• Neighbourhood Properties

22 things Landlords need to know in 2022

This post sets out to highlight the main points that landlords in

Wales need to consider in 2022 to ensure they are compliant to

rent out their property. It’s our aim to help landlords navigate

the buy to let landscape and to avoid any pitfalls which could

result in the risk of being unable to remove a tenant from your property should issues occur. With the new Renting Homes (Wales) Act 2016 coming into

force on the 15th July 2022, there are new regulations coming

into effect that all landlords need to be aware of and act on in

due course. There are updates to the system constantly and it

is essential to be on top of your game, so you don't get caught out.


The legislation is geared towards protecting tenant’s rights,

and should you not follow the correct process right from the

start, you could find yourself in a tricky situation later down the line.


We thought it would be helpful to highlight the main points that landlords need to consider in 2022.



Registering with Rent Smart Wales (Part 1 Housing (Wales) Act 2014)

On 23 November 2015, it became a legal requirement for all landlords with privately rented property on a domestic tenancy in Wales to register with Rent Smart Wales. Joint landlords are able to register as one registration, but one landlord will need to act as the ‘lead’ landlord for the purpose of the register.


Registration should be completed by the landlord themselves and should not be outsourced to a letting agency on the landlord’s behalf, this is because the person completing the registration will need to confirm that the information being provided on the registration is true, accurate and complete. They are personally responsible for the information provided on the register. However, Power of Attorney and Executors are permitted to complete the registration on behalf of a landlord.


There is a fee for the registration. (Prices as of 2022 and could be subject to change)

New and revoked registrations: £45 online fee, £84 paper fee.

Renewing registrations: £36 online fee, £67.20 paper fee.


The registration is valid for 5 years. In order to take advantage of the renewal fee discount, a landlord must apply for the registration renewal within 84 days before the registration expires.

More information can be found, and registration can be done by visiting: https://www.rentsmart.gov.wales/en/landlord/landlord-registration/ Landlord Licenses Rent Smart Wales (Part 1 Housing (Wales) Act 2014)

It is also a legal requirement in Wales that any landlords or agents who undertake lettings and property management of rental properties have a Rent Smart Wales licence.


The Housing (Wales Act 2014 requires that anyone letting and managing domestic tenancies are suitable to do so and are appropriately trained in their rights and obligations.


Any landlords who do not employ an agent and undertake lettings and property management activities themselves will need to be licensed to do so with Rent Smart Wales.


There are two types of licenses available:


Landlord License - Once a landlord has completed their registration with Rent Smart Wales as set out above, if they intent to conduct the letting and management of properties they own they will need to apply for a landlord license and complete the necessary landlord training. If a landlord is not involved in setting up tenancies and managing their rental properties and do not require a license, they will need to appoint a licensed agent.


Agency License


An agent completing letting and/or management of properties on behalf of a landlord will need to apply for an agent licence and complete the approved agent training.


Licences last for 5 years from the date of issue. There are fees associated with obtaining a license, the costs along with all other information relating to Rent Smart Wales. Licences can be found at: https://www.rentsmart.gov.wales/en/licensing/

Source of information https://www.rentsmart.gov.wales



GDPR:

The General Data Protection Regulation (EU) 2016/679 (GDPR) is a regulation in EU law on data protection and privacy in the European Union (EU) and the European Economic Area (EEA).

Since the end of the Brexit transition period on 31 December 2020, GDPR will be retained in domestic law and new regime is known as the ‘UK GDPR’

UK GDPR deals with data protection and is the legal control over the processing of and access to personal information stored.

The Information Commissioner’s Office (ICO) is the appointed authority to uphold information rights and data privacy.


As part of the lettings process, landlords collect and handle tenants/prospective tenant’s personal data and therefore are classified as data controllers. Data controllers have the responsibility to ensure that tenant information is kept safe and secure and is only used for the purpose which conforms to the lawful basis.


The typical data that landlords may collect when letting a property are:


Tenant’s contact details, including telephone number, email address, previous/forwarding postal address.

Proof of ID such as passport, driving licence, NI number etc. Bank details for direct debits. Employment information taken for referencing purposes. Financial information/credit history taken for referencing purposes. Emergency contact information for next of kin/guarantors and their respective personal data. Special category data which refers to personal data that may reveal racial or ethic origin, sexual orientation, political opinions, religious beliefs, trade union membership, biometric data, health and well-being data.


Methods of storing data that landlords will need to consider the security of include:

Computers, mobile and tablet devices, hard copy filing, and cloud storage.


As a landlord you should be aware of your full obligations under UK GDPR, more information can be found at www.ICO.org

Landlord Insurance:

Your rental property portfolio is an investment you want to protect. There can be risks connected with rental properties and without the right cover, unexpected events could leave you seriously out of pocket. Therefore, it is advised to talk to a number of insurance providers to make sure you find the right cover for you and to always read the fine print so you are never caught out should anything ever happen.

Landlord insurance is more than a buildings insurance and can also protect your rental income and covers your liabilities if your tenants are injured on your property and you are deemed to be at fault. You can boost your cover with add-ons protecting you from lost rent if tenants decide to move out, as well as accidental damage and periods where your property is empty. You can also include contents cover if your rental property is furnished to protect any white goods, furniture and other items left in the home for the duration of the tenancy.


Logging Deposit with Protection Scheme or Deposit Replacement Schemes (disputes, end process)


Landlords are now legally required to safeguard their tenants' deposits with one of three government-backed deposit protection schemes: Deposit Protection Service, MyDeposits and Tenancy Deposit Scheme.

The deposit needs to be registered with one of the above schemes within 30 days of receiving the payment this will either be done by the landlord if you manage the property yourself or by the managing agent.


All of these schemes hold the tenant's deposit throughout the period of the tenancy, and administer the repayment when they leave. They also manage any deposit disputes, for example there is evidence of damage to the property that has been caused by the tenant or rent arrears outstanding and therefore the cost to rectify this will be deducted from the deposit they paid at the start of their tenancy.


The deposit or bond is usually equivalent to a month’s rent but this can be altered such as some landlords wish to take an extra £100.00 as a deposit if the tenant wishes to have a pet living at the property. This is all agreed and paid before the start of the tenancy.




Gas Safety Checks:

The Gas Safety (Installation and Use) Regulations 1998 (GSIUR) outline your duties as a landlord to make sure all gas appliances, fittings, chimneys and flues are safe and working efficiently.


If you’re letting out a property with gas appliances installed, a gas safety check needs to be carried out by a Gas Safe registered engineer annually, for the duration of the tenancy. If the gas appliances in the home are unsafe, you could be at risk of fire, explosion or carbon monoxide poisoning.


Once the gas safety check has been carried out, the engineer will issue a gas safety certificate. This should be kept safe and will highlight any potential advisories and is proof that the property is safe to reside in. A copy will be issued to the landlord, tenant and letting agency (if required) with the date of expiry and when the next gas safety check is due. By law, a copy of your Landlord Gas Safety Record should be given to your current tenants within 28 days of the gas safety check - and for new tenants, you’ll need to provide this at the start of their tenancy.


To check if the gas engineer you wish to use is gas safe registered, you can confirm this on the public register below by inputting their details:

https://www.gassaferegister.co.uk/


EICR:

Electrical Installation Condition Report or EICR is a formal document that is produced following an assessment of the electrical installation within a property. It must be carried out by an experienced qualified electrician or approved contractor.


EICR’s are not currently a legal requirement for single-let properties in Wales, but do apply to HMOs (house of multiple occupation). In this case, a copy of the latest report must be provided to new and current tenants. If the condition of all of these is deemed 'satisfactory', the report is valid for five years and can therefore be used for future tenancies until the five years expire.


It has now been confirmed by Rent Smart Wales that new regulations are coming into force on the 15th of July 2022 where an EICR will now become a legal requirement for all rental properties, alongside the gas safety certificates and will need to be renewed every five years. This is unless the requirements of the previous Electrical Installation Condition Report (EICR) indicate a shorter inspection and testing interval. Failure to comply will mean that the dwelling is considered unfit for human habitation and the landlord could face prosecution. The current EICR must be made available to new tenants within seven days of the occupation date and within seven days of the latest inspection date going forward.


EPC:

An EPC or energy performance certificate, gives detailed information about your property’s energy efficiency and carbon dioxide emissions, this must be produced by an accredited energy assessor.


Since October 2008, rental properties in England and Wales have required an Energy Performance Certificate (EPC). On April 1st 2018, the Minimum Energy Efficiency Standards (MEES) came into force. This required all properties being let or sold in England and Wales to have a minimum EPC rating of 'E' or above. Therefore, if your property doesn’t have a valid EPC rating of ‘E’ or above, it cannot be legally let. The penalty for not having a valid EPC on your rental property currently stands at £5,000 plus.


In 2021, it was announced that changes to the Minimum Energy Efficiency Standards will come into affect for landlords and rentals from 2025. The government have proposed that all rental properties will need an EPC rating of ‘C’ or above by 2025. These new regulations will be introduced for new tenancies first, followed by all tenancies from 2028. This is a result of the governments pledge for the UK to be carbon net-zero by 2050 and the fine for not having a valid EPC on your rental property will increase from £5,000 to £30,000 from 2025.


Legionnaires disease test:

Legionnaires disease testing is a procedure carried out on water supplies to your rental property to rule out any bacteria that can cause Legionnaires disease by consuming the water.


This test can cost around £45.00 to carry out, where you are sent a kit to fill up bottles and send off for analysis, once this has been assessed a certificate and report is provided that gives you peace of mind when renting out a property that all is well with the water supply and flags up any potential causes for concern. The legionnaires disease test is not required by law but is seen as an extra precaution to take for your tenants wellbeing.


Smoke alarms requirements

Landlords are responsible for fitting smoke alarms before their tenants move in. A smoke alarm is required to be present on each floor of the property that is used as living accommodation. This will usually mean a cost of £15 - £30 for the average rental property.


Tenants are responsible for making sure that the smoke alarms are tested and working efficiently for the duration of their tenancy and should replace batteries when required. If a smoke alarm stops working they need to contact the landlord or managing agent to arrange a replacement alarm. They should also allow access to the home to fit or repair smoke alarms.


Carbon monoxide alarms are also advised to be fitted near the boiler in your rental properties. This is not currently required by law but from the 15th July 2022 the Renting Homes (Wales) Act 2016 is going to be introduced to tackle the threat of carbon monoxide poisoning and will require rental properties to have a carbon monoxide alarm fitted near any gas boiler/appliances as well as smoke alarms on every floor.


The new legislation states that a property will be deemed unfit for human habitation if there isn’t a carbon monoxide or smoke alarm installed in a room which requires one, and rent will not be payable by the tenant for the unfit period.




Advertising Costs

When marketing your rental property through a letting agent, the cost of advertising will be included in your set up fee. Where the property will be advertised through the letting agents website, property websites such as Zoopla and On the Market and through the letting agents social media.

If you are managing the rental property yourself as a landlord, this cost will need to be covered by yourself. Different property search websites have different packages and memberships that you can join where you can market a certain number of properties in a certain length of time for a certain price.


Thanks to the power of social media however, you may feel that you do not need to market on a property search site and would just post about it on Facebook and Instagram etc. but remember not everyone on your social media platform is your target audience whilst advertising open a property website - you are promoting your property to people who are actively looking for a property and have matched the search criteria. Advertising this way can also make the experience less personal, instead of people you may know contacting you through your social media, people will have to contact you through the website and therefore if you wish to remain anonymous, this may be the best method.


Referencing

When finding a new tenant for your rental property, we always advise that they are referenced before agreeing to enter into a tenancy agreement. There are many referencing companies that will conduct this for you for a small fee who will obtain all the information needed to draw up a final report for your consideration.


There are different levels of referencing but we always advise to proceed with a full reference so you have all of the information needed to make a final decision. The checks would include proof of ID and proof of current address, a full credit report, a current employer reference confirming their employment status, their income, how long they have worked at the premises for and if they are permanently employed, casual or contract; a previous landlord reference confirming how long they have rented for, whether their rent was paid on time and if the landlord would let to them again. This gives you relevant information for you to come to a decision on whether they would be a suitable tenant or not and if you wish to proceed with their application.


Many if not all rent guarantee insurance policies also require your tenant to be referenced and deemed ‘acceptable’ in order to provide cover.


Guarantors

During the referencing process on your potential tenant, there may be some factors that cause the referencing report to be concluded as ‘Accept with guarantor’. This is where a slight risk has been highlighted during the referencing and therefore a guarantor will be required as an assurance for the landlord.


A guarantor is someone who is also willing to go through the referencing process and understands that they are responsible for any outstanding rent, should the tenant not be able to pay for any reason for the duration of the tenancy. This acts as a safeguard for you as landlord and gives you peace of mind should any issues arise.


An example of this would be if the potential tenant going through referencing has been confirmed as permanently employed, earns enough to cover the rent and they have received a good reference from their previous landlord but their credit score is slightly lower than average. The referencing team would then advise that this would be accepted with a guarantor in place to minimise any risk.


Tenancy agreements/occupation contracts and renewals:

Most tenancy agreements start on a fixed term contract of either 6/12 months. This can automatically turn into a rolling contract once the date of the tenancy expires or usually a month before this date a landlord and tenant can agree to renew the tenancy for another fixed term amount.


If the landlords and tenants agree to have another fixed term contract, a new tenancy agreement will be issued with the new dates and both the landlord or letting agent and the tenant will sign this and all terms in this new agreement will be in action. If using a letting agent, an administration cost may be incurred by the letting agent to draw up the new agreement and issue this.


However if both landlord and tenant decide to let the tenancy go on to a rolling contract, where the tenancy simply rolls on month by month, the initial tenancy agreement that was signed will still be in motion and all terms included in this will be in place until the tenancy ends or notice has been given.


From the 15th July 2022 the implementation of the Renting Homes (Wales) Act 2016 will come into effect meaning all assured shorthold tenancy agreements will be abolished to be replaced by “occupation contracts". References to a “tenant” will no longer apply and will instead be known as “contract-holders”. It will be a legal requirement to have a written agreement. There will be certain statutory terms of the agreement which cannot be changed (known as fundamental terms)


Move-in Inventory

A move-in inventory report is carried out just before the date that the tenants move in and records the condition of the property and has photo evidence of this. Photos are taken of each feature of each room from flooring, ceiling, walls to furniture, fireplaces plug sockets and any notes are added to this if required.


Meter readings are also taken whilst the inventory is being done and this will be provided to utility providers. We always recommend tenants and the person who carries out the inventory report (whether this is the landlord or managing agent) to check through the report and both sign and date this, to confirm they are happy with everything the report contains and it is a true likeness of the properties current condition.


This is always a huge benefit for landlords and tenants to have as a mutual agreement of the condition of the property and it’s contents that can then be used to work from at the end of the tenancy when the tenants move out to ensure apart from general wear and tear, the property is left in similar repair. From July 2022, there may be a requirement for every new tenancy to have an inventory report conducted on the property before the tenants move in and for both them and the agent/landlord to sign and date and have a copy. This is yet to be confirmed by Rent Smart Wales but we provide updated information on this once we have it.


Inspections/notice to inspect


Mid-term inspections are always advised to be carried out every few months or mid way point of the fixed term tenancy. This is to ensure all is well at the property and gives the landlord and tenant an opportunity to point out any potential issues that may occur. Photographs are are also advised to be taken during the visit so that these can be compared to the inventory report that was carried out before the tenant has moved in. These images can also be used in comparison with the following mid-term inspection or check-out report if needed.


If there is damage to the property this is a great way to prove what time frame this has occurred due to the photo evidence and builds a strong case when debating the return of the deposit.


As a landlord or letting agent you must give at least 24 hours notice to the tenant that you will be visiting the property and carrying out the inspection and to confirm if they wish to be present or not during the visit. We would always recommend putting this in writing whether via email or a letter so you have proof that the tenant has been notified of the visit.


Tenants calling direct if not fully managed


When managing your own property, you are the main contact for your tenants should they have any queries for the duration of the tenancy. This could include unsociable hours especially if there is a maintenance emergency such as a leak.


You will also have to liaise with your tenants directly should you need to hand them a section 21 notice, arrange a gas safety check, mid-term inspection or chase any late payments on the rent and more. It really is a full time job!


This is the bonus of using a letting agent to manage your rental property. They then become the main point of contact for your tenant regarding any query when it comes to your rental property, including out of hours emergencies. It takes the weight off your shoulders to know that everything is in hand and there is always someone to contact, should you not be available.


Dealing with Damage to the property


Sometimes damage to the property is no ones fault and can be caused due to external matters such as floods, storms etc. if you have insurance in place this may be covered by this but if not, as the landlord and the owner of the property. It is still your responsibility to rectify these issues to ensure your tenant resides in a suitable condition.


However, damage caused by the tenants whether by accidental or deliberately would be at the cost of the tenant to rectify. Again, this is why we stress having mid-term inspections and inventories are alway a good idea as evidence of this is clear to see and diffuses any disputes quickly. Without this photo evidence, things could become very difficult with it becoming one persons word against the other.




Rental Increases

As a private landlord, the rent charged to your tenant should be at a ‘market rent’ pricing point, which is usually advised by a letting agent at the time of letting. These values are affected by availability and cost of other rental properties in the area. Therefore, should you wish, you can increase the rent as long as it sits at market value and the tenants are in a rolling contract or in readiness for their contract renewal.


If your tenants are in a fixed term contract, you cannot request a rental increase until this term expires. You or your letting agent will then need to issue your tenants with a Section 13, notifying them of the changes to their rent and the date this will be effective from. You must give your tenants at least one month’s notice of the changes to their rent.


Arrears/Rent Loss


Tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. But sometimes unforeseen circumstances can occur that doesn’t enable them to pay their rent on time and therefore become in rent arrears. If you mage your own property portfolio you will need to contact your tenant directly in order to chase rent payments, however if you use a letting agent to manage your property they will do this for you and keep you updated on the situation.


Every circumstance is different, and an early conversation between landlord and tenant is advised to understand why the tenant is struggling to pay their rent. Some landlords can decide to agree to a payment plan in order to help the tenants pay back the rent they owe overtime, whilst still paying their current rent on time or agree a plan to pay off arrears at a later date.


However, if the rent arrears become more substantial and if disputes over rent or other matters persist, landlords and tenants are encouraged to consider mediation. Mediation allows an independent third-party to assist those involved to try to reach a mutually acceptable agreement to resolve their dispute and settle how any arrears will be paid and if possession of the property is required. This can be your letting agent if a fully managed property.


Some landlords insurance policies can cover you if your tenant is in arrears and covers any rent loss but this does depend on what policy you have chosen to take out.


Section 21


When you have entered into an assured short-hold tenancy with your tenant, you may recover possession of the property from them by using the notice procedure set out in Section 21 of the Housing Act 1988. It is not available to any other form of tenancy agreement.

For most landlords, serving a Section 21 notice will be the most common way for them to begin the process of ending a tenancy. This route to possession is simpler than serving a Section 8 notice as it does not require you attend a court hearing. It also does not require you to provide a reason why you are seeking possession. However there are a number of procedural requirements that you must have complied with if you wish to use this type of notice to regain possession of a property.


In July 2022 with the implementation of the Renting Homes (Wales) Act 2016 (RHWA) in Wales, all section 21 notices will be abolished and replaced with similar types of notice. The equivalent to the section 21 notice will be a minimum six months notice if there are no breaches to the contract. This cannot be served until after six months from when the contract-holder moves in (essentially guaranteeing a contract-holder the right to a minimum of 1 year initial term). Where the contract-holder has breached the occupation contract the minimum notice period that must be given is one month. This notice period can be shorter where it relates to a breach of the anti-social behaviour or the serious rent arrears terms.


A landlord will not be able to give such a notice unless they have complied with certain obligations, including registration and licensing with Rent Smart Wales and deposit protection rules.


Sources of information: https://www.nrla.org.uk and https://www.landlordsguild.com/renting-homes-wales-act-starts-july-2022/ and https://gov.wales/landlords-housing-law-changing-renting-homes


Section 8

A Section 8 notice is available where you have granted an assured or assured short-hold tenancy and one of the grounds for possession apply. In practice, most landlords only use this notice where the tenant is in at least two months of rent arrears and the fixed term of the tenancy has still got some time to run.


According to the The Housing Act 1988 grounds for a section 8 notice are as follows:


- mandatory; the tenant will definitely be ordered to leave if the landlord can prove the ground exists, and

- discretionary; the judge has discretion on whether to grant possession


As with the section 21 notice all section 8's will be abolished in July 2022 with the implementation of the Renting Homes (Wales) Act 2016 (RHWA) in Wales and replaced with similar notices.


Source of information: https://www.nrla.org.uk and https://www.landlordsguild.com/renting-homes-wales-act-starts-july-2022/


Bailiff cost

When the court issues a warrant, it will send your tenants an eviction notice with the date they must leave your property by. A bailiff can evict your tenants if they do not leave by this date.

You can apply for a warrant of possession up to 6 years after a possession order is made.

Bailiffs (also called 'enforcement agents') can charge fees for collecting any debt. They can charge for writing to and visiting the person in debt as well as some of their expenses, for example court fees.


Stage 3 Bailiffs to Evict a Tenant: Average Cost £348 (county court) or £1,219 (High Court) In the UK, the average cost of getting bailiffs to evict your tenant is £348 if you use county court and £1,219 if you use the High Court.


Legislations preventing bailiff enforcement of evictions due to the Covid-19 pandemic have now expired. This measure was in place from 17 November 2020 until 31 May 2021. Orders can now be enforced where the landlord has a valid warrant of possession. However, bailiffs must provide 14 days’ notice of an eviction and have been asked not to carry out an eviction if they are made aware that anyone living in the property has COVID-19 symptoms or is self-isolating.



We hope you have found this information helpful and if you have any feedback or wish to discuss any of the above in more detail, please feel free to get in touch with the team on

01685 375511 or email hello@neighbourhood.properties






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