Landlord lettings update – the latest legislation to hit the industry and thoughts from our Lettings managing partner William. If you’re a landlord we don’t yet look after, you may be interested in catching up with the raft of new rules in place / about to go live in 2019.
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Homes (Fitness for Human Habitation) Act 2018 – In force from 20th March 2019
This legislation has really just added to the Landlord and Tenant Act 1985 (amended) Section 11 Landlord obligations. It has brought in the 29 hazards that are currently adopted under the Housing Health and Safety Rating System (HHSRS) which all rented properties must comply too. The local authorities have already been applying this to all properties they visit anyway. However, a key part of this legislation is that the Tenant can now take their Landlords to court over breaches to any of the 29 hazards directly without having to go through the local authority. Obvousily any judge will rule what compensation (if any) applies case by case as well as any enforcement action to ensure remedial work is done. Please know since the start of 2019 we have already incorporated the HHSRS standard into our inspection procedures. Also as and when case law progresses we will amend our inspection processes and advise you accordingly. There is nothing you need to do.
I have provided the link to the government legislation guidance below:
https://www.gov.uk/government/publications/homes-fitness-for-human-habitation-act-2018
Client Money Protection (CMP) – In force from 1st April 2019
This legislation applies to all letting agents who handle any client money i.e. Landlords or Tenants. As of 1st April 2019 all agents must hold a government approved CMP or they are unable to handle anything like rents or deposits. Please be aware Madison Oakley are regulated by the Royal Institution of Chartered Surveyors (RICS) and their approved CMP scheme. In essence, this legislation comes to the fore in the highly unlikely event for example an agent goes on holiday with all your money and never comes back. The CMP scheme is there to ensure you can recover any proven monetary loss and so is added protection for both Landlords and Tenants. There is nothing you need to do.
I have provided the link to the government legislation guidance below:
https://www.gov.uk/government/publications/client-money-protection-for-letting-and-managing-agents
Tenant Fees Act 2019 – In force from 1st June 2019
This legislation is probably the biggest shake up for the private rented sector over the last decade or more. It is also possibly some of the worst written legislation for contradiction and ambiguities if you ever have the unfortunate need to read the 40+ pages. In any case to summarise no Landlord, Agent or 3rd party on behalf of the first two (e.g. referencing company) can charge any fees or administration costs to Tenants. To make it simple the UK government have listed ‘permitted’ payments that can be charged and anything else is a ‘non-permissable’ fee. Madison Oakley have been preparing for this for a number of months now and I can confirm our documentation and procedures are now in line with these requirements. There is nothing you need to do.
I have provided the link to the government legislation guidance below:
https://www.gov.uk/government/publications/tenant-fees-act-2019-guidance
Consultation on Redress scheme for all Landlords
This legislation is still in the consultation stage although something I believe you should be aware of. Currently all Letting Agents must be part of a redress scheme – Madison Oakley are part of ‘The Property Ombudsman’ (TPO). The UK government want all Landlords, as they know a number rent out their properties without an agent being involved, to answer to an ombudsman body if a Tenant has a complaint that can’t be sorted out between the Tenant and Landlord. The aim is to redirect these types of common law housing complaints from the already severely limited court system, to an independent professional body who can arbitrate on these disputes. At the moment we are not sure when this will come in, but it could be as early as spring 2020. As with all these things costs will be involved and we don’t know whether Landlords who use an agent to full manage their property(ies) on their behalf will have to be part of a redress scheme.
Consultation of Section 21s abolishment
This is more of an FYI following the announcement earlier this week that the UK government are looking to abolish Section 21s or now more commonly known as ‘the no fault eviction notice’. This is the main way that Landlords and Agents issue notice on Tenants to vacate the property. No reason for requesting vacant possession needs to be provided to the Tenant though there are a number of procedures you must go through to ensure its validity.
All I would say at the moment is a lot of scaremongering is going on in the media and if they just abolished Section 21s with no thought they would be right. Nevertheless, in my professional opinion and having been in this sector for 11yrs this sort of huge legislation change, which would be the largest shift in the private rented sector since the Housing Act 1988, will take years to go through. As we know legislation can be dropped tomorrow and governments can shift or change in a matter of months, so at the moment I would take it with a ‘pinch of salt’ and watch this space. In my personal opinion I think it is the government trying to move focus from the Brexit failure and get more voters on side in case there is a general election!
I hope the above gives you an idea of the shifts in the private rented sector and confidence that Madison Oakley are ensuring you remain compliant. We are also preparing for future events and keeping up to date with definite and possible changes in legislation and regulation in the industry.
William Bell-Knight
Lettings Managing Partner – Madison Oakley
