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June 2, 2017 Landlords

Landlord Law Conference update – May 2017

Myself & Liz from the Kent office attended the Landlord Law Conference held in Norfolk in May.

Claire & Liz Daisy Lets & Sales

There were ten talks throughout the day, we were given a 90+ page document with notes from the speakers, including David Cox from ARLA PropertyMark, top Lawyers, Barristers and Industry Trainers.

These are a few key points for our landlords below, put together from notes I made on the day:

 

Brief notes

Tenant fee ban

Tenant Fee Ban

  • The Government Consultation (read document here) closes June 2nd – you can respond to the government directly here until 11.45pm on June 2nd! HAVE YOUR SAY!
  • Likely exemptions:
    Holding Deposits, “In tenancy” management charges – so hopefully a deed of surrender is included too (ARLA has requested this and for agents to keep the referencing/Right to Rent part of the Holding Deposit if a tenant pulls out).
  • LANDLORDS will be banned from taking fees from tenants too.
  • Most likely coming into force Oct 2018, but could be April 2019 depending on the process they use (see graphic).

Government Housing White Paper Feb 2017 (not in force yet)

  • CONSIDERING – electrical testing being mandatory, 5 year EICRs.
  • LIKELY – Mandatory HMO licensing rules – changing from 3 floors and above to ALL amount of floors – any property with 5 tenants.
  • Minimum Room sizes – anything less than 6.52sqm cannot be used as sleeping accomodation – this is USEABLE floor space (not alcoves or eves) 10.23sqm for a couple.
  • Mandatory longer term tenancies will only be for LA Housing or Housing Associations.
  • Minimum EPC with a rating of E comes in, April 2018 (no F or G allowed).
    Tenants can request improvements to a property, but it cannot be at an upfront cost to the landlord, it is capped at £5k currently and the Government led ‘Green Deal’ loans have ended – so currently this is unenforceable!

Gavin Barwell & David Cox

David Cox – President of ARLA Propertymark talks about the impending ban on letting fees for tenants

Housing & Planning Act 2016 changes – not in force yet

  • ABANDONMENT
    Supposed to be a quicker, cheaper alternative to going to court, but actually take around the same time as the usual procedure,  plus it’s fiendishly complicated and it’s best not for anyone to do it themselves!
  • BANNING ORDERS – Due to come in, in the Autumn 2017.
    • No good landlords will have to worry, so none of the landlords we advise (that take our advice on board) should have to worry!
    • If banned, the landlord will not be able to let property in the UK.
    • A tribunal can make the order if a landlord has committed an offence.
    • A breach of a banning order will be a criminal offence subject to unlimited fine, 6 months in prison or a civil penalty of £30k.
    • The Landlord will be entered onto a Rogue Landlord List
  • RENT REPAYMENT ORDERS
    • For breach of Mandatory, Additional & Selective license – Tenant can apply themselves if they realise there is no license.
    • Unlawful eviction
    • Breach of Banning Order
    • Non compliance with a Council improvement notice
    • Only relevant for Universal Credit or Housing benefit – and only the portion of the top up paid by the tenant needs to be repaid.

Tenancy Deposit Schemes

  • The TDS confirmed they don’t like video inventories – pictures and text is still best. They also confirmed criteria for withholding deposits, none of this was new news, so I didn’t make notes on this – the graphic below sums up the main criteria.

TDS

Tenancy Agreements

  • UNFAIR TERMS
    • If you are seen as taking away/limiting a tenants rights by a clause, it will be seen as invalid & unenforcible.
    • Prohibits imbalances in the contract between landlords and tenants obligations.
    • If you are imposing a charge, it has to be reasonable.
    • Prohibitions in contracts – unless you are stopping them doing something illegal, it must be followed by the words “consent not to be unreasonably withheld or delayed”.
    • Clauses need to be easy to understand (explain legal terms).
    • No hidden terms – transparency is key.
    • Charging for key replacements if they are lost / late rent – ok if the charges are reasonable for the time taken.
    • No fires! – A term that is deemed unreasonable. Same for unusual requests or unreasonable requests regarding repairs and cleaning.
    • You can’t make the tenant give more than one month’s noice on a periodic tenancy – you can insert it in the contract as a request, but if it went to court as a dispute for unpaid rent for e.g. for that portion, they could argue it.
  • PETS
    • Do put in the pet clause “not to be unreasonably refused” however there’s a lot of reasons you can reasonably refuse:
      – Future occupants allergies
      – Large dog in a small flat
      – Pet could cause damage
      – Infestations infecting the property
    • If you do allow pets, put all the details of the pet in a clause, and also get the name and details of someone willing to look after the pet if the tenant can’t for any reason (sudden hospital visit etc) – or you will become responsible for the pet! The Dogs Trust apparently have a “Pet Form” to use.

RIGHT TO RENT

  • Started in England in Feb 2016, in Dec 2016 it became a criminal offence to let knowingly to tenants with no Right to Rent. Punishable by fine or 5 years in prison.
  • ALL occupants MUST be listed on the AST including relatives/children (no harm if under 18 too) even if not paying rent. If they look like teenagers, ask for proof of age. If a landlord becomes aware someone extra is there afterwards, they must to a Right to Rent check.
  • Obviously allowing guests for a certain amount of time, but prohibiting other long term guests with a clause.
  • Set number of people permitted to live in the property on contract.
  • Don’t get the tenant’s to sign the contract until Right to Rent checks are done, if you do, a clause needs to go in to provide for compensation if they don’t actually have permission.
  • If tenants are coming from abroad, you can sign a “Conditional Agreement” (Tessa Shepperson from Landlord Law has one)  then when they arrive, do the checks and a new agreement (AST).
  • Company Lets – you don’t need to check the occupants they put in themselves (that’s the company’s job). A clause should be inserted to cover this.
  • Keep documents for 12 months after the tenancy has ended.
  • Be careful about discrimination.
  • A landlord taking over a property from someone else – the previous landlord is responsible for the checks, the person receiving the rent is liable going forward, so you need to ask for the proof they checked, if not available, do it again.
  • If you realise you have rented to a person who has no Right to Rent:
    • Seek mutual agreement within 4 weeks
    • Get out the disqualified person and re-assign the tenancy
    • Use a break clause and evict within 3 months.
  • Eviction without a court order is possible –  New immigration Act 2014

Consumer Law

  • CPR (Consumer Protection Rights)
    These are relevant for letting property too now. You must not hide defects of a property if you know about them. Knowingly painting over damp and mould without treating it for eg – the tenants can walk away and not owe any money as they would get a full refund for up to 1 month of occupancy if they can prove they were mislead, after that they pay rent for maximum of 90 days, they can also seek damages.


Claire Empson

Posted by Claire Empson, Managing Director, Daisy Lets & Sales


 

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