14:12 PM, 1st August 2019, About 5 years ago 11
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Many landlords contact Caridon Landlord Solutions to see whether they are following the correct procedures when entering into a letting agreement with a tenant, this has increased ten-fold following a raft of changes introduced by the government such as The Deregulation Act, How to Rent, Homes (Fitness for Human Habitation) Act 2018, Universal Credit, the list goes on.
Failing to comply with your legal obligations as a landlord see you face costly mistakes further down the line, particularly if the relationship between with your tenant breaks down and you seek to recover possession of your property.
To help landlords, CLS has put together some key checkpoints to make the process easier and to ensure that you are complying with the new regulations:
Inventory
Create an inventory listing all fixtures and fittings as well as the condition of the property. We would recommend that you appoint a reputable local company to carry this out on your behalf. If you are renting the property furnished, furniture must meet the minimum safety standards, must have the appropriate safety labels attached and appliances should be PAT tested. At the start of tenancy, the tenant should be provided with a copy of the inventory signed by both parties.
Tenancy Agreement
Create a Tenancy Agreement but if you have not done this before, use a letting agent or specialist organisation such as Caridon Landlord Solutions to ensure it contains all the correct details.
We would always recommend including a six-month break clause in the agreement, meaning you can issue the tenant with two months’ notice – Section 21 (no fault eviction). That way, if the arrangement is not going well or you need your property back for your own personal reasons, you can do so. However, the government is currently considering abolishing Section 21 so this may change in the future.
A break clause also provides the tenant with freedom, as they can provide written notice after month four.
Minimum energy efficiency standards and Gas Safety
Launched in April 2018, minimum energy efficiency standards (MEES) mean that newly-rented homes and those with renewed tenancies must have an energy performance certificate (EPC) rating of E or above.
On the day that the tenant signs the agreement it is important that you issue the tenant with an EPC
However, from 1 April 2020 these rules will extend to cover existing tenancies too, meaning landlords can no longer rent out homes with an EPC rating of F or G – or face fines up to a maximum of £5000 if they continue to do so.
If the property has a Gas supply, under the Gas Safety (installation and Use) Regulations 1988, you must also provide a Gas Safety Certificate prior to, the tenant moving in. You must also keep record of the last 2 years GSC and issue a copy to the tenant.
It is the law to carry out a GSC every 12 months using a registered Gas Safety Engineer and leave the tenant with a copy of the report.
In addition, a copy of the latest version of the ‘How To Rent Guide’ must also be provided to the tenant and the tenant must satisfy Right to Rent.
Homes (Fitness for Human Habitation) Bill
The Homes (Fitness for Human Habitation) Bill came into effect on 20th March making it a requirement for all social and private landlords (or agents acting on their behalf) in England to ensure their property is fit for human habitation at the beginning and throughout the duration of the tenancy. Failing to do so gives tenants the right to take legal action against their landlords.
Tenancy Deposit
If the tenant has paid you a deposit you will have to register the deposit with a government approved scheme such as My deposits, DPS or TDS. Under each of the schemes you will have two options, a custodial scheme, where the company holds the deposit on your behalf, or insurance scheme, where you can hold the monies and pay a fee to protect the deposit.
Once the deposit is protected you will need to provide proof and details of the scheme to the tenant and issue them with the Prescribed Information.
The deposit must be protected within 30 days of receiving the money. If you or your agent fails to do so, you are liable to the tenant for a penalty of up to three times the deposit sum and you cannot serve a valid section 21 notice.
Landlord Insurance
Although not a legal requirement, as a landlord we would strongly recommend you have Landlord insurance (which includes building insurance), not only to protect your investment but also your tenant. Tenants should also be encouraged to have contents insurance to cover their own belongs against theft or damage.
Licence
In some areas, under the Housing Act 2004, Local Authorities are enforcing selective licensing where it is compulsory for the property to be licensed if rented out. Please check whether your property falls into the designated area as you may be subject to a fine of up to £30,000 if you do not comply.
Client Money Protection
If you are using an agent, please check that they are part of a Client Money Protect scheme. From 1st April 2019, it is a legal requirement for all letting agents in England England’s to be members of a Client Money Protection scheme. Those who are not members are now trading illegally and face a fine of up to £5,000.
Tenant Fees Bill
On 1st June, the Tenant Fees Bill came into force which means tenant deposits are capped at five weeks’ rent (or six for tenancies that cost more than £50,000 a year). This means that landlords and letting agents can no longer charge fees for services such as tenant referencing and inventories etc.
Sherrelle is an independent consultant and is recommended by Property118 for landlords who require professional advice and assistance in regards to dealing with Universal credit related matters
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lloydbuilders@hotmail.co.uk
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Sign Up10:35 AM, 2nd August 2019, About 5 years ago
I`d be grateful if you would clarify points made to a recent post of mine regarding
`The issue of costs that are the responsibility of the tenant`
Under the T&Cs of their AST the tenant is responsible for repairs and/or renewals of day to day occupation of the property. Basically if they break it, block it, damage it they are legally responsible to correct matters.
Some say the landlord cannot charge as it is a `fee` whilst another has stated that if the tenant agrees that the costs of the works are required and reasonable and that the tenant agrees it is their responsibility AND that the tenant asks the landlord to carry out these works then such charges would not be considered Prohibited Payments and that such charges may be considered a legitimate charge from a tradesman or supplier which the landlord has been asked to arrange by the tenant.
Which is correct?
Seething Landlord
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Sign Up10:37 AM, 2nd August 2019, About 5 years ago
Your first paragraph about gas safety certificates is incorrect. The certificate needs to be given to the tenant at or before the time he moves in, not "within 28 days" - that period only applies to new certificates during the course of the tenancy. It is crucial to get this right because failure to provide the certificate at the beginning of the tenancy cannot be rectified and the right to issue a section 21 notice will be lost forever.
Mark Alexander - Founder of Property118
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Sign Up10:51 AM, 2nd August 2019, About 5 years ago
Reply to the comment left by at 02/08/2019 - 10:35
Asking tenants to pay for repairs is still perfectly legal. That's very very different to charging them fees.
lloydbuilders@hotmail.co.uk
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Sign Up12:19 PM, 2nd August 2019, About 5 years ago
Reply to the comment left by Mark Alexander at 02/08/2019 - 10:51
Good news, but do you have to wait until the end of the tenancy to deduct from the deposit or can an invoice be presented upon completion of works and payment expected in return?
Mark Alexander - Founder of Property118
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Sign Up12:31 PM, 2nd August 2019, About 5 years ago
Reply to the comment left by at 02/08/2019 - 12:19
Either is fine. Better still, make it clear than your tenant is responsible and give them a timescale to put things right at their own expense and using contractors of their choice where that is a realistic option
Mkahn
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Sign Up12:22 PM, 3rd August 2019, About 5 years ago
Very useful information. Can I get some advice on this issue. We had a company let property. Company did not pay rent for eight months. We got possession through the court. In the same judgment, court ordered the company to pay the rent amount and cost about £20000.00 but the company has ignored the court order and refused to pay. Our solicitor is demanding more money to persuade the case but also not hopeful as company can declare bankruptcy. Finally he sent us a letter to persuade the case through another solicitor. The company is still existing. Need some guidance. Thank you
Michael Barnes
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Sign Up3:52 AM, 4th August 2019, About 5 years ago
Reply to the comment left by Seething Landlord at 03/08/2019 - 13:22You are right; they are wrong, which is worrying as they are promoting themselves as experts.
"It is the law to carry out a GSC every 12 months" is also wrong.
The requirement is for the check before the expiry of the previous certificate; that means it could be up to 14 months from the previous check.
Michael Barnes
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Sign Up3:55 AM, 4th August 2019, About 5 years ago
"We would always recommend including a six-month break clause".
Why would you recommend this rather than a 6-month term?
Seething Landlord
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Sign Up20:35 PM, 5th August 2019, About 5 years ago
Reply to the comment left by CARIDON LANDLORD SOLUTIONS at 05/08/2019 - 16:11
Your advice is in direct conflict with the judgement in Caridon Property Ltd v Monty Shooltz 2018 which held that the 28-day period for compliance does not apply to new tenancies. The certificate must be served at the commencement of the tenancy.
Neil Patterson
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Sign Up9:40 AM, 7th August 2019, About 5 years ago
Apologies for the corrected error regarding issuing the GSC as I obviously did not check the fine detail closely enough either. This had been discussed at length at Tessa Shepperson's Landlord Law conference the previous year, but I missed the extra wording.