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Receivers with properties in Wales - deadline for registration is approaching

The Housing (Wales) Act 2014 means that landlords of domestic properties that are let under assured, assured shorthold or regulated tenancies must register with the licensing authority, Rent Smart Wales. Landlords have been able to register since last November, and now the deadline for registration is only six months' away. This means that receivers who have been appointed over properties in Wales need to act now to ensure they comply.

Whilst it is clear that the draftsmen have not considered the position of receivers in putting together the legislation, the definition of a landlord includes the person entitled to possession of the property. Therefore, it is highly likely that receivers will have to comply with the landlord's obligations.

Who needs to register?

The landlord of a property let under an assured, assured shorthold or regulated tenancy needs to register, unless an exemption applies. The exemptions are very limited. A landlord will not be penalised for failing to register if:

  • The landlord has made an application for registration and it has not been processed;
  • The landlord has been assigned the interest in the property within the last 28 days; or
  • If, within 28 days of acquiring the property, the landlord takes steps to obtain possession.

Registered social landlords and fully mutual housing associations are also exempt from the requirement to register. The legislation provides that it will be a defence for the landlord to show that it has a reasonable excuse for not being registered. However, there is no guidance available on what will constitute a reasonable excuse, so receivers are advised to comply with the registration requirements.

Registration can be carried out online at a fee of £33.50. The cost of a paper application is £80.50.

The application is made on a landlord, rather than a property, basis. Therefore, if a receiver has been appointed over a number of properties in Wales, the receiver should include details of all of them on the same application. Only one fee will be payable.  

The registration lasts for five years and, during that time, the receiver landlord will be responsible for keeping the details up to date. This could be a huge administrative burden for receivers. If a property is sold, the registration will need to be updated. If a receiver is appointed over another Welsh property that is subject to, or being marketed or offered to let under a domestic tenancy, the receiver will have 28 days to add that property to the registration.

Do receivers need to be licensed?

Whether or not a landlord receiver also needs to be licensed depends upon the activities that it proposes to undertake. If it appoints a management company to carry out letting and property management activities on its behalf, it will not need to be licensed. However, it will need to ensure that the agent carrying out these activities holds a valid licence.

Without a licence, a landlord, or an agent acting on behalf of the landlord, cannot carry out any of the following letting activities:

  • Arranging or conducting a viewing with a prospective tenant;
  • Gathering evidence to establish the suitability of prospective tenants; 
  • Preparing, or arranging the preparation of, a tenancy agreement; and
  • Preparing, or arranging the preparation of, an inventory or schedule of condition.

A licence will also be required for the following property management activities:

  • Collecting rent;
  • Being the principal point of contact for the tenant in relation to matters arising out of the tenancy;
  • Making arrangements with a person to carry out repairs or maintenance;
  • Making arrangements with a tenant or occupier to secure access to the dwelling for any purpose;
  • Checking the contents or condition of the dwelling, or arranging for them to be checked; and
  • Serving notice to terminate a tenancy.

As receivers will usually appoint agents to deal with both letting and property management activities, it is unlikely that they will need to be licensed. However, the receiver will need to ensure that the agent is licensed. 

What if you do not comply?

The implications could be severe. The consequences for non-compliance with the obligations set out in the Act are:

  • Fines of up to £1000 for landlords or agents;
  • Rent-stopping orders or rent repayment orders; 
  • Prohibition on the service of section 21 notices until the landlord is compliant.

Receivers need to be aware of their obligations and take the necessary steps to ensure that they comply with them. A failure to do so could result in a fine. Perhaps more seriously, the receiver could find itself unable to obtain possession of premises by the use of a section 21 notice.

Contributor: Alexandra Holsgrove Jones

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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