Kate Faulkner

From a lettings perspective, it is becoming virtually impossible to keep up with the legals. There are so many rules and regulations both at a national and local level that unless you have legal training and a way to keep up to date with the changes, plus a real understanding of how to implement them in individual circumstances, staying on the right side of the law is becoming increasingly difficult.

These rules and regulations include making sure your property doesn’t fall foul of one of the 29 hazards to tenant’s health and safety set out by the Housing Health and Safety Rating System, then there are annual gas safety checks, electrical checks at the end of the tenancy and every five years, as well as keeping on the right side of the new rules set out by the Consumer Rights Act.

Just this year we have changes to a landlord’s ability to evict a tenant, a requirement to have smoke alarms and carbon monoxide detectors and on top of this, everyone outside of the West Midlands is waiting for the national roll out of the requirement to check whether a tenant is in the country legally or not, before they let to them.

This is already a required check employers need to make on staff they employ, but for the future, individual buy to let investors will have to take on the same burden of responsibility.

Latest announcements by the Communities Secretary Greg Clark show the government hasn’t yet finished making legal changes.

They are “determined to crack down on rogue landlords who make money out of illegal immigration” and “in the future, landlords will be required to ensure that the people they rent their properties to are legally entitled to be in the country”.

These changes announced this week are coming via the Immigration Bill and the idea is twofold.

Firstly, the landlord will need to check whether new tenants are in the country legally and if they are not, they can’t let the property to them.

Secondly, if the landlord finds out their existing tenant is in the country illegally, then they will have the right to evict them under the ‘right to rent’ checks, in some cases doing so without even needing a court order.

And to make sure that landlords stop exploiting illegal immigrants, those that flout the law will face a new criminal offence which will apply to both landlords and agents who continuously fail to carry out ‘right to rent’ checks and allow illegal immigrants to rent their properties.

The new punishments are pretty harsh – a fine or up to five years imprisonment and sanctions under the ‘Proceeds of Crime Act’.

Anyone found guilty will be held on a register so councils can more readily identify ‘rogue landlords’.

Other things that the government is looking at are:

1. Tougher rules on licensed properties to make sure landlords are a ‘fit and proper person’ to let
2. Allowing local authorities to claim back rents from Housing Benefit payments if the property isn’t kept to a good standard
3. Letting local authorities issue penalty notices and keep the money secure to use for housing purposes
4. Allowing the sharing of Tenancy Deposit Protection data so councils can crack down on landlords renting out unsafe properties
5. Ensuring landlords can get their properties back without the need to go to court

Where does this leave landlords? I think you really have two choices moving forward.

Either you join a landlord association such as the Residential Landlord Association or the local Lincoln landlord accreditation scheme and be willing to invest time taking regular training sessions on up and coming new rules and regulations or leave the responsibility to a letting agent, but make sure their staff are trained to keep up with the legals and have access to resources, such as a helpline.

Not all agents do, so it is important to check they are members of NALs, ARLA or RICs.

Unfortunately running a property to let without huge amounts of support to keep you on the ‘right side of the law’ is now virtually impossible – however long you have been doing it for.

Need help? We offer a free Q&A service to buy to let investors and landlords, so if you are concerned about these new rules or the way you run your buy to let, do contact me via www.propertychecklists.co.uk.

This week’s column is by special request; I was asked to write some thoughts this week on Article 4. It is especially timely as by 5pm on Friday, March 20, 2015, all representations must be made, so for what it’s worth – here are mine and some other experts thoughts!

Firstly, it’s important to understand what Article 4 actually means and the impact it’s had on other cities who have introduced it.

Essentially, Article 4 gives additional powers to the City of Lincoln Council to manage and control the number of houses in multiple occupation, which is where people who are unrelated rent a room in a shared house.

What this will actually mean is that for any shared, rented properties, full planning permission will be required for a ‘change of use’ from a Class C3 to a Class C4 from March 1, 2016.

For those in favour

If you live in a nice quiet street which is full of other people who live and work there, and then investors come in and turn most of the road into shared housing, there is a perceived view this causes problems in the neighbourhood.

There are fears of the rubbish piling up and a transient population which isn’t ‘tied into’ the local area, and as such the community feel that once existed can disappear quite quickly.

Having Article 4 powers means they can decide how many and which properties can be rented on a shared basis.

For those against

Shared homes are a great way for students to afford to go to universities and afford the fees. They are also a great way for local skilled workers and professional people to share homes together to help save for a deposit for their first home rather than having to move back with mum and dad.

What those who need shared ownership are frightened of is this will restrict their ability to put a roof over their heads at an affordable cost. For students or young professionals the idea that they just live in ‘squalor’ and don’t form part of their local community is tarnishing them all with the brush of a few.

Who are the real winners and losers?

Although no-one has carried out any robust studies I am aware of, there is evidence of the pros and cons from other areas which have had Article 4 for a few years.

For areas which are already quite well known as student spots, what we have seen is people’s homes now struggle to sell. The investors don’t want them and families don’t want to live there, particularly if they are on busy main roads.

Secondly we’ve seen in areas where there is a real housing shortage, people now can’t find enough rooms to rent, so are having to continue to live with mum or dad or move away, limiting the potential labour market.

In areas which are still predominantly homes for families and professionals as opposed to rented, then it may help maintain the current status quo for a while. However, our population is changing and certainly in the East Midlands, there is a move away from owning large homes.

With or without Article 4, it’s likely the community will still see a changing dynamic, perhaps with the larger homes being made into smaller flats or houses where possible.

Talking to Paul Collins from Belvoir Lincoln, who is one of the most experienced lettings experts in the area, his fear is that the reason they are being introduced is to try and help solve a problem of anti-social behaviour, and the two are not necessarily linked, so it may make little difference.

He also worries the area chosen is so large it could restrict the growth of mulit-lets in parts of Lincoln where they are most needed, just at a time when tenants are desperate for homes to rent or rooms to share.

From Paul’s perspective though there is still a strong business and housing case for landlords to continue to create more shared homes in the future, with or without planning permission. For Paul “the tenant demand is strong and the income returns are much higher than standard lets, so I expect they will still be a growing number in Lincoln.”

For those interested in finding out more, the Residents Landlord Association suggests twenty questions all councils should ask themselves  before they introduce the new rules, which could help some but adversely affect others.

Finally, do have your say; do email to [email protected] or by post to Article 4 direction, City Hall, Beaumont Fee, Lincoln, LN1 1DD.

And remember, any representations must be made by 5pm on Friday, March 20, 2015.