Posted by Admin - 15/11/2016
You may be aware that in May this year, royal assent was awarded to the Housing and Planning Act 2016. It is paramount that landlords consider the implications this may have in the private rental sector. Here is a list of some of the aspects of the sector that may be affected by the new act.
Banning Orders for rogue landlords and letting agents:
There will be a new database created to compile details about rogue landlords which will ultimately stop them from conducting business in the rental sector.
Those who receive a ban will be unable to undertake any work in property management or lettings and such ban may be issued for a minimum of 12 months. If someone is found to be in breach of a ban they can face a fine of up to £30,000 and even a custodial sentence for up to 51 weeks.
The database will be managed by local housing authorities alongside HMRC who also have access to ensure compliance of landlord tax obligations.
Recovering Abandoned Property:
The new act states that landlords will now be able to recover their abandoned property without a court order. This has not yet been enforced, however, the likelihood is that in accordance with Section 57 it will allow a landlord to service notice to end the tenancy on the same day if:
The property is in England
The rent has not been paid
(Section 58) – This states that arrears must accrue before you are able to serve a second notice. If the rent is paid monthly and tenants are in 2 ensuing months of arrears you will be able to serve the notice. However if payment is made before the notice to end tenancy is served the unpaid rent plight will be terminated.
Several warning notices have been issued to which no one has responded
(Section 59) – This states that a landlord must give at least 3 warning notices before they can issue a notice to end the tenancy. The notices must be addressed to the tenant, person who paid the deposit and if applicable, any other person named on the tenancy agreement. These notices must state that you have reason to believe the property has been abandoned. You will also need to put a specific date in the warning notice to ensure the recipient knows how long they have to respond. It will also need to be stated that you aim to end the tenancy should you receive no response in the outlined time-frame.
However it has been stated that this can cause immediate problems for landlords as tenants will be eligible to apply to reinstate their tenancy within 6 months of the notice effectively ending their tenancy. This is subject to them being able to give the court a good enough reason of why they did not respond to the notice. Another potential problem for landlords is the regulation that the third notice issued must be affixed to a visible area of the property, which will ultimately leave the property vulnerable to thefts or squatters.
Fitness Test for HMO Licenses:
New precedents will be introduced in regards to the HMO license application fitness test (section 125). You will now not pacify this test if you are bankrupt, if you fail to prove your entitlement to live and remain in the UK or any previous non-compliance issues under the Immigration Act 2014 which may include prospective tenant immigration status.