15th December 2020
Newsletter Editorial By Michael Moore.
Recent changes to the legislation in the Property Redress Scheme have been introduced in the government’s newly issued ‘How to Rent Guide’ (December 2020). This MUST be given to tenants BEFORE they enter into a new assured shorthold tenancy (AST) or renew an existing assured shorthold tenancy.
The latest version includes a reference to tenancies affected by the Coronavirus pandemic. The most significant inclusion is the section on what the landlord MUST do before a tenancy can commence or continue. This specifically relates to:
I’m sure every landlord is aware that the tenant must be issued with an in-date gas safety certificate. I rarely come across rented properties with gas installed that do not have an up-to-date certificate, as it has been mandatory for some years.
However, we are frequently asked to value tenanted properties where the self-managing landlord has not registered the tenant’s bond (around one in five). Many landlords do not realise the serious implications of not registering the bond. The landlord loses the power to make a court application for possession at the end of the fixed term, should it be necessary. The tenant is also able to claim compensation for the fact the bond was not registered.
The lack of an EPC, an out of date EPC or an EPC with a rating below E at the start of a tenancy also removes the landlord right to gain possession. In the past month I’ve valued two properties (which we don’t manage) where tenancies had been renewed in the last six months, but where the EPC had expired in 2019. The landlords in both instances wanted me to list the properties for sale whilst the tenants were still in occupation. This would maintain rental income whilst the property was being marketed. Their strategy was to serve two months notice to quit (per their AST) once we’d found a buyer.
I explained to both clients that due to the Coronavirus Act 2020 the two months notice has been extended to six (which they were not aware of). Moreover, as they did not have an in-date EPC when the tenancy was created, they have lost the right to make an application to court for possession, should they need to. I had to insist that they obtain vacant possession before we could even market the properties as there was no certainty they could obtain vacant possession to meet a buyer’s timescale.
Since the summer of 2020 any new tenancy created must have had an Electrical Installation Inspection Report undertaken. This must be issued to the tenant prior to, or at the time of, commencement of the tenancy. The Report must also state the property to be safe, or where essential works were highlighted, that those works are now complete. Again, I am coming across tenanted properties created in the last few months where no report has been provided. In some instances I can see there are issues with the installation that will not pass the current (forgive the pun) inspection standards.
Gemma and Jaymie in our Maintenance Department have been working tirelessly this year to ensure all our managed properties have the necessary reports and certificates. This enables our negotiators, Angie, Karl, Fran and Sophie, to be able to let – whether for new clients or existing clients. The team also have systems in place to ensure we avoid last minute requests for inspections and certificates. This ensures all necessary documentation can be presented to new or renewing tenants, including the latest mandatory ‘How to Rent Guide’.
The Private Rented Sector is no longer a ‘safe’ sector of the property market for DIY landlords who cannot commit a significant amount of time and effort to meeting ever-tightening legislation. More changes are coming, especially with the minimum EPC rating of ‘E’ expected to be raised to ‘D’. Some Government white papers in circulation are even indicating this could be raised to ‘C’. (see above clipping from ‘Property Professional’ magazine, Nov/Dec 2020)
Generous grants are available already for upgrading insulation and heating systems to improve the EPC rating. I am expecting the grants to be improved further in the next 12-24 months. Applying for the grants and meeting the criteria and timeframes will be complex and time consuming. At Moores, the directors are gearing-up for these changes, ensuring our clients maintain, and where possible, increase their income on their buy-to-let investments.
If you’re managing your own residential investment properties and would like help meeting legislation, please get in touch. We can also help to improve your income/yield! In the first instance email my co-director, Angie Wright, who looks after our lettings and management department at firstname.lastname@example.org. Angie will be happy to talk through how we can help without any obligation on your part.
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