For those of you who signed up to the series too late to receive some of the earlier mailings or who have accidentally deleted them, here is the text of the emails sent so far.
Email 1 – Tenancy Deposits
This is the first of a short series of emails to bring you up to date with recent developments and take a look at the future developments likely for landlords and agents.
We have a new government, which rather to everyone’s surprise is a majority conservative government (despite the fact that they only got 36.9% of the vote). It looks as if housing is gradually getting higher on the agenda and changes are on their way.
If you are reading this in Wales or if you own property in Wales, change is at the door, with new laws on their way (you can find out more about this in the new Wales section on my Landlord Law website).
Hopefully this series of fairly short, snappy emails looking at the most important changes that you need to know about, will help you face the future with more confidence.
We start with the changes on tenancy deposits, where the law has recently been amended by the Deregulation Act.
To everyone’s relief, the Deregulation Act 2015 has sorted the ‘Superstrike’ problem. If you remember, this was the Court of Appeal decision from 2013 which resulted in landlords who had acted in accordance with government advice at the time, suddenly finding that they were in breach of the law.
Now provided you protect the deposit and serve the prescribed information within the prescribed 30 day time limit (which runs, remember, from the date of receipt of the money), that’s it. You no longer have to keep re-serving the prescribed information every time the tenancy goes periodic.
The 30 day limit is an absolute limit, by the way, and you cannot extend it if, for example the tenant has only paid a part of the deposit. You need to protect that part NOW and then protect the rest of it separately when it comes along. For this reason it is a very bad idea to allow tenants to pay the deposit by instalments.
Pre 7 April 2007 Deposits
If you received a deposit before 7 April 2007 and your fixed term went periodic after that date (and is still ongoing) – you do need to protect the deposit (sorry). However the Government have given you a period of time, which is rapidly running out, to do this without penalty.
The last day to do this is 23 June 2015 – so if you hold one of these deposits, make sure you protect it and serve the prescribed information by then. You won’t get given another chance.
Early deposits where the fixed term ended and a periodic tenancy started before the 7 April 2007 do not need to be protected – unless you want to serve a section 21 notice. In which case you need to protect and serve your prescribed information first, or the section 21 notice will be invalid. Otherwise you do not need to worry about it.
In short therefore, there is no way now that you can serve a valid section 21 notice if you have not protected the deposit first in compliance with the regulations.
Agents and prescribed information
Finally, the new rules confirmed that agents’ details can go on the prescribed information, if the agent was dealing with the deposit on behalf of the landlord.
That’s all for this update. I will be sending another one out tomorrow which will be looking at the forthcoming changes to section 21 and the new anti retaliatory eviction rules.
Email 2 – Section 21 / Retaliatory Eviction
This is the second in this short series of emails to bring you up to date with recent developments and take a look at the future developments likely for landlords and agents. This is the first of two emails on changes with section 21.
Section 21 is one of the most important and significant sections in the Housing Act 1988. As you will know, after service of a properly drafted section 21 notice, a landlord can evict his tenant as of right, without having to give a reason.
Arguably it was the cause of the ‘buy to let industry’ – under the previous Rent Act 1977, landlords found it almost impossible to recover their property from tenants. Which is one reason why the households living in the private rented sector had dropped from about 80% in 1014 to about 8% in 1990.
However changes are now on their way.
Retaliatory eviction (England only)
Tenants organisations have been calling for years for legislation to prevent landlords from evicting tenants who complain about disrepair. Now they have it – in the Deregulation Act 2015.
After these regulations come into force in October 2015, section 21 notices will be invalid in the following circumstances
- if it is served after a tenant complains about the condition of their rented property and the landlord fails to provide an adequate response, and
- the tenant then goes to the Local Authority and complains and they serve a ‘relevant notice’ on you
An adequate response by the way, is one which
- gives a description of the work you intend to do to deal with the complaint and
- sets out a time table for doing it.
You can’t serve a notice within 6 months of a Local Authority serving a relevant notice on you.
A relevant notice is basically an improvement notice or a notice regarding remedial action being taken by the Local Authority.
There are exceptions if:
- it was the tenant who caused the damage to the property being complained about, and/or
- the property is genuinely on the market for sale (but this must be the open market and there must not be any intention to sell to a connected party).
The same rules will also apply to the common parts of a building (for example stairs and hallways outside rented flats) if the landlord had a ‘controlling interest’ and the condition of the common parts affected the tenants use of his rented property.
Note that these changes are only for England.
I will be writing tomorrow about some other changes coming for section 21.
Email 3 – further changes to section 21
This is the third in this short series of emails to bring you up to date with recent developments and take a look at the future developments likely for landlords and agents. This is the second of two emails on changes with section 21.
Yesterday we looked at the forthcoming changes on retaliatory eviction. Today we look at
Further changes to section 21
You may have read about the Court of Appeal case of Spencer v. Taylor. This changed the interpretation of the law on section 21. Now:
- The easier s21(1) notice can now be served during statutory periodic tenancies, and
- The more complicated s21(4) notice only needs to be served if there has never been a fixed term or if the periodic tenancy is contractual (ie if it is there because the tenancy agreement says so).
This remains for the time being, but the Deregulation Act will take away the requirement to give the ‘last day of a period of the tenancy’ in a s21(4) notice – which is the main thing that landlords tend to get wrong. So that is good news for landlords.
Other new changes (in England only) coming under the Deregulation Act 2015 are:
- A new prescribed form of section 21 (not yet available)
- Time limits on when you can serve and use a section 21 notice:
- you will not be able to serve a valid s21 notice during the first four months of a tenancy and
- you will not be able use a section 21 notice for proceedings for possession more than six months after the date given in the notice
- Prohibitions on serving a section 21 notice if a landlord has failed to comply with various health and safety or energy performance obligations (yet to be specified), and
- Prohibitions on serving a section 21 notice if prescribed information (currently unknown but probably a statement of tenants rights) has not been served on the tenant first
- A requirement that the landlord refund a proportionate part of any rent paid in advance if the tenant leaves early after service of a s21 notice
These rules will initially only apply to new ASTs which start after these new regulations come into force. There is a long stop date of 2018 when the changes will apply to all ASTs.
There is a commencement order which brings some of these changes into force on 1 July . However, the requirement for the new section 21 notice cannot come into force until the statutory instrument giving the text of the new form is published. Also some of the other issues also require further notification.
At the moment I am unsure as to which (or whether any) of these new rules will actually come into force on 1 July. As soon as I know for sure I will do a post on the Landlord Law Blog.
Section 21 in Wales
Note that these changes will apply only to England, not Wales. However the whole system is due to be changed in Wales in a few years time when the Renting Homes (Wales) Bill comes into force.
Welsh readers may be interested in the free talks available here.
The next email tomorrow will be about letting agents fees.
Email 4 – Agents’ regulation and fees
Changes for letting agents / property managers
Mandatory redress fee for agents come in last year on 1 October. I hope that all agents and property managers reading this have joined one of the three schemes. Otherwise (when you are found out) you will be fined and strictly speaking, are not authorised to remain in business.
The three schemes are:
The Consumer Rights Act
The most recent changes (for England only) come under the Consumer Rights Act which came into force on 29 April 2015.
These require ALL agents to disclose full details of their fees, so landlord and tenants will know exactly how much they will be paying before they commit themselves.
Total transparency is required, meaning, for example, that fees must be inclusive (e.g. of VAT) and must show whether they are payable per property or per tenant. If the fee cannot be ascertained in advance you must make it clear how it will be worked out.
Fees must be displayed at the agent’s premises where they will be seen by customers (e.g. they must not be hidden behind a screen or kept in a drawer) and on the agents website.
The rules do not apply to landlords but do apply to property managers (if you make a charge).
Note that (if the rules apply to you) they do not cover how much you charge – that is a commercial decision for you to make. The rules merely require that they be displayed clearly.
As well as your charges, you also need to say whether you have client money protection and state which Redress Scheme you belong to.
The new rules are enforceable by trading standards who can impose a fine of up to £5,000.
Help from ARLA
ARLA members should use the excellent templates that have been put online for their use at the ARLA website here. Non ARLA members should follow the format of the templates, but not in a way which would imply that they are an ARLA member if they are not.
The next email will be on Monday and will be on HMOs and licensing.
Email 5 – HMOs and HMO licensing
In this series we have looked at tenancy deposits, section 21 and agents fees. The last topic I want to look at is HMOs.
<p”>I think HMOs and licensing are going to become really significant.
At present there are many HMO properties which do not need a license – mainly because they are fairly small and do not fall within the national or Local Authority licensing schemes.
Many of these landlords consider that they have escaped the HMO regulations altogether – not realising that the fact that a property does not need a license does not mean that it is not an HMO! The two are not necessarily connected.
There are actually four types of HMO, but the one we are really concerned with will, essentially, be created when a property is
- Occupied by three or more people
- who form more than one household
- who share basic amenities
- who pay rent and
- at least one of whom occupies the property as his principal home.
This effectively means ALL shared houses save those with two people or families.
(The other types of HMO relate to buildings not complying with certain building regulations and having 1/3 or more rented flats, planning and Council tax.)
It appears (and this has been confirmed apparently by the DCLG) that the government will be consulting on extending the existing statutory licensing regime for HMOs – which currently applies to properties:
- three or more storeys high,
- lived in by five individuals
- making up two or more households.
However, many, many shared houses will just be two stories high and will therefore only need to be licensed if their local authority has an additional licensing scheme in place.
So if the mandatory licensing requirements are widened to, say, include all two story buildings, this would bring a huge number of extra properties into scope.
And don’t think that they won’t notice your property! Local Authorities are bringing more and more prosecutions under the HMO Regulations and the fines can be substantial. So this is something you need to take very seriously.
Particularly as fines in Magistrates Courts are now unlimited. So almost certainly they will be going up.
This is, therefore, a good time for landlords to do a bit of training to learn more about HMOs, and what the obligations are. This is important whatever your property type, as if you do not want to have an HMO, you need to know what to avoid.
To help landlords with this, and also with the other issues discussed in the previous emails, I have created a new online course. This will make it easy for you bring yourself (and your staff) fully up to date.
The course is currently being finalised and I will be in a position to write to you tomorrow and tell you more. However it has a lot of content on HMOs as well as content on the other topics in this email series, both to bring you up to date and to refresh you on other areas of landlord and tenant law.
So please watch out for tomorrow’s email, when I will have more information as well as a special offer for you, and a free training video.
Email 6 – How to find out more
You will have received five emails from me warning about the legal changes that are taking place this year, and which will affect all landlords. (If you have not seen all of them, you will find them here)
However these emails are just a summary. There is much more than I can fit into a short email update series. You really need to know about these changes in detail otherwise you could risk problems and prosecutions!
If you want to find out more, I have created a special refresher and updating course for you from the footage of our recent Landlord Law Conferences. These consist of our expert speakers (mostly solicitors or barristers) giving a series of half hour talks, plus their notes and powerpoints.
The course is in four parts
- The first part has nine videos from our 2014 and 2015 conferences which will remind you of the law and bring you up to date with the major changes.
- The second part is for Welsh readers, and contains five videos from our Welsh Conference looking at the forthcoming changes there (and a separate video from David Smith on s21 as this is now different in England and in Wales).
- The third part has all three of David’s HMO talks at our conferences – David Smith is a real expert in HMO law and enjoys teaching it. You will learn a huge amount from these talks
- The fourth part is the HMO Basics series from the Landlord Law Blog, but in a more convenient format with links which make it easier to move through the series.
There are also all the speakers notes and powerpoints (in pdf format) and audio versions of the talks which you can either listen to online, via the player on the page, or download to your computer to keep forever.
To find out more, click here to view the information page.
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