1) Section 21 notices
The standard form of expat tenancy in England is the Assured Shorthold Tenancy (AST). In practice, an AST is used except where the tenant is a company or the annual rent exceeds £100,000. New legislation is currently being introduced, in the form of an amendment to the Housing Act 1988, which restricts how a landlord can end an AST using what is called a section 21 notice.
Many landlords and letting agents had adopted the practice of serving a section 21 notice at the start of the tenancy. Under the new legislation, these notices will require to be served later, ensuring that tenants are given two months' notice before the tenancy comes to an end. A prescribed form of section 21 notice is also being introduced.
The new rules will apply to England only and will not affect ASTs where the fixed term was granted before these provisions came into force.
2) Letting agents under scrutiny
There is growing pressure for legislation to outlaw the administration fees imposed on tenants by letting agents to cover items such as credit checks and lease preparation. The fee will often be in excess of £500 and, in the context of expat leases, is an unwelcome extra relocation cost to be picked up by the employer.
The issue was explored in a recent BBC item. In Scotland, it is illegal for a letting agent to impose charges on the tenant and it may not be long before we see a similar prohibition in England. The argument against legislation is that letting agents will then increase the charges paid by their landlord clients and that this will lead to higher rents.
It will also be interesting to see whether Scotland's new scheme for the mandatory regulation and registration of letting agents is adopted in the rest of the UK. The new regulations will include mandatory registration of all letting agents, a code of practice, training requirements, a scheme for monitoring compliance and enforcement and a complaints regime.
3) E-signatures on leases
We are now seeing the growing use of e-signatures on residential leases. In terms of efficiency, we see this as a positive development. A few points to note:
- E-signatures on leases are legally binding
- If you sign leases on behalf of clients, you need to ensure that you have a robust internal process which restricts e-signing to your authorised staff only
- The other practical "risk factor" with an e-signature is a change being made to a document after signing. The e-signing system should "lock" the document after it is e-signed, ensuring that it cannot later be altered (by a letting agent, for example) without your authority.
If you would like further information on any of these tenancy issues, please contact me on the details below.