New legislation rules – what Landlords need to know
Commencing duties as a landlord is a daunting task. There is a bewildering amount of legislation and best practices to keep up with. While you are busy ensuring things are going smoothly, it’s easy to overlook things coming your way and keep up to speed with the latest changes in landlord legislation.
We know that keeping up with so many things at a time is a struggle, so here we are to make things easier for you with our guide on landlord legislation changes to keep an eye on and avoid nasty surprises to stay one step ahead of the game.
Tenant fees bill
This is the new legislation that aims to make renting fairer for tenants and was effective from 1st June 2019. The law prevents landlords and letting agents from charging a fee for services such as tenant referencing and inventories, contract changes, termination, utilities and council tax, renewal fees and check-out fees. However, landlords can still charge a fee when they have incurred costs because of the tenant’s actions. Landlords can also make deductions if there is a breach of the tenancy agreement.
Compulsory client money protection schemes (CMPS)
All letting agents need to register under a client money protection scheme. Whether it is a tenancy deposit, rent, or funds to cover property maintenance, this scheme gives landlords added protection on rental income. Letting agents who don’t have CMPS in place will face a penalty of up to £30,000 for non-compliance.
Mortgage interest tax relief
The mortgage interest tax relief has decreased and landlords can only claim 25% of their mortgage tax relief when filing their taxes. For the tax year 2018-19, it was 50%. The mortgage interest tax relief will continue to decrease until April 2020, when landlords can no longer deduct their mortgage costs from their rental income. Following this, landlords are given tax credits worth 20% of the mortgage interest cost to offset income tax.
Landlord’s minimum energy efficiency standard (MEES)
This standard means that all the newly rented homes and those with renewed tenancies must have an energy performance certificate (EPC) rating of E or above. However, from 1st April 2020, this rule will extend to existing residences too. This means that you can no longer rent out homes with an EPC rating of F or G and face a fine of £5000 if you continue to do so.
With that in mind, you as a landlord should act now to ensure your property is compliant.
These are just some of the new legislation laws to add to obligatory electrical safety checks, the homes act and the minimum space requirements for bedroom sizes and join redress schemes.
Finding time to stay compliant with the latest changes to landlord legislation can be tricky. That is why having comprehensive insurance coverage is essential. It will keep you protected from incurring penalties.
