Landlords, letting agents and property management companies
Several laws affect landlords, letting agents and property management companies. We have set out some of them below and provided links to more detailed advice. The subjects covered are listed below:
- minimum energy efficiency
- client money protection scheme
- tenants redress schemes
- restrictions on fees
- deposit protection
- general guidance for landlords and tenants
- other consumer protection laws
- model agreement.
New minimum energy efficiency standard
Since April 2018 a property that requires an Energy Performance Certificate (EPC) can only be let on new tenancies, which includes renewals, if it has an EPC in band E or better. The law affects domestic and non-domestic premises, but trading standards only enforce it for the latter - premises like shops and offices.
For existing tenancies in such premises, landlords have till 2023 to comply.
There are also many exemptions to the requirements. However, almost all require the landlord to register the exemption they are claiming with the government on the national PRS exemptions register.
Central government have provided guidance on the requirements, claiming an exemption, and an email address for the register. If you believe you can claim an exemption, follow the guide on how to do so, and email the address given, even though it is described as a pilot. See Private rented property minimum standard landlord guidance documents.
Landlords of property with an EPC in bands F and G should speak to an energy efficiency advisor about their options, but should also contact the planning department if their property is in a conservation area, as this will affect their options.
A landlord of a non-domestic property who needs advice in addition to the guidance, should contact the trading standards team:
Phone: 020 8753 1081
For more information see Minimum Energy Efficiency Standards for domestic properties, or visit the GOV.UK website
Client money protection scheme
You must join a ‘client money protection scheme’ if you’re a letting or property management agent in the private rented sector in England and you hold clients’ money.
These schemes make sure landlords and tenants are compensated if you cannot repay their money, for example if you go into administration. This is different to tenancy deposit protection.
You may be fined up to £30,000 if you do not join a client money protection scheme.
Government approved schemes
You can join any of the following approved schemes:
- Client Money Protect
- Money Shield
- Safeagent (previously NALS)
- UKALA Client Money Protection
- hold your clients’ money in an account with a bank or building society authorised by the Financial Conduct Authority
- get a certificate confirming membership of the scheme you join, and provide it to anyone who asks, free of charge
You’ll need to display the certificate:
- in any office where you deal with the public
- on your website
You may be fined up to £5,000 if you do not display a certificate of membership or provide it when asked.
Tenants’ redress schemes
Letting agents and property management companies must join a tenants’ redress scheme, or face a penalty of up to £5,000. The following run approved schemes:
- the Property Ombudsman
- the Property Redress Scheme.
Restrictions on fees
The payments that landlords and agents can demand are now restricted.
- There are some obvious exceptions, such as rent or fees for utilities.
- There are also some that are limited to specified amounts, such as deposits and charges for change of tenancy requested by the tenant.
This prohibition came into effect on 1 June 2019. If your agreement predates that, you can continue charging on the basis of the existing contract until 31 May 2020.
More information about the Tenant Fees Act 2019 is available on the GOV.UK website , including the impact breaches have on eviction proceedings, and the type of tenancies affected.
Display of Fees
There are requirements to display fees that are charged, which may include adverts on sites such as Gumtree, etc. For more guidance please see the above mentioned Tenant Fees Guidance.
Tenancy deposit protection schemes
Landlords or letting agents must place a tenant’s deposit in a tenancy deposit protection scheme if the home is rented out on an assured shorthold tenancy that started after 6 April 2007. There is more information about tenancy deposit protection scheme on the GOV.UK website.
There are three schemes currently approved (My Deposits, the Deposit Protection Scheme and The Dispute Service)
Letting agents are also required to display details of the redress scheme they are members of, with the list of fees.
The Department for Communities and Local Government has also produced information for tenants and landlords:
Advice on consumer protection laws
There are other laws affecting traders in general, which also apply to agents. The Competition and Markets Authority publish Key Principles for Lettings Professionals (pdf 512KB), a quick guide to compliance with a broad range of consumer protection legislation, and a more detailed document, Lettings guidance CMA31 (pdf 966KB) to accompany the quick guide.
Model agreement for a shorthold assured tenancy
The Department for Communities and Local Government has produced a model agreement for a shorthold assured tenancy for use by landlords and agents. You are not obliged to use this, but you may find it useful.
For further information please contact us on 020 8753 1081 or email email@example.com