Posts with tag: landlord law

Save Your Energy!

Published On: February 13, 2017 at 11:21 am

Tags: energy efficiency,EPCs,landlord law

Martyn Reed, Managing Director of energy performance specialists Elmhurst Energy, looks at energy efficiency legislation affecting landlords:

The energy efficiency standard in private rental properties is amongst the lowest within the UK housing sector. The Government has turned its attention to this market with a stated aim to address this, not just because of carbon reduction commitments, but also due to the high levels of tenants living in fuel poverty.

Last year, two pieces of legislation relating to energy efficiency of properties, which have a real impact on landlords, came into force: the Tenant’s Energy Efficiency Improvement and Minimum Energy Efficiency Standards, both of which are part of the Private Rental Sector Energy Efficiency Regulations 2015.

Martyn Reed, Managing Director of energy performance specialists Elmhurst Energy

This new energy efficiency legislation gives more rights to tenants and sets a minimum standard of energy efficiency. Since 1st April 2016, all domestic tenants have had the right to request consent for energy efficiency improvements. This applies to all privately rented domestic properties let under an assured tenancy and a regulated tenancy. This will be widened to cover an assured agricultural occupancy, protected tenancy and statutory tenancy. There are some exceptions. If the building is exempt from having an Energy Performance Certificate (EPC), then a landlord is not required to provide consent. The tenant must also show that the measures could be installed with no upfront cost to the landlord. However, residential private landlords cannot unreasonably refuse consent to a tenant’s request for energy efficiency improvements if the various criteria are met. It’s imperative therefore that landlords are aware of their obligations and do not get caught out by these changes.

Coupled with this legislation, from 1st April 2018, the minimum EPC rating for private rental properties will be set at a band E. The regulations will initially only apply upon the granting of a new tenancy to a new tenant and a new tenancy to an existing tenant. However, from 1st April 2020, the regulations will apply to all privately rented property within scope, which are those that have an EPC or are required to have an EPC as per existing EPC legislation. While some exemptions apply (including where improvement measures would devalue the property by more than 5%, or where properties are unsuitable for wall insulation) there are penalties if regulations are not met, with fines up to a maximum of £5,000.

So, now is the time for landlords to begin planning and implementing the energy efficiency improvements to their property portfolios.

Hints and tips

Complying with energy efficiency legislation

Assess your property’s energy efficiency rating using an Elmhurst accredited energy assessor to produce a Energy Performance Certificate (EPC). It is recommended that you only rely on a recent EPC as changes in the building, in technology and fuel prices can all impact the EPC recommendations. You can find an energy assessor in your area via a search facility here: elmhurstenergy.co.uk
Don’t get caught out by the Deregulation Act, as EPCs are central to this legislation too. As a landlord entering a short-term tenancy, you risk losing your right to issue an eviction notice under Section 21 if you have not complied with all your legal obligations, including the provision of an EPC.
If your property does not reach energy efficiency rating band E, plan for energy saving measures such as cavity wall, loft insulation, hot water, cylinder insulation or double-glazing. Your EPC will indicate options including estimates of cost, payback and the predicted improvement in your rating.
Landlords with multiple properties may consider using energy efficiency software such as Elmhurst’s Streamline EPC, which can help you to calculate the effect of improvements over your portfolio of properties.

Don’t see the energy efficiency measures as punitive. Remember, energy efficiency measures do require some initial outlay, but will save your tenants money, make their home more comfortable and add to the value of your property run. Think of them as an investment in your business.

For more details on Elmhurst Energy, please visit: www.elmhurstenergy.co.uk

Electrical Safety Checks in PRS Homes Must be Risk Based, Insists RLA

Published On: February 7, 2017 at 9:24 am

Author: Em Morley

Categories: Landlord News

Tags: electrical safety,electrics,Health and safety,landlord law

The Residential Landlords Association (RLA) supports the Government’s plans to introduce mandatory electrical safety checks in private rental sector homes, but insists that the tests must be risk based.

The organisation agrees that compulsory checks of fixed wiring are necessary due to the wide range of homes and standards in the private rental sector, and has proposed a risk based frequency for testing.

Electrical Safety Checks in PRS Homes Must be Risk Based, Insists RLA

There is currently no requirement to bring in regulation for electrical safety checks under the Housing and Planning Bill, so a working group was set up by the Department for Communities and Local Government (DCLG) to discuss the pros and cons of compulsory tests of private rental sector homes.

In a submission to the DCLG, the RLA said that it believes electrical safety checks are a good idea, but risk must be taken into account when specifying how frequently they must be conducted.

The Director of the RLA, Chris Town, explains: “Compulsory five-yearly testing has been brought in in Scotland, where housing is a devolved power, but we need to remember that Scotland has a relatively small population, so what is suitable there is not necessarily suitable here in England.

“The private rental sector in England is huge and extremely diverse, ranging from £1m properties to tiny bedsits and everything in between, and the RLA believes the best course of action would be to bring in a risk based system.

“At the moment, mandatory Houses in Multiple Occupation (HMOs) must have five-year electrical safety tests, as they are deemed to be high risk, suffering multiple and intensive use.”

However, if you take a family home for instance, the system does not experience the same demand, Town points out, so there should be a longer test cycle.

“The RLA proposes a system whereby only high risk properties are placed on a five-year cycle,” he says. “This is not just because of the expense of doing the checks, but the inconvenience to the tenants.”

He continues: “To carry out these checks, every single fixed electrical fitting, such as sockets, switches and light fittings, must be opened up and examined; it is not just a case of plugging in a tester.

“This can take half a day or longer, and is much more intrusive and expensive than a gas safety check.”

The RLA also recommends the installation of Residual Current Devices, which offer added protection for the tenants from electrical shock and can provide extra protection from faulty appliances.

The organisation’s response is now with the DCLG. Civil servants will look at representations from a range of groups to decide whether to bring electrical safety checks forward and, if so, what form they will take.

How do you think electrical safety checks should be introduced?

Important Changes to Lettings Legislation for 2017 and Beyond

Published On: February 3, 2017 at 11:22 am

Author: Em Morley

Categories: Landlord News

Tags: landlord law,letting agents,lettings law,tax changes

Lettings legislation has been making the headlines over the past year, so what can we expect for 2017 and beyond?

From the 3% Stamp Duty surcharge on buy-to-let properties, to the Right to Rent scheme, these ongoing changes to lettings legislation mean that it is more important than ever for landlords to fully understand their responsibilities.

Romans letting agent has reviewed the recent changes and highlighted some key lettings legislation changes for 2017 and beyond:

Buy-to-let tax restrictions – April 2017-2020

From April 2017, mortgage interest tax relief will start to be restricted to 20% for buy-to-let landlords. The restriction could affect investors who are both basic rate and higher rate taxpayers. The changes will have the greatest impact on higher rate taxpayers, and landlords with high mortgage costs and low rental incomes. Due to the changes, some landlords could also be forced into the higher tax rate.

Important Changes to Lettings Legislation for 2017 and Beyond

The change will be gradually phased in from this April:

From 6^th April 2017 – The existing system can still be claimed on the first 75% of landlords’ finance costs, including mortgage interest. The remaining 25% will have the new system applied (basic rate of tax).
From 6^th April 2018 – The amount of tax relief that landlords can claim on the existing system will drop to 50% of their finance costs. The remaining 50% will have the basic rate of tax applied.
From 6^th April 2019 – The tax relief using the existing system can only be applied to 25% of landlords’ finance costs. The remaining 75% will be at the basic rate.

From 6^th April 2020 – Landlords will only be able to claim tax relief using the basic rate of tax. The tax relief will be given as a reduction in tax liability instead of a reduction to taxable rental income.

Housing and Planning Act 2016 – April 2017

This piece of lettings legislation became law back in May 2016, and is expected to come into force by April 2017 – once the second legislation has been drafted. The purpose of the act’s rogue landlord and letting agent database is not to ban property managers from operating. The idea is to enable local authorities to monitor the activity of rogue landlords and letting agents, and effectively target enforcement action. The act covers four areas: electrical safety requirements; Client Money Protection; rent repayment; and banning orders.

Electrical safety requirements – Regulations will require portable appliance testing (PAT) and an electrical safety check of wiring. Timeframes have not yet been confirmed, or which tenancies these regulations will apply to. There will be penalties for non-compliance.
Client Money Protection (CMP) – This will mean that all letting agents must have CMP, which will protect landlords and tenants. A date has not yet been agreed.
Rent repayment – If a landlord is convicted of not having a license for a House in Multiple Occupation (HMO) under the Housing Act 2004, they could be ordered to pay the tenant or a local authority up to 12 months’ rent. The tenant or local authority will make the application to the First-tier Tribunal. An order may be made if the landlord: fails to comply with an improvement or prohibition order; unlawfully evicts or harasses a tenant; does not comply with a banning order.
Banning orders – If a local authority believes that a landlord or letting agent should be banned from letting or managing a property, it should apply to the First-tier Tribunal for a banning order. The ban will last for a fixed term of 12 months. It will be a criminal offence if the ban is breached – landlords/letting agents could be imprisoned for up to 51 weeks or be fined up to £30,000. The rules are expected to be in force by April 2017.

Further guidance is expected from the Government before the database of rogue landlords and letting agents is implemented, which is expected from 1^st October 2017.

Minimum energy efficiency standards – April 2018

Tenants are already able to request consent from their landlords to carry out energy efficiency improvements on their rental properties. Landlords are not able to unreasonably refuse consent.

However, from 1^st April 2018, rental properties entering into new lets or renewals will be required to have an Energy Performance Certificate (EPC) rating of E or above. A penalty of up to £4,000 will be imposed for breaches. The regulations will affect all existing tenancies from 1^st April 2020 onwards.

Stay on top of lettings legislation

With so many changes to lettings legislation over the past and coming years, it is vital that landlords and letting agents stay on top of their obligations.

The easiest way to understand your responsibilities is by keeping up with the latest updates from the sector. Our online news portal is completely free to use, while our handy monthly newsletter is also free and includes the important changes that you need to be aware of. Sign up here: www.34.207.192.121/register/

Tenancy Deposits in London Hit the Highest Level Ever

Published On: January 31, 2017 at 11:07 am

Author: Em Morley

Categories: Property News

Tags: deposit protection,landlord law,tenancy deposits,tenant deposits,tenants

Average tenancy deposits in London have hit the highest level ever, while the typical deposit in England and Wales continue to hover just below £1,000, according to the latest figures from The Deposit Protection Service (The DPS).

Tenancy Deposits in London Hit the Highest Level Ever

The firm’s Tenancy Deposit Ratings show that the average tenancy deposit between October and December 2016 stood at £970.18.

However, properties with London postcodes set a new all-time high during the period, with tenancy deposits averaging £1,831.14 – more than double that for areas outside of the capital (£883.21).

Julian Foster, the Managing Director of The DPS, comments: “It’s important that landlords have protection against damage and other problems that can arise when they rent out property, but tenancy deposits can be demanding sums for tenants to raise when they move.

“However, both parties can have peace of mind over the money when it is protected with The DPS, with our secure and easy processes backed up with a free, impartial dispute resolution service on the rare occasions it is needed.

“The DPS is the UK’s largest protector of tenancy deposits, and we’ve been entrusted with over 4.7m since launching a decade ago.”

Landlords, remember to stick to the law surrounding the protection of tenancy deposits: /landlords-guide-tenancy-deposits/

While The DPS’s figure for October to December represents a £154.40 increase on July to September, it is just 30p lower than April to June, with the third quarter typically experiencing a dip, as students return to rental accommodation ahead of the new academic year.

The average tenancy deposit for the fourth quarter of 2016 also represents a £21.88 rise on the same period in 2015 (£948.31) and a £117.81 increase on the fourth quarter of 2014 (£852.37).

The research found that Sunderland has the lowest tenancy deposits in England and Wales, with the average cost in the SR postcode less than three times lower (£490.13) than that in London.

Have you put your tenancy deposits up over the past few months?

Landlord and Letting Agent Hit with £26,000 Fines for HMO Breaches

Published On: January 30, 2017 at 10:11 am

Author: Em Morley

Categories: Landlord News

Tags: HMO's,landlord law,letting agents,rogue landlords

A landlord and their letting agent have been hit with fines over £26,000 after being found guilty of HMO breaches on two properties in Luton, following a multi-agency operation.

Landlord and Letting Agent Hit with £26,000 Fines for HMO Breaches

Adrian Simion, 30, and his letting agent, Altavon Property Management, were found guilty at Luton Magistrates’ Court of a series of management regulation breaches relating to the safety and organisation of illegal Houses of Multiple Occupation (HMOs).

Neither Simion nor the letting agent attended the hearing, but were convicted of the HMO breaches in their absence.

Magistrates imposed fines totalling almost £7,000 on Simion for two offences of failing to licence a HMO and nine separate management regulation breaches. He was also ordered to pay £500 in costs and a £110 victim surcharge.

Alvaton Property Management was fined £10,000 for the HMO breaches, £2,500 for each of four management breaches, along with £500 costs and a £120 victim surcharge.

Luton Borough Council, which brought the prosecutions, reported the occupants found at the address, and was supported by the Romanian Embassy, Bedfordshire Clinical Commissioning Group, Citizens Advice Luton and various charities.

Councillor Tom Shaw, the Portfolio Holder for Housing at Luton Borough Council, says: “We hope that this prosecution sends a very strong message that we will act on information we receive, especially if we suspect that people are being exploited.

“Our rogue landlord project, in partnership with the police, fire and rescue service, and other organisations, is taking action against these landlords who expect people to live in overcrowded and unsafe conditions.”

Superintendent David Cestaro, the Bedfordshire Police Lead for Modern Slavery, also comments on the HMO breaches: “While no offences under the Modern Slavery Act were identified from this particular operation, we have managed to safeguard people who were taken advantage of by being provided substandard living arrangements.

“We continue to ask members of the public and professionals in public-facing roles to trust their instincts and report anything which they believe could be a sign of someone being exploited, whether that be for labour, domestic servitude, sex or crime.”

Landlords, remember that HMO breaches carry significant penalties – Always stick to the law and protect your tenants.

Is the Right to Rent Scheme Racist?

Published On: January 24, 2017 at 11:00 am

Author: Em Morley

Categories: Landlord News

Tags: immigration,landlord law,letting agents,racism,Right to Rent

A campaign group has been set up opposing the Right to Rent scheme on the grounds that it is racist.

The group, called Homes Not Borders, has launched a campaigning website after initially setting up a Twitter account last October. It is now threatening direct action against the “racist” legislation.

Under the Right to Rent scheme, landlords or their letting agents are legally obliged to check the immigration status of all prospective tenants. Those that knowingly let to illegal migrants could face criminal penalties.

Our guide, created in association with the Home Office, comprehensively details how landlords and agents can comply with the scheme: /home-office-reinforces-landlord-responsibilities-right-rent/

Homes Not Borders claims to be made up of people who have been directly affected by the Right to Rent scheme, insisting that the legislation is intensifying discrimination of migrants.

Is the Right to Rent Scheme Racist?

It highlights research from the Joint Council for the Welfare of Immigrants into the pilot scheme in 2015, which found that 65% of landlords would be less likely to let to someone who required a little time to provide documentation, while 42% would be less likely to consider letting to someone who does not have a British passport.

More worryingly, 27% would be less likely to open discussions with a prospective tenant who “had a name which doesn’t sound British” or “had a foreign accent”.

Before the scheme rolled out nationally on 1^st February last year, concerns were raised over how the scheme could be considered racist.

A statement on the Homes Not Borders website reads: “The Right to Rent will only intensify the discrimination that migrants and people of colour face in their search for housing, exacerbating the housing crisis for particularly vulnerable communities.

“Homes Not Borders are building a movement to abolish the racist Right to Rent. As people directly affected by this policy, we are organising our communities through building relationships, developing bonds of solidarity work across the diverse, migrant, non-migrant communities of colour. We will use all tools at our disposal, including direct action.”

It adds: “This racist Right to Rent must be challenged. It must be resisted. It must be abolished.”

Do you believe the Right to Rent scheme to be racist, or induce racism in the private rental sector?