If you are a landlord

Holmes Pearman - if you are a landlord

The following information has been provided by Holmes Pearman Limited to outline the main information that you need to be aware of if you are considering letting a property.

The introduction of the Housing Act 1988 (amended 1996) opened up the letting market.  It allowed tenants to take properties and landlords to achieve market rents with the protection of vacant possession.

Most types of property can be let provided they have kitchen and bathroom facilities and mains services connected.

Letting contracts are usually for six or twelve months and can be renewed if required.

The rent is normally exclusive of gas, electricity, telephone, water and council tax.

Under Assured Shorthold Tenancies the rent remains static. It is necessary that an Assured Shorthold Tenancy Agreement be drawn up for the stated term together with the relevant notices.

A full inventory of furniture, fittings and condition of the property should be attached to the agreement and signed by both parties.

The property, unless other arrangements have been made and written into the agreement, is the landlord’s responsibility to maintain in good order throughout the letting term.

The law on CORGI gas appliances

A CORGI Registered Gas Installer must check all gas appliances in rented accommodation every year. This is compulsory under the Gas Safety (Installation and Use) Regulations 1994 (as amended).

It is the responsibility of the Landlord or his agent to arrange for these checks to be carried out. Both the Landlord and the tenant should each have a written report on the condition of each appliance.

Landlords or their agents must keep records of the safety checks and issue a copy of them to new and existing tenants.

FAILURE TO COMPLY WITH THESE REGULATIONS MAY LEAD TO A PROSECUTION WITH  PENALTIES OF IMPRISONMENT OR FINES UP TO £25,000.00.

The Health and Safety Executive enforce these regulations. For further advice on these regulations please ring the free HSE Gas Safety Advice Line on 0800 300 363.

From 1 January 1997 all upholstered furniture in rented accommodation must comply with the fire resistance requirements of the Furniture and Furnishings (Fire) (Safety) Regulations 1988 (as amended).

All upholstered or part-upholstered furniture is covered by the regulations including beds and mattresses, pillows, cushions. Bedclothes, carpets and curtains are not included, neither is genuine antique furniture made before 1950.

Each piece of furniture that complies with these regulations (except beds and mattresses) should have a rectangular label permanently attached to it with the heading “CARELESSNESS CAUSES FIRE”

If the furniture does not have this label or was made before 1988 it will probably not comply with the regulations.

FURTHER ADVICE CAN BE OBTAINED FROM YOUR LOCAL TRADING STANDARDS DEPARTMENT

FAILURE TO COMPLY WITH THE FURNITURE AND FURNISHINGS REGULATIONS MAY CONSITUTE A CRIMINAL OFFENCE UNDER THE CONSUMER PROTECTION ACT 1987, WHICH CARRIES A MAXIMUM PENALTY ON SUMMARY CONVICTION OF A £5,000 FINE AND/OR 6 MONTHS IMPRISONMENT.

Legislation means that Landlords and Letting Agents have a legal obligation and a duty of care to tenants to ensure that the electrical installation and the electrical equipment supplied is safe.

What does the legislation mean?
 
The electrical installation & equipment & appliances in a property have to be:

  • certified safe when a tenancy begins
  • maintained in a safe condition throughout the tenancy
  • maintained only by 'competent persons'
  • fit for purpose and free of defect 

What should a landlord do? 
 

Landlords should remove the risk of danger to the tenants and their property by: 

  • As a minimum, have an annual electrical safety inspection (i.e. the Enhanced Electrical inspection or "E2"), which includes the electrical equipment.
  • Ensure any installation or maintenance works are done by Part P 'competent persons'

From the above it is clear that electrical safety in rented property is extremely important and that, in the event of injury or death, both the Landlord and Letting Agent could be held liable if they are found to have been negligent. Such breaches can be punishable by substantial fines and or imprisonment.
 
An appropriate electrical safety inspection will not only reduce the risk of fire or injury to tenants, but will also mitigate the risk to Landlords and Letting Agents in the event of a claim arising from such an event

The regulations on electrical appliances

The Electrical Equipment (Safety) Regulations 1994 have been mandatory since 1st January 1997. They state that all electrical appliances supplied with let accommodation must be safe. This applies to both new and second-hand appliances and covers all electrical items supplied for the intended use of the Tenant. The regulations also cover fixed appliances such as cookers, showers and immersion heaters, which must also be safe. The only method of ensuring that these appliances are safe is to have them tested by a trained competent person using the appropriate calibrated portable appliance testing equipment (PAT).

Such tests and inspections should be made at reasonable and regular intervals, bearing in mind the rate of use of both portable and fixed appliances.

FAILURE TO COMPLY WITH THE ELECTRICAL REGULATIONS MAY CONSITUTE A CRIMINAL OFFENCE UNDER THE CONSUMER PROTECTION ACT 1987 THAT CARRIES A MAXIMUM PENALTY ON SUMMARY CONVICTION OF A £5000.00 FINE AND/OR 6 MONTHS IMPRISONMENT.

When do landlords need to complete an electrical inspection?

Unlike the gas regulations there is not a statutory period for completing electrical safety inspections or maintenance. Guidance is contained in the IEE Code of Practice. This document places a general requirement for a "routine check" on properties of twelve months with a more thorough examination including inspection and testing every 5 years.

Who should Landlords Employ to carry out Electrical Checks?

As with almost all safety legislation, the person required to carry out electrical checks must be a competent person. Competency is judged on a combination of training, knowledge and experience.

As from January 1st 2005, any contractors used for electrical work should be approved under Part P of the Building Regulations. The intention of Part P is to bring domestic electrical installation work in England and Wales under the legal framework of the Building Regulations. For the first time it placed a legal requirement for safety upon electrical installation work in dwellings.

Part P places two requirements on landlords and their agents. Part P insists that reasonable provision shall be made in the design, installation, inspection and testing of electrical installations in order to protect persons from fire or injury. Part P also states that sufficient information shall be provided so that persons wishing to operate, maintain or alter an electrical installation can do so with reasonable safety.

Security Deposits

From 6th April 2007, all deposits taken by Landlords for Assured Shorthold Tenancies in England and Wales must be protected by a tenancy deposit scheme. Landlords will be able to choose between two types of scheme; a single custodial scheme and two insurance-based schemes.

Custodial Scheme

  • The tenant pays the deposit to the landlord;
  • The landlord then pays the deposit into the scheme;
  • Within 14 days of receiving a deposit, the landlord must give the tenant the prescribed information (see over page) about the scheme being used and the tenancy;
  • At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme which returns the deposit, divided in the way agreed by both parties;
  • If there is a dispute, the scheme will hold the amount until the dispute resolution service or courts decide what is fair;
  • The interest accrued by deposits in the scheme will be used to pay for the running of the scheme and any surplus will be used to offer interest to the tenant, or landlord if the tenant isn’t entitled to it. For more information contact The Deposit Protection Service (The DPS) on 0870 7071707 www.depositprotection.com.

Insurance based schemes

  • The tenant pays the deposit to the landlord;
  • The landlord retains the deposit and pays a premium to the insurer – the key difference to the custodial scheme;
  • Within 14 days of receiving a deposit, the landlord must give the tenant prescribed information (see over page) about the scheme being used and the tenancy;
  • At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit;
  • If there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.
  • If for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.
  • For more information contact Tenancy Deposit Solutions Ltd (TDSL) www.mydeposits.co.uk or The Tenancy Deposit Scheme (TDS) www.tds.gb.com  0845 2267837

In each scheme, the deposit must be returned within ten days of the landlord and tenant agreeing how the deposit should be divided, or within ten days following notification of an ADR/court decision.

4.1 Property managed by Holmes Pearman Ltd. The deposit will be protected by The Deposit Protection Service (The DPS) in accordance with the Terms and Conditions of The DPS. The Terms and Conditions and ADR Rules governing the protection of the deposit including the repayment process can be found at www.depositprotection.com.
4.2 Properties not managed by Holmes Pearman Ltd. If you have selected either the non-managed Deposit to DPS or non-managed Inventory supplied and Deposit to DPS option, Holmes Pearman Ltd will forward the Security Deposit to the DPS and advise the Tenant accordingly. If you have not selected either of these options it is your responsibility to send the deposit to one of the above approved schemes and provide the Tenant the prescribed information (see over page) about the scheme safeguarding the deposit within 14 days.

4.3 What happens if a deposit has not been protected?
Unable to use ‘notice only’. Currently, a landlord can obtain an order for possession of an AST at any point after the first six months of the tenancy providing any fixed term has expired and the landlord gives the tenant at least two months’ written notice (Under Section 21 of the Housing Act 1988). This is known as ‘notice only’. However, under TDP, the landlord is unable to regain possession of the property using the usual ‘notice only grounds”, if the deposit has not been safeguarded and the prescribed information passed onto the tenant within 14 days of the landlord receiving it.‘Fine’. Tenants can apply for a court order requiring the deposit to be safeguarded or the prescribed information to be given to him about the scheme in which the deposit is safeguarded. Where the court believes that the landlord has failed to comply with these requirements, or the deposit is not being held in an authorised scheme, the court must either order the landlord within 14 days of the making of the order to repay the deposit, or order the landlord to pay the deposit to the custodial scheme administrator. The court must also order the landlord to pay to the tenants a fine of three times the deposit amount within 14 days of the making of the order.

4.4 Exceptions.  The following are not Assured Shorthold Tenancies and therefore deposits do not need to be registered with a tenancy deposit protection scheme; resident landlords (those living in the property), properties with rents in excess of £25,000 a year and company lets. In these circumstances and where Holmes Pearman Ltd hold the deposit we will hold it as Agent for the Landlord and Holmes Pearman Ltd will retain any interest earned.

Please click the related link, REQUEST A LETTINGS VALUATION, or telephone your nearest Holmes Pearman office to arrange for one of our representatives to carry out a free no obligation pre-marketing visit, when we will discuss, and advise you specifically on the matters that relate to your property, along with providing an idea of the rent achievable.

Basildon        - 01268 531313
Billericay       - 01277 622466
Grays             - 01375 384442
Southend       - 01702 333600

We look forward to hearing from you.

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