If you were to attempt a count of the number of private rental sector legislation changes over the past 10 years, you’d need far more than the fingers of two hands.
Put simply, landlords are struggling to keep up.
And proof of that fact has now been revealed in fresh research by bridging lender Market Financial Solutions (MSF), who surveyed 400 private landlords on regulation change.
The headlines are:
-30% did not understand changes to HMO licensing from October 2018
-28% weren’t aware of the proposed scrapping of section 21 evictions
-27% were uncertain about the Tenant Fees Ban
-28% don’t understand reforms to inheritance tax
-25% weren’t aware of changes to tax relief on mortgage interest payments
Those are, frankly, scary numbers.
But is it any surprise some landlords have failed to keep up with the pace of change in the private rental sector?
Landlord legislation changes
In 2018 alone, landlords were faced with a raft of major changes, including:
-GDPR: From May 25 2018, landlords must abide by data protection laws on retention, safeguarding and sharing tenant data
-Minimum Energy Efficiency Standards (MEES): In April 2018, new laws came into force regarding minimum standards of energy efficiency in private rentals
-Deregulation Act changes: From October 2018, landlords must have a valid Energy Performance Certificate, have provided tenants with a gas safety certificate and the How To Rent guide in order to issue a valid section 21 eviction notice
-HMO licensing changes: From October 2018, landlords renting houses in multiple occupation (HMO) must have a licence if the property is housing five people or more who are not related, regardless of the number of storeys the property has
And if that weren’t enough, 2019 has already brought with it the following legislation:
-Homes (Fitness for Habitation) Act: in March, the introduction of this legislation means tenants can now take legal action against landlords whose properties are in sub-standard condition
-Mortgage interest tax relief: Okay, so this is nothing new, but the phased process of changes to mortgage interest tax relief meant that, from April, landlords could only claim relief on 25% of their mortgage interest
-The tenant fees ban: Since June 1, landlords and lettings agents are now unable to charge tenants a host of fees
-Removal of section 21: The government announced in April that it is consulting on the abolition of section 21 eviction notices
-Mandatory electrical safety: Currently landlords need to ensure the electrics in their properties are safe at the start of tenancies and maintained throughout. Proposed changes being discussed in government could see mandatory five-year safety checks and certificates implemented for all rental properties and not just HMOs (as they currently are)
-Three-year minimum tenancies: The government is currently debating on minimum tenancies that would essentially make them open-ended, providing security for tenants alongside the abolition of section 21
Keeping up with constantly evolving legislation is far from easy, as the MSF survey proves.
But with the penalties as severe as they are, including hefty fines and even prison sentences in some cases, ensuring you are legally sound before and during a tenancy is crucial.
And the fact is, the legislation touched on in this piece is only scratching the surface of the compliance required – there are actually almost 200 pieces of legislation that can, and often do, affect private landlords.
The best way to stay compliant and preserve the safety and well-being of your tenants, as well as protect yourself from fines or even prison, is to engage a pro-active full managing agent.
Martin & Co manages hundreds of rental properties for landlords in Chelmsford, ensuring they remain on the right side of mounting legislation.
Contact one of the lettings team who would be happy to discuss your management needs.