Lettings: Legislative changes coming in 2019

Lettings & Property Management

There are further changes coming to the lettings industry in 2019. We thought it would be useful to provide a brief overview of a couple coming up – one that provides value to tenants, the other to landlords:

Tenant Fees Bill

The Tenant Fees Bill will set out the Government’s approach to banning letting fees paid by tenants in the private rented sector. This is currently going through legislative stages in the House of Lords, and it could be coming into force in April 2019. The Bill will ban almost all charges made to tenants.

Other key measures of the Bill include:

  • Security deposits must not exceed the equivalent of six weeks’ rent
  • Holding deposits will be capped at no more than one weeks rent. The Bill also sets out the proposed requirements on landlords and agents to return a holding deposit to a tenant
  • The amount that can be charged for a change to tenancy will be capped at £50 unless the landlord demonstrates that greater costs were incurred
  • A fine of £5,000 for an initial breach of the ban with a criminal offence where a person has been fined or convicted of the same offence within the previous 5 years. Financial penalties of up to £30,000 can be issued as an alternative to prosecution
  • Trading Standards will enforce the ban and make provisions for tenants to be able to recover unlawfully charged fees via the First-tier Tribunal
  • Landlords are prevented from recovering possession of their property via Section 21 until they have repaid any unlawfully charged fees
  • Enabling the appointment of a lead enforcement authority in the lettings sector
  • The Consumer Rights Act 2015 will be amended to specify that the letting agent transparency requirements should apply to any third-party websites, such as property portals
  • Local Authorities will be able to ring-fence any money raised for future local housing enforcement.

 

Alongside rent and deposits, agents and landlords will only be permitted to charge tenant fees associated with:

  • A change of early termination of a tenancy when requested by the tenant
  • Utilities, communication services and Council Tax
  • Payments arising from a default by the tenant such as replacing lost keys.

 

Electrical Safety Checks

2019 should see the introduction of five-yearly electrical installation safety checks.

The Housing and Planning Act 2016 included an enabling power for the introduction of electrical safety standard requirements in the private rented sector.

  • In 2017 ARLA Propertymark was part of the Electrical Safety Standards Private Rented Sector Working Group. The Working group, which was composed of industry experts, was set up to determine how five-yearly mandatory electrical checks in the private rented sector should be introduced.
  • The Working Group then passed on the recommendations to the Ministry of Housing, Communities and Local Government.
  • In July 2018, the UK Government announced that all private sector landlords will have to have all electrical installations in their properties inspected and certified safe every five years.
  • This announcement came after further recommendations made by Dame Judith Hackitt following the tragedy of the Grenfell Tower.

Please note, an implementation date has not yet been announced. It is already a requirement to carry out 5 yearly electrical checks on HMOs.

You can contact our Lettings Teams on:

 

 



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