Landlords – do you know how to avoid falling foul of the Deregulation Act?
Happy New Year and welcome back to what I sense promises to be another full on year for the Lettings and wider property sector.
This month I thought I’d highlight several of the problems landlord’s can run into that are linked to the recently passed Deregulation Act, and how to best protect yourself from potential trouble ahead.
A double edged sword
On the whole the Deregulation Act is a vital piece of legislation that was passed into law in 2015 to tackle rogue landlords who give the rest of the industry a bad name and also make tenants’ lives a misery.
That said, the lack of publicity and general raising of awareness to landlords regarding the Act by the Government is worrying. Indeed this may result in many ‘accidental landlords’, with only one or two rental properties, falling foul of some unscrupulous tenants out there, (who in turn give the majority of decent tenants a bad name!) seeking to exploit the legal protections afforded by the Deregulation Act.
Key points to be aware of
Smoke & CO (Carbon Monoxide) alarms – As of 1st October 2015 smoke and CO (Carbon Monoxide) alarms have to be fitted to all rental properties. Smoke alarms have to be fitted to every floor with habitable living spaces and CO alarms in every room where there are solid fuel burning appliances such as coal burning fireplaces, woodburners etc. Failure to have working smoke and CO alarms fitted is punishable by law with large fines.
Therefore it is imperative that as a landlord you protect yourself and your tenants by ensuring that not only are the alarms fitted BUT that you check and demonstrate to/with tenants at the booking in inventory and handing across of keys that these are in working order AND obtain signed documentation from your tenants that they agree these are installed and working correctly.
Solution? Ensure you have working alarms fitted to all areas of your property. Any broken or old alarms should be replaced by fully qualified and insured contractors. Always use fixed alarms not portable ones as it has been known for some tenants to remove the portable alarms from the property which leaves both them and your property unprotected! Demonstrate fire and CO alarms are working at the booking in and handing across of keys and obtain signatures from your tenants(s) to confirm they are satisfied that this has been carried out.
This vital act protects you from unscrupulous tenants who may (for whatever baffling reason) choose to remove alarms and then claim that these have not been fitted and report you to the local authority.
EPCs, Legionella Risk Assessment Reports, Gas Safety Certificates and How To Rent Guides – In the same vein as smoke and CO alarms you must also ensure that your tenants have been issued with and that you have signed documentation from them to say that they have received an up-to-date EPC, Legionella Risk Assessment Report (with guidance as to how to reduce their risk of exposure from showers etc), current Gas Safety Certificate and a How To Rent Guide which details their renting responsibilities for your property.
It is critical that you obtain signed evidence that these items have been issued and received. Failure to do so will mean you are UNABLE TO SERVE A SECTION 21 NOTICE AT A FUTURE POINT IN TIME!
Solution? Ensure you have requested and received fully passed certificates from fully qualified and insured contractors for your rental property and provided these to your tenant(s) before the next tenancy begins. EPCs must be made available at the marketing and viewing stage of the property to allow prospective tenants to see how much their chosen property may cost to heat. Copies of the remaining certificates are best issued at the booking in and handing across of keys to tenants – this allows you to demonstrate fire and CO alarms are working and obtain those all important signatures from your tenants(s).
New section 21 notice – All landlords can now only serve a section 21 notice after the first four months of the tenancy have elapsed. You may no longer serve the section 21 at the beginning of a tenancy, as previously practised. The good news about the new section 21 notice is that it’s much simpler for landlords to serve with less chance of falling foul by calculating the wrong dates that the tenancy ends upon. Now you do not have to specify an end date, just at least 2 months’ notice in writing. The only exception to the 2 month’s notice is when both of the following apply:
- the fixed term has expired
- the rental period is more than 2 months, eg it’s paid quarterly
Up until October 2018 the new section 21 notice only applies to tenancy agreements granted after 1 October 2015. All tenancies starting prior to 1st October 2015 are still subject to the old rules (and old notices). However beware – this is only the the case until October 2018 when all tenancies will then be subject to the new rules irrespective as to when they were granted.
Solution? Obtain detailed guidance and access the correct forms and procedures to use from a legal advisor and Government websites such as Gov.uk If in doubt always seek legal counsel from a qualified Solicitor.
Retaliatory Eviction Rule – A controversial area for sure. The Retaliation Eviction Rule was put in place to protect tenants from rogue landlords who were effectively leaving their tenants in properties of appalling states of disrepair. That said, there is now the real flip-side possibility that some rogue tenants may attempt to abuse their landlords and use the Rule to not pay their rent.
Under the Retaliatory Eviction Rule, when there are repair issues tenants must now place their complaints of disrepair in writing to the landlord. As a landlord you now have 14 days to respond to all complaints. Your response should set out when an inspection of the repairs will be arranged, how the repairs will be remedied and the timescale within which these can be expected to be completed.
It’s imperative that you respond in the above time-scale, otherwise the tenant can then make a complaint to the Environmental Health Officer (EHO) at their local authority and possibly try to avoid paying rent, or withhold a proportion of rent.
It has been suggested by others within the rental sector that due to cuts and employee shortages at local authorities an EHO may not be able to attend to investigate the tenant’s complaint for a protracted period of time. In this scenario this could mean you are without rent for a long period of time despite the fact that the tenant still has an obligation to pay the rent under their tenancy agreement.
In the case where a property is in poor condition an EHO can serve an Improvement Notice on the landlord. The landlord then has to remedy all of the works noted in order to address the issue(s). In addition landlords are also unable to serve a section 21 notice within 6 months from the date of the Improvement Notice.
Worst case scenario? Rogue tenants could decide to continuously cause damage to your properties, prevent you from gaining access to assess/address the situation and place complaints to the local authorities in order to avoid paying rent and eviction.
Ensure you carry out thorough due diligence and pre-tenancy checks before you let to your tenant(s) – don’t forget you also have to carry out Right To Rent Checks on all of your tenants by law as well as of 1st February; see my dedicated blog post on Right To Rent here.
Knowing who you are letting to and their past rental history/behaviour can make all the difference. In addition, if managing the rental yourself make sure that you put a set procedure in place that tenants should use to alert you fast to any repairs/issues within the property.
LME Move makes available to its landlord and letting clients a cost effective, cloud based repairs alerts system. This allows tenants to report a repair quickly and easily via smart phone, tablet, PC and phone day or night. It provides a direct way for landlords to be notified of a problem even when they are unable to be reached by phone. Perhaps more crucially, it allows landlords to evidence to local authorities that they are taking their duty of care seriously and shows a full audit trail of all repair issues and resolution time frames to prevent or resolve any dispute.
As the tenant completes the details the software even prompts the tenant to check that the issue isn’t a minor one that can be resolved by simply changing a fuse or checking the fusebox for example. A significant amount of emergency call-outs for loss electrical supply in an evening comes from blown fuses or tripped circuit breakers as everyone rushes home and puts on the kettle!
There are many ways that the lettings industry is vastly improving its game – which can only be a good thing considering the number of the UK population who now live in private rental accommodation. However, conversely, there are now ever more ways that genuine landlords can fall foul of some of the less than sincere tenants out there.
Rental property compliance can be a complex subject area it but doesn’t need to be a nightmare or take up all of your time.
Help and advice is out there if you know where to seek it. The various Landlord’s Associations are on hand to provide advice and guidance and a search of the Government’s websites can help you narrow down what your specific obligations are.
Of course we are here at www.lmemove.com to also assist you with support and nationwide supply and fit of all compliance aspects such as Repairs Reporting Software, Gas Safety Certificates, Portable Appliance Tests (PATs) Electrical Condition Inspection Reports (EICRs), Legionella Risk Assessment Reports, Smoke & Co Alarms and EPCs.
That’s all for this month – here’s to a successful and what I sense will be a rapidly changing 2016 for landlords, letting agents and the rental sector.
Wishing you every success!
Sue Clear is Property Compliance Executive at LME Move
The information contained here is for general information purposes only and does not constitute legal advice. If in doubt qualified legal advice should also be sought when dealing with all rental compliance matters. LM Experts and LME Move accept no liability for any legal consequences, claim or loss that may be incurred relating to information supplied.
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