Are you risking massive fines and penalties by ignoring legal training in these three areas?

At the moment a lot of landlords and letting agents providing a poor service are ‘getting away with it’.

The main reason for this is that Local Authorities are not enforcing housing-related law properly. The reason for this? They can’t afford the staff.

A sea change is coming

However, this is all set to change. From 6 April 2017 Local Authorities have been given extended powers under the law to impose penalty notices and apply for rent repayment orders. AND – they can now keep the money.

They have also been given a new way to identify enforcement prospects as they can now call for data from the tenancy deposit schemes.

This will undoubtedly result in a sea change in Local Authority enforcement action. As they get to keep more and more of the income from fines and rent repayment orders, they will be able to increase their staff, train them and then use them to bring more enforcement action.

It will become an income generating exercise. And what cash strapped Councils need is income.

The ‘Ordinary’ landlord is at risk

The main targets of the new rules are the ‘rogue landlord’.  So they include things like violence in securing entry to rented properties and eviction and harassment of tenants.

However, they also include things, such as failure to comply with HMO law, which can catch any landlord out.  Then once they have the staff to carry out proper enforcement work, this will mean more enforcement in other areas.  Bearing in mind that Trading Standards Officers have powers to take action against any business which is failing to comply with consumer law.

The only landlords and agents who will be immune from all this are those who are fully up to date and compliant with the law.  So let’s take a look at some of the areas of law where landlords and agents need to get up to speed. Here are three:

1 Houses in Multiple Occupation (HMO)

There are many, many landlords whose rented properties constitute an HMO but who are not aware of it.

For example, you will normally have an HMO if three or more unrelated people share a flat. So if you rent a flat to three nurses – that will (unless they are related e.g. sisters) almost certainly be an HMO.

Most landlords don’t worry about this too much as even if it is an HMO they don’t have to license it because in most areas it is only the larger properties, with three or more storeys, which require a license.

This though is set to change. The government are looking to widen the remit of licensing and bring smaller properties into scope. This will affect all landlords other than those who rent to families, couples and single tenants.

However, the significance of a property being an HMO is not limited to licensing. ALL HMO properties, whether licensable or not, must comply with the HMO Management Regulations.

These are mostly health and safety related and there are a lot of them. David Smith and I discuss them in our post here.

A Landlord breaching these regulations will now be vulnerable to improvement notices and prosecutions – which in turn can lead to penalty notices and rent repayment orders. So you need to find out what they are and ensure you are compliant.

2 Letting agents

Letting agents are also vulnerable to Local Authority enforcement actions, particularly with reference to transparency and fees.

The ‘low hanging fruit’ so far as Local Authority trading standards offices are concerned, are agents who do not display their fees correctly.

Local Authorities are also likely to be given powers to enforce the government’s forthcoming ban on letting agent fees to tenants – giving them further opportunities to increase their enforcement income.

3 Consumer law

This is an area of law where there is considerable ignorance among both landlords and letting agents. However, there is potential for it to prove equally expensive for landlord and agents who breach the rules.

For example:

• Tenants seeking to ‘unwind’ tenancies where they were induced to enter into the tenancy by some sort of misrepresentation or unfair practice
• Landlords entering into agency contracts where they are entitled to a ‘cooling off’ period being entitled to cancel without penalty (or payment of fees) long after the contract was made where legal information including cancellation rights have not been provided to them

This is a complex area of law but one which people dealing with ‘consumers’ need to be aware of and comply with.

Training and keeping up to date with the law

Both landlords and letting agents need to make it a priority to keep up to date with the law by doing regular training.

One way to bring yourself up to date quickly is to attend the annual Landlord Law Conference. The 2017 conference will update you on all the issues mentioned above with talks from solicitor David Smith on HMO law and on Consumer Law and from ARLA managing Director David Cox on letting agent fees.

Other talks include a right to rent legal update, tenancy agreement clauses, tenancy deposit adjudications and possession proceedings – all from legal experts, mostly solicitors and barristers. You can find out more here.

So far as I am aware this is the only one-day event which packs in this amount of detailed legal training.  However, there are also training courses provided by ARLA and the landlord associations, as well as my company’s Easy Law Training workshops and online training.

You should also follow at least one updating service, such as my Landlord Law Blog and/or one of the property journals.

My Landlord Law service provides somewhere you can look things up 24/7 and ask ‘quick questions’ in the members’ forum area. If you are short of cash you can find out five cost-effective learning resources here.

Slow but inevitable

It will take some time for Local Authorities to gear themselves up for this.  At the moment all too often enforcement officers have been made redundant due to funding cuts.  It is not unknown for departments which formally had eight or more staff now being run by a just a couple of officers.

Inevitably it will take a while for new powers to take effect, and for Local Authorities to recruit new staff and train them up.

However I am already seeing articles, for example, this one from Oxford, which makes it clear that many Councils are determined to use their new powers.  Others will follow.

So if you are a landlord or a letting agent – use this time to get fully up to date with the law and ensure you are fully compliant.  So that when your Council start to flex their new enforcement muscles – you won’t be on their target list.