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The Register of Overseas Entities is Now Live

Parliament

Further to our previous post on the New Registration Requirements for Overseas Entities Buying Land in the UK, the Register of Overseas Entities (“ROE”) at Companies House is now live and was launched on 1 August 2022.

Overseas entities who purchased a freehold estate or a lease (with a term of more than 7 years) in the UK, on or after 1 January 1999, now have six months to register on to the ROE. The deadline for registration is 31 January 2023.

An overseas entity (or an officer of that entity who is in default), who fails to comply with the registration requirements will commit a criminal offence, punishable by: 1) a daily fine not exceeding £2,500; 2) imprisonment of up to five years; or 3) both.

Overseas entities will need to provide “required information” of the overseas entity, as set out in the Economic Crime (Transparency and Enforcement) Act 2022 (“the Act”), and also “required information” of their registrable beneficial owners, which is also set out in the Act. This information will need to be verified by a third party who is either an external accountant, independent legal professional, or an estate agent or letting agent who is regulated by HMRC.  This verification lasts for three months from the date it is made, and the person providing the verification will need to retain this information for a period of 5 years. For those professionals who may be required to complete verification checks, technical guidance is available; Register of Overseas Entities: guidance on registration and verification.

Overseas entities who are required to register should act now and seek independent legal advice if they have any concerns about the ROE.

Further guidance can be found on the Government website.

Section 21 “No-Fault” Evictions and Fixed Term Tenancies Set to be Abolished

Government Proposes a Fairer Private Rented Sector

After a policy decision was announced that Section 21 “no-fault” evictions would be abolished three years ago, the Government has published a white paper which promises a “new deal” for renters in England. The white paper sets out a plan of action (which is summarised below) to address the imbalance between tenants and landlords in the private rented sector. A draft bill is expected to be published later this year.

The main takeaways are:

1. Section 21 “no-fault” evictions are to be banned

The Government states that as tenant demand has grown in recent decades, and the renter demographic has changed, renters are now looking for more security and stability from their rented accommodation. According to Government research more than 1/5th of renters moved because their landlord asked them to leave or because their fixed term ended. Abolishing “no-fault” evictions will give tenants greater security.

2. Changes to Section 8 grounds and court reforms

If Section 21 “no-fault” eviction notices are to be abolished, the Government acknowledges that changes need to be made to the grounds for possession under Section 8. New (and reformed) grounds are to be created:

  • Strengthening the mandatory grounds of criminal behaviour/serious antisocial behaviour;
  • New mandatory ground for repeated arrears (tenants must have been in at least 2 months’ arrears three times in the previous three years) regardless of whether they are in arrears at the time of the hearing;
  • Reformed “moving in” ground (to include close family members who want to live in the property); and
  • New mandatory ground if the owner wishes to sell the property.

Reforms to the court process are also needed to make this more efficient and effective. Claim forms are to be simplified and streamlined, and there is to be a new online process for court possession, which will make it easier and more efficient. Certain cases are also to be prioritised.

3. Fixed term tenancies to be abolished and all tenancies in writing

Landlords will not be able to create fixed term tenancies.

All tenancies are to be periodic and can be terminated by the tenant serving two months’ notice to end the tenancy at any time. Landlords will only be able to end the tenancy using one of the grounds under Section 8 of the Housing Act 1988 (as amended). The Government wants to increase flexibility for tenants, especially if the property is unsafe.

Currently, an assured shorthold tenancy can be made orally. Under the new proposals all tenancies must be in writing.

4. Decent Homes

The Government state that 21% of private rented homes are non-decent, especially in areas of the North of England.

Landlords will be required by law to meet the Decent Homes Standard. It is not confirmed what the Decent Homes Standard will entail but it is likely to include minimum EPC levels of C by 2030 where practical, and where it is cost effective.

Rent repayment orders are to be made if a tenant is living in a non-decent home.

5. Tenants to have a right to request a pet

Tenants will have a right to request a pet in their house which the landlord must consider and cannot unreasonably refuse. Landlords will be able to request that the tenant purchase pet insurance to protect against damage to the property.

6. Landlords to be members of a mandatory redress scheme

There is to be a new private renters’ ombudsman which will enable disputes between tenants and landlords to be resolved without going to court (using alternative dispute resolution and mediation) and which will also be cheaper.

7. New property portal

There is to be a new portal which can be used by landlords, tenants, and local authorities. Tenants will be able to check landlords’ compliance, landlords can understand their responsibilities better by having all the information on the portal, and councils can better crack down on criminal landlords.

8. No ban on letting to families or those in receipt of benefits

Landlords will be prohibited from imposing a blanket ban on lettings to families with children or those in receipt of benefits.

9. Rent Review

All rent increases will need to be undertaken via the Section 13 process, which can take place annually, but other rent review clauses are banned.

The Government is unlikely to make any changes to tenancy deposits at this stage, but it will be closely monitored.

Whilst some change may be welcome, landlords are likely to be concerned about these proposals, which will fundamentally change the private rented sector in England. Landlords may look to sell up at a time when demand from tenants for rental properties is high. This will only seek to drive up rental prices even further.

Ground Rents Abolished for New Long Residential Leases

From 30 June 2022, anyone buying a new long residential lease in England or Wales (which has been granted for a premium) will not be charged ground rents under the Leasehold Reform (Ground Rent) Act 2022.

Ground rents are often found in long leases (granted for a term of more than 21 years) and are annual payments a tenant must make to its landlord, which gives the landlord an incentive to retain some interest in the property. Some leases contain mechanisms for ground rents to increase over decades which can make the payments quite substantial. This has become problematic for prospective purchasers who cannot get funding as banks are refusing to lend because of the increased liability of ground rents.

Following a consultation on leasehold reform undertaken in 2018, (the subject of our previous blog post on the Government response), this change has been introduced to make leasehold ownership fairer and more transparent for tenants.

The Act will only affect new leases and not existing tenancies. If a new lease is granted, or the term of an existing lease is extended, or additional land is added to the demise (a deemed surrender and regrant), a landlord will need to ensure that no ground rents are charged, or they may face penalties of up to £30,000.

A new long residential lease can make provision for collection of a ground rent, but this must be a peppercorn rent (which has no value). If a landlord can recover administrative charges from the tenant, these cannot relate to any collection of the ground rent.

This change is part of the Government’s wider focus on leasehold reform to create a fairer housing system. The Government is also considering reform of the enfranchisement rules (which govern the extension of a lease or the purchase of the freehold), and right to manage (taking control of the management of their building). Further changes on leasehold reform are not expected until next year.

The Register of Overseas Entities – Buying Land in the UK

New Registration Requirements for Overseas Entities Buying Land in the UK

For several years, the UK government has sought to cut property fraud and money laundering activity in the UK. One key element they have focused on is making the ownership of property in the UK more transparent. Overseas entities have sought to invest in property in UK, but the ultimate beneficial owners of these overseas entities are often not known. The proposals for an overseas entities register were put forward in a government bill in 2018, but have now been passed into law under the Economic Crime (Transparency and Enforcement) Act 2022 (“the Act”).

The Act, (which, for the main part, is not yet in force) creates a new registration requirement at Companies House for any overseas entity who:

  • Is buying a freehold property or a lease (with a term of more than 7 years) in the UK; or
  • Owns a freehold property or a lease (with a term of more than 7 years) in the UK, which was purchased on or after 01 January 1999.

Once the relevant provisions of the Act are in force, an overseas entity will be required to register at Companies House and provide the required information about their beneficial owners.

A beneficial owner is anyone who holds:

  • More than 25% of the shares or voting rights in the overseas entity;
  • Has the right to exercise, or actually exercises, significant influence or control over the overseas entity;
  • Holds the right to appoint or remove a majority of the board of directors of the overseas entity.

This works on the same principle as the PSC register (people with significant control).

Once registered at Companies House, the overseas entity will be issued an overseas entity ID number. This ID will then be provided to HM Land Registry to enable land transactions to be registered.

There will be a six month transitional period from the date the Act commences for overseas entities to register at Companies House.

During this six month window, HM Land Registry will register a restriction on the registered title of land owned by an overseas entity. This restriction will limit the overseas entity’s ability to transfer, let (for more than 7 years) or charge the property unless they have complied with the registration requirements. Some exceptions will apply, but these are beyond the scope of this post.

There is a further obligation on overseas entities to ensure that the register at Companies House is up-to-date, and they will be required to update this information annually.

Failing to comply with the registration requirements under the Act can result in a criminal offence, with the penalties for non-compliance of the Act including fines and imprisonment.

We will continue to monitor this and update our portfolios if and when necessary, once the implementation dates are known and if any supporting legislation is passed following the Act receiving Royal Assent.

Occupation Contracts – The New Form of Tenancy Agreement Under the Renting Homes (Wales) Act 2016

The Renting Homes (Wales) Act 2016 (“the Act”) (passed six years ago) will be coming into force on 15 July 2022. This Act will fundamentally change the current system for letting residential property in Wales.

The change has been introduced to simplify the letting process and make it easier for contract-holders (the new term for tenant) and landlords by having one overarching Act in place which sets out the parties’ rights and obligations, (as opposed to various pieces of legislation).

For the purposes of this post, we will be looking at occupation contracts (which are the new form of tenancy agreement) which will replace most assured shorthold tenancy agreements and licences to occupy in Wales.

Standard vs. Secure

There are two types of occupation contracts: 1) Standard; and 2) Secure.

Secure occupation contracts are intended for use by community landlords. As a result, we will be focusing on standard occupation contracts, which are to be used by private landlords.

Fixed Term vs. Periodic

Standard occupation contracts can either be for a fixed term (an agreed period of either months or years (less than 7 years)) or periodic (week to week or month to month). A fixed term contract will become a periodic contract on expiry of the term if the contract-holder remains in occupation.

Written Statements

Occupation contracts must be in writing and must contain certain terms. Landlords must give their contract-holder a written statement setting out the terms of the occupation contract within 14 days of the date the contract-holder is entitled to begin occupying the property.

Written statements must be used for standard occupation contracts entered into on or after 15 July 2022. In the case of existing tenancies and licences that fall within the definition of an “occupation contract”, these will automatically convert to occupation contracts on 15 July 2022, and landlords will need to provide a written statement to the contract-holder within 6 months (no later than 14 January 2023).

Written statements can be issued in hardcopy or, if agreed by the contract-holder, can be sent electronically.

Terms

These are broken down into four categories:

  • Key matters – information about the property, occupation date, amount of rent or other consideration.
  • Fundamental Terms – these are the essential rights and obligations of landlords and contract-holders.
  • Supplementary Terms – these are practical matters to make the occupation contract work, access for repair
  • Additional Terms – other agreements not dealt with elsewhere (for example the keeping of pets).

Model Written Statements

Model written statements for both periodic and fixed term standard occupation contracts have now been published by the Welsh Government. The model statements incorporate all the fundamental and supplementary provisions to be included (without modification). The model statements can be found here.

When an existing tenancy is converted to a standard occupation contract, the existing terms of the tenancy will apply unless they conflict with the fundamental terms. Supplementary terms will be included unless they conflict with the terms of the existing tenancy.

Joint Contract-Holder

Parties can be added to the contract as joint contract-holders with the consent of the landlord. A contract-holder can leave the contract without the tenancy ending.

Succession

On the death of a sole contract-holder, the contract will terminate unless there is someone who qualifies to succeed the contract-holder.

Termination

A contract-holder cannot be evicted without a court order unless the contract-holder abandons the dwelling.

For no-fault evictions, the minimum notice period is six months. A landlord will not be able to give a possession notice until 6 months after the contract starts. This will give contract-holders a minimum 12-month contract.

A landlord can still terminate early if the contract-holder is in breach of contract. Typical grounds include serious arrears of rent (if the rent is paid monthly, at least two months’ rent unpaid), anti-social behaviour, or failing to take proper care of the property. A court must find it reasonable to evict the contract-holder.

Most grounds require one month’s notice; however, where there are grounds of anti-social behaviour and other prohibited conduct, the landlord can make a possession claim on or after the day on which the possession notice is served. Where there are serious rent arrears, the notice period is 14 days.

Fundamental changes are being made to how the private rented sector will operate in Wales. This blog post is only a high-level summary on occupations contracts. For more information on this and other key changes being introduced please read Renting Homes (Wales) Act 2016. We will be producing more detailed guidance and publishing new templates for Wales over the coming months.

Formalities for Signing Tenancy Deposit Protection Prescribed Information

Since 06 April 2007, landlords of assured shorthold tenancies in England and Wales have been legally required to protect their tenants’ deposits in an authorised tenancy deposit scheme within 14 days of receipt of the deposit monies. Landlords must also provide tenants with prescribed information about the scheme (which contains a confirmatory certificate from the landlord) within 30 days of the deposit being received. If the legislation is not complied with the landlord may be prevented from serving a valid section 21 notice to recover possession of the property and/or the landlord may have to pay a fine.

The case of Northwood Solihull v Fearn & Ors called into question the signing of prescribed information by a corporate landlord or agent. The prescribed information had been certified by the property manager who was authorised to sign this document. The tenants argued that the prescribed information had not been validly executed which in turn invalidated their eviction notice. This case also looked at the execution of section 8 possession notices, but that is beyond the scope of this post.

In January 2020, the High Court ruled that where the landlord is a corporate landlord, they must sign the prescribed information in accordance with s44 of the Companies Act 2006 which requires signatures from two directors, or a director and company secretary, or a director who signs in the presence of a witness. The High Court held that the prescribed information had not been signed in accordance with s44 of the Companies Act 2006 and was therefore not valid.

The Court of Appeal overturned this decision (which will be welcomed by landlords and letting agents) and held that the prescribed information can be validly signed by an authorised individual on behalf of a corporate landlord or agent. It can also be signed in accordance with s44 of the Companies Act 2006. The Court of Appeal also confirmed that if the prescribed information had not been signed by an authorised individual on behalf of a corporate landlord or agent, nor signed in accordance with s44 of the Companies Act 2006, it wouldn’t necessarily invalidate the document. Each case would be considered on its own merits, taking into consideration the specific facts of that case.

Note that it has now been announced that the Renting Homes (Wales) Act 2016 (which will change all aspects of renting residential property in Wales), is due to come into force 15 July 2022. This Act will introduce a new tenancy deposit scheme in Wales. We will be producing further content on the new rules for Wales in due course.

Anticipated Changes for Property in 2022

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

Residential Property Outlook 2022

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

Commercial Property Outlook 2022

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.

Draft Bill for Ring-Fencing Commercial Rent Debt Now Published

Parliament

Following up on September’s post, New Rent Debt Ring-Fencing Legislation, (which looked at the Government’s intention to set out legislation to deal with commercial rent arrears built up during the pandemic), this post looks at the Government’s much-anticipated draft Bill to address this issue.

The Bill (expected to come into force in England and Wales from 25 March 2022), introduces a binding arbitration procedure for landlords and tenants who cannot reach an agreement on how to deal with the rent arrears.

There has been lots of hype and commentary surrounding the Bill. This post sets out the key points from the Bill. Note that this is subject to change as the Bill progresses through Parliament.

Commercial landlords should be aware of the proposals as these are likely to impact negotiations with a tenant and what enforcement action a commercial landlord may consider in the future.

The Arbitration Procedure

1. Once the Bill becomes law, there will be a six-month window within which either party can refer the matter to arbitration.
2. One party states their intention to refer the matter for arbitration to the other (which is to be supported by a proposal for how to resolve the debt). The corresponding party then has 14 days to respond. Upon receipt of a response (or at the end of 28 days from notifying the respondent), the first party may refer the matter for arbitration which must be accompanied by a formal proposal for how to resolve the debt.
3. The arbitrator will consider the matter and make a binding award which may:
– Write off the whole or part of the debt;
– Give the tenant time to pay (up to a period of 24 months from the date of the award);
– Allow the tenant to pay by instalments; and/or
– Reduce the interest which has accrued, or which may be written off.
4. The arbitrator may dismiss the referral if the tenant’s business is not viable (or would not be viable even if an award were made), or the debt in question is not a ‘protected rent debt.’
5. In making the award, an arbitrator is required to follow certain principles and may consider certain factors which are set out in further detail in the new Code of Practice (which is discussed below).
6. The arbitrator must make their award within 14 days of a hearing, or as soon as reasonably practicable.
7. Each party must incur their own legal fees. The initiating party must pay the arbitrator’s fees, but once an award is made, the cost may be split between the parties unless decided otherwise by the arbitrator.

Protected Rent Debts

1. A matter can only be referred to arbitration if it relates to a ‘protected rent debt’, which means the debts arose because of the closure of and/or severe restrictions placed on businesses during the pandemic.
2. The period of closure starts from 21 March 2020 and ends on the earlier of:
a. 18 July 2021 (England) and 07 August 2021; or
b. The last day on which the relevant business was subject to restrictions (these are set out in the new Code of Practice). Periods in between where businesses were allowed to trade are to be included.
3. Principal rent, interest, service charge, and VAT can be protected rent debts.

Temporary Moratorium

This Bill is due to commence from 25 March 2022 to coincide with the expiry of the current moratorium on forfeiture proceedings and restrictions on the exercise of Commercial Rent Arrears Recovery (CRAR). There will be a temporary moratorium, which means landlords will not be able to:

1. forfeit the lease;
2. exercise CRAR;
3. serve a winding-up petition;
4. serve a bankruptcy petition;
5. issue debt claims; and/or
6. draw-down on the tenant’s deposit,

in relation to protected rent debts until an award has been made by the arbitrator, or until the six-month window has passed and no arbitration has been sought.

A key point to note is once the Bill becomes law, if a debt claim was made for protected rent debts on or after 10 November 2021, either party can request that the claim be stayed. If a judgment was made (for protected rent debts) on or after 10 November 2021, it will not be enforced.

New Code of Practice for Commercial Property Relationships Following the COVID-19 Pandemic

A new code of practice (which replaces the current code) now applies to negotiations between landlords and tenants dealing with rental arrears. The code also sets out a framework for the arbitration process and how this will work once the Bill becomes law. The code is not binding, but the Government strongly advises that the parties follow it.

This post is a high-level summary and only covers the key issues. A link to the code can be found here.  The Bill can be found here.

The Government is also asking people who have expertise or a special interest in the Bill to submit their views to the House of Commons Public Committee. A link to the consultation can be found here. The consultation closes at 5.00pm on 16 December.

We will continue to monitor the progress of the Bill through Parliament and will publish further updates as and when necessary.

Renting Homes (Amendment) (Wales) Act 2021

Row of houses

The Renting Homes (Amendment) (Wales) Bill gained Royal Assent on 07 April 2021 (‘the Amendment Act’). The Amendment Act amends certain provisions of the Renting Homes (Wales) Act 2016 (‘the 2016 Act’). The 2016 Act (when it comes into force) will significantly reform housing law and practice in Wales. No date has been set for when the 2016 Act will come into force, but it is expected to come into force early 2022.

The Amendment Act gives residential tenants in Wales greater security. Residential tenancies in Wales will change to give tenants:

  • A minimum 12-month contract;
  • Minimum notice periods to evict tenants will be extended from two to six months in the case of “no fault evictions” (section 21); and
  • Landlords will only be able to serve an eviction notice six months after tenants have moved in (as opposed to four months).

A tenant will therefore be able to move in and spend a year in a property before the landlord can take possession.

When the 2016 Act comes into force, it will simplify and standardise tenancy agreements to make them easier to understand and reduce legal costs. Some of the key provisions of the 2016 Act are as follows:

  • Create a new model written statement, a “standard occupation contract”, modelled on the present assured shorthold tenancy (AST);
  • Many licences will be converted into occupation contracts;
  • The occupation contracts will include certain terms that cannot be varied unless the variation improves the tenant’s or licensee’s position; and
  • It will introduce a new tenancy deposit scheme which will apply to all occupation contracts.

Consultation

The Welsh Government has the power to prescribe model written statements and has now launched a consultation seeking views on:

  • The draft Renting Homes (Model Written Statements) (Wales) Regulations; and
  • The draft Renting Homes (Explanatory Information for Written Statements) (Wales) Regulations

Any interested parties can respond to the consultation and views are being sought on the design, structure, and order of the draft model statements and explanatory information. The terms of the statements are pre-determined (by the 2016 Act). You can read the consultation document and respond online here. The consultation closes on 16 June 2021.

The aim of the 2016 Act is to streamline the housing process in Wales; however, opinion is divided with some stating that these changes will significantly inhibit a landlord’s ability to recover possession even from a problem tenant. This is likely to have a negative consequence for the wider sector with landlords leaving the market when demand for lettings is high.

Electrical Safety Standards – Changes from 1 April 2021

Electrical Checks

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 (‘the Regulations’) require landlords in England to have the electrical installations in their properties inspected and tested by a person who is qualified and competent, at least every five years. Landlords have to provide a copy of the electrical safety report to their tenants and to their local authority, if requested.

Most tenancies are caught by the regulations, although a number of tenancies, including long leases, tenancies granting a right of occupation for a term of seven or years or more, social, or resident landlords, care homes, and licences for lodgers (where the occupier is sharing accommodation with the landlord) are excluded.

The Regulations came into force on 1 June 2020, requiring all landlords who took on new tenants from this date to have all fixed electrical installations inspected and tested by a qualified person before the start of the tenancy.

Landlords of existing tenancies (signed before the Regulations came into force on 1 June 2020) must now also ensure that all fixed electrical installations in their properties are inspected by 1 April 2021. It does not appear that this deadline will be extended, despite the complications caused by the current pandemic. Landlords who fail to comply with the Regulations are liable to face fines of up to £30,000.

Since the Regulations came into force, the Government has issued guidance for landlords on these Regulations which can be found here.

Due to Covid-19, it is more complicated for Landlords and agents to enter properties and carry out inspections, tests, and any remedial work. Landlords and agents should ensure that they have taken all reasonable steps to comply with the Regulations as well as complying with the Government’s safety guidelines for people who work in other people’s homes. Landlords and agents should keep a paper trail of all documentation and correspondence they have had with tenants and electricians regarding these works, and any responses they receive.

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