Landlords

If you are a leaseholder, you must ensure that renting your property out is permitted in your lease and falls within the period set out in the lease. Failure to do so may leave you in breach of the lease agreement.

The Home Office has announced that from 1 February 2016, the ‘Right to Rent’ scheme will be extended across England. The legislation comes under section 22 of the Immigration Act 2014. What this means is that all private landlords in England have a legal requirement to check that new tenants have the right to be in the UK before renting out their property. Failure to comply means you could have a civil penalty of up to £3,000.

The NRL scheme operates for rental income paid on or after 6 April 1996 and replaces the old rules under Taxes Management Act 1970. If you live outside the country for 6 months or more per year, you will be classed as a ‘non-resident landlord’. If you want to pay the tax owed on your rental income through your self-assessment, you will need to complete an NRL1 form and be accepted onto the scheme by HMRC. Failure to do so will mean that your letting agent, or tenant if you do not have a letting agent, will deduct the tax at basic rate from your rent and submit to HMRC.

Landlords giving a new tenancy or a replacement tenancy from October 1st 2015 onwards need to comply with the prescribed information requirements for the new Section 21 form. As part of this landlords must provide an up to date version of the ‘How to Rent: A checklist for renting in England’ booklet at the outset of the original tenancy. Landlords are also required to provide a new copy at the outset of any subsequent tenancy, including statutory periodic tenancies, but only if there has been an update to the booklet. If they do not, then no valid Section 21 can be served.

By law, you must have an Energy Performance Certificate (EPC) and provide a copy to tenants when letting a property. Failure to comply with this legislation may lead to a fine of £5000. This certificate must be in place before the property is advertised and a copy must be given to the tenant on move in day. The EPC provides an energy efficiency rating for a property on a scale of 'A' to 'G' with 'A' being the most efficient and 'G' being the least. An EPC must be completed and issued by a qualified and accredited Domestic Energy Assessor. In the rented sector, an EPC is valid for 10 years and can be reused as many times as required during that period. This also forms part of your agreement with the tenant, and in so doing allows you to issue a Section 21 notice.

Since 6 April 2007, all deposits taken by landlords under an Assured Shorthold Tenancy (AST) agreement in England and Wales must be protected by a tenancy deposit protection scheme. Landlords can choose between two types of scheme: a single custodial scheme and two insurance-based schemes. The deposit must be registered with an appropriate scheme within 30 days of initial receipt. Failure to do so can mean the tenant can take legal action against the landlord in the County Court. The Court will make an order stating that the landlord must pay the deposit back to the tenant or lodge it with a custodial scheme. In addition, a further order will be made requiring the landlord to pay compensation to the tenant of an amount equal to between one and three times the deposit. You will be unable to serve a Section 21 Notice on your tenant until compliant with the above conditions and the Court will not grant you a possession order.

Under the Gas Safety (Installation and Use) Regulations 1998 all gas appliances and flues in rented accommodation must be checked for safety within 12 months of being installed, and thereafter at least every 12 months by a competent engineer (e.g. a GAS SAFE registered gas installer). Tenants must be given copies of the Certificate prior to moving to the property, or within 28 days of the check being carried out, if an existing tenant. Breach of the regulations is a criminal offence with the Health & Safety Executive empowered to bring proceedings. Landlords and/or managing agents can be convicted for non-compliance. The standard penalty is a £6,000 fine for each item and/or 6 months imprisonment.

There are several regulations relating to electrical installations, equipment and appliance safety, which affect landlords who are supplying rental property. They include the Electrical Equipment (Safety) Regulations 1994, Low Voltage Electrical Equipment Regulations 1989, the Plugs and Sockets Regulations 1994, the 2005 Building Regulation – ‘Part P, and British Standard BS1363 relating to plugs and sockets. It is a landlord’s duty to ensure that all electrical appliances and fixed wiring in a property are safe. Although there is no legal requirement for electrical safety certificates to be issued to tenants (except in the case of all HMOs) it is accepted that the only safe way to ensure safety, and to avoid the risk of being accused of neglecting your ‘duty of care’, or even of manslaughter, is to arrange electrical inspections and the issue of safety certificates.

From the 1st October 2015 all rented properties must be fitted with a smoke alarm on each storey of the premises on which there is a room used wholly or partly as living accommodation. In addition, carbon monoxide alarms also need to be equipped in any room of the premises which is used wholly or partly as living accommodation and contains a solid fuel burning combustion appliance (i.e., gas fire, log burner, gas hob/oven, boiler etc). Checks must be carried out to ensure that each prescribed alarm is in proper working order on the day the tenancy begins if it is a new tenancy. Failure to do this can result in fines of up to £5000.

The Furniture and Furnishings (Fire) (Safety) Regulations 1988 (amended 1989 & 1993) provide that specified items supplied in the course of letting a property must meet minimum fire resistance standards. The regulations apply to all upholstered furniture, beds, headboards and mattresses, sofa beds, futons and other convertibles, nursery furniture, garden furniture suitable for use in a dwelling, scatter cushions, pillows and non-original covers for furniture. They do not apply to antique furniture or furniture made before 1950, unless they have been reupholstered after 1950, bedcovers including duvets, loose covers for mattresses, pillowcases, curtains, carpets or sleeping bags. Items that comply will have a suitable permanent label attached. Non-compliant items must be removed before a tenancy commences.

Selective Licensing only applies in designated areas. Where it applies all private rented sector accommodation in that area has to be licensed by the Local Authority. The scheme ensures that landlords are deemed ‘fit and proper’ and that licensed properties meet fire, electric and gas safety standards and be in a good state of repair. Licensed landlords must be able to deal effectively with any complaints about their tenants. A breach of licensing conditions is an offence and can result in a fine of up to £5,000. A failure to licence a licensable property is also an offence and can result in a fine up to £20,000. If a property is let on an AST, the landlord loses the right to serve notice requiring possession under section 21 of the Housing Act 1988 until the property is licensed. Rent repayment orders can also be made in some circumstances if the Local Authority or an occupier apply to a residential property tribunal.