Letting a property in England, Scotland, and Wales: the key legislative differences your agency needs to know
Lettings laws and regulations vary across the borders for agents, landlords, and tenants in England, Scotland, and Wales. Here's a breakdown of what you need to know.
The rights and responsibilities of letting and estate agents, landlords, and tenants in the private rented sector across England, Scotland, and Wales vary as they can be decided at the level of each devolved government - and therefore the legislation and regulations differ too across Great Britain. So what should your agency consider when renting out your landlords' properties?
Registering and licensing landlords and agencies
Registration and licensing aim to protect tenants from "rogue" landlords and agents.
- Landlords in Scotland have to register with their local authority and obtain a licence, to show they are authorised to let a property. This must be renewed every three years. Letting agents need to join the Scottish Government's Register of Letting Agents, pass a ‘fit and proper person test’, and comply with a Letting Agent Code of Practice.
- Under the Housing (Wales) Act 2014, landlords must register any properties they rent out in Wales with Rent Smart Wales. Their agents will have to be trained and licensed under Rent Smart Wales too.
- Landlords in England should check with their local council to see if they require registration or a property licence, but landlords can choose to register voluntarily with either the National Landlords Association or Residential Landlords Association. For agents, there's currently no regulation but this will soon come into play with the Regulation of Property Agents, which will require agents to be licensed, adhere to a code of practice, and obtain professional qualifications. Download your free guide to the Regulation of Property Agents.
The property that your landlords rent to your tenants should meet certain criteria to ensure they're fit to be rented out.
- In England, landlords must ensure that their rental properties, including common areas, are fit for human habitation at the beginning of the tenancy and throughout its duration, in line with the Homes (Fitness for Human Habitation) Act 2018. Landlords are responsible for repairs when the tenancy has a fixed term of less than seven years. Download a guide for your Landlords' obligations under the Fitness for Human Habitation Act.
- In Scotland, landlords must adhere to the Tolerable Standard as minimum for a rental property, to ensure it's fit to live in. Landlords must also follow the Repairing Standard - including checks before a tenant moves in, and throughout their tenancy.
- Landlords with properties in Wales can apply for a loan from Houses into Homes to help get a property fit to let.
Although rent controls used to exist historically, this changed with the Housing Act 1988 which deregulated rents in England and Wales. In Scotland, national rent control is in the consultation stage.
- Rent can be increased at the end of a fixed term for an Assured Shorthold Tenancy (AST), with a Section 13 notice, or according to any rent increase clause in the contract in England and Wales.
- In Scotland, ASTs were replaced with Private Residential Tenancies (PRTs) in 2017, which have no tenancy end date and must give tenants at least three months’ notice to increase rent. An area can be designated a "rent pressure zone" if rents in an area are rising too quickly, where a cap will be introduced on how much landlords or agents can increase rents for existing tenants. A consultation is currently open until April 2022 on rent control and other topics, under the "A New Deal for Tenants" strategy.
Your agency and landlord must follow strict guidelines to evict a tenant - hinging on many factors, including when you provide the relevant property documents. Although there have been temporary measures in place during Covid-19 to help protect tenants, but there are standard possession processes to follow to ask tenants to leave a property.
- In England, Section 21 notices can be served on an AST to evict a tenant with two months' notice after a fixed term ends - known as a no fault eviction - or a Section 8 notice can be served to evict a tenant before the end of the fixed term, if a tenant has breached their contract or fallen into rent arrears. The Renters' Reform Bill aims to abolish Section 21, while strengthening Section 8. A government white paper is expected to outline the full plan in Autumn 2021. Download your free guide to the Renters' Reform Bill.
- Sections 21 and 8 also exist in Wales. However, rather than through the Renters' Reform Bill, the Welsh government plans to extend the minimum notice period from two months to six months and to restrict the issuing of such a notice until six months after the start date of the contract, rather than the four months it is currently, through the Renting Homes (Amendment) (Wales) Bill.
- The PRT in Scotland means that contracts have no set end date and, as long as tenants abide by their tenancy agreements, it's very difficult to evict them. There are eight mandatory grounds for eviction and the tenant would have to meet at least one to be considered for eviction, with varying notice periods. A consultation is currently open on the "A new deal for tenants" strategy, which includes proposals for increased penalties for illegal evictions, and restrictions on winter evictions.
Property documents to serve tenants
When you or your landlord welcome a new tenant into a property, there are documents that you must share with your tenant at set points in the process.
- Tenants in England must be provided with the "How to Rent" guide, a gas safety certificate, Electrical Installation Condition Reports (EICR), and an Energy Performance Certificate (EPC), which should also be displayed in any advertising. For any deposits protected in a government-approved deposit protection scheme, the prescribed information about the scheme must be shared with the tenants within 30 days.
- With PRTs in Scotland, tenants have to receive the written tenancy terms and certain statutory terms. If the landlord uses the government's model tenancy agreement, they should also receive the Easy Read Notes, explaining the contract in simple terms, while if the landlord creates their own agreement, they'll have to share the Statutory terms supporting notes. As with English tenancies, the EPC certificate must be displayed in advertising for the property.
- Landlords with properties in Wales have to give or link tenants to the "A Home in the Private Rented Sector – A Guide for Tenants". As in England, they should also provide a gas safety certificate, deposit protection scheme information, EICR, and EPC certificate.
Tenant and landlord fees
Tenant fees are banned in one form or another in all three nations, but the details differ.
- The Tenant Fees Act is applicable in England, and limits the fees that agents and landlords can charge their tenants. Holding deposits are limited to one week's rent, and security deposits at five week's rent for properties with an annual rent of below £50,000. For changes to the tenancy agreement requested by the tenant, agents or landlords can still charge an admin fee of up to £50, and can charge for the replacement of a lost key or other security device to give access to the housing, or late payment of rent. Download your free guide to the English Tenant Fees Act.
- In Wales, the lettings fee ban has some differences to the one imposed in England. There is no limit on security deposits, but the holding deposit is limited to no more than 1 week's rent, and tenants aren't required to pay administration fees or inspection fees when they move out.
- In Scotland, the fees ban is more stringent. Tenants only have to pay rent and the deposit - the landlord must pay all other fees.
This article is intended as a guide only and does not constitute legal advice. Learn how Goodlord can help your agency with compliance in the lettings process.
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