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Changes for landlords and letting agents

March 2017

...under Housing and Planning Act 2016

On the 1st April 2017 the Housing and Planning Act 2016 (HPA) brings further key changes to how landlords and letting agents operate within the residential rental market in England.

The Part 2 of the HPA will target the rogue landlords and letting agents in England. Some of the provisions will be;

All the new rules has serious implications if landlords find themselves in breach of them, the Act imposes tough penalties, fines up to £30,000 and even imprisonment.

Banning Orders

Expected to come on the 1st October 2017, Local Housing Authorities will be able to apply for banning orders against landlords and letting agents if they have committed a banning offence. There are no definitions of what constitutes a banning offence as yet, however this will be confirmed by the Secretary of the State. The banning order will last for at least 12 months. Within this period a landlord or a letting agent will be prevented from letting any houses or being engaged in any letting work in England. Wales will have its own separate rules at some point in the future.

A banned person will not be able to hold a HMO License (a license which permits multiple occupants within a house) or continue to collect rent from the tenants but the landlord or the letting agent would still need to carry out their obligations to their existing tenants.

Once subjected to a banning order the person’s details will be entered into a database for rogue landlords and letting agents maintained by the local authorities.

Electrical Safety Requirements

The Act introduces rules which require landlords to ensure electrical safety standards are met during the term of the tenancy, and if they fail to do so, a landlord may have to pay a penalty for not complying with such standards.

Recovering abandoned premises

The Act also looks to deal with abandoned properties in England, let under assured shorthold tenancies, and where tenants are in arrears of rents. There will be an out-of-court procedure that landlords can follow to recover possession of an abandoned property.

The procedure may take up to a maximum of 8 weeks which starts with the landlord issuing a series of warning notices. If neither the tenant, the named occupier or the deposit payer responds in writing to any of the warning notices before the date specified in the notices, the landlord can then serve a notice to bring the tenancy to an end on the date the notice is given. Tenants can apply to the county court for an order to reinstate their tenancy within six months if they have a good reason for not responding to the warning notices.

Limitation of administration charges under leases

Historically the Landlord and Tenant Act 1985 allowed landlords to recover professional service charges directly from the leaseholder or tenant but under the HPA the courts and tribunals will be given a discretionary power to limit the ability of a landlord to recover these fees from a leaseholder as an administration charge.

So what happens now?

The residential letting market is becoming more and more regulated. The mere fact that Parliament had decided to use the word “rogue” landlords and letting agents within a statutory provision shows what their intentions are. Those who use best practice and manage their properties well should not have too much to fear.

The Act will come in to force at different stages of the year and updates and more information will be published in the upcoming editions of our Odyssey News.

Penny Gordon

Associate of CILEX

e pgordon@prettys.co.uk

t 01473 298338

 

 

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