Recently there has been much conversation around energy efficiency and changes to the standards that properties in the private rented sector will have to meet. However, these obligations are only a small part of the regulations with which landlords have to comply. For properties that are let as a tenant's only or principal home, there are seven key rules and regulations to follow.
- Landlords must be registered with their local authority. It is an offence to own a property that is either let or to be occupied by an unconnected third party if you are not registered, and the maximum fine is now £50,000. An owner must register even if the property occupied is let by a third party (for example a farm cottage included within an agricultural tenancy and let by the agricultural tenant). In such a case, the owner must register and the agricultural tenant must be entered on that registration as the owner's agent.
- If the property being let has three or more unrelated occupants, an HMO licence is required.
- Before letting out a property a landlord must obtain an energy performance certificate; this will soon need to show that the property being let meets the required energy efficiency standards (the minimum requirements start coming into effect on 31 March 2020).
- The property must also comply with all the other aspects of the repairing standard. As of 28 March 2027, this will apply to properties let within agricultural tenancies, which were previously exempt. There are a number of obligations regarding smoke and carbon monoxide alarms, gas safety and the condition of electrical installations. There are also regulations on the standard/safety of electrical equipment and furniture and furnishings. Landlords should also carry out Legionnaires' disease risk assessments.
- Tenancy deposits must be deposited in a tenancy deposit scheme - there are strict time limits for doing so and financial penalties (up to three times the amount of the deposit can be payable to the tenant) for failure to comply. Landlords cannot charge their tenants for the lease documents (which they have an obligation to provide) or take any premium payment for entering into the lease. A deposit cannot exceed two months' rent and more than six months' rent cannot be taken in advance.
- Landlords must manage their properties appropriately and responsibly. This includes managing any anti-social behaviour that the tenants demonstrate. Local authorities have powers to issue anti-social behaviour notices where the person who occupies the property or a visitor to that property acts in an anti-social manner.
- Tenants are protected from wrongful eviction and harassment and those with disabilities have certain rights regarding alterations to properties. There are also regulations about the number of people permitted to be in a house before it is overcrowded. Local authorities can serve overcrowding statutory notices.
Some final points to remember are that letting agents now have to be registered and terminating a tenancy correctly can be a complicated matter, so seeking legal advice is important.
Letting a residential property can provide useful income for the owner but care must be taken to avoid breaching the various rules and regulations that apply.
This Article first appeared in Scottish Land & Estates LandBusiness Magazine Autumn 2019 issue.