If you are letting and managing the tenancy yourself it is vital that you are aware of these basic pointers. If you are using a professional letting agent there’s still quite a lot you need to know.
- In some regions, Scotland in particular, you will need to register as a landlord with your local authority before you can rent-out your property.
- Single house or flat lets are not a problem but in some areas you may need planning permission for multi-lets such as student accommodation and houses with multiple tenants who are not one family. It is also the case that multi-lets must meet stringent safety and management requirements and in some types of Houses in Multiple Occupancy (HMOs) you need a licence from your authority to operate them. There are heavy fines if you do not comply.
- Letting to a lodger who shares your own home is less onerous as lodgers have a license not a tenancy, they have reduced rights, but you still need to meet some basic safety requirements.
- Before you let a house or flat you may need permission to do so – get permission in writing:
a. From your mortgage lender if your property is mortgaged
b. From the freeholder if your property is leasehold
c. From your insurers. It is absolutely vital you arrange a landlord’s insurance policy before letting – this covers you for claims for injury or worse from the occupants, visitors or the general public, plus malicious damage and for periods when the property is empty – usually up to 30 days.
- Decide whether to use a professional letting agent to do this work for you or whether you will do it yourself. If you do use an agent make sure you have a written agreement with your agent so it is clear what contractual responsibilities the agent is carrying out on your behalf.
- If this is your own home and you may wish to return to live there you should, just prior to letting, serve a written notice under Ground 1 of the Housing Act 1982 Schedule 2. This informs the tenant you may wish to return to live there yourself and will ease the process of re-possession for you.
- You will need to arrange for and provide an Energy Performance Certificate (EPC). It shows the energy efficiency of the property and must be provided by law whenever the property is marketed to let to a new tenant.
- You will need to arrange a Gas Check and the issue of a 12 month Gas Certificate if there is gas and gas appliances in the property – this is a legal requirement with heavy fines for non-compliance.
www.hse.gov.uk or contact its Gas Safety Advice Line on 0800 300 363.
- Although not a legal requirement in England yet, it is recommended that you arrange a Periodic Electrical Inspection Report (PIR) from a qualified electrician before letting and every 5 years thereafter. You must use an approved registered electrical contractor to comply with Building Regulations Part P. It is also recommended that all portable electrical appliances be tested prior to each tenancy. This called a P.A.T. test and can quickly be carried out.
- Make sure your tenants are safe by installing and maintaining a smoke detector and if there are gas appliances, a carbon monoxide detector (this is not a legal requirement but is regarded as best practice). Properties built after 1992, will have automatically been fitted with smoke detectors wired into their electrical circuits. They will in addition have a battery fitted. The smoke detector should be cleaned at least annually and the battery backup changed as necessary. There is no obligation for properties built prior to 1992 to be fitted with smoke detectors. Landlords offering a property to three or more tenants should seek advice from their Local Authority Environmental Health Department to meet the more stringent fire safety equipment required in these cases.
- Check that the Furniture and Furnishings provided comply with current fire regulations. You are not liable to check furniture provided by tenants, only the furniture you provide as a landlord: three piece suites, sofas, arm chairs, scatter cushions, seat pads including dining and desk chairs, bean bags, beds, padded headboards, mattresses, pillows, convertible sofa beds, futons, loose and stretch covers for upholstered furniture, nursery furniture, conservatory furniture, garden furniture suitable for indoor use. All must meet safety standards as per the Furniture & Furnishings (Fire) (Safety) Regulations 1993. Look for the fire safety labels.
- Do your own safety, security and maintenance inspection / risk assessment report for the whole property making sure there are no obvious dangers such as lose stair rails and treads, slippery surfaces, faulty locks on doors and windows, faulty electrical cables and plugs, sockets, wrong electrical fuse types, blocked gutters and rains, items needing decorating / painting etc. Having written evidence that you have carried out these checks could be a life saver in the event of a claim.
- Thoroughly clean the property and remove any items which you value or could cause a danger to anyone in the property. Don’t leave any more appliances than are necessary or agreed with the tenant/s.
- Market the property: prepare advertisements to appear on the Internet or in the local press and newsagents etc. Consider using a to-let sign on the property with a linked web page and photos.
- Prepare a list of questions for telephone enquiries and
arrange viewings for any likely applicants. Pre-Tenancy Checks – for new tenancies starting on or after the 1st of October 2015 new rules apply.
a – Right to Rent checks – you or your agent MUST check documents face-to-face to make sure the applicant tenant has a Right to Rent – passports, visas etc.
b – If you delegate the task of Right to Rent checks to an agent you MUST have an agreement in place between you to say the agent accepts full responsibility – £3,000 fines for non-compliance.
c – Tenants must now be served with a valid EPC, Gas Safety Certificate and latest Government provided "How to Rent Guide" –
see here You can serve this by e-mail if tenant has agreed in writing to accept documents in this way – our tenancy application form takes care of that – read the notes on this form.
Deposits must be protected within 30 days of taking them and a statutory deposit notice (s213) notice served – get proof of service for all these docs. The notice is available from you deposit protection agency’s website.
If you miss any of these steps you will be unable to use section 21 eviction process, which would cause you no end of hassle if you do. Letting has got a whole lot more complicated since 1st October 2015.
- Use a Tenancy Application Form once you have interviewed and selected your preferred tenant. Discuss and agree furnishing requirements, to let fully or part furnished.
- Carry out Credit Checks and Referencing on the prospective tenants and do the same with any tenant guarantor you decide to involve.
- Make a final letting decision based on your holistic assessment of the tenant/s, bearing in mind that by law you must not discriminate on race, sex, colour etc. To avoid discrimination claims you should be able to show that your assessment process is fair by being transparent, consistent between applicants and documented.
- Prepare the paperwork ready for signing: the Tenancy Agreement, Inventory, Deposit Protection Details, Check-in Checklist.
- Always use a tenancy application form, a written tenancy agreement and a written inventory report as these documents will give you all the back-ground information you need to carry out checks and help ensure your tenant knows what they are responsible for, plus you will have proof or the condition of the property in case of a claim against the damage deposit.
- Arrange a check-in meeting at the property where you will carry out a full check-in procedure.
- Conduct an inventory check with the tenant/s or arrange
for a separate inventory report with an independent
- Provide your tenants with a property guide, a file which gives the tenants all the information they need about the property including the location of all stop taps, fuses, switches, alarms and operating / safety instructions for all appliances.
- Arrange with your tenant to set-up a banker’s standing order for rent payments direct to your bank account.
- If you take a deposit make sure you protect it within 30 days of receipt and serve the statutory deposit notice on the tenant/s – make sure you get proof of service. You are subject to a fine if you do not comply and you won’t be able to evict your tenant using the s21 procedure.
- Once you have let your property and the tenant has checked in, immediately write to the local council informing them about the new tenant for council tax purposes. Also write to all the utilities suppliers with meter readings where appropriate so they can apportion bills for you and the new tenants: water, gas, electricity etc.
- Monitor your bank account for rent payments throughout
- Arrange for annual gas safety certificate checks when they become due again.
- Keep the property in good repair – local authorities have powers to take action against you if the property contains serious health and safety issues.
- Give your tenant proper written notice if you want possession of your property.
- If problems arise during the tenancy contact your tenant immediately and try to resolve them amicably. If they cannot be resolved quickly, such as non-payment of rent, set in motion a clear rent arrears and eviction strategy.
- Never get into a big argument or fight with tenants or try and remove them yourself by changing the locks or throwing out their possessions. This is illegal and you could be prosecuted.
- If you use an agent don’t leave large sums of rent with
them for long periods – make sure rent is paid to you on a
regular basis and that this is included in your agreement
with the agent.
- Be aware they you may have on-going costs when running your rental property and you should always keep money in reserve for this. Here is a list of some of the costs to be considered when owning a buy-to-let property: