Landlord Regulations, Obligations & Laws
Sections 79, 80 and 81 of the Housing Act 2004 mandate for the introduction of a “landlord licensing” scheme.
If you have a property in a selective licensing area, you are required to get a “landlord licence” from the local council before being permitted to let the property. These areas are selected based on a number of factors, including where there is low housing demand, or where significant anti-social behaviour problems have been identified. Failing to procure a licence when required can result in punishable fines of up to £30,000.
To qualify for a licence, you must be able to demonstrate that you are acting within the law and taking appropriate steps to manage your properties. Guidelines will be outlined by your local council. If you’re unsure if your property is in a landlord licence zone, you can call your local council directly. NLA members can also use NLA Licensing 365 to track their properties and get automatic notifications when licensing affecting their properties is being consulted on, or when a scheme becomes law.
Commencing a tenancy
Upon starting a new tenancy, you must serve a tenant:
- an Energy Performance Certificate (EPC) for the property
- a gas safety certificate (if your property has gas appliances)
- in England only, a copy of the latest How to rent guide (if you have an assured shorthold tenancy that started or was renewed on or after 1 October 2015)
As a landlord if you have a tenant on an AST (Assured Shorthold Tenancy) legally you must protect it in one of three government-backed schemes within 30 days of receiving the deposit. You must also serve the tenants with Prescribed Information related to the deposit, within 30 days.
Failure to comply can lead to financial penalties of up to three times the total deposit, and may impede your ability to serve a Section 21 notice, which means you may not be able to successfully repossess your property unless you have sufficient grounds for an eviction e.g. rent arrears.
In Wales, you must ensure you are registered with Rent Smart Wales, and that the manager of the property – whether you as a self-managing landlord or an agent you have appointed to act on your behalf – has a Rent Smart Wales licence. This is in addition to any licence your property requires.
Ending a tenancy
For landlords wishing to end a tenancy or regain possession of their property, there are two ways to do this. The first is a Section 21 notice, which can be issued as a no-fault possession. The second is by issuing a Section 8 Notice.
Serving a Section 21 notice
Are you a landlord worried about the latest news that government plan to end Section 21? Head over to our guide on how the latest Government changes to Section 21 will affect landlords and what you can do to counter the effects.
In England, in order to correctly serve a Section 21 Notice to gain possession on an Assured Shorthold Tenancy, (and to ensure it is not invalid), all tenants must have been in receipt of the following prior to the beginning of the tenancy:
- A valid Energy Performance Certificate (EPC)
- A copy of the government’s How to Rent Guide
- A valid Gas Safety Record (if applicable) including any renewal (if applicable). You can also see below for guidance on the Monty Schooltz case.
If you have taken a deposit, you must also issue within 30 days:
- Deposit protection leaflet
- Prescribed Information related to how the deposit is protected
- Deposit certificate proving that the deposit has been registered
If the property is an HMO and requires a licence, any Section 21 would be invalidated if the property is not licensed.
Under the Deregulation Act 2015, in England Section 21 notices will also be invalid where a local authority has served an enforcement notice following a complaint by the tenant about the condition of the property.
Serving a Section 8 notice
There are multiple grounds under which you can serve a Section 8 notice. Some are mandatory grounds and some are at the judge’s discretion. We usually recommend that landlords only consider using ‘ground 8’ – a mandatory ground, which you can use when the tenant is at least two months in arrears.
For more help dealing with these issues, members can contact the NLA Telephone Advice Line on 020 7840 8939. For membership options, please see here.
Right to Rent checks & the Immigration Act 2016
New provisions came into force on 1st December 2016. The requirements currently only apply to England.
Landlords in England must undertake checks to ensure that their prospective tenants have the right to live in the UK, before they let a property to them. This requires landlords to view and take records of identity information, such as passports and visas. The government has outlined the permissible documents.
A landlord (or an agent if he has failed to notify the landlord) will be liable if he has knowingly let property to tenants who do not have the right to rent; if found guilty he could face an unlimited fine or up to five years’ imprisonment.
However, you will have a defence if the correct steps have been taken to end the tenancy and evict the tenants within a reasonable period of time (which the draft guidance states is within three months of discovering that the tenant has no right to rent).
GDPR for landlords
GDPR is a new set of rules designed to give EU citizens more control over their personal data. It came into effect on the 25 May 2018, and applies to all landlords.
Under the new rules, all landlords are classified as data controllers, who need to process and control tenant information in a transparent fashion, which includes explaining:
- What personal information is being collected
- Why this information is needed
- How and where it will be stored
- How it will be used
- How long it will be retained for
Landlords & Energy Performance Certificates (EPCs)
All tenancies in England and Wales that begin after 1st April 2018 will be required to have a minimum EPC rating of E (all existing tenancies will have to comply by 1st April 2020). The regulations will prevent any landlord from letting a property with a rating of F or G until the necessary energy efficiency improvements have been carried out. A local authority could impose financial penalties on a landlord if it finds they are in breach of these regulations or unable to prove compliance.
We strongly advise that you review your property’s EPC rating now and undertake any reasonable improvements that may be necessary. It is also important that landlords check the date the EPC was carried out – they are only valid for 10 years and you need a valid EPC every time your property is marketed to let.
Landlord gas safety checks & certification
If there is a gas supply in the property, it is a legality that landlords must have a gas safety inspection each year. Furthermore, a copy of the Gas Safety Certificate must be given to tenants every year. All appliances, installations, pipework, and air vents must be checked to ensure they’re safe to use.
Please note: Only a Gas Safe-registered engineer can conduct inspections and carry out repairs.
Landlord Electrical Safety
Landlords letting property in the UK have a legal obligation to ensure that the property being let is safe to occupy, which includes ensuring the electrics, including portable appliances supplied with the property, are in a safe condition.
The Government has recently announced they will require landlords to have an electrician perform tests every five years and a record of electrical inspections should be kept. This will require further legislation and is not yet mandatory, but is likely to be introduced for new tenancies first.
In the meantime, best practice dictates you should conduct regular and routine checks (e.g. ‘PAT testing’ and ‘Electrical Installation Condition Reports’) by a qualified electrician.
Plugs and Sockets (Safety) Regulations 1994 for landlords
This regulation requires that any plug, socket or adapter supplied for intended domestic use complies with the appropriate current standard, and specifically that:
- the live and neutral pins on plugs are part insulated so as to prevent shocks when removing plugs from sockets and all plugs are pre-wired.
Landlord fire safety checks
By law, your rental properties must have fire alarms and carbon monoxide detectors. For best practice, it is also recommended you include a fire extinguisher in the property.
There are additional requirements for HMOs which reflect the greater risk for these properties, including ensuring a protected escape route.
Please note: A smoke alarm must be installed on each floor of your rental property and carbon monoxide detectors must be installed in any room with a solid fuel-burning device.
Landlord responsibility for fire safety in relation to furnished properties
All furniture provided by the landlord must meet the fire resistance requirements in the Furniture and Furnishings (Fire) (Safety) Regulations 1988.
Non-compliance with the regulations is a criminal offence and carries penalties of a £5,000 fine or six month’s imprisonment, or both.
Fire Safety & Carbon Monoxide Regulations for Landlords
Landlords in England are required, from 1 October 2015, to:
- have at least one smoke alarm installed on every storey of their rental property which is used as living accommodation, and
- have a carbon monoxide alarm in any room used as living accommodation where solid fuel appliances are contained. The Smoke and Carbon Monoxide Alarm booklet provided by the Government defines that as appliances that are powered using a type of solid fuel, such as coal, wood etc.
- check that each prescribed alarm is in proper working order on the day the tenancy begins if it is a new tenancy (this part only applies to “new” tenancies that start on and after the 1st of October 2015).
Landlord responsibility for repairs & maintenance
The landlord is responsible for the structure and exterior of the property; baths, sinks and other sanitary items; heating and hot water installations.
However, this only applies if the tenant has a fixed tenancy contract for under 7 years, else these issues become the tenant’s responsibility. The landlord is not responsible for damages caused by the tenants.
Under section 11 of the Landlord and Tenant Act 1985, the landlord is responsible to:
- keep the structure and exterior of the property in good repair, including drains, gutters and external pipes
- keep installations for the supply of water, gas, electricity and sanitation in good repair and proper working order
- keep installations for space heating and water heating in good repair and proper working order
Declaration of taxable rental incomes
As a landlord you must declare rental income to Her Majesty’s Revenue and Customs (HMRC). This means you may have to pay tax if your rental income is above a certain threshold, (or passes a threshold when combined with other taxable income). Landlords can be fined if they don’t declare this income.
It is advisable to note the self-assessment deadlines and set up reminders so you submit returns in plenty of time.
It is also worth noting a lot of landlord expenses are tax deductible. please see here for examples of tax-deductible expenses (link to tax article).
Houses in Multiple Occupation (HMO) and licensing
Following changes implemented on the 1st October 2018 regarding the licensing of HMOs, these will include licencing for:
- any tenancy with five or more people forming two or more households
- any properties above or below business premises
These are separate to selective licencing schemes that certain local authorities have recently brought in.
HMOs are also subject to additional management regulations.
A Landlord’s Obligations
Landlords are responsible for repairs to the exterior and structure of a property including problems with the roof, chimneys, walls, guttering and drains.
Landlords must make sure the equipment for supplying water, gas and electricity is kept in safe working order.
If your need access to your property to inspect it and do repairs, you should give reasonable notice and arrange a suitable time to visit (unless there's an emergency). You may stipulate in your tenancy agreement how much notice you will give tenants.
Health and safety obligations
As a landlord, you must:
- have a gas safety check done every 12 months by a Gas Safe registered engineer
- make sure any furniture you provide meets safety standards
- ensure electrical equipment you provide meets safety standards, see more NLA guidance on PAT testing here.
- install a smoke alarm on each floor of your home and carbon monoxide detectors in any room with a coal fire or wood- burning stove.