What is it?
The Act introduces many new protections and enforcement mechanisms for tenants. It abolishes Section 21 ‘no fault’ evictions with the overarching Government aim to provide renters with more security and stability to stay in their homes for longer.
It also places emphasis on a tenant’s right to have a pet in the property, which cannot be unreasonably refused!
I am selling my buy-to-let property – how might this impact me?
If you are selling with tenants in situ, you will likely need more documentation to ensure compliance with statutory obligations and notices relating to possession. It is vital to have these documents checked thoroughly by your Conveyancer to ensure you do not fall foul of the new rules and be mindful of the fact that the usual timelines for reaching exchange, may be increased, if vacant possession is required. To mitigate against timescales being lengthened, preparing documentation early will help reduce late stage delays. The key take away is that the sooner you reach out to us to check your tenancy-related documentation in anticipation of a sale, the better! There is an industry wide movement towards upfront disclosure in residential conveyancing and this reform has certainly reinforced the need for this!
I am purchasing a buy-to-let property – how might this impact me?
If you are Buy-to-let purchaser, the reform will likewise require robust legal checks to ensure compliance with the Act, and avoid any future disputes or penalties! Enforcement is one of the key shake ups of the Act, and it may take longer for a seller to recover possession of the property if you are hoping to purchase the property without the tenant remaining in situ.
Does the Act make any changes to ground rent for long leases?
Yes, the Act is good news for leasehold transactions which were previously stung by the Housing Act 1988 £250/£1000 ground rent thresholds which caused delays to transactions whilst Deeds of Variation were negotiated between sellers/buyers and landlords. The legislation removes long residential leases (terms over 21 years) from the assured tenancy regime, and abolishes the ability for such leases to be classified as Assured Shorthold Tenancies, regardless of the ground rent level. The Act therefore removes the sting in the tail of the old “AST trap” under which a ground rent of more than £250 outside London or £1,000 within Greater London could cause a long lease to fall within the AST regime. This means that many mortgage lenders will have or will be adjusting their Finance Handbook lending instructions to conveyancers, to remove the requirement for Deeds of Variation to be negotiated in a leasehold sale transaction, to address the “AST trap” which means that this common delay to transactions has been eradicated, subject to individual mortgage lender requirements.
How we can support you
Whether you are planning to sell, purchase or remortgage, we can guide you through the implications of the Act on your transaction, and identify risks/actions needed before you go to market, put in your offer, or obtain your mortgage offer! Whatever your circumstances, we can support you to achieve a smooth transaction!