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Landlords: are you up-to-date with legislation?

09 December 2018 / Landlord News

Landlords letting residential property need to make sure they stay up-to-date with a huge amount of legislation. Laws are changing all the time, so keeping up can often be a job in itself. 

We spoke to David Cox, chief executive of ARLA Propertymark, who summed up the new laws that were introduced last year: “In the grand scheme of recent changes, 2018 has not seen a huge amount of new legislation. Instead, it has been a year of preparation for the tsunami of new laws which are to come.”

So, it’s clear that landlords can’t afford to be left behind and those who keep in touch with any changes will stay ahead. “Unquestionably, there are challenging times ahead for the industry, but there is light at the end of the tunnel and those who are planning now will reap the rewards down the line” David Cox said.  

Although 2018 was fairly light in terms of new legislation, there are still a number of important changes every landlord should know. At Stirling Ackroyd, we look after properties as if they were our own, so our lettings team is always monitoring for updates. If you want a team that is constantly looking out for you, speak to us today.

Here, we outline the major changes that were introduced in England last year and look ahead to 2019…

How to Rent Guide

All landlords need to provide their tenants with an up-to-date How to Rent checklist. This applies to all new tenancies, or tenancies that have been renewed from 9 July 2018 and is available from the Ministry of Housing, Communities and Local Government (MHCLG).

Remember that landlords who haven’t provided their tenants with this information won’t be able to regain possession of their property as it renders a Section 21 notice invalid – so make sure you provide your tenants with a copy of the latest guide at the start of each tenancy. At time of writing* the most recent edition was published in July 2018.

New Minimum Energy Efficiency Standards

From April 2018, all rental properties under new tenancies need to have a minimum energy performance rating of E or above. From April 2020, this will apply to all tenancies. If your property isn’t up to standard, take a look at funding options such as The Green Deal.

There are some exemptions, but make sure your property is registered on the National PRS Exemptions Register if they apply to you.

Gas Safety checks

Recent changes mean landlords will have more flexibility when obtaining a gas safety certificate. Put simply, landlords can now complete a gas safety record up to two months before the date it needs to be renewed – much like a car MOT.

Banning Orders and Rogue Landlord/ Agent Database

From April 2018, local authorities can apply to obtain a banning order against any landlord or agent after they have been convicted of an offence, such as illegally evicting a tenant or not obtaining the correct HMO license.

This means they will also be placed on a national database and the control of the property (including all rent) will pass to the local authority for a minimum of 12 months. In these cases, the landlord will still be liable for the property.

The national database isn’t publicly available yet, but a similar database for London can be viewed online.

Mortgage Interest Relief Reduction

Before April 2017, landlords were able to deduct the interest they paid on mortgages from their taxable income, which means they could pay tax on profits rather than turnover. From April 2018, landlords were only able to offset 50% of their mortgage interest. This is set to drop to 0% in 2020. Mortgage Interest Relief has been replaced by landlords being able to offset a basic rate (20%) deduction from their rental income.

General Data Protection Regulations (GDPR)

In May 2018, significant changes were made to Data Protection rules. These changes mean that landlords now need to audit the information they currently hold about people, how it is treated and how long it is retained.

These rules aren’t straight-forward, so check out the Information Commissioner’s Office 12 step guide and read more about complying with the new legislation on this website.

Houses in Multiple Occupation and Residential Property Licensing Reforms

Changes will now mean any property with five or more unrelated occupiers to have an HMO licence; irrespective of the number of storeys in the property. Minimum room size regulations have also been published – these prescribe the national minimum sizes for rooms used as sleeping accommodation and require landlords to keep up with council refuse schemes.

Read more about these changes here.

What next for 2019?

The first major change for this year is the long-debated tenant fees ban. The aim of the Tenant Fees Bill is to reduce the costs that tenants face at the start of a tenancy. Further clarification on the new rules have since been made public. For example, landlords must make sure that security deposits don’t exceed five weeks’ rent and holding deposits must be capped at one weeks’ rent.

The penalties for non-compliance are high, with a fine of £5,000 for an initial breach of the ban. ARLA Propertymark has outlined all the important clarifications on their website.

Another major change for 2018 is the introduction of compulsory Client Money Protection (CMP) for letting agents. From April 2019, all agents must belong to a Government approved CMP scheme, which offers their clients greater protection (Stirling Ackroyd already belongs to such a scheme). The agent must ensure the level of CMP membership provides sufficient cover to compensate clients for the maximum amount of client money that they hold – so make sure your agent has the right cover. The various laws governing the private-rented sector can be overwhelming. If you let residential property and would like peace of mind that every element is safely in hand, speak to one of our experts at your local branch about our Lettings services today, or call 0203 961 7806.

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