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LEGAL OBLIGATIONS FOR RESIDENTIAL LANDLORDS
Over the last few years there has been an increase in the legislation requirements that landlords have to comply with when entering in to assured shorthold tenancy agreements (AST’s). Landlords are mostly aware that since 2006, where a deposit is taken in connection with an AST the landlord is obliged to protect the deposit in a Government approved scheme and provide certain prescribed information within a set timeframe. If a landlord fails to comply with these requirements, a tenant can pursue them for between 1 and 3 times the deposit for both failing to protect it and failing to provide the prescribed information i.e. between 2 and 6 times the deposit. In addition any notice served pursuant to Section 21 of the Housing Act 1988 to terminate the AST will be invalid until such time as the landlord has either returned the deposit or complied with the legislation.
On 01 October 2015 further legislation came in to force which meant that for all AST’s entered in to on or after that date, a landlord must provide their tenant with an EPC, gas safety certificate and a Department of Communities and Local Government booklet entitled “How to Rent, the Checklist for Renting in England”. A failure to provide this information means that again a valid notice cannot be served pursuant to Section 21 of the Housing Act 1988 to terminate the tenancy.
At the current time the requirements apply to all AST’s entered in to on or after 01 October 2015 but there is a long stop date of 01 October 2018 where it will apply to all AST’s regardless of when they were entered into.
From 01 February 2016, landlords have to check the immigration status of their prospective tenants by carrying out right to rent checks. A failure to carry out those checks can result in a fine of up to £3,000 for renting a property to someone who is not allowed to rent a property in England.
In summary, at the start of the tenancy as well as undertaking all the necessary credit and referencing checks to make sure that the tenant is a desirable tenant, a landlord also has to take the following action:
1) Deal with the deposit correctly
2) Provide EPC, gas safety certificate and DCLG booklet
3) Carrying out the right to rent checks
The penalties for failing to comply with these pieces of legislation ranges from a potential monetary claim against a landlord by a tenant or the inability to serve a valid Section 21 Notice (to terminate a tenancy).
The majority of problems that I come across with the landlords who wish to serve a Section 21 Notice relate to a failure to supply the relevant information to their tenants or a failure to deal with the deposit correctly. With the information requirements, it is possible to comply with the legislation late. However in relation to the deposit requirements although a landlord may comply with the legislation late this does not provide a defence if the tenant decides to make a claim for failure to deal with the deposit in a correct manner i.e. if the landlord complies late and a tenant brings a claim against them for failing to deal with the deposit correctly a Court must award at least 1 times the deposit for failing to protect it and provide the prescribed information within the relevant time frame i.e. the least amount that the landlord will have to pay out is 2 times the amount of the deposit.
It is therefore imperative that landlords make sure that they are complying with their legal obligations at the start of the tenancy. Landlords should also be aware that there are then further legal obligations throughout a tenancy which they must comply with.
Fiona Squire a Partner specialising in landlord and tenant advice. For more information please telephone 01803 403403 or email on firstname.lastname@example.org. Fiona sends out a monthly newsletter to residential landlords. To sign up to the newsletter please email her on the above email address.
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