If you are a landlord or a tenant, you’re probably aware of all the red tape and bureaucracy involved in letting or renting a property. While the pile of necessary checks and paperwork can be a real headache, for the most part, they aim to protect and reassure both parties. However, just when you think you are up to date with the situation, it seems that new lettings laws come into play every year, as well as amendments to current legislation. This year is certainly no different.
As experienced letting agents, the experts at Trust Milo Ltd always do our best to keep up with proposed changes to legislation and regulations. This enables us to better serve our clients in and around the Wandsworth area.
On this blog page, we reveal some of the changes to expect in 2020. Parliament has already passed some of them and set the date for the law to come into effect. However, others are still in the early stages but should unfold later in the year.
The Fifth Money Laundering Directive (5MLD)
This has already come into effect in the UK, as of 10th January 2020. This directive brings letting agents onto the radar of the Money Laundering Regulations. It means that we must now carry out Customer Due Diligence (CDD) checks on landlords and tenants, where the tenancy agreement results in 10,000 Euros per calendar month, or more.
Whether you live in Wandsworth or elsewhere, if your situation qualifies, you should expect more in-depth questions and administration.
Changes to Minimum Energy Efficiency Standards
From 1st April 2020, it will be illegal to let any property on an assured shorthold tenancy (AST) with F or G rating on the Energy Performance Certificate (EPC), unless you register an exemption. While this legislation has already been in effect since April 2018 for new tenancies, landlords with long-term tenants may not have taken the necessary steps to improve the energy rating of their Wandsworth property.
Our letting agents remind you that if your EPC rating is not E or higher, you could face a fine of up to £5,000. You also won’t be able to let the property until it is compliant.
Changes to Capital Gains Tax (CGT) Payments
There are 3 changes coming into effect on 6th April 2020:
• If your gains are liable to CGT, you will have to make a payment within 30 days of completing the sale of a residential property, or other type of disposal
• Private Residence Relief (PRR) will change from an exemption of 18 months to 9 months
• If you don’t live at the Wandsworth property you currently let out, you will no longer receive lettings relief
Tenant Fee Ban
Although the fee ban already came into force in June 2019 for new tenancies, as of 1st June 2020, it will apply to all tenancies. This means that landlords and letting agents can no longer charge tenants any fees, other than for the following:
• Administration fee if the tenant asks for an early termination or change of tenancy
• Council Tax, communication services and utility bills
• Payments caused by a tenant defaulting
In addition, there is a cap on holding deposits of one week’s rent. Furthermore, the cap on tenancy deposits is 5 week’s rent, or 6 weeks if the annual rent amounts to £50,000 per year, or higher.