New laws 2020 and what is proposed?
The government have decided to put new laws in place for 2020 which as landlords you’ll need to know about. The industry has had over 127 new laws within the last 5 years. This in turn makes the paperwork needing to be served very substantial.
Lettings law is becoming more complicated and the consequences of not keeping up to date can be devastating. The deregulation bill has made it difficult for landlords. Their paperwork must be correct. We take properties over from private landlords. The paperwork is often incorrect. Some of these issues can no longer be solved easily. For example, a gas safety must be served within 30 days. Not only do you have to serve it on them you then have to have a signed copy returned. If not, you cannot issue them with a notice to quit.
New laws for 2020 are as follows:
Electrical Installation Condition Report – EICR’s
The EICR legislation has been put in front of parliament & has been agreed that EICR’s will be compulsory from the 1st of July onwards. The EICR requires an electrician to test all of the electrical wiring within the property. This alone would ensure some additional costs for landlords. Electrical items have become more stringent for example you have to have a metal fuse board. In February 2020, there was a new electrical standard released (18th edition) which electricians need to adhere by.
EICR’s are now compulsory. They must be carried out every 5 years. It is so important you understand what the requirements are. If works are required from the EICR these needs to be carried out within 28 days. We would seriously suggest that any landlord that has not carried out these reports to do them immediately.
PAT Testing is now required. This is known as portable appliance testing. You have to your appliances tested to confirm they are safe. This is a test of all your appliances that you supply to the tenant to ensure that they are safe.
The legislation is already law however as of 20th March it now includes all existing tenancies. There is a separate article on our website regarding this. We genuinely believe that this will be the new PPI for tenants. The new act ensure all landlords are carrying out works within a reasonable period of time. There is no definition of reasonable but we would anticipate that any works should be done within 14 days. Unfortunately, this is not the case on HMO’s i.e., where there is a license on the property. The new act requires works to be carried out immediately.
This new law is going to be so wide ranging and problematical for landlords. For instance if you have damp at your property & a damp specialist confirms this, then you will be required to carry out the works immediately.
If you don’t the tenants are entitled to make an application to the court for compensation. They could request the judge to return the rent as compensation. The tenant and the landlord would need to provide evidence for any case. This will have to be done within a reasonable time.
EPC’s now require a minimum rating of E for any property. This means that if your rating is E or below, you will not be able to rent out your property. To increase your EPC rating you must carry out a maximum work of £3,000.00.
If you are not sure whether your EPC is correct please do not hesitate to contact us or read our previous article, click here.
Mortgage interest tax relief changes
This now comes to the last section of this particular phase within the tax year of 2021. The interest tax relief has been phased out over the last few years. However as of April 2020 landlords will receive a tax credit on their interest payments of no more than 20%. Landlords have set up limited companies to try and avoid this. However, they may choose to change it to also cover limited companies. You should seek confirmation from your tax advisor.
What is proposed?
Section 21 notices – New Laws
The government are currently changing this law. Please see our latest article here. We are keeping an eye on what the Government wish to do. There is a consultation being entered into to see whether there is a requirement for this. However we have no doubt that the government will try to bring this consultation forward.
Please refer to their website for more information, click here.
Pet friendly tenancy
The Government announced a revision of the tenancy agreement for AST’s in the private renting sector. The revision is intended to make it easier for tenants with pets to find landlords who will accept them.
It will remove restrictions on tenants with pets and encourage landlords to offer flexibility to pet owners. We are waiting for an announcement from trading standards on pet rents, which will be incorporated.
If you have a leasehold flat check your lease. You may have to check with the managing agents. You can always check with the freeholder. We will keep you updated.
Compulsory redress schemes for landlords
This has been a proposal for some time. We are currently waiting for the Government to outline their proposal. They may wish every landlord to be part of a compulsory redress scheme. In future landlords will need to be part of a redress scheme.
Every letting agent must be part of a redress scheme, we are a part of the Property Redress Scheme. If you are with a letting agent, you may be able to use their scheme in future. We anticipate that they will not be and if we already manage your property it will not be an issue. However, if you have property elsewhere and not managed then you will have to go into a scheme.
There is also a requirement by you to have certain requirements such as.
- Firstly, you will need to have a complaints procedure that the tenant can request at any point. This procedure must be outlined in writing so if they wish to make a complaint they can do so.
- Secondly, if the tenant feels you have not dealt with the complaint successfully. They are then they are entitled to ask fort the PRS to step in and adjudicate.
- If the PRS are requested they can investigate any matter on behalf of a tenant and make an adjudication. They can award compensation. This may against the letting agent or the landlord. It is compulsory for the award to be paid. It is down to them. You will be given the opportunity to provide evidence of any problems as well as the tenant will be.
We will keep you advised of when this proposal comes to permission.
There have been 127 laws in the last 5 years. There are more coming in every year. It is so important that you understand what your legal responsibilities are. If you have any issues, please do not hesitate to contact us on 01273 749169. We will be happy to discuss any questions with you.
Renters Reform Bill – White Paper 2022. Update
The Renters Reform Bill was mentioned in the Queens speech in May 2022. The Government have decided to push their plans forward regarding rental reform in order to improve this for private tenants.
The Government says it will deliver the biggest change to the law in a generation. They are bidding to improve the lives of million renters by driving up standards in the private/socially rented sector.
They confirmed their new deal will be put in place for 4.4 million households privately renting across England by extending the decent home standard to the private rented sector for the first time.
The reforms will build a progress the Government has already made in this area. They will ensure all renters have access to secure, quality homes, levelling up opportunities for the 21% of private rented homes who currently live in what the Government believes are “homes of unacceptable standards”.
The Government will bring in new measures that will also be aimed to protect tenants. This relates to the so called no fault Section 21 eviction. This allows landlords to terminate tenancies without giving a reason. This has been outlawed so renters can remain in their homes and communities.
Landlords will still be able to remove tenants from properties but under a Section 8 notice but the full details have yet to be disclosed by the Government.
The Government claims that more than a fifth of those who have moved in the past year did not end their tenancy by their own choice. These Government reforms could impact landlords quite dramatically but the White paper hasn’t yet been delivered.
The Bill however will it claims also strengthen landlords ground for repossession making it easier for them to evict tenants who wilfully don’t pay their rent and are repeatedly engaging in anti-social behaviour.
The housing sector in Michael Gove says
“too many renters are living in damp, unsafe and cold homes, powerless to put it right, and under the threat of sudden eviction
The new deal for renters announced today will help in this injustice, improving conditions and the right for millions of renters.
This is all part of our plan to level up communities and improve the life chances of people from all over the country”.
What is more concerning for landlords that it has been confirmed that there will be a private renters ombudsmen will be created to enable disputes between private renters and landlords to be a set a quicker and low cost and without going to court.
The ombudsmen will cover all privately let properties and make sure that when residents make a complaint, landlords take action to put things right.
In addition, the Bill will also introduce a new property portal to help landlords understand their obligations, give tenants performance information to hold their landlord to account and help councils crack down on poor practise.
The Government will hopefully publish a white paper setting out the full details of the proposals. At this moment in time there is very little detail of the actual proposal there are only headlines.
There has also been some discussion within the recent questions in parliament that the white paper might include some form of rent control. This was confirmed in a question to one of the housing minsters. Again, no detail has been put in place but we understand it will involve some form of rent control.
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