Legislation for landlords: Everything you need to know
Legislation can be a minefield for landlords. Regulations and laws relating to the private rental sector are increasingly in a state of near constant flux, meaning changes can be easy to miss. And this can be costly for landlords who fail to comply.
A 2019 government survey into private letting found that many landlords are not compliant with basic new legislation. For instance, 38 per cent of those questioned did not check a tenant’s right to rent, while 48 per cent did not issue tenants with the government’s ‘How to Rent’ guide. Meanwhile, over 30 per cent of landlords failed to provide carbon monoxide alarms. A potentially deadly mistake.
As a landlord, you have to stay one step ahead of changes in the law. Here’s everything you need to know.
1. Do you need a landlord licence?
At present, the only UK-wide ruling that requires a landlord to obtain a licence is if a property is let as an HMO (House in Multiple Occupation). A property is classed as an HMO if at least three tenants live there – forming more than one household – and the toilet, bathroom or kitchen facilities are shared.
Courts are known to hand out huge fines to shared house landlords who do not obtain HMO licences. One landlord in Burnley was recently fined £56,000 for the offence. For more information on the exact guidelines for owning an HMO, please check our full guide or the GOV UK license details.
Individual councils are also able to issue selective licensing, through schemes that tackle poor housing stock or anti-social behaviour. This includes a 2018 ruling that allows them to define what constitutes an HMO in their area. An estimated 160,000 more rented homes will need a licence under these decentralised powers. In this instance it is a good idea to check with your local council to see if your property is classed as an HMO and therefore license it correctly.
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2. Have you carried out right to rent checks on all tenants?
Landlords must check that any tenant or lodger over the age of 18 can legally rent residential property in England. A person will have the ‘right to rent’ in the UK provided they are in the country lawfully, in accordance with immigration laws.
Prospective tenants still need to be checked even if they are not named on the tenancy. Original documents will be required to prove a tenant’s right to be in the UK, such as ID cards or passports.
In a 2016 podcast, Paul Shamplina – Brand Ambassador for Hamilton Fraser – discussed the importance of right to rent and the requirements now placed on landlords.
It covers why right to rent was introduced and what you need to do to comply with the law, and is worth a listen for any landlord.
Right to rent was further updated following the Windrush scandal, after the Home Office accepted that some immigrants might not have proof of residence despite being legally in the UK. Details of the change can be found here.
Landlords can use the government’s step-by-step online process to check their tenants. Be warned: failure to check can result in an unlimited fine or up to five years in prison, so it is important to get this right.
3. Have you protected your tenant’s deposit in a licensed government scheme?
Since 2007, landlords have been legally obliged to protect tenancy deposits in a government-approved deposit protection scheme.
There are three government-registered schemes in England and Wales eligible to protect a rental deposit. Hamilton Fraser is the parent company of ‘mydeposits’, one scheme that provides simple deposit protection for landlords, letting agents and tenants. Find out more at mydeposits.co.uk
These schemes ensure that the deposit is kept safe during the tenancy, and they also arbitrate over disputes between tenants and landlords. Deposits can be used to cover damage to the property (not including fair wear and tear) and cleaning issues at the end of the tenancy.