Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Yes you are your brother’s keeper. Immigration Bill 2013

Last week the Immigration Bill was given its first reading in Parliament. As was mooted in the Queen’s Speech, it contains requirements on landlords and agents to check the immigration status of tenants, with penalties for failure to comply.

If the Bill becomes law, people living in the UK without the “right to rent” are to be prohibited from renting premises in the UK. Section 17 of the Bill provides that persons “disqualified by immigration status” are not to be granted tenancies. Tenants who become disqualified during a tenancy are to lose their right to rent.

And the landlord/agent is responsible for checking.

If a landlord and/or agent lets a property to, renews a tenancy agreement with, or possibly allows continued occupation once a statutory periodic tenancy arises of a disqualified person, that landlord/agent will face a penalty of up to £3000.00.

There is a list of excuses that landlords can look to rely on, including that it was the agent’s fault (!), or that the “prescribed requirements” ( yet to be prescribed, but probably something along the lines of taking copies of passports/visas etc) were complied with before the tenancy was granted. If a person becomes disqualified during the tenancy the Landlord can try to wriggle out of paying a penalty if he tells on the tenant. Agents will have similar excuses set out in section 21.

The penalty system looks like this: 1. Landlord/agent receives penalty 2. Landlord/agent objects 3. Penalty is cancelled, reduced, increased, or no action to be taken. The prospect of an increase might put some people off lodging an objection.

The Bill anticipates that landlords might try to get around the responsibility to check immigration status by inserting a clause into the tenancy agreement prohibiting occupation by a disqualified person; section 17(6) provides that any such clause will be ignored for the purposes of determining whether there has been a contravention.

In anticipation of the fact that asking landlords and agents to do the job of the UKBA could give rise to racial profiling and discrimination ( hmmm, that name looks a bit foreign, let’s be on the safe side and not let our property to them),
Section 28 provides that a code of practice is to be issued to ensure compliance with the Equality Act 2010 and Race Relations ( Northern Ireland) Order 1997. Interestingly though a breach of the code will not incur civil or criminal proceedings. This looks like a dangerous balance: breach of the Immigration Act will incur a penalty, whereas breach of the so-called safe-guard will not.

Points to note:
• The Bill is currently in draft form. If and when it becomes law the current draft provisions may have been amended considerably.
• It does not apply to British Citizens, EEA nationals or Swiss nationals.
• Currently the referencing checks that reputable agents carry out would probably provide the necessary information ( sight of passports, evidence of bank accounts etc).
• The Bill covers tenancy agreements whether written or oral.

The above may seem unusually political for a Painsmith blog. This is not the intention. However Painsmith is committed to helping to eliminate discrimination in the private rental sector and in its current form this bill is set to cause problems.

Filed under: England & Wales, , , , ,

Lettings Fees

The Advertising Standards Authority (ASA) has decided that all charges that will be imposed on a proposed Tenant must be made clear in all advertising of the property prior to the letting. In other words, no hidden fees.

This comes after a complaint was made against Your-move.co.uk Ltd ( Your Move) stating that an advert that had been placed on Rightmove did not contain details of compulsory charges such as administration fees. It is worth noting that the advert in question stated that fees would be payable and even then had a link to Your Move’s own website that did specifically detail the charges. The ASA decided that this in itself was insufficient and the exact fees needed to be stated on the advert itself. In addition to this, if there are fees the value of which are not known at the time of advertising then it will need to be explained how those charges would be calculated.

The fact that this issue has been addressed now is not surprising given the report that the OFT ( Office of Fair Trading) has recently published which criticised the disclosure of letting agent’s fees which are payable by Tenants. With these findings coming it would be prudent for Letting Agents to “get their houses in order” to quote Guy Parker, the Chief Executive of the ASA, and ensure that fees are transparent so that they are not the ones that fall foul of latest requirements.

Currently, Rightmove’s own policy is that fees are not included in any of their advertisements. Whether they will be looking to change this in light of the above is unclear but as this case shows the letting agent will not be free of the obligations simply by following Rightmove’s protocol and so it should be requested that the fees are included in any such advert taken out on their site.

It would appear that there will be a tough approach on this and as such until proper guidance has been given (we would expect a number of relevant authorities, Office of Fair Trading included, to be issuing guidance imminently) our advice is that all advertising or publicity material (including window cards, brochures and website posts) contain the non-optional fees payable so that it is reasonable that any proposed Tenant looking in to the letting of a property will know the exact amount that they will be required to pay.

Filed under: England & Wales, , , ,

EPCs – latest news

Tomorrow 9 January 2013 sees the coming into force of changes in the regulations regarding Energy Performance Certificates.

The government announced these changes to the EPC, and air conditioning inspections regime, on 19 December 2012. The changes come from the EU Directive (Council Directive 2010/31/EU) on the energy performance of buildings (EPB Directive 2010). The directive mainly consolidates the regulations but there are some significant changes in relation to the contents, issue and display of EPCs.

In relation to residential lettings the significant changes are as follows:
• property advertisements are to include details of the energy performance certificate rating ( the A-G rating) where available;
• the requirement to attach the front page of the certificate to any written material is to be removed;
• listed buildings are exempt from the need to have a certificate on their sale or rent.

The above does get around some of the problems that agents have been facing such as how to attach a front page to the particulars on display in the window. However agents will nevertheless have to produce the EPC to potential tenants and there is no additional leniency in respect of obtaining it, and the penalties have not been amended for failure to comply.

Remember the other requirements still apply and you can read about them on our previous blogs here.

Filed under: England & Wales, , , , , ,

Energy Performance Consultations and Next Steps

The DCLG has published summaries of responses to a series of consultations on Energy Performance Certificates and has indicated how it will be taking the matter forward.

The main proposals of interest to the PRS being consulted on were:

  1. Wider publication of EPC data
  2. Requiring EPCs where individual rooms in HMOs were rented
  3. Requiring EPCs for holiday lets
  4. Publication of EPC figures in all property advertising

The first proposal was to create new powers for EPC data including address data and EPC recommendations to be published. The government intends to take this forward and will implement new legislation to allow for this. The legislation will deal with any data protection issues that may arise. Naturally this means that prospective tenants and third parties will have unfettered access to EPC reports and will be able to tie them to properties.

Currently where an HMO is rented out as a single property an EPC is required but where HMO property is rented out on a room by room basis then an EPC is not required. The government is not planning to fix this discrepancy as it is not required to by the relevant EU directive.

The EU directive which required EPCs actually demands that holiday lets for more than 4 months include an EPC. The legislation implementing it here did not cover the point but Government guidance said that all holiday lets were excluded. The Government will fix this by amending the guidance to make clear that EPCs are required for holiday lettings in excess of 4 months. Arguably they should actually fix the regulations to make this issue clearer and to define what is meant by a holiday letting.

The latest version of the underlying EU directive requires that all property advertising carry the EPC rating by July 2013. Currently this information is only required where written information is made available to a prospective buyer or tenant. Arguably, of course, advertising is written information and so an EPC should be provided with adverts already. However, one supposes that the reference is more to the sort of small adverts found in newspapers and magazines which typically supply very limited information. At the moment the Government does not intend to implement this proposal for the simple reason that they do not have to until 2013. However, agents should be aware that this is on its way and they will need to adjust procedures accordingly.

The overall message seems to be that the Government will only do what it absolutely has to do to service its EU requirements.

Filed under: England & Wales, FLW Article, Northern Ireland, Scotland, ,

Further Energy Performance Tweaks

The Energy Performance of Buildings (Certificates and Inspections) (England & Wales) (Amendment) Regulations 2009 came into force on 10 August 2009.

These make a small amendment to the EPC regulations to allow for disclosure of EPCs, recommendations and Display Energy Certificates on the sale of properties. Where an EPC is produced for a property which is for sale and the rating on the certificate is in bands F or G the keeper of the EPC register (ie. one of the licensed bodies who register and maintain records of inspectors) is permitted to disclose the certificate to the Energy Saving Trust Ltd, a body licensed by government to provide information and advice in relation to energy saving in the home.

The objective of the disclosure is to allow the trust to provide information to the owner of the property on things they can do to improve the efficiency of the property and grants that might be available to pay for the improvements.

In general this will have limited effects on the sector except to encourage improvement of less efficient properties. This may be of benefit as these properties are generally less desirable and harder to sell although, in truth, most agents will already be pointing vendors and landlords towards the trust and its free advisory services in any event.

Filed under: Uncategorized, , ,

EPC Directive Changes

The European Commission, the primary legislative body of the EU, has put forward proposals to make changes to the Energy Performance of Buildings Directive (EPBD). CLG has published a consultation on the proposals to allow it to reflect the views of UK stakeholders back to the commission.

The proposals are in two categories. The first stage, which UK government supports seeks to clarify and simplify the directive. The other part seeks to expand and strengthen the directive. The UK government is largely opposed to this, in common with its general policy on Europe, and takes the view that many of the issues should remain with member states under the general principle of subsidiarity.

Looking at the key proposals they are as follows:

  • buildings occupied by public authorities or where the public visit regularly are to have a Display Energy Certificate on display where the building is larger than 250 sq m as oppose to the current size of 1000 sq m;
  • any commercial or domestic building which is renovated will also have to have its energy performance upgraded at the same time for which targets will be set;
  • there will be minimum requirements for technical building systems such as boilers in commercial property.

Naturally this will cause increased costs for many older properties.  However, given the impact of empty building rates on commercial property and the consequent knocking down of some of these properties the impact may well be small.  In residential properties properties being renovated will have to have their performance improved but this would probably be done in the majority of renovations anyway.

The consultation is open for responses until 2 October 2009.

Filed under: Uncategorized, , ,

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