The Deregulation Act: we've all heard its name by now but do you know what its implications are Contrary to what the name suggests, the Act actually introduces more regulation for agents to keep on top of. Confused Don't be. Below I try to simplify what the changes will mean for you.
1. Letting Agent Fee Transparency
You will soon be required to publicise a full breakdown of the fees you charge, state whether or not you're a member of a Client Money Protection (CMP) scheme and state which redress scheme you belong to (England only). All this information will need to be prominently displayed in office and on your website.
The Advertising Standards Agency (ASA) has also recently published a ruling that means all tenant and landlord fees must be advertised inclusive of the current rate of VAT. For example, a tenant reference fee of £200 + VAT should be advertised as £240. Adding an "inclusive of VAT" type statement is optional. The guidance applies to ads across non-broadcast media including posters, newspapers, magazines, leaflets, mailings, commercial emails, ads on websites, text messages and those on advertisers' own websites, including social media spaces that they control.
When's it happening
Providing inclusive VAT quotes: immediately
Displaying fees, CMP and Redress membership: 27 May 2015
Remember, if you don't have Client Money Protection insurance in place, UKALA membership includes cover with CM Protect at no extra charge. Find out more here.
2. Changes to deposit protection in England & Wales
In short, the Government has made changes intended to clarify and simplify issues created by the Superstrike and Charalambous legal decisions, which muddied the waters with regard to responsibilities around protecting deposits and using no fault possessions. However, the changes do mean that there will now be a large number of deposits that need protecting despite not previously needing to be, and it's likely that many landlords and agents may not be aware of what they need to do. If you do still hold a deposit for any assured shorthold tenancies (ASTs) then UKALA's advice is to contact your landlord clients about protecting them if you haven't already done so - even if the deposit was taken before the law was introduced.
When's it happening
The announcement was made on 26 March 2015, and if you have any deposits that need protecting then you should act immediately. Still unsure UKALA and NLA members can speak to a member of the Advice Line. Not a member Purchase call credits.
3. Retaliatory evictions
I wrote about retaliatory evictions at length back in October last year, so I won't dwell on the subject other than to say that you won't be able to serve a no fault possession (Section 21) if a local authority notice has been issued following a complaint from a tenant about disrepair. We will all need to ensure we remain vigilant about disrepair claims and making sure that necessary repairs are carried out if we want to avoid the wrath of clients unable to regain possession of their properties.
When's it happening
1 October 2015
Separate to the Deregulation Act, there is one more change you should know about that has already happened:
Changes to wording of Section 8 and 13 Notices in England (not Wales)
This might sound dull, but it's incredibly important. The wording of Section 8 Notices used in England has now changed, and you must use the new wording when serving notice on behalf of your landlord clients or risk the case being thrown out by a judge if you subsequently have to apply for a Possession Order. The same goes for a Section 13 Notice, which is used to notify a tenant of a rent increase if your tenancy agreement does not include a rent review clause.
When did it happen
New legislation came into force on Monday 6th April. However, it's important to note that any Section 8 or 13 Notices served prior to Monday 6 April will still be valid so long as the original wording was used and they were served correctly. Note also that the changes don't affect Wales and that the previous wording remains correct for Notices served in Wales.
The latest version of the both Section 8 and 13 Notices, using the correct wording, are available to UKALA members to download from the National Landlords Association website at www.landlords.org.uk/forms.
*Richard Price is Executive Director of UKALA (The UK Association of Letting Agents)