Breaking news this morning following the leak last week – the government has published their Levelling Up White Paper – and the impact of matters contained within could shake up the private rented sector and have far reaching implications on landlords and tenants alike.

What is a White Paper?

A “White Paper” is a policy document published by the government which sets our their intentions for future legislation. White papers form the basis of discussion and consultation before the final bill(s) are put forward before government to be voted into law.

What is the purpose of the Levelling Up White Paper?

The purpose of this document is to bring about system change across both the Government and the country. The White Paper sets out the changes required, and how these will be implemented to “level up” the UK. The paper contains 12 national missions that are to be completed by 2030, and are quantifiable allowing them to be tested and measured.

How does this apply to landlords?

There are three main elements within the White Paper that will affect landlords: The introduction of a “Decent Homes Standard”, the introduction of a National Landlord Register and the abolition of the Section 21 Eviction Notice.

The Decent Homes Standard

Homes in the private rented sector will need a meet a mimumum standard known as the “Decent Homes Standard”. There is nothing new about this standard, and you can find information about it by clicking here. We are in support of this government move, as decent landlords will not be affected, only those who do not maintain their properties and protect their tenants.

The National Landlord Register

There is minimal information provided within the White Paper on this proposal so we will be tentatively waiting for further details to be released. There is likely to be a minimum standard or accreditation to join the register, or it may be that landlords can avoid registration by using a registered letting agent such as ourselves. If you would like more information about our services, please do get in touch.

The Abolition of the Section 21 Notice

The abolition of the Section 21 notice has been under discussion for a number of years, but its inclusion in the White Paper shows that the implementation is moving closer. The idea behind the abolition is to prevent landlords from evicting tenants with no formal reason – hence the Section 21 procedure is known as the “no fault eviction”.

Giving tenants more security should not be seen as a bad thing given the number of “rogue” landlords operating in the UK, however in our opinion, a sharp reform of the remaining eviction process “known as the “Section 8″ procedure” needs to be completed before the loss of the Section 21. At the very least, the process needs to be shortened and simplified, with additional grounds added and all grounds to be made mandatory. We simply cannot be placed in a position where landlords cannot regain possession of their property when there is a genuine requirement to do so.

What Happens Next?

According to Government officials, £4.8 billion has be commiteed to this project and its implementation although there are some doubts over the contents of the paper and the ambitiousness of the 12 national missions with regards to funding. The next step will be for the contents of the paper to be discussed and debated, until a draft bill is produced ready to be put forward before Government and eventually enacted into law.

What is a Residents’ Management Company?

A Residents’ Management Company (RMC) is a limited company set up to manage a building containing flats, or an estate containing freehold houses. In most cases the property owners or leaseholders are members or shareholders of the company.

The RMC is normally set up by the original developer to enable to ongoing management of the building and/or communal areas, and it some instances the freehold of the development will transfer to the RMC when the last unit is sold.

An RMC can also be written into a lease where the freehold is retained by the developer. The RMC would have management obligations such as insurance, maintenance, compliance and collection and accounting for service charges. In most instances, an RMC will employ a professional managing agent (like us) to run and manage the development.

What are RMC Directors?

RMC directors are members of the company who are appointed by the leaseholders/owners to make decisions on behalf of the company. It is normally an unpaid position.

To be eligible to be a director, you must:

  1. Be an owner/leaseholder within the development (this is often a requirement, but check your Mem & Arts to confirm)
  2. Over the age of 16
  3. Not be an undischarged bankrupt
  4. Not be a disqualified director whose term of disqualification has not yet been spent
  5. Not be the auditor of the company

What are the obligations of an RMC Director?

As a limited company registered in the UK, the Company and its Directors must abide by company law. The general principles that must be abided by are:

  • Follow the rules of the company (known as the “Memorandum and Articles”)
  • Decisions must always be made for the benefit of the company rather that the individual
  • Promote the success of the company at all times
  • Complete statutory filings and returns
  • Maintain the statutory books
  • Ensure the statutory accounts are an accurate representation of fact
  • Disclose any conflicts of interest to other directors immediately

In addition, as an RMC director, there are a few other responsibilities:

  • Be available to liaise with your managing agent and other directors on management matters
  • Discussing and approving the annual service charge budget
  • Ensuring the service charge accounts are an accurate representation of fact
  • Ensuring that all decisions or actions taken are within the bounds of the lease
  • Ensuring that all Health, Safety and Fire obligations are met
  • Ensuring the insurance cover is valid and adequate
  • Attendance at 1to 2 board meetings per year, or as required
  • Attendance at AGM
  • Willingness to be involved with on-site issues

Do I need any experience?

In short, no. You need a willingness to be involved in the proactive management of your building or estate; the rest you can leave in our hands. As professional managing agents with a proven track record, we can make your life as an RMC director easy and stress free.

What are the benefits?

As an RMC director, you will gain an insight into how your block or development runs. You will be involved in decisions relating to the service charge budget and mangement of the site. You will have more input over the service charge budget and the selection of the managing agent who is ultimately responsible for the day to day running of the development.

How do I become a director?

Each company will specify how directors are appointed with its Memorandum and Articles. Often, directors can be appointed by being proposed and seconded by existing directors. At other times, you will need to wait for the next AGM to be appointed. You can view the Memorandum and Articles of your RMC by clicking this link and searching for your company.

For more information on becoming an RMC director, use the contact form below to contact us today.

Unless you have been living without a TV, phone or radio, I expect you have now heard about the Tenant Fees Act 2019, aka the “Tenant Fee Ban” (TFB).

So, what is it?

In short terms, the TFB is a piece of legislation introduced by the government which came into force on 1st June 2019. It specifically prohibits landlords and agents taking any form of payment (or forcing tenants to contract with a third party) in order to obtain or continue an Assured Shorthold Tenancy Agreement, unless that payment is specifically permitted by the ban (a “permitted payment“). All other payments are known as “prohibited payments” and carry heavy penalties, as I will discuss later in this article.

The TFB applies to all AST’s and licences (not common law, company or high rent tenancies) granted on or after 1st June 2019 and all AST’s and licences from 1st June 2020.

What payments are permitted?

There are several, including:

Rent (but this must be kept at the same level, or higher, throughout the duration of the fixed term. If it is decreased, the additional amount during the months prior to the increase will be seen as a prohibited payment.

Security Deposit (This is now capped at 5 weeks rent, and not a penny over, regardless of circumstances i.e. pets. Deposit calculators are widely available online, and the the following calculation must be used: (Monthly rent x 12/52 x 5). This cap is increased to six weeks rent for properties with an annual rent of over £50,000.

Holding Deposit (there are many regulations around the acceptance of a holding deposit, which I may need to go into further detail on a separate post. However the main points are that it is capped at 1 weeks rent, and it must be returned to the tenant save for four explicitly stated sets of circumstances .)

Change of tenancy Charge (a charge can be made when the tenant requests a change to the tenancy, such as the addition of a permitted occupier, or the change of a rent date. This charge is capped at £50 including VAT).

Late Rent Charge (this is one is pretty laughable and likely not worth even thinking about. You cannot charge for late rents, chasing letters, visits. The only charge you can make is an interest charge of 3% over the BOE base rate, after the rent is more than 14 days late).

Replacement keys/security device (Self explanatory, but you can only charge the cost of the replacement key or device, not for your time.)

Early Termination (If the tenant would like to leave a contract early, you can charge to cover your costs. However, if you are not using an agent, you are not permitted to charge them for re-referencing the new replacement tenants. They are also expected to pay rent and utilities up until the day before a replacement tenant moves in).

Breach of tenancy (If the tenant breaches any part of the agreement, you can seek to recover your costs from them, either directly or through the security deposit).

What payments are prohibited?

Anything not listed above is prohibited.

What are the penalties for breaching the ban?

Luckily for us Bristol folk, the government helpfully decided to place the central UK enforcement authority for the Tenant Fees Act within Bristol city council. They are a team who will be able to enforce the ban through penalties, and make no mistake, after reading the government guidance written for enforcement authorities it is very clear that they are being pushed to enforce this legislation to the letter. The reasons for this may become clearer to you if you allow me explain a little further about the penalties for breaching the ban.

If you purposefully or accidentally take a prohibited payment and do not return it to the tenant within 28 days, if reported it is likely you will be given a penalty charge. Ignorance is sadly no excuse so it is important you are aware of your obligations.

Any breach would render a Section 21 eviction notice invalid, so you would not be able to regain possession of your property until the prohibited payment was returned.

First breach: Up to £5000 penalty charge per breach (note: if you charge one fee that includes several items i.e. referencing, check in, tenancy fee: this could easily be seen as multiple breaches which would each attract a penalty charge in its own right).

Second or subsequent breach within 5 years: Criminal offence, or a penalty charge of up to £30,000 as an alternative to prosecution, per breach.

Common Errors

There are many people that believe the TFB only applies to letting agents, however this could not be further from the truth. As a self-managing landlord, here are a couple of scenarios which could easily catch you out if you are not making sure you are fully up to date with your obligations.

  • Your tenant is on a six month AST which renews on the 1st August 2019. You currently hold six weeks deposit. At their request, you supply another six month agreement as you normally do, and as the deposit is held in a custodial scheme, no action is needed.

WRONG. Prior to signing the new fixed term agreement (and effectively creating a new tenancy, you MUST return the portion of the deposit that is over the five week deposit cap. If you do not do this, that money will become a prohibited payment and you will be in breach.

  • You are advertising your property to rent as no pets, but someone phones and offers to pay a separate payment as protection against pet damage. This is fine, because it technically isn’t part of the security deposit.

WRONG. You must not take any money over the five weeks rent as a security deposit. In this scenario, not only would you be in breach of the TFB, but you would also be in breach of the Tenancy Deposit Protection Legislation.

  • You are advertising your property to rent as no pets, but someone phones and offers to sign a contract that states they will have the property and carpets professionally cleaned and flea treated at the end of the tenancy. You agree to the tenancy on those terms.

WRONG. You must not make or allow the tenant to contract with a third party (that costs them money) as a condition of granting a tenancy. In this instance, the fact that they must pay for cleaning and flea treatment in order to have the tenancy would be a breach.

  • Your tenant calls you at 10pm to say they have locked themselves out as they have lost their keys. You visit the property to let them in and provide them with a spare, and they give you £20 for your trouble.

WRONG. You are not able to charge for your time when resolving issues like this. You are only able to charge them the cost of the key. Our advice in this situation would be to either ask them to come to you to collect the key, or for them to call a locksmith who they would need to pay directly.

As you can see, the TFB was created as a piece of legislation to protect tenants from unscrupulous landlords and letting agents. I am the first to acknowledge that historically there has been a huge amount of unfair treatment of tenants, particularly from city centre Letting Agents across the country. However, the way this legislation has been written goes above and beyond the job it was meant to do.

It is so convoluted and technical that it makes it difficult for the non-professional landlord to stay compliant without expert support. It is full of opportunities for mistakes, and this coupled with widespread ignorance around the true implications and requirements of the Act means I am expecting to see a large amount of prosecutions over the next few years.

That said, any piece of legislation is subject to interpretation and until we have case law coming through giving us better more conclusive guidance on how to interpret the Act, we all just need to keep our fingers crossed that doing our due diligence is enough to comply and ensure that we aren’t one of the unfortunate few who are involved in creating that case law that everyone else is awaiting to enable them to learn from.

As always, I hope this information was useful, and if you have any questions feel free to post them below. Please make a point of reading our disclaimer located on the privacy page of this website.

There is a lot of discussion around asbestos, particularly in recent years where Health & Safety has been pushed to the forefront of our minds – but what actually IS asbestos and why do we, as property managers and landlords, need to know about it?

All landlords and property managers must abide by the Health and Safety at Work Act 1974, hence they must be aware of anything that may impact the general health and safety of their tenants.

Asbestos was known as the “Magic Mineral” for many years given its versatility and properties as a construction product. It was used in many ways such as insulation, fire proofing, cladding, even roofing and floor tiles. It wasn’t until much later that the effects of asbestos on those who produced, shipped and used it became apparent. Unfortunately by this point, asbestos was so widely distributed and used that it was impossible to trace it and remove it from those buildings that had included it.

So WHY is Asbestos dangerous?

Asbestos is made of fibres, as you will see below. When the Asbestos is “friable”, meaning the edges are damaged or worn, these fibres can be released into the air, and inhaled or ingested. Once ingested or inhaled, they are difficult (if not impossible) to remove, and eventually cause disease, such as lung cancer or conditions known as Asbestosis and Mesothelioma.

What does Asbestos look like?

To keep things simple, there were three main types of Asbestos in use in this country – these are nicknamed after their appearance: “White Asbestos” (Chrysotile), “Blue Asbestos” (Crocidolite) and “Brown Asbestos” (Amosite).

Image courtesy of: https://www.merryhillenvirotec.com/types-of-asbestos/

The use of Blue and Brown Asbestos was banned in the UK in 1985 but large amounts remain. Blue is widely seen as the most dangerous type of asbestos due to its structure – the fibres are short and spiky, which cause the maximum damage to the lungs.
Blue asbestos was often used for products such as spray on pipe lagging, insulation or asbestos cement.

Image Courtesty of: https://www.ad-asbestosremoval.co.uk/

Just as a matter of interest, a lot of people think that the visible fibres of asbestos are what cause the problem. In fact, it is actually the fibres you can’t see with the naked eye that are more troublesome, as shown by this micrograph:

Similar to Blue asbestos, Brown asbestos was mostly used for cement sheets and insulation.

The most common type of asbestos, white, was banned in 1999 which means as a landlord or property manager you should be aware that it may be present in most properties built or converted before 2000. White asbestos is commonly found in areas like artex ceilings, insulation, cement, soffits, piping, fireproofing and ceilings but is so widespread the uses of this type of asbestos would take too long to thoroughly list.

Image courtesy of: https://job-prices.co.uk/asbestos-in-the-home/
Image courtesy of: https://job-prices.co.uk/asbestos-in-the-home/
Image courtesy of: https://job-prices.co.uk/asbestos-in-the-home/

How can I tell it is asbestos?

To only way to confirm the prescence of asbestos is by testing it. There are many companies that will offer a sampling and testing service, often with a 24 hour turnaround. They will take a look at the sample under a microscope to identify the type of fibres it contains, and therefore confirm the presence of asbestos in the sample.

What do I do if I have asbestos?

The first step in the sucessful management of asbestos is the identification of the location and type of asbestos, and the assessment of the current condition.
We would always recommend using a professional company to carry out an “Asbestos Management Survey” and if necessary, an “Asbestos Management Plan and Asbestos Register”.
This survey will review the property non-invasively to identify the location of asbestos on site, as well as giving recommendations for its management and/or removal.
Should there be extensive works being carried out at the property, it is important to take this further and arrange for a “Refurbishment/Demolition Survey” which is much more invasive.

Both types of survey will provide information on how to manage the asbestos, which is likely to be either complete removal, encapsulation (covering to prevent the release of fibres) or regular checking of the condition.

If you would like further information, the Health and Safety Executive website is a fantastic resource, in particular the booklet titled “Asbestos Essentials“.

References:

https://www.hse.gov.uk/asbestos/

https://ibasecretariat.org/lka-paper-asbestos-from-magic-mineral-to-killer-dust-apr-28-2013.pdf

https://ehs.oregonstate.edu/asb-when

https://ehs.oregonstate.edu/asb-when

Guidance has now been produced by the government relating to the upcoming Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020. Originally included in the Housing and Planning Act of 2016, this is now a standalone piece of legislation. We have been aware that this particular piece of legislation was coming for several years and it is actually very welcome. Most landlords are very keen to ensure their properties are safe, but there are the minority that are not.

There will now be a legal obligation and not just a moral obligation to ensure that your rental property is safe and to the standards contained in the 18th edition of the ‘Wiring Regulations’, which are published as British Standard 7671.

So, what do the regulations mean for landlords?

If you love reading legislation, you can review the actual legislative document by clicking here. If not, read on to read a summarised version of what is required.

  1. For all new tenancies starting on or after 1st July 2020, the landlord must obtain, and provide to the tenant within 28 days, a satisfactory DEICR (Domestic Electrical Installation Condition Report) – also known as a “Fixed Wire Test”.
  2. This requirement will be rolled out to ALL tenancies from 1st April 2021.
  3. The certificate must be carried out by a qualified and competent electrician. Further information relating to qualification of electricians is available by clicking here to visit the NICIEC website.
  4. The certificate will last for 5 years, and therefore must be repeated prior to expiry.
  5. Where remedial work is required, this must be carried out within 28 days, or sooner if deemed necessary by the qualified electrician carrying out the test.
  6. The certificate must be provided to the tenant prior to moving into the property, similar to the Gas Safety Certificate.
  7. You must retain a copy of the report to provide to the electrician prior to the next test.

What parts of the property are included under the test?

The ‘fixed’ electrical areas in the property, starting with the RCD board (also known as a fuse board) and including the wiring, the plug sockets, the light fittings and any hard wired items such as showers, extractor fans or ovens.

How is remedial work classified?

Within the report, remedial work is classified into the following groups:

C1 = Danger present. Risk of injury. The electrical inspector may make any C1 hazards safe before leaving the property.

C2 = Potentially dangerous.

FI: Further investigation required without delay.

C3 = Improvement recommended. Further remedial work is not required for the report to be deemed satisfactory.

A test with any C1, C2 or FI observations will be deemed unsatisfactory.

When the remedial works are complete, the landlord must supply written confirmation to the tenant within 28 days.

What type of properties does the new law apply to?

Any property where the tenant lives as their primary residence will be covered by the legislation. This includes agreements such as Assured Shorthold Tenancies (AST’s), licences to occupy and company lets.

Social housing, lodgers, those on a long lease of 7 years or more, student halls of residence, hostels and refuges, care homes, hospitals and hospices, and other accommodation relating to healthcare provisions are not included.

If you have a property that was built in the last 5 years (or completely re-wired) it should have a current Electrical Installation Certificate (EIC). This will last for 5 years, at which point it must be re-tested. However, you must make sure that the EIC includes all installations within the property, not just one area.

What happens if remedial works are not carried out?

The local enforcement authority may serve upon the landlord a remedial enforcement notice legally requiring them to carry out remedial works. If they do not comply with the notice, the enforcement authority may proceed with the work and charge the landlord for the works, and their costs in administering them.

In addition to this, a fine of up to £30,000 may be given to the landlord for the breach. Should a tenant be injured or killed due to an uncertified and faulty electric installation, the landlord may find criminal charges are applied against them.

What about tenancy renewals?

If your tenancy expires after the 1st July 2020 and you provide the tenant with a new tenancy agreement (also known as a fixed term renewal or extension), just must ensure that you have a certificate in place and it is provided to the tenant prior to this document being signed.

If your tenancy expires after 1st July 2020 and it turns into a contractual periodic tenancy (it is written into the agreement that after the fixed term, the agreement will turn into a monthly tenancy) you do not need a certificate until 1st April 2021, however, if you do not have one, it is advisable to get one as soon as possible.

If your tenancy expires after 1st July 2020 and it turns into a statutory periodic tenancy (nothing is written into the agreement), you will need a certificate in place and provided to the tenant prior to the end of the current tenancy. This is because the change of tenancy type from fixed term to statutory periodic constitutes a “new tenancy” in law.

For further information or help with this new legislative requirement, please do not hesistate to get in touch with us. We can arrange for you to have a DEICR carried out by local, trusted electricians at the following cost:

1-4 Bedrooms: £210 including VAT

4+ Bedrooms: £234 including VAT

Communal Areas of Leasehold Apartments (Landlord Supply): By Quote

If you don’t know what the Tenant Fees Act 2019, or the “Tenant Fee Ban” is – then I suggest you go to THIS POST first and a have a read through.

This piece of legislation came into force on 1st June 2019, and applied to all tenancies signed on or after that date.

However, included in the legislation was the provision that the requirements would be rolled out to ALL tenancies on 1st June 2020 – something that has now taken place.

Regardless of what is contained in your current tenancy agreement (and if created in the last 12 months, it should really be “fee ban” compliant, from last Monday (1st June 2020) landlords or agents are not allowed to charge tenants for anything other than the following:

Rent (but this must be kept at the same level, or higher, throughout the duration of the fixed term. If it is decreased, the additional amount during the months prior to the increase will be seen as a prohibited payment.

Security Deposit (This is now capped at 5 weeks rent, and not a penny over, regardless of circumstances i.e. pets. Deposit calculators are widely available online, and the the following calculation must be used: (Monthly rent x 12/52 x 5). This cap is increased to six weeks rent for properties with an annual rent of over £50,000.

Holding Deposit (there are many regulations around the acceptance of a holding deposit, which I may need to go into further detail on a separate post. However the main points are that it is capped at 1 weeks rent, and it must be returned to the tenant save for four explicitly stated sets of circumstances .)

Change of tenancy Charge (a charge can be made when the tenant requests a change to the tenancy, such as the addition of a permitted occupier, or the change of a rent date. This charge is capped at £50 including VAT).

Late Rent Charge (this is one is pretty laughable and likely not worth even thinking about. You cannot charge for late rents, chasing letters, visits. The only charge you can make is an interest charge of 3% over the BOE base rate, after the rent is more than 14 days late).

Replacement keys/security device (Self explanatory, but you can only charge the cost of the replacement key or device, not for your time.)

Early Termination (If the tenant would like to leave a contract early, you can charge to cover your costs. However, if you are not using an agent, you are not permitted to charge them for re-referencing the new replacement tenants. They are also expected to pay rent and utilities up until the day before a replacement tenant moves in).

Breach of tenancy (If the tenant breaches any part of the agreement, you can seek to recover your costs from them, either directly or through the security deposit).

If you would like help or advice on anything relating to the Tenant Fee Ban/Tenant Fees Act 2019, please do not hesitate to get in touch.

It has just been announced today, by the Chancellor Rishi Sunak, that the threshold for stamp duty land tax will temporarily be raised to £500,000 from today until 31 March 2021.

This means that when buying a property up to and including £499,999 you will not pay any stamp duty, regardless of whether you are a first time buyer or not.

There are no changes to properties above £500,000 – you would still pay stamp duty of any portion above the new temporary threshold.

This is great news for buy to let investors and it will hopefully mean a surge in investment into the sector and a boost to the rebound in the housing market.

Overall, it is projected that 89% of sales will be exempt with an overall saving of £3.8 billion.

Flats, Houses & Homes to rent in Bristol - South West Relo

SWR can help you find a property that is best for you - whether you are looking for Homes, houses, or flats to rent in Bristol.

For flats, houses &  homes to rent, Bristol has a great selection. SWR is a well-established, professional letting agency with the most extensive selection of quality properties to rent in Bristol.

Finding a place to live can be a stressful task, especially in a big city like Bristol. SWR can help you find out which property is the best for you whether you are looking for houses to rent Bristol or flats to rent Bristol we are here to offer the most comprehensive and personalised and “stress-free” services. SWR is here to listen to your requirements and we take pride in providing outstanding customer service. We want to help you find your next home and we’ll guide you through the process so that the experience is enjoyable and exciting.