Landlord Legislation Guide

Updated 15th September 2016

Introduction

Are you an accidental landlord wanting to let property you have gained almost by chance or quite unexpectedly? Or have you bought buy to let property with the single-minded view of making a business out of letting to tenants?

In either case, there are a number of laws and rules that determine the way in which you manage the letting. Some may be clear, common sense and more or less obvious. Others however, might be new or less clear and catch out even the most seasoned landlord.

This Landlord Legislation Guide sets out to describe the various pieces of legislation that might affect you and looks in more detail at your legal responsibilities for:

  • gas safety;
  • electrical safety;
  • Health and Safety Executive (HSE) regulations;
  • the law applying to Houses in Multiple Occupation (HMOs);
  • fire retardant furnishings;
  • the Tenancy Deposit Protection scheme; and
  • the need to keep and provide copies to tenants of important certificates.

Clearly, it is important to stay within the law and abide by the rules – your failure or oversight might result in particularly stiff fines.

Finally, this guide is based on our current understanding of legislation, which can be subject to change. Some legislation only relates to parts of the UK and we have highlighted these wherever possible.

Gas safety

Many dwellings use it, but gas may prove a potentially dangerous fuel for heating water and living spaces. From time to time, there are dramatic news reports of explosions which completely destroy a property or the escape of lethal gas fumes overcoming inhabitants.

The Gas Safety (Installation and Use) Regulations 1998 set out the landlord’s legal responsibilities for ensuring the safety of gas supplies, installations and appliances in any let property – whether self-contained, shared or a holiday let.

The law refers to three principal aspects of the landlord’s obligations to:

  • maintain all flues, pipework and gas appliances in a safe condition, ensuring that these are maintained according to the manufacturer’s recommendations or on an annual basis;
  • ensure that all gas installations and appliances have been maintained to a safe standard, the landlord is responsible for arranging an annual inspection and test by an engineer listed in the register of the official Gas Safe register of qualified engineers; (failure to arrange a annual inspection could invalidate your landlords insurance cover) and
  • keep records of the annual gas safety inspection for a minimum period of two years and to make a copy available to your tenants within 28 days of the safety checks having been made or to new tenants immediately prior to their moving in.

The government’s Health and Safety Executive (HSE) is responsible for the administration of these gas safety regulations and places a high priority on compliance with them. If you fail to abide by the rules, therefore, the HSE warns that you may face a stiff fine or even imprisonment.

The Smoke and Carbon Monoxide Alarm (England) Regulations 2015

Since 1 October 2015, private sector landlords in England are required to have at least one smoke alarm installed on every storey of their properties and a carbon monoxide alarm in any room containing a solid fuel burning appliance (eg a coal fire, wood burning stove).

At the start of each new tenancy, the landlord must make sure the alarms are in working order.

Electrical safety

The law also requires a landlord to ensure that electrical appliances are safe for tenants to use.

The law relating to electrical safety does not prescribe annual inspections or the maintenance of records, but places a responsibility firmly on the landlord’s shoulders to ensure that safety standards are maintained.

In this, HSE regulations underscore the common law principle of the landlord’s duty of care towards his or her tenants. The duty of care extends to the landlord ensuring that all reasonable steps and precautions are made to prevent personal injury to or damage to the property of tenants, their visitors or indeed any other member of the public.

This is commonly referred to either as landlord’s liability or public liability. The consequences of an allegation that the landlord has breached that responsibility and is negligent in his duty of care may result in very substantial claims for compensation. For this reason, the public liability cover we at Cover4LetProperty include in landlord insurance policies is a minimum of £1 million.

Even so, it is important that any insurance policy requires the insured to take every precaution in mitigating the risks of claims. A flagrant or glaring breach of your duty of care towards tenants may result in any claim being rejected and your being left with a substantial sum to pay.

So what can you do?

The HSE offers no specific guidance on ways for ensuring that electrical equipment is safe. It all depends on the nature of the equipment, its age and the way it is used.

So maintaining electrical safety might require little more than a thorough visual inspection to rigorous checking and testing of appliances either by the manufacturer or by a suitably qualified electrical engineer – an approved contractor registered with one of the four national associations.

HSE regulations

As previously mentioned, the Health and Safety Executive (HSE) is responsible for ensuring compliance with the various regulations relating to the safety of gas and electrical installations and appliances in your let property. As the title of the agency suggests, however, the HSE has a more general, wider remit too.

How the HSE works

The HSE works hand in hand with local authorities to ensure the health, safety and well being of anyone affected by a work or business activity.

From the moment you let your property, you are in business as a landlord. Your local authority and the HSE, therefore, share a responsibility for ensuring that you provide an environment for your tenants which protects their health, safety and well being. This, together with the landlord’s underlying duty of care, makes for practically every aspect of the relationship between landlord and tenant to come under some form of scrutiny.

HSE inspections

The HSE and the local authority therefore have a right to come and inspect your let property if:

  • there is evidence that you may be failing in your duties as a landlord to maintain a healthy and safe environment for your tenants;
  • investigation is needed following a specific complaint made about the premises you let;
  • particular geographical areas or districts containing let properties have a poor record for maintaining adequate standards of health and safety; or even
  • to conduct spot checks on compliance with HSE and local authority regulations.

Houses in Multiple Occupation (HMOs)

If you own a residential property in multiple occupation, special, generally more rigorous, laws and regulations apply.

What is an HMO?

The law defines a house being in multiple occupation if:

  • more than three tenants live at the premises as part of more than one household; and
  • facilities such as the kitchen, bathroom or toilet are shared with other tenants; and
  • if the property houses more than five tenants, sharing facilities and living as more than one household in building more than two storeys high, it is classified as a large HMO and needs to be licensed by the local authority.

The standards that apply

HMOs are subject to the same range of laws and regulations governing all let residential property, but there are additional provisions.

The special provisions relating to HMOs relate principally to the way in which the let property is managed. The relevant laws are The Management of Houses in Multiple Occupation (England) Regulations 2006 and The Licensing and Management of Houses in Multiple Occupation (Additional Provisions) (England) Regulations 2007.

Together these pieces of legislation prescribe quite specific and detailed requirements for the management of HMOs. The following synopsis compiled by the West of England Private Housing Partnership summarises just some of the provisions:

  • full contact details for the owner or manager of the HMO must be displayed within the premises and copies given to each tenant;
  • adequate fire safety measures must be taken and all fire escapes kept free of obstructions and in good working order;
  • the water supply and drainage of the premises need to be maintained in good working order;
  • gas and electricity supplies must not be unreasonable cut off or disconnected;
  • the electrical installation and appliances must be checked and inspected by a qualified engineer at least once every five years;
  • both gas and electrical inspection reports and certificates must be made available to the local authority within seven days of their being requested;
  • common areas, including any garden and outbuildings, must be kept clean, safe and in good decorative condition;
  • the owner or manager has a specific responsibility for ensuring that the interior of each unit of accommodation is clean and in good decorative order before any tenant moves in and that it is kept in a similar condition throughout the tenancy; and
  • adequate and appropriate waste disposal facilities must be provided.

Fire safe furnishings

The Housing Act 2004 and the Regulatory Reform (Fire Safety) Order 2005 provide the legal basis for landlords’ obligations to ensure fire safety in buildings let to their tenants.

Local authorities and local fire brigades work together to raise consciousness of the dangers and to help landlords adopt adequate fire safety precautions in general, but there is one area where there are specific regulations designed to reduce the risks of fire.

Furnishings fire safety

The escalation of many domestic fires is the result of furniture catching alight and rapidly spreading the fire.

Landlords should take special note, therefore, of the legislative provisions designed to make furniture and furnishings safer from the risk of fire – the relevant legislation is the Furniture and Furnishings (Fire) (Safety) Regulations1988 (amended 1989 and 1993). It is handily summarised by Home.co.uk.

In essence, the regulations require all fabrics covering furniture and the fillings used in them must have passed a match resistance test. Upholstery and fillings also need to have passed a cigarette resistance test.

As a consequence of this legislation, most furniture and furnishing on sale today carry a code indicating their compliance or some other evidence that the materials have been fire tested. As a general rule of thumb, all furnishings bought after the year 1988 are likely to comply, so those items bought before that date may need to be replaced in order to comply with the law.

Furnishings covered by these regulations include armchairs, sofas, beds and nursery furniture but do not extend to duvets, carpets, curtains or antique furniture manufactured before 1950.

Tenancy deposit protection

It is customary for landlords to ask tenants for a deposit when they move in, to cover against the possibility of damage to the let accommodation or any contents owned by the landlord.

Disputes between landlords and tenants as to any amount to be deducted from the deposit at the end of the tenancy to account for any breakages or other damage have been common. Some tenants may have found it difficult to recover any of their deposit at all.

New legislation

In order to protect tenants’ rights, the government has launched a Tenancy Deposit Protection scheme under which any deposit taken from tenants must be lodged by the landlord with one of three approved independent third party agencies for safe keeping.

Return of the tenant’s deposit is then made within 10 days by the independent agency at the end of the tenancy provided the tenant:

  • has no outstanding bills or rent to pay;
  • the property has not been damaged; and
  • the terms of the tenancy agreement have been kept.

In the event of a dispute between the landlord and tenant over the amount of deposit to be returned, the deposit continues to be held by the third party until the dispute is resolved. The scheme offers a free and independent dispute resolution procedure and although neither party is under any obligation to use it, if they choose to the arbitration’s decision is final.

If you fail to protect a deposit paid to you by a tenant in accordance with the compulsory Tenancy Deposit Protection scheme, you may be taken to court, where you may be ordered to repay to the tenant up to three times the original amount of deposit.

Right to Rent scheme

Barely a day goes by without one media report or another referring to the issue of illegal immigration into Britain.

As part of its campaign to combat the crisis and under provisions of the Immigration Act 2014, the government launched a scheme called Right to Rent, which put an onus on private sector landlords to verify the immigration status of any prospective tenant. The scheme was initially trialled in the West Midlands, but was rolled out across the whole of the country in February 2016.

Detailed guidance on the implementation of the scheme is given on the government website and describes the steps landlords need to take in order to verify the immigration status of prospective tenants – and anyone else who will be living with them in the let property.

Civil penalties of up to £3,000 may be imposed on landlords who fail to make and keep records of the immigration checks the scheme obliges them to make.

Unsurprisingly, many landlords have objected to the prospect of a further administrative burden being placed upon their operation of a buy to let business.

Certificates

Reference has been made throughout this brief guide to the various reports, records and certificates which landlords are required to arrange and retain in order to comply with a catalogue of legislation.

To help you stay of the right side of the law, therefore, it might be helpful to produce a checklist of the certificates and other records you need:

  • gas safety – an annual inspection has to be performed by a Gas Safe registered engineer, with a copy of his certificate going to your tenants within 28 days of the inspection and your retention of the original for at least two years;
  • electrical safety – with the exception of Houses in Multiple Occupation (HMOs) an electrical safety certificate is not mandatory, but as and when you have any inspection carried out, it is clearly prudent to retain the report and, if necessary, also make it available to your tenants;
  • energy efficiency certificate – as from the 1st April 2018, in England and Wales, properties rented out in the private rented sector will need to have a minimum energy performance rating of E on an Energy Performance Certificate (EPC);
  • HSE regulations – either the HSE or your local authority may inspect your let property if they have due cause. You will want to retain any correspondence or notices from them, together with documentary evidence of your having addressed any problems;
  • HMOs – if you are the owner or manager of an HMO, the same rules apply as to any other rented accommodation, plus certain additional requirements, such as the need for annual inspections of electrical systems and appliances. All relevant certificates of safety need to be kept;
  • fire safe furnishings – all furnishings that have passed the required fire retardant tests carry a tag to that effect and this is effectively your certificate of compliance. Therefore, do not remove the tags or labels;
  • Tenants Deposit Protection – there is a long list of information you are now required to give any tenant from whom you accept any cash deposit. For the avoidance of any doubt, it may be prudent to confirm this information in writing and to retain a copy for your records;
  • Right to Rent – the trail scheme makes clear not only the checks you need to make on the immigration status of prospective tenants, but also the documentary evidence you need to retain that these checks have been carried out.

Summary

Becoming a landlord involves your entering a whole new world of various and detailed pieces of legislation. It may appear labyrinthine at times. It is important to comply with any and all of the aspects mentioned – not least because of the penalties which may attach to your failure to do so.

Some of the legislation may appear sensible and straight forward, but some of it might also be regarded by many landlords as an unnecessary and suffocating restraint.