Building Legal Solutions
How can residential landlords be compliant?
- AuthorMohammed Mangera
When reviewing residential properties subject to a tenancy, we often see how easy it is for landlords to fall out of compliance with the relevant legislation when letting their properties. Whilst it may not be the most glamorous part of their job, a landlord’s failure to comply with such regulations could result in fines, the loss of their section 21 rights to evict tenants (discussed further below) and in even extreme cases, put at risk the health and safety of the occupiers. Therefore, from our client’s perspective, when acting for buyers or lenders, it is important for us to have sight of the relevant documents to ensure compliance with legislation. It is always recommended to check your statutory compliance regularly and in advance to avoid delays with future dealings of the property.
This blog sets out a brief overview of some of the documents we require sight of when reviewing residential properties subject to a tenancy.
Energy Performance Certificate
We will need sight of a valid Energy Performance Certificate (EPC) with a minimum rating of “E”. This must have been made available for free of charge to the tenant at the start of the tenancy, or, when marketing the property. There are fines for failure to provide an EPC.
Where the rating is less than the minimum, the landlord is required to carry out the works to improve the energy performance before the property is let out.
Any deposit collected by a landlord must also be protected by an approved tenancy deposit scheme, of which there are three service providers in England and Wales;
Once the landlord has received the deposit, they usually have 30 days to register it with an approved scheme and provide a Deposit Protection Certificate to the tenant that contains the details of where the deposit is held.
If a landlord fails to protect the deposit in an approved scheme, the tenant may be permitted to take the landlord to court which could result in the landlord being ordered to pay compensation to the tenant. It can also potentially invalidate the landlord’s right to evict the tenants when using the Section 21 procedure (see below).
Gas Safety Record
Landlords are responsible for ensuring that all the gas appliances, fittings and equipment that they supply at a property residentially let are safety installed and maintained. This includes having a registered engineer carrying out annual gas safety checks on each appliance and following receipt of the Gas Safety Record, this should be provided to the existing tenant within 28 days of the inspection. The latest record available needs to be given to new tenants at the start of their tenancy.
Failure to uphold the gas safety standards in accordance with the law can also be a criminal offence, where convicted offenders can face a fine and/or imprisonment.
Electrical Condition Report
Recently introduced legislation obliges landlord to have the electrical installations in their properties inspected at least every five years by a “qualified and competent” person. The landlord must then supply a copy of the Electrical Condition Report to any existing tenant within 28 days of the inspection and the new tenants before they move into the property.
Where the report recommends remedial action, the landlord has 28 days, or shorter if specified in the report, to carry out such works and supply the tenant written confirmation of completion of such remedial works within 28 days of completion.
Why are these documents important?
The above documents are very easily overlooked but are very important not only for the landlord but also from the lender’s or buyer’s perspective. Once the buyer owns the property, or in the event the lender enforces their security, they will become responsible for the statutory compliance and therefore, must rectify any ‘non-compliance’.
Failing to provide any of the above documents at the very least may invalidate any Section 21 notice to evict the tenants. Very briefly, a Section 21 notice allows landlords to evict their tenants under certain circumstances (i.e. once the tenancy’s fixed terms end or during a ‘periodic’ tenancy) with 2 months’ notice and without any specific reason. Although, with the coronavirus pandemic, the notice period is now considerably longer which you can check here. Therefore, failure to comply with legislation may invalidate a Section 21 Notice which means the Landlord may only rely on the Section 8 eviction procedure to evict tenants. Notably, Section 8 procedures are more cumbersome as the landlord must prove the tenant’s breach of the tenancy based on one of the 8 mandatory grounds which is not an ideal position to be in as a landlord.
There can also be more severe consequences of unintentionally causing harm to your tenants by failing to maintain the electrical installations or gas appliances, or even, potentially invalidating the building insurance.
The above documents are our starting point when reviewing residential properties subject to a tenancy. Undoubtedly, there are many more regulations and consideration that may apply, particularly where an HMO or other form of tenancy is involved.
Lastly, the law is always changing and so it is always worthwhile undertaking research, particularly at the start of a new tenancy, to ensure you do not accidentally get caught out from any new or changing legislation.
Author: Mohammed Mangera
16 April 2021