Two Keys Regulations that had a Big Impact on Estate Agents & HMO Landlords

The life of the estate agent & HMO landlords  is constantly changing, with new regulations being introduced all the time. It can be tricky for estate agents to keep up with these changes. However, doing so is essential so that you can give the best possible service to your clients and ensure that the right tenants end up in the right properties.

The most important recent changes you need to consider are the Tenants Fee Act and Homes with Multiple Occupants (HMO) room size regulations. These are both relatively new but profoundly important changes in property market law. Here’s what the new regulations are and how estate agents need to adapt.

The Tenant’s Fee Act

Fees for using estate agents have been common practice for many years. On top of asking for the first month’s rent and a deposit, many estate agents have asked for an additional one-time fee. Called a tenant’s fee, admin fee, or lettings agent fee, this is applied when a tenant rents a new property. Sometimes, it’s also applied if a tenant renews a contract for the same property.

This has been deemed unfair and a way for estate agents to make larger profit margins. As a result, tenant’s fees have been banned since 2019. Any contract signed after 1 June 2019 must not contain an unfair additional fee. It’s estimated that this will cost the estate agent industry £157m each year.

It’s now unlawful to charge viewing fees, fees for referencing, credit checks, taking inventory, gardening services, and fees for third parties. You may continue to charge for lost keys, rent, deposits, bills, canceling a contract early, and late rent fees. Breaking this regulation can result in a £ 5,000 fine and a significant hit to your reputation as an estate agent.

Minimum Room Size Requirements for HMOs

The other big regulation change regards room size requirements for HMOs. These regulations didn’t exist before 2018 but in October of that year, it became a regulation rather than a recommendation. A room must be at least 4.64 square meters for any occupant under 10 years old. 6.51 square meters is the minimum size for a child or adult over the age of 10. Finally, 10.22 square meters is required for two persons over 10.

For estate agents, this means checking the sizes of all your properties. If they don’t meet requirements, then you should ask the landlord to make changes or drop them from your list of approved landlords. Ideally, ensure all bedrooms meet the 10.22 square meter size. This way, you’ll be able to provide that property to any tenant. Be sure not to let out a property to a client over 10 if the room is only suitable for someone under 10. This could damage your reputation and cause legal repercussions.

Keeping up with regulations is difficult but they exist for a reason. The tenant’s fee ban and minimum room sizes are there for the benefit of tenants. By sticking to them, you’re providing a better service as an estate agent and will find success as a result.

Written by: ThomBrown19

2 thoughts on “Two Keys Regulations that had a Big Impact on Estate Agents & HMO Landlords
  1. The room size regulations are national minimum sizes. But local authorities can impose higher standards. Islington did just that after we spent a lot of time extending two rooms up to the national minimum only to be told that they wouldn’t grant a licence allowing us to let out those rooms. So we have two empty rooms that had been happily let out for many years at a lowish rent to lower wage tenants who were very happy to do so because the house itself was large with plenty of communal space and several bathrooms. A shame as it reduces the number of rooms in London to lower income tenants, reduces our income and achieves very little despite meeting a national minimum standard. There is such inconsistency across London boroughs when it comes to licensing HMOs and what is and isn’t acceptable. Challenging the imposition of unrealistically high standards or legally incorrect conditions is effectively impossible. We were made to install a panel type fire and smoke alarm system with emergency lighting in a newly built house licensed for just 4 people that wouldn’t have been out of place in a 100 room hotel. I carefully checked the law and such a system isn’t required for a “small” but the HMO officer wasn’t interested.

    1. Having gone through the Council’s complaints procedure try the local government ombudsman.
      Doesn’t cost anything apart from time.

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