The private rental sector has seen an influx of government legislation over the last few years. This has included regulation such as the tenant fee ban and the removal of tax relief.
Here we outline the legislation that landlords need to know, the measures that have been introduced since the coronavirus pandemic began and the regulations that are in the pipeline.
Legislation landlords need to know
The rental eviction ban was introduced in March 2020 as a temporary solution for tenants facing financial difficulty. This ban meant that landlords were restricted when serving a Section 21 or Section 8 notice to their tenants for a three month period, starting in March.
The government also extended the eviction ban by a further two months at the end of June to last until the end of August. New associated rules also included a six months’ notice period. While the eviction ban has now ended, landlords still have to adhere to the six months’ notice period. This is in place until March 2021.
Some landlords who had been facing problems with their tenants in rent arrears found the eviction ban escalated the problem. However, the courts are now rehearing cases, but are facing a backlog. As a result, they are prioritising eviction cases relating to domestic abuse or anti-social behaviour.
The end of mortgage and rent holidays
In March 2020, a three-month mortgage payment holiday was announced for buy-to-let landlords as a temporary solution. The government suggested these payment holidays could be passed on to tenants who were struggling financially at the landlords’ discretion.
Agreeing to a rental holiday for tenants may be a good option to consider as it means you can ensure a consistent level of income continues to come in. It can also help prevent rent arrears from piling up and avoid the process of finding a new tenant.
Minimum Energy Efficiency Standards
The Minimum Energy Efficiency Standards were first introduced in April 2018.
Currently all rental properties have to have an energy performance certificate rating of E or higher.
If a property falls in the F or G rating, then it cannot legally be let out to tenants. Landlords would instead have to pay up to £3,500 on making improvements to the rental properties.
There are some exceptions to the rule. For example, if a property’s market value would be reduced or if the improvements wouldn’t result in energy savings that are more than the cost paid for. In those cases, the property must be listed on the National PRS Exemptions Register.
Fitness for Human Habitation Act
The Fitness for Human Habitation Act was originally launched in March 2019 and applied to new tenancies only. The aim of the Act was to protect tenants and ensure the properties they rent are fit for purpose.
As of March 2020, the Act was extended to include all existing periodic tenancies.
However, the Fitness for Human Habitation Act doesn’t apply in cases where a tenant has damaged the property to the extent it is no longer habitable.
Extension of Tenant Fees Ban
Originally introduced in June 2019, the Tenant Fees Ban (known officially as the Tenant Fees Act) was extended to apply to all tenancies in June 2020.
Fees such as admin charges, credit checks and referencing were all banned. Other restrictions include the capping of a holding deposit at no more than one week’s rent, and limiting the tenancy deposit to no more than five week’s rent. This can be extended to six weeks’ rent where the annual rent amounts to more than £50,000.
If a landlord breaches the Tenant Fees Act, they can face fines of up to £5,000 and considered a civil offence. If they breach the act again within the next five years, it changes to a criminal offence and fines increase to £30,000.
Legislation in the pipeline
Mandatory electrical safety checks
As of July 2020, landlords are required to undertake electrical safety checks every five years on new tenancies. This is set to apply to all tenancies from April 2021.
Any landlords who breach the mandatory electrical safety checks could face fines from the local housing authority.
Section 21 ban
Back in December 2019, it was announced a Renters’ Reform Bill would be introduced as a replacement to Section 21 notices which are also known as ‘no fault’ evictions.
The Renters’ Reform Bill has been placed on the backburner due to the coronavirus pandemic and a date is still to be announced.
At the start of 2020, there were discussions around making it easier for tenants with pets to find suitable properties.
Due to the coronavirus pandemic, there haven't been any recent developments. However, it is something landlords should be aware of and start to consider now.
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