News

Rental market tipped to stay strong, even in the face of Brexit

BrexitThe British rental market is so strong at the moment that even the vote to leave the EU referendum should have little to no effect on its overall health, letting agents nationwide believe.

According to a survey released by the Association of Residential Letting Agents (ARLA), the majority of those operating in the sector believe that the three main factors that contribute to sector health – supply, demand and pricing – will remain unaffected, allowing the market to continue its growth moving forward.

In the survey, some 65 per cent of respondents said that they feel the levels of supply across the nation will not be affected, with landlords still likely to invest despite the decision for the UK leave the EU. This compared to just 22 per cent of letting agents who said they believe the Brexit vote will mean fewer rental homes becoming available.

As well as this, demand should remain steady, the majority believe, with as many as 55 per cent saying there will be little to no negative impact of the Brexit vote on the number of tenants in the market. On the flipside, some 31 per cent believe that the UK becoming less of an attractive prospect for relocation would mean a fall in demand across the PRS.

And when it comes to what tenants are having to pay to live in rented homes, letting agents also believe there will be only negligible changes, with as few as 19 per cent predicting any significant upwards pressure on pricing for landlords in the wake of the Leave vote.
As outlined in the recent Brexit Report, the lettings market hosts a large number of non-UK born citizens and any change in migration policy is likely to have an impact down the line, especially in London. However, our monthly report clearly shows the sentiment amongst members is that the immediacy of this effect is likely to be minimal.

Category : News

PREPARING FOR THE RIGHT TO RENT – A LANDLORD’S GUIDE TO THE IMMIGRATION ACT 2014

Introduction

The Immigration Act 2014 introduced the concept of ‘right to rent’ to the private rented sector. Originally introduced in the West Midlands, right to rent requires landlords and agents check the immigration status of their prospective tenants at the outset of the tenancy. Under the previous coalition government, this introduction to the West Midlands was intended as a pilot scheme. National rollout was only expected to take place after consultation and impact studies had been completed. Sadly, this is no longer the case however and the requirements came into force on February 1st 2016 for all landlords in England.

Is this for assured shorthold tenancies only?

No, this applies to all residential tenancies with some limited exemptions for social housing, halls of residence, etc. Almost all private sector landlords will be caught when they have anything from ASTs to lodger agreements.

What types of occupancy are exempt?

Holiday lets, lettings where it is not the tenants’s main home, tenancies of more than 7 years where there is no break clause for the landlord, letting to students where the education institution has placed the tenant in the property, people whose accommodation is provided by their employer and finally, mobile homes.

Licences and lodger agreements are included.

What are the requirements?

Landlords must not authorise an adult to occupy a property as their only or main home unless they can establish the adult has a right to reside in the UK. This means landlords are now required to check the identification of everyone who is over 18 and expected to occupy the property.

Who is responsible for these checks?

The landlord would normally be responsible for these checks but they can pass on the obligation to their agent as part of a written agreement. This means that the agreement between the landlord and the agent must specifically refer to who is responsible for performing right to rent checks. Hayfield Robinson L&M Ltd will carry out the necessary checks to ensure their landlords are meeting the new regulations.

Where the tenant sublets the property they will usually be responsible for checking the right to rent status of their subtenants. However, the landlord can perform the right to rent checks expressly agreed with the tenant who is subletting that they will do so. Landlords will not be liable for unauthorised sub-letting.

What is ‘right to rent?’

Right to rent means simply that the occupier has a right to rent a property in the UK. Anyone without it is disqualified from renting. This can be broken down into two different groups, permanent and time limited rights to rent. Each has different requirements.

Who has a permanent right to rent?

  • British citizens; European Economic Area nationals (Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.); and Swiss nationals,
  • People who have a right of abode in the UK; who have been granted indefinite leave to remain; or have no time limit on their stay in the UK.

Who has a time limited right to rent?

Those who are not British citizens, EEA or Swiss nationals who have

  • valid leave to enter or remain in the UK for a limited period of time
  • are entitled to enter or remain in the UK as a result of Acts of Parliament, European Union Treaties and Immigration Regulations (eg family members of EEA nationals). However, some family members of EEA nationals may be able to demonstrate an unlimited right to rent.

My tenant has 3 months left on their right to rent, how long should my tenancy be?

Right to rent checks last for a minimum of 12 months, regardless of how long the tenant’s actual right to reside has left. Landlords can therefore safely give 12 month tenancies without issue provided the checks have been made at the outset.

Landlords should be wary of discrimination. For example, if a landlord normally offers 6 or 12 month tenancies, it would be discriminating against a prospective tenant if they only offered a 3 month tenancy to someone with only 3 months left on their right to reside.

How often should I check their right to rent?

People with a permanent right to rent need only be checked once before the tenancy commences.

For those with a time limited right to rent, landlords need to keep a note of when the time limit expires and check within 29 days of the tenant’s right to rent expiring. Alternatively, if it falls on a later date, they should check within 29 days of the 12 month anniversary of the previous right to rent check. This follow up check should then hopefully show the tenant has a right to remain in the property.

The requirements are for adults. What about children?

Children do not need to be checked but landlords will need to prove they are under 18 unless it is obvious. It would be wise for landlords to keep their birthdates on record so they know when they become adults if they have a time limited right to rent. Particularly where an adult occupier’s right to rent is dependent on this child.

If an occupier turns 18 during the same tenancy they should also be checked.

For more information on “right to rent” or if you have any questions in relation to this issues please contact us when we will be delighted to assist.

Category : News

DPS Conclude 4 Yearly Decorating Cycles are Appropriate – Is this Fair?

One of the moInventory Picturest contentious issues affecting residential tenancies is that of redecoration and how far internal decor deteriorates during the course of the tenancy.  Below is an extract taken from a decision made by the alternative dispute resolution service (ADR), offered by the Deposit Protection Service (DPS) following a landlord’s claim that the deterioration in the decorations was over and above what should be deemed as fair wear and tear.  Importantly it refers to joint guidance issued to inventory clerks and letting agents by ARLA, RICS, NAEA and Asset Skills suggesting decorations have a lifespan of only 4 years.  The extract reads:

“Having carefully considered and compared the check in and check out evidence, on balance, I am persuaded that the condition of the property’s decor has deteriorated during the course of the tenancy.  Whilst I am satisfied that work was needed to re-decorate, however, I would refer to the joint guidance issued to inventory clerks by ARLA, RICS, NAEA and Asset Skills, which states that decoration would normally be expected to last approximately 4 years.

In light of this guidance and given the pre-tenancy condition of the property’s decor, reasonable lifespan of the decor and the length of tenancy.  I am not persuaded that the tenant should contribute towards the redecoration costs.  I find it reasonable to anticipate that the decoration would have come to the end of its useful lifespan by the end of the tenancy irrespective of any additional damage caused by the tenant.  I cannot therefore find that the landlord has suffered any financial loss as a result of having to redecorate on termination of this tenancy.  Consequently the claim fails”.

In this case accurate check out and check in inventories were prepared and while the adjudicator agreed there had been deterioration in the decor, as the tenancy term had been in excess of 4 years, the conclusion that was reached was that the property would need redecorating irrespective of any damage caused by the tenant.

It is therefore important that this is factored into any appraisal when considering letting residential property.  Of course if you have any questions whatsoever in relation to this matter, or residential letting in general, please feel free to contact us.

Category : News

New Tax Legislation Changes – How do they Affect Landlords & Buy to Let Investors?

house news

‘Wear-and-tear’ tax allowance

As part of George Osborne’s new income tax regime for property investors, landlords will no longer be allowed to automatically deduct a set amount of wear-and-tear tax on properties as of next April. This means an end to the generous deal, which allowed investors to deduct 10 per cent of annual rent from their income before working out their taxes. This was even if no money had been spent maintaining rental properties.

This means that buy-to-let landlords will instead only be able to deduct the cost of repairs actually carried out, meaning you will have to keep a hold of any receipts should the HM Revenue & Customs ask to see them.

Tax relief for high earners

From April 2017, there will be reductions to the amount of tax relief that higher rate taxpayers can enjoy on their rental profits. This means that 40 and 45 per cent taxpayers will only be able to deduct a smaller portion of their property’s rental income, meaning payable taxes will rise.

High earners who currently, or are looking to invest in profitable buy-to-let accommodation, are advised to read up on the changes and see how much they may be affected. It may make sense to switch buy-to-let mortgage providers or seek impartial advice.

Buy-to-let mortgage changes

Two years ago, the Financial Conduct Authority pledged to rein in ‘irresponsible lending’ and introduce tough affordability tests for anyone applying for a mortgage.

However, with the government increasingly striving to get more young and first-time buyers onto the property market, this could mean more stringent application processes for property investors and those looking for buy-to-let opportunities.

Many lenders have hardened their approach to buy-to-let applications, increasing the length of the process and turning down applicants if they do not have a decent non-property salary and low monthly outgoings.

Fortunately, it’s not too late to find a low rate, buy-to-let mortgage, with some lenders opening up buy-to-let loans to non-customers and taking on ‘amateur’ smaller investors as well as ‘professional’ landlords with larger property portfolios.

If you have any questions on the issues raised in this article please contact us and we can put you in touch with the right people to offer advice and guidance and get you the best deals possible.

Contact Lee Bilbrough on 01535 600097 or email lee@hayfieldrobinson.co.uk

Category : News

Checkout as Important as Check In!

Inventory PictureThe checkout is a vital process as it helps you to avoid disputes, and provides evidence to support your case if there is one. However, not all checkouts are equal and there are a number of considerations you need to keep in mind to make sure that yours is suitably thorough. We have set out below our top 10 tips for a great checkout to help you get it right.

 

1 – Take along your check-in report/inventory
You should have made a detailed check-in report prior to your tenant taking occupation which will be the starting point when arguing if the property has deteriorated.

2 – Invite tenants to the checkout inspection
by giving them reasonable notice to attend and keep a record of the invite so it cannot be disputed afterwards.

3 – Make sure your tenant understands the process
by explaining that it is their chance to put forward their case regarding the state of the property.  Once the inspection is over they will have little chance to further argue their case.

4 – Consider using an inventory clerk/letting agent
The process can be complex, particularly when arguing a dispute via a deposit company’s alternative dispute resolution service which in many cases offer no second chance, so getting the claim right the first time is essential.

5 – Be safe
Make sure someone knows where and when the checkout is taking place and if you have any concerns about the tenant consider taking someone else along with you.

6 – Take your time and be thorough
Attending your property when it has been the tenant’s home can feel awkward but you need to cover every aspect of the check-in list properly or you could face problems later on.

7 – Make notes
A detailed checkout inventory is essential when making a claim on the deposit.  It is also useful to make a record of your tenant’s admissions or agreements that you may reach.  Your tenant should have the opportunity to review the checkout report and ideally should sign it to confirm both its accuracy and their approval.

8 – Bring a camera and take photos
Ideally photos should have a date stamp which demonstrates exactly when and where the photos were taken.  Again these are vital when referring the matter to a third party resolution service and can often be the difference between a claims success and its failure.

9 – Use video evidence where appropriate
If photographs don’t show the full picture then considering using a video which can assist in telling the full story.

10 – Carry out the checkout before any repair works take place
Although landlords are often keen to get problems rectified as quickly as possible to enable the next letting, it is important to ensure the checkout is done before any remedial works are started so as to avoid any confusion as to the exact condition of the property upon tenant’s departure.

We hope these tips prove of some use and naturally if you have any queries in relation to the checkout process or indeed how it affects your claim on your tenant’s deposit please do not hesitate to contact us.

Category : News

Carbon Monoxide & Smoke Detector Requirements from 01.10.15

From the 1st Smoke Detector PicOctober 2015, subject to Parliamentary approval, regulations require both smoke alarms and carbon monoxide alarms to be installed in rented residential accommodation. Changes are also made to the licence requirements in relation to houses in multiple occupation (HMOs), such as shared houses and bedsits which require a licence and also in relation to properties which are subject to selective licensing. This Guidance is based on draft regulations which have been published. The Regulations apply both to houses and flats. Failure to comply can lead to a civil penalty being imposed of up to £5,000.

 

These provisions only apply in England; not Wales.

Who is affected?

The requirements are imposed on the immediate landlord. There is an exemption for providers of social housing. A tenancy includes a licence to occupy a residential premises and it also extends to subletting for these purposes.

In the case of a licensed HMO or where there is a selective licensing it is the responsibility of the licence holder to ensure that mandatory conditions imposed in relation to the installation of alarms are complied with.

The premises affected

These duties apply to residential premises which means premises all or part of which comprise a dwelling. Thus, it will apply to a flat over a shop. If the property is a licensed HMO or subject to selective licensing there are mandatory conditions imposed on licences.

The premises must be let under a specified tenancy or a licence. This is a tenancy or licence of residential premises which grants one or more persons the right to occupy premises as their only or main residence. Rent or a licence fee must be payable.

There are various exemptions:-

  • A tenancy under which the occupier shares any accommodation with the landlord or a member of the landlord’s family. There must be a sharing of an amenity which includes a toilet, personal washing facilities, a kitchen or a living room but excludes any reference to storage or access.
  • A tenancy which is a long lease or which grants a right of occupation of the premises, i.e. for more than 21 years
  • Student halls of residence
  • Hostels
  • Care homes
  • Hospitals
  • Accommodation relating to health care provision

Requirement for Smoke alarms

During any period beginning on or after 1st October 2015 while the premises are occupied under a tenancy (or licence) the landlord must ensure that a smoke alarm is equipped on each storey of the premises on which there is a room used wholly or partly as living accommodation. A living room will include a lounge dining room and kitchen as well as a bathroom or toilet. It also includes a hall or landing. This means that a smoke alarm must be provided in working order on each storey. Since the regulation relates to each storey in the premises this suggests that a separate alarm is not needed on a half landing as these would not be regarded as individually being a storey. As regards individual flats located on one floor then there will have to be at least one alarm within the flat itself or alternatively are provided outside the flat on the same floor of the building, i.e. a communal alarm.
Likewise, for flats comprising more than one storey there will need to be a smoke alarm on each floor.
It is the location of an alarm which sounds which is crucial; not the positioning of detectors.
The Regulations do not stipulate what kind of alarm is required. Ideally it should be a hard wired alarm system. It can, however, be a single stand alone alarm. Landlords are recommended by the RLA to fit ten year long life non-tamper proof alarms, otherwise there is a problem of batteries being taken out and not being replaced.

Carbon monoxide alarms

Likewise, during any period beginning on or after 1st October 2015 when the premises are occupied under a tenancy or a licence a carbon monoxide alarm must be provided by the landlord in any room in premises which is used wholly or partly as living accommodation which contains a solid fuel burning combustion appliance. This applies to any kind of wood burning stove or an open coal fire. It will also extend to equipment such as a solid fuel Aga in the kitchen. This is already a requirement with new installations of solid fuel burning combustion appliances as under Building Regulations there is a requirement to install a carbon monoxide alarm. This is now extended to any existing appliances already in place before Building Regulations imposed this requirement or where building regulations are not observed.

Checks

The landlord is specifically required to carry out a check to ensure that smoke alarms or carbon monoxide alarms installed to comply with the Regulations are in proper working order on the day a tenancy begins where it is a new tenancy. A new tenancy is a tenancy granted on or after 1st October 2015.

For these purposes a new tenancy does not include a tenancy which was granted where the original agreement was entered into before 1st October 2015; nor does it include a periodic statutory tenancy which arises when a fixed term shorthold tenancy ends. It does not apply to a tenancy which starts at the end of an earlier tenancy where the landlord and tenant are the same as under the earlier tenancy and the premises are the same (or substantially the same) as those under the earlier tenancy. Therefore this express requirement to check does not apply to the renewal of a tenancy for the same premises by the same landlord to the same tenant.

In our view, landlords should not be under a false sense of security because of this provision. Our reading of the regulation is that there is an ongoing obligation to ensure that any smoke alarm or carbon monoxide alarm installed to meet these requirements is in working order. Alarms should therefore be checked periodically to see that they are working properly. There is no reason why this responsibility should not be placed on the tenant but the landlord will then have to make sure that the tenant does actually carry out the checks. If challenged, a landlord could have to show that a proper system has been put in place to check alarms regularly.

HMOs and Selectively licensed properties

As from 1st October 2015 new licence conditions will be included requiring the provision of smoke alarms and fire detectors. In the case of HMO licences they already contain provisions for alarms in any case. The regulations themselves are not applicable in this kind of accommodation.

Enforcement

The local authority is responsible for enforcement.

A local authority must serve a remedial notice within 21 days where they have reason to believe that the landlord is in breach of any of these duties relating to smoke alarms or carbon monoxide alarms. A remedial notice must specify the action to be taken within 28 days of the date of the service of the notice. It allows the landlord 28 days to make representations against the notice.

The landlord must then take the required action within the period allowed. There is an excuse for a landlord for non-compliance with the notice if the landlord can show that he has taken reasonable steps to comply with the duty, but the landlord is not required to take legal proceedings. This could cover a situation where the tenant refuses access to allow the work to be done.

If the landlord fails to take action then the local authority must, if it has the necessary consent to do so, arrange for the work required to be undertaken within 28 days of consent being obtained if consent of the occupier of the premises is required. Therefore if a local authority is also refused access by the tenant it cannot take the necessary steps itself.

Penalties

If the landlord is in breach the local authority may require the landlord to pay a penalty charge up to a maximum of £5,000. It has discretion whether or not to impose this charge. If it intends to impose a charge it must serve a penalty charge notice within six weeks from when it is first satisfied that a breach has occurred. A right to make representations against the penalty notice is given and the local authority may reduce the charge for prompt payment.

Appeals

If the local authority upholds a penalty charge notice there is a right to appeal for the landlord to the First Tier Tribunal. The Grounds of Appeal are:-

• Local authority has made an error of fact or law
• The amount of penalty charge is unreasonable
• The decision to impose a penalty is unreasonable for any other reason

Payment of the penalty is suspended pending any appeal.

Local authority penalty policy

Each local authority must publish a statement of principles which will be followed in determining the amount of any penalty charge. This statement will be taken into account in deciding on an individual penalty for a particular case.

Category : News

Generation Rent Good News for Landlords

The proNews Report Graphportion of households renting privately could surge to 7.2m by 2025, while the numbers categorised under the umbrella of Generation Rent will continue to rise substantially over the next decade. These are the main findings of a report by accountancy firm PwC, which also forecasts that home ownership levels will decrease from 68% to roughly 60% in the next ten years.

PwC expects house prices to rise by 5% a year, pushing the average house price in the UK up to approximately £360,000 by 2020. This, coupled with a shortage of housing supply and the difficulty involved in buyers cobbling together increasingly large deposits, means many people will be opting to rent privately for the long-term.

According to PwC’s report, a quarter of all households will privately rent by 2025, with more than half of those under 40 living in the private rented sector (PRS). A “clear majority” of those aged between 20 and 39 will be living in properties owned by private landlords within the next decade. This demographic, which includes many students, families with young children, creatives and young professionals, often enjoy the flexibility provided by renting for the long-term.

Young professionals in their twenties and thirties are more likely to move from job to job as their career progresses, particularly if they live in major cities like London, Birmingham, Manchester or Liverpool. They’ll appreciate rental properties that are close to city centres and good transport links, as well as being nearby to places with buzzing social scenes and many leisure/sporting opportunities.

Families with young children, too, enjoy the flexibility that renting can offer – they can move from, say, a smaller house to a larger house as their family expands. Not having the financial pressures of the costs associated with owning a house – such as a broken boiler or leaking pipe – would also no doubt have significant appeal. Generally speaking, families will be keen on rental properties with gardens, green space nearby and good local schools and amenities.

As for students, they make up a major part of the PRS in large university towns and cities. This isn’t going to change anytime soon as this demographic will nearly always rent during their studies – firstly, because they can’t afford to buy; secondly, because they appreciate the flexibility provided by rental properties. As a result, demand for student accommodation is always very high and landlords will have very few problems in getting tenants in place. Regular, stable rental income’s pretty much guaranteed for much of the year, which means good rental yields can be achieved.

The increasing strength, growth and resilience of the sector is, of course, excellent news for landlords. With sustained demand, the pool of prospective tenants for rental properties will be much larger. Crucially, this can reduce the chances of void periods. If investors and landlords buy in the right areas, there could be little issue with keeping those properties occupied for the long-term.
The continued expansion of the PRS is positive news for letting agents, as the volume of potential landlords grows.

Category : News

Our Top 10 Inventory Tips

Inventory-for-Landlords-and-Tenants

Tip One

If you can’t agree deposit deductions with the tenant, and you enter our Alternative Dispute Resolution process, the adjudicator will use evidence like the inventory to compare the property condition at the beginning and end of the tenancy

Tip Two

The adjudicator will need to judge how reliable the inventory is.  Those considered to be the best evidence will usually:

  • Have been prepared in a clear and professional manner and be as detailed as possible.
  • Contain dated photos.
  • Have been signed by the tenant.

Tip Three

The inventory shouldn’t just be a list of items.  It should include the condition of:

  • The property
  • The décor
  • Fixtures and fittings
  • Any furnishings or other items

Don’t forget – the adjudicator won’t visit the property, so the inventory needs to give as clear a picture as possible.

Tip Four

An inventory should be completed for each new tenancy.  It should also be done every time there’s a change of tenant at your property, even if it’s a multiple tenancy and not all the tenants are leaving. If a new inventory can’t be created, adjudicators will consider updated or annotated versions of the original.

Tip Five

Check-out evidence should be completed as soon as possible after the tenant returns the keys. If the tenant has left the property without attending a check-out inspection, you should compile the check-out evidence as soon as possible.  The tenant doesn’t have to attend the check-out inspection, but they should be encouraged as it will be easier for you both to agree the results.

Tip Six

Inventories can be the deciding factor in a dispute (and can even prevent them occurring) so it’s really important they’re clear and detailed.

Tip Seven

There’s no set layout to inventories but information should be clear and methodical. The check-in report will need to be as comprehensive as possible, but the check-out report can just note any changes to the condition of the property and contents.

Tip Eight

If you’re explaining the condition of an item, be descriptive! Words like ‘fair’ and ‘ok’ can be interpreted in many different ways, and might not help your case. It’s important to say if an item is brand new.

Tip Nine

Make sure you always label items in the same way. For example, changing the label of bedrooms from “front, middle and back” in the check-in report to “bedrooms 1, 2 and 3” at check-out can make it difficult for the adjudicator to be sure they are comparing the same rooms!

Tip Ten

Photos must be good quality, and clearly show the alleged damage or defect. If the inventory has been photocopied, photographs can be unclear and the adjudicator may not be able to make out any damage.  Electronic versions of the photos are much easier for our adjudicators to judge.

 

A good quality inventory shows the tenant that care has been taken in recording the property’s condition at the start of the tenancy and often encourages the tenant to leave the property in a good condition.  Here at HR L&M Ltd inventories are included FREE OF CHARGE in both our letting and management services, whereas the majority of agents charge an additional fee.  For more information please contact us.

Category : News

5 top tips to avoid rent arrears!

ArrearRent_Arrearss, void periods and damages are almost always the top three landlord concerns.  So what can you do to minimise the risk and impact of your tenant falling into arrears?

 

HERE ARE MY TOP FIVE TIPS:

1 – Comprehensive referencing

Make sure that you check into the background of your tenant. For example – do they have a good credit history? Steady job? Bank account? Previous good tenancy? Can they afford the rent? Also, are they actually who they say they are?

2 – Trust your instincts

Spend time getting to know your tenant before they sign on the dotted line. Is this someone you that you feel you can trust and will be able to work with over the period of the tenancy?

3 – Protect yourself

If you have successfully referenced your tenant, you will be able to purchase a Rent and Legal Policy which will provide you with cover for arrears and the legal costs associated with eviction.
Policies vary so ensure you take out the right one to ensure you receive the cover you need.

4 – Keep communicating

Regular communication with the tenant is essential to help you identify any issues early, so that they can be dealt with. Some flexibility is important as anyone can have an emergency that affects their cash flow for the month. If your tenant loses their job they may be eligible for benefits which you or your agent can help them to apply for. This would enable them to continue paying their rent.

5 – Act quickly

Don’t let the level of arrears get out of hand.  The bigger the debt the less chance of recovery.  Most Assured Shorthold Tenancies (AST’s) charge rents calendar monthly in advance allowing for notice to terminate to be served once the tenant falls in excess of 2 months behind.  Despite any promises of payment begin the possession procedure as soon as you are able as you can always revoke the notice at a later date if need be. If you are in the unfortunate situation where you need to evict your tenant, it is crucial that you follow the correct legal process.

Category : News

Deregulation Act and tenancy deposits – Are you properly protected?

Man with a Pound Sign Medium[1]More than 300,000 tenancy deposits are at risk of being affected by an upcoming change in legislation.

As of June 23rd, the Deregulation Act will apply to landlords who have existing tenancies that started before Tenancy Deposit Protection was introduced in England and Wales.

Some 330,000 existing rental agreements will be affected by this change and landlords could be fined if they fail to move deposits into an approved protection scheme and provide their tenants with the necessary prescribed information and relevant terms and conditions.

It is important that landlords are aware of the legislation changes and how it affects them. They must act now and check whether they need to protect any deposits and avoid a fine.

Any tenancy that began prior to April 6th 2007 and has since rolled into a Statutory Periodic Tenancy must have a protected deposit as of June 23rd. The change does not apply to rental agreements where the deposit was taken before April 6th 2007 and the tenancy became periodic before this date. However, the money will need to be placed in a protection scheme if the landlord or letting agents wish to regain possession of the property through a section 21 notice.

To avoid any doubt about the deposit then the belt and braces approach is to protect it and provide your tenant with all the relevant information as soon as possible.

According to recent research almost 48 per cent of landlords struggle to keep up with changes in legislation and as such can unwittingly fall foul of the law.

If you have any questions about the upcoming changes or indeed protecting tenant deposits in general please feel free to contact us.

Category : News