Legal advice for landlords
Over the past few years, the government has passed a raft of new laws and regulations targeting the private rented sector. It’s likely that this will continue. With this in mind, landlords need to do their homework and make sure they understand and comply with new and existing legislation alike. Landlords who don’t keep up-to-date with the latest regulations run the risk of fines or even jail time.
Wondering where to start and where to look for advice? Good news. We’ve put all of our legal advice for landlords in one place. From the 2019 tenant fee ban to evictions to writing tenancy agreements, we’ll be sharing the legal essentials that landlords need to know.
New tenancy laws: The tenant fee ban
Letting agents in England, Scotland and Wales are now banned from charging tenants fees to setup new tenancies. It’s likely that Northern Ireland will follow suit in the future. The government’s aim is to crack down on the ‘hidden costs’ of renting a property, from tenancy fees to exorbitant deposits.
Up until now, tenants have been charged fees for a range of services involved in setting up or renewing a tenancy – from referencing and credit checks to carrying out an inventory, right down to administrative things like phone calls and postage.
Since there have been no rules setting out how much they can charge, different agents and landlords have been levying a variety of fees for the same service. Many renters have paid out excessive amounts.
Going forward, there will be a fixed list of acceptable charges such as rent, deposits and charges for early termination of tenancy. You can find the full list of ‘permitted fees’ below:
- A refundable tenancy deposit capped at no more than five weeks’ rent where the annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above
- A refundable holding deposit (to reserve a property) capped at no more than one week’s rent
- Payments to change the tenancy when requested by the tenant, capped at £50, or reasonable costs incurred if higher
- Payments associated with early termination of the tenancy, when this termination is requested by the tenant
- Payments in respect of utilities, communication services, TV licence and council tax
- A default fee for late payment of rent and replacement of a lost key / security device, where required under a tenancy agreement
Everything outside of this is banned. It’s also worth noting that there are some differences between the rules in England (listed above) and those for Wales. Welsh landlords should get familiar with their local regulations.
The likely outcome is that letting agents will pass the charges they used to pass onto tenants onto landlords instead. And in turn that landlords will pass them onto tenants in the form of slightly increased rents. Here’s how landlords should respond to this new legislation.
We get asked a lot of questions about the tenant fee ban, so have rounded up some of the most common here.
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New tenancy laws: deposits
As we’ve already mentioned, landlords are now limited to charging the equivalent of five weeks’ rent as the security deposit on a property. They can only charge the equivalent of one weeks’ rent for a holding deposit.
There are also much stricter rules around how quickly deposits must be paid back.
You can find specific FAQs around the new deposit regulations here and a useful description of what these new rules mean in practice for landlords.
We recently spoke to one of our customers to find out what they thought of the new deposit regulations and how they’ve responded to them.
Houses in Multiple Occupation (HMO) regulations
The law and regulations surrounding HMOs are quite complex. The government is also cracking down on ‘rogue’ HMO landlords, making compliance more important than ever.
What qualifies as an HMO can vary by council, but as a general rule of thumb, if you’re renting to three or more tenants with shared facilities such as bathroom and kitchen, that’s an HMO. Properties with more than five tenants and three storeys qualify as ‘large HMOs’, which are subject to different rules and require a license to operate
Smaller HMOs with less than five tenants may also require a license depending on local council rules. If you’re unsure, contact your council to find out if you need a license.
Whether you need a license or not, HMOs are subject to specific regulations around room size, electrical, gas and fire safety that all landlords need to comply with. As well as the standard rules around deposit protection and fitness for habitation.