The Housing and Planning Act, passed in May of 2016, changed many things in the housing market. This post focuses on the changes that were made that will impact landlords, and what landlords can expect moving forward. Note, the Housing and Planning Act only applies within England.
When laws change, it can be hard to keep up with the new rules. Often times, there is concern for negative changes or more hassle. However, in most cases the new rules streamline processes for landlords.
How will the new laws make it safer for landlords?
Many letting agencies are already insured through the SAFEagent scheme, but it may become mandatory for all agencies to carry a kind of client protection insurance as the new rules are implemented.
This means that an agency will not legally be able to take off with rent money collected in the event of the agency going out of business, or through theft.
How will the new laws make things easier for landlords?
There have been changes made, particularly in how a landlord must handle abandoned properties. Landlords must take legal precautions before re-letting the property, so that the former tenant cannot claim damages or that their abandoned items were stolen by the landlord.
Before the act was passed, the landlord would have to take these precautions through a lengthy court process. This came in the form of a possession order that had to be enforced through the court.
Now, as the new rules come into effect, a landlord will be able to avoid the court by issuing a series of warning letters to the former tenant stating that the property is about to be taken over by the landlord. If the tenant does not respond to the letters then it is within the landlord’s power to take over the property once again. Of course, the landlord will have to give the tenant time to respond to the letters.
With the new process, there is the possibility for the tenant to apply to be reinstated within six months of the end of the tenancy if they provide good reason for not responding to the landlord’s warning. Though the new procedure will cut out the necessity for the court process in many cases, it is still advised that landlords give ample time to the process of repossessing an abandoned property, because of the tenant’s right to appeal to the court to be reinstated within that six-month window.
The new Housing and Planning Act will be bad news for rogue landlords. Landlords who rent out unsuitable accommodations and take advantage of their tenants will be facing harsher consequences.
One consequence will be the issuing of banning orders. A banning order will prevent the landlord or agency from renting properties within England. If a landlord or agency does not honor the banning order, they will be subject to fines or even imprisonment.
Another consequence will be that rogue landlords will be put into a public database. This database will help warn tenants of such landlords.
What does all of this mean?
Tenants will be safer from rogue landlords, which will help the landlords with suitable properties and procedures. Landlords will be more protected from bad agencies, and from unnecessary court fees, saving money and time. So, if you are a law-abiding landlord, this act will likely help you.