Landlords, Don’t Ignore This Change

Important news for landlords which could prevent you from gaining possession of your property under Section 21 I recently attended a landlord’s meeting and was shocked at the lack of knowledge in the room, especially regarding important changes which came into effect this month.   Firstly, new legislation came into effect from the 1st of June under the Tenants Fees Act 2019 regarding charging tenants – what you can and cannot charge tenants. If you are a landlord and you ignore new letting rules, you could face fines of up to £30,000 and a criminal charge, according to the National Landlords Association (NLA).   Secondly, many of the landlords were unaware of Section 24 removing mortgage interest tax relief on their buy-to-let mortgage.   Finally, landlords had no idea that following a court ruling (Caridon Property Ltd v Monty Shooltz) Section 21 notices are invalid unless the gas safety certificate has been given to the tenant before the tenancy agreement has been signed.   Landlordsadvice.co.uk reports that Section 21A of the Housing Act 1988 (as amended by the Deregulation Act 2015) provides that for tenancies granted after 01 October 2015, a Section 21 Notice cannot be validly served on the tenant if the landlord is in breach of a “prescribed requirement”.   Remember that the landlord is ultimately responsible, even if your letting agent screws up. Several agents in my area had never heard of prescribed information when I quizzed them.   The prescribed requirements are set out in The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 (the “AST Regulations”).  Regulations list the requirement for a landlord to provide a tenant with a gas safety certificate in compliance with the Gas Safety (Installation and Use) Regulations 1998 (the “Gas Safety Regulations”). Regulation 36(5) of the Gas Safety Regulations states that it is a statutory requirement for every landlord to ensure that:   (a) a copy of the record made pursuant to the requirements of paragraph (3)(c) above is given to each existing tenant of premises to which the record relates within 28 days of the date of the check; and (b)  a copy of the last record made in respect of each appliance or flue is given to any new tenant of premises to which the record relates before that tenant occupies those premises save that, in respect of a tenant whose right to occupy those premises is for a period not exceeding 28 days, a copy of the record may instead be prominently displayed within those premises. However, Regulation 2(2) of the AST Regulations states that the time limit for compliance with Regulation 36(5) of the Gas Safety Regulations does not apply.   In this case, the court had to decide whether a landlord could validly serve a Section 21 notice if Gas Safety Regulation 36(5)(b) hadn’t been complied with at the start of the tenancy. The judge came to this conclusion on the basis that a gas safety certificate had not been provided to the tenant at the start of the tenancy, before the tenant took up occupation although one was served shortly before the service of the s.21 notice. Caridon Property Ltd. The ruling has been appealed.   The judgement is a county court appeal and therefore not binding on the county courts. However, the judgment is a decision of one of the country’s leading housing lawyers and therefore County Courts may be persuaded by this ruling when dealing with your claim for possession. Interestingly, HHJ Luba is also one of the authors of “Defending Possession Proceedings”, which is the textbook that most District Judges have on their benches to consult when deciding housing cases.   AST regulations could be amended following this judgement or the ruling heard by a Court of Appeal. In the meantime, any landlord who failed to provide a gas safety certificate at the start of the tenancy, in other words before the tenant moved in, is likely to find that they cannot serve a section 21 notice during the period of that tenancy.   The government recently announced proposals to abolish “no fault evictions” under Section 21 notices.   On 26 June 2019, Prime Minister Theresa May confirmed the government’s intentions during a frank speech at the Housing 2019 conference.   The Prime Minister said:   “…We are re-balancing the relationship between tenant and landlord, making major changes that will make an immediate and lasting impact on the lives of millions of families.   In the private sector we’ve already capped the size of rent deposits and abolished letting fees, cutting the amount tenants have to find upfront and making it harder for landlords and agents to take advantage of desperate house hunters.   Now we’re going further…because if you rent a property it will not be your house, but it is still your home.    And to me that means that if you pay your rent, play by the by the rules and keep the house in good order your landlord should not be allowed to throw you out on a whim. It is simply not fair.    So we’re bringing to an end the practice of the so called no-fault evictions. Repealing the section 21 of the 1988 Housing Act.   A consultation on the changes will be published shortly, with a view to introducing legislation later this year.”   The Government will shortly launch a consultation as to the proposed repeal of section 21 of the Housing Act 1988 in which landlords will have the opportunity to give their views to the government on this major proposed change.      It is well worth becoming a member of the NLA, or similar organisation, which represents the interests of landlords, lobbies the government, runs a helpline and holds meetings all over the country.   The important thing is to learn your trade do your CPD by keeping up with changes to legislation. Property still a good investment because you can use leverage or bank and other people’s money to acquire properties.   If you currently own property, I would not panic about new rules or jump ship as they tend to drive out the cowboys or reluctant landlords. If you are planning to invest, always educate yourself before dipping your toe in the market.   If you like further details a property courses, such as a one-day introduction to property investing, drop me a line to [email protected]   I have a limited number of complimentary tickets to attend an excellent course run by experts, which will give you a clear overview into the market.   Here are some of the courses coming up in the next few months:   Multiple Streams Of Property Income (Three days of world-class training)   Beginner Property Secrets (Full days training)   Deal Packaging Discovery Day   Serviced Accommodation Discovery   No Money Down Discovery   For full details and a list of further courses click here to learn how to become a UK property investor or go to http://bit.ly/2ZVAVtvcourses.