New Landlord Rules to Know in 2017 – Legislative Update

We’ve had feedback to write our own version, as other sources can get taken down suddenly or the selling angle is too distracting. Here it is, including as much useful hyperlinks as possible that you may want to bookmark for the future.

1. Immigration Act 2016

What? The Right to Rent legislation has been in force since last year but since 1 December 2016, it has become a criminal offence for breach and there is also a new ground for possession.

So what? The penalty is now unlimited and/or 5 years in prison. This is on top of £3k civil penalty. If you have been notified to terminate the tenancy of someone who does not have the Right to Rent, this is the prescribed form of notice to serve. 7B is a new mandatory grounds for possession.

More info:

  • The Home Office has provided a very helpful visual on acceptable documentations and checklist.
  • PRADO (Public Register of Authentic travel and identity Documents Online) is the source to check for all countries’ travel documentations if you’re doing it yourself.
  • Read more about it from Guild of Residential Landlords.

2. Mortgage interest relief

What? From 6 April 2017, the tax will be on your turnover, not profit. It will take 4 years to phase in. There are many websites that explains this but not as clearly and succinctly as Accounting IT.

So what? Unless you are mortgage free, this change can drastically change your mind about being a landlord. There has been a lot in the media about landlords scrambling to incorporate their portfolio but this may not be the right solution. Speak with other landlords and get their recommendation on tax advisors or accountants. If you’re stuck, Micro Business Team seems to know what they are doing.

More info: Tax calculator – Check what you’d be paying via this Residential Landlord Association tool.

3. Housing & Planning Act 2016

What? The idea is to capture rogue landlords more effectively and is expected to come in by 6 April 2017. It seeks to introduce higher fines for repeat offences, rent repayment orders, fixed penalty notices, and Tenancy Deposit Protection data given to councils.

Offences include:

  • illegally evicting a tenant
  • renting out a property decided to be unsafe as a dwelling by local authorities
  • failing to carry out works required by local authorities to prevent health and safety risk to tenants
  • renting out a property to an illegal migrant
  • using violence, or threatening violence against a tenant
  • making fraudulent applications for housing benefit, or committing identity theft
  • using the property to cultivate cannabis
  • theft or criminal damage
  • colluding with the tenant to commit a criminal offence, such as tax evasion or the supply of illegal drugs.

So what? The above offences are illegal anyways so if you are an honest landlord, there is nothing to worry. Currently, nothing stops rogue landlords from renting out again and a way to identify it has been introduced, already, by most local authorities in the form of licensing schemes. Wales has already introduced Landlord Registration so although this is a long way ahead, the road is paved towards it being potentially introduced in England.

More info: London Property Licensing – Our favourite place to find out and keep on top of new licensing schemes.

4. Banning Orders

What? Expected to come in 1 October 2017, this is part of the above but specifically, to create a rogue landlord and agent database to be used by the DCLG and Local Authorities. If convicted, landlords and agents will be banned from letting for at least 12 months. Individuals may be banned for:

So what? Landlords and agents could be banned forever to let out or manage properties. They could be a subject to a management order by the local authority, which allows the council to rent out the property instead and you get no rent.

More info: Anthony Gold solicitors

5. Electric Safety

What? Currently, the Electrical Installation Condition Report (EICR) is optional for landlords in England. It is expected that the report coming out in Spring will make it mandatory for all private rental sector. If you operate a HMO, the rules are different, an annual PAT test is already mandatory.

So what?  This measure is formalising the existing landlord’s duty of care for people on their property under the Landlord and Tenant Act 1985 and Occupiers’ Liability Act 1957 so if you are not providing this, you should. It can range in price so do shop around.

More info:

  • Check that you might already have one at Check My Notification here. NICEIC is an old name for EICR.
  • If you don’t have it, The Registered Competent Person Electrical is the place to check or find that your electrician is qualified to do the job.
  • Electrical Safety First’s landlord page has lots of useful guides and also to share with tenants.

6. Energy Efficiency

What? Minimum Energy Performance Standards (MEPS) says that by 1st April 2018, all private sector rental that is new or renewing must have an EPC rating of E or above. By 1st April 2020, all existing tenancies will need to be met. Since 2016, tenants can already demand for reasonable improvements.

So what? Most properties in London may not have this problem but there are two concerns. One, that at least 100,000 properties may have been given incorrect F and G classifications. Check yours for free by going here and you can type in your address from the left hand column. EPC lasts for 10 years. Two, financing the upgrade as the Green Deal has been struck off. There is a move to bring this back in some shape, funded by the Stamp Duty levy.

More info: Read the coverage from Residential Landlord Association here.

Don’t have the time to keep up with legislations? Why not talk to us about management only service so you can have peace of mind. Call 0203 588 5115 or email [email protected] today.