2022 is set to see more legislative and regulatory change for both residential and commercial property in England and Wales.
In this blog post we look at anticipated changes and recent government announcements. It is not a conclusive list, and we have focused on those matters of particular relevance to our customers. As we have seen over the past two years, legislative changes are frequent, and introduced often with little notice.
Residential
Renting Homes (Wales) Act 2016
It has been announced that this Act will finally come into force in July 2022. This Act will fundamentally change all aspects of renting residential property in Wales. Model contracts will be available and will give tenants in Wales a minimum 12-month contract with eviction notice periods of 6 months for “no-fault evictions”. Further legislation will be introduced to put in place additional measures to support the existing legislation.
Carbon Monoxide Alarms
The government intends to extend the 2015 regulations so that landlords must install a carbon monoxide alarm in any room with a fixed combustion appliance (excluding gas cookers). Legislation only currently requires landlords to fit an alarm where there is a solid fuel burning source. Landlords will be required to repair or replace smoke and carbon monoxide alarms once they have been informed by the tenant that they are faulty.
Right to Rent
On 5 April 2022, the temporary measures introduced during the coronavirus pandemic are set to end. Updated guidance will be published before 6 April 2022, as the way in which checks of biometric residence cards and permits, and frontier worker permits are set to change. These checks will be done using the Home Office online service only.
Eviction Notice Periods (Wales)
The modified notice periods in Wales were extended until 24 March 2022. Save for any further legislation being introduced, the notice periods will then revert to pre-pandemic lengths.
Renters’ Reform Bill
Draft legislation is anticipated relating to the abolition of section 21 notices, the introduction of a lifetime tenancy deposit, and changes to the court procedure for eviction cases. This Bill may also deal with the question of whether landlords will be required to be members of a redress scheme (which deals with complaints) or an obligation for private landlords in England to be registered.
Minimum Energy Efficiency Standards
The government is committed to raising the minimum energy efficiency rating from E to C by 2028. We may see draft proposals from the government this year.
Anti-Money Laundering (AML) and Agents
Agencies which are regulated for AML purposes and earn over £10.2million will be liable to pay a levy which is intended to be used to tackle money laundering in the UK. The amount of the levy varies depending on the revenue of the company. This levy is part of the Finance Bill 2021-22 which is making its way through Parliament. This provision is intended to commence in April 2022.
Letting agency business guidance for money laundering supervision is still awaited.
Regulation of Property Agents
It is still uncertain whether steps will be taken to regulate property agents. A report was published in 2019 by the working group RoPA (Regulation of Property Agents). There has been little progression since the report was published. This question may be addressed in the Renters’ Reform Bill.
Leasehold Reform (Ground Rent) Bill 2021-22
Ground rents payable in new long leases must be one peppercorn (unless the property is exempt). This Bill is likely to be passed this year.
Building Safety Bill 2021-22
This Bill will have a significant impact on those constructing premises, those involved in property management and health and safety of ‘higher-risk buildings’ (buildings with at least two residential units and at least 18 meters in height or seven storeys). The Bill currently proposes a New Homes Ombudsman scheme, with a new code of practice on standards of construction, increased obligations under the 2005 Fire Safety Order and restrictions on landlords and developers recouping remedial costs from tenants.
Commercial
Moratorium on Forfeiture Proceedings, Commercial Rent Arrears Recovery (CRAR), and Winding Up Petitions
The moratorium on forfeiture proceedings for commercial leases (for non-payment of rent) in England and Wales is in place until 25 March 2022. The use of the CRAR regime was also extended. 554 days’ rent needs to remain unpaid for a landlord to exercise CRAR. The ban on landlords issuing a winding-up petition for debts relating to rent or other sums payable by a tenant under a business lease (among other conditions) is due to expire 31 March 2022.
Commercial Rent (Coronavirus) Bill 2021-22
This Bill addresses the issue of commercial rent arrears built up during the pandemic and will establish a binding arbitration procedure to resolve ongoing disputes. This Bill is progressing through Parliament and is expected to come into force in England and Wales from 25 March 2022.
Charities Bill 2021-22
The Bill aims to make land disposal for charities easier. It aims to give greater flexibility, remove certain prescriptive requirements, and make the legal framework for disposing of charity property clearer and less burdensome.
Minimum Energy Efficiency Standards
From 01 April 2023, it will be unlawful for a landlord to continue to let commercial property with an Energy Performance Certificate (‘EPC’) rating of ‘F’ or ‘G’ unless an exemption applies and has been registered.
The Government intends to make it unlawful to let commercial property with an EPC rating of below B by 2030. Proposals to address this are likely to be published this year.
Here at Simply-Docs we will continue to monitor the development and progress of these proposed legislative and regulatory changes and will update the portfolio and notify you when necessary.