14:12 PM, 1st August 2019, About 2 years ago 11
Many landlords contact Caridon Landlord Solutions to see whether they are following the correct procedures when entering into a letting agreement with a tenant, this has increased ten-fold following a raft of changes introduced by the government such as The Deregulation Act, How to Rent, Homes (Fitness for Human Habitation) Act 2018, Universal Credit, the list goes on.
Failing to comply with your legal obligations as a landlord see you face costly mistakes further down the line, particularly if the relationship between with your tenant breaks down and you seek to recover possession of your property.
To help landlords, CLS has put together some key checkpoints to make the process easier and to ensure that you are complying with the new regulations:
Create an inventory listing all fixtures and fittings as well as the condition of the property. We would recommend that you appoint a reputable local company to carry this out on your behalf. If you are renting the property furnished, furniture must meet the minimum safety standards, must have the appropriate safety labels attached and appliances should be PAT tested. At the start of tenancy, the tenant should be provided with a copy of the inventory signed by both parties.
Create a Tenancy Agreement but if you have not done this before, use a letting agent or specialist organisation such as Caridon Landlord Solutions to ensure it contains all the correct details.
We would always recommend including a six-month break clause in the agreement, meaning you can issue the tenant with two months’ notice – Section 21 (no fault eviction). That way, if the arrangement is not going well or you need your property back for your own personal reasons, you can do so. However, the government is currently considering abolishing Section 21 so this may change in the future.
A break clause also provides the tenant with freedom, as they can provide written notice after month four.
Minimum energy efficiency standards and Gas Safety
Launched in April 2018, minimum energy efficiency standards (MEES) mean that newly-rented homes and those with renewed tenancies must have an energy performance certificate (EPC) rating of E or above.
On the day that the tenant signs the agreement it is important that you issue the tenant with an EPC
However, from 1 April 2020 these rules will extend to cover existing tenancies too, meaning landlords can no longer rent out homes with an EPC rating of F or G – or face fines up to a maximum of £5000 if they continue to do so.
If the property has a Gas supply, under the Gas Safety (installation and Use) Regulations 1988, you must also provide a Gas Safety Certificate prior to, the tenant moving in. You must also keep record of the last 2 years GSC and issue a copy to the tenant.
It is the law to carry out a GSC every 12 months using a registered Gas Safety Engineer and leave the tenant with a copy of the report.
In addition, a copy of the latest version of the ‘How To Rent Guide’ must also be provided to the tenant and the tenant must satisfy Right to Rent.
Homes (Fitness for Human Habitation) Bill
The Homes (Fitness for Human Habitation) Bill came into effect on 20th March making it a requirement for all social and private landlords (or agents acting on their behalf) in England to ensure their property is fit for human habitation at the beginning and throughout the duration of the tenancy. Failing to do so gives tenants the right to take legal action against their landlords.
If the tenant has paid you a deposit you will have to register the deposit with a government approved scheme such as My deposits, DPS or TDS. Under each of the schemes you will have two options, a custodial scheme, where the company holds the deposit on your behalf, or insurance scheme, where you can hold the monies and pay a fee to protect the deposit.
Once the deposit is protected you will need to provide proof and details of the scheme to the tenant and issue them with the Prescribed Information.
The deposit must be protected within 30 days of receiving the money. If you or your agent fails to do so, you are liable to the tenant for a penalty of up to three times the deposit sum and you cannot serve a valid section 21 notice.
Although not a legal requirement, as a landlord we would strongly recommend you have Landlord insurance (which includes building insurance), not only to protect your investment but also your tenant. Tenants should also be encouraged to have contents insurance to cover their own belongs against theft or damage.
In some areas, under the Housing Act 2004, Local Authorities are enforcing selective licensing where it is compulsory for the property to be licensed if rented out. Please check whether your property falls into the designated area as you may be subject to a fine of up to £30,000 if you do not comply.
Client Money Protection
If you are using an agent, please check that they are part of a Client Money Protect scheme. From 1st April 2019, it is a legal requirement for all letting agents in England England’s to be members of a Client Money Protection scheme. Those who are not members are now trading illegally and face a fine of up to £5,000.
Tenant Fees Bill
On 1st June, the Tenant Fees Bill came into force which means tenant deposits are capped at five weeks’ rent (or six for tenancies that cost more than £50,000 a year). This means that landlords and letting agents can no longer charge fees for services such as tenant referencing and inventories etc.
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