New Legislation Affecting Landlords
Following on from our article last month on the changes happening with buy-to-let mortgages, we take a look at some other recent key legislation which will impact the rental market.
Housing and Planning Act 2016
This controversial new law took its time going through both the House of Commons and House of Lords last year, and aimed to address a wide number of issues, from affordable housing to recovering abandoned properties.
One of the more relevant areas of this act was in regard to dealing with rogue Landlords; allowing authorities to capture them more effectively and introducing tougher punishments for offences. The relatively long list of these offences includes:
- Renting out a property to an illegal immigrant
- Renting out a property that is deemed unsafe by a Local Authority
- Failing to carry out works to the property required by a Local Authority to prevent any risks to the health and safety of Tenants
- Illegally evicting a Tenant
- Using or threatening violence against a Tenant
- Using the property to cultivate cannabis
- Theft or criminal damage
- Making fraudulent applications for housing benefits or committing identity theft
- Collusion with a Tenant to commit criminal offences including supplying illegal drugs and tax evasion
It will come as little surprise to know that all of the above were already illegal before this act came along, however up until recently, there was nothing stopping unscrupulous Landlords from renting out property again and again, often committing repeated offences.
A Local Authority who has reason to believe a Landlord should be banned from renting can now apply to the First-tier Tribunal for what is called a Banning Order, preventing a Landlord from legally renting out a property for a period of 12 months. Any breach of this order would be a criminal offence, with imprisonment of up to 51 weeks and fines of up to £30,000.
Landlords and Letting Agencies committing these offences will be added to a database, enabling Local Authorities to monitor their activity and target enforcement actions appropriately.
Immigration Act 2016
Whilst the Right to Rent checks have been a legal requirement since December last year, this new act builds on some of those measures and outlines the heavy punishments for non-compliance.
This act included a huge draft of legislation aimed at illegal migration and punitive measures for rule breakers. Keeping our focus on the rental sector, some of the key new rules are as follows:
- Any migrant who is not in the country legally can have their privileges revoked, including bank accounts being frozen and having their driving license revoked
- It is criminal offence for a Landlord to knowingly rent a property to an illegal migrant, with punishment on conviction being a jail sentence of up to 5 years and an unlimited fine, on top of the £3,000 civic fine
There is a new form of notice to be served if you as a Landlord have been notified to terminate the Tenancy of someone who is in the country illegally, available on the gov.uk website:
There is also a new form of mandatory ground of possession for a Landlord because of this; 7B.
Currently, an Electrical Installation Condition Report (EICR) is optional for Landlords in England, however this is very likely to change soon in the private rental sector and become mandatory.
A Landlord has always had a duty of care towards their Tenants, stemming from the Landlord and Tenant Act 1985, the new measure simply formalises it.
The EICR was originally referred to as an NICEIC certificate (National Inspection Council for Electrical Installation Contracting). It is an official document which is produced following an assessment by a qualified and insured engineer of a domestic or commercial electrical installation.
The general recommendation is for an EICR to be carried out every 10 years or after a change of occupancy (this may not be needed for shorter lets of a few years or less). It consists of a visual inspection of the installation, dead testing and live testing .
Since 2016, Tenants have already been able to demand reasonable improvements to be made by the Landlord to a property to improve the energy efficiency.
Starting from 1st April 2018, all private rental sector property that is subject of a new or renewing tenancy must have an EPC rating of E or above. This is not a particularly hard barrier to overcome in a lot of smaller properties, particularly flats, however in larger detached houses, particularly those where no improvements have been made recently, it could be quite a large task to bring them up to scratch.
From 1st April 2020, all properties in the private rental sector must comply with this legislation, including existing tenancies.
Breaches of this legislation (minus a very few exceptions) could result in a civil penalty of up to £4,000.
An important point to note however, that a Landlord in breach of these regulations who continues to let out their property does not affect the legality or validity of the Tenancy itself, and thus rent still continues to be payable.