Latest Legal News - Proposed Changes to the Private Letting Sector (July 2009)

The Government has produced its response to The Rugg Review and is inviting responses to its proposals by 7th August 2009.

The Rugg Review, which was completed in October 2008, looked at the whole of the private rented sector and made a number of recommendations that the Government is proposing to adopt. If adopted, these would directly affect landlords in the private sector. They include the following recommendations:

A national register of private landlords
This is described as a "light touch" "no hurdle" system where all landlords would be required to pay a small annual fee to register and to receive a licence number which would be a requiste for any type of landlord activity.

The upper limit for assured tenancies be increased
The proposal is to increase the annual rental maximum from £25,000 to £100,000. The figure of £25,000 was set in 1990 and is therefore now very out of date. The aim of this uplift would be to include more tenancies within the legislative framework and protections for tenants.

All tenancy agreements must be in writing
This might be by requiring tenancy agreements to follow the general form of a model tenancy agreement or to specify the minimum requirements for a valid tenancy agreement.

Regulation of private sector letting and management agents
Excepting estate agents who act as letting or management agents, there are currently no regulations or requirements to be fulfilled for setting up as a letting or management agent and, consequently, there are no mandatory safeguards for consumers. Whilst many agents have joined voluntary schemes such as ARLA, many have not. The proposal is therefore to require full, mandatory and independently-led regulation of letting and mangement agents. This would entail entry requirements, codes of practice for members and the need to have in place business and consumer protection measures such as client money protection, independant complaints procedures and professional indemnity insurance.

These are important issues for those involved in letting in the private sector and therefore it may be opportune to make a response to the proposals and to keep abreast of any likely changes so as to be ready for them in due course.

The Government response can be found at - http://www.communities.gov.uk/publications/housing/responseruggreview

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