Posts with tag: landlord law

Landlords, Are You Ready for the Housing and Planning Act 2016?

Published On: October 14, 2016 at 8:30 am

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Landlords, are you ready for the changes and regulations set to be introduced by the Housing and Planning Act 2016?

Landlords, Are You Ready for the Housing and Planning Act 2016?

Landlords, Are You Ready for the Housing and Planning Act 2016?

On 12th May this year, the Housing and Planning Act 2016 was awarded royal assent. Various parts of the act will come into force in stages through commencement orders. Landlords must keep up to date with the parts of the law that regard the private rental sector.

Francesca Tremeer, of QualitySolicitors Burroughs Day, has the latest information for landlords on how the Housing and Planning Act 2016 will affect them.

In particular, the Housing and Planning Act directly affects all of the below:

  • The process of recovering abandoned property: The Housing and Planning Act will make it possible for landlords to recover possession of their abandoned property without a court order. However, Francesca explains why this could create immediate problems for landlords.
  • Fitness tests for Houses in Multiple Occupation (HMO) licenses: New criteria for HMO license applications will be added for landlords, including your duties under the Right to Rent scheme.
  • Banning orders for rogue landlords and letting agents: Rogue landlords and letting agents who consistently flout the law will now be banned from operating in the lettings sector and put on a new database, which will be maintained by local housing authorities.

For more details of these updates and how they will affect you as a landlord, read the full article here.

Landlords, remember that you can keep up to date with your responsibilities as a landlord, along with any changes to the law, at Landlord News.

We will keep you posted on forthcoming regulation changes in the lettings sector, such as the rules detailed above. Don’t get caught out – stay on top of your legal duties!

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Landlords and Letting Agents Not Up to Speed with the Law, Warns AIIC

Published On: October 11, 2016 at 10:52 am

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Landlords and letting agents are not up to speed with the law in the lettings sector, warns an industry trade body.

The Association of Independent Inventory Clerks (AIIC) reports that its members frequently receive queries about new industry regulations from landlords and letting agents, particularly laws regarding carbon monoxide and smoke alarms, and window blinds.

Landlords and Letting Agents Not Up to Speed with the Law, Warns AIIC

Landlords and Letting Agents Not Up to Speed with the Law, Warns AIIC

Since October 2015, it has been compulsory for landlords and letting agents to install smoke alarms on each floor of every rental property where someone is living, partially living or is deemed a habitable area. Bathrooms, for example, are considered habitable areas.

Landlords or their agents must also fit carbon monoxide alarms in rooms with a solid fuel-burning appliance, including wood burners and open fires.

The AIIC says that the most common queries from landlords and letting agents regarding these laws are the required location and type of alarms, as well as when they need to be tested.

This guide to fire safety will ensure that you stick to these important regulations: /guide-fire-safety-rental-property/

Additionally, the AIIC claims that its members have also received queries from landlords and letting agents relating to safety requirements for blinds and curtains.

In 2014, the British Standards Institution introduced a new set of safety requirements, aiming to address the child safety risks posed by blinds and curtains.

The rules mean that any blind installed with cords and chains must have breakaway connectors, and cord and chain safety retainers. The cords and chains must also be maintained at a minimum of 1.5 metres from floor level.

All new blinds and curtain tracks fitted by a professional must pass the new standard, meeting the necessary safety requirements and test methods.

If an accident involving a non-compliant blind or curtain track takes place in a rental property, the landlord could face prosecution from Trading Standards.

The Chair of the AIIC, Patricia Barber, is concerned: “A worryingly large number of letting agents and landlords are still completely unaware of some important new regulations according to our members, who are being asked to explain health and safety rules.

“There is no excuse for anyone in our industry to ignore regulations – this could be dangerous and very costly in the long-run.”

Barber insists that all landlords and letting agents must strive to ensure that they are clear on all their legal obligations, and has urged other trade bodies to publish as much helpful information as possible.

She adds that in the rapidly developing lettings sector, there is likely to be much more new legislation in the future, so it is important for landlords and letting agents to keep an eye on the ball.

Remember that Landlord News provides the latest information and updates for landlords, including any changes to the law.

Tenant Group Supports New Tax Changes for Landlords

Published On: October 11, 2016 at 8:32 am

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Generation Rent, the tenant lobby group, has spoken out in support of new tax changes for landlords.

The comment arrives following a call from the Royal Institution of Chartered Surveyors (RICS) to scrap the additional Stamp Duty charge on second homes and two landlords’ fight in court to repeal the forthcoming mortgage interest tax relief reduction.

Tenant Group Supports New Tax Changes for Landlords

Tenant Group Supports New Tax Changes for Landlords

Disappointingly for property investors, the landlords lost their challenge on Thursday. This means that if all goes to plan, the amount of tax relief that landlords can claim on mortgage interest will be cut to the basic rate from April 2017. The Government has provided a guide on how the change will affect you: /government-guide-tax-relief-changes-residential-landlords/

However, the Director of Generation Rent, Betsy Dillner, believes that the tax system has favoured landlords for too long, and the new tax changes should help first time buyers get onto the property ladder.

“For too long, the tax system has favoured people who bought homes to make a profit over people who just wanted somewhere to live,” she insists. “The Government’s recent tax changes should help to dampen speculation and give an advantage to people who have to date been shut out of the housing market.”

She continues: “These are long-term measures whose success depends on house prices slowing down. Warnings about the impact on the overall supply of private rented housing are premature, and clouded by the result of the EU referendum.

“Despite the prospect of mortgage interest tax relief being phased out for landlords paying the higher rate of income tax, the number of purchases with a buy-to-let mortgage increased by 14% in the 12 months since George Osborne announced the policy in July 2015.

“And despite the introduction of the surcharge in April, and the subsequent dip in sales to landlords, Stamp Duty receipts increased in the second quarter of the year, from £1.75 billion to £1.98 billion.”

She concludes: “As important as it is to dismantle the damaging culture of property speculation, tax is only one part of the solution to the housing crisis. We need to build more homes for low-income households, and the tax reforms mean there’s a new source of revenue for this. We also need to improve protections for tenants whose lack of rights mean they face a high risk of eviction.”

Despite Generation Rent’s beliefs, industry professionals have supported RICS’s calls, claiming that the new tax changes for landlords will hinder investment in the private rental sector, and thus make rental accommodation more expensive for tenants.

Additionally, the Residential Landlords Association warns that tenants will face rent rises as a result of the new taxes.

No Judicial Review of Section 24 Rules for Landlords

Published On: October 7, 2016 at 8:46 am

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Yesterday, a judge ruled against a judicial review of forthcoming section 24 rules for landlords.

Landlords Steve Bolton and Chris Cooper had joined forces to challenge the measure, which was announced in last year’s summer Budget. Chancellor George Osborne introduced the plan to restrict the amount of mortgage interest that buy-to-let landlords can offset against tax.

The Government has provided a guide on how the new tax measures, set to be gradually phased in from April 2017, will affect landlords: /government-guide-tax-relief-changes-residential-landlords/

Bolton and Cooper, who are thought to be unlikely to appeal the ruling, said they were “outraged” by the judge’s decision.

However, they added that although their legal challenge, which was crowdfunded by around £180,000, has come to an end, they will not give up their fight.

Without a judicial review or Government U-turn, the restriction on mortgage interest tax relief to the basic rate (20%) will be phased in from April next year.

Bolton and Cooper argue that the measure means that most landlords will pay extra tax, of 20% or more, on their mortgage interest. They warn that the tax landlords will have to pay could be bigger than their profit, leaving them with losses.

They insist that the real losers of the tax change will be tenants, as many landlords will be forced to put rents up or leave the market.

At yesterday’s hearing at the Royal Courts of Justice in London, Bolton and Cooper were represented by Omnia Strategy, led by Cherie Blair, whose own family is thought to own at least ten houses and 27 flats.

Blair’s legal team argued that section 24 is unlawful on the grounds that the restriction on landlords’ ability to deduct finance costs as a business expense may constitute an illegal grant of state aid to corporate landlords and owners of commercially let holiday homes, and may breach the European Convention on Human Rights.

No Judicial Review of Section 24 Rules for Landlords

No Judicial Review of Section 24 Rules for Landlords

In court, Blair was initially applauded from the public gallery, when she said that the Government was unfairly penalising individual buy-to-let landlords by “singling them out”, while allowing others, such as limited company landlords, to keep their tax perks.

However, Timothy Brennan QC, representing HM Revenue & Customs and the Treasury, said the claim was arguable: “There are cases which justify the courts looking at them in the public interest. This is not one of them.”

After the hearing, Blair said: “The court’s decision that our clients’ legal challenge should not proceed is very disappointing. Steve and Chris, and many others, have dedicated a lot of time and energy into putting forward the best case possible.

“We know the case has been supported and followed with interest by a large number of individual landlords. Many of these landlords now face challenging times ahead.”

She added: “From the outset, the legal process was just one aspect of our clients’ fight against this unfair measure. Together with their impressive and growing coalition, they will continue to engage with the Government, and the legal team wishes them every success.”

In a joint statement, Bolton and Cooper said: “We are outraged by the court’s decision. It has completely missed the opportunity to protect tenants, landlords and the housing market from the disastrous consequences of section 24.

“From April 2017, the negative impact of this previously failed tax experiment from Ireland, where rents increased by 50% over a three-year period, will be felt far and wide. Sadly, it will be tenants who are hit hardest; they are set to see unprecedented rent increases over the coming months and years, which will be a very clear and direct consequence of this ludicrous legislation.

“For many, it will also mean the loss of their homes, because vast numbers of landlords will be forced to exit the market. Hard-working, responsible landlords will have their pension plans in ruins, but the large corporations and the wealthiest in society, who can buy property without the need for mortgage finance, are systematically excluded from this unfair tax policy.”

They look ahead: “Now that the legal route has run its course, we will be focusing 100% of our attention and resources on taking our case more forcefully, more powerfully and more directly right to the heart of the Government.

“Our goal is simple: to abolish this tax or to remove the retrospective nature of it. We will be launching a range of lobbying, media and grassroots activism measures over the coming days and weeks. We will also be encouraging all of our landlords to write to their tenants if they have to increase their rents or sell up, clearly explaining that it is this Conservative tax policy that has forced them into this situation.”

Landlord groups have also spoken out in support of the cause.

The Chief Executive of the National Landlords Association, Richard Lambert, responds to the court ruling: “This decision is ultimately disappointing, not just for landlords, but for the tenants who will see their rents rise as a consequence of the changes to landlord taxation.

“While we have never been convinced that there was a solid enough legal case to overturn George Osborne’s decision, we hoped the courts would be prepared at least to listen to the arguments.

“We congratulate Steve, Chris and the campaign team on their determination, perseverance, and their success in raising awareness and increasing the visibility and understanding of what will be dramatic change to the ability of hard-working people to provide homes for others.”

David Smith, the Policy Director for the Residential Landlords Association, also comments: “Having provided support for this case, the RLA is disappointed it will not progress to a full judicial review.

“The campaign to seek changes that will address the more difficult aspects of recent tax reforms to the private rented sector must now focus on a political path.

“The Autumn Statement next month provides an important opportunity for the Government to make changes that will support the development of the new homes to rent the country desperately needs.

“The RLA has already met with Treasury officials to discuss the issue, and it will continue to lobby for changes that are good for tenants and landlords, whilst recognising the Government’s limited financial room for manoeuvre.”

Failure to Comply with Right to Rent will be Criminal Offence from December

Published On: October 5, 2016 at 10:15 am

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Failure to Comply with Right to Rent will be Criminal Offence from December

Failure to Comply with Right to Rent will be Criminal Offence from December

Yesterday, the Home Secretary, Amber Rudd, announced at the Conservative Party Conference that failure to comply with the Right to Rent scheme will become a criminal offence from December.

As of 1st February this year, all landlords and letting agents in England have been legally required to conduct immigration status checks on all prospective tenants under the Right to Rent scheme. Those that do not comply with the new law can currently face civil penalties, such as fines of up to £3,000.

However, for many months now, the criminalisation of the Right to Rent scheme has been in discussion in the House of Commons.

Rudd has now confirmed that failure to comply with Right to Rent law will become a criminal offence as of December 2016.

All landlords and letting agents must be aware of their duties, to avoid facing criminal sanctions. The Home Office has compiled information for landlords on how to conduct the immigration checks: /home-office-reinforces-landlord-responsibilities-right-rent/

Reacting to the news, the Managing Director of the Deposit Protection Service, Julian Foster, says: “Although landlords will always want to operate within the law, ever changes in the regulatory environment can mean that many fall foul of legislation without realising it.

“Pressures on landlords can be significant, particularly those who are also in full-time work, so it’s vital that they receive sufficient information and support whenever the rules change.”

He insists: “Anyone letting out property must fully understand regulations that affect them, as well as their obligations as a landlord to both their tenants and the authorities.”

We remind all landlords of their responsibilities under Right to Rent and to stick to the law at all times.

To keep up to date with your obligations as a landlord, remember to check back to Landlord News regularly for daily advice and updates.

Tenants Let Down by Local Authorities when Suffering with Rogue Landlords

Published On: September 26, 2016 at 8:31 am

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Tenants are being let down by local authorities when they suffer at the hands of rogue landlords, according to the Residential Landlords Association (RLA).

Tenants Let Down by Local Authorities when Suffering with Rogue Landlords

Tenants Let Down by Local Authorities when Suffering with Rogue Landlords

The landlord body spoke out after shocking new figures from housing charity Shelter revealed that around one million tenants have been the victims of rogue landlords in the past year.

The charity claimed that one in eight tenants have suffered issues with landlords that break the law. Some of the problems highlighted by the research include landlords entering properties without consent, deposits not being protected, tenants being abused or harassed, and discrimination on the grounds of race, nationality and gender.

The report also suggests that 64,000 tenants have had their utilities cut off by rogue landlords, while 50,000 have had their belongings thrown out or the locks changed on their properties.

Now, the RLA claims that local authorities are not using the powers available to them to tackle rogue landlords and protect tenants.

The Chief Executive of the RLA, Andrew Goodacre, says: “Figures from the English Housing Survey show that 82% of tenants are happy with their rented accommodation, but we recognise that there are landlords who do not abide by the law.

“The RLA is fully supportive of regulations that protect tenants, but the reality is that we can regulate all we like, but without proper enforcement, it becomes meaningless. Tenants are being let down by local authorities, who are failing to properly enforce the powers available to them to tackle the criminal minority of landlords.”

A helpline advisor at Shelter, Danielle Goodwin, speaks of her experiences: “Every day at Shelter, we speak to people at the end of their tether after a law-breaking landlord has caused chaos in their lives.

“These range from instances where the renter has been unaware of their rights, to cases where renters are exploited and subjected to terrible experiences by a minority of law-breaking landlords.”

We remind all landlords that they must stick to the law and protect their tenants at all times. Keep up to date with your responsibilities and any changes to the law at LandlordNews.co.uk.