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Lettings Legislation Changes

The regulations around letting a property in the UK have changed considerably over the last twelve years. With the tenant fee ban coming into effect on 1st June 2019, we decided to look back at the key changes to lettings legislation that have been made in recent years.

Tenant Fee Ban (1st June 2019)

The fee ban will initially only apply to new tenancies or renewals of tenancies, excluding statutory and contractual periodic tenancies that arise after the Tenant Fees Act comes into force. After one year the ban will attach to pre-existing tenancies, and clauses that attach fees in them (tenancy renewal paperwork etc) will become ineffective.

Examples of banned fees will include:

  • Charging for a guarantor form
  • Credit checks
  • Inventories
  • Check in
  • Check out
  • Drafting tenancy agreements and other admin charges
  • Professional cleaning
  • Gardening services
  • Referencing

There are some exemptions, and these primarily relate to deposits.

Holding deposits, rent, deposits and charges for defaulting on the contract are all exempt from this ban. They are however subject to additional restrictions, for example holding deposits can be no more than one week’s rent and subject to statutory legislation on the repayment of this, should the tenancy not go ahead.

Deposits are limited to five weeks rent as a maximum amount where the annual rent of a tenancy does not exceed £50,000. If the tenancy exceeds that amount annually there is a cap at six weeks rent.

Mandatory Client Money Protection (1st April 2019)

All property agents must be part of a mandatory Client Money Protection scheme that offers cover ‘at a level of compensation that is no less the maximum amount of client money that the agent may from time to time hold.’ The scheme must also be one that has been approved by the government. The local authority is in charge of enforcing the regulations with a maximum breach penalty of £30,000.

Right to Rent scheme (1st February 2016)

The Right to Rent scheme was first introduced to the West Midlands and Wales in 2014 and subsequently rolled out to the rest of the UK in 2016, in conjunction with the Right to Work checks. Landlords and letting agents must carry out quick and simple checks to ensure that the person renting from them is legally entitled to remain in the country and able to rent a property. The penalty for allowing someone to rent illegally is a fine of £3,000.

Consumer Rights Act (1st October 2015)

The Consumer Rights Act made it clearer and easier to understand when buying and selling a product. On occasions when issues arise, it is now less expensive and quicker to resolve. These rights now protect consumers and seller for goods and services that are bought either at home or out and about.

There are now also new, clear rules for what should happen if a service is not provided with reasonable care and skill or as agreed. For example, the business that provided the service must bring it into line with what was agreed with the customer or, if this is not practical, must give some money back.

Deregulation Act (26th March 2015)

The Deregulation Act was introduced to reduce some of the burdens that had been left behind by previous legislation. The key changes that impacted landlords were:

  • The Energy Performance Certificate (EPC) – All landlords must provide their tenants with an EPC and gas safety certificate prior to the commencement of a tenancy; without these a landlord cannot enact the Section 21 eviction notice.
  • Tenancy Deposit Protection – all deposits must be secured using an appropriate Tenancy Deposit Scheme (TDS).
  • Additional Information Relating to Prescribed Information – At the start of each Assured Standard tenancy (AST) the Landlord must provide tenants with the ‘How to rent: the checklist for renting in England’ booklet.
  • Section 21 Notice – The New Section 21 now combines fixed-term and periodic tenancies and now also has a lifespan of six months from the date that the notice was given.
  • Retaliatory Eviction – Landlords are not permitted to serve retaliatory evictions when their tenants complain about the state of the property. Instead a landlord now has 14 days to respond and action the improvements or they can be served an enforcement notice by the local authority.

Deposit Protection Scheme (6th April 2007)

All agents and landlords must secure their tenants’ deposit in a Tenancy Deposit Protection scheme. This government-backed scheme means tenants will get their deposit back if:

  • Landlords don’t meet the terms of the tenancy agreement
  • If they keep the property in good working order with no damages
  • Pay their rent and bills on time

Other legislative changes that have come into force in the last 10 years include:

  • Energy Efficiency Rating, UK (April 2018)
  • Restriction of allowable costs, UK (April 2017)
  • Rent Repayment Orders, England only (April 2017)
  • Wear and Tear, UK (2016)
  • Stamp Duty Changes UK (2016)
  • Smoke and Carbon Monoxide Alarms, England & Scotland (2015)

Want more information or need advice about being a landlord? Get in touch.