Taken from the Residential Property Investor (RPI), the RLA’s member magazine, this is the first of a series of articles from the Landlord Advice Team (LAT) designed to help landlords understand their rights and obligations. This first article provides landlords with a simple guide to renting.
Many landlords are novices or people who never intended to own a rental property – and they are regular callers to the RLA’s advice team.
On the RLA’s advice team, we have noticed a trend for landlords to be confused and unsure about some of the most fundamental matters of letting properties.
Many of these people are what can loosely be described as accidental landlords.
Typically, they never set out with the intention of being buy-to-let investors or landlords. They have often inherited a property or they are people who have relocated and been unable to sell their old address.
It is our intention therefore to put together a series of articles on a variety of topics to clarify these issues. This first article focuses on “Being a landlord”. Future articles will focus on: recruiting an agent; landlords’ obligations; collecting rent; serving Notices seeking possession; applying to the county court for possession.
Let’s return now to the first topic of “Being a landlord”.
At the risk of stating the obvious, landlords need to know what they are doing, have a clear understanding of which legislation they need to comply with, and just as importantly, how to get professional help when needed.
At the last count, there are over 100 different pieces of legislation which relate to letting properties. Landlords need to be aware of such legislation. Failure to comply with legislation relating to letting accommodation may lead to heavy financial penalties or, in very rare cases, even a prison sentence.
For example, the next piece of legislation to affect landlords is the Immigration Act, which will make landlords legally responsible for checking the immigrant status of tenants and their right to be in the UK .
Letting a property is by no means an easy matter and landlords should appreciate and understand that the legislation around letting
in England and Wales heavily favours tenants rather than landlords.
So, what are the basics that private landlords need to be aware of both before and during the letting of a property?
Here are some key points:
- Gas Safety Certificate: If there are gas appliances in a property, a landlord by law must have a current Gas Safety Certificate and have it renewed each year. This should be done by a Gas Safe registered engineer.
- Energy Performance Certificate (EPC): Every property must have an EPC which provides a rating of the property’s energy efficiency rating. Furthermore, it should be available on request by the tenant. An EPC is valid for ten years. It must be provided to prospective tenants “at the earliest opportunity”.
- Deposit: If you are asking a prospective tenant for a deposit, be aware of the legal requirements to protect the tenant’s deposit in one or other of the Government approved deposit schemes. Failing to protect the deposit within 30 days has serious financial and other consequences for a landlord.
- Licensing: If you intend letting a property to sharers, check on the local council’s website in case you need a House in Multiple Occupation (HMO) licence. Some HMOs will always need a licence, where they are of three or more storeys and are occupied by five or more unrelated tenants. This is a national requirement. However, there are other types of HMO that will need a licence if a particular local authority has this as a policy. In addition, some councils are now introducing selective licensing schemes for landlords. In those areas, a landlord of any type of property will need a licence from the council for each property before it can be rented out.
- Planning: If you propose converting a property which was last used as a family dwelling into a shared home, then you may need to apply to the local council for planning permission. You may also need to apply for planning permission for change of use, even if you are not planning any conversion work. This requirement varies from council to council, so do check first.
Don’t be afraid to ask your prospective tenant for photographic proof of identity such as a passport or driving licence. Ask them to complete an application form, and be sure to ask for their National Insurance number and next of kin details as these may be useful in the future. Always do a credit check to see if they have a good credit history. If your prospective tenant lives in the locality, make time to visit them at their present address and check out how they are looking after that accommodation. Needless to say, if they look as if they are trashing that address, don’t let them anywhere near your accommodation.
Satisfying yourself on these last two points should help to alleviate your chief concerns:
- Does this tenant have the financial ability to pay my rent?
- Are they likely to take care of my property?
RLA members should not hesitate to contact the RLA’s advice team for further clarification on any of these points or sign up for one of the RLA’s training courses.