Laws for Landlords and Tenants

Posted on July 24, 2019 by

Coming into force from 1 June 2019, the Tenant Fees Act aims to ensure that tenants will be able to see at a glance what a given property will cost them in the advertised rent with no hidden costs.

The new rules also mean that deposits will be capped at five weeks’ rent (or six for tenancies that cost more than £50,000 a year), and agents and landlords will be banned from charging fees for anything other than contract changes, council and utilities tax, changes to the tenancy, and issues for which the tenant is at fault.

The tenant fees ban is set to affect both landlords and agents, who won’t be able to pass on the cost of activities such as inventories, tenant referencing, and credit checks to tenants. This is a problem, because these processes all involve time, people and systems, and hence generate a cost.

Many agents won’t be able to absorb these costs, and so although tenants will have to pay much less in up-front fees, the knock-on effect of the bill will almost certainly lead to rents being raised as a means to recover losses.

Homes (Fitness for Human Habitation) Act

Having come into force on 20 March, this requires that landlords ensure their property is free of any hazards and fit for human habitation, and properties breaching the updated legislation will be liable for court action from tenants. The Act amends the existing Landlord and Tenant Act 1985 by extending the obligations in that legislation

The law is designed to empower tenants to take legal action if their property is found to breach the guidelines, and to improve property conditions within both the private and social sectors.

There are warnings that the legislation may encourage some tenants to take legal action just to win compensation, and the Residential Landlord Association has expressed concerns over “vexatious cases” being brought against landlords.

However, agents and landlords have plenty of ways to remediate, such as limiting telephone and email contact. Through the Anti-Social Behaviour, Crime and Policing Act 2014 Act, agents and landlords can also rely on the “nuisance to landlord” ground, which can help to tackle vexatious complainants.

Client Money Protection scheme

Under a new law taking effect from 1 April 2019, private-sector agents will be required to join a government-approved Client Money Protection (CMP) scheme or face up to a £30,000 fine.

The new law will ensure that the client funds, including landlords’ rental payments and tenants’ deposits, will be protected. This should bring reassurance to people across the industry that their money is safe while with their agent.

Agents will need to meet a number of standards to join a CMP, such as having a separate client bank account and having professional indemnity insurance. However, most agents should already have access to a CMP scheme through their membership of agency bodies such as ARLA, RICS, NALS, or UKALA