LANDLORD COMPLIANCE GUIDE


Landlord Compliance Guide


Legislative Regulations

1 - The Electrical Equipment (Safety) Regulations 1994

All portable electrical appliances supplied in rented accommodation must be safe. Cabling, fuses and plugs must also be inspected and replaced where necessary to the correct rating for the particular appliance. This applies to both new and second-hand appliances and covers all electrical items supplied for the intended use of the Tenant. All new appliances must be CE marked and instruction booklets for all appliances must be given to the Tenant at the commencement of the Tenancy. Any appliance without written instructions must be removed from the Property as unsafe. The only safe method of ensuring that these appliances comply with the regulations is to have them tested by a qualified electrical engineer. The regulations do cover fixed appliances such as cookers, showers and immersion heaters. However, the Consumer Protection Act 1987 specifies that all items supplied in a rental Property need to be safe. If the Tenant suffered personal injury due to an unsafe appliance the Landlord could have to pay substantial compensation.

A new part of the Building Regulations, Part ‘P’ Electrical Safety came into force from 1st January 2005 which requires certain electrical works to be carried out by an electrician who is part of an approved scheme. Townends only use electricians who have provided Us with proof of a scheme membership. We will ensure that all electricians comply with Part ‘P’ regulations when carrying out certain works that fall within the regulation. We will only use the Landlord’s contractor as long as that person complies with the regulations. If the Property is deemed to be a House of Multiple Occupation as defined in the Housing Act 2004, then Townends reserve the right to conduct an Electrical Installation Condition Report to ensure that You comply with Your statutory requirement. Please note that electrical testing of portable appliances is mandatory if We are providing our Fully Managed or Rent Collect Service unless You advise Us in writing otherwise. In these instances Townends will arrange for an inspection by a qualified electrician and deduct the relevant amount from Your account.

2 – Homes (Fitness for Human Habitation) Act 2018

The Homes (Fitness for Human Habitation) Act 2018, known as the Homes Act, replaces Section 8 of the Landlord and Tenant Act 1985 (LTA 1985) in England, with the purpose of improving living standards in the private and social rented sectors.

Under the Homes Act 2018, landlords and letting agents acting on their behalf must ensure properties, including common parts where they have an estate or interest, are fit for human habitation at the beginning and throughout the duration of a tenancy. Tenants will now be able to take direct legal action if their agent or landlord does not comply with the Act. NB: Agents should be aware that property checks will no longer be needed by local authority enforcement officers before being taken to Court by a tenant.

The new rules apply to all domestic tenancies granted or renewed on or after 20 March 2019 and effect tenancies in England only. NB: The Act also applies to leases used wholly or mainly for human habitation not exceeding a period of seven years (or longer tenancies that can be cancelled before seven years). Existing Fixed-Term Tenancies will fall under the requirements of the Act when they are renewed or become Periodic. NB: Existing tenancies that have changed significantly, such as having a Change of Sharer (including through use of an addendum) on or after 20 March 2019, will also have to comply with the new rules. Periodic Tenancies that commenced before 20 March 2019, will come under the scope of the legislation 12 months after commencement on 20 March 2020.

Fitness for human habitation is defined in the LTA 1985. The Homes Act amends this definition to include other dwellings alongside houses. A property unfit for human habitation is ‘so far defective in one or more of those matters that it is not reasonably suitable for occupation in that condition.’ ‘Matters’ refers to: Repair; Stability; Freedom from damp; Internal arrangement; Natural lighting; Facilities for preparation and cooking of food; Water supply; Drainage and sanitary conveniences; Ventilation; and facilities for the disposal of waste water. NB: The Homes Act adds to this list ‘any prescribed hazard.’

The Housing Act 2004 defines a ‘hazard’ as ‘any risk of harm to the health or safety of an actual occupier of a dwelling or HMO which arises from a deficiency in the dwelling or HMO’. The hazards used in the Homes Act, are the 29 as listed in the Housing Health and Safety Rating System (HHSRS). The 29 HHSRS hazards are: Damp and mould growth; Excess cold; Excess heat; Asbestos and Manufactured Mineral Fibres; Biocides; Carbon monoxide and fuel combustion products; Lead; Radiation; Uncombusted fuel gas; Volatile organic compounds; Crowding and space; Entry by intruders; Lighting; Noise; Domestic hygiene, pests and refuse; Food safety; Sanitation and drainage problems; Water supply; Falls associated with baths; Falls on level surfaces; Falls associated with stairs and ramps; Falls between levels; Electrical hazards; Fire; Flames, hot surfaces and materials; Collision and entrapment; Explosions; Ergonomics; and Structural collapse and falling elements.

It is recommended that agents ensure that the hazards identified in the HHSRS are integrated into all inventory check-in reports. NB: Any hazards that are identified must be remedied before the tenancy begins. The Homes Act removes the requirement for fitness for human habitation to apply for ‘potential occupants’, as the rules apply to the start and duration of a tenancy only. This allows time to remedy any identified hazards before the commencement of a tenancy. For more information regarding Homes (Fitness for human Habitation) Act 2018 please contact your local office.

3 – The Tenant Fees Act 2019

The ban on tenant fees applies only in relation to tenancy agreements and licences signed on or after the 1 June 2019. The Tenant Fees Act prevents landlords and their agents from requiring tenants to make any payment as a condition of granting, renewing or continuing a tenancy apart from:

  • Rent
  • A capped refundable Tenancy Deposit
  • A capped refundable Holding Deposit
  • Payments in the event of a default
  • Payment on variation, assignment or novation of a tenancy
  • Payment on termination (surrender) of a tenancy
  • Payments in respect of Council Tax
  • Payments for utilities (electricity, gas or other fuel, water or sewage)
  • Payments for a television licence
  • Communication services (telephone other than a mobile telephone; the internet; cable television, satellite television)

The ban on tenant fees applies only in relation to tenancy agreements and licences signed on or after the 1 June 2019. NB: For existing tenancies the ban will apply to renewals (where the tenancy agreement becomes a new Fixed Term agreement) granted from 1 June 2019. The ban applies to:

  • Assured Shorthold Tenancy (AST)
  • Licence to occupy
  • Student lettings provided by a specified educational institution (tenancy which meets the
  • conditions set out in paragraph 8 of Schedule 1 to the Housing Act 1988)

For existing tenancies (those signed before 1 June 2019) there is a transitionary 12-month period ending 31 May 2020. During this time, agents can continue to charge fees written into existing tenancy agreements. If an existing tenancy is renewed this is classed as a new tenancy agreement and under the ban agents will not be able to charge fees. After 12 months (31 May 2020) from when the Tenant Fees Act comes into force all Prohibited Payments will be unlawful regardless of when the tenancy started.

For more information on the Tenant Fees Act 2019 please contact your local branch.

4 -The Gas Safety (Installation and Use) (Amendment) Regulations 2018

Landlords are legally responsible for the gas safety of their properties. The Gas Safety (Installation and Use) Regulations 1998 outlines what landlords must do to ensure gas appliances, fittings and flues provided for tenants are safe. The Gas Safety (Installation and Use) (Amendment) Regulations 2018 provide new flexibility in the timing of landlords’ annual gas safety checks and the date when the next safety check is due. NB: There is no change to the legal requirement for an annual gas safety check or for maintenance to be carried out. It is not compulsory for landlords to take advantage of the new flexibility and can continue with their current arrangements for gas safety checks. However, landlords must keep the last two records of their gas safety checks rather than keeping copies of each check for two years.

The law applies to all landlords across the UK and the new rules come into force on 6 April 2018. It covers fixed as well as portable appliances (gas cookers, gas fires, gas heaters, gas boilers and water heaters) provided by the landlord for tenants’ use and flues (chimneys and pipework) they are connected to. The rules are applicable to property rented under either an Assured Tenancy, Fixed Term Tenancy, licence or leases granted for a term of seven years or less. NB: Gas appliances, fittings and flues in a communal area of a property, but which may be used by tenants also fall under the responsibility of landlords.

Landlords must ensure that pipework, appliances and flues are maintained in a safe condition. Gas appliances should be serviced in accordance with the manufacturer’s instructions. If these are not available, it is recommended that they are serviced annually unless advised otherwise by a Gas Safe registered engineer. Landlords must arrange an annual gas safety check on every gas appliance and flue by a registered Gas Safe engineer. NB: Under the amended rules, if it is not possible to examine the operating pressure or heat input of the gas appliance, the person who carries out the gas safety check must instead examine the combustion performance of the appliance to ensure it is operating safely.

Before any new tenancy starts landlords must ensure these checks have been carried out within one year before the start of the tenancy date, unless the appliances in the property have been installed for less than 12 months, in which case they should be checked within 12 months of their installation date. NB: The checks are a requirement for both mains gas and liquefied petroleum gas (LPG) appliances including hobs and gas fires. Under the new flexibility, landlords can obtain a gas safety certificate up to two months before the current certificate expires and keep the same expiry date. This means that landlords may ensure that an appliance or flue is checked for safety within the two-month period beginning with the deadline date (a 10-12 calendar month window after the previous gas safety check), instead of checking it within the 12 month period ending with that date. NB: The deadline date is the last day of the 12-month period within which the check is or was required to be made.

5 - Furniture and Furnishings (Fire) (Safety) Regulations 1988 as Amended

The above regulations were amended in 1993 and have set new levels of fire resistance for domestic upholstered furniture and furnishings. It is now an offence to ‘supply’ in the course of a business any furniture, which does not comply with the regulations. This includes supplying furniture as part of a let residential Property. The regulations apply to sofas, beds, bedheads, children’s furniture, garden furniture suitable for use in a dwelling, scatter cushions, and pillows, and other similar upholstered items. All furnished Property available for rental must contain furniture that complies with the regulations. Any additional or replacement furniture supplied must comply with the regulations. Any furniture manufactured after March 1990 is likely to comply but if the appropriate labels are not affixed to the furniture, compliance is in doubt and checks should be made with the manufacturer. By signing the Terms and Conditions the Client confirms that the Property complies with the above regulations.

6 - Smoke Alarms and Carbon Monoxide Alarms 2015

As from the 1st October 2015 under ‘The Smoke and Carbon Monoxide Alarm (England) Regulations 2015’ it is a requirement of the Landlord to ensure that there is a working smoke alarm on each storey of the Property and a working carbon monoxide alarm in a room where there is a solid fuel appliance and these are tested as working on the Day a new Tenancy commences. Where Townends manages a Property, the Landlord agrees that Townends will install and fit such alarms to any Property which does not comply with the requirements of the legislation and will arrange for a contractor to visit the Property and test the alarms in accordance with the manufactures instructions and deduct the relevant cost from Your rent account. Where the Landlord arranges for their own installation or opts for the Let Only or Rent Collect Service, the Landlord will be responsible for ensuring they comply with the statutory obligation.

7- Legionnaires Disease

In order to comply with the Health and Safety Executives Code of Practice, Landlords must ensure the Health and Safety of Tenants by keeping the Property safe and free from hazards. The L8 Approved Code of Practice (3rd edition) (ACOP) establishes a requirement for Landlords of both domestic and business premises to assess the risks from exposure of Legionella to their Tenants.

Whilst there are practical and proportionate measures Landlords may undertake there remains a ‘duty’ on the Landlords part to assess the risk from exposure to Legionella. By signing these Terms of Business, the Landlord acknowledges his responsibility for the safety of the Tenant at the premises, confirms he has considered all risks regarding Legionnaires Disease and has taken prudent steps to document and keep a record for their own purposes. If You do not feel competent to carry out a risk assessment, Townends will undertake this for You, by arranging for a professionally trained and accredited assessor to carry out an assessment, providing You with an appropriate record of such, deducting the cost from the Landlords account.

8 - Tax

You will be liable for tax on rental income and You must inform the Inland Revenue that You are letting the Property. There are a number of allowances that You can claim against the rental income. You should seek advice on these allowances from Your accountant or from the Inland Revenue website which can be accessed at www.hmrc.gov.uk. For tax purposes You must keep all Your invoices for 6 years. You should also be aware that Townends forwards a form to the Inland Revenue annually detailing all Landlords whose Property Townends has let regardless of the country of residence of that Landlord.

If the Landlord is resident abroad for more than 6 months in the tax year or a company registered overseas, the Inland Revenue require Townends to deduct income tax at the basic rate from the payments received and account to the Inland Revenue for it under Section 42A of the Income Tax and Corporation Taxes Act 1988. Overseas Landlords can apply to the Inland Revenue to receive rent without the deduction of tax. Provided that the Landlord’s tax affairs are in order, the Inland Revenue will authorise Townends not to withhold tax from the rent received. Please ask for an application form. The Non-resident Landlord Scheme includes members of HM Armed Forces and other Crown Servants who are resident abroad for their employment, even though their employment duties, while performed overseas, are treated as performed in the UK for the purposes of charging their salaries to tax. Unless Townends are in receipt of a letter of authorisation from the Inland Revenue, We will withhold monies from rental received as advised by the Inland Revenue. No interest is payable on monies held. The appropriate form for applying for an approval number can be downloaded from www.hmrc.gov.uk/cnr/nrLandlords.htm.

Should an approval number not be obtained for each person who owns the Property and Townends have to retain tax at the basic rate, We will charge and deduct from Your account an administration fee for preparation of the quarterly and annual returns required to be made by Us to the Inland Revenue. The Client will be liable to reimburse Townends against all payments of interest on outstanding tax or penalties levied on or made by Us and shall pay to Us any shortfall of such monies upon written demand. Should any Client require an annual summary of income and expenditure for tax purposes this can be provided at an additional cost.

9 - Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018

In May 2015, the UK Government announced that they would extend mandatory licensing of Houses in Multiple Occupation (HMOs) to address poor conditions and overcrowding.

Under the Housing Act 2004 an HMO is where three or more people share accommodation and amenities (washing and cooking facilities) and form two or more separate households (this can be a family, a couple or a single person).

Large HMOs are properties consisting of three or more floors and occupied by five or more people living in two or more single households where the occupiers share basic amenities. NB: Since 6 April 2016 all large HMOs must be licenced with a local Council under mandatory licensing.

Each Council has the power to introduce additional licensing schemes which apply to certain HMOs that fall outside the scope of mandatory licensing. NB: It is a requirement for the licence holder of a licenced HMO (mandatory or additional) to provide: An annual gas safety certificate; keep electrical appliances and furniture safe; ensure smoke and carbon monoxide alarms are fitted and kept in working order; provide written tenancy agreements.

A landlord or agent managing of an HMO must have a separate licence for each property. Each licence is valid for maximum of five years. Licences are non-transferable. The fee charged for a licence is set by each local Council. NB: Upon the death of a licence holder, a three-month temporary exemption is automatically granted with an option to renew. Licences are granted: if the house is suitable for occupation; the proposed licence holder or agent managing of the property is a ‘Fit and Proper’ person; and the proposed management arrangements are satisfactory.

A ’Fit and Proper Person’ test involves a check on whether the licence holder or agent has any previous convictions relating to violence, sexual offences, drugs or fraud; whether they have contravened any laws relating to housing or landlord and tenant issues; and/or whether the person has been found guilty of unlawful discrimination. NB: Under the Housing and Planning Act 2016 additional criteria was added to the ‘Fit and Proper Person’ test. A landlord or agent managing a HMO must: Not be an illegal immigrant; not be insolvent or bankrupt; and not have committed an offence under the Immigration Act 2014. Authorities do not have to inspect every licensable HMO before issuing a licence, but all licensable HMOs could be inspected within five years.

Mandatory licensing will no longer be limited to certain HMOs that are three or more storeys but will also include buildings with one or two floors. Any landlord who lets a property to five or more people, from two or more separate households, must be licenced by their local authority. The rules also introduce new mandatory conditions for national minimum sleeping room sizes and waste disposal facility requirements.

The new rules apply only to licences granted or renewed on or after 1 October 2018 and affect HMOs in England only.

10 - Mandatory Licensing

Under the Housing Act 2004 Landlords of certain properties where individuals are living as more than one household will need to be licensed by their local authority. If the Property potentially requires a licence You will either need to obtain a licence from the relevant local authority or Townends will only be able to let the Property to a single family group. The Property will require a licence if it falls into the following definition. If the Property is 3 storeys or more and has 5 or more occupiers who do not form one household and share kitchen or bathroom facilities it is subject to mandatory licensing. It is the responsibility of the Landlord to apply and pay for the licence along with communicating any management requirements to Townends of the licence. Townends will notify the Landlord of any fee payable if this is not included within the Fully Managed Service.

11 - Selective Licensing

Under the Housing Act 2004, Landlords of properties in certain areas may be subject to a licensing requirement from their local authority to be able to lawfully let the Property. It is the responsibility of the Landlord to apply and pay for the licence along with communicating any management requirements to Townends of the licence. Townends will notify the Landlord of any fee payable if this is not included within the Fully Managed Service. If the Client does not have a valid license when required then a valid Section 21 notice seeking possession of the Property cannot be served. The local authority can also take action against the Client which can include application to the First Tier Property tribunal to seek a rent repayment Order to seek recovery of the rent paid up to1 year.

12 - The Energy Efficiency Regulations 2015 & MEES

The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 introduce measures to improve the energy efficiency of private rented property under the Energy Act 2011.

Part Two of these Regulations allow the tenant of a private rented property to request permission from their landlord to make energy efficiency improvements in the property they rent.

Part Three of the Regulations outline that private sector landlords must not grant a new tenancy of a property (including an extension or renewal) they let after 1 April 2018 and must not continue to let the property (on an existing tenancy) after 1 April 2020, where the Energy Performance Certificate (EPC) is below the minimum level of energy efficiency for private rented properties of band E.

The Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 make changes to Part Three of the 2015 Regulations. From 1 April 2019, landlords of domestic properties with an EPC rating below E must carry out up to £3,500 (inc. VAT) worth of works improving their energy efficiency if they cannot obtain third-party funding to meet the costs. NB: This requirement applies before the property is let on a new tenancy, or by April 2020 if no new tenancy has been entered into. The £3,500 cap is an upper ceiling, not a target or a spend requirement and landlords may spend more if they wish. If a landlord can improve their property to E (or higher) for less than £3,500 then they will have met their obligation. NB: If a landlord is unable to improve their property to EPC band E for £3,500, they should install all measures which can be installed up to £3,500, then register an exemption on the PRS Exemptions Register.

Listed buildings, and buildings within a conservation area, will not be required to meet the minimum energy efficiency standards if they are not required to have an EPC. If an individual listed building is required to have an EPC (and if it is let on a qualifying tenancy type) then it will be covered by the Regulations.

Since 1 April 2018 it is unlawful for landlords to grant new tenancies of properties that have an energy efficiency rating of F and G on its EPC, unless an exemption applies or the landlord has made all the relevant energy efficiency improvements. Under the rules relevant energy efficiency improvements which a landlord may choose to install to reach an EPC rating of E (either a single measure, or a combination of measures) are any energy efficiency improvements recommended for the property through a relevant Recommendation Report (contained within an EPC), a Green Deal advice report or a report prepared by a qualified surveyor. NB: A list of the energy efficiency measures which may be recommended for a property on an EPC or as part of a Green Deal Advice Report are set out in our fact sheet ‘Tenant’s Energy Efficiency Improvements’. A landlord of an F or G rated property is required to make energy efficiency improvements to reach an EPC E by using either: self-funding (capped at £3,500, inc. VAT); third-party funding (uncapped); or a combination of third-party and self-funding (capped at £3,500, inc. VAT).

13 - Flood and Water Management Act 2010 (Section 45)

Under this Act an obligation is placed on the Landlord to provide the Tenant’s contact details to the relevant water company at the end of the Tenancy or they will become jointly and severally liable for any unpaid water charges during the Tenancy. Consumer Protection from Unfair Trading Regulations 2008 in marketing the Property, Townends is legally obliged to ensure that all information is accurate, not misleading and does not omit material information. You must make Us aware of any matter which may be material to a Tenant.

14 - Landlord Repairing Obligations

Section 11 of the Landlord and Tenant Act 1985 as amended by Section 116 of the Housing Act 1988 places and obligation on Landlords to keep in repair and proper working order the installations for the supply of water, gas, electricity and sanitation including basins, sinks, baths and sanitary conveniences and the installations of space heating and heating of water.

15 - Safety Standards for Internal Blinds and Curtains

It is a legal requirement that all blinds and curtains which include a cord or chain must comply with the recently published safety standards. Legally all blinds and curtains must have built-in safety systems. Blinds and curtains that are already fitted to a Property must be made safe or replaced.

16 - Retaliatory Evictions

Under the Deregulation Act 2015, measures were bought in to stop Landlords evicting Tenants who reported issues with the Property rather than fixing them. Under an AST, if poor state of repair is reported to a Landlord and an adequate written response within 14 Days, the Tenant may inform the council who could then stop the Landlord serving a Section 21 notice for 6 months, as well as issuing an improvement notice.

17 - Asbestos

It is the Landlord’s responsibility to ensure that Townends are informed of any asbestos fixtures and fittings within the Property or any outbuildings included in the Tenancy Agreement. This ensures that contractors are properly instructed.

18 - Private Water Supplies

It is a Tenant’s right to enjoy pure drinking water in their home. It is our advice that a Tenant should be provided with a copy of the report from the Environment Agency confirming the standard of the water supply to the Property. If the report does not show that the water reaches recommended levels, We must advise that a UV filter be fitted to the Property supply, either at the main water inlet to the Property, or to a separate drinking supply. The Tenant should be made responsible within the Tenancy Agreement for changing the UV bulb within the filter, or if 1 specific tap is to be used for drinking water the Tenant should be notified accordingly.

19 - Finance Act 2003

From 1st December 2003 the liability for Landlords to pay Stamp Duty was abolished. The liability is purely that of the Tenant if the rent after deduction of the discount exceeds £125,000.00.

20 - Defective Premises Act 1972

Under the Defective Premises Act 1972 the Landlord is liable as owner for any occurrence originating from a defect or lack of repair that the Landlord knows of or should have been aware of. If the Tenant suffers loss due to the defect the Landlord will be liable to compensate the Tenant. Townends assume that the Property has no defect unless advised to the contrary. If You require a survey to be carried out please advise. Many building insurance policies provide cover against claims under this act, but You should check Your own policy to ensure You are covered.

21 - Consumer Protection Regulations

Under the Consumer Protection Regulations, the Client is required to disclose any information that might materially affect a Tenant’s decision to take out a Tenancy at the Property. In the event that information to this affect is not provided to the Tenant they can seek damages as well as a cancellation of the Tenancy that they entered into. The Client is required to inform Townends of anything that may fall under this category. If such information is not disclosed then and Townends suffer any loss as a result, the Client agrees to indemnify Townends against any such losses.