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, CEO ARLA Propertymark

Landlords: are you up to date with legislation?

For landlords lettings legislation can be a nightmare. Landlords who are 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. 

David Cox, chief executive of ARLA Propertymark, commented on the new laws introduced in 2018 stating: “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.”.

Cox continued, “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” .  

Although 2018 saw minimal new legislation come into play, there are still a number of important changes every landlord should be aware of. At Stirling Ackroyd, we look after properties as if they were our own. Our lettings team is always monitoring for updates. If you want a team that is constantly looking out for you, speak to us today.

We outline the major changes that were introduced in England last year and look ahead the expected lettings legislation in 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. Landlords who haven’t provided tenants with a checklist won’t be able to regain possession of their property as it renders a Section 21 notice invalid. Make sure you provide your tenants with a copy of the latest guide at the start of each tenancy.

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 legislation 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 and if applicable to you, your property must be registered on the National PRS Exemptions Register.

Gas Safety checks

Recent changes mean landlords will have more flexibility when obtaining a gas safety certificate. Landlords can now complete a gas safety record up to two months before the renewal date.

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. These offences include illegally evicting a tenant or not obtaining the correct HMO license and result place offenders on a national database. During this time, the control of the property (including all rent) is passed 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. This means they could pay tax on profits rather than turnover. From April 2018, landlords were only able to offset 50% of their mortgage interest and 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)

Significant changes were made to Data Protection rules in May 2018. This means that landlords need to audit the information they hold about people, how it is treated and how long it is retained.

These rules aren’t straight-forward, we recommend checking the Information Commissioner’s Office 12 step guide to find out more about the new legislation.

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. Additionally, minimum room size regulations have also been published which outline the national minimum size for rooms which are used for sleeping accommodation. They also 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 Tenant Fees Bill aims to reduce the costs that tenants face at the start of a tenancy. 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.

The various laws governing the private-rented sector can be overwhelming.

Speak to one of our experts today to ensure your property is compliant with legislation today.

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