As we move forward into a new year many landlords are hoping to forget the bumpy end to 2015, and are looking to start afresh in 2016!
If you’re starting the new year with new tenants, it is important to remember that there were a fair few legislation amendments to lettings last year.
We’ve compiled a ‘New Year Checklist’ for anyone looking to start a new lease in 2016, just to make sure that the new lettings legalities don’t trip you up – there’s plenty of changes which could take even the most experienced landlord by surprise!
Gas Safety Check
Not much has changed in 2016 with regards to the need to be on top of your gas safety planning, as a landlord you are still responsible for the maintenance of your property and the overall safety of your tenants.
It is your responsibility to ensure that all gas appliances, pipework, fittings and flues in your property are maintained and serviced regularly, and that an annual gas safety check is carried out by a Gas Safe Registered engineer – make sure your contract states that your tenant will allow access for this to take place.
A record of this annual check must be presented to your tenant within 28 days of the check, and if you have new tenants, the certificate must be provided before they move into the property. You should keep these records for two years.
Don’t forget to make sure that your tenant knows how and where to turn the main gas supply to your property off in event of an emergency, this should be added to your ‘New Tenant Check List.’ If you use a property management company make sure they are aware of this as well.
- Ensure that you have your annual gas safety check booked for 2016
- Make sure your contract states that this is an annual safety measure, and that new tenants will accommodate it
- Make sure your tenant receives a copy of the certificate within 28 days, or before they move in
- Make sure your tenant knows how to turn the gas supply to your property off
For more information, download ‘A guide to landlords’ duties: Gas Safety (Installation and Use) Regulations 1998’ from the Health and Safety Executive
Carbon Monoxide Alarms
New regulations came into place in 2015 (October 1st in England and Wales, December 1st in Scotland) which state that all residential rental properties must be fitted with carbon monoxide detectors.
Detectors must be fitted in rooms used as living accommodation where solid fuel appliances are installed. Although they are not required for gas appliances, it is being encouraged as ‘best safety practice’ to fit them wherever possible.
Devices should have been fitted by October 1st, with landlords not waiting for new tenancies before fitted the detectors. You are responsible for checking that the detector is working properly at the start of every new tenancy, with your tenants then responsible for checks throughout the duration of the lease.
Having detectors installed is a legal requirement, with a fine of up to £5,000 for non-compliance, so if you have a property that doesn’t have the appropriate fittings, it is important to make sure that this is a priority for the new year.
- Ensure that every room with a solid fuel burning appliance is fitted with a CO detector
- Test at the start of every new tenancy
- Ensure tenants are aware that they are responsible for checks throughout duration of the lease
The official government guidance on Carbon Monoxide detectors in rental properties is available for download here
As well as carbon monoxide detectors, October 2015 saw legislation passed that required landlords in the UK to supply their properties with smoke alarms.
It is a legal requirement to have a smoke detectors fitted on every storey which is used as living accommodation, and similarly to carbon monoxide detectors, failure to comply could land you with a £5,000 fine.
As a landlord it is your responsibility to supply and fit the smoke detectors, and ensure that they are in full working order on the first day of every new tenancy. After your initial test, it is your tenant’s responsibility to test the detectors regularly to ensure that they work as they should – it is recommended that they carry out these tests once a month. If the detector is found not to be working, it is your responsibility to replace the unit as soon as possible.
- Make sure that there is a smoke detector fitted on every storey of your rental properties
- Test at the start of every new tenancy
- Ensure tenants are aware that they are responsible for monthly checks throughout duration of the lease
The official government guidance on smoke detectors in rental properties is available for download here
Energy Performance Certificate
An EPC is a vital piece of information about your property, and you simply can’t let a property legally without one.
There is often confusion about when you need an EPC.
- If you are letting a self-contained property, which is let on a single tenancy agreement - single EPC for the property (whether it is a detached house, or a flat in an apartment block)
- Individual rooms with shared bathroom/kitchen facilities, with each room let on an individual tenancy agreement - no EPC is required
- Shared properties, a whole property on a single tenancy agreement - single EPC for the building
- A room in a hall of residence or hostel - no EPC is required
Following changes to the Housing Act in October 2015, if you have failed to provide your tenant with an EPC, you will not be able to rely on a Section 21 notice should you need to. Furthermore, if you are unable to provide an EPC when requested, there is a fixed penalty of up to £200 per property.
Scottish landlords have to go one step further, and as well as being part of the pack that is supplied to tenants, the EPC actually has to be displayed in the property. Most choose to position it near the boiler or in the meter cupboard, but it has to be shown somewhere.
- Make sure your property has an EPC if it requires one
- Make sure your tenant has a copy of the EPC, and any new tenants have it before they move in
- If you are in Scotland, make sure your EPC is displayed somewhere in the property
How to Rent
As a landlord, when you take on new tenants it is your responsibility to issue them with a copy of the ‘How to Rent’ booklet. If you fail to do this, you will fall foul of the new guidelines regarding Section 21 notices, and will not be able to issue a notice should you need to.
The booklet provides tenants with a lot of useful information about their rights for the duration of the tenancy – most tenants enter a tenancy agreement fairly unsure some of the more complex stages of the rental process, and the booklet serves as a handy document which outlines the basics, providing clear advice from a reliable source.
It is permitted to supply the booklet via email, as long as your tenant has agreed that email is a permissible format for document transfer. Many people still prefer a hard copy of legal documents, so do get it in writing that they are happy to receive documents digitally. It is advisable to ask for confirmation of receipt, either asking you tenant to sign and date a copy (that you keep) or sending an email confirming receipt.
- Make sure that all new tenants are issued with a How to Rent booklet
- Ensure you receive confirmation of receipt
- Keep the confirmation safe, just in case you need to prove that you issued the document
The most recent copy of the ‘How to Rent’ booklet is available here
Tenancy Deposit Protection
As a landlord, understanding deposit protection law is vitally important.
Most landlords will be familiar with the Tenancy Deposit Protection legislation (part of the Housing Act 2004) that has been in place since April 2007 that states that Assured Shorthold Tenancy deposits must be registered in a custodial or insurance based scheme and that they must serve Prescribed Information to their tenants.
However, further amendments were made in March 2015 via the Deregulation Act which had an impact on landlords with existing tenancies, who previously were exempt from having to protect deposits and serve the prescribed information. In order to be able to ever gain possession of your property using a section 21 notice, the following regulation now apply:
If you have a fixed term tenancy which started before April 2007 and went periodic after April 2007 the deadline to protect your tenant’s deposit was 23rd June 2015, you are now unable to protect your tenants deposit and serve the Prescribed Information, and there are potentially financial penalties for failure to comply.
- If you have a fixed term tenancy which started before April 2007 and went periodic before April 2007 you must protect the deposit and serve Prescribed Information on the tenant as soon as possible. This should be a priority for the New Year! If you wish to gain possession of the property under section 21 Housing Act 1988, the deposit must be protected and prescribed information must be served before a valid section 21 notice may be issued.
- If you have a fixed term tenancy which started after April 2007 which has been subsequently renewed or went periodic, the deposit should already be protected and Prescribed Information should have already been served. The deposit does not need to be re-protected nor prescribed information served again on renewal as long as the tenant, landlord and the premises remain the same and the deposit is held in the same scheme.
If you are entering into a new tenancy agreement in 2016, there are some important points to remember. Once you have received your tenant’s deposit, you have 30 days to issue them, and any relevant person with the Prescribed Information. A relevant person is anyone –individual, company or organisation – who has contributed to the deposit on behalf of your tenant. This may be a family member, a local authority or a guarantor, but each must be supplied with the same information as the tenant.
The Prescribed Information includes:
- The address of the property that deposit has been taken for
- How much deposit has been paid by the individual you are sending the information to
- How the deposit is protected
- The name and contact details of the tenancy deposit protection (TDP) scheme
- Details of the TDP scheme’s dispute resolution service
- Your name and contact details
- The name and contact details of any third party that’s paid the deposit
- What would lead to you holding some or all of the deposit back
- How your tenant can apply to get the deposit back
- What to do if they can’t get hold of the you at the end of the tenancy
- The actions they have to take if there is a dispute over the dispute over the deposit at the end of the tenancy
Your chosen TDP Scheme will issue you with a certificate showing what has been taken and how much is being held on your behalf. You must provide a copy of this to your new tenants, and any third parties, within 30 days of taking the deposit.
- Make sure you have protected all existing deposits and issued all existing tenants with the correct Prescribed Information.
- For new tenants, make sure you issue Prescribed information within 30 days of receipt of their deposit
- Make sure the information is distributed to every contributor, not just your tenant
- Ensure that your TDP Scheme certificate is distributed to everyone within 30 days of receipt of the deposit
Legionnaires' Disease Plan
Legionnaires' disease is a potentially fatal form of pneumonia, caused by the inhalation of contaminated water. The bacteria that causes it can flourish anywhere that there is water at suitable temperature and the scary fact is that residential water systems are not immune.
As a landlord, you have a legal responsibility to ensure the safety of your tenants through the maintenance of your property. Since 2001, assessing the risks of exposure to the Legionella bacteria has been a legal requirement. Although a vitally important piece of maintenance, this is a little known piece of legislation, and many landlords still don’t have Legionella Assessment plan in place.
Assessing your property for this potentially deadly disease needn’t be hard though. You can carry out the checks yourself, there is no legal requirement to pay for a professional to do this for you.
There is no legal guidance on how often the checks should be carried out, but it might be an idea to carry out the checks at the same time you schedule your gas safety checks, get both done on an annual basis and only trouble your tenants once a year for maintenance access. In most cases, all that is required to maintain a bacteria free water system is to ensure that the system is kept moving, with no water left to stagnate in pipes or tanks, and the temperature is controlled - Legionella bacteria can only flourish between 20 - 45°C.
- Check the temperature that water, especially in large tanks, is being stored at. If it is within the 20-45°C it poses a risk.
- Check if water can stagnate anywhere within the property’s system – are there any long or redundant lengths of pipe? If so, consider removing these in order to remove the possibility of pooling stagnant water.
- Check with the ‘Water Fittings and Materials Directory’ that none of the fixtures and fittings in your water systems are ‘Legionnaires friendly’ – certain materials encourage the growth of the bacteria and should be avoided if possible.
- Ensure tanks and cisterns are covered and free from debris
Most tenants are unaware of the potential threat of Legionnaires Disease, so letting them know that you will be carrying our checks every now and again is good practice. If you are putting temperature-based controls in place as a management control, be sure to notify your tenants not to change these, and ask them to keep you informed if the water system doesn't seem to be heating properly or if they notice any changes.
- Schedule in a time to carry out a check of the water system at your rental property
- Make sure your tenants are aware of the checks, and any controls you put in place
- Make note of the date you carry out the checks, for your records
For more information on your duty as a Landlord, a downloadable PDF is available from the Health and Safety Executive
Right to Rent
Right to Rent is the elephant in the room for many landlords as we move into 2016, with the deadline of February 1st looming and many people still unsure of what exactly the new legislation means for them.
If you’re a landlord letting private rented accommodation, a landlord or occupier allowing a lodger to live in a property, or a tenant or occupier sub-letting a property, you are responsible for carrying out a Right to Rent check. And it’s a serious responsibility – if you get it wrong and you let a property to someone without the ‘right to rent’ in the UK, you could be liable for a £3,000 fine.
The scheme has been broken down into a four-step process designed to make it as simple as possible for the thousands of landlords and tenants who will be getting to grips with the new legislation in 2016. As a landlord you’re responsible for:
Step 1: Identifying your prospective tenant
Clarify the names of all of the tenants over the age of 18 who will be living at the address, whether they are named on the tenancy agreement or not.
Arrange to liaise in person, or via video link, and confirm that they have documentation that will serve as identification.
Step 2: Verifying your tenant’s identity
In person, or via video link, verify that your tenant’s documentation matches their identity. There are three lists of acceptable forms of identification.
‘List A, Group 1’ only requires one form of identification. It includes:
- A passport (current or expired) showing that the holder is a British citizen or a citizen of the UK and Colonies having the right of abode in the UK.
- A passport or national identity card (current or expired) showing that the holder is a national of the EEA (European Economic Area) or Switzerland.
- A registration certificate or document (current or expired) certifying or indicating permanent residence issued by the Home Office, to a national of a European Union, European Economic Area country or Switzerland.
- A permanent residence card, indefinite leave to remain, indefinite leave to enter or no time limit card issued by the Home Office (current or expired), to a non-EEA national who is a family member of an EEA or Swiss national.
- A biometric immigration document issued by the Home Office to the holder indicating that the person named is allowed to stay indefinitely in the UK, or has no time limit on their stay in the UK. The document must be valid at the time of the check.
- A passport or other travel document (current or expired) endorsed to show that the holder is exempt from immigration control and is allowed to stay indefinitely in the UK
- A current immigration status document containing a photograph issued by the Home Office to the holder with an endorsement indicating that the named person is permitted to stay indefinitely in the UK or has no time limit on their stay in the UK. The document must be valid at the time of the check
- A certificate of registration or naturalisation as a British citizen
- Two of the following documents from ‘List A, Group 2’ would also be acceptable. These documents must be produced together and they must be dated to show they were issued within the specified date shown, and contain the full name of the prospective tenant.
- A full birth or adoption certificate issued in the UK, the Channel Islands, the Isle of Man or Ireland, which includes the name(s) of at least one of the holder’s parents or adoptive parents.
- A letter issued within the last 3 months confirming the holder’s name, issued by a UK government department or local authority and signed by a named official (giving their name and professional address), or signed by a British passport holder (giving their name, address and passport number), or issued by a person who employs the holder (giving their name and company address) confirming the holder’s status as an employee.
- A letter from a UK police force confirming the holder is a victim of crime and personal documents have been stolen, stating the crime reference number, issued within the last 3 months.
- Evidence (identity card, document of confirmation issued by one of HM forces, confirmation letter issued by the Secretary of State) of the holder’s previous or current service in any of HM’s UK armed forces.
- A letter from HM Prison Service, the Scottish Prison Service or the Northern Ireland Prison Service confirming the holder’s name, date of birth; or a letter from an officer of the National Offender Management Service in England and Wales, an officer of a local authority in Scotland or an officer of the Probation Board for Northern Ireland.
- Letter from a UK further or higher education institution confirming the holder’s acceptance on a course of studies.
- A current full or provisional UK driving licence (a photo card without paper counterpart is acceptable). A current UK firearm or shotgun certificate.
- Disclosure and Barring Service certificate issued within the last 3 months.
- Benefits paperwork issued by HMRC, Local Authority or a Job Centre Plus, on behalf of the Department for Work and Pensions or the Northern Ireland Department for Social Development, within the last 3 months.
‘List B’ documents are to be used when a time limited excuse is established.
- A valid passport or other travel document endorsed to show that the holder is allowed to stay in the
- A current biometric immigration document issued by the Home Office to the holder, which indicates that the named person is permitted to stay in the UK for a time limited period – you MUST copy both sides of this document.
- A current residence card (including an accession residence card or a derivative residence card) issued by the Home Office to a non-EEA national who is either a family member of an EEA or Swiss national or has a derivative right of residence.
- A current immigration status document issued by the Home Office to the holder with a valid endorsement indicating that the named person may stay in the UK for a time-limited period.
- In the case that the person has an ongoing application with the Home Office, or their documents are with the Home Office, or they claim to have a permission right to rent, an email from the Landlords Checking Service providing a “yes” response to a right to rent request. This will only be sent to the landlord by the Landlords Checking Service
Take a copy of their documentation, and make sure that you date the copy that you make.
Step 3 – Follow up checks
Once you have made the Right to Rent check, and are confident that your tenant is suitable, you must retain the copy that you made of their document and record the date of the check.
If you had to take a check using one of the documents from List B, it is likely that you will have to make a follow-up check to check the status of your tenant’s right to remain in the UK during the length of the tenancy – don’t forget to note down when this check needs to be carried out.
Step 4 – Your records
You must keep the copies of documentation for the duration of the tenancy, and at least one year afterwards. It is important to be able to prove that you carried out the checks appropriately should you ever need to, so try and keep digital copies if you can.
- Make sure you check every tenant's 'right to rent', whatever the circumstances
- Date and keep copies for your records
- Make sure you make a note if you have to make a repeat check
Further guidance on the Right to Rent scheme can be found here
Rent Smart Wales
If you own a rental property in Wales, there’s been big changes in the way you are allowed to operate, after the Rent Smart Wales Scheme was implemented on November 23rd.
Any landlord who operates in the private lettings sector in Wales, and undertakes management activities or maintenance of a rented property must hold a licence. If you don’t want to obtain a licence, a licensed agent must manage your property on your behalf.
Under the regulations, the following actions require you to register for a licence:
- Arrange or conduct viewings with prospective tenants
- Gather evidence for the purpose of establishing the suitability of prospective tenants (this includes referencing, performing credit checks and/or interviewing a prospective tenant
- Prepare, or arrange the preparation, of a tenancy agreement
- Prepare, or arrange the preparation, of an inventory for the dwelling or schedule of condition for the dwelling
- Collecting rent
- Being the principal point of contact for the tenant in relation to matters arising under the tenancy
- Making arrangements with a person to carry out repairs or maintenance
- Making arrangements with a tenant or occupier of the dwelling to secure access to the dwelling for any purpose
- Checking the contents or condition of the dwelling, or arranging for them to be checked as part of a current tenancy or for one which has ended;
- Serving notice to terminate a tenancy.
Even if you don’t currently undertake these activities, it is worth considering getting your licence arranged, so that should you need to in the future you are prepared. At the point of registration, you will have to list each of your properties, so if you own more than one property there is no need to go through multiple procedures. Once you've got your licence, it will last for five years.
The cost of the licence is £144 if you register online and £186 for if you prefer to submit a paper application. You have a year to make sure that all your registration is in place, but if you do not have a licence by the 23rd November 2016 you will face penalties.
- If you own a rental property in Wales, make sure you register before November 23rd 2016
- Keep up to date with training availability on the Rent Smart Wales website
- Make a note to renew your licence in five years time
You can download your rent Smart Wales Landlord Licence application form here:
If you need any assistance in 2016 with any of the changes to letting legislation, the team at Urban.co.uk are always on hand to offer expert advice on all of the issues that impact the UK's landlords.
Give us a call on 0800 689 9955, or contact us at firstname.lastname@example.org and we'll be happy to help - seven days a week!
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