15th June 2021
Residential landlords are under pressure to keep on top of a raft of new legislation and guidelines this year.
They include a change to the evictions process, the new debt moratorium scheme, and changes to validating the right to rent, through to permission for pets, new rules on electrical testing and the anticipated extension for carbon monoxide monitoring later in the year.
Landlords must also comply with the shift to online reporting to HMRC, under the Making Tax Digital initiative.
Below we provide a quick refresher and overview of the changes to be mindful of…
The hold on evicting tenants has now been removed, as of 1st June. This temporary legislation was put in place to help protect renters who had their income impacted due to the pandemic and to ensure that people were not left struggling for somewhere to live during national lockdowns.
Landlords who want their tenants to move out can now give four months’ notice and from 1 October it will return to two months.
Minimum notices of two weeks may be possible in some circumstances where renters have broken the tenancy agreement and in serious cases, no notice of eviction can be applied.
Another major legislative change is the debt respite scheme which came into force on 4 May 2021 in England and Wales. Now, a debt advisor authorised by the Financial Conduct Authority (FCA) or a local authority can start what is known as a ‘breathing space moratorium’. This will provide someone in financial difficulties with legal protections from creditors, and in this context the landlord will usually be the creditor and tenant the debtor.
The government has published some useful guidance for creditors, although it’s likely specialist advice will be needed as creditors feel their way on this. What is important to understand is that if you are told that a debt owed to you is in a breathing space, you must stop all action and put protections in place until the breathing space ends.
There are two types of breathing space: a standard breathing space and a mental health crisis breathing space. The standard breathing space is available to anyone with problem debt, giving legal protection from creditor action for up to 60 days. Those given breathing space while receiving mental health crisis treatment will have additional protection, with the breathing space lasting as long as the treatment, plus 30 days.
Every property should have an electrical safety compliance certificate since 1 April 2021, to prove that fixed electrical installations have been safety tested by a qualified electrician.
The Electrical Safety Standards in the Private Rented Sector (England) Regulations applied to all new tenancies from June 2020, and all existing tenancies were required to comply by April this year.
There are few exceptions on residential tenancies, and landlords must ensure that electrical installations are checked by a qualified person to ensure they meet the standards set out in the BS 7671: 2018 Wiring Regulations and an Electrical Safety Condition Report – or EICR – must be provided to existing tenants within 28 days and before a tenancy starts for new tenants. The electrical installation must be visually checked on a regular basis, and a full check undertaken by a qualified person at least every five years. Failure to comply with these requirements can result in the court refusing to grant a possession order and fines being issued of up to £30,000.
The outcome of a review of carbon monoxide alarm requirements is expected later this year. Currently limited to solid fuel appliances in the private rented sector, the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 may be extended to the installation of oil and gas boilers and to social housing.
Following the huge spike in pet ownership during the pandemic, being a pet-friendly landlord came another step closer, with the government amending its Model Tenancy Agreement (MTA) to make allowing pets the default position.
The MTA is the recommended contract for landlords and under the new guidelines, landlords will no longer be able to impose a blanket ban on pets. Instead, they will have to object in writing within 28 days of a written pet request from a tenant and provide a good reason for their objection. Tenants could still face restrictions, such as in smaller properties or flats where it may be impractical and would still be legally required to repair or cover the cost of any damage to the property caused by the pet.
There are further changes in validating prospective tenants under Right to Rent rules. Firstly, because of Brexit, since 1 January the EU-Exit grace period has allowed EEA citizens to continue to use their passport or national identity card to demonstrate their right to rent in the UK, but this comes to an end on 30 June 2021. Also in June, there will be an end to the temporary relaxation on seeing original documents which was allowed during the pandemic, meaning landlords could check tenant documents over video call or by receiving a scanned version. From 21 June 2021 landlords must revert to face-to-face and physical document checks.
All landlords with a turnover of more than £85,000 should already be reporting their VAT digitally, under HMRC’s MTD (making tax digital). From April 2022, MTD will apply to all UK VAT registered businesses, regardless of their turnover, and to certain business income tax records from April 2023. It means even micro businesses who may have registered voluntarily to obtain VAT refunds, will need to use compatible software to submit their VAT return.
This year there are more tripwires than usual for landlords who don’t keep an eye on the calendar and up to date with all these changes.
We often speak to landlords who have run into issues with their tenants, and it is important to tread carefully when trying to resolve a dispute in order to keep both sides happy and avoid racking up large legal bills or the need to attend court.
If you have a dispute with your tenant, be it regarding rent arrears, complaints or other issues then please get in touch with our legal team who can help you to understand your rights and options to find a way forward.
Call us on 01256 844888, email email@example.com or speak to our website chat assistant who can take some details and arrange for a call back.
Pets & Lets: A Welcome Change for Tenants
Friend or Foe – Getting the Landlord & Tenant Relationship Right
Buying a Property in 2021
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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