New legislation, tax changes and licensing schemes are some of the many changes affecting landlords in recent months. There has been a lot of publicity about these changes, because many of the new regulations have not found favour with landlords, whilst falling foul of some could lead to huge fines or a criminal record. However, a survey of about 4,000 buy-to-let investors has shown many are unaware of their obligations.
The Landlord Knowledge Survey conducted by online letting agency, Urban, has revealed glaring gaps in landlords’ knowledge and highlights the need for letting agents or property managers to help buy-to-let investors keep on the right side of rules and regulations in the complicated private rental sector. The survey showed:
– about 20% did not know about existing Energy Performance Certificate regulations, giving properties an energy-efficient rating. Each property must have an EPC before it can be marketed for sale or rent.
– 17% did not know about the Minimum Energy Efficiency Standards regulation changes due to come into play next year. This means that if the EPC of a property is below E, works will have to be carried out, so it has a rating of at least E. Landlords who do not comply could be fined. Urban’s research also suggests that about 17% of private rental properties could be unfit by 2018 because of the Energy Efficiency Regulations, making it unlawful for new tenancy agreements to be agreed on properties with an EPC rating below E, from April 1.
– Just 34% of landlords carry out adequate tests to the smoke and CO2 alarms in their rental properties.
– 38% were unaware that their tenants have the right to refuse them access to their property, even if they have given notice.
– 90% made mistakes when asked about their responsibilities.
– about one in three were unsure of gas safety requirements.
– about half knew about the tax changes regarding mortgage interest relief coming into effect in April.
– 20% of landlords thought they had until April 2017 to comply with the right to rent regulations, while 3% thought they had until 2018. In fact, the scheme went live across England on February 1 last year. Right to rent requires landlords to carry out checks to make sure their tenants have the legal right to be in the country. Failure to comply can carry penalties of up to £3,000 per tenant.
Urban co-founder, Adam Male, said he knew UK landlords were struggling to keep on top of the changes to legislation in the rental market. Certainly, landlords who use a registered agency should not be at risk of falling foul of the law, because their agents will be dealing with all contracts and other administrative issues. They can use software and apps to ensure they keep on top of check-ins, check-outs, contract renewals, property inspections, EPC certificates, annual gas safety checks and other issues relating to the rental property. With all these changes and potentially huge fines, it is imperative for landlords to make sure they stay above the law.