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.
The latest government survey into private letting found that many landlords are not compliant with basic 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. Every year brings more stringent legislation and, despite the impact of COVID-19, 2021 is no exception. We’ve included the most recent legislative changes at the start of this guide. There are a number of additional legislative changes that we were expecting later this year, which may or may not happen, such as the Renters Reform Bill and the abolition of Section 21. We will be updating you on these as soon as we hear more news.
While we await further changes, please read on for our comprehensive guide to everything you need to know when it comes to legislation, updated for 2021.
1. Are you aware of COVID-19 measures impacting landlords?
In March 2020, the Government introduced a radical package of measures to protect tenants and landlords affected by coronavirus.
These measures were updated in August 2020 as part of the Coronavirus Act. From that date, landlords have needed to provide at least six months’ notice to their tenants in most circumstances.
Exemptions for complying with this law include where at least six months’ rent has not been paid or where there have been instances of antisocial behaviour or domestic violence. More information can be found on GOV.UK.
At the time of writing there is a ban on tenant evictions due to coronavirus. We will continue to update as the situation progresses.
2. Do you allow pets?
Recent updates to the Government’s model tenancy agreement include the requirement for landlords who do not allow pets to justify the reasons for their policy. From 29 January 2021 the default position will be that responsible tenants are allowed well-behaved pets.
If the landlord objects to a written request from the tenant they must respond within 28 days, also in writing.
3. 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 HMO landlords, and agents, who do not obtain HMO licences.
Individual councils are 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.
It is therefore a good idea to check with your local council to see if your property is classed as an HMO to license it correctly. Landlords should also be aware that there are differences between HMO properties and bedsits which will impact licensing regulations.
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4. 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 are required to prove a tenant’s right to be in the UK, such as ID cards or a passport.
There are no changes expected to the right to rent for EU, EEA and Swiss citizens until 30 June 2021. After this date, new rules will be introduced, although landlords will not be asked to conduct retrospective checks.
Landlords can use the Government’s step-by-step online process to check their tenants’ status for right to rent.
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.
While we await news about the new rules, listen to our podcast on right to rent to make sure you’re compliant.
5. 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.
Take a look at our tenancy deposit protection guidance.
The private rented sector has seen significant changes over the last few years which have changed the rental landscape.
A number of ‘deposit replacement’ options have recently entered the market offering tenants an alternative to traditional tenancy deposit protection. Hamilton Fraser launched its very own deposit replacement product, Ome, in early 2020. Find out more about deposit replacements, and how they could benefit you and your tenants.