As a landlord, the legal landscape is complex and ever-changing, and understanding the intricacies of compliance is important to both managing successful tenancies and avoiding costly pitfalls. With the UK property market undergoing big changes following the general election on 4th July 2024, alongside the Renters' Rights Bill making headlines and expected to be introduced to Parliament in the autumn, more changes are on the horizon. So what’s the latest?
Here’s what we know so far about the Renters’ Rights Bill: Formerly acknowledged as the Renters’ Reform Bill but revised by the new Labour government to be the Renters’ Rights Bill is an overhaul of the private rented sector. Amongst several proposed changes, it includes strengthening tenants’ rights and protections, abolishing Section 21 ‘no-fault evictions,’ and giving tenants the right to request a pet. In addition, the government’s background notes on the bill highlight the creation of a digital private rented sector (PRS) database that brings together key information for landlords, tenants, and councils. This database is proposed to help landlords quickly understand their obligations and demonstrate their compliance. What does this signal? The current legal obligations for landlords in the PRS are complex.
In the meantime, this guide will unravel everything you need to know about landlord property legislation in England as of August 2024. From the basics to the most recent updates, we dive into the key legal obligations you need to know.
Fees, deposits, and tenant protection
First things first, let’s identify some of the key things relating to rent, deposits, and your legal obligations surrounding fees.
Under the Tenant Fees Act, landlords and letting agents are required to adhere to specific caps on tenant deposits:
- For properties with an annual rent under £50,000, the deposit must not exceed five weeks' rent.
- For properties with an annual rent of £50,000 or more, the deposit is capped at six weeks' rent.
- For holding deposits, which are used to reserve a property, landlords can only charge up to one week’s rent as a refundable deposit.
You are also legally obliged to protect tenancy deposits in a government-approved tenancy deposit scheme (TDP). Once the deposit is protected you must provide the tenant with the correct information surrounding their deposit as documented here, within 30 days.
The only costs your tenants should incur when signing a new tenancy agreement are a holding deposit (refundable in most instances), rent, and a security deposit. The Tenant Fees Act 2019 makes any further ‘permitted’ payments very clear, and any supposed charges that fall outside of this list are prohibited. Failure to comply with any of the above incurs several penalties.
Finally, you cannot increase your tenant's rent during a fixed term unless you agree or your tenancy agreement allows it. With the upcoming Renters' Rights Bill, you can expect the rules around rent increases and rent review clauses in tenancy agreements to change.
Right to Rent
Right to Rent checks are the starting point to ensure tenants have the right to rent in England. No sooner than 28 days before the start of any agreed letting you must complete the relevant due diligence, these checks are mandatory and non-discriminatory. You must:
- Obtain original documents such as a passport or ID - or view your tenant’s right to rent online if they have a ‘share code’.
- Check the documentation for every tenant and ensure validity - even if they may not be listed on the tenancy.
- Maintain a copy, keep a record of the date of the “check” and oblige by GDPR - you must be registered with the ICO for GDPR and be fully compliant when processing your tenant's data.
Not forgetting your Consent to Rent as a Landlord. If you have a residential mortgage on a property you plan to rent out, you need consent from your mortgage lender. Consent to Rent is a formal agreement between you and your providers that allows you to rent out your property. It’s worth noting that your lender may require a change in your mortgage to buy-to-let. Alongside this your insurance provider will need to be notified and your coverage changed from home to landlord insurance. Failure to do so can result in denied claims if an issue arises.
How to Rent guide
Following the relevant checks and consent, every tenant must receive a copy of the How to Rent guide at the beginning of their tenancy. This guide is produced by the government providing advice to tenants on the rental process in England and Wales, not only does it detail their rights and responsibilities as a tenant but also your legal obligations as a landlord.
Failure to provide the most up-to-date version of the How to Rent guide to tenants (found on the GOV.UK website) at the start of their tenancy leaves you in trouble. If you don’t provide one, it can be used against you if legal disputes arise and as it stands at present, prevent you from serving a Section 21 Notice should you need to. While Section 21 has made the headlines as a result of the Renters’ Rights and Reform Bill, and is set to be abolished, this guide, amongst other critical legislation is unlikely to go anywhere anytime soon.
Gas and electrical safety regulations
You are legally required to ensure the gas and electrical systems and appliances in your property (or properties) are safe for tenants throughout their tenancy.
Every rental property in the UK must hold an up-to-date gas safety certificate, known as a Landlord Gas Safety Check (LGSC) which you can obtain via a registered Gas Safe Engineer. Your LGSC needs to be renewed every 12 months, the documents need to be supplied to tenants when they move in and within 28 days of the most recent check at renewal and lastly, you must keep a record of each safety check for at least two years.
According to the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020, a full electrical inspection must be carried out at least once every five years by a qualified electrician. After the inspection, you will be provided with an Electrical Installation Condition Report (EICR), which notes any issues that need to be addressed. You have a given period of 28 days to rectify any faults and you need to share written confirmation of the completion of the remedial works from the electrician to both the tenant and your local authority within the time frame for completion.
You must provide tenants with a copy of the EICR within 28 days of the inspection and for new tenants before they move in. While Portable Appliance Testing (PAT) is not an official legal requirement for single-let properties in England and Wales, councils may request it. If your property comes furnished, it would be recommended. And if you own a House of Multiple Occupancy (HMO), you may need PAT testing to be licensed by your local council.
Fire safety, smoke, and carbon monoxide regulations
Following the Regulatory Reform (Fire Safety) Order 2005, completing a fire risk assessment for your premises is a legal requirement if you are responsible for a building that is not a ‘single private dwelling’. HMO properties and any other rented properties that aren’t classified as ‘single privates’ and have communal living spaces like kitchens are legally required to have a fire risk assessment.
If you are the “responsible persons” of tenants within high-rise buildings or HMOs, letting on a room-only basis, then you need to ensure you are compliant with The 2022 Fire Regulations that came into force in England on 23 January 2023. These regulations stipulate that you must not only provide more information to occupiers on fire door safety and evacuation routes in a clear, easy-to-understand, and up-to-date format (and provided to your tenants once they move in) but that you must display this in a very conspicuous part of the building, such as the entrance hall.
Under The Smoke and Carbon Monoxide Alarm (England) Regulations 2022 you are required to install a working smoke alarm on every floor of your property where there exists at least one room used as living accommodation. Likewise, you must ensure a carbon monoxide alarm is supplied in any room that contains a fixed combustion appliance such as a boiler, stove, or heater. If those devices become faulty, you are legally obliged to repair or replace them once notified.
London Fire Brigade has several helpful resources that go into more detail on these requirements.
Legionella
You must also assess the risk of Legionella, as part of your responsibilities under the Control of Substances Hazardous to Health Regulations 2002. These assessments are crucial for keeping the property in line with the Homes (Fitness for Human Habitation) Act 2018. This leads us to…
The Homes (Fitness for Human Habitation) Act 2018
This Act updated the Landlord and Tenant Act 1985, placing a responsibility on landlords to ensure that their properties are fit for human habitation. This includes keeping the property safe, healthy, and ultimately free from hazards both from the beginning of and throughout a tenancy. Damp, natural light, water supply, and drainage all fall under this act as the responsibility of the landlord, you can read more on your duties at GOV.UK.
Minimum Energy Efficiency Standards (MEES) requirements
To boost energy efficiency across the UK, the government introduced the Minimum Energy Efficiency Standards (MEES). These regulations require all properties - both residential and commercial - to have a minimum Energy Performance Certificate (EPC) rating of 'E'. This is particularly important for landlords when starting new tenancies or renewing existing ones.
However, as of April 1, 2023, this regulation expanded to include all existing tenancies, meaning that even if your property has long-standing tenants, it must now meet this 'E' rating requirement. Failure to comply with these standards could lead to fines of up to £5,000 per property and may prevent you from renting out your property..
Come 2030 the EPC rating for rental properties is set to rise to a minimum of 'C' as part of the government’s Warm Homes Plan. While that’s still a few years out, it’s worth being mindful of the energy efficiency updates you might need to make to your property to mitigate the all-at-once impact at a later date.
Repairs
Landlords are responsible for maintaining the structure and exterior of their properties under Section 11 of the Landlord and Tenant Act 1985. This includes addressing issues with the roof, walls, chimneys, and drainage systems to ensure the property remains in good condition.
For landlord advice and trusted letting agents call upon Urban Village Homes
With all the changes afoot, having an experienced and reliable estate agent by your side is more important than ever. At Urban Village Homes, we’ve spent over 30 years guiding landlords and tenants through the complexities of property management and evolving legislation in and across South London.
If you want to attract the right tenants and ensure you are doing everything you need to, to be and remain compliant, our team is here to help. From marketing to maintaining the smooth running of your property and everything else in between Urban Village is here to provide helpful, expert, and personalised support to ensure a seamless and successful letting experience from start to finish.
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