Preparing a property to let – Gardens

In preparing your property to let, we recommend landlords tidy the gardens.

If the tenant is to be held responsible for maintaining the garden, make available the appropriate gardening tools and equipment. Any tools or equipment you do provide must be safe and in full working order and must be supplied with manufacturer’s instructions.

Few tenants are experienced gardeners so if the garden is particularly large, of an elaborate design, contains plants of high monetary or sentimental value or must be maintained to a particular standard we recommend you contract a gardener to maintain the garden on behalf of the tenant and add the cost to the rent.

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Do I need an Energy Performance Certificate (EPC) for my new home?

Yes – for all new homes completed on or after 6 April 2008, the builder is required to provide an EPC to the owner, with evidence shown to Building Control.

When the builder has finished building they will submit a notice to Building Control which includes an energy rating using SAP (Standard Assessment Procedure) to demonstrate the building complies with Building Regulations. By the same date on the notice, the builder must get an EPC from an accredited On Construction Domestic Energy Assessor (OCDEA) give the EPC to the owner of the building and tell Building Control that this has been done.

Building Control will not issue a final completion certificate until they are sure that this has been done.

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Online Tenancy Compliance Check – Health and Safety

Landlords are you compliant with all current health and safety legislation? Use this FREE online tool to check if you are:
Tenancy Compliance Checklist – Part 1 ~ Health and Safety
If you identify any errors or omissions, please let us know and we will get straight on to it.

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Fire safety legislation for landlords – Common Parts of Purpose Built Blocks of Flats

In this second part of the series on fire safety legislation for landlords I look at common parts of purpose built blocks of flats.

The first part of this series looked at fire safety legislation for dwellings (flats and houses) used for rented single household (family) occupation and can be found here.

Fire safety in common parts of purpose built blocks of flats is covered by the following:

Building Regulations 2010 Part B

See – Technical guidance for Part B is contained in Fire safety: Approved Document B.

Application – all dwellings where significant building work is carried out.

Housing Health & Safety Rating System (“HHSRS”)

Fire is included in the 29 hazards covered by the system introduced by Housing Act 2004.

See – Operating Guidance and Guidance for Landlords and Property Related Professionals. Further information on fire standards can be obtained in the LACORS Guidance on fire safety provisions for certain types of existing housing.

Application – all dwellings

The Regulatory Reform (Fire Safety) Order 2005

See – Fire safety in purpose-built blocks of flats.

See – LACORS guidance on fire safety provisions for certain type of existing housing for guidance on common parts of buildings containing flats.

Application – common parts (i.e. the shared areas including shared stairways, landings, kitchens, bathrooms etc.) of dwelling buildings containing in bedsits and flats both converted and purpose built.

If a flat is occupied as bedsits there are two sets of common parts within the building. The first is the shared access route to the flat front door and other is the shared areas within the flat e.g. hallway, shared kitchen, bathroom etc. Both areas would require risk rating.

Does not apply to shared houses let on a joint tenancy.

The guidance contained in this article also applies to converted flats that are not a section 257 HMO (House in Multiple Occupation)

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Fire safety legislation for landlords – Single Household (family) Occupation

In the aftermath of the Grenfell Tower tragedy there has been renewed interest in fire safety. In the coming months and years it seems likely that there will be changes to legislation but what does the law currently say about fire safety in rental property?

In the first of a series of articles I look at fire safety legislation for dwellings (flats and houses) used for rented single household (family) occupation.

Fire safety in this type of dwelling is covered by the following:

Building Regulations 2010 Part B

See – Technical guidance for Part B is contained in Fire safety: Approved Document B.

Application – all dwellings where significant building work is carried out.

Housing Health & Safety Rating System (“HHSRS”)

Fire is included in the 29 hazards covered by the system introduced by Housing Act 2004.

See – Operating Guidance and Guidance for Landlords and Property Related Professionals. Further information on fire standards can be obtained in the LACORS Guidance on fire safety provisions for certain types of existing housing.

Application – all dwellings

The Smoke and Carbon Monoxide Alarm (England) Regulations 2015

See – Smoke and carbon monoxide alarms: explanatory booklet for landlords.

Application – all rented dwellings

Licensing Condition

Basic fire safety conditions including provision of alarms have to be imposed if the premises requires a licence under Housing Act 2004 and Councils have discretion subject to appeal to impose additional fire requirements.

There are 3 types of licence.

• Mandatory Licence – applies to HMOs of 3 or more storeys and occupied by 5 or more persons who occupy as 2 or more households. Applies to all areas of England and Wales.

• Additional Licensing (HMO) – discretionary scheme which a Council may apply by Declaration which can apply to any HMO, other than those requiring Mandatory Licensing. Council has discretion on the extent of the area affected and the type of HMO e.g. could limit to HMOs with only 4 persons, or could apply to all other.

• Selective Licensing – discretionary scheme may apply by Council’s Declaration to any rented dwellings which are not a HMO – family/single households – and may cover all or part of the Councils district.

Application – any premises which requires a Licence under Housing Act 2004.

In the next part of this series I will look at fire safety regulations for common parts of purpose built flats here.

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How to deal with bats in a property

Unlike rodents, wasps and cluster flies, bats are not pests. As population numbers have fallen, all bats and their roosts are protected under The Wildlife and Countryside Act 1981 (as amended) and The Conservation of Habitats and Species Regulations 2010 (as amended). Under these pieces of legislation it is illegal to:

* deliberately capture (or take), injure or kill a bat;
* intentionally, recklessly or deliberately disturb a bat. In relation to the The Wildlife and Countryside Act 1981 (as amended) the offence applies whilst the species is occupying which it uses for shelter or protection; in relation to the Conservation of Habitats Regulations 2010 (as amended) it applies anywhere;
* damage or destroy the breeding or resting place (roost) of a bat;
* possess a bat (alive or dead), or any part of a bat;
* intentionally or recklessly obstruct access to a bat roost;
* sell (or offer for sale) or exchange bats (alive or dead), or parts of bats.

Under the law, a roost is any structure or place used by bats for shelter or protection. Because bats tend to re-use the same roosts year after year, the roost is protected whether or not bats are present. In this context ‘damage’ could include treatment with chemicals found in wood preservatives.

For more information contact the Bat Conservation Trust here

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Can an agent withhold part payment of 6 months rent in advance?

Yes – If the terms of the agency/client agreement allow the agent to retain certain monies received on behalf of the principal (landlord) it is acceptable for the agent to do so consistent with the terms of the agency/client agreement.

If the agency/client agreement does not allow the agent to withhold rent paid in advance then the agent should not do so….

The agency agreement (the contract) is governed by a fiduciary duty which the agent owes to the landlord. A fiduciary duty is a very stringent duty and Bristol and West Building Society v Mothew [1996] EWCA Civ 533 is a leading English fiduciary law that is globally cited for its definition of a fiduciary. In the landmark case Lord Milllett said a fiduciary is someone who is undertaken to act on behalf of another the circumstances of which give rise to a relationship of trust and confidence. As the fiduciary, the agent has the highest duty of care, higher than any contractual duty, because it is a fiduciary duty. The agent must be loyal to the principal, not put his own interest first and not profit from his fiduciary position unless the principal consents. Breach of a fiduciary duty is considered a fundamental breach and would allow the landlord to terminate the contract without notice. Specific examples:

* Agent must not delegate from his office – the agent cannot get someone else to do what he is contracted to do

* Agent cannot accept bribes – e.g. From prospective tenants

* Agent must not make a secret profit – e.g. From contractors employed to undertake work on behalf of the landlord by way of inflated invoices or paying commission to contractors

What does the fiduciary duty have to do with the payment of advance rent? I would suggest that as part of an agents ‘highest duty of care’ they should pay the landlord monies the agent receives on their behalf as soon as possible after the agent receives them minus any agreed deductions. Why would a landlord want to delay receiving money? Why would a landlord want to employ an agent to delay receiving money when they would otherwise receive the money much quicker without an agent?

Finally the fiduciary duty covers secret profits – if an agent withholds the landlords money and and it earns interest, they should pass this on to or declare it to the landlord otherwise it becomes a secret profit and is a fundamental breach of contract.

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Landlords should beware of cannabis farms

The extraordinary story of former Bath Tory councillor Donal Hassett who used false names, references and cover stories to rent homes to create a network of cannabis farms is a reminder of the problem this can be for landlords. Read the full story here

Cannabis farms in rented accommodation have been a problem for landlords for several years. Criminals spread farms around multiple locations to ensure that production continues even when one farm is discovered and closed. It is this need for multiple locations which leads the criminals to rented or squatted property.

For landlords, the discovery of a cannabis farm can be devastating and frightening. Under S.8 of the Misuse of Drugs Act 1971 a landlord (or anyone managing the property) can receive a maximum of 14 years in prison and/or a fine if they knowingly permit the production of controlled drugs to take place in rented accommodation. Arguably, “knowingly permit” could include turning a blind eye to the production of cannabis to ensure that their rental income continues. A further complication for landlords is that they could then find any rental income received seized under the Proceeds of Crime Act.

Landlords and their agents should therefore take steps to minimise the risk of cannabis cultivation in rented accommodation. Some signs to watch out for include:

• Tenant’s paying a large amount of rent up front;
• Tenant’s refusing or making excuses to prevent regular inspections or restricting access to parts of the property during inspections

Landlords should always carry out regular inspections or instruct their agent to and should look out for:

• Strange smells;
• Excessive heat;
• Blacked out or sealed windows;
• New ventilation units;
• Signs of meter tampering.

If there is a suspicion that cannabis is being grown at the property landlords should not address the matter directly with their tenant but should report it to the police. The landlord is then advised to serve the tenant with a Section 8 notice.

If the police discover a cannabis farm they will attempt to arrest the tenant and the landlord will need to co-operate with any investigation. Unfortunately, while removing the cannabis plants from the property the police will often leave behind the pots, soil, heat apparatus and any other paraphernalia connected to the cultivation of the cannabis. This can leave the landlord with a substantial clean-up bill and a lengthy delay prior to gaining possession.

Despite the tenant’s conduct, landlords cannot simply take back possession they will need to wait for a county court order for possession upon the expiry of the Section 8 notice. Where all the tenants have been arrested, and are not to be released on bail then landlords may be able to treat the property as abandoned however, prior to taking any steps in this respect legal advice should be sought.

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Why the Homelessness Reduction Act is good news for landlords

The Homelessness Reduction Bill has received Royal Assent and become an Act of Parliament. The Act places a new duty on Local Authorities to help prevent the homelessness of all families and single people, regardless of priority need, who are eligible for assistance and threatened with homelessness.

Positive News for Landlords

Until now a common problem for landlords was when a section 21 notice was served, the tenant went to the Local Authority with the notice and the tenant was told that they must wait for a court order and possibly bailiffs before they would be deemed to be homeless and therefore eligible for assistance.The Homeless Reduction Act prevents Local Authorities issuing this advice.

The Homeless Reduction Act amends the Housing Act 1996 adding a new definition of threatened with homelessness:

“(5) A person is also threatened with homelessness if—
(a) a valid notice has been given to the person under section 21 of the Housing Act 1988 (orders for possession on expiry or termination of assured shorthold tenancy) in respect of the only accommodation the person has that is available for the person’s occupation, and
(b) that notice will expire within 56 days.”

Two possible pitfalls to be aware of:

1. The duty only arises if a valid section 21 has been given – landlords need to ensure any section 21 notice they serve is definitely valid.

2. Local Authorities have struggled making decisions on the validity of section 21 notices even before this Act – Local Authorities commonly try to find reasons why a section 21 notice is not valid and no doubt given the fact that some courts struggle with this, this problem will persist.

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Legal Update – April 2017

The legal landscape for landlords and letting agents is ever-changing and here is a summary of what we have encountered in the last month:

Landlords lose mortgage interest tax relief – Effective April 5th 2017, landlords lost the right to claim full tax relief for mortgage interest payments.

Despite a year of protests and a High Court legal challenge, the government has stood firm on the proposals made by former Chancellor George Osborne and has resolutely refused to even water them down.

The Government estimates around 440,000 landlords will pay more tax because of the change.

HMRC plans new tax burden for landlords with licences – Landlords face a new regulation threat as anyone letting a property with a local authority licence may have to prove they file tax returns before moving in a tenant.

HM Revenue and Customs (HMRC) is moving forward with efforts to tackle the black economy with a new compliance tool called ‘conditionality’.

The idea is any landlord who must apply for a house in multiple occupation licence or register with a landlord licensing scheme must show they are also tax registered with HMRC before the licence is granted.

Part 3 of the Housing and Planning Act – Expected to come into force in October 2017, Section 216 of the Act will permit private landlords in England of properties let under an Assured Shorthold Tenancy to seek possession without a court order where the tenant has abandoned the premises.

Part 5 of the Housing and Planning Act – Will allow for regulations to be made requiring Electrical Safety testing by landlords.

At present under the Landlord and Tenant Act 1985 landlords only need to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity. Under the new provisions in Part 5 of the Act this will change.

The Electrical Safety Standards that the Secretary of State may impose are in relation to:

the installation in the premises or the supply of electricity; or
electrical fixtures, fittings or appliances provided by the landlord.

The landlord’s obligations are expected to include duties to ensure that a suitably qualified electrician has checked that the standards have been met, that they obtain a certificate confirming this with a copy provided to the tenant or any other relevant person.

Homelessness Reduction Bill – Expected to come into force in early 2018 this provides real hope that one of the most frustrating issues for both landlords and tenants, that of local authorities insisting on eviction before offering alternative housing, will be eliminated by this Bill.

As the private rented sector adapts to new pressures hopefully the Homelessness Reduction Bill will help landlords to have confidence in their investment and help tenants to feel more secure in their homes.

Banning letting agent fees paid by tenants – The Government has published its consultation paper on banning letting agent fees paid by tenants. The consultation is expected to last for 8 weeks until the 2 June 2017. My personal take on this is the ban is going to happen (probably not until late 2018) and that in order to compensate for the loss of income many agents will pass on some or all of the fees to landlords and this will ultimately put upward pressure on rents. For those agents who were making lots of money from tenant fees they will require a paradigm shift if they wish to flourish.

Compulsory money protection on the way for letting agents – Housing minister Gavin Barwell has confirmed that the government is ready to consult on compulsory money protection in the letting industry after years of misery for renters and landlords who have seen a succession of rogue agents run off with their money.

Tobacco tax evasion – In February, HM Revenue and Customs published a consultation paper on further measures to help tackle tobacco duty evasion and other excise duty evasion.

Part 6 of the consultation paper discusses imposing a statutory duty of care on landlords where a tobacco offence has been committed. A tobacco offence includes the importation and sale of illicit tobacco, which is tobacco that has been imported without the proper declarations being made or duty paid.

With so many changes in the industry it is more important than ever that landlords use a letting specialist to let and manage their property or have some means, such as membership of a trade association, to keep up-to-date with the changes.

This article is provided for information only and does not constitute legal advice.

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