Important Aspects of Property Law You Should Know!
Over the years, the enhanced enforcement of existing Property Laws with regards to rental property, means that a tenants rights appear to be more favourable than was the previously the case.
There were always several bones of contention between Landlords and Tenants but these have been somewhat clarified within the terms of the Property Law. Let’s look at some of these changes in more detail and how they affect both parties.
Please note that this review relates to the applicable laws within England and Wales and may have different implications in respect of Scotland and Northern Ireland.
In the past, the question of a deposit resulted in more issues of dispute between both Landlord and Tenant than any other aspect of a rental agreement. Whilst the amount of the deposit may often seem questionable, the surety of that deposit in so far as the Tenant was concerned, was never secure.
This has changed substantially because landlords are now required to place a deposit into a UK Government-approved Deposit Protection Scheme and must return it at the end of the tenancy agreement. The tenant will now be guaranteed to have the deposit returned in full, unless there are any disputes concerning rent arrears or property damage.
It is a tenant’s responsibility to take care of some minor repairs and general maintenance within the property. This normally relates to such items as internal decorations, furniture and small jobs, such as unblocking sinks and changing light bulbs etc.
The landlord is responsible for most of the repairs to the property including the general structure of the property and items such as external walls, guttering roof and chimney.
It is the landlords’ responsibility to ensure any equipment used for the supply of water, gas and electricity is kept in a proper and safe working condition. They are also responsible for the provision of a Gas Safety Certificate for every applicable appliance in the property.
Whilst not a legal requirement, tenants can also request a landlord to install and maintain carbon monoxide detectors.
Right of Access
As a result of the enforced regulations, a landlord can no longer turn up at the home and demand immediate right of entry.
Whilst it is obviously true that a landlord or their agent must be able to get inside the property in order to inspect it and carry out repairs, the landlord must now give reasonable notice and arrange a mutually convenient time to carry out the visit.
If the landlord insists in turning up and demanding entrance at unacceptable times, or indeed attempts to make it difficult to continue living in the property, such actions could be termed as harassment and if found guilty, the landlord could be either fined or indeed imprisoned for such an offence.
Often tenants will change the locks on external doors to maintain their privacy. The problem arises when the tenant is about to vacate and omits to put back the old ones in an undamaged state, and return the correct keys. This can sometimes result in the landlord breaking down doors to get inside the property and the cost of such repairs may legally be withheld from the initial deposit.
Never forget that a tenancy agreement is a legal contract. The following four points are the minimum that must be contained in that agreement:
- The name and address of the landlord
- The address of the property to be rented.
- The amount of rent.
- The period of the tenancy agreement
There are occasions when the agreement to rent is purely a verbal permission between the tenant and landlord to reside in the property. When this applies, the Tenancy agreement becomes a Licence Agreement. This form of agreement gives fewer rights to the tenant but always remember; the landlord cannot take away basic tenant’s rights just because there may be no written agreement.
This agreement can be extended to include other specific items such as
- Rent – try and ensure the exact date by which the rent is due, exactly what it covers and how it should be paid, such as by cheque, cash, standing order or direct debit.
- Deposit – in most cases a deposit will be required. It is essential to understand exactly what it covers and under what circumstances it can be retrieved in full at the end of the tenancy agreement.
- Furniture and Decorations – a detailed inventory is required for the description and condition of each item and must be signed at the start of the tenancy by both parties.
- Duration of the agreement – it is sometimes the case that a tenant’s circumstances may change, for example posting to another part of the country at short notice. Tenants must ensure that they are fully cognisant with the conditions since they may very well be penalised for breaching the agreement.
This can be one of the most complicated and disputed sections for both tenant and landlord concerning a rental property.
There are normally two main types of agreement – a periodic tenancy and a fixed-term tenancy.
Periodic Tenancy – this is basically an agreement that rolls on either from week to week, month to month or even annually. Under usual circumstances, a landlord cannot increase the rent more than once in a 12 month period, unless of course, agreed otherwise in the written agreement.
Fixed-Term Tenancy – this is an agreement to rent the property for a fixed period such as six months or one year. In these circumstances, the landlord is unable to increase the rent until the end of the stipulated period. On a six monthly rental basis, the landlord must give one months’ written notice prior to a proposed increase and for a yearly term, the minimum amount of notice is six months.
In both instances, it is essential that these changing terms are noted on a document and signed both by the landlord and the tenant. In either cases, the increase must be a fair one and in line with similar amounts in the area.
This is a general overview of some of the main stumbling points when it comes to tenants’ rights within the terms of a Tenancy Agreement. There are certain finer points within any agreement and it is essential that tenants carefully check the terms of the agreement so that they know exactly where they stand. Remember, the agreement must be both readable and understandable and terms cannot be concealed within any legalistic writing.
→ The Landlord
If you have read the above section and are either an existing or would-be landlord, you might possibly be starting to feel depressed and confused with all the current legislation. But this does not necessarily have to be the case and if you look carefully at some of the items shown below, you could possibly see how these could be of benefit both you and the tenant.
As you will know, the deposit given to you by the incoming tenant must be placed in one of four Tenancy Deposit Protection schemes within 30 days of receiving the amount. You should bear in mind that in the event you do not do this, the tenant may at any time throughout the period of agreement, apply to the County Court to register a complaint. You could then be ordered to either a) return the full deposit to the tenant or b) instruct you to deposit it within one of the schemes. It is also possible that the Court may order you to pay the tenant up to 3 times the original deposit within 14 days of the order being granted.
The main advantage to a landlord is the ability to reclaim any rent arrears or damage to the property caused by the tenant against the deposit. On a side point however, it does mean that you are unable to use the deposit for possible building repairs or anything else during the period of the tenancy agreement.
You have an obligation to keep the exterior and main structure of the building in a good state of repair and to ensure that where appropriate, there is in force a current Gas Safety Certificate on any relevant equipment within the premises. Each Certificate needs to be renewed annually and is a legal requirement, even for very short-term rentals, such as Holiday Homes.
Similarly the landlord is responsible for the appropriate Safety Certification in respect of Electrical Installations and Equipment, which must be kept valid throughout the term of the tenancy agreement.
Remember that any furniture provided by the landlord must be completely fire resistant!
The responsibility for internal decorations and furniture normally rests with the tenant and if damaged, the cost of repair can be deducted from the initial deposit. However it is sometimes the case that this deposit is wholly insufficient to pay for these damages and the likelihood of recovering the difference in costs from the tenant without legal action, can often vary from slim to impossible.
The only way round this is to demand a high level of deposit based upon your personal experience of property damage caused by other tenants, or a history of such damage by any incoming tenant. The decision in this respect must be yours as to the amount of deposit you require to protect your interests.
The landlord is somewhat restricted as to the amount and number of times they can increase the rent on a property. For any fixed-term tenancy that is longer than 12 months, the landlord must give notice of at least six months of any rent increase to the tenant, prior to the termination period of the agreement. If the duration of the agreement is less than 12 months, then you are permitted to give the tenant one month’s notice of any increase prior to the end of the agreement.
The problem with any weekly or monthly “rollover” agreement is that the landlord is only able to increase the rent once per year.
Fluctuations of rent within the industry are a matter of supply and demand according to the location of the property. Under a Fixed Term AST, changes in rent can only be made at the end of the contract period. If the tenant does not accept the proposed renewal terms then the landlord can demand that the tenant vacates the property when the current agreement expires.
There are set procedures laid down in order for a landlord to successfully evict a tenant. Tenants may be evicted for a variety of reason such as:
- Failure to vacate the property at the end of the Agreement
- Failure to pay rent
- Antisocial behaviour
- Use of illegal drugs within the premises
Harassment is not tolerated under any the law and landlords could face a criminal conviction for such behaviour. Therefore it can be very frustrating, expensive and time consuming to evict a tenant The procedure involves issuing a series of “notice to quit” letters to the tenant, followed by court applications and possibly, after a period of time, using the services of bailiffs to finally secure an eviction.
Remember throughout all these prolonged procedures, the landlord does
- a) not receive any rent throughout this period and
b) seldom recovers the full amount due.
Licensing of Landlords
There are currently moves being made by the UK Government to enforce a register of Licensed Landlords throughout the UK. This effectively is an gradual implementation of various relative sections within the Housing Act 2004. Effectively, management of the scheme will be handled by the Local Authorities but failure to register where appropriate, could result in a £20,000 fine! There are a number of Authorities currently enforcing the scheme with Newham in London being the first.
The purpose of the register is to abolish poor quality landlords as well as anti-social tenants and a license must be obtained for each property, dependent on the size and nature of the property rental. Each license lasts for a period of 5 years.
There is a similar scheme currently in operation in Scotland and the intention to implement another scheme in Northern Ireland, although no date has as yet been agreed.
If you are tired Landlord
Many existing landlords have often asked themselves the question as to whether the pressure and efforts involved, in relation to the return received are really worth it. Not all tenants are bad but there are some who can make a landlord’s life extremely difficult. Failure to pay rent, unnecessary damage to fixtures fittings furniture and decoration are just a few of the problems faced by some.
As an existing landlord, you may very well have reached the end of the line; fed up dealing with awkward tenants, collecting rent or even no free time. It maybe that you want to liquidate and turn your properties into real cash and either invest elsewhere or just retire!