Landlord regulations

There are a myriad of different regulations, acts and rules that apply to lettings, and many have been introduced or changed only recently. Letting agent Leaders has produced a summary of the requirements as of April 2005.

Gas safety regulations

The Gas Safety (Installation & Use) Regulations 1998 place a statutory duty on all landlords of residential property to ensure that all gas appliances, pipework and flues are maintained in a safe condition. They particularly seek to avoid the escape of carbon monoxide poison which is silent, odourless and deadly and require that:
• all let properties must have at all times a valid Gas Safety Record, even if the gas supply consists only of a capped off gas pipe where all other pipework and appliances have been removed;
• before a tenant takes occupation, the gas appliances and pipework must be checked by a CORGI registered engineer who must provide the landlord with a Gas Safety Record (the landlord must provide the tenant(s) with a copy of that safety record at the start of the tenancy);
• a gas safety check must be carried out annually and the tenant(s) provided with a copy of the safety record within 28 days of that check being carried out (this does not mean you have a 28 day grace period between a Gas Safety Record expiry and a new record being issued); and
• the landlord must also keep a copy of each
Gas Safety Record for at least two years.

Letting agents, if used, are also liable under the regulations to ensure that the Gas Safety Record is in place and all equipment and appliances comply.

Non-compliance with the safety regulations is a criminal offence and carries monetary penalties or imprisonment or both. In the event of a death, charges could extend to manslaughter. If the property is found to be unsafe or in breach of any of the safety regulations the landlord and agent, depending on the circumstances, can be held responsible for the consequences.

It may be a defence to any prosecution that the landlord or the letting agent concerned took all reasonable steps and exercised all due diligence to avoid committing the offence.

From April 2005, it will be necessary to register any new gas installation in a residential property with CORGI who will then issue a declaration of safety which will form part of the house seller’s information pack which everybody marketing a property will need to prepare as from 2007.

The Furniture and Furnishings (Fire) (Safety) Regulation 1988
- as amended 1993

These regulations require that the following furniture and soft furnishings supplied by the landlord in let properties meet fire safety standards:
• beds, headboards of beds, mattresses (of any size);
• sofas, sofa-beds, futons and other convertibles;
• nursery furniture;
• garden furniture which is suitable for use in a dwelling;
• furniture in new caravans;
• scatter cushions, bean bags, window seats and seat pads;
• pillows;
• padded stools and padded chests (Ottomans);
• put-u-up beds and garden loungers/seats;
• loose and stretch covers for furniture.

Furniture manufactured since March 1989 will comply with these regulations and most will be marked with a label showing compliance.

The regulations do not apply to:
• sleeping bags;
• bed-clothes (including duvets) and pillowcases;
• loose covers for mattresses;
• curtains and carpets;
• furniture and furnishings manufactured before 1 January 1950 as the inflammable materials were not in use prior to 1950 (‘period’ or antique furniture would be exempt unless it had been re-upholstered in the intervening period); and
• properties let continuously to the same tenant since prior to December 1996 until there is change of tenancy.

Non-compliance with the above regulations is a criminal offence and carries penalties of a £5,000 fine, 6 month’s imprisonment, or both. In the event of a death, charges could extend to manslaughter.

The Electrical Equipment (Safety) Regulations 1994

These regulations require that all appropriate electrical equipment supplied in a property must be safe to use. Unlike the Gas Safety Regulations, there is no mandatory requirement for the equipment to undergo any safety testing, but the duty of care remains the same.

The following guidelines apply to all electrical appliances supplied for the tenancy:
• live parts should not be accessible;
• leads should not be worn or frayed and be complete with no joins;
• trailing leads and the use of multiple plug adaptors should be avoided;
• correct plugs (marked ‘B SECTION 136’) should be fitted and correctly fused;
• plug sockets should be firmly fastened to the wall or skirting;
• any moving parts should be guarded;
• electric blankets should be serviced according to the manufacturer’s instructions; and
• microwave doors should be clean, free from corrosion and effective.
• washing machines, cookers, etc, should be serviced and in good working order;
• electrical heaters and central heating appliances should be serviced annually;
• fireguards should meet BS3248; and
• any fire extinguishers should be marked ‘BS6575 1985’.

Although there is no mandatory requirement for equipment to be checked – nor any stipulations as to how often the electrical supply or appliances might need to be checked – we urge all our landlords to have all electrical appliances and electrics (wiring, plugs and sockets, etc) checked before the start of a tenancy and regularly thereafter.

If landlords or agents should be found guilty of non-compliance with these regulations, the penalties are severe in monetary terms and include possible imprisonment.

If landlords and/or agents can prove that ‘reasonable’ steps have been taken and all due diligence to (a) avoid committing an offence and (b) rectify any problems brought to their attention, then the danger of prosecution could be avoided.

Plugs and Sockets (Safety) Regulations 1994

These regulations require that where any plug, socket or adapter supplied for intended domestic use, that it complies with the appropriate current standard, and specifically that:
• the live and neutral pins on plugs are part insulated so as to prevent shocks when removing plugs from sockets; and
• all plugs are pre-wired.

Building regulations part P, Electrical safety in dwellings

Part P came into effect in England and Wales on 1 January 2005 making it a legal requirement for certain types of electrical work in dwellings – and associated buildings such as garages, sheds, greenhouses and outbuildings – to comply with the UK safety standard BS 7671:2001.

The table below summarises the types of electrical work that are affected by the legislation. Anyone carrying out these ‘notifiable’ types of electrical work must either be registered with one of the Government-approved Competent Person Self-certification Schemes or they must submit a building notice to the local authority before starting the work.

Whether work is notifiable is dependent on the nature of installation work proposed and its location within a dwelling. The location is important because some locations may pose a greater risk. The table below shows which types of work are notifiable and which are not:

Selective licensing of private landlords – (Housing Act 2004)

This legislation is intended to ensure that landlords of residential property are fit and proper persons or if they are not, that they employ agents who are.

To avoid excessive regulation, licensing is only applied in limited circumstances, specifically there is to be:
• mandatory licensing for houses in multiple occupation (HMOs);
• additional licensing for other types of HMO in particular areas designated by local authorities; and
• selective licensing of privately rented properties in designated areas which are suffering from low housing demand and/or antisocial behaviour.

There has not yet been confirmation of when the Housing Act 2004 licensing provisions will come into effect, but we are anticipating it may be later this year.

Houses in multiple occupation (HMO) fitness standard

Under the Housing Act 2004, a house in multiple occupation (HMO) is defined as ‘any building or flat occupied by two or more households which share basic amenities’. There is to be mandatory licensing for all HMOs of three storeys or more and of those occupied by at least five people forming two or more households.

Consultation continues regarding the exact details of licensing but the Office of the Deputy Prime Minister has indicated that it is unlikely that properties made up solely of self-contained flats occupied by single households of no more than two sharers will required a license. However this may change depending on the results of the consultation.

Shared flats with five or more occupiers are likely to be included but consultation is also continuing about this. The ODPM has advised that it hopes to start licensing in the autumn of this year.

It is important to note that the new definition of HMOs includes houses and buildings with shared facilities and flats and houses that are occupied by people living on a sharing basis, for example students.

The Act tightly defines a household as a family (including a couple living together as husband and wife, and same sex couples in a similar relationship), and any of their relatives.

Registration schemes are locally based and may differ from local authority to local authority.

Local housing authorities have the power to request that specific works be carried out to make an HMO fit for the number of occupants, or alternatively the authority may simply limit the number of occupants if the property does not meet the required standards, which include:
• satisfactory facilities for the storage, preparation and cooking of food, including an adequate number of sinks with a satisfactory supply of hot and cold water;
• an adequate number of suitably located water closets for the exclusive use of the occupants;
• an adequate number of suitably located fixed baths or showers and wash hand basins for the exclusive use of the occupants, each of which is provided with a satisfactory supply of hot and cold water; and
• adequate means of escape from fire and adequate fire precautions.

Items being consulted on by the ODPM include:
• whether five is the appropriate number people to share bathrooms, toilets, wash basins and showers;
• how much refrigerated and other storage there should be;
• whether a microwave oven is appropriate as an alternative to an oven;
• what cooking facilities there should be; and
• whether laundry facilities should be provided.

There has been consultation on Management Regulations, Approved Codes of Practice and Amenity Standards in HMOs. Both landlord representatives and local authorities have asked for prescribed national standards, however if there are to be national standards there may be need for further consultation which will cause further delay. If the Government decide against national standards it will still take time for local authorities to develop local standards.

Running an HMO without a license, or breaching the terms of a licence, is a criminal offence carrying a fine of up to £20,000.

Section 47, Landlord and Tenant Act 1987

This legislation requires that every demand for rent carries the address of the landlord and if that address is outside England and Wales the demand for rent must also carry an address in England and Wales where notices in proceedings can be served on the landlord.

Failure to comply with section 47 means that any portion of the rent which is attributable to service charge is not lawfully due. The address of the landlord on such a written demand could be the landlord’s office address, rather than home address.

Section 48 Landlord and Tenant Act 1987

This requirement is very similar to section 47 but with a subtle difference – it requires that the tenant must be given an address in England where notice of proceedings can be served on the landlord – it follows that this address does not have to be that of the landlord.

Until section 48 of the Landlord and Tenant Act 1987 is complied with rent is not lawfully due.

Section 11, Landlord and Tenant Act 1985

This legislation requires landlords to:
• keep the structure and exterior of the property in good repair, including drains, gutters and external pipes;
• keep installations for the supply of water, gas, electricity and sanitation in good repair and proper working order; and
• keep installations for space heating and water heating in good repair and proper working order.

Landlords also have an implied right to view the condition and state of repair of their property on giving the tenant 24 hours notice in writing.

Taxation of Income from Land (Non-Residents) Regulations 1995

Any landlord who is considered non-resident for taxation purposes is liable to pay tax on the rental income arising from letting his property.

When a landlord is resident abroad and the agent is collecting rent from the tenant on his or her behalf, the agent is obliged to deduct tax at the basic rate (less allowable deductions) and each quarter to account for and pay to the Inland Revenue this tax deducted. However, overseas landlords may apply to the Inland
Revenue for an exemption from this requirement.

Where a tenant pays rent direct to a landlord who is resident abroad, the liability to deduct income tax as outlined above remains the same, except that becomes the responsibility of the tenant. Non-resident status includes those living in the Channel Islands, Isle of Man and the Republic of Ireland.

The Accommodation Agencies Act 1953

The Accommodation Agencies Act 1953 is a very short, but long standing, piece of legislation which has limited modern application.

It prohibits an agent from advertising a property to rent, without the express consent and instructions from a landlord client. It also prohibits certain specific practices by agents, such as charging members of the public for giving them a list of properties available to rent. Such a list must be supplied to members of the public without charge.

Obtaining consent to let a property

Before letting a property, landlords must obtain permission, as applicable, from:
• Any bank, building society or lender whose loan or mortgage is secured against the property. If the landlord has not obtained consent from his lender the tenancy is deemed an unlawful tenancy which gives the lender an automatic right to take possession of the property.
• In respect of leasehold properties, the head landlord, (the terms and conditions of the long leasehold will almost certainly require that permission is sought before letting).
• Any housing association or other body which has regulations applying to the property, for example in the case of shared ownership or local housing authority property.
• Any adult who has been living in the property with the landlord as husband, wife or partner who may have occupancy rights.
• The landlord's insurance company who must confirm that cover will be maintained if the property is let. In particular it is important that the public liability element covers any loss or injury occurring at the property, which might be sustained by the tenant or visitors during the tenancy, for which the landlord could be liable.

The Protection from Eviction Act 1977

Neither the landlord nor the agent is entitled to regain possession of a property from an occupier who is unwilling to leave without a court order. To do so is a criminal offence punishable by a fine or imprisonment. Harassment, for example, cutting off services, changing locks or removing a tenant’s possessions, is also a criminal offence.

Stamp Duty Land Tax

From 1 December 2003 the old style stamp duty was replaced by stamp duty land tax (SDLT). This is only payable by the tenant, and then only if the total rent under the tenancy agreement exceeds £60,000.

The Data Protection Act 1998

Since the 1984 Data Protection Act was updated by the introduction of the Data Protection Act 1998 and manually maintained paper records have been covered for the first time. This means landlords who hold information on their tenants should be registered data users.

The following rules apply to both companies and individuals holding or processing personal data:
• obtaining and processing of personal data must be fair and lawful;
• personal data must be held only for specified and lawful purposes;
• personal data held for any purpose must be adequate, relevant and not excessive in relation to that purpose;
• personal data must be accurate and, where necessary, kept up to date;
• personal data must not be kept for any longer than is necessary for its purpose;
• an individual is entitled to be informed whether personal data relating to them is being held and to access any such data;
• an individual is entitled, where appropriate, to have such data corrected or erased;
• appropriate security measures must be taken against unauthorised access to, or alteration, disclosure or destruction of, personal data and against accidental loss or destruction of personal data; and
• consent must be obtained from an individual to process their personal data.

A data subject may be entitled to compensation for any damage or distress he or she may have suffered in consequence of inaccurate data held by the data user, or data lost, destroyed or disclosed without authority. Alternatively, a court may order inaccurate records to be rectified or erased.

Longer term tenancies

Any tenancy over three years must be created by deed and such a document can only be created by a solicitor. An oral tenancy can also be created, but this is highly inadvisable.

The Sex Discrimination Act 1975; The Disability Discrimination Act 1995;
The Race Relations Act 1976.

It is unlawful to discriminate against an applicant for a tenancy on the grounds of sex, marital status, disability or race (including colour, nationality, creed, ethnicity or national origin). The new Disability Discrimination Act passed just before Parliament broke for the General Election also makes it unlawful for landlords to refuse unreasonably consent to a disabled tenant to adapt accommodation to his or her needs.

Tenancy deposits

The Housing Act 2004 included provision for a compulsory scheme to safeguard tenants’ deposits. This will make it unlawful for landlords or agents to accept deposits unless covered by the proposed scheme, or a similar approved scheme run by a recognised professional body such as the Association of Residential Letting Agents, The Royal Institution of Chartered Surveyors, and the National Association of Estate Agents.

Details of the deposit scheme are still being .finalised, but it is likely to follow a programme already up and running – the Tenancy Deposit Scheme (TDS) – which allows a third party to hold tenants’ money and aims to ensure deposit disputes are swiftly resolved. Private landlords letting without an agent will also be required to join the scheme.

Financial Services Authority regulations

With effect from 14 January 2005, only companies that are authorised by the Financial Services Authority (FSA) are legally permitted to sell general insurance products – including home and contents insurance – or even to offer advice or information regarding insurance.

This means that many letting agents who have been providing insurance products and services to their clients are no longer permitted to do so, unless they have taken steps to become FSA authorised, either as an introducer, appointed representative or principal.

Landlords should seek confirmation from their agent, or from anyone who is providing them with insurance, that they are in fact authorised under the new FSA regulations to offer this service.

Energy efficiency certificates

From 6 January 2006, all residential buildings being let or sold in the EU will require an energy performance certificate issued by an accredited expert. More details on this legislation will be available later in the year.

Based in the south east, Leaders (www.leaders.co.uk) is one of the largest privately owned chain of letting agents in the country. It has branches throughout Sussex, Hampshire and Surrey, concentrate in letting and nothing else, and specialises in letting all types of property, from city centre one bedroom studio flats, two and three bedroom apartments and houses, through to substantial country residences.

The above is taken from Leader’s publication The Knowledge which can be downloaded in PDF form (http://www.leaders.co.uk/Protem/Knowledge/default.asp). The content has been verified by landlord and tenant law exerts at Dean Wilson Laing solicitors and is correct as at April 2005.