Lettings Legislation 2020

12th February 2020

The property industry is constantly changing, especially for the lettings sector. Here we look at some of the changes that both landlords and letting agents will need to do to ensure they remain compliant.

Section 21 ban | Wales

It has been very recently announced that Wales will ban Section 21 Notices and twelve-month contracts are to become mandatory under new law announced. Landlords are already unable to serve notice during the first six months of a new let, however, under the Renting Homes (Wales) Bill the subsequent period has extended from two months to six months. 

For landlords, this means that it will be a year before you can repossess your property. Therefore, if you are a landlord that wishes to take back the property to move into it yourself or to sell it, you will need to put these new timeframes into consideration. For issues such as rent arrears and anti-social behaviour you can still provide a shorter notice period under a Section 8.

When? The industry could see this proposal come into effect in Wales as soon as Spring 2021.

Minimum Energy Efficiency Standards | England and Wales

The Energy Efficiency Regulations 2018 has introduced Minimum Energy Standards, which is legislation that all properties now have to have a minimum of an E rating to be a rental property. This has been phased in gradually since 2016 and there are some exemptions which can be checked and registered on the National PRS Exemption Register. Failure to have an EPC with a minimum E rating can result in a fine of up to £5,000 as well as potentially affect a Section 21 Notice being served.

It’s important to note that if you are a landlord with a HMO then individual tenancies are exempt as you can’t provide an EPC for a bedroom, however, as a joint tenancy, an EPC will need to be completed and graded above an E. The Government estimates that a landlord will need to spend an average of £1,000 of work on each property to achieve an E rating.

When? By 1st April 2020, all rental properties need a minimum of an E rating on the EPC for that property.

Electrical Safety Regulations | England (and most likely Wales)

Under the Housing and Planning Act 2016, sit Electrical Safety Regulations. Proposals state that similar to an annual gas safety certificate, you will be required to produce an Electrical Installation Condition Report that will last 5 years. We still don’t know the full requirements of this certification and the legislation has not yet gone through parliament. There are also a couple of concerns in terms of a supply chain to deliver up to 4 million installation reports by April next year and whether new builds would be included in this regulation, as new-builds carry a 10-year certificate. Most landlords and agents will already be producing these reports as best practice and these certificates will still be valid for the full five years once the legislation is passed.

When? 1st July 2020 for all new lets and renewals and by 1st April 2021 for all existing tenancies.

ROPA – Regulation of Property Agents | England and part Wales

The Regulation of Property Agents will cover sales, lettings, auctioneers and block management. As Wales has its own legislation, ‘Rent Smart Wales’ where a minimum standard of training is already required for landlords and agents, it is only Sales and Auctioneers that covers both England and Wales. For Lettings and Block Management in England, a minimum of Level 3 NFoPP will be required. Currently, Scotland only requires one person in the company to be qualified (either the business owner or highest person). In Wales, everyone who deals with that property needs to have a level of training and in England, under ROPA they are proposing that all agents will need to be qualified with senior positions requiring higher qualifications. However, they are also looking at the concept of reserved activity. For example, people who just conduct viewings may not need a qualification but their managers will.

It has been confirmed that NFoPP, one of the awarding bodies, will exist and certificates will be valid providing the qualification was after 2011.

When? There are no set dates for this, however, Propertymark estimate 2023/2024.

Tenant Fee Ban | England and Wales 

England and Wales both have slightly different legislation regarding the Tenant Fee Ban, however, both confirm that any periodic or existing agreements do not require a new agreement to be signed, any clauses that state fees become non-existent and all fee clauses can no longer be enforced.

In England, there is also a deposit cap of 5 weeks and you cannot take a deposit or rent until the contract is signed, otherwise, it becomes a prohibited payment. However, Wales there is currently no cap and it is possible to take the rent and deposit upfront without signing an agreement.

For both, no fees can be charged on a renewal tenancy and any overpayments need to be paid back by May 2020.

When? The legislation is already in place. In Wales, default fees are being implemented 28th April 2020.

Seraph Property Management are experts in the current legislation if you want to be kept up to date and compliant speak to us about property management.

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