April 2019 Property Updates

Rather than re-write an excellent article, I am treating you to one of our own company’s legal helpline updates. They write various articles on our companies behalf. They also provide us with a dedicated rental helpline and provide us with a regularly updated latest state of the art tenancy agreements, to give our landlords what we believe to be, the very best peace of mind available in our challenging market place today. It also does include the usual (virtually mandatory these days), disclaimer. Not for any other reason there are still sadly folk out there that expect everyone to look out for their interests and make no attempt to run their own businesses professionally and take on board their responsibility. They will instead, often try to blame anyone else (people or companies), who try to support them as a client or customer. Thankfully we have very few (if any) of those types of clients left (at least we hope we have got rid of them all so far ), but as we expand our business there is always that chance. The deal from our company is still the same for all landlords or investors in the North East, who want to deal honestly, fairly and within the law. If you would like to discuss your rental needs or require advice in purchasing investment properties, or discuss the market with a view to purchase. Please feel free to contact me at my Durham Office on 0191 212 6970. Enjoy the article. John

Just to illustrate how far our sphere of influence reaches, this week alone, we have been (and continue to do so), advising Ex Pat investors in Cyprus and Spain, to review, aid and add to their investment portfolios in the region.

PROPERTY MATTERS

0191 212 2020 Acorn Properties (Jesmond) Ltd Spring 2019

DRIVING OUT ROGUE LANDLORDS AND AGENTS

The slew of new legislation either in force or in the pipeline, appears to be geared to driving from the market both rogue landlords and rogue agents. This is aimed at driving up living standards and improving conditions for UK tenants.

Tenant Fees Act 2019

The Chancellor of the Exchequer announced the Government’s intention to ban fees to tenants in the Autumn Budget 2017. The law is now passed and await implementation, highly likely to be 1st June 2019.

Section 1 deals with prohibitions on landlords, section 2 introduces the ban for agents. The separation is deliberate as some of the rules are different e.g. the landlord may still serve a section 21 even if the agent takes a prohibited payment.

All fees and payments required by the landlord or agent are prohibited unless they are identified in Schedule 1. There are 10 permitted payments which mercifully includes rent, utilities and council tax. A 5 week deposit is the maximum chargeable, as well as a 1 week holding deposit which is subject to strict treatment rules found in Schedule 2.

Default payments are limited to the loss of keys or other security device and to interest on late payment of rent. A payment for damages is also a permitted payment subject to there being a breach of the agreement.

After the coming in to force of the Act it will be an offence to even put a prohibited payment in a tenancy agreement. Taking a prohibited payment will also be an offence, although there are transitional provisions for tenancies granted before the Act comes into force. Rules around the repayment of prohibited payments and enforcement are set out in various sections through the Act. The penalty for a first offence is up to £5,000. A second offence in section 12 is either a financial penalty up to £30,000 or a criminal conviction and an unlimited fine, which may lead to a banning order. The consequences of getting it wrong are serious.

Where a landlord is guilty of taking a prohibited payment, the section 17 prohibits the landlord from serving a section 21 notice till the prohibited payment is refunded.

The Act applies to assured shorthold tenancy agreements and licences but not long leases and contractual tenancies.

Homes (Fitness for Human Habitation) Act 2018 (the Act)

The vast majority of landlords are keen to ensure that their tenants are looked after and that the property is well maintained. When it goes wrong, however, the tenant has a limited and protracted route to get disrepair remedied. This new Act which came into force on 20th March 2019 updates the Landlord and Tenant Act 1985 (LT85) and gives the tenant the right to take a landlord to court directly for disrepair where they may seek specific performance i.e. to get the work carried out, and compensation. As action will be taken through the courts and compensation is available we can expect to see ‘no win, no fee’ lawyers chasing a share of any compensation awarded.

There is an implied covenant within each tenancy agreement, to which the Act applies, that the property is fit for human habitation at the start and throughout the tenancy. There is a further implied covenant by the tenant that the landlord, or someone authorised in writing by the landlord, may inspect the property to inspect its condition and state of repair. This covenant is subject to the tenant being given 24 hours’ written notice with the visit at a reasonable time of day.

Landlords will become responsible for disrepair upon notification although in the case of common areas, for instance in an HMO, the landlord will be responsible immediately the disrepair occurs.

The property will be considered to be in disrepair and if not reasonably suitable for occupation if it is defective in any of the matters within section 10 of LT85 including the 29 hazards from the Housing Act 2004.

The Act will apply to all new tenancies granted after 20 March including statutory periodic tenancies arising. A transition period of 12 months applies to existing statutory periodic tenancies unless a new tenancy arises.

Some exemptions are listed in section 9A(2) of LT85, however, the importance of maintaining a regular and documented inspection routine and responding promptly cannot be overstated.

N.B. This newsletter article, is produced and distributed on a limited basis. Whilst the information researched and provided is believed to be correct, neither the sender nor anyone involved in the production of it, accepts responsibility for its accuracy.   © TFP