For this week’s Top Tip Tuesday, we have decided to share a guide that will help landlords understand their obligations and responsibilities. Whether they are a first-time landlord or have let properties in the past, there are numerous legislations that landlords are governed by, making it easy for them to unintentionally break the law. So, it is vital to stay up to date.
Inspired by Propertymark’s how-to guide of letting out a property, we have decided to create our very own top tips below.
Selective Licensing – In some areas around the UK, local councils may require a license before renting out a property. If your local authority has enforced landlord licensing, then it is illegal to operate without one.
The Housing Act 2004 introduced the Selective Licensing initiative to help ensure landlords maintain their rental properties to an acceptable standard, particularly in areas where there is low housing demand and/ or suffering with anti-social behaviour.
How Much Can I Rent my Property for?
It is important that you get to know the market and find out how much similar properties in the area are being let for, so that you can set your rent accordingly. You may want to consider your target demographic and who your property would be suitable for: young families, students, single professionals etc.
You will also need to consider whether to let the property as furnished or unfurnished. A property that offers a blank canvas is more appealing to prospective tenants. However, for students it will be unlikely that they have accumulated enough belongings to furnish a house.
It is not easy being a landlord, there are currently around 145 legislations landlords must adhere to when letting a property. By law, the property must be fit for purpose and the safety of the tenants are of high importance. Some of these responsibilities include:
- Electrical safety standards.
- Gas safety checks.
- Right to rent checks.
- Fire safety regulations.
Tenancy Agreements and Deposit Protection
It is best practise in the UK that a landlord provides a written tenancy agreement. The agreement will outline all parties’ responsibilities but remember, just because something is in the agreement and has been signed, does not mean it is enforceable. When issuing the tenancy agreement, tenants must receive a copy of the ‘How to rent: the checklist for renting in England’ guide, which can be found on the government website.
If a landlord takes a deposit from a tenant, it must be protected in a government-approved tenancy deposit protection scheme. This includes:
- Tenancy Deposit Scheme (TDS)
- Deposit Protection Scheme (DPS)
Deposits must be protected within 30 days of receipt. In the UK, tenancy deposits are capped at five weeks rent where the annual rent is less than £50,000, and six weeks rent where the annual rent is £50,000 or more.
Once protected, the prescribed information about the scheme must be provided to the tenant. This outlines the scheme used and where it is insurance based or custodial. Failure to protect a deposit can lead to problems over eviction, full return of the deposit and a fine of up to three times the value of the deposit.
If you are a landlord, you must inform your current buildings and contents insurer of your intentions to let the property, otherwise you will risk invalidating your policy. There are specialist policies available to landlords that can protect you from potential losses. Shop around different insurance providers to find a deal that is right for you. While it may seem expensive for insurance, the savings and compensation offered in the long run will be invaluable.
The main protection these policies include are:
- Building Insurance – For potential damage to the property structure or built-in features.
- Loss of Rent Insurance – This if for when you are unable to rent out your property through no fault of your own (such as a flood or fire), this will cover the potential rent lost.
- Tenant Default/ Rent Guarantee Insurance – This covers any rent lost due to the tenant not paying.
- Contents Insurance – Covers any contents that the landlord has provided (tenants must acquire a separate policy for their belongings).
- Liability Insurance – This covers any legal costs if the landlord is taken to court. For example, if the property causes injury to a tenant or visitor.
*Be aware that in extreme cases where a landlord needs to take a tenant to court or the tenant takes the landlord to court, this will incur further costs. Some insurance policies will cover potential legal costs because of being a landlord. However, by ensuring the landlords responsibilities are upheld and laws are followed correctly, then court can be avoided altogether.
Avoid Disputes with a Detailed Inventory
A properly prepared inventory list sets the scene for what the landlord provides at the start of the tenancy. It plays a significant role in protecting both the landlord and the tenant. An in depth inventory list will help avoid disputes.
Regular inspections will also help but remember, a landlord cannot legally enter the property without the tenant’s permission. It is best practise to grant them 48 hours written notice (this should be included in the tenancy agreement).
A landlord should make copies of any keys a tenant may need for windows, doors, gas supply and energy meters. It is also worth providing instruction manuals for the boiler, cooker, white goods, thermostat, or house alarm just so tenants know how to use them properly.
Handing the reigns to a letting agent is an important decision and at Boxall Brown & Jones, we want to take the stress out of your hands. As a member of ARLA Propertymark, we can take care of everything for you and guarantee that you will be working with a professional agent who will provide up-to-date advice and guidance.
Are you interested in letting out a property? Contact us today on:
TEL: 01332 384438