so.
The GDPR dictates that landlords must follow certain guidelines surrounding the lawful basis for processing data. Tenants must be made aware of how their data is to be processed and records must be kept in line with the GDPR requirements. A privacy notice should also be established and made available to all tenants.
Fines for not complying with the GDPR can be as high as 20 million Euros or 4% of turnover (whichever one is higher) according to the regulation. It therefore goes without saying that this is a very important procedure..
Illegal Eviction / Harassment
There are specific procedures to follow for landlords who wish to evict their tenant(s). Failure to follow the procedures to the letter can result in a judge dismissing any case which ends up in court. Initially – and depending on the type of tenancy agreement used – specific prescribed documents must be issued to the tenant and the correct notice period given.
Should a tenant decide not to leave a property following service of the relevant document(s) a court order is required. Once obtained, the only way for a landlord to then legally evict their tenant is by arranging for bailiffs to attend the property.
Under no circumstances is a landlord able to harass their tenant(s). Landlords cannot throw a tenant out for being in arrears or even for breaking the terms of their tenancy. This can be a tricky process to navigate without the correct guidance.
Landlords are unable to carry out revenge or retaliatory evictions. This means that if a tenant has justifiably complained about the condition of the property or required works, the landlord cannot ask them to leave without proving that this has been handled correctly. It is therefore important that landlords respond to legitimate maintenance requests in a timely manner and keep audit trails throughout the process.
Non Resident Landlord (NRL) scheme – overseas landlords
A landlord with a rental property in the UK but with their usual home outside of the UK will need to sign up to the Non-Resident Landlord (NRL) scheme. This applies to all landlords who live outside of the UK for 6 months or more per year.
Landlords have two options for obtaining rent under the scheme:
1) in full and by paying tax via a self assessment if HMRC allow this
2) by having tax deducted at source by the letting agent or tenant, and subsequently paid to HMRC on a quarterly basis.
Option 1 requires the landlord to first complete and submit form NRL1i. Once approved, HMRC will send a notice to the letting agent or tenant which gives authorisation for rent to be transferred to the landlord in full.
Option 2 requires the letting agent or tenant to deduct tax at the basic rate and subsequently pay this to HMRC on a quarterly basis. An annual return must then also be completed and sent to HMRC.
Failure to comply with overseas landlord tax regulation can result in significant fines.
It’s becoming quite clear that UK government aren’t taking things lightly when it comes to professionalising the rental sector. Gone are the days when landlords can simply buy a property and draw up a tenancy agreement. Instead, dedicated enforcement teams and savvier tenants are cracking down on those who don’t obey the rules.
Landlords simply cannot be too careful when it comes to ensuring that regulations are met. Did you know that there are over 100 individual pieces of legislation currently?
Get your FREE checklist today!
For landlords who wish to tackle the legislation on their own we have created a FREE legislation checklist. Simply download it by clicking the link below.
Alternatively, why not save yourself the hassle and try our Award Winning service instead? We have the systems and procedures in place to ensure that you don’t fall foul of the law. Simply call us today on 0115 981 9651 to find out how we can help.