LEGAL
The new challenges facing landlords and agencies
By Adam Kingswood (pictured), Director of Kingswood Residential Investment Management
Heralded as a positive piece of legislation for tenants who will no longer face fees for services including credit checks, references and when setting up a tenancy, the jury remains out on the wider implications of this latest piece of legislation for landlords and letting agents. The Tenant Fees Act effectively
bans most fees from being charged for tenancies in England with the exception of rent with a refundable deposit capped at no more than five weeks’ rent - where the total annual rent is less than £50,00, or six weeks’ if over this - a refundable holding deposit equal to no more than one week’s rent, payment for early termination of the tenancy where requested by the tenant, payment for bills such as utilities and council tax and a default fee for late payment of rent and the replacement of a lost key. However, ARLA Propertymark
reports both landlords and letting agents are feeling the financial strain and looking for ways to cover the legitimate costs incurred when setting up a tenancy. Getting fully up to speed with
the Tenant Fees Act is essential. Anyone in breach will be punished with a financial penalty of up to £5,000 per offence and further breaches within five years of the
‘The private rental sector is becoming a complex landscape’
first offence will result in fines of up to £30,000. It’s essential agents and landlords are fully aware of how this regulatory change will affect their business and that the necessary steps are taken to ensure all procedures are compliant with the new legislation. The legislation does affect self-managing landlords who have properties already let prior to 1 June with old-format tenancy agreements, which may have higher deposit amounts and tenant fees within it. The primary aim of the Act was to
reduce the costs tenants can face at the outset and during their tenancy, while ensuring they can see what a property will cost them in terms of rent with no hidden costs. Sounds like great news for ‘generation rent’ and with 4.7 million households
across the UK living in rented accommodation, this could mean more disposable income for a substantial number of people. However, there are fears this will
result in more landlords leaving the market and with rental supply already facing shortages, market pressures will force rental prices to rise. The pace of regulation to protect
tenants has strong momentum. The tenant fee ban and the need to ensure the latest ‘How to Rent Guide’ is given to tenants are already here, as is The Homes (Fitness for Human Habitation) Act 2018, which came into force in March, but on the horizon are other matters such as the report of the Regulation of Property Agents working group.
Rather than see investors leave a
housing market when demand is so high, it could be that now is the time to seek professional support from reputable accredited and regulated agents for the management of property investments. Ultimately, well-informed
landlords and lettings agents will find a way forward. It’s a partnership after all - landlords need good tenants and they need decent landlords so let’s hope changes like the Tenant Fee Act create a firm foundation of clarity so we can create a better regulated lettings industry.
Help for small and medium size business
The Solicitors Regulatory Authority, the regulatory body for solicitors in England and Wales, recently published the result of a survey it had carried out by Nesta Challenges, as part of a launch of its Legal Access Challenge. The results of the survey were very revealing. It found two fifths of SMEs
in England and Wales believe that legal advice is reserved for big businesses or those that can afford it. Nearly half (43%) of small business owners and self-employed people questioned agreed the legal advice sector was not set up for them. With 5.6 million small businesses in the UK, that could mean as many as 2.4 million risk falling into the “legal gap”. One legal area that affects most businesses is employment law. It is vital
to get it right in two aspects. The first is making sure the business is compliant with up-to-date employment law. That means having up-to-date and compliant contracts of employment and having the necessary policies and procedures. Without these, it leaves the business open to operational problems and potential issues if there is a problem with an employee. The second part is managing employees. If it goes wrong, it could lead to an employment tribunal claim. Employees no longer have to pay fees to
88 business network October 2019
‘The way advice and support is given is crucial - not using jargon and focusing on getting the issue resolved’
issue a claim at an employment tribunal and claim numbers have risen significantly. Having expertise available to deal with difficult HR matters is therefore crucial. Rob Tice (pictured), Director at BMcPrecept,
said: “The way advice and support is given is crucial - not using jargon and focusing on getting the issue resolved. “To help SMEs access high quality HR
compliance documents we have created easy to use web services. We’ve also designed affordable packages to access high quality HR and Employment Law advice from a dedicated expert adviser.”
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