Top tips for Assured Shorthold Tenancy StartUp

There are certain requirements that a landlord must meet before a tenant takes occupation of the Property. Landlords who fail to adhere to the requirements are often met with court proceedings by their tenants, resulting in large fines.  

We understand that a landlord who owns a number of properties may occasionally miss out on certain requirements and think that it is not a big deal. Unfortunately, missing out on these requirements can become a huge deal for a landlord and cause significant issues, particularly when they may wish to terminate a tenancy agreement.  

A landlord is required to:  

  • Protect your tenant’s deposit in a government-approved scheme. 
  • Keep rented properties safe and free from health hazards. 
  • Make sure all gas and electrical equipment is safely installed and maintained.  
  • Provide an Energy Performance Certificate for the Property.  
  • Provide your tenant with a copy of the ‘How to Rent’ checklist when they begin their tenancy.  

Protecting Deposits  

Prior to 2007 it was easy for a landlord to set up a tenancy without completing certain prescribed requirements. The Housing (Tenancy Deposit Schemes) Order 2007 changed the law to compel a landlord to protect a tenant’s deposit within a statutory scheme. Sections 212-215 and Schedule 10 of the Housing Act 2004 deal with the Provisions relating to Tenancy Deposits.  

The tenancy deposit protection legislation applies to all new tenancy deposits taken on or after 6th April 2007 for qualifying assured shorthold tenancies. Deposits must be protected in an authorised scheme within 30 days of receipt and tenants should be provided with Prescribed Information about where their deposit was protected and how the tenancy deposit protection scheme operates.  

This Prescribed Information has to be provided by the landlord within 30 days of the deposit being received. Failure to protect the deposit and/or provide the prescribed information in time or at all can result in a landlord being unable to rely on s.21 Housing Act 1988 to terminate an assured shorthold tenancy, and the tenant can sue the landlord for the return of the deposit, plus up to three times that amount. Three recommended sites to protect a deposit are:  

How to Rent, Gas Safety and Energy Performance Certificates (EPC)  

The Deregulation Act 2015 introduced changes to the prescribed requirements at the start-up of a tenancy agreement. Prior to 2015, although the requirements to provide the above documents existed, there was no impact upon recovering possession of a property if a landlord failed to give these documents to a tenant.  

For any new Assured Shorthold Tenancy Agreement, from 1st October 2015 a landlord is required to provide the tenant with the latest copy of the Gas Safety certificate, an EPC for the building and a current copy of the How to Rent guide: https://www.gov.uk/government/publications/how-to-rent  

If a landlord fails to provide the information to a tenant at the outset of a tenancy then they cannot serve a section 21 Notice Seeking possession of the Property. As of 1st October 2018, a Gas Safety Certificate and EPC must be provided to a tenant before serving a section 21 Notice. It is also a legal requirement for a landlord to renew their gas safety certificate every year, failure to do so constitutes to a serious offence and a landlord can be liable for unlimited fines and / or six months of imprisonment. An updated EPC must be provided every ten years.  

Electrical Installation Condition Report (EICR)  

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 impose specific requirements on a landlord to follow before setting up an Assured Shorthold Tenancy Agreement.  

A landlord must provide an Electrical Installation Condition Report to the tenant at the outset of the tenancy. The landlord must ensure electrical installations are inspected and tested by a qualified and competent person at least every five years. The report must give results of the inspection and must be provided to the existing tenant within 28 days of the inspection or supplied to a new tenant before they occupy the premises.  

Where the report shows that remedial or further work is necessary, this work must be completed within 28 days. Failure to do so is not strictly a bar to relying on a section 21 Notice, but legislation may change, and it is recommended to be provided to a tenant in any event. Additionally, a local authority may impose a financial penalty of up to £30,000 on landlords who are in breach of their duties. 

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If you have any questions, please do not hesitate to contact George Chai at georgechai@msbsolicitors.co.uk.