Common Mistakes Landlords Make by Not Staying Updated with Lettings Regulations

With the Renters (Reform) Bill moving through Parliament, several significant changes to lettings legislation are expected, such as the abolishment of Section 21 notices, the end of fixed-term tenancies, and new requirements for landlords and properties to be registered.

Currently, there are approximately 170 laws governing the private rental sector (PRS), many of which contain multiple rules. Staying up to date with them is crucial, as the last five years alone have seen 23 legal changes in England, including:

- Updates to the Minimum Energy Efficiency Standards (MEES), increasing the minimum Energy Performance Certificate (EPC) rating to ‘E’

- Introduction of banning orders for landlords violating certain regulations

- Revisions to mandatory licencing for Houses in Multiple Occupation (HMOs)

- New property standards under the Homes (Fitness for Human Habitation) Act

- The Tenant Fees Act

- Mandatory 5-year electrical safety checks

- Revisions to smoke and carbon monoxide regulations

- New building and fire safety regulations

In addition to national laws, local councils have the authority to enforce their own licensing rules, including additional licensing for HMOs and selective licensing for other types of rental properties. This makes it easy for landlords to unknowingly breach regulations if they don't proactively monitor local requirements.

Violating lettings regulations can result in severe penalties for landlords, including:

- Fines up to £30,000 by local councils

- Rent repayment orders for up to 12 months’ rent

- Prosecution, with the possibility of unlimited fines or jail time

- Banning orders preventing further property rentals

For more on recent fines imposed on landlords, see our article from last month.

Here are five common legal mistakes landlords make:

1. Failing to protect a tenant’s deposit in a government-approved scheme and provide the required prescribed information. Without this, a valid Section 21 notice cannot be issued, and tenants may sue for up to three times the deposit amount.

2. Including unenforceable terms in an Assured Shorthold Tenancy (AST). Any changes to a tenancy agreement should be legally reviewed, as tenants have statutory rights that cannot be overridden by unfair clauses.

3. Not providing tenants with a copy of the Gas Safety certificate before the tenancy begins and within 28 days of annual checks. Failing this can invalidate a Section 21 notice.

4. Entering the property without the tenant's permission. Landlords must provide at least 24 hours’ notice, ideally in writing, and have a legitimate reason. Tenants aren’t obligated to provide access except in emergencies like gas leaks.

5. Assuming a tenancy automatically ends when the fixed term expires. A periodic tenancy is created under the Housing Act 1988, so a Section 21 notice must be issued to regain possession.

Additionally, many landlords are unclear on the taxes they owe on rental income, resulting in either underreporting profits or overpaying.

To ensure compliance with lettings laws, it's advisable to work with a professional letting agent, like PRS Properties, which is a member of the PRS Redress Scheme. Our team stays fully informed on all legislative changes and can assist you with a fully managed service or any questions regarding recent or upcoming legislation changes.