June 2019 - Howsy

Smoke Alarms and Carbon Monoxide Detectors in Rental Properties

by Asif AliPosted on 25 June 2019

Putting solid safety measures in place is good for everyone. Both landlords and tenants can sleep well at night knowing there are working safety alarms in their property that will warn of any danger.

There’s no doubt about it; working alarms save lives. If there was a fire in your home, it’s said you’re at least four times more likely to die if there’s no working smoke alarm.

Since the Smoke and Carbon Monoxide Alarm (England) Regulations 2015 came into force on 1 October 2015, it’s a legal requirement for private landlords in England to fit smoke and carbon monoxide alarms. This means privately rented properties are now in line with building regulations that require newly-built homes to have hard-wired smoke alarms fitted.

Are smoke and carbon monoxide alarms the landlord’s responsibility?

Yes, and no. Yes, the landlord has to make sure the alarms are working on the first day of the tenancy (even if the tenant decides to move in after that date). After that, it’s the responsibility of the tenants to check – ideally every month – they’re working properly.

Is it illegal not to have a smoke and carbon monoxide alarms?

Yes, it is.

Are there penalties?

Fail to install smoke alarms and carbon monoxide detectors and landlords in England could face up to a £5,000 civil penalty, imposed by the local housing authority. If they disagree with the penalty charge notice, they can ask the relevant local authority to review it.

At worst, landlords may go to prison for breaking the law. A landmark British case in 2018 saw a landlord jailed for a year following the death of two young brothers from a fire in a Huddersfield home that his property company managed.

The West Yorkshire Police Detective Superintendent dealing with the tragedy said: “We hope that this case is a stark reminder to landlords and letting agents to treat their responsibilities seriously and they have an obligation to ensure that all properties are fully equipped with all adequate safety measures to ensure the safety of their tenants.”

Where should the alarms be placed?

The regulations don’t state where the alarms should be go, just that at least one smoke alarm should be on every storey, and a carbon monoxide alarm in every room with a solid fuel-burning appliance in it, such as an open fire. A purely decorative fireplace doesn’t count.

However, as gas appliances can emit carbon monoxide, we encourage landlords to ensure that working carbon monoxide alarms are installed in any room with a gas appliance in it.

In general, smoke alarms are best fixed to the ceiling in a hallway or a landing, and carbon monoxide alarms at head height, either on a wall or shelf, about one to three metres from a potential source of carbon monoxide.

London Fire Brigade strongly recommend an additional heat detector in the kitchen.Your local fire and rescue authority may be able to offer extra advice, or you can download fire safety information from www.gov.uk/firekills.

Do rental properties need hard-wired smoke alarms?

The regulations don’t specify what type of alarm should be fitted. That said, Howsy believes the best option would be a hard-wired type. If opting for stand-alone ones, we recommended getting the models with a 10-year battery life.

If the occupier shares the accommodation with the landlord or landlord’s family, the 2015 regulations don’t apply.

Tenancy Deposit Schemes – What Landlords need to know

by Asif AliPosted on 18 June 2019

Landlords and letting agents that rent a private property on an assured shorthold tenancy have to protect their tenants’ deposits in a government-backed tenancy deposit scheme. It’s the law, and it protects you too.

What is a tenancy deposit protection scheme (TDP)?

A tenancy deposit protection scheme has two main roles: to protect deposits in an authorised scheme, and to help resolve disputes about deposits.

What are the schemes I can use?

In England and Wales a deposit can be registered with one of these schemes:

They’re quick to join if you opt for what’s called custodial protection, where the deposit is held by the scheme provider for the duration of the tenancy. The other option is insured protection, where the landlord and the agent holds the deposit and the TDP scheme to protect it.

And while there are other schemes you could use, only the three above are protected in law. Other schemes won’t give the same level of protection for either landlords or tenants.

Does a landlord have to put deposit in a scheme?

Yes; as of 1 June 2019 it’s a legal requirement. You have to use a TDP even if a deposit is paid by someone other than the tenant, such as their parents. And you have to pay it in within 30 days of receiving it. Within that time, you must also tell your tenant:

the address of the rental property
how much deposit they’ve paid
how their deposit is protected
the name and contact details of the TDP scheme and its dispute resolution service
your (or the letting agency’s) name and contact details
the name and contact details of any third party that’s paid the deposit
why you would keep some or all of the deposit
how to apply to get the deposit back
what to do if they can’t get hold of you at the end of the tenancy
what to do if there’s a dispute over the deposit.

You don’t need an inventory to join a TDP but it can be helpful to have one anyway. It could help resolve any dispute that may arise at the end of a tenancy.

How can a tenant check if their deposit has been secured?

By visiting the website of the scheme their deposit is protected with and entering a few details, such as a code (provided by the landlord or letting agent), postcode, surname and/or the date the tenancy started. The details asked for differ from scheme to scheme but are all straightforward.

What are the benefits for landlords?

It allows them to have money as security should a tenant break the terms of the tenancy agreement.

What are the benefits for tenants?

They’ll get their deposit money back if, at the end of the tenancy, they:

meet the terms of their tenancy agreement
haven’t damaged the property
paid the rent and all bills in full.

Landlords must return a deposit within 10 days of agreeing with the tenant(s) how much they’ll get back.

How much deposit can a landlord ask for?

Landlords in England cannot legally ask for more than the equivalent of five weeks’ rent for new and renewed tenancies — or six weeks if the annual rent is at least £50,000.

What happens if you don’t protect a deposit?

A tenant can apply to the local county court if a landlord hasn’t used a TDP scheme when they should have.

Penalties include:

repaying the deposit in full to the tenant
paying it into a TDP scheme’s bank account within 14 days
a fine between one and three times the deposit amount, payable to the tenant
you may also lose the ability to get a court order to regain possession of the property (under a Section 21 notice of the Housing Act 1988). The landlord can only serve a Section 21 eviction notice after the deposit has been repaid, or after any court case about the deposit is over.

The court can decide that the tenant won’t have to leave the property when the tenancy ends.

What can a landlord deduct from a deposit?

The landlord or agent can take a payment from the deposit if:

both landlord and tenant have agreed
the court has ordered the deposit to be paid.

How are deposit disputes handled?

If there’s a disagreement about how much money should be given back, your tenancy deposit protection scheme offers a free dispute resolution service.

Your not obliged to use the service, but if you do, both tenant and landlord have to agree to it. You’ll both be asked to provide evidence, and the decision made about a deposit will be final. There’ll be no right to appeal. The entire process can be handled completely online. The alternative? Go through the courts.On a final note, the law requires your TDP scheme to guarantee only that the tenant receives the amount they’re entitled to. No more, no less.

Howsy uses MyDeposits.co.uk, a scheme authorised by the British Government that protects tenants’ money across England and Wales.

Tenant Fee Ban – What Does it Mean for Landlords?

by Asif AliPosted on 10 June 2019

The new Tenant Fee Ban now effects all residential landlords in England. Whether you know much about it or not, landlords can’t afford to ignore the new legislation. Those who do risk facing a big fine. Here’s what you need to know…

What is the Tenant Fee Ban?

The Tenants Fee Act 2019 came into effect 1 June, making it now illegal to charge unfair additional fees — such as an admin fee — to tenants when they take on a new property, or renew a contract.

The ban automatically applies to all new contracts signed after 1 June 2019. From 1 June 2020 it will apply to all other applicable tenancy contracts too.

Why has the Tenant Fee Ban been introduced?

To make renting fairer for private tenants who for too long were being charged unfair fees each time they went to rent a new property.

Private renters in England — including families with dependent children — have been paying £13 million a month in letting fees, says Citizens Advice. One in seven tenants paid over £700, while one shelled out over £2000 for the privilege of moving into one property!

The old ‘system’ was especially harsh on those forced to look for a new place because their landlord was selling up. In other words, it wasn’t their choice to move.

When landlords use a traditional letting agent to let out their property, the agent would charge to cover the purported costs of credit checks, referencing and drawing up the tenancy agreement, for example. Charges could also include a mandatory inventory fee, contract renewal fee, and an ‘admin fee’.

With so many people moving home every year, such fees could put a huge strain of families and individuals. Research by the Citizens’ Advice Bureau reveals that 42% of renters had to borrow money just to pay their tenant fees.

What does the tenant fee ban mean for landlords?

The government estimates that in its first year it could cost landlords up to £83m, and letting agents £157m.

What’s certain is that landlords cannot now lawfully charge:

Viewing fees
All fees associated with setting up a tenancy, including referencing, inventory and credit checks
Check-out fees
Third party fees
Gardening services.

You can, however, charge for:

Rent
A refundable tenancy deposit (maximum five weeks’ rent, or six if the annual is £50,000 or more)
A holding deposit (capped at one week’s rent)
Replacing lost keys
Any changes the tenant asks to be made to the contract (capped at £50)
Bills, such as council tax, water, broadband, TV licence
Ending the contract early
Late rent payments (after 14 days, and only if written in the contract)
Cleaning fees in extreme circumstances.

Tenant fees account for about 19% of a letting agent’s income, with some agencies reporting as much as 30% of their annual income from tenant fees alone. Agents will look to recover this by increasing the fees they charge the landlords.

While many have argued that the landlord will in turn increase the rent they charge, there’s evidence this may not happen. The ban was introduced in Scotland in 2012, yet only 2% of Scottish landlords were able to put up their rents because of the fee ban. Which means the hit is to be absorbed between landlords and letting agents.

Experts agree that the most likely outcomes for landlords now are:

Face longer void periods because they increased rents to cover costs
Cut back on making improvements, which will see them unable to raise the rent or attract better-quality tenants
Decide to ‘self-manage’ their properties rather than use an agent, which will see many landlords struggling to stay abreast of property rules.

In Wales, agents and landlords will be banned from charging for viewings, signing a contract or renewing a tenancy from September. Northern Ireland have yet to announce a ban on tenant fees.

What is the risk of non-compliance?

Landlords and lettings agents who ignore the ban face an initial fine of up to £5,000. Those committing another breach within five years may be fined a maximum of an extra £30,000, and may possibly be taken to court.

The changes aren’t retrospective, so landlords and agents will not be penalised for fees already paid. They do, however, apply to all landlords, even those who only own one property.

Howsy — the smarter solution

We started Howsy to provide a fairer, kinder lettings service for both landlords and tenants. This is why we don’t charge our landlords or our tenants for:

advertising the property on big property search websites
referencing and credit checks
arranging viewings, or
drafting and renewing contracts.

And we don’t take any ‘admin fees’ either. This was true before the new ban.

In fact, Howsy landlords don’t pay a thing until AFTER the tenants have moved in. And our tenants don’t pay anything besides their rent and deposit.

We offer a complete property management service for just £35 a month anywhere in England, and £55pm inside the M25. As a landlord, you’ll be completely covered for repairs, inspections and rent collections. And even for the eventuality that you’ll need new tenants.

For savvy landlords, this is the time to start looking around for better alternatives to your letting agent. Unlike Howsy’s model, getting out of a contract with a traditional letting agent can take up to six months.

So, waiting until the last moment to start shopping around could mean facing the double impact of increased letting agent fees and the next Section 24 increase. Act now and protect your profits.

To find out more about what we can do for landlords, email us or call us on 0330 999 1234 today.