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What Are the Legal Requirements of a Landlord?
It can be a universal concern, not just that of new and accidental landlords but, perhaps even for first time tenants new to the rental market. Knowing what a landlord cannot do, and more importantly, what are the legal responsibilities of a landlord can help protect landlords from the reprise of failing to comply with government regulations; resulting in fines , legal action and in rare cases even imprisonment.
However, here we aim to offer our guidance for those left asking what a landlord needs to do before renting. Although many wish it could be as simple as leaving the door wide open and collecting rent each month, the reality can be a touch more sobering.
What Must a Landlord Provide by Law?
Energy Performance Certificate
Rating the energy efficiency of a property on a scale from A to G (with the later being the least energy efficient), every property in the UK is required to produce an Energy Performance Certificate whenever a transaction take place or it is rented. Whilst these measures were introduced in October 2008, it was not until April 2018 that a minimum standard was imposed. With the enforcement of the Minimum Energy Efficiency Standards (MEES), any property that was to be rented in a new tenancy to either a new or existing tenant, ie renewing a tenancy, first required the rental property to meet a minimum EPC rating of “E” or higher.
These movements towards a more energy conscious, greener renting environment were further extended in April 2020, with the minimum energy efficiency standard a property could achieve before being rented encompassing all existing tenancies. Any property that is let past this date must comply with this minimum energy efficiency threshold, or the rental will not be considered legal.
An Energy Performance Certificate can be obtained from an energy assessment survey, with a throughout inspection of the internal and external of the property taking place. Providing that the rental property is found to comply with these energy efficiency standards an EPC will be issued. These certificates are valid for 10 years and must be provided to tenants at the start of each new tenancy.
Landlords that are also trying to evict a problem tenant could face issues further down the legal avenue if they are not able to produce a EPC for the specified property, as from October 2015 an EPC is required from landlords to issue a Section 21 notice.
If a landlord is currently letting out a property that does not have a valid EPC the local authority is able to issue a fine of up to £5,000. Similarly, if a property is found to not meet the minimum energy efficiency standard the landlord must finance repairs and upgraded to the property to ensure it fulfils the specified efficiency criteria. However, there are some exemptions, as if the work to make the property more efficient would decrease its value by 5% or more, the mortgage provider doesn’t approve the work, or if the rental property is listed and the work would “unacceptably alter” its aesthetic appeal.
It is also important to note that a landlord must have ordered an EPC before putting any rental opportunity on a marketing channel. If the property is being handled by an agent, it is their obligation to ensure the landlord has done this and that a valid EPC is in place before the tenancy begins.
Gas and Electrical Safety Checks
It is also the duty of the landlord to ensure that all of the gas and electrical appliances within their rental properties are maintained and functioning safely. Regarding electrical outlets and appliances, the property owner’s duty to comply with the Electrical Safety Standard Regulations introduced in June 2020. However, these are soon to be updates as new measures for landlords are introduced on the 1st April 2021. These changes demand that all the electrical outlets and installations throughout a rental property are assessed each five years by a verified electrician. Once the inspection has been conducted landlords will receive an Electrical Installation Condition Report or EICR. In order to comply with the new measures introduced in 2021, private rental properties must meet the national standards for electrical safety and wiring regulations, with any changes to the property being conducted within 28 days of the EICR’s findings being reported. Similarly any tenants that are currently occupying the rental property must be supplied with a copy of the new EICR within 28 days of it being received by the landlord.
With gas appliances however, inspections of the property are to take place annually, with the assessor being a registered Gas Safe engineer. Once each appliance and Flue has been tested a safety certificate will be issued to the property owner which must be provided to the tenants within 28 days of the inspection. If issues are found in the inspection the appropriate appliances will be marked with a warning label until remedial work can be carried out.
Alongside ensuring the safety of appliances and outlets throughout the rental property, it is also the landlord’s obligation to protect the residents of each let from any potential fire hazards. To this end each floor of any rental property that has living accommodation must have a working smoke alarm installed. Additionally, any space in the property that stores fuel or contains an appliance that burns solid fuel is required to have a carbon monoxide alarm fitted.
For landlords that have a house in multiple occupation or HMO, fire extinguishers must also be provided before tenants must into the property, with all of the rentals occupants being aware of escape routes and understanding that they must be kept clear of obstructions. Due to the increased amount of tenants that would occupy the residence, houses in multiple occupations must have a fire blanket in each kitchen, alongside high risk areas being installed with fire warning systems.
With the introduction of the Furniture and Furnishings Fire Safety Regulations 1988, the minimum ignition resistance levels were established for furniture and upholstery. These regulations demanded that cigarette and match resistance specifications must be satisfied alongside the ignitions resistance requirements. It is the legal duty of the landlord to ensure that any furnishings within a rental property satisfy all of the outlined fire safety requirements, and should document the safety specifications of each piece encase of an inspection from an enforcement officer.
Whilst it is not the landlord’s responsibility to confirm that any furniture or appliances brought into the property by the tenant meet these stringent standards, the repercussions for failing to do so for their own furnishings could be devastating. Of course, if the rental property is being advertised as unfurnished then this wouldn’t be of concern to the landlord; however failure to comply with fire safety regulations as a landlord can result in a fine of up to £5,000 for each hazardous appliance or furnishing found, up to six months in prison and even legal action from the tenant.
Right to Rent Checks
After being implemented in 2016 landlords and property owners must authenticate the identification of all potential tenants, verifying their immigration status and their right to rent a property.
Prior to a new tenancy commencing it is the legal obligation of a landlord to ensure that all tenants are over 18 years of age regardless of if they are named of the tenancy agreement, or if the agreement is verbal.
The right to rent check comprise determining with of the tenants will be using the rental property as their main residence, with accompanying documents being provided by each of the tenants authenticating that they can indeed live in the UK and rent a property. These checks conducted by the landlord should verify that all of the details on provided documents match and that they are indeed the potential tenants you are communicating with. The tenant may still be able to rent even if they are unable to supply the property owner with these documents if the home office is in possession of their document, they currently have an outstanding appeal with the home office, or that they have been granted permission to rent from the home office.
Once the right to rent checks have been completed the landlord is required to make copies of the documents provided by the tenants and hold onto them for another year after the tenancy period comes to an end.
How to Rent Checklist
Landlords must supply tenants with a copy of the mist recent ‘How to Rent Guide’ at the start of each new tenancy. The guide can be an essential tool for any first time tenants in helping them to fully understand the rights and responsibilities they have as an occupant of the rental property. The guide comprises information on Assured Shorthold Tenancies, with information on appropriate paperwork, what to look for in a rental and what help is available if the tenancy goes wrong. If a landlord or property owner fails to provide this guide to new tenants before the tenancy period begins then they will be unable to serve a section 21 notice.
What Are the Financial Responsibilities of a Landlord
Alongside a great deal of administrative work, landlords are also legally required to uphold a number of financial obligations. For instance landlords are legally obligated to pay income tax on the revenue they make from their rental property portfolio. Whilst property owners do not need to pay any tax on the first £1000 they receive, once their earning exceed this threshold HMRC should be contacted. If the amount a landlord receives from a rental property each year is between £2,500 and £9,999 after expenses have been accounted for, or more than £10,000 before the expenses have been deducted then the property owner is required to detail their earnings through a self-assessment tax return. These deductions lower the amount that the landlord is required to pay in tax to HMRC and exclusively take the form of business expenses such as letting fees, utility bills, council tax, accountants and other paid services.
Do All Landlord Need a License?
In an effort to combat rogue landlords throughout the private rented sector, landlords situated in Wales, Scotland and Northern Ireland are legally required to be registered. However, this is much more inconsistent throughout England, with only certain parts on the making this requirement.
Local authorities throughout England have introduced these requirements through selective licensing schemes, requiring private landlords to obtain this before letting out the property to tenants. This is typically done in areas where there is a low demand for housing and the implementation of a licensing scheme will be financially beneficial to the area.
If a landlord fails to comply with these regulations then they may be ordered to pay a fine of up to £30,000, alongside a rent repayment order being issued. It does without saying but, if not licensed then the landlord will also face multiple hurdles when trying to pursue legal action against a tenant, making possession order particularly hard to enforce.
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