section 1 6 version

The law requires private landlords In Wales to register and either become licensed or appoint another person/company to hold the licence on their behalf. Licensing requirements will require licence holders to have completed approved training.

Rent Smart Wales process landlord registrations and grant licences to landlords and agents who need to comply with the Housing (Wales) Act 2014. In addition they offer training for people who need a licence and authorise other providers to run approved courses which are also suitable for licensing purposes. I have been authorised to offer such training and currently offer classroom based and online training. These training sessions can be booked directly from my website.

There are five sections to this online training and within each section there are a number of modules. Start with the first section and work your way through the instructions on the screen. You can take as long as you like to complete the training. When you have finished each module click on the recap page to consolidate what you have learnt in that particular section. You can return to any of the slides by clicking on the buttons on the screen or click on the home button to return to the menu. There is an assessment at the end of the course (section 5) and based on your results you will be able to downloadable the ‘Rent Smart Wales’ certificate.

Marie Lamb F.E. TutorARLA Qualified

About Rent Smart Wales

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ICT Trainer and Property Management

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Section 1 General Overview Section 2 Setting up a Tenancy Section 3 During a Tenancy Section 4 Responsibilities and Liabilities Section 5 Ending a Tenancy

Section 1

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Section 1 – General Overview• Part 1 of the Housing (Wales) Act

2014• Agents Role and Services

• Common law and Statute

• Organisations

• Re-Dress Scheme

• Client money protection (CMP)

• Contracts

• Home Owner Permissions

• Mortgages • Leasehold and freehold

• Overseas landlords

• Consumer Law

• Income Tax

• Council tax

• Planning and Building regulations

• Letting agents record keeping

• Setting rent and rent period

• Alternative Dispute Resolution

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Recap on Section 1

All private landlords who have a rental property in

Wales must register themselves and the

addresses of their rental properties in Wales.

Landlords who undertake defined letting or property management activities at a

rental property in Wales must apply for a licence. If a

landlord instructs an agent to do such work on their behalf, it is that agent who must become

licensed

Rent Smart Wales (Wales Only)

The law requires private landlords to register and either become licensed or appoint another person/company to hold the licence on their behalf. Licensing requirements will require licence holders to have completed approved training. This training will provide agents with relevant, up to date information and professional development opportunities in order to successfully manage tenancies within the law. A licence expires at the end of a period of 5 years beginning with the date it was granted.

In order to get a licence a person must be adequately

trained, and also declare themselves ‘fit and proper’

Who Needs to register?Click on the picture

What about Letting Agents?Click on the picture

Who Needs to be Trained?Click on the picture

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Anyone who deals with the day to day activities in managing a property in Wales is defined as a ‘Connected Person’ and must be adequately trained

There will be a 12 month grace period for landlords who need to register, and agents and landlords looking to be licensed. After the 12 month period it will become an offence to operate without registration or license. The deadline is November 2016.

The new legislation and ‘Rent Smart Wales’ will replace the existing voluntary Landlord Accreditation Wales

Section 1

Rent Smart Wales Legislation

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Who, in this situation, is defined as a ‘Connected Person’ under the ‘Rent Smart Wales’ legislation? Click on the picture to reveal the correct answer

a) Anyone who deals with day to day activities in managing a property in Wales

b) Anyone who does repair work to a propertya) Letting Agent

b) Repair Man

https://www.welshlandlords.org.uk/

To follow instructions

Not to take a bribe

To keep account of money owed

To exercise due care and skill

To carry out instructions personally

Not to allow a conflict of

interest

Not to make a secret profit

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Help and Advice for Agents

Letting Agents Services

The Role of the Agent

Click on the links in the circle

Letting Agents’ Role Responsibilities and Services

The Agents Duties

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The Agents Duties

Ensure that they promptly and properly carry out their duties under their terms and conditions of their business

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Ensure that repairs are carried out in a reasonable timescale Ensure that if

requested they pay the premium for the renewal of the Landlords insurance

Ensure that the gas safety inspection is carried out within the timescale and a copy of the gas safety record is given to the tenant(s) within 28 days

Endeavour to provide tenants with adequate facilities e.g. heating and hot water, during the tenancy

Be realistic when giving advice such as;

Market Value is based on;Condition

MarketLocationAgeImprovements

Be honest with the type of tenants the landlord can expect.

How long the property will take to rent.

Advice for Agents

Where can agents obtain advice; https://www.rentsmart.gov.waleshttp://sheltercymru.org.uk/ https://www.citizensadvice.org.uk/wales

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Letting agents will be expected by the landlord to have full and detailed knowledge of all legal matters relating to the lettings industry such as;

Click on each picture

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Letting Agents’ Management Services

Three main services usually offered by an agent;Move the mouse over each title;

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Tenant find only

Tenant find and rent collection

Full management

The Role of the Agent

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Advising clients

Handling problems

Check tenant references

Ensuring legal requirements

Hover the mouse over each figure to view the various roles of an agent

are adhered to

Common law is effectively all law that has not been ‘Enacted by Parliament’.

Legislation or statute law has become the dominant form of law making

What is Common Law and Statute Law?

Statute law means that the courts must apply the laws that have been passed. Common law goes back hundreds of years and is formed from local custom which has now become

common law. Basically meaning a judge would have to use these customs to assess a court hearing using his/her experience, knowledge and judgement in the books of ancient law.

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Statute LawCommon Law

Click on each picture for a definition of the law

When dealing with landlords, tenants or contracts you will need to be aware of the law concerning these areas.

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Agents are required to operate to standards recognised by their organisation. This basically means that if a landlord makes a complaint about any of the services they receive from an agent, the scheme will investigate the issue

The agent is part of a ‘Client Money Protection Scheme’ and has a customer complaints procedure offering independent redress

If an agent belongs to an organisations it means the agent has agreed to meet defined standards of customer service

Voluntary Organisations

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Some agents belong to a voluntary organisation which demonstrates to the landlord/tenant they are working professionally and within the law. The organisation they belong to will be displayed in their office

Click here for more information



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The local authority is the enforcement action. There is a civil penalty of up to £5,000 for breach of a requirement to belong to a redress scheme.

Redress SchemeMany agents will already belong to a redress scheme but as from 1 October 2014 it is now a legal requirement for lettings agents and property managers in England to join 1 of 3 government approved redress schemes. Wales have their own Licensing and procedures.


apologise Issue a

reprimand

Order compensation Fine a member Expel a member

A redress scheme can requirea member to;

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https://www.theprs.co.uk/

http://www.ombudsman-services.org/

What is Client Money Protection (CMP)


From 27 May 2015, under the requirements set out in the ‘Consumer Rights Act’, it became compulsory for all agents to display in their offices and on their websites whether or not they are part of a ‘Client Money Protection Scheme’

Clients' money means money of any currency (whether in the form of cash, cheque, draft or electronic transfer). Protecting clients’ money is one of the conditions of ‘Rent Smart Wales’ mandatory code of practice

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http://conversation.which.co.uk/energy-home/safe-agent-scheme-for-letting-agents/attachment/safe_logo/

Agents Taking Instructions from a Landlord

When taken instructions from a landlord you will need to ensure you perform certain checks regarding their identity and if they are the owners of the property. The list below will help you establish whether the landlord owns the property;

Whether the property is leasehold or freeholdIs it a Buy-to-Let (BTL) this will give you an idea regarding the mortgage arrangementsAre they first time investors?

Having the above information is a good basis to establish the landlord’s authority to rent the property. Often people with financial problems will do anything to hang onto their property, even if it means they let the property without their mortgage lender’s permission. An agent during the course of checking the property should ensure the home owner has permission to let the property as this could have serious consequences. It could result in the home owner being unable to financially carry out essential repairs to the property. Furthermore, if the situation comes to light, not only will the landlord be in serious trouble, but any tenant in the property will have fewer rights and is more likely to face homelessness.

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Permission for Home Owners to Let Their Property

Which of the following, do you think could be a consequence of not informing a mortgage provider of your intention to let your property? Click on the picture you think is correct….

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a) Insurance policies could be invalidb) The landlord could be ordered to pay the loan

backc) A black mark may go against the landlords

credit rating

a) c)b)

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Mortgages

Home owners will need to have a buy-to-let mortgage before they can let their propertyThey need to inform their lender and obtain their permission. It is important that they get permission in writing from the mortgage lender, their insurer. If they own a leasehold property they will need to get permission from their landlord before they let their property to tenants


Insurance policies could be invalid The landlord could be ordered to pay the loan back A black mark may go against the landlords credit rating

If you clicked on all answers on the last page you were correct – well done!

Note; For rental property in Wales, agents should check the landlord’s registration on the ‘Rent Wales register‘ to ensure the landlord is registered

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Leasehold/FreeholdWith leasehold properties the land remains owned by the landlord who is also known as the ‘Freeholder‘If a home is owned on a freehold basis, the ‘Freeholder’ owns the property and the land it stands on

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Julie wants to rent her

maisonette.

Georgia wants to rent her flat

Jane wants to rent her house

Who is most likely to need permission from their landlord to let their property? (assuming they all have a mortgage)

a) Julieb) Georgiac) Jane

Click here for the answer

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Overseas Landlords

Apply to the centre for non-residents (CNR) through the (HM Revenue & Customs) Form NRL1 (Non Resident Landlord) for individual landlords, NRL2 if the landlord is an off shore company or form NRL3 if the landlord is an off shore trust


If a landlord is out of the country for six months in any tax year he/she will need to do the following;

Note: because the number is specific to the person receiving the rent, any new person who takes over this task must re-apply for a new approved number.

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https://www.gov.uk/government/organisations/hm-revenue-customs

Consumer Law

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The Competition and Markets Authority (CMA) issued guidance last year to help letting professionals comply with consumer law. The guidance is aimed at anyone who is managing a rental property, whether they are an agent, an accidental landlord or a landlord with a large property portfolio. The CMA issued the guidance in response to the Advertising Standards Authority's ruling on the need to disclose fees in property advertisements. Letting professionals should be aware of all the housing legislation that sets out their legal obligations to tenants, but may be less familiar with how consumer law impacts on how they run their business. Click on the picture to view a guidance into different areas of the consumer law

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Landlords must tell HM Revenue and Customs about any profit or income they make from their property.

Click here for some things you can claim Click here for some things you can’t claim Reasonable management fees

including advertising for a tenant legal fees for lets of a year or

less, or for renewing a lease for less than 50 years

Accountants’ fees Buildings and contents insurance Interest on property loans Maintenance and repairs to the

property (but not improvements)

Income Tax (Allowed)


Capital payments on a mortgageImprovement to property

There are different tax rules for: Residential propertiesFurnished holiday lettingsCommercial properties

Note; As an agent you must remember that you are not qualified to advise landlords on their tax affairs. You should always advise landlords to take financial advice from a specialist.

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Tenancy Contracts

There are two main types of tenancy agreements ‘Assured Shorthold Tenancy’ and ‘Assured Tenancy’. Both are explained in more detail in subsequent sections.


The main difference between an AST and an AT is; with an AST the Landlord can claim his property back

With an AT unless the tenant is in serious breach or the matter is taken to court the landlord may not be able to gain his property back

A Tenancy agreement is a contract between a landlord and a tenant specifying the terms and conditions of a rental agreement. Tenancy contracts are usually put in place before letting a property.

The main difference between a tenancy and a licence is that a tenancy usually gives you more protection from eviction. A licence for example would be someone (a lodger) living in the landlords house which is the landlords main residence and the lodger does not have exclusive right to any part of the property.

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Council Tax

You’ll usually have to pay Council Tax if you’re 18 or over and own or rent a home. You’ll need to know 3 things:

•the valuation band for your home in England and Wales or in Scotland •how much your local council charges for that band•whether you can get a discount or exemption from the full bill•There are also certain exceptions when a property is not occupied

Who is responsible for council tax in the following properties?

Houses in multiple occupation HMO (Generally the landlord will be responsible for paying council tax)

Joint tenancies (Generally tenants will be responsible for paying council tax)

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Planning and Building Regulations

No one is allowed to start development of land or property without permission from the local planning authority. Anyone carrying out development must make a planning application. In addition where building is to take place an application for approval under the building regulation is also required.

Some building work may not require planning permission;

A small extension i.e. a porch A garage Conversion of a space or cellar space to living accommodation A small conservatory


Click on the picture for more information

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6 years

Landlord Record KeepingThe Property Ombudsman (TPO) has issued a warning to letting agents that they must keep clear and full written records of all transactions within their business including conversations, emails and phone messages for a period of six years.


The legal advisor at TPO says; ‘If a complainant makes a claim and has a record which appears to substantiate that claim but the agent is unable to provide any concurrent evidence to counter the allegation, the result is that I can only find in the complainant’s favour’.

Agents should take their responsibilities very seriously, and protect their landlords from illegitimate claims by keeping written records of maintenance problems reported, repairs completed, and all contacts with tenants. This is in addition to full records of rents received, payments made and tenancies terminated

How long should records be kept for?Click on the picture

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The amount of rent and the date the rent is paid will be set out in the tenancy agreement. However, sometimes the tenant may want to change the date the rent is paid. This could be due to them changing their job and their salary is now being paid on a different date. You can handle this in one of two ways;

Setting Rent and Rent Period

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Give the tenant a new tenancy agreement or amend the existing

one to incorporate the new date and ask the tenant for the extra

payments to make up the days

Continue with the tenancy but agree that the rent can be paid say perhaps a week later.

There is no law which says that rent has to be paid a month in advance. The default position

is that rent is due in arrears

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1. Who is a ‘Connected Person’?Someone who deals with letting and management

tasks Someone you employ to take care of repairsAll landlords

All the above

2. What is a Safe Agent?An organisation that protects clients’ moneyRedress organisationAlternative dispute organisation Deposit protection scheme

3. What could happen if a Landlord failed to gain

permission from the mortgage lender?Insurance policies could be invalidThe landlord could be ordered to pay the loan backA black mark may go against the landlords credit

ratingAll of the above

Click on the letter on the left of the question to reveal the answer

4. Which building work may not require planning permission? Conversion of a space or cellar space to living accommodationA Kitchen ExtensionA bedroomA living room

5. What is CMP?Client Membership ProcedureClient Money ProtectionClient Money ProcedureClient Mandatory Protection

6. How long must an agent keep the landlords records on file?

4 years6 years2 years1 year


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Both Julie and Georgia would most probably have a lease and would need to look closely at the terms and conditions in the lease before letting their property. A lease is a legal document outlining the terms under which one party agrees to rent property from another party. A lease guarantees the lessee (the renter) use of an asset and guarantees the lessor (the property owner) regular payments from the lessee for a specified number of months or years. Both the lessee and the lessor must uphold the terms of the contract for the lease to remain valid.

Flats are most commonly owned on a leasehold basis, while houses are normally sold as freehold properties. If you buy a leasehold property you'll be known as the 'leaseholder'. This means you own the property but not the land it stands on. Buying a freehold property means that you're the sole owner of both the building and the land it stands on.

With leasehold properties the land remains owned by the landlord, who is also known as the 'freeholder'. Ownership of the property will revert back to them once the lease runs out. Leaseholders have to get permission from the freeholder to make certain alterations to the property and will often have to pay an annual fee to a managing agent. A management agent (in this case) is someone who looks after the building or block for properties.

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Leasehold/Freehold

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Advertising and provide information to tenants. When advertising a property to rent, agents should be able to answer all reasonable questions asked by potential tenants.

Ensure adverts are clear, accurate and not misleading. Ensure adverts include sufficient information about fees, costs and charges

Clearly explain what principal features/fittings are included, rather than simply describing the property as fully furnished, unfurnished or partly furnished.

Check that the landlord has Gas Safety Certificates for all relevant appliances

Negotiating, conducting viewings and arranging and signing the tenancy agreement

Ensure that any information that can’t be included in the advert, due to space restrictions, is easily available elsewhere

Consumer Law

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Agents fees should not be transparent. Fees and associated costs should be displayed on any marketing material and on the agents website

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Building Regulations apply to building work in England & Wales and set standards for the design and construction of buildings to ensure the health and safety of people in and around those buildings. They also include requirements to ensure that fuel and power are conserved and facilities are provided for people, including those with disabilities, to access and move around inside buildings. Scotland has its own set of Building Regulations. With all building work, the owner of the property (or land) in question is ultimately responsible for complying with the relevant planning rules and building regulations. As an agent you should be able to assess the building and ensure that it is safe for tenant(s). If an agent is taking instructions to let a property they will have to know from the landlord that planning permission and building regulation approval have been obtained where appropriate. If the agent is in doubt regarding a property improvement or conversion they can contact the building regulators who are enforced by local authority building control officers. They can be consulted for further information about compliance with these regulations.

Building Regulations

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Dealing with Complaints

The particular rules applied which agents must comply with vary from scheme to scheme. Generally speaking you will have to read the terms and conditions of the particular scheme.

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The first step in dealing with a problem is communication and negotiation. Talk to the person causing the problem. You should explain how their behaviour is affecting other people. Try to reach a compromise. Do this as early as possible before the problem gets too serious.

Do not put yourself in a situation where you feel unsafe: If you ever feel like your safety is in jeopardy, you need to remove yourself from the situation. Hopefully, it never gets to this point, but if it does, you need to move away from the situation and consult the proper authorities if necessary. There is no sense in putting your life or your career in peril due to a tenant conflict.

Tenants, including prospective tenants can complain to a redress scheme. Agents in England have to, by law, belong to one of 3 schemes. Wales now have their own landlord/agent licences procedures. Most landlords (not just smaller consumer) can now also access the three schemes if they wish to complain about lettings and managing agents that are members of any of these redress schemes.

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Alternative dispute resolution (ADR) refers to ways of resolving disputes between consumers and traders that don’t involve going to court. The government wants to encourage the development of ADR. Better ADR and easier access to it should also be good for all businesses committed to giving their customers the best possible service.Common forms of ADR are:

Mediation Arbitration

In the UK, there are already several large and well-established ADR schemes in regulated sectors

Landlords/TenantsRedress schemes such as the PRS, The Property Ombudsman, and the Ombudsman Service (as previously discussed) all offer ADR for landlords and tenants as does the Deposit Protection Scheme (DPS) (discussed in a later section )

Alternative Dispute Resolution

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Mediation, where an independent third party helps the disputing parties to come to a mutually acceptable outcome

Arbitration, where an independent third party considers the facts and takes a decision that’s often binding on one or both parties

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