A RESIDENTIAL REFRESHER
With the legislation surrounding residential lettings constantly changing, below is an overview of some key factors relating to such lettings that anyone renting out residential property should be aware of.
- Right to rent checks ‘Obtain, Check, Copy’. Landlords and/or their agents must check anyone over the age of 18 years old, even if they are not on the tenancy agreement. If you are not compliant then you could face a fine of up to £3,000 or a prison sentence.
- A House in Multiple Occupation (HMO)Licence is required where three adults (or more) who are not related live together.
- Ensuring a property is in a safe condition and fit for human habitation both at the beginning and throughout the duration of the tenancy is a legal requirement for Landlords.
- Smoke alarms are required on each floor and Carbon Monoxide detectors are required in rooms where the tenant is burning any solid fuel. It is best practice to install these for gas systems as well. All alarms/detectors must be working on the day that tenants move in.
- Gas Safety checks must be carried out annually by a Gas Safe registered engineer on all gas appliances and flues. A record of the check must be kept for a minimum of two years and a copy provided to tenants within 28 days of completion.
- Electrical Installation Condition Reports (EICRs) are not a legal requirement but it is considered best practice for these to be carried out every five years or when a new tenant moves in.
- Legionella protection is not yet a legal requirement for landlords. However, it is best practice to drain down taps and to include in agreements that it is the tenant’s responsibility to regularly clean shower heads and taps etc.
- An Energy Performance Certificate (EPC) lasts for ten years and is required to be shared at the start of a tenancy (or property sale). Since April 2018, a rating of E or above (A is the highest rating with G being the lowest) must be achieved to let a new property unless an exemption can be applied. Please see further details on the Minimum Energy Efficiency Standards (MEES) below.
- Septic tanks and small sewage treatment plants must be well-maintained and regularly emptied in order to prevent pollution.
Minimum Energy Efficiency Standards (MEES)
MEES is a hot topic in the rental sector as new legislation is in force and further requirements due to come in from 1 April 2020.
From this date it will be unlawful to have a tenant in a property that has an EPC rating below an E, even if the tenancy was in place prior to this date. Currently, the E rating restriction only applies where a new tenancy is granted (including both new fixed term tenancies and periodic tenancies following the expiry of a fixed term).
However, there are a number of exceptions and clarifications including those outlined below:
- If a tenant has rented the same property since before 1 October 2008 there is no requirement for the property to have an EPC, however a new tenant or a successor to the tenancy will require one.
- Domestic property let as part of an Agricultural Holdings Act tenancies (AHA) or Farm Business Tenancy (FBT) need an EPC but not necessarily to meet MEES. However, if the FBT tenant sublets any property on an AST then it must meet MEES and the responsibility lies with the FBT tenant.
- HMOs do not require an EPC – as multiple tenants are all on individual contracts.
- A Listed building does require an EPC; however, the current government guidance is that if EPC works will have an impact on the character of the property then it is not required to meet MEES. If you can complete the recommended actions without unacceptably altering the character or appearance then these must be carried out. If they cannot then you must ensure that you have an EPC and then register the property as exempt.
- Consent from the tenant is required before carrying out any improvements – if consent is not given the property can possibly be registered as exempt.
- For properties unlikely to meet an E rating without considerable works, you may be able to register an exemption, providing you have relevant evidence. The Government has confirmed that the cap on the cost of works will be £3,500 including VAT. If, once this sum has been spent, the property is still below an E rating it may be possible to register the property as exempt provided the required evidence is accepted.
Note: Registered exemptions last for five years, after which the process begins again.
In some cases, there may be grant funding available to undertake works.
Section 21 (S21) Notices
Landlords can serve a S21 Notice to tenant(s) with no reason required to end an existing tenancy. However, a S21 Notice cannot be served if the tenant is less than four months into the tenancy, if an improvement notice has been served, or if any key documents were not given to the tenant at the start of tenancy, for example an Energy Performance Certificate, Gas Certificate or the ‘How to Rent’ Guidance.
Deregulation Act 2015
The Deregulation Act 2015 gave tenants additional protection through the regulations regarding retaliatory eviction, whereby if a tenant complains to the landlord regarding the condition of a property the landlord may then not be able to evict the tenant simply by serving a S21 Notice as above.
In most cases, the landlord must respond to the tenant and rectify the issue. If the situation can not be remedied between the landlord and the tenant, the latter may apply to the local environmental health officer to request an inspection. The environmental health officer will then follow up the works with the landlord if necessary.