Looking back at 2015 and forward to 2016

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December is the time to take stock of the year that is past and look forward to the year that is to come.   

This has certainly been one big year for landlords and agents!  We have had the following changes:

  • The case of Edwards v Kumarasamy made leaseholder landlords liable for repairs in areas previously considered to be the sole responsibility of the head lessor
  • The effect of the Superstrike case has been reversed under the Deregulation Act, which also ushered in
  • Major changes to section 21 for English tenancies started or renewed on or after 1 October 2015
  • We have also had new regulations regarding transparency of agents fees and
  • Smoke and carbon monoxide alarms and
  • New and changed forms have come into force for section 8 and section 21 notices and the rent increase notice under s13.
  • Finally the first of the major Welsh legal reforms came into force on 23 November with the launch of the Rent Smart Wales website.

What does all this mean for landlords?

More complexity

Despite the government saying in the past that they did not want to increase ‘red tape’, things are now immeasurably more complex for all in the Private Rented Sector. 

To work out what your rights are, you now need to consider

  • When the tenancy was granted (on or after 1/1/1989, on or after 27/2/1997 and on or after 1/10/2015),
  • Where the property is (in particular whether it is in England or Wales) as well as
  • All the other issues such as
    • Whether the property is an HMO or not,
    • Whether the deposit has been properly protected and
    • What type of tenancy it is, etc

 More expense

Landlords are going to be under greater pressure to bring properties up to scratch, at a time when tax changes are going to reduce their available funding.  

The considerably larger than expected registration fees for the Rent Smart Wales scheme are a foretaste of what further regulation could bring in England and the fact that Magistrates Courts fines are now unlimited makes it clear that the cost of non-compliance is only going to go up.

More obligations

Its going to be difficult to just rent a property to a tenant and collect the rent and do nothing else.  There are now extra rules relating to

  • Deposits
  • Houses in Multiple Occupation (which apply to practically all shared houses with more than two sharers, which are not family homes), and
  • Health and safety

 Coming in 2016 are further rules relating to

  • Right to rent checks, and almost certainly
  • Increased licensing for HMOs

 Letting agents

Letting agents are also becoming subject to greater regulation as regards fees and the requirement to belong to an Ombudsman scheme.  

 It also looks as if client money protection insurance may become mandatory next year.

 Conclusion

 To a certain extent, many of these changes are understandable.  The government pays millions to the private sector in benefit payments - they are entitled to demand that the money paid is for rented property of a certain standard and that tenants’ rights (e.g. as regards deposits) are respected.

 The new requirement to provide the How to Rent booklet is particularly welcome as so many tenants are completely clueless about their legal rights and obligations.

However it does look as if the private rented sector is being targeted by government.  New tax rules will make it more difficult for them to make a profit, and it also looks as if the Bank of England is considering making it more difficult to obtain a buy to let mortgage.

One thing is clear - if landlords are to have any hope of making a profit from their properties, it is essential that they comply rigidly to all the new rules and avoid expensive penalties and charges.

How to keep up to date:

There are many free resources online, such as the TDS blog and mailings, my Landlord Law Blog, and the Nearly Legal blog.  As well as the various landlord associations and industry services.

Training has never been more important.  Easy Law Training will be launching their new workshop program for spring 2016 soon, and our annual Landlord Law Conference in Manchester in May will concentrate on legal issues for landlords.  It remains the only major event to provide a full day of specialist legal speakers and is sponsored (as always) by TDS.

For more information about our services visit the website at www.easylawtraining.com.  My own Landlord Law service also provides support and paperwork for landlords to help them be compliant with all the new rules.

Tessa Shepperson

Tessa is a specialist landlord & tenant lawyer and director of the training company Easy Law Training Ltd.


Posted by Tessa Shepperson on 21 December 2015

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