- Law and regulation for residential lettings
1.1 Minimum Standard of Energy Efficiency (MEES)
1 April 2020 regulations state that all properties rented out in the private rented sector must have a minimum standard of energy efficiency (MEES) performance rating of E on an Energy Performance Certificate (EPC). It is unlawful to rent a property which breaches this requirement unless there is an applicable exemption.
It is a requirement for Landlords registered with S Stone Management to have a performance rating of D or above.
Rental of a Bedsit
If the property you are letting is not self-contained it will not require an EPC. However, the building as a whole may require an EPC, triggering the MEES. You should check and clarify the requirements for your property and confirm these arrangements with S Stone Management.
1.2 Electrical Safety Inspections (Installations & Alliances)
The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 came into force on 1 June 2020 and apply to all tenancies created on or after that date in England from 1 July 2020.
These new regulations require Landlords to have the electrical installations in their properties inspected at least every 5 years and tested by a person who is qualified and competent. Landlords will also have to provide a copy of the electrical safety report to their Tenants as well as to the local authority if requested.
Landlords are expected to provide evidence of their compliance with this regulation on request from S Stone Management.
1.3 Smoke & Carbon Monoxide Alarms
There has been a revision to the smoke and carbon monoxide alarm regulations in England that will take effect from October 1st, 2022, which all landlords will need to comply with.
These regulations include at least one smoke alarm on each floor of the home that has a room that's used for living accommodation. Landlords must also make sure that there is a carbon monoxide alarm in any room that has a fixed combustion appliance such as gas or oil boilers or log burning stoves (excluding gas cookers).
- Initial Obligation of the Agent
2.1 Various acts of parliament cover letting property. There must be adherence to such acts by both the Landlord and the Agent before the property can be let. Specifically, the Landlord and the Agent agree and acknowledge that:
The Agent has a duty to any potential tenant(s) (the ‘tenant’) to make sure that both the Agent and the Landlord are legally entitled to offer them a tenancy. If the Landlord has a mortgage, there may a requirement for them to obtain the lenders permission before letting the property. The Agent may assist and offer advice on how to do this. If there are joint owners, the Landlord must inform the Agent who they are, and their permission will be needed in writing before the Agent is authorised to act for the Landlord.
2.2 Under the consumer protection acts, the property must be fit for someone to live in at the point of letting. The Agent will inspect the property and inform the Landlord of anything that is felt may not meet those laws. Any repairs that are deemed necessary must be completed before the Agent allows the property to be let.
2.3 All furniture and soft furnishings supplied by the Landlord as part of the tenancy must meet the furniture and furnishings (fire safety) regulations 1988 (as amended in 1989, 1993 and 2010).
2.4 The Landlord must have a valid Gas safety record (CP12) for the property before the start of the tenancy. This is a requirement under the Gas Safety Installation and Use Regulations 1998. The Landlord is also required to possess an Electrical Installation Condition Report (EICR). If a valid certificate is not provided, then this gives the Agent the permission to arrange for this to be done and made chargeable to the Landlord.
2.5 The low voltage electrical equipment (safety) regulations 1989 and electrical equipment (safety) regulations 1994 deal with the safety of electrical appliances and wiring, these regulations are not a legal requirement the Agent reserves the right to instruct the Landlord to have this completed
2.6 If there is a garden, the Landlord needs to indicate to the Agent how they expect the Tenant to maintain it. This will need to become a condition of the tenancy. The Landlords should elect from the following options:
- The garden must be maintained according to the time of year.
- The tenant must mow the lawn, trim the hedges & weed the garden regularly.
Recommendation: If there is a lawn and some hedges the Landlord must provide the garden tools the tenant will need for this, and have an RCD protected electrical supply (an electrical supply with a circuit breaker to prevent electrocution) and provide safety gloves.
Recommendation: If the gardens are landscaped, the office of fair trading state that Tenants do not have a long-term benefit from the garden, the Landlord should pay the greater share of the cost, as they receive the long-term benefit.
2.7 The Agent will be responsible for paying our contractors on the agreed amount for both parties, any profit or loss will not be the Landlord’s responsibility.
2.8 The Agent agrees that:
When marketing the property, we will use the database of possible Tenants, advertise the property on online portals, using professional photography or photos to a high standard and display the details of the property specifications in their window.
The Agent reserves the right to do only those things listed above deemed appropriate in the current market conditions.
The Agent will advise the Landlord on a suitable rental value based on the market, (at the time of instruction) and will come to an agreement with the Landlord at what initial asking price the property will be marketed at
They will show possible Tenants around the property and the Landlord must provide the Agent with keys to all parts of the property.
When a suitable tenant is found, the Agent will contact a Credit Reference Agency to make checks about them (and any potential guarantor). The agent will be responsible for ensuring all references have been checked.
Referencing Process:
The Credit Reference Agency conduct checks to:
- See if the tenant has any County Court Judgments against them
- Confirm that the tenant/s are on the electoral roll at the address they have provided.
- Obtain proof of the tenant’s current earnings
- Ask the tenant’s employer to confirm that their employment is likely to continue for the term of the tenancy
- Obtain a reference from the tenant’s current or previous Landlord is applicable
- Obtain Landlord reference
2.9 The Landlord acknowledges that references give details of a Tenant’s past behaviour and do not guarantee that they will pay their rent in the future. Accordingly, no future liability attaches the Agent in respect of Tenant references, provided the agent has acted with reasonable care and skill in performing their contractual obligations.
When a suitable Tenant is found, the Agent will:
- Agree with the Landlord, the length of tenancy to offer them and the date the tenancy should start. The Agent will prepare an Assured Shorthold Tenancy in line with these instructions and get the Tenant to sign it.
- Prepare details of the condition of the property and a list of its contents. (if required by the Landlord.) This list will be agreed with the Landlord and the Tenant. Alternatively, the Agent reserves the right to have this function performed by an independent third party which specialises in Inventory Preparation.
2.10 The Tenant will take the first month’s rent in advance, and five weeks rent as a security deposit. The tenancy will not be permitted to proceed until this is in cleared funds. The deposit will be held in a Tenancy Deposit Scheme and the Agent will provide the Landlord with details of that scheme.
- Obligations of the Landlord
3.1 The Landlord must inform their insurers once the property is let. The Landlord should seek specific advice from an insurance professional about insurance cover that makes sure that there is no liability in the event of the tenant, or any visitors being injured in the property. The agent cannot provide advice on insurance matters, and it is the Landlords obligation to make sure that there is adequate cover.
3.2 The Landlord must notify the Agent of any restrictions in the lease or freehold documents pertaining to the property. For example, clauses preventing you from parking caravans or commercial vehicles on the drive. The Agent will not be liable for the departure of a Tenant caused by a restriction that the Agent was not made aware of. Additionally, the Landlord will still remain liable for any Agent fees and may be liable to the Tenant for damages.
3.3 The Tenants must not make any changes to the property without having the Landlord’s consent in writing first.
3.4 The Landlord will sign a subject to contract letter after the terms have been agreed by both parties, this letter will set out the agreement from the Tenant proposed offer for the tenancy agreement. If the Landlord were to change the agreed terms this could then cause Agent and Tenant damages (loss) therefore the Landlord will incur both parties’ cost dependant on the status of the move in.
3.5 If there is a reported maintenance issue the Landlord has 48 hours to respond to the Agent, organise a contractor or give authorisation for the Agent to resolve the issue on the Landlords behalf.
If the Landlord has not responded within 48 hours, The Agent will then have the authority to hire a contractor to resolve any issues reported.
3.6 The Landlord agrees to:
A. Pay the Agents fees as outlined in the Landlord details sheet, such fee will be deducted from the money received from the Tenant and the balance will be sent to the Landlord within seven working days of the start of the Tenancy. VAT will be added at the prevailing rate. Please be advised, we only make rental payments on Tuesdays and Fridays’.
B. Authorise the Agent to sign all legal documents in connection with matters arising from the Tenancy Agreement on the Landlord’s behalf except Court Applications.
C. Always provide the correct contact details for themselves and sufficient identification.
D. Inform the Agent of any items that are currently in the property, but which will not be included in the new tenancy.
E. Pay the Agent any legal costs and damages suffered as a result of the Landlord breaking any of their legal responsibilities.
F. Inform the Agent beforehand about any Tenants the Landlord may not want. For example, smokers, people with pets and so on.
G. Upon instructing S Stone Management, we will automatically order an advertising board to generate more exposure to your property.
H. Be responsible for carrying out inspections during ‘voids.’ This is when the property is empty.
I. Pay any other fees or expenses in full within seven days of receiving a demand for payment.
J. If the Landlord changes service throughout the tenancy and the Tenants remain within the property, the Landlord is responsible to pay the agents let only service fee.
- Managing and ending the tenancy
4.1 Notices
If the Tenant breaches any of the terms of their Tenancy Agreement, the Agent will prepare a Section 8 Housing Act 1988 notice upon instruction from the Landlord. If the Tenant is late paying the rent, the Agent will write to them once the rent is seven days late and will communicate this to the Landlord.
Should the Landlord wish to seek possession of their property, the Agent will serve the tenant(s) a Section 21 Housing Act 1988 notice, the Landlord will be liable to pay the Agent a fee of £375 plus VAT.
In the event that the Landlord would like to evict the Tenant through legal procedures the Landlord is responsible for seeking their own legal counsel. If the Agent is required to attend court on behalf of the Landlord, a fee of £60 plus VAT per hour will be applicable.
4.2 Renewals
Two months before the end of the tenancy, the Agent will contact the Landlord and the Tenant to confirm whether both parties want the tenancy to continue. If the tenancy is to be renewed, the Agent will prepare a new Assured Shorthold Tenancy Agreement in line with the Landlord’s instructions. This will be a cost of £210 plus VAT. Should the tenancy come to an end and the Landlord does not wish to renew their contact with S Stone Management, however, still wish to keep the existing Tenants, the Landlord agrees to pay still pay S Stone Management their let only fee upfront.
4.3 Tenancy End
At the end of the tenancy, the Agent will arrange a check out. This will check the condition of the property and the list of items included with the tenancy, making allowance for fair wear and tear. If any items have been damaged, we will negotiate with you and the Tenant an appropriate figure to compensate you for your loss. If the Landlord wishes to open a dispute this must be dealt with in accordance with the rules of the Tenancy Deposit Scheme (TDS). The Agent will charge £90 incl VAT to submit a case to the TDS. At the end of the tenancy the Agent will read the gas and electricity meters, tell the utility companies and the Council Tax Department that the Tenant has moved out. When the Tenant leaves the Agent will secure the property and will either turn off the water supply or leave the central heating on a low setting to prevent damage by frost during the winter.
4.4 Termination & Fees
This Agreement will end immediately if the Landlord withdraws their instruction before the Agent finds a Tenant.
Once the Agent finds a Tenant who meets the criteria which was agreed with the Landlord, the Landlord is required to pay the agent any additional costs or losses that the Agent has incurred, to compensate the Agents damages.
If during the Tenancy or Periodic, you wish to terminate our agreement, the Landlord is required to give 3 months’ notice and pay the Agent a fee 10% of the annual rent.
Once the Tenancy Agreement has ended either party may give 3 months written notice, sent by first class recorded delivery to the address for the parties as contained in the Landlord information agreement (or such subsequent address as has been notified in writing by either party).
In the event of this Agreement ending, the Landlord will be entitled to such copies of all documents the Agent has on file so long as the Landlord has paid the Agents agreed fees in full.
The Landlord will have to pay the Agent’s reasonable expenses if the Landlord does not deal with the issues raised in Point 3 (Obligations of the Landlord) of this agreement, or if the Landlord lets the property through another Agent without telling the Agent when they have also found a Tenant. The Landlord will also have to pay the Agent’s fees if the Landlord offers a tenancy to anyone that the Agent has introduced to the property. If the Landlord withdraws this instruction, and the Agent had to return an administration charge to a possible Tenant as a result, the Landlord agrees to repay the Agent that administration charge.
4.5 Notice of Right to Cancel
You have the right to cancel this contract within 14 days without giving any reason. The cancellation period will expire after 14 days from the day of the conclusion of the contract. To exercise the right to cancel, you must inform S Stone Management, Interchange House, 81-85 Station Road, Croydon CR0 2RD or email propertymanagement@sstonemanagementltd.co.uk of your decision to cancel this contract by a clear statement (e.g. a letter sent by post, fax or e-mail). To meet the cancellation deadline, it is sufficient for you to send your communication concerning your exercise of the right to cancel before the cancellation period has expired.
4.6 Effects of Cancellation
If you cancel this contract, we will reimburse to you all payments received from you. We will make the reimbursement without undue delay, and no later than 14 days after the day on which we are informed about your decision to cancel this contract. We will make the reimbursement using the same means of payment as you used for any initial payment unless you have expressly agreed otherwise; in any event, you will not incur any fees as a result of the reimbursement. If you requested that we begin the performance of services during the cancellation period, you shall pay an amount which is in proportion to what has been performed until you have communicated to us your cancellation from this contract.
- Safety and the law
The information contained below is intended for general guidance and is not an authoritative statement of the law. If you need further information our staff will be able to help you or direct you to the appropriate body, or a solicitor.
5.1 The gas safety (installation and use) regulations 1994, (amendment) regulations 1996 and (amendment) regulations 1998.
The regulations state that:
- It shall be the duty of any person who owns a gas appliance or any installation pipework installed in the premises or any part of the premises let by to ensure that such appliance or installation pipework is maintained in a safe condition. This will prevent any risk of injury to any person
Additionally, that person should:
- Ensure that each appliance is safety checked at intervals of not more than 12 months, or by an employee of, an approved person for the time being by the health and safety executive.
They should keep a record in respect of the appliances to which that duty extends of the dates of the inspection, the defects identified, and any remedial action taken.
- The record referred to above shall be made available upon request and upon reasonable notice for the inspection of any Tenant who may be affected by the use or operation of any appliance to which the record related. “A copy must be supplied to the Tenant within 14 days of move in or renewal. We always provide a current Gas Safety Certificate to a Tenant at move in and when we arrange renewal, we provide a copy to the Tenants. If you arrange your own certificates via a contractor or British Gas for example you must ensure that you are supplying copies to the Agent and Tenant in an appropriate time.
5.2 General Safety:
If a house is divided into flats, the Landlord retains control and occupation of all common areas. Legislation such as the housing (management of houses in multiple occupation) regulations 1990, the occupiers liability act 1958 and the housing act 1885 place responsibility on all Landlords for the safety of Tenants and visitors and anyone else who comes into the building.
The regulations are strictly enforced, and Landlords must ensure that all areas which are in common use are maintained in good repair and decoration, clean and in good order.
Corridors and staircases etc. must be kept free from obstruction and kept safe. There must be full fire precautions and means of escape. For example, it is not permissible to have missing handrails or banisters. If there are any shared kitchens, toilets, bathrooms, or showers, these must be kept in proper working order, clean and properly lit.
Fire safety regulations must be adhered to and there must be full provision of such fire precaution works as the local authority or fire service may require.
5.3 General & Electrical Safety Law
Unless the Landlord is a qualified electrician, they will not be able to check the electrical safety of the appliances and therefore we require that all Landlords have a PAT (portable appliance test) for the appliances in the rental property which is renewable annually in advance. Unless a report is received by us, this will be arranged before the move in date and the Landlord charged at the current standard rate.
There is a legal requirement for the Landlord to ensure the safety of the Tenant, for example if a Tenant is seriously injured from an electrical shock from the washing machine that is supplied by the Landlord and has a portable appliance test certificate to prove they had it tested then this can prove it was just a horrible accident. However, if the Landlord does not have this certificate, then it is a criminal negligence and prosecution can follow. We do not take this risk and all tenancies therefore must have a current (annual) portable appliance test certificate (PAT).
The consumer protection act 1987 controls the safety of consumer goods, these requirements extend to “consumer goods" supplied during business, in this case rented accommodation.
Other legislation covers electrical installations and the safest way of avoiding prosecution for breach of one of the many regulations is to ensure that everything in the rented property is regularly checked and serviced. It is recommended that Landlords keep a log of work carried out and items replaced.
Nearly all items that have been purchased since June 1989 should meet British standards. If an appliance is older than this, it should be checked by a competent electrician.
Other safety requirements however not limited to:
- Upstairs windows must have appropriate limited opening locks
- Kitchens must have fire blankets
- Stairways must have handles and or safety barrier or rail
- Balconies must have appropriate safety railing
Must Know:
- We operate under the CMP which is client money protection
- We require an EPC on the property. Pass rate is E and above, we recommend D+
- A Landlord licence will be required dependant on which borough your property is located in. This can be confirmed on the gov.uk website.
- You must contact your council for a licence to rent out your property as a house in multiple occupation (HMO) in England or Wales. A house in multiple occupation is a property rented out by at least 3 people who are not from 1 'household' {e.g. a family) but share facilities like the bathroom and kitchen and if it is over three stories tall. All HMO restrictions alter dependant of the borough, please contact your borough if you have any questions.
- Key guide to useful information
Failure to comply with safety legislations is a CRIMINAL OFFENCE.
6.1 Electrical appliances check list:
- Live parts should not be accessible
- Leads should not be worn or frayed and be complete with no joins
- Fire blankets should be marked BS6575 1985
- Washing machines, cookers etc. should be serviced annually
- Any moving parts should be guarded
- Correct plugs (marked BS1363) should be fitted and correctly fused
- Electric blankets should be serviced according to the manufacturer’s instructions
- Microwave doors should be clean, free from erosion and effective
- Fireguards should meet BS3248
- Any fire extinguishers should be marked BS5423 1987
6.2 Furnished v Unfurnished
There is no exact definition of what constitutes a fully furnished property. In general, if a property is to be furnished with the higher standards of furnishings the easier the let will be. Although if the property is offered as furnished it must have the basic requirements for a Tenant to move in and be able to live in the property. The necessary appliances must be offered such as a lawn mower if the tenant is instructed to keep the garden of a high standard.
We recommend for the Landlord if they have any items that hold great value or any emotional connection, please remove the items before the start of a tenancy.
In most circumstances furnished properties will not command higher rents than unfurnished properties. Unfurnished properties are still expected to have at least white goods particularly oven and hob/extractor hood, fridge and freezer or combined and a washing machine. We also advise that the Landlord provides things such as a curtain pole unless the Landlord wishes for the Tenants to drill in their own holes.
By law all properties are required to have adequate heating, cooking and washing facilities as a basic requirement. Heating must be safe, economic, and fixed (i.e. plug in heaters is not an option). The EPC will draw attention to any defects in heating or insulations and you should pay attention to that document. If in any doubt, please ensure to seek expert advice. Hot water must be readily available and economic.
6.3 Keys
The Landlord should provide at least three copies of the front door keys as two should be provided to the Tenant and as the Agent we should hold a set of keys. If additional keys are required for a larger number of Tenants, then the Landlord shall pay for the cost of key cutting. Once we are in possession of the keys, we will ensure they are tagged and logged in as necessary.
The Landlord should also ensure they retain a set of keys.
6.4 Inventories
Under the tenancy deposit scheme, it is vital that you have an independent inventory is taken. The Agent will arrange for this service to be carried out on behalf of the Landlord and the Landlord will incur a fee for this. The inventory will include photographs and a schedule of condition report, which will be checked and signed by the Tenant at the time of move in.
Should the Landlord decide not to carry out an inventory check or have one done by another provider, the Landlord will sign a disclaimer exonerating the Agent from any liability for loss or damage caused by the Tenant.
6.5 Tax
Our accounts team are not able to give any advice on income tax and we will stress to you as Landlords to ensure you get expert advice regards to this, you can visit www.gov.uk.
6.6 Security Deposit
A security deposit, typically 5 weeks rent, is taken just before the tenancy is going to start this is then registered in a deposit scheme either by the Landlord or Agent. This money is then held for the duration of the tenancy as it is there to ensure that the property condition is protected from damages by the tenant. If at the end of the tenancy, the property is left in the same condition as when initially rented, barring typical wear and tear, the deposit will be returned to the Tenant within 14 working days. However, should the condition of the property at the end of tenancy be unsatisfactory the Landlord can make a claim from the deposit to fix any issues. The claim will be decided by the tenancy dispute scheme
- Legislation
Under the De-regulation act the following applies from the 1st October 2015:
7.1 Legionnaires risk assessment
It is proposed that each property has a risk assessment for legionnaire’s disease — this will either show that there is no risk, minimal risk that needs minimal maintenance or high risk that requires immediate remedy or regular maintenance.
At present the above are recommended safety checks that you should take- although they are currently not a legal requirement you must remember that you have a duty of care to the safety of the Tenants and their visitors, in this respect you should also ensure you have 3rd party or public liability insurance.
7.2 Smoke and Fire safety
A smoke alarm must be provided for each floor of a property, or you can arrange for example interconnecting alarms for say a two or three storey house which is recommended as it requires less maintenance however, it is more expensive.
Carbon Monoxide monitor for each room that has a gas appliance, coal or wood burning fire or stove.
Although it is the tenant liability to upkeep these during the tenancy the Landlord has the minimum obligation of having them tested and working at the commencement of each new tenancy.
Building regulations 1991 require that all properties built since June 1992 must have mains operated interlinked smoke alarms fitted on every floor.
7.3 New section 21 notice requirements
All tenancies which commenced after the 1st of October 2015 come under the new regulation in the de-regulation act. One of these requirements is for the use of the new form of section 21 (6A). Another is that you cannot issue notice to a tenant within the first 4 months of a tenancy.
7.4 Requirements for registration or re-registration of the deposit
The de-regulation act confirms that once the deposit is properly registered and the Tenants’ rights protected, we do not need to re-register the deposit again unless there is a material change to the tenancy agreement (change of rent, occupier, terms etc.). This overrules case law which did cause problems when deposits were not re-registered for every renewal {even periodic renewal).
7.5 Revenge Evictions
If a Tenant reposts non repair to the environmental health department, they can then issue you a notice of repair, you may not evict your Tenant under a section 21 notice after that notice for four months. It is vital that all items of repair reported by Tenants are therefore addressed, and a record kept of every attempt for entry or access to make repairs. You can still evict the Tenant under section 8 of the housing act however non repair is also a defence in that matter and you would have to be able to provide evidence of repair or access issues with the tenant (this is an example).
- Terms and Conditions
Residential Lettings Service Agreement
This agreement sets out the terms under which the Agent will market the Landlord’s property and find a tenant far them. It defines the services the Agent will provide as part of their full management service.
Terms of Business
By signing below the Landlord confirms that they are the sole owner(s) of the property or are entitled to lawfully let the property and are signing for and on behalf of all persons who have an interest in the property and have the required permission to do so. The Landlord declares that the information provided is true to the best of the Landlord’s knowledge and should the Landlord’s status change during the tenancy the Landlord will immediately notify S Stone Management of that change. If the Landlord has provided incorrect information, which causes S Stone Management to suffer loss, or causes legal proceedings to be taken against S Stone Management the Landlord agrees to reimburse and compensate S Stone Management for all losses suffered.
The Landlord confirms that they wish to be bound by the content of S Stone Management.
By continuing with my registration on the S Stone Management Portal, I/We confirm that we are the sole/joint owners of the property and agree to these terms and conditions
Other Conditions:
- No one else will benefit from this Agreement as permitted by the Contracts (Rights of Third Parties) Act 1999 ad the Consumer Protection (Distance Selling) Regulation 2000 are excluded from this agreement.
- If any term of this Agreement cannot be enforced or is found to be unfair, it does not affect the other terms of the Agreement.
- The Agent shall have the right to assign this Agreement if the rights of the Landlord are not materially affected.
- The Agent retains the right to change the terms of this Agreement by giving you two month’s written notice of the change and the date the change will become effective.
- This Agreement is governed by and should be read in accordance with the Law of England and Wales.
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