Hamilton Fraser Academy – Legal Update and Compliance course

Hamilton Fraser Academy recently welcomed letting agents to their offices in Borehamwood for their Legal Update & Compliance training course.

The session was hosted by Susie Crolla, the Managing Director of The Guild of Lettings and Management (GLM), and Paul Shamplina, founder of Landlord Action and Brand Ambassador for Hamilton Fraser.

In this blog, we summarise some of the key lessons and topics highlighted during the course.

 

Good practice

It is important to maintain a high standard of good practice as a letting agent. This involves being professional, keeping a record of all transactions, and being scrupulous at all times.

Susie highlighted the importance of keeping a clear audit trail to ensure that all paperwork is correct and avoid any negligence. Keeping an audit trail enables you to record and observe the sequence of events that happened with a client, which can prove to be useful in the event of a complaint or dispute further down the line. You can choose to either self-audit, or be audited externally.

It’s also good practice to carry out reference checks on all prospective tenants. Reassuringly, all the agents who were present at the course said that they carry out reference checks.

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Core documents

It is also vital to make sure that all paperwork and documentation is up to date and correct. Susie advises agents to use solicitors to draft legal documents, because it’s not uncommon for agents who prepare their own documents to make mistakes with spelling, dates, or wording. You can also make use of accessible online resources – for example, the Government website has a downloadable draft Assured Shorthold Tenancy (AST) document, which can also be amended.

You can provide links to digital documents, which can be distributed and signed electronically. However, it is important to note that sending documents electronically is not always as reliable as traditional mail. For instance, you can’t prove that an email has been received if there is no response – so you may want to avoid emailing highly important documents which require a response within a certain period.

Any Assured Shorthold Tenancy agreement should be compliant with the Tenant Fees Act 2019, and include the following:

  • Grounds for serving a Section 21 or Section 8 notice
  • Rent increase clause
  • Forgotten/remaining belongings clause
  • Clause relating to the property becoming inhabitable
  • Permitted payment clause – payments that tenants can be charged for

Permittable payments which are allowed by the Tenant Fees Act 2019 include:

  • Rent
  • Deposit (Capped)
  • Capped deposit (Holding)
  • Default payments
  • Keys, fobs, security devices
  • Change of tenancy, if the landlord approves
  • Change of rent due date

Any Holding Deposit Form should include:

  • A draft of the AST
  • The Energy Performance Certificate (EPC)
  • How to rent guide

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Section 21

Paul Shamplina stepped in to discuss evictions and give an update on the abolition of the Section 21 rule.

Paul confirmed that the ban on Section 21 is now certain but there hasn’t yet been any clarification on when this will take effect.

“The positive side of the Section 21 ban is that it presents an opportunity for letting agents to demonstrate their value to landlords” Paul commented.

“With all the legislation changes in the industry, agents can position themselves in a specialist role as compliance officers, which is needed now more than ever for landlords who struggle to self-manage.”

– Paul Shamplina, Brand Ambassador of Hamilton Fraser

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HMOs

There are different types of HMO licensing and it is important for agents to be aware of each. They include:

  • Mandatory licensing
  • Additional licensing
  • Selective licensing

In the case of selective licensing different rules can apply depending on the local authority, so you’ll need to be aware of the legislation in your local area.

 

Regulation of Property Agents Working Group (RoPA)

The session also covered some of the regulatory guidelines proposed by the Regulation of Property Agents Working Group (RoPA). The regulatory framework is intended to raise standards within the industry and stamp out bad practice. Some of the key changes brought by the group will include:

  • All agencies operating rental properties will have to be licensed
  • All customer-facing staff employed by an agency business should be licensed and hold a qualification of level 3 or higher
  • All company directors and management agents should be qualified to level 4 (university level)
  • AMP and redress certificates must be displayed in the office – failure to do so may result in a fine
  • A regulating body will oversee compliance to a Code of Practice

With more legislative changes sets to impact the industry, it is more important than ever for all letting agent staff to be fully informed and trained in compliance. Visit the Hamilton Fraser Academy website to find the latest information on courses and training sessions, as well as updates on date changes due to coronavirus.

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