Video Series 22/30 - Lettings Regulation Changes You Need to Know About RIGHT NOW!

Dear Reader/Watcher,

Fresh off the press in time for the summer - the latest changes to lettings regulations you need to know about.

As always I love feedback, comments and so forth so do get in touch if you're interested to speak further. On that note I have some interesting opportunities for sophisticated investors - if you are looking to invest in property and are looking for good returns then please drop me a line and start the conversation; I have a few projects which need funding and I am still looking for an investor in order to get it off the ground.

More legislation you need to know about when renting your property in Clapham, Brixton and elsewhere!

October brings us many things. Cold mornings, grey skies and it brings us a little bit closer to Christmas. My local supermarket outdid themselves by bringing out the tins of Quality street on the last day of September. Fill your boots.

More pressingly though, some interesting bits of legislation have been brought in recently. You will know about some I trust, with my recent post on the Deregulation Act. I thought I'd elaborate on that some more, reason being a landlord asked me more specifically about the changes regarding prescribed information.

We're all familiar with prescribed information. This is given when a tenant's deposit is registered. However as of the first of this month you will need to supply a little bit more...

Point 39 of the Deregulation Act 2015 states that: The Secretary of State may by regulations require information about the rights and responsibilities of a landlord and a tenant under an assured shorthold tenancy of a dwelling-house in England (or any related matters) to be given by a landlord under such a tenancy, or a person acting on behalf of such a landlord, to the tenant under such a tenancy.

So what is this "Prescribed Information" you speak of? Well a lot of you will be thinking it simply refers to the Deposit Protection PI. A standard document that we've all heard of at some stage. It comes attached to the certificate usually, most people don't even think twice.

BUT...

It's not that. In this case reference is made to a "How to Rent" booklet published by the government. Click here and have a read. You're now legally responsible for serving this on the tenant. A lot of people have criticised its value, arguing that it's a merely a guide aimed at people looking to rent and should be made available earlier in the rental process, not just before signing a tenancy. Truth is that most agents and landlords will send a link through to this booklet prior to starting paperwork. It contains a few obvious things - obvious to you and me - but its existence in itself is anything but. The guide is helpful to those new to the country, supposedly an aid for immigrants that flood in through our private rental sector and perhaps don't know about repairing obligations and the such. The law is of course different from country to country. You would however be surprised at how busy Shelter is with those that are not new to the country. The guide does a good job at pointing out the major landlord obligations. Again something to help the tenants go to the right place when their "rogue" landlord is not complying. That can only be a good thing. It will hold bad landlords accountable and improve the housing stock. Naturally you are of course a good landlord and maintain your property well. This guide will help you because bad landlords with bad property will simply end up selling their properties because they can't be bothered to maintain them well and deal with the extra regulations. Enter stage right, savvy investor. Embrace the compliance and see your returns improve.

In any case, more changes you as a landlord should be aware of. Is your agent handling these things for you? Excellent. If not, time to hand over your management to someone in the know.

Looking at an investment property? Excellent news - run it by me and I'm happy to give you my opinion on figures: buying, resale, letting, you name it. Email me on jeroen@claphampropertyblog.com

£400,000 fine for non-compliance. Are you complying when you are letting your property in Clapham?

Another day, another news article about a rogue landlord. They seem to be plentiful these days. Here's the latest one:

Click here for the article

I'll save you clicking through. In a nutshell, Mr. Landlord chopped up a house into flats and rented them out, despite planners at the council telling him "no, no no." So they took him to court and he was fined £30,000 and his rents and proceeds of £382,000.

Ouch.

That's a fairly extreme example, and let's face it - this particular landlord was a bit audacious ignoring the planners and proceeding anyway. Some say he had it coming, or so the reporters want you to believe for journalistic effect.

Relevance to your letting? A lot really. It just goes to show that landlords are being fined and punished for non-compliance. We have seen a lot of legislation change over the years, I've listed below a few examples with their penalties for non-compliance

Year	Legislation	Penalties
2008	Housing Act 1988 (amended 2008) - Deposit Registration	3x deposit amount and Section 21 can't be used to evict tenants
2014	Immigration Act 2014 - Obligation for landlords to check immigration status of tenants	Fine up to £3000
2015	Smoke and Carbon Monoxide Alarm (England) Regulations 2015	Fine up to £5000
2015	HSE revised Approved Code of Practice (ACOP) 'Legionnaires' disease	Fine up to £20,000

So as you can see, a lot is happening in the lettings sector. This is just a pick of the bunch, there will be more of course. So as a landlord it's important to comply. In addition to these regulations there will be restrictions from your lender as to what type of tenant you can let to (an how many), if you have a leasehold property there will probably be more restrictions - you may not be able to change the interior walls of the property without consent, paint the windows a different colour and so forth - you may not even be able to let it at all without asking parental - ahem - freeholder consent.

Fall foul of these regulations and plead ignorance all you like, it won't be a valid defense. You will more than likely have given some thought to handling some elements of the letting process yourself. But truth be told, when there's fines of £20,000 at risk along with the fact that you can't ask tenants to leave if you don't handle the paperwork to the letter of the law, why risk not getting a good managing agent on board to look after your compliance. It's a good insurance policy to have.

Your agent should be a competent, ARLA and NAEA qualified and member agent. They will be up to speed with the latest legislation and therefore offer you good value. In addition they will be able to help you get the most from your investments. After all, you have property in order to benefit you financially. With a little boost from good advice you may just be able to retire that little bit earlier, or buy that next property which will yield you another £500-£1000pcm. If you like the sound of that why not drop me a line: jeroen@claphampropertyblog.com and tell me what you would like to achieve. I help you get there.

So…. We’re deregulated now!

Tenancy deposits, and the adherence to the rules thereof, remains a headline topic these days. It can be a minefield! Anyone who’s heard someone talk sensibly will have heard of the “Superstrike vs Rodrigues” Case. What? Ah yes, that one…

In a nutshell if the tenancy started before April 2007 (when all these laws came into force) so the deposit wasn't protected. What happened was the court ruled the deposit should have been protected when the tenancy renewed. The court had, at the time, interpreted this as a new tenancy. Rightly or wrongly at the time, this had massive implications on every tenancy that was holding over or renewed by means of fixed term extension in the whole country! Every landlord for every running tenancy would have had to reserve the “prescribed information” (set of particulars to confirm certain details like who the landlord is and where the deposit is kept etc) upon each renewal. So every 6 or 12 months, however long the extension was for, or upon the fixed term lapsing and it becoming a statutory periodic tenancy.

“So what?” I hear you thinking… well here’s what – if you didn’t comply with these regulations to reserve the prescribed information bits and pieces you wouldn’t be able to serve S21 notice on the tenants (so you can’t make them move out). What’s worse is the tenants could sue mr. landlord for 3x the deposit amount because, even if it was registered correctly at the time of the tenancy starting, if the prescribed information wasn’t reserved it all went out the window…

"NIGHTMARE" I hear you say... Thank goodness for the Deregulation Act 2015 which fixes all these things, and then some. Read all 250plus pages of glory here if you like: http://www.legislation.gov.uk/ukpga/2015/20/pdfs/ukpga_20150020_en.pdf. To be fair only 20 points out of the 116 relate to property, but that’s still a lot to take in.

Or allow me to summarise:

• New Section 21 Notice - There will be a new prescribed notice available from this date onwards.  You will be able to download it from the Court website.
• If there is no Energy Performance Certificate or valid Gas Safety Certificate on the property, a landlord will not be able to serve a Section 21 Notice until this is rectified.  
• To prevent a landlord evicting a tenant who has complained about the condition/disrepair of the property, a landlord will no longer be able to serve a section 21 notice if the tenant has previously complained about the state of repair.
• Landlords are not under obligation to re-serve the PI nor re-register the deposit upon every renewal of tenancy or change from fixed term to statutory periodic at present.

So, all in all good changes for good landlords!

Remember if you want to talk property or run a new purchase by me please do so: I’m on 020 3637 4474 or email: jeroen@claphampropertyblog.com.