Being a good landlord or property manager in the UK is about responding to your tenants’ needs. It’s also about getting a variety of tasks finished on time, with quality in mind. But it doesn’t end there.
There are also rules and regulations to navigate, so you can stay in compliance—and in business.
Let’s talk about the five most common areas where landlords slip up, unintentionally putting themselves at risk.
Tenant Fees Ban: In effect since June 2019, the Tenant Fees Ban requires landlords to include all costs in advertised rental rates, with no surprises for tenants. Deposits cannot total more than five weeks’ worth of rent (or six weeks’ worth when the total rental exceeds £50K annually). All fees are banned, with a few exceptions: utility and council tax fluctuations, contract addendum fees, costs for which the tenant is at fault, and changes in tenancy. Some examples of fees that cannot be imposed on tenants include credit checks, references and inventory costs.
If you’re passing along any costs prohibited by the Tenant Fees Ban, or adding anything not permitted on top of your tenants’ rent, you could be looking at fines of up to £5K and civil penalties of up to £30K.
Homes (Fitness for Habitation) Act: As stated in the regulation’s title, landlords are legally required to make sure every property is fit for human habitation, and free from hazards. That’s nothing new. What is new, however, is March 2019’s revision that gives tenants authority to take court action against property owners.
Most good landlords are already ensuring their properties are suitable for occupation; however, overlooking just one aspect could land them in court.
Those aspects include things like structural instabilities; dampness or mould; too little natural light; poor ventilation; an inconsistent, inadequate or unsafe water supply; drainage or sewage deficiencies…and more.
HMO Licensing: An HMO, or House in Multiple Occupation, was once defined as a home of three storeys or more, with five or more unrelated inhabitants, or two separate families, all sharing the same facilities. In October 2018, the regulation was adjusted to include properties of any number of storeys. This means that many landlords who never needed an HMO license must now acquire one for each property meeting the new, stricter criteria. Noncompliance (or failure to present a license to new and existing tenants) can bring serious legal complications, including elimination of a landlord’s right to evict.
Minimum Space Standards: In the UK, a housing shortage has led to a reduction in property size, with the British average now around 71sq m. This has resulted in regulations to control overcrowding.
Bedrooms that are too small, for instance, make letting particular homes and flats illegal. To remain in compliance, landlords must ensure that a bedroom occupied by one adult is no smaller than 6.51sq m, a bedroom for two adults is no smaller than 10.22sq m, and a room slept in by children under the age of 10 is at least 4.64sq m.
Paperwork on File: In the event that you should have to serve a Section 21 (eviction) Notice, you are required to have the following paperwork on file: a valid EPC (Energy Performance Certificate), a How to Rent guide, a valid Gas Safety Record (if applicable) with renewals, prescribed information (the amount of the tenant’s deposit and how it has been protected), deposit protection leaflet, deposit certificate (proof that the deposit has been registered), and the HMO license (if applicable).
There are changes coming that will make being a good landlord just a little more complicated. In 2020, individuals who own properties will no longer be able to deduct mortgage interest. Additionally, all properties will be held to an EPC rating of an “E,” in order to comply with minimum energy efficiency standards.
This list is by no means exhaustive, and is only intended to give you a taste of what it takes to be in compliance. Laws are continually changing, and the best landlords stay informed and up-to-date in every facet of property ownership and management.
With all these regulations to navigate, landlords can easily become overwhelmed. In 2020, being a good landlord will mean more than being available 24/7. It will mean having full access to all documents and regulations. PropTech is the common-sense way to ensure that you are not only in compliance, but that you can demonstrate how good a landlord you really are!