Being a self-managing landlord is scary, you’re responsible for keeping on top of the 150+ pieces of legislation that apply to private rented housing that, should you fall foul of any of them, could see you on the receiving end of hefty fines and even a prison sentence. This article tells you what you need to know to be a legally compliant landlord in England (though references to local authorities will be with Leicester City Council in mind, each local authorities may have slightly different rules). These tips should enable you to put your best foot forward in the turbulent landscape of being a landlord in 2019.
How to be legally compliant
Being a landlord isn’t what it was twenty years ago where we could get away with poor standards of housing and a “like it or lump it” attitude when it came to dealing with tenant complaints. Today, it only takes ONE bad tenant to make your life a misery should you step a single toe out of line.
Things you must know:
- How to rent guide – regularly updated and you’re not informed
- Smoke alarms and changes in legislation
- Gas Safety
- Minimum Energy Efficiency Standards & Exemptions
- Deposit registration and prescribed information
- Tenancy set up & Renewals
- Identity Verification
- Proof of right to rent
- Service of notices
- Professional contracts
- Deregulation Act
- Immigration Act
- Homes (Fitness for Human Habitation) Act
- General Data Protection Regulations (GDPR)
- Fines upwards of £30’000 and possibly being sent to prison
- Banning orders
- Fire Safety
- Minimum space regulations
- Consumer protection regulations
If you are unsure of your duties under any of the above, we would highly recommend giving us a call on 0116 321 4970 or emailing [email protected] to instruct us to manage your property because you are managing it wrong. Click here to see what’s included in our management services.
Requires you to verify the Right to Rent of EVERY occupier, not just the tenants.
If someone moves in or is staying overnight on a short to long term basis and you haven’t done right to rent checks, you’ll be in breach.
If you aren’t aware someone has moved in and you haven’t done right to rent checks, you will be in breach.
If a child turns 18 and you haven’t done a right to rent check, you’ll be in breach.
Penalties: £6’000 fine and/or 6months in prison.
Repairs & Maintenance
You are responsible for the health and safety of your property.
You may be required to provide evidence of what repairs have been carried out.
Health & Safety obligations toward contractors and workman. When you instruct a contractor to carry out work in your property, you are responsible for their health and safety and if they injure themselves because you haven’t taken adequate measures to comply with Health & Safety regulations, you will be in breach.
Health & Safety laws mean you will become the site manager of any works carried out by your contractors and this makes you fully liable for any harm caused to your tenants, their property or the contractors themselves.
You are responsible for your contractors and any repairs that are carried out in the property, this means you are also responsible for:
- Ensuring contractors are accredited and trained in the work they carry out.
- Adequate safety training is provided to your contractors in health & safety in the workplace, even if they are self-employed or a limited company.
- Making sure they have enough public liability insurance cover to protect your interests in the event of a claim
You become Site Manager under Health & Safety regulations when repairs are being carried out meaning you have a duty of care to your contractors to provide a safe working environment. If they aren’t adequately trained or prepared for the job and injure themselves or die as a result, you will be liable for this and any unsafe working conditions.
You will need to provide PPE in certain working conditions should contractors not have this and where contractors refuse to wear it in conditions it would normally be required in, they should be dismissed.
Likewise, if you have work carried out that is legally required to be done by qualified/authorised professionals (e.g. Gas Safe registered, CSCS, etc) and the contractor doesn’t meet the legal requirements to do the work, you will be liable.
If you’re not registered with the ICO, you are in breach of the Data Protection Act 2018.
If you have tenants and don’t use an agent, you will be processing and holding the tenant’s personal data whilst you hold it, because of this, you are required to be registered with the ICO.
If you use a managing agent, we hold and process the data instead of you meaning you will be exempt from registration.
Penalties: Up to 4% or £250’000 (whichever is higher) fine.
You will not be able to serve a valid Section 21 notice if you haven’t complied with the law in most cases.
You will almost certainly not be able to serve a valid Section 21 notice if you haven’t set the tenancy up or renewed/extended the tenancy correctly.
Section 21 is being abolished meaning you will not be able to serve this in future. Section 8 grounds are expected to be improved and we are looking at Scotland’s implantation of removing “no-fault” evictions from their landlord’s arsenal as a framework of what to expect in England. After careful consideration, this may not be the end of the world of landlording as we know it.
Deposits & Inventories
Deposits are now limited to 5 weeks rent and if you have deposits held that are equivalent to more than this, you will be in trouble within the next 12 months as you fall in breach of the Tenant Fees Act 2019. You need to refund any excess deposit to the tenant before you will be able to evict them.
Deposit disputes will almost certainly not work in your favour should you have failed to include a thorough inventory detailing a schedule of condition for all fixtures and fittings within a property.
If the deposit has not been protected correctly, you will be liable to pay the tenant up to 3x the amount of the original deposit. Refunding the deposit DOES NOT absolve you from liability.
If deposit information has not been served on the tenant correctly, you may lose the right to evict the tenant using Section 21.
You need to serve a valid gas safety certificate on the tenant every 12 months, failure to do so could lead to a £6’000 fine for each offence and/or 6 months in prison.
If you fail to serve a gas safety certificate correctly, you will forfeit the right to evict your tenant using Section 21, effectively converting any tenancy into an Assured Tenancy. Likewise, if you fail to serve a valid gas safety certificate on a tenant prior to the tenancy commencing, you will be in breach of the act and this CANNOT be remedied. You will not be able to serve a Section 21 under any circumstances if you haven’t served a valid gas safety certificate before the tenancy commenced.
Tenants are entitled to a reasonable amount of space to live in. This can present issues if you’re converting a property into single units.
If minimum space requirements aren’t met, the property would likely become unmortgageable if you split the title and sold it to the tenant meaning the sale could fall through if the tenant or other buyers can’t raise alternative means of finance.
Minimum Space Regulations are not compulsory (yet) but each local authority will have their own rules with regards to how they handle minimum space requirements and this will often be a consideration in any planning applications.
Minimum Energy Efficiency Standards
Rental properties in England need to have a minimum energy efficiency rating of E or above unless they are exempt.
Exemptions usually apply to HMOs and listed buildings where improving the energy efficiency would result in altering the fabric or décor of buildings.
Exemptions may also be granted where improvements exceed reasonable costs. However, you will be expected to spend up to the limit of reasonable costs set by the government and still fall below the required E rating before an exemption will be given.
Banning orders can now be issued to landlords who are found in breach of legislation or local housing policies applying to the private rented sector.
A banning order can result in you being forced to use an agent and will apply to all properties you own, not just the property or properties that are found to be in breach.
- Banning orders can be issued for a large range of reasons including:
- Breach of housing health and safety regulations
- Defying an improvement notice, HMO licensing rules or breaching other housing legislation or local policy
- Severe criminal convictions unrelated to housing
More enforcement powers are being handed to local authorities and bigger incentives for them to enforce legislation is resulting in more landlords being prosecuted for breaching regulations that they weren’t aware of or thought didn’t apply to them.
Local authorities can use income generated from fines to reinvest in the enforcement of the private rented sector.
Licensing is being rolled out across the country to generate more funds for local authorities to enforce housing regulations.
YOU are responsible should things go wrong.
If you’re unsure, use a professional agent.