Things landlords need to know in 2021

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It was a tough year in 2020 for all landlords in many ways. There was the economic impact of Covid-19. As well as additional laws to protect tenants who have fallen into arrears. We hope that with the vaccine now on the horizon and being rolled out that it can only get better. Hoping that your businesses are returning to normal and you will have a prosperous year.

We list out various items that may be of interest to you this year and new laws.

Evictions will resume

The government has again extended the burn of bailiff evictions. These all but from the most extreme cases are now extended until the 21st of February 2021. We do not know whether the government will extend it again but there is a likelihood.

The only exception to the ban for evictions is due to anti-social behaviour. It also includes illegal occupation, fraud or rent arrears of more than 6 months. It will also include some form of domestic violence.

The community executive Robert Jenrick said that the measures would be kept unreview. You still must give tenants 6 months’ notice period, and this will last until 31st March. However, we suspect this also may be extended.

So, from February landlords will once again be able to evict their tenants

We doubt very much this will be the reality. We do not expect evictions to occur until the 8th  of March at the earliest. The review is taking place on the 22nd but we expect the government to extend most evictions beyond this date. Unfortunately, most evictions were put on hold over Christmas and the economic disruption caused by the pandemic. Evictions can only be implemented in cases of anti-social behaviour or where tenants owned more than 9 months’ rent before the 23rd of March 2020.

Landlords can now look to use provisions of issuing a section 21 or a section 8 notice. As a landlord at this moment in time you do not need to give a reason to serve a section 21 notice. This will change in future. Why not read our other article on the renter’s reform bill here. You are still able to serve a section 8 notice if the tenant is in arrears.

Under section 21 notice the tenant is entitled to 6 months’ notice. Under section 8 this is different but again this comes to an end in March 2021. We will suggest that you need to watch this space on any new changes.

New safety requirements

The government has already put in place the EICR requirements, why not read our previous article here. This covers wiring and electrical sockets and must be tested by a qualified electrician. You must have an EICR report for every property for new tenancies by the end of March 2021. This now includes any existing properties as well. It is another expense that landlords must incur.

Inspections will then have to be carried out every 5 years. The tenants must be given a copy within 28 days of it being issued. They also must acknowledge it.

The new measures are really in response to the awful Grenfell Tower fire in 2017. We would suggest that you carry these out as soon as possible.

Stamp duty holiday ends

Are you thinking of expanding your portfolio? You have until the 31st of March 2021 to take advantage of stamp duty holiday. If you are looking to expand your portfolio why not ask for a quote for your insurance, click here.

When the stamp duty holiday ends normal stamp duty land tax obligations will come back in place. This is anything above £125,000. Why not speak to your solicitor to make sure they are aware of the changes.

Tax changes

Mortgage interest and tax relief was completely phased out and there has been some big tax changes. This has been replaced with 20% tax credit for mortgage interest relief. Which is less generous than the previous system of higher rate taxpayers. This did come into force on the 6th of April 2020. This now only gives the impact from 2021. We would suggest you speak to your accountant on this.

Want to save some money on other areas why not ask us for our professional indemnity insurance.

Brexit

The real impact of Brexit has not yet come through as obviously we are currently in the transition period. Most people will not see them for a while. However, there are the right to rent checks that you will now need to take place, and these have changed. Landlords currently must verify all the immigration status of tenants. They must ensure that they can legally rent their property.

From the 1st of this year, we have now introduced a new points system. The right to rent process has yet to be changed and this could take place in Spring once the pandemic is hopefully under control. You need to check this so why not click here to look at the government website.

Right to have a pet

The government has now decided to make it easier for renters with pets to secure a home. The government have a new model tenancy agreement which you can read here.

Under this agreement tenants are now entitled to have well behaved pets.

The model tenancy agreement is the governments recommended contract for landlords. However, if you have a leasehold flat it is not that simple as most landlords know. You would need to get consent from the managing agent or freeholder first. Even then it does not protect you. However, figures show that more than half of adults in the UK own a pet. Many more are welcoming pets in their lives during the pandemic. These changes mean that more landlords will have to cater for a responsible pet owner.

Few private landlords currently advertise pet friendly properties. We understand from Zoopla this is only 7%. Many people with pets have struggled to find suitable homes. You could therefore if you wished to open a larger market for your potential property.

Landlords have been able in the past to ensure blanket ban on pets. They insert clauses into their tenancy agreement to state renters cannot keep them.

If you do allow a pet additional tenancy clause need to be added. You need to make sure for instance that the animal does foul in the gardens. Or inside the property. Not leaving it alone at the property for too long. Clean the property thoroughly before the end of the tenancy.

Any damage or cleaning etc should also be considered. We enclose a potential pet clause below but please check with your solicitor.

Pet Clause

It is agreed between the landlord and the tenant that the landlord grants permission for the tenant to keep a small dog/cat at the property for the duration of the tenancy. The tenant agrees not to keep or permit to keep on the property any further pet or animals of any description without previous consent in writing of the landlord. The tenant hereby undertakes and agrees to remedy and pay for any damage caused to the property and/or contents of the property that shall have been caused by the pet residing in the property. For the avoidance of doubt any such damage shall not deem to be fair wear and tear. The tenant agrees to pay for professional cleaning at the property at the end of the tenancy including cleaning of all carpets and treating the property for fleas and mice.

The following are the pet policies of the landlord outlined below in respect of the said pets;

  • The tenants are responsible for their pets in accordance with the animal welfare act. If the landlord believes that pet kept in the property is being neglected or abandoned, they will report it to the appropriate animal welfare organisation.
  • The tenants must not leave their pets in the property when they are away unless cleaning arrangements have been made for their care.
  • Dogs should not be left alone at the property for more than 4 hours at a time. Tenants must ensure that their dogs will not cause damage to the property if they are left unsupervised.
  • All pets kept at the property must be vaccinated and regularly treated for fleas and worms (if appropriate).
  • Tenants are responsible for keeping all areas of the property clean and free from parasites, such as fleas.
  • Tenants must ensure that their pets do not cause a nuisance to any neighbours. This includes excessive noise. Dogs must be kept under control and on a lead in any public areas, communal areas or walk ways.
  • Pets must not be allowed to fowl inside the property, expect for caged pets and pets trained to use a litter tray. Any pet faeces must be removed immediately from the garden or outside area and is disposed of safety and hygienically.
  • Any dog listed under the dangerous dog’s act 1991 must not be kept at the property with the acceptation of dogs registered on the index of exempted dogs.
  • Tenants may not breed animals or offer for sale any animal in the property.
  • If tenants wish to obtain an additional pet other than the one that has been given permission must first apply in writing for the consent of the landlord

The new tenancy by the government is not legally binding

However, the government hopes that landlords will adopt it. If the landlord objects to having a pet most landlords would need to give a good reason. Is it in a smaller property, where this is impractical? Is it against the lease?

A responsible pet owner will be aware of their obligations. They will ensure their best efforts to make sure their pet does not cause a nuisance.

Charging a fee to a tenant who wishes to keep pets is now not permitted. However, permission may have to be a conditional and an additional deposit may be required. Obviously, there is a cap under the tenant fee ban 2019.

Renters reform bill

You can read our article on the renter’s reform bill here. This is going to be a massive change to the whole industry. It was delayed but it looks as though the government are now moving it forward. It could have wide ranging impact on landlords. There are so many measures in the bill it is quite substantial. These include ending landlord’s ability to evict tenants without good reason. Giving landlords more rights to remove tenants if they have a valid reason. Introducing lifetime deposits. Enabling tenants to transfer a deposit from one property to another. But one of the biggest changes is short term contracts. Please read our article.

Digital tax account

Investment landlords with VAT registered business over 85,000 are now required to have digital tax accounts. Click here on the government website to see this.

From 2022 all businesses will have to follow the making tax digital rules. These rules require landlords to send HMRC quarterly updates on their income expenses. Rather than completing an annual tax return. Another changes that landlords must deal with. There are so many changes going to happen this year, this is just a small snapshot of what there is. Why not talk to us about any property you may have or insurance you may require. We are always here to help.

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