5. Deposit monies given over by the tenant must be lodged with the Deposit Protection Service (DPS). Any disputes associated with a final settlement when a tenant is leaving a property will inevitably involve the DPS as the arbitrator but is considered by many BTL landlords to be in the tenant’s corner in a dispute.
6. If your BTL is a House of Multiple Occupancy (HMO) or is in Scotland it is already the law to get all electrical appliances safety checked at least once every five years by a certified electrician and all appliances and plugs documented as passed in an electrical installation condition report.
These tend to cost about £150.
Other rules around the requirement for fire risk assessments were also rolled out for any properties with communal seating areas and for HMOs.
Following the Grenfell Tower fire disaster other, more stringent requirements to prevent fire and ensure all electrical equipment has been safety checked came through.
Many of these requirements seem sensible. They are, after all, protecting tenants and ensuring rental properties are safe to live in.
However, if any of these checks have not been carried out when required and are not properly documented and circulated in a timely way to the tenant, this prevents landlords from evicting tenants under Section 21 of the Housing Act 1985 if they want the property back.
Section 21 to go
Further, Section 21s themselves are on the chopping block. Experts indicate that Section 21 Notices – one of two key legal levers landlords can pull to repossess their property in case of breakdown in agreement with tenants – will probably be no more within 18 months.
In the meantime, Covid-19 has amplified what was already becoming a problem – getting repossession claims processed through the courts.
When lockdown happened, all existing repossession claims were staid (held up) and no new claims could be started as courts closed.
Courts jammed up
There are now more than 10,000 Section 21 claims currently in process and a further 14,000 Section 8 claims and other private possession claims held up.
And that is before you get into the new ones which have not been started during lockdown.
Experts predict that claims being started now are likely to take 12-14 months to process from here.
We will inevitably see many more landlords carrying costs associated with having tenants with more than six months of rent arrears before the end of this year.
Mortgage Interest Tax Relief ending at the end of 2020
2020 is also the year which sees the final death knell for mortgage interest tax relief.
This change dates back to 2015, when the then Chancellor George Osborne announced plans that meant landlords would have to pay tax on residential investment property income turnover, rather than the difference between rental income and mortgage interest.
