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The buy-to-let sector is facing a number of new obstacles this year.

Right to Rent 

As from 1 February 2016, a new additional ‘right to rent’ burden has been placed upon landlords; it will now be a legal obligation for landlords to ensure that a tenant (or lodger) has the right to live in the country before they grant the tenancy or licence to reside.

This means in real terms that landlords will have to check and copy all identity documents, e.g. passports, biometric residents’ permits, identity cards, and/or certificates of Naturalisation or British Citizenship. They must insist on seeing and copying original documentation, keeping it safe, and logging the date on which the checks were made. If a potential tenant does not have those documents, then the landlord must contact the Home Office using a particular online reporting facility, and must wait for up to two working days to know whether s/he can let the property to these potential tenants.

It should also be part of any agreement between the landlord and their managing agents that the agent is fully responsible for fully completing the ‘right to rent’ checks, and that they should be fully liable for any breach of the obligations and will pay any penalty due as a result of any breach.

Of course, it will be impossible for any lay individual to detect whether any of the documents shown are fake or not; at best, they can check dates and that the photographs resemble the potential tenant in front of them – they are not police officers after all! It is vital that the landlord or their agent uses their best endeavours.

There are, of course, penalties to be paid if the landlord or managing agent is found to be in breach of this duty; currently a maximum fine of £3,000, however, the impending Immigration Bill 2015/16 promises the threat of custodial sentences for landlords who fail to meet their obligations. Additionally, the bill will bring accelerated eviction systems, which will ensure that the illegal tenants will be evicted from the premises quickly.

New obligations re heating and energy 

Later this year, 31 December 2016 to be exact, landlords with more than one tenant and a communal heating system must do the following:

  1. All heating bills must be based on consumption of energy;
  2. Landlords must notify the National Measurement and Regulation Office (NMRO);
  3. They must install meters and temperature controls (except where the landlord can show that it is neither cost effective nor technically feasible);
  4. If that exemption can be proved that the landlord must install heat cost allocators, thermostats, radiator valves, and hot water meters, unless s/he can prove that another exemption under the relevant regulations applies.

It is advised that the landlord should insert a clause within the lease or rental agreement for the recovery of the costs of the billing and the installation of the equipment in the Services Charges.

Smoke Alarms

Since 1 October 2015, landlords in the private rental sector are obliged to:

  1. Place one smoke alarm on each floor of the rented premises;
  2. Fit a carbon monoxide alarm in any room with a solid fuel burning combustion appliance;
  3. The alarms must be in proper working order on the first day of a new tenancy. After this, it becomes the tenants’ responsibility to ensure that the alarms are tested regularly so that they are always in working order.

These obligations do not apply to HMOs (houses in multiple occupation), social housing, or live-in-landlord situations.

Penalties 

Breach of any of the above could result in a maximum fine of £5,000.

Contact Lewis Nedas Expert Buy-to-Let Property Lawyers

If you are a buy-to-let investor or landlord and need advice on any of the above, our property lawyers are able to assist. Call us on 0207 387 2032 or complete our online enquiry form here.


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