Property Licensing and Regulation

Estate Agents and Auctioneers

An estate agent does not require a licence, as such. However, an estate agent must comply with rules and requirements under the Estate Agents Act. The legislation provides for codes and standards of conduct. There are requirements in relation to dealing with clients, clients’ money and other aspects of the business. An estate agent must provide certain required information in writing to prospective clients and must be a member of a redress scheme.

Breach of the Estate Agents legislation is a criminal offence. The Office of Fair Trading can fine, discipline or restrict an agent in breach of the legislation. The OFT may issue a warning order or a prohibition order. Trading Standards Officers have rights of entry and inspection in order to enforce the legislation.

In addition to the regulatory rules on the conduct of business, there are a number of other legal requirements with which an estate agent must comply.

• There are laws in relation to the sale and description of property under the Property Misdescriptions Act;
• The Sale of Land by Auction Act 1867 provides that certain declarations must be made in advance of an auction, if there is a reserve price or if the seller has reserved the right to bid.
• An estate agent must procure that a Home Information Pack is available when marketing and selling a residential property (abolished May 2010);
• There is an obligation to provide an Energy Performance Certificates for buildings.
• The charging of service charges and the management of common parts of developments is subject to regulation and certain tenants’ and owners’ rights.
• Letting agents may only charge tenants when a  tenancy has commenced. A letting agency, which charges tenants is subject to certain requirements and restrictions.

Private landlords

Private landlords are not subject to automatic licensing. Houses in multiple occupation and properties in certain areas designated by the Local Authorities must be licensed. See our guide in relation to the regulation of the letting of residential property.

The vast majority of residential lettings will be, by way of assured shorthold tenancies. A residential landlord is responsible for the loss to tenants or anyone else suffered as a result of failure to repair under the Defective Premises Act 1972.

A landlord of residential tenants must not evict without a court order. Tenants must not be harassed.

Landlords of tenancies under seven years are obliged to keep the structure and the services in repair / g0od order under the Landlord and Tenant Act 1985.

There is a national tenancy deposit scheme which regulates holding of deposits. The sale of a property is subject to the obligation to produce a Home Information Packs (repealed May 2010).

A manager of a house in multiple occupation has obligations in relation to management, control, fire safety and other obligations. Services must be kept in good order. Fixed electrical installations must be secured. Common areas must be kept in good order repair and condition. There are specific obligations in relation to plant, fixtures and equipment.

The former option to claim arrears of rent by distress (i.e. taking property personal property from the premises) is now restricted. A person recovering by this means must be certified. Landlords must meet certain conditions to recover rent by distress. The certificate must be produced at the tenant and must be renewed every two years. The certificate is obtained from the County Court.

Services,  Fittings and Furniture

Landlords are obliged to ensure safe gas fittings. Landlords must ensure all parts of the gas installation are checked by a registered gas contractor. They must make sure all appliances are checked every 12 months. A record of the checks must be kept. The tenant is entitled to a copy of the certificate.

Furniture and soft furnishings supplied by the landlord in letting properties must meet fire safety standards: Furniture manufactured since March 1989 will usually comply with these regulations and will be marked with a label showing compliance. There are certain exemptions. Non-compliance is a criminal offence and carries penalties.

Regulations require that electrical equipment supplied in a property must be safe to use. There is no mandatory requirement for the equipment to undergo any safety testing, but the duty of care remains the same. Regulations require that where any plug, socket or adapter is supplied for intended domestic use, that it complies with the appropriate current standards.

The landlord must provide a smoke alarm on each storey and a carbon monoxide alarm in any room with a solid fuel burning appliance (for example a coal fire or wood burning stove). He must provide fire alarms and extinguishers if the property is a large house in multiple occupation.

Disability discrimination legislation requires that, if the property is let to a disabled person, those reasonable adjustments be made. This may require a change in a practice, policy and procedure. Residential landlords are not required to make changes to the physical features of the property. Physical features do not include furniture and fittings and equipment Generally a tenant cannot be refused consent to make a disability-related alteration.

Rent and Service Charges

This legislation requires that every demand for rent carries the address of the landlord and if that address is outside England and Wales, the demand for rent must also carry an address in England and Wales where notices and proceedings can be served on the landlord. The address of the landlord on such a written demand could be the landlord’s office address, rather than home address.