Landlords: are you leasing property lawfully?
Being a landlord isn’t an easy job to take on, there’s a myriad of legislation that landlords must comply with, otherwise they could face hefty penalties and unwittingly put their tenants at risk. However, if you do your research, work with a good agent who can manage your property portfolio for you and ensure you are kept up to date with legal requirements and changes, there’s no reason why property letting couldn’t provide you with a great revenue stream and a responsibility that can work alongside your day-to-day job.
Below is a handy ‘to do and to don’t’ guide that can help get you up and running, protect you and your assets and also ensure you have a happy, long-term tenant.
Take care of your property
Do try and keep the property looking as good as it can, even if this sometimes means spending a few pennies! Replacing a worn carpet or re-decorating every 2-3 years will keep your property looking fresh, and you will be more likely to either keep a good tenant, or attract a new one more quickly. It will also keep up the capital value of your investment.
Aim to put aside 10% of your rental income each year to invest back into the property for minor repairs, refurbishment or for unexpected bills. Remember, being a landlord involves taking responsibility for your property, and this will inevitably sometimes involve cost.
Ensure you’re Gas, Electrical and Energy compliant
By law, landlords must carry out annual gas safety checks by an engineer who is registered on the Gas Safety Register (which has replaced Corgi). A copy must be given to the tenant before they move in and the check must have been carried out within the 12 months before the new tenant takes up occupation.
Similar laws apply to electrical appliances. The landlord must ensure that all hard wiring in their property is safe – the only way this can be done is to have the electrics fully tested by a qualified electrician.
Landlords must be able to present an Energy Performance Certificate (EPCs) to the tenant when they move in, which provides an estimated cost of how much it would be to run the home in terms of utilities like central heating.
Landlords in England are also required to provide smoke alarms on every floor of their property and a carbon monoxide alarm in every room with a solid fuel source.
If you don’t comply with these legal requirements, landlords in England can face penalties which include fines, potential prison terms, or being unable to gain possession of their property when they wish to.
Be clear when it comes to deposits, fees and rent
By law, you must protect a tenant’s deposit in an authorised deposit protection scheme (there are three main schemes) under an assured short hold tenancy within 30 days of receiving the deposit.
You must ensure that you have clearly outlined how much rent is due, on what date, and in what way within the tenancy contract. It is also important to not confuse advance payments of rent and non-returnable administration fees with deposits. You should always make clear to tenants what money is being taken for; otherwise it could be regarded as a deposit which shall be protected under one of the deposit protection schemes.
Manage tenants illegally
This may sound obvious but, under any circumstance, you must not harass your tenants. It is unlawful to evict a tenant without a Court Order. Even if a tenant hasn’t paid their rent for one month or three, or is breaking terms of their tenancy agreement, you cannot evict them. Landlords, by law, must go to Court to get a possession order. Any possession order obtained must be enforced by the Court Bailiff.
In any situation, at any time, a landlord has to serve a minimum of 2 months’ notice to a tenant (called a Section 21 notice). A landlord cannot just ask a tenant to leave at the end of a tenancy, or expect the tenant to move out without having served the legal notice on them.
Charge tenants for property repairs
Repairs and works to a property are solely your responsibility, as a landlord. A tenant is expected to look after a property in a “tenant like” manner, and deal with things such as changing lightbulbs, but they’re not responsible for a broken boiler, for example, or can’t be asked to repair a washing machine belonging to the landlord. Legally, this is the landlord’s responsibility.
Entrust an agent
Don’t try and manage a property yourself to save a few pounds, especially if you’re a first-time landlord and/or don’t know what you are doing. GFW Letting is regulated by the Association of Residential Lettings Agents and our teams have to sit and pass legal exams to be able to do what we do. As a landlord, you may end up in very hot water or paying out more money in the long run by not employing a managing agent for your property.
For more information about our landlord services, please contact Donna Cheney or Simon Harrison on 0191 284 7171.