Make sure you comply with the Deregulation Act 2015

Keeping up with the constantly evolving legislation in the private rental sector has become par for the course for landlords and letting agents. After all, those who fail to comply risk hefty fines and could lose their rights to evict troublesome tenants should such a situation arise, so it pays to keep up with the changes.

The Deregulation Act 2015 included provisions that applied to both landlords and tenants in relation to deposits, retaliatory evictions and section 21 notices for new or renewed tenancies in England only.

What many landlords and letting agents don’t realise is that, from October 2018 the provisions outlined in the Act will apply to all tenancies, not just new tenancies or renewals.

What will landlords and letting agents in England need to do to comply from 1^st October 2018?

From 1^st October 2018, all requirements that applied to post 2015 tenancies will apply to all assured shorthold tenancies and those that have become periodic that started before 1st October 2015.

For landlords and letting agents, this simply means that the following documents will need to be issued to all tenancies that began before 1^st October 2015:

1. A valid Energy Performance Certificate (EPC) except where a property is not required to have an EPC such as where the landlord is letting a room on a single AST in a House in Multiple Occupation (HMO).
2. A valid Gas Safety Certificate covering all fixed as well as portable gas appliances provided by the landlord for the tenants’ use. For more detailed information on the requirement to provide a gas safety certificate at the start of a tenancy, read Hamilton Fraser Director and Founder of Landlord Action, Paul Shamplina’s article, ‘Gas safety certificates and Section 21 – be compliant or you may pay the price,’ in which Paul highlights the impact of the Caridon Property Ltd v Monty Shooltz case which took place in February 2018.
3. The most up most date version of the Ministry of Housing, Communities and Local Government’s How to rent guide. This can be provided digitally or as a hard copy, but should not be provided as a link to where the document can be found. The ‘How to rent’ guide is periodically updated so it is important to ensure that you provide the latest version (currently 9 July 2018). Note that the requirement to provide the ‘How to rent’ checklist is not obligatory for tenancies before 1 October 2015 unless they have been renewed after that date, but landlords may wish to consider providing a copy of the guide as good practice regardless, so that this can be noted on the claim form if possession proceedings are required at a later date.

Another key change coming into force in October 2018 is that these documents must be provided at the start of the tenancy, before the tenant has moved in.

What other changes should landlords and letting agents be aware of?

• Retaliatory evictions: landlords will be prevented from serving a Section 21 notice in certain circumstances if the landlord has received notice requiring them to carry out repairs.
• Section 21 notices: Landlords will not be able to serve a Section 21 notice in the first four months after the start of an AST. Landlords will have only six months from the date the Section 21 notice was given in which to act on it.
• Prescribed Form 6A: Before 1^st October 2018 a landlord has had the option of using a non-prescribed form of notice if the AST was granted before 1^st October 2015. After 1^st October 2018, landlords will need to use the prescribed Form 6A for all ASTs, no matter when they were granted.
• Prescribed information on the condition of the property: Landlords and managing agents will be required by law to give tenants prescribed information on the condition of the property for all ASTs.  In order to ensure compliance with minimum property standards, it is advisable to carry out periodic inspections of the property. This includes mid-term inspections, which provide a good opportunity to identify any potential issues. The key point here is that it will not be possible to serve a Section 21 notice on tenancies unless tenants have been provided with the EPC, gas safety certificate and most recent ‘How to rent’ guide (for tenancies after 1 October 2015) before the tenant moves into the property.

HMO licensing reform comes into force 1^st October 2018 in England only

Also, coming into force on 1^st October 2018 are new guidelines relating to HMOs agreed earlier this year. As a result of the guidelines, thousands of additional landlords will fall into the HMO landlord category and will therefore be required to apply for an HMO licence.

Landlords and managing agents who have not applied for a new licence by 1^st October could face criminal prosecution and fines of up to £30,000. It is therefore important that landlords and agents responsible for management are aware of the changes.

What is changing for HMOs on 1^st October 2018?

Currently only those HMO properties with three or more storeys shared by five or more persons from two or more households require an HMO licence. They must also be sharing facilities such as kitchens and bathrooms to be classified as an HMO under pre-1^st October legislation.

However, from 1^st October 2018 the “three or more storeys” criteria in England will cease to exist.  This means that all those landlords housing multiple occupants (five or more people in two or more households sharing facilities), regardless of the configuration of the property, will need to have a mandatory HMO licence.

The new regulations also change the definition for a home needing a licence to one where five or more residents who are not all related to one another share kitchen and bathroom facilities.

The new HMO rules include two other changes for licensed property:

• Minimum bedroom sizes are updated – rooms for a single adult must measure at least 6.51 square metres and those for two adults must have a floor area of at least 10.22 square metres.
• Bedrooms for children under 10 are slightly smaller at 4.64 square metres.

The final change makes landlords responsible for providing bins and storage for household waste.

Landlords and agents should always check with their local authority, where the rental property is based, to see if there is a scheme in operation, to find out more about the scheme, as it will have serious implications for letting a property.