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Update for Residential Landlords Granting Assured Shorthold Tenancies

Post by Admin , May 27, 2020.
Residential Property

In our blog published on 10 March 2020, we prepared a checklist of useful matters for landlords of residential property to consider if they are worried about what they should do before granting an assured shorthold tenancy

It is obviously important for those landlords to keep abreast of changes in the law affecting assured shorthold tenancies. Here are 3 examples of changes that they should be aware of:

 

1.Electrical Safety

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 are coming into force on 1 June 2020. Landlords should be aware that from 1 June 2020 prospective tenants will need to be given a copy of the electrical safety test (electrical installation condition report) before they occupy the premises. For tenancies pre-dating 1 July 2020, landlords must comply with this obligation before 1 April 2021. Be aware that the local authority can enforce this through financial penalties.

Click here to read a Government Press Release about Electrical Safety. 

2. Maximum Limit for Tenancy Deposits

The Tenant Fees Act 2019 came into force from 1 June 2019 and for relevant assured shorthold tenancies granted on or after that date, the amount that landlords can accept for deposits has been capped at five weeks' rent where the annual rent is less than £50,000, and six weeks' rent where the annual rent is £50,000 or more.

Any excess is a prohibited payment (see comments below).


Where deposits above the level of the cap were paid to Landlords before 1 June 2019 under a tenancy agreement signed by the tenant before 1 June 2019, Landlords will not need to refund the excess above the cap to tenants until the tenancy is renewed. Where fixed term contracts are renewed for another fixed term after 1 June 2019, Landlords will be required at this point to repay the excess amount of the deposit above the cap.


3. Prohibited Payments

 

The Tenant Fees Act 2019 identifies certain fees and other payments that landlords and their agents are entitled to charge tenants applicable to tenancies entered into after 1 June 2019 but any other fees or payments that are not permitted by that legislation will be prohibited payments and banned.

 

Examples of prohibited payments are:

 

  • Tenancy set up fees
  • Viewing fees
  • Credit-check fees
  • Inventory check fees
  • Check out fees
  • Fees for professional cleaning services

 

If a tenancy agreement was entered into before 1 June 2019, landlords can continue to require a tenant to pay fees written into that agreement until 31 May 2020 but after 1 June 2020, the term requiring that payment will no longer be binding.

 

The consequences for Landlords and their agents who breach the ban include:

 

  • enforcement action by Trading Standards authorities;
  • claims by tenants through the First-Tier Tribunal for repayment of prohibited payments;
  • inability to seek recovery of possession of the premises using the Housing Act 1988 ‘section 21’ eviction procedure until all prohibited payments have been refunded.

 

Here are some useful links to Government Guidance for landlords that may help to keep them up-to-date:

https://www.gov.uk/government/publications/how-to-let/how-to-let

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/819633/TFA_Statutory_Enforcement_Guidance_190722.pdf

 

This blog was prepared on 19 May 2020. It is not intended to be advice and should not be relied upon as such.

If you require any specific advice or assistance about granting an assured shorthold tenancy or any of the issues referred to in this blog, please contact Yvonne Addy by telephone on 0207 486 5131 or by email to yvonne.addy@mwh-law.co.uk or make an online enquiry here.