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Mon 04 Feb 2019

Are you scandalous or scrupulous Take our landlord quiz

Do you know your EPC from your section 21? With more than 150 laws and 400 regulations — and counting — on letting a property in England and Wales, it is more complicated and more expensive than ever to be a landlord.

As Home rounds up recent and upcoming changes in this quiz, how many questions can you answer correctly? Are you a rogue landlord (1-2 correct), an accidental landlord (3-5), a dinner-party landlord (6-7), a portfolio landlord (8-9) or the housing minister we’ve all been waiting for (10 out of 10)?

1 What is the smallest bedroom you can let in a home with sharers? 
A 50 sq ft
B 70 sq ft
C 90 sq ft
D 110 sq ft

Answer: B 
As of last October, you need a “mandatory” licence for a house in multiple occupation (HMO) to let any home in England to five or more people from at least two households — affecting 170,000 properties. As part of this, stricter space rules mean many landlords can no longer let the box room. Bedrooms have to be at least 50 sq ft (the size of two double beds) for a child under 10, 70 sq ft for one person over 10 and 110 sq ft for two people.

Many town halls, and more than half of London boroughs, use “additional” HMO licences to extend these rules to homes rented by three or four sharers — Hackney and Nottingham are among the most recent. Each HMO needs a five-year licence; fees vary by council.

2 Which is not (yet) true? 
A You must belong to a landlord redress scheme
B Your lettings agent must belong to a redress scheme
C In some areas, you need a licence to let any home
D A court can ban you from renting out any home

Answer: A
All lettings agents must belong to one of two approved redress schemes — giving about a third of tenants an easy way to complain. DIY landlords, who account for the other two-thirds of tenants, will soon have to do the same under laws expected to take effect this year.

You must register to rent out any home in Scotland, Wales and about 70 council areas in England (and counting — Newcastle is planning to license 9,000 homes). Since last April, councils can ask the court to ban the worst landlords from letting any home in England; this national blacklist is not yet public.

 

3 Under energy-efficiency rules, in which homes can’t you start new lets? 
A Those without wall insulation
B Those without smart meters
C Those rated D or below
D Those that need £1,000 of work to bring the property up to a rating of E

Answer: D
Before you list a property for rent, it must have an energy performance certificate (EPC), which is valid for 10 years; check epcregister.com to see if your home has one. In England and Wales, you can’t let to new tenants if the EPC rating is F or G unless your home is exempt: for example, if three quotes show that £3,500 of works won’t upgrade it to the minimum E standard, or if an expert says wall insulation won’t be suitable. Fitting LED lightbulbs and a smart meter may be enough to bring it up to scratch, but ask an energy assessor for advice. From next year, the rules will also apply to existing lets.

4 To comply with data protection rules, which of the following must you do?
A Inform your tenant by letter about how you handle their private information
B Register with the Information Commissioner’s Office (ICO), the government regulator on personal data
C Check that your plumber doesn’t scribble the tenant’s phone number on the back of an envelope
D Delete tenants’ details when they move out

Answer: A, B and C 
Even if you let only one property, you’re a business, so must comply with EU-wide general data protection regulation (GDPR) — though no landlord is thought to have been prosecuted yet. You must register with the ICO every year (£40; ico.org.uk) and tell your tenant how you handle their information in a privacy notice. Organisations such as the Residential Landlords Association (RLA) offer templates (membership £45; rla.org.uk). Store data on secure, password-protected networks and devices, and make sure anyone to whom you pass your tenants’ data also complies — yes, that includes the plumber. But don’t delete former tenants’ details: HMRC requires you to keep records for six years.

5 What must you do to minimise legionella risks?
A Prevent excessive mould
B Assess the water system
C Test ventilation
D Kill pest infestations

Answer: B 
Yes, you must assess the risk of legionella in your property’s water system — do this yourself before a new tenancy starts, or pay an expert (£80). This regulation “slipped in through the back door”, and many landlords are unaware, says Theresa Wallace, head of lettings customer services at Savills estate agency.

If inhaled in a fine spray, the bacteria can cause legionnaire’s disease, a potentially fatal form of pneumonia. It breeds in standing water at 20C-45C, so use a thermometer (one for cooking will do) at the taps closest and furthest from the boiler to ensure the cold water runs below 20C and hot above 50C. Also check the hot-water tank is above 50C. Disinfect showerheads, especially those in rarely used ensuites. A combi boiler means you are likely to be safe; big country houses where water can stagnate in “dead leg” pipes need testing.

 

6 What can’t you (or your agent) charge when the tenant fees ban kicks in?
A Six weeks’ deposit
B One week’s holding deposit
C Costs to change the name of a tenant
D Interest on rent arrears

Answer: A 
Once the Tenant Fees Bill comes into force in England on June 1, the maximum deposit for homes letting at less than £50,000 a year will be five weeks’ rent. “Vulnerable tenants, and those with pets, will lose under the deposit changes, as landlords see them as higher risk and often seek a larger deposit,” says David Smith, policy director of the RLA.

Holding deposits are limited to one week’s rent, and interest on rent arrears to 3% above the Bank of England rate. If a tenant loses keys, asks for a contract change (such as changing a name) or leaves early, you can charge only for costs proven with receipts. You can’t levy any other fees, not even for third-party services such as inventories or professional cleaning.

 

7 Whose right to rent don’t you have to check?
A British citizens
B EU citizens
C The tenants’ au pair
D The tenants’ children

Answer: D
In England, you must check whether everyone over 18 who will live in your property can legally stay in the UK — even if they’re not named on the lease, as in the case of an au pair. To avoid discrimination, check personal documents of Britons, too. If someone’s right to live here has a time limit, check again before it expires. What does that mean if you have an EU tenant? If Brexit goes ahead, EU citizens here must apply for settlement by June 2021, so recheck their documents just before then.

 

8 What new safety requirements will soon be mandatory for landlords?
A Annual fire-risk assessment
B Carbon monoxide detectors on every floor
C Electrical inspections every five years
D Appliance testing every two years

Answer: C
In the wake of the Grenfell fire, the government has said electrical installation condition reports (EICRs) will become mandatory for all rental homes, although details are yet to come. Every five years, a registered electrician will have to check that wiring, fuse boxes, switches, sockets and light fittings are safe, at a cost of about £150.

The current laws require annual checks by a Gas Safe engineer, soft furnishings with fire labels, smoke alarms on every floor and carbon monoxide detectors in every room with a solid-fuel appliance such as a woodburner. At the start of every tenancy, ensure electrical appliances have at least the CE safety mark and no visible damage or burns. You have no obligation to test your kettle and washing machine, but you can: experts charge £50-£100 for portable appliance testing.

 

9 On which of these can’t you claim tax relief from 2020?
A 20% of mortgage interest
B Replacing furniture
C The gain in price while you lived in the home, plus 18 months
D £40,000 of the gain in price while you had lodgers

Answer: C 
If you sell your main home now, you don’t pay capital gains tax on the increase in its price that occurred while you lived there, plus 18 months after you moved out. From next April, however, that extra grace period will be reduced to nine months. This change, announced in the autumn budget, will hit accidental landlords who rent out what used to be their home. At the moment, they can also claim relief on up to £40,000 of the gain made while letting it, but from 2020 that will only apply when sharing the home with tenants.

This is the latest in a long line of tax changes targeting landlords. The level of mortgage interest you can offset against tax on rental income is falling every year; from April 2020, you will be able to get only 20% relief on finance costs (as opposed to 40% for high-rate taxpayers before 2017). You can also only claim the actual cost of replacing furniture and appliances, instead of 10% of net rent, as in the past.

 

10 You have a 12-month assured shorthold tenancy (AST), the most common type of rental contract. What can’t you do?
A Give your tenant notice so you can sell after eight months
B Raise the rent after a year
C Evict your tenant over rent arrears after five months
D Without giving a reason, ask your tenant to leave after a year

Answer: A 
With an AST, you can’t take back your property before the end of the fixed term — in this case, 12 months — unless you have one or more grounds listed in the Housing Act 1988, such as the tenant not paying rent. Selling up is not on that list. Only at the term’s end can you raise the rent or send the tenants packing — whether to sell or for any other reason, which you don’t have to state if you’re using a no-fault section 21 notice.

A near-record high of 8,550 people have commented on the government’s consultation model of a three-year tenancy, in which either the landlord or the tenant can leave after the initial six months. Thereafter, only the tenant can give two months’ notice, unless the landlord has grounds such as rent arrears, selling or moving back in themselves. The official response is expected by summer.

Despite tenant campaigns claiming that section 21 notices are the biggest reason for homelessness, there are “no plans” to end no-fault evictions, says Anne Frost, the government’s head of private renting policy. “That is not one of the government’s policies, and I would be surprised if that was something that came out of the longer tenancies consultation,” she told Home.