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Important Update for Landlords

11 December 2015

SMOKE ALARMS AND CARBON MONOXIDE ALARMS

On 1st October 2015, it became a legal requirement for all private rented properties to adhere to the changes outlined within The Deregulation Act 2015. Working smoke alarms are to be fitted to each elevation of a private rented property and carbon monoxide alarms are to be fitted in rooms that are classed as ‘high risk’. Further information regarding the changes can be found on the following link;

Tenants Safer Under New Government Measures

Tenants can report poor housing (e.g. no running water, excessive mould etc) to their Local Authority. Under the Landlord and Tenant Act 1985, Section 11, the Landlord has a legal duty to ensure their property is kept in repair and in working order unless damage is caused through Tenant negligence. If a Landlord does not carry out repairs under Section 11 of the act within a reasonable timeframe, in certain cases the Tenant has the right to withhold the rent until work has been completed. Part 1 of the Housing Act 2004 risk assessment procedure – The Housing Health and Safety Ratings System (HHSRS) assesses the risks to Health and Safety within Residential Properties and Local Authorities have the power to enforce action upon the Landlord or Letting Agent to ensure the property is returned to a satisfactory condition.

DEPOSITS MUST BE PLACED IN A TENANCY DEPOSIT SCHEME

Any deposit funds must be placed in one of the three designated government backed Tenancy Deposit Schemes (TDS) within 30 working days of a Tenancy commencing/the deposit being received. Failure to do so is a criminal act and may make the Landlord liable for a fine at court of three times the deposit amount being payable from him/her to the tenants. Putting the money into a separate bank account doesn’t qualify. Failure to place a deposit fund within a Deposit Scheme will invalidate any Section 21 Notices the Landlord is required to serve, should they wish to regain possession of their property.

Tenants are expected to keep a rented property in a ‘tenant-like manner’.

Tenants are expected to look after their rented property and carry out small jobs around the property – subject to Health and Safety considerations. A Landlord is not expected to repair or maintain items that a tenant has broken through negligence or misuse.

TAX EVASION IS ILLEGAL

Landlords who earn an income from their rental property must generally complete a Tax Return. Letting property is, in effect, running a small business and should be treated as such. HM Revenue & Customs can impose hefty fines on anyone discovered to be evading tax.

Generally, the interest part of a buy to let mortgage can be off-set against the tax bill for the property along with various other concessions, however, following the recent budget, this is set to change from April 2017. Further details are available at: https://www.gov.uk/government/organisations/hm-revenue-customs

LEGIONNAIRES DISEASE

All residential properties which are rented out must now have a risk assessment undertaken to determine the risk of Legionella, which then allows landlords to implement a suitable control scheme. Further information regarding the changes can be found on the following link;

Important Changes for Landlords to HSE Legislation on Control of Legionnaires Disease

INSURANCE

Landlord insurance is a growing area, with an increasing number of specialist policies covering a range of products from building insurance, contents, legal protection, rent loss and appliances. Having the correct insurance is vital and not being adequately protected could be disastrous.

SAFETY REQUIREMENTS

Before letting out a property, a Landlord should ensure that the property meets all current safety regulations, these include:-

Gas Safety Regulations 1998 – A mandatory check to ensure the property and gas items meet current regulations is required annually.

Electrical Equipment (Safety) Regulations 1994 – Not a mandatory requirement to have electrical equipment checked annually however it is recommended as ‘best practice’. Should a tenant come to harm through faulty electrics within a rental property, the Landlord and Letting Agent could be held liable under the Defective Premises Act 1972.

Plugs and Sockets Regulations 1994

Furniture and Furnishings (Fire) (Safety) (Amendment) Regulation 1993

The Energy Efficiency Regulations 2015 – From 1st April 2016, a Tenant will be allowed to reasonably ask for a relevant energy efficiency improvement. From 1st April 2018, all rented property (both domestic and non-domestic) which is to have a new tenancy, must have an EPC rating of at least ‘’E’’, subject to some small exemptions. For further information, please follow the below link: http://www.legislation.gov.uk/uksi/2015/962/contents/made

CHECK-INS AND CHECK-OUTS

Conducting a proper check-in and check-out is essential. These should include a full inventory check, condition report check, and a full set of dated digital photographs. If the Landlord and the Tenant can’t agree on what the Tenant may be liable for at the end of the Tenancy then the check-in and check-out evidence is the only way a Landlord can prove their case. In contested cases, TDS adjudicators start from a position of ‘the money belongs to the tenant’, and it’s up to the Landlord to prove otherwise.

IGNORANCE IS NO EXCUSE

It is important for Landlords to keep up-to-date with letting rules and regulations. A person who is unaware of a law may not escape liability for violating that law merely because he or she was unaware of its content.

CONSTRUCTION (DESIGN AND MANAGEMENT) REGULATIONS 2015

The new Construction (Design & Management) Regulations 2015 came into force on 6th April 2015 but are still subject to Parliamentary Approval and therefore subject to change.

The Regulations apply to all construction work, which is defined as “the carrying out of any building, civil engineering or engineering construction work”. Construction includes the following work in relation to a “structure”:-

repair, alteration and conversion, fitting out, redecoration, maintenance, preparation work (site clearance, excavation, etc.), installation, maintenance, repair and removal of mechanical, electrical, gas, telecommunications or similar services which are normally fixed within or to a structure, assembly of on-site of pre-fabricated elements to form a structure and subsequently disassembly and removal.

CDM 2015 introduced significant changes to the earlier Regulations and they will impact now on all residential management, estate and farm building projects.

It is important to note that a Construction Phase Plan is mandatory for every project and clients must ensure that a plan is in place before any works commence, including setting up the construction site.

What is a Construction Phase Plan (CPP)?

The CPP is a document that provides background information, outlines the principal concerns in the task and identifies what action is required. It is different from a Risk Assessment (which is still required). Whilst this must be produced by the Principal Contractor, the client has a duty to ensure that it is produced. The client must not allow work on site to proceed, unless a Construction Phase Plan has been prepared, at least for the early stages of the works, and arrangements for the development of the rest of the plan has been established.

Here at GSC Grays we are licenced members of ARLA – Association of Residential Letting Agents. We are regulated by ARLA and follow a strict code of conduct. We can provide you with professional, up to date advice and guidance, giving you peace of mind that your property is managed effectively. For further information and advice, please contact:

[team-member name=”Lucinda Riddell”]

or:

[team-member name=”Sean Skelton”]