Current Landlords and Lettings Legislation 2016
Being a landlord is a complicated thing. If you’re in the business of allowing people to live in buildings you own in exchange for regular payment – or, if you aspire to – then you’ll have to navigate a minefield of laws, regulations and red tape. And in order to do so without stepping on something unpleasant, you’ll need to educate yourself about just what these laws mean for you and your business.
If you’re a landlord, then you’re in a position of huge responsibility. This legislation is there to ensure that you’re taking every sensible measure to ensure that the quality and safety of your property is of the appropriate quality, and that you’re letting it out in a responsible manner.
Suffice to say, the penalties for failing to abide by this legislation can be severe. In this article, we’ll go through some of it, and see exactly a landlord might do to avoid a substantial fine or a prison sentence.
The Housing Act
The most obvious and significant laws governing landlords are those introduced in the Housing Act 2004, which came into force slightly behind schedule on October 2006. It introduced enormous changes in the way that properties were inspected, registered and licensed, as well as changes to the way that deposits were dealt with. The definitions of all of these terms became a great deal stricter. The act also introduced the Housing Health and Safety Rating, through which councils could quantify whether properties were unsafe. The housing bill has since been supplemented with the 2012 localism and 2015 deregulation bills – the latter of which we’ll look at in a moment.
Failure to comply with these laws can result in jail time, exorbitant fines and lifetime bans from ever renting property again – which, if you’re a landlord, is very bad for business indeed.
The Deregulation Bill
The 2015 deregulation Bill came into effect just last year, and brought with it significant changes to the laws governing evictions. This makes it more difficult for a landlord to evict a problem tenant. If the landlord fails to abide by deposit laws, or does not properly serve a Section 21 notice, or if the tenant alleges that the property is in disrepair, then the landlord will have no legal right to evict them.
It’s this latter condition that has seen landlord associations so apoplectic. They claim that, since it’s a mere allegation of disrepair that’s required to block an eviction, a non-paying tenant can simply reside indefinitely in a property, and effectively and legally squat in it. Though the landlord might ultimately prove that the allegation was frivolous, this process can take many months – resulting in thousands of pounds of lost rent.
The new rules governing section 21 notices (the notices given to a tenant who is being evicted) are also much tighter. They must now be issued only after the tenure is four months old – basically giving tenants a grace period in which they cannot be evicted. Moreover, the notice must give the tenant two months to get their affairs in order before moving out. This effectively gives the tenant six months to do as they please without fear of eviction.
Some Common Tactics
If you’re looking to evict a troublesome tenant, then you should be prepared to come up against a brick wall of legal problems. Wily tenants will know how to bend the law in order to drag this process out for as long as possible – even if they know that there’s no way that the whole thing can end in anything but an eviction.
They’ll do this using a number of different tactics. Let’s consider some of the most common. The first defence is ignorance. They might claim never to have received a notice of eviction. They might claim that they did receive the notice, but that it didn’t comply with the rules of civil procedure, or those of the court. They might dispute the amount that they owe in rent arrears, or withhold money for repairs.
They might, so to speak, ‘pull a sicky’ – further delaying their day in court. They might even make a counter claim, asserting that the property is unsafe and in disrepair. They might even sue you for injury, harassment or unlawful eviction. And, if you haven’t been careful and professional with the process, they’ll likely be successful. More likely, they’ll simply delay things further with frivolous and vexatious litigation, and thereby cause a nuisance to your business.
The only thing one can do when faced by this sort of thing is to ensure that you’ve put into place water-tight procedures that give problem tenants no legal grounds for objection – and to be selective about who you grant tenancy to. After all, it’s a great deal easier to not allow people to stay in your property than it is to remove them once they’ve moved in.
Gas and Electricity
If you’re a landlord, you’ll want to provide your properties with gas and electricity. But such things are, if not dispensed in a responsible manner, very dangerous. Consequently, there exist a few regulations designed to ensure that this happens.
You need to ensure that any gas equipment has been installed professionally. This means enlisting the services of a qualified engineer who is listed on the Gas Safe Register. Installing the equipment is just the start of it, however – once it’s all in place you’ll need to have an engineer return annually to make sure that each appliance is functioning properly and safety. Not only is this a legal requirement, it’ll help to improve the longevity of your property and its equipment, and save you money in the long-term.
You’ll also need to provide new tenants with a copy of the gas safety check record, and to provide existing ones with the record within 28 days of the check. Similar responsibilities apply to electrical equipment. You’ll need to ensure that all sockets and light fittings are safe, along with any appliances they supply with power, like kettles, toasters and such.
If the unthinkable should happen, and someone should be injured or killed as a result of faulty electricity or gas, then the landlord might find themselves on the receiving end of substantial legal action. If you’re letting out a sufficient number of properties, then the unthinkable can and will happen on a regular basis – and so is worth thinking about.
Similar legislation requires that tenants be protected by their landlords against fire. Specifically, the Regulatory Reform Order 2005 places the duty on the person in control of the building to perform regular fire risk assessments. These are key to preventing fires before they happen. A tenant must have an adequate means of escape from a fire – windows must be able to open and close easily, and doors should ideally be self-closing in order to limit the spread of fire and (perhaps more importantly) smoke.
The majority of fire deaths occur not as a result of burning, but with suffocation as a result of smoke inhalation. It’s difficult, then, to exaggerate the importance of smoke detectors. Smoke detectors, broadly speaking, come in two different varieties – photoelectric ones, which measure interruptions of a beam of light, and ionization ones, which are better at detecting fast-flaming fires. The best variety combine the two, ensuring that all eventualities are covered.
If you’re letting out a block of flats, then you might want to include more specialised fire-safety equipment, like extinguishers and blankets, along with at least one smoke alarm in every corridor.
Tenancy Deposit Law
The Housing Act 2004 also made it a legal requirement that all deposits collected by landlords of letting agents be registered with either a custodial or insurance-based scheme, which between them protect all deposits on ASTs in England and Wales.
In 2012, this legislation was augmented with new requirements, which insist that the deposit-holder comply with new deposit-protection laws. The landlord must, within thirty days of receiving a deposit, lodge it into a scheme to insure it.
They must then provide the tenant, along with anyone else who might have provided the deposit, with a few details about how the deposit is being protected. These include the contact details for the deposit scheme provider, the conditions of the scheme and an explanation of how to apply for the deposit’s release, and what to do in the event of a dispute.
Failure to do this can be punished with mandatory fines. A landlord might be summoned to court and ordered to return or protect the deposit, and to pay the tenant an amount which is more than the deposit’s value, but less than three times its value. Clearly, avoiding such a circumstance would be desirable.
We’ve just scratched the surface of the voluminous body of legislation covering letting in the UK – and in doing so we’ve demonstrated that there’s much for landlords to ponder. Whether you’re just getting into the business or you’ve been around for a while, then it’s vital that you appraise yourself of your legal duties – or pay someone qualified to do it on your behalf!