Three years ago, I was informed, that there were 55 Acts of Parliament and a further 70 regulations governing the UK housing rental market. Now bizarrely no one is able to quote me the facts, as laws are being rolled out at such a pace.
As a fully accredited agent we work exceptionally hard to keep up with legislation as protecting our landlords is a major priority for us. Over the past twelve months a lot has been happening in the background in our market place, that in the most has gone relatively unnoticed, or has been miss quoted and aimed at agents when in reality the main targets are actually landlords.
Why have these important points been missed? Well frankly there are (or people thought there were), “Bigger Fish to Fry”.
i.e. The new EPC regulations (M.E.E.S.), Right to rent checks and of course the upcoming “Tenant Fee Ban.” In addition, let’s not forget the imminent introduction of electrical certification for Non-HMO properties. Again sadly, the majority of Landlords (and a lot of agents too), still have not realised that electrical certification is mandatory for all HMO properties (3 bed +) not just the licenced (5 bed+) HMO’s since 2007! That is a little worrying don’t you think?
So, what are we talking about then? What is so important and what will be the impact on Landlords (and agents) actually be?
Well the biggest impact you are about to face, is a very clever law that was passed in October 2017 that to-date, I note the North East Councils appear to have not yet capitalised on, but I believe that is all about to change. The real underlying problem with councils is that they are grossly underfunded (or poorly managed), you choose as this is not the discussion point here, it is simply the underlying fact that needs to be realised and understood.
Up until 2017 any fines imposed by councils went to a central government pot to fund central needs (Moats for MP’s houses etc. ?). The biggest bug bear for councils was (and still is), that they have a huge workload and not enough resource to fund such activity.
As of last October, any fines levied by councils, now go to the local authority who imposed the fines. This has clearly been designed as a self-funding initiative, providing councils with the incentive to clean up the private housing rental market and pay for the personnel (resources), to achieve this. Now that is only a personal opinion, however I heard last week that one council in London has now employed a number of new housing inspectors to cope with the increasing number of new prosecutions for bad practice. Anecdotal evidence I know, but it does make you think doesn’t it!
I was fortunate the other week to see a letter sent to a landlord from one of our local authorities (copied to the tenant, who approached us for advice) that read;
“Please note that it is a criminal offence to fail to comply with your HMO licence conditions and the above regulations. A person who commits an offence is liable on summary conviction to an unlimited fine. Breaches of licence conditions or the regulations may also be dealt with by way of a civil penalty. Any such action may also give rise to the revocation of your HMO licence.”
In addition to that fine, the government in April of this year introduced another law, allowing them to issue “Banning orders” based on non-compliance, to both rogue landlords (and agents).
In more detail;
On 6 April 2018, the Government introduced banning orders on rogue landlords and letting agents, barring those who commit certain housing offences from working in the lettings industry whilst placing their details in a database of rogue landlords. I did enquire why there was not going to be a database for rogue tenants only to be told by an eminent housing specialist that the reason was very simple, “There are no votes in that” so it is unlikely a political party would spend time (or money) on such activity”!
The Housing and Planning Act 2016 (Banning Order Offences) Regulations 2018 will result in landlords and agents who are convicted of a banning order offence being prohibited from working in the lettings market. Whether it be as a landlord, a letting agent or working as part of a property management team.
The new database of criminal landlords and lettings agents has been created under the regulations and went live on 6 April 2018.
Some of the most common banning order offences are:
- Illegally evicting or harassing a residential occupier in contravention of the Protection from Eviction Act 1977
- using violence to secure entry under the Criminal Law Act 1977
- providing false or misleading information
- failing to comply with an improvement notice
- failure to comply with a prohibition order
- offences in relation to licensing of Houses in Multiple Occupation
- offences in relation to selective licensing under Part 3 of the Housing Act 2004 (section 95)
- offences related to drugs
- contravention of an overcrowding notice
- fire safety and gas safety offences
- harassment and stalking.
The effect of this order could be disastrous. As a landlord would effectively lose their business! A landlord or agent would be forbidden from renting or managing rented property although the order may permit them to do such work whilst they are closing the business down.
A banning order is for a minimum of 12 months but there is a possibility that it could be for longer, right up to a ban for life. Banned landlords will also be forbidden from transferring their property to a business where they have an interest or a close colleague has an interest.
The provision of housing is critical and an essential service provided to the consumer. With more and more legislation coming into force within the lettings industry, from right to rent checks to taxation changes, it is becoming increasingly more complex for landlords to manage their own property.
A recent study conducted by the National Landlords Association (NLA) found there was a 7% increase in the number of landlords using a letting agent from the end of 2016 to June 2017(just six months)! Annually the proportion of landlords who self-manage their properties has reduced by almost 10%.
Bleak news I know, but just pause for thought for one moment. You don’t keep your money under the bed, do you? Your will was discussed and overseen by a specialist. Wasn’t it? You didn’t get a pair of pliers from your toolbox to fix your sore tooth, did you? Precisely! A rental property is a valuable asset and should be looked after by specialists who are there to protect your investment for you. We have been advising, renting and managing for over twenty years now. If you would like to discuss your rental or management needs, just call me at my Durham office on 0191 212 6970 for a chat or no obligation consultation.