Updated Compliance. The Government has outlined a lot of changes that will be coming down the line this year for landlords under the white paper. It was announced in the Queens Speech that the Renters Reform Bill will now be bought forward and will include the following provisions for landlords;
Abolishing the Section 21 whilst strengthen possessions proceedings.
This was proposed back in 2019 abolishing the Section 21 notice which will end no fault evictions in England. It will strengthen Section 8 which is the ground in order to take possession regarding arrears and help support landlords that want to recover a property.
Applying legally binding decent home standards.
It will start to set standards that will be the first for the private rented sector. This will give better and safer quality homes.
Creating a new ombudsmen scheme.
A new ombudsman for private landlords will help resolve disputes before reaching the court. This will ensure that landlords take action to put things right if a tenant complains.
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Introducing a property portal for landlords.
The property portal will function as a register to share property and performance information with tenants. It will aid local authorities and enforcement and help landlords understand their obligations. There are various other reforms to include installation on new regulation of new social housing. Setting up a new planning system and housing reform. And reforming the UK data protection regime.
We will keep you updated as to all the new rules and regulations.
What has been updated for compliance?
Digitising the Right to Rent.
The Right to Rent has undergone additional resolution in face of both covid and Brexit. In June 2021 the Government introduced a new set of post Brexit rules for EU, EEA and Swiss citizens. They can now view and provide a share code to pass to their agent or landlord to complete the online check.
Applicants with Biometric residence cards, permits or frontier worker permits now also have no choice but to prove their Right to Rent through the online checking service. This was put in place as of the 6th April 2022. Agents and landlords can also make use of certified identification documentation validation technology service provided. They can do digital checks for applicants that aren’t able to use the home office online checking service including British and Irish citizens.
The British and Irish tenants will still have the right to ask for their documents to be checked manually it is not mandatory for them to have their ID virtually checked.
The temporary covid-19 adjustment checks requiring agents and landlords to check their tenants Right to Rent via a video call with scans or photos of their appropriate documents has also been extended to the 30th September 2022. To give agents and landlords more time to build commercial relationships.
A fully digital process will help efficiency in lettings. However, as a landlord it is your responsibility to ensure that you are aware of the regulations and what they mean.
How to check your tenants Right to Rent.
Checks for EU, EEA and Swiss nationals.
Applicants that hold a biometric resident permit, a biometric card or a status issued under the EU settlement scheme can use the Home office online checking service.
They must obtain a share code via the prove your Right to Rent to a landlord or an agent or the new view and prove service.
The landlord or agent enters the applicant share code and the date of birth in the Governments portal to confirm they have the Right to Rent with the applicant present via video call.
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Checks for nationals under B5JSSK.
B5JSSK nationals include Australia, Canada, Japan, New Zealand, Singapore, South Korea and the United States. These are entering England as a visor granted automatic leave to enter. This lasts for a maximum period of 6 months. The landlord and agents will need to check their applicants passport of evidence they arrived in the UK within the last 6 months.
Firstly, follow up checks should be undertaken to ensure the tenant has proof to continue their Right to Rent.
Covid-19 adjusted checks until the 30th September 2022 check a scanned copy or photo of your tenants original documents via email or using a mobile app.
Arrange a video call with your tenant, ask them to hold up the original documents to the camera and check them against the digital copies or documents.
Record the date you made the check and mark it as undertaken on due to Covid-19.
Managing these compliance is absolutely critical for landlords. If you ever wish to evict your tenant you will need these documents.
Moving towards a digital tax system.
The Government aims to make HMRC one of the top digital administration in the world. Making tax digital known as MTD. This will affect estate agents, letting agents and landlords across VAT returns, income tax and eventually corporation tax. Agents are in a strong position to support their landlords through the changing process.
What is changing under the making tax digital?
Since April 2022, all registered businesses are required to follow the making tax digital rules, keeping digital records and signing up to submit their VAT returns through the MTD compatible software.
Secondly, will be for income tax, again requiring a self-employed person and landlords to keep digital records and use third party software to submit their tax returns. This will mean it will be transferring to a digital system as a large undertaking and the Government has already realised this by pushing back the deadline on income tax to 2024.
Finally, the last step towards digitising the HMRC will be for corporation tax.
What will this mean for landlords?
Although there may be a cost involved when setting up any new systems, estimated at £330 to set up and then £35 annually per business once implemented, HMRC anticipates that this will be balanced out by the increase efficiency. The Government site also confirms that business already operate MTD are reporting time saved, reduction in input errors and increased confidence in managing their affairs.
Increasing minimum energy efficiency standards.
A move towards EPC ban C rating.
The minimum energy efficiency standards are a hot topic in the midst of a energy crisis. Not to mention climate change. Residential properties are renowned for being amongst the top emitters of carbon dioxide. Therefore are an easy target for Government regulations to meet the target of net 0 by 2050.
The Government green agenda.
In 2021 the Government released its heating building strategy which included a move to encouraging heat pumps instead of gas boilers.
Currently private rented homes need a rating of E or above. The Government invested a campaign to enforce minimum energy standards across local authorises in November 2021.
New proposals intend to increase the required rating to EPC ban C by 2025. This is to include new tenancies and private rented home by 2028.
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However, these are still simple proposals there is going to be a lot of people moving to a ban C for properties in 2025. Then existing properties by 2028 is going to be quite difficult. However, it is no good saying “don’t worry about it to yourself its not going to happen” because it is. It is important you start to make provisions now for this.
New regulations for agents and landlords under the Renters Reform Bill expected.
There has already been a substantial amount of discussion regarding the Renters Reform Bill. We have already outline above the regulations that are due to come through. It is important you understand what the regulations may and what you will need to do in future.
There is further legalisation coming this year and we will keep you updated on everything that happens.