Tenancy Deposit Schemes
Under the provisions of the Housing Act 2004 every landlord or letting agent that takes a deposit for an Assured Short-hold Tenancy in England and Wales must join a Tenancy Deposit Scheme. The new regulations came into effect from April 6, 2007. The purpose of this regulation is to ensure good practice. The secondary purpose is to try and keep disputes between landlords and tenants out of the courts by encouraging alternative dispute resolution.
In November 2006, three companies were awarded contracts by the Government to run Tenancy Deposit Schemes:
- The Deposit Protection Service (The DPS)
Insurance backed schemes
- Tenancy Deposit Solutions Ltd (TDSL) (now trading as my deposits)
- The Tenancy Deposit Scheme (TDS)
Health And Safety
Gas safety regulations ensure that gas appliances are installed properly and checked once a year to avoid the risk of carbon monoxide poisoning. The landlord must also give a copy of the current gas certificate to the tenant within 28 days of the check being completed. We suggest that all electrical appliances in let properties are regularly serviced.
The Gas Safety (Installation and Use) Regulations Act 1998 say landlords must ensure that gas appliances, fittings and flues are safe for tenant’s use and that installation, maintenance and annual safety checks are carried out by a technician registered with the Gas Safety Register (which superseded CORGI on 1st April 2009).
While there is no legal obligation on landlords to have professional checks carried out on the electrical appliances, there is however, an obligation to ensure that all electrical equipment is safe, under the Electrical Equipment (Safety) Regulations 1994, the Plugs and Sockets Regulations 1994, the 2005 Building Regulation – Part P, and the British Standard BS1363 (relating to plugs and sockets).
All electrical certification should be carried out by an electrician whom is registered with the National Inspection Council for Electrical Installers and Contractors (NICEIC). There are two types of electrical certificate:
- Periodic Inspection Report
- Portable Appliance Testing (PAT)
The Furniture and Furnishings (Fire Safety) Regulations 1988 (as amended in 1989 and 1993) sets minimum fire resistance standards for domestic upholstered furniture, furnishings and other products containing upholstery that remain in a dwelling during the course of a tenancy.
These include any of the following containing upholstery:
- Furniture intended for private use in a dwelling, including children's furniture
- Beds, head-boards of beds, mattresses (of any size)
- Sofa-beds, futons and other convertibles
- Nursery furniture, garden furniture suitable for use in a dwelling
- Scatter cushions, pillows, seat pads and loose and stretch covers for furniture
The Regulations do not apply to:
- Furniture made before 1950
- Fleeping bags
- Bed-clothes (including duvets and pillowcases)
- Loose covers for mattresses
For items that do apply, a suitable label must be attached to the furniture in a prominent position so that the label will be clearly visible to a potential purchaser of the furniture and the wording on both sides can be read with reasonable ease.
Smoke Alarms & Carbon Monoxide
After October 1st 2015, the landlord must ensure that a smoke alarm is equipped on each storey of the premises on which there is a room used wholly or partly as living accommodation. Additionally, landlords must ensure that there is a carbon monoxide alarm fitted in any room that is used partly or wholly as living accommodation which also contains any appliance which burns, or is capable of burning solid fuel. This would include log and coal burning stoves and open fires.
Energy Performance Certificate
After October 1st 2008, all new tenancies require an Energy Performance Certificate. Their purpose is to determine how energy efficient homes are on a scale of A-G. The most efficient homes with the lowest fuel bills, are in band A. The certificate uses the same scale to define the impact a home has on the environment. Better-rated homes should have less impact through carbon dioxide emissions. The average property in the UK is in bands D-E for both ratings.
The certificate includes recommendations on ways to improve the home's energy efficiency to save money and help the environment.
Homes Of Multiple Occupancy
If the landlord wishes to rent their property to multiple occupants, it may mean that a licence is required before the property can be legally rented. Houses in Multiple Occupation are also referred to as 'HMOs' and the purpose of the licensing scheme is to improve management and safety standards in this area of the rental sector.
It is now a mandatory duty for:
- All Local Authorities to have a licensing scheme
- Owners of certain types of HMOs to have a licence
For further information on Houses in Multiple Occupation and how this may effect you as a landlord, please speak to one of our representatives.
Overseas Landlords and Income Tax
The scheme requires UK letting agents to deduct basic rate tax from any rent they collect for non-resident landlords. If non-resident landlords do not have UK letting agents acting for them, it is their responsibility to inform the Inland Revenue of rental income received, and to pay any tax due. Non-resident landlords can apply at any time for approval to receive rent with no tax deducted.
If your intention is to reside abroad then we can offer the following services:
- Arrange for annual rental accounts to be prepared by a local firm of chartered accountants and be submitted to the Inland Revenue at the end of each tax year.
- Tax saving schemes relating to earned income abroad and the possibilities of re-investing your income to receive tax-free interest.
- We have the expert advice of a firm of financial consultants on hand.
Details are available on request.