legislation
Legislation overview
for the Private
Rental Sector
Providing homes for rent can be an effective means of investment, and the buy to let sector has enjoyed huge growth over the last 40 years. However, being responsible for the dwelling place of others does put many legal obligations on to a Landlord. In-fact there are over 120 separate Acts of Parliament that are relevant to the private rental sector in the UK and Landlords should be ever mindful of their obligations.
Our guide isn’t an exhaustive list but covers those that most regularly influence the sector, and the relationship between Landlord and tenant.
Many Landlords choose DC Lane to manage their investments and trust us to guide them through the myriad of obligations. By reducing the worry of being at risk from non-compliance our managed service can be cost effective and gives ultimate peace of mind.
1.
Where it all started - The Housing Act 1988
In its simplest form, this Act of Parliament created the modern tenancy, and after amendments in 1997, the Assured Shorthold Tenancy (AST) that we currently use came into being. This tenancy type allowed Landlords to rent out and regain possession of property and effectively created the private rental sector (PRS). Almost all properties let as homes fall within the act, and for this reason most subsequent legislation is aimed at AST’s. A cornerstone concept of the Act was that all tenancies that qualify are an AST, so that Landlords were able to ensure possession could be regained as a default position and tenants had certain protections as a result. This allowed confidence in the tenure as a form of investment and the number of properties available for rent has consistently risen; with over 20% of all UK housing stock being privately rented in 2017. Currently to qualify the following must be true
- The original tenancy started on or after 28 February 1997
- The Landlord does not live at the property
- The tenant(s) must be a person or persons over 18
- The rent must be lower than £25,000 (or £100,000 in London)
- The property is the tenant’s main home
Our guide specifically covers requirements for AST’s but some of the legislation will cover other forms of tenure as well. DC Lane can cater for tenancies that fall outside the Act such as high rents, company lets and holiday homes.
2.
Gas safety
Gas Safety (Installation and Use) Regulations 1998 (GSIUR) place a requirement on Landlords to have any installation & all gas appliances checked annually by a gas safe registered engineer and to provide the tenant with a copy of the certificate. This iteration of the regulations allows Landlords to preserve the due date if the check was carried out within a month. A homeowner check is not sufficient. Failure to comply is a criminal offence and the enforcement powers are wide ranging. Landlords cannot serve a section 21 notice to end the tenancy if the tenant has not been provided with a copy.
3.
energy performance
On the 9th January 2013, the Energy Performance of Buildings (England and Wales) Regulations 2012 came into effect meaning that all properties marketed for sale and let must have a current EPC. Further legislation was laid down called the Domestic Minimum Energy Efficiency Standard Regulations (MEES) which required all property let from 1st April 2018 on an AST to have a minimum rating of E. In practice this is most tenancies within the PRS.
4.
Protection from Eviction
The protection from Eviction Act 1977 is a powerful piece of legislation that protects tenants from harassment and illegal eviction from their Landlord. Illegal eviction is defined in law; however, it can be reasonably explained as removing a tenant without having first obtained a possession order through the courts. Harassing a tenant to leave is also in breach of legislation. Illegal eviction is a criminal offence and can lead to arrest, imprisonment, and large fines. Harassment does not need to be physical. An excellent source of information to find out more is the Shelter page:
5.
Section 21 Notices
Section 21 Notices are the current vehicle used to end an assured shorthold tenancy without reason. Over the last few years, they have become known as ‘no fault evictions’ and are currently under review by the government in England. You may serve a section 21 notice to coincide with the end of a fixed term tenancy, in line with a valid break clause within a tenancy agreement, or during a periodic tenancy.
The Deregulation Act defined the S21 into a prescribed format and must be served correctly. In most cases, a tenant will mutually agree with a Landlord to vacate at the expiry of the notice, but they are not required to do so. This means that even at expiry the Landlord must not evict a tenant illegally and will need to apply for a court order to bring the tenancy to a conclusion if the tenant does not leave.
6.
Section 8 Notices
This is the prescribed notice used if you wish to terminate an AST for breaches. There are 18 grounds for possession, some of which are mandatory (i.e. if proved, a court must give possession) and other are discretionary. In all cases a court hearing will be required to progress a section 8 eviction. This can be an expensive process and we advise Landlords to employ a legal representative to draw up these notices because the risk of loss from an incorrect application being dismissed in court far outweigh the cost of legal help. Landlords should not attempt to illegally evict the tenant even if they believe there has been a breach such as non-payment of rent. There are insurance products that will help cover repossession costs and we can arrange these for all clients.
7.
HHSRS
The Housing Health and Safety Rating Scheme was introduced on the 6th April 2006 from within the Housing Act 2004. Essentially this is a 29-point risk-based assessment of homes which is employed by the local authority, most often after a tenant has made a complaint about disrepair.
It is likely that a housing officer will arrange an inspection of the property and if hazards are identified, will respond by issuing an awareness notice. If the hazard is urgent, they may take more immediate action. If the Landlord does not make improvements that negate the hazards identified, the local authority will escalate this to an improvement notice and ultimately have the power to both place a financial charge on the property and carry out works themselves at the Landlords cost. The De-Regulation Act prohibits Landlords from evicting tenants while notices are in force and for a period of six months thereafter – known as ‘retaliatory eviction’
8.
Deposit Protection
Deposit Protection is quite a complicated subject that has been through legislative amendments and a well-known case law test (Superstrike Ltd v Marino. Rodrigues) that has led to quite a few misunderstandings within the sector. This is an area with potential for private Landlords to er, with expensive consequence.
The Housing Act 2004 requires financial deposits given by tenants to Landlords to be protected by an approved scheme from April 2007. Failure to correctly protect a deposit will mean that Landlords are unable to secure possession of their property through a section 21 process and may be ordered to repay the tenant up to three times the deposit amount. The Localism Act updated the regulations from 6th April 2012 to give Landlords 30 days to protect the deposit and serve the prescribed information from the time the deposit was paid. The Deregulation Act clarified confusion created by Superstrike in relation to re-protecting at renewal or start a periodic tenancy.
9.
Deregulation Act
This Act was put in place to simplify and clarify many areas of regulation for Landlords and was laid down on the 26th March 2015. Its more straightforward to list the areas of relevance.
- Clarified the deposit protection requirements for renewal of fixed term, periodic tenancies and those starting before April 2007
- Required Landlords to serve to the tenant prescribed documents at the commencement of a tenancy including gas safety certificate, EPC & How to Rent Guide.
- Introduced a new standard section 21 form for use when evicting tenants
- Placed a timeframe on use of section 21, so that it cannot be served during the first 4 months of the tenancy and must be enforced within 6 months of expiry
- Section 21 cannot be served if the Landlord is not compliant with their obligations for condition of the property, health and safety of the tenant and energy performance requirements.
Retaliatory Eviction can be used as a defence against section 21 possessions claims. Landlords should respond to complaints of disrepair within 14 days, setting out the intended remedies and timescales. Tenants can complain to the local Authority and if an improvement order is served, the ability to serve a Section 21 in suspended until 6 months after the repairs are completed.
10.
fire safety
The 2 most relevant areas are the smoke and carbon monoxide alarm (england) regulations 2015 and The Furniture and Furnishings (Fire) (Safety) Regulations 1988.
The former law essentially requires all rented property to have a compliant smoke alarm fitted on each floor of the property, and a carbon monoxide alarm in any room that contains or has the potential to contain a solid fuel appliance. The alarms must be checked on the first day of a new tenancy. HMO’s that require a grade A fire system fall outside the legislation, but where a section 257 HMO requires a grade D system, this is unlikely to qualify and therefore we advise further alarms to be fitted.
The latter prohibits a Landlord from providing any soft furnishings that are not compliant with the regulations – Furniture must be match and cigarette resistant and is always sold with a label. It is not lawful to gift or sell non complaint items.
11.
hMO's
Houses in multiple occupation laws changed on the 1st October 2018. These changes meant that all properties let to 5 or more people consisting of 2 or more households are licensable HMO’s. Each local Authority has different policies and therefore a catch all guide will never be entirely accurate, however failure to license an HMO will lead to fines and enforcement action that can include being banned from operating such premises. Usually, a license will be issued after payment of relevant dues, a satisfactory application and visit from a housing officer. Improvements may be required and can include the provision of fire alarms, fire doors, prevention of risk from falls and emergency escape. HMO licensing shouldn’t be confused with planning requirements. Some local authorities (usually city centre) may require specific planning permissions for licensable and even small HMO’s. This is relevant to purchases and caution all buyers to thoroughly investigate planning and HMO license compliance early in their due diligence enquiries.
12.
Landlords Repair Obligations
Landlord’s obligations to repair & maintain a property come from 3 main sources. Firstly, the Landlord and Tenant act 1985 section 11, followed by any contractual clause and finally the concept of warranty.
If you look at any well drafted tenancy agreement, you will find a section covering the Landlords obligations to repair under section 11. Landlords must maintain the exterior and structure of the property. This includes installations for the provision of water, heating systems, drainage, sanitary appliances and gas and electricity. As this is a statutory requirement, even without written clauses these obligations remain. Some contracts may include other repair obligations and although most keep Landlord’s requirements to the statutory minimum, this may not always be the case. Be careful to check when a third party has offered to provide the paperwork. Where a contract is silent on a matter, Landlords may have obligations created by warranty – for example if the property was advertised and rented with a white good, the rent payable reasonably includes the appliance, so as such it should be in working order.
Landlords must respond to tenants who report disrepair in line with the Deregulation Act.
13.
Electrical Regulations for Landlords
The most recent safety legislation for Landlords was introduced in June 2020 and is called The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020. All Properties must have a valid EIC (Electrical Installation Certificate) for new installations or an EICR (Electrical Installation Condition Report) for existing installations. The reports must be carried out by a competent person, and the local authority re responsible for enforcement.
14.
Right to Rent Checks
The Immigration Act 2016 along with amendments in 2020 & 2021 require Landlords to carry out a right to rent check on all occupiers of their property. There are both permanent and time – limited rights for certain tenants. A re-check is required in line with the legislation where a time limited right has been established. Brexit means that European citizens may not now have a permanent right to rent. As a result of the COVID pandemic, some checks that previously must have been in person were allowed to be completed online which was welcomed by agents who carry out checks for their clients. Allowing tenants to occupy who do not have a right to rent is a criminal offence, can lead to fines of £1000.00 for a first instance increasing to £3000.00 for repeated non-compliance, and may result in both a banning order from renting property and imprisonment. Don’t do it, Folks.
