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 making sure things are going nicely, it’s easy to overlook things coming your way and keeping 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 the 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 where 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 tenancy deposit, rent, or funds to cover property maintenance, this scheme gives landlords an added protection on the 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 will no longer be able to deduct their mortgage costs from their rental income. Following this, landlords are given tax credit worth 20% of the mortgage interest cost to offset against 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 tenancies 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 legislations laws to add to obligatory electrical safety checks, 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.