Renting out a property is one of the best ways to make a profitable passive income. You can gain from the rental income and make a healthy return on your investments. Rental income can be a source that can see you through to your retirement. But it is not just a case of sticking your property on the books of a letting agency. You may have invested in a Buy to let, or plan to rent a property of your own. But there are some important landlord responsibilities that you may not be aware of. If you have a rental property you may not be aware of what is legally required so we have put together some important items which are required and enforced through local authorities and the government.
Health and Safety regulations
As a residential and commercial landlord, you will need to ensure that your property is safe to rent. This is a landlord responsibility. You will need to make sure of whether there are any signs of damp and mould which often means that there is condensation.
As a landlord, it is your responsibility to maintain the structure and the exterior of the premises including the drains, gutters, and external pipes. If the property is a house the whole structure including the land it sits on is the landlords’ responsibility such as steps in the street, structures on the exterior, garden paths and steps. It is important to inspect water and gas pipes and electrical wiring together with basins, baths, and toilets. As well as all fixed heaters and water heaters.
Mould is the most common complaint from students as they believe that mould is growing on their property and they think it is “damp”. Water ingress causes damp, either from roofs, leaks, blocked gutters, rising damp and cracks in internal walls.
Condensation can also cause mould. It is caused by poor ventilation in the property and moisture on the building and walls and around windows. Condensation looks like black spots on the walls and is an easy problem to solve by simply opening the window on a regular basis. You may find that this is not necessarily a landlord responsibility but for a tenant to ensure that it is wiped down.
Gas Safety Certificate
All gas appliances within the property require a gas safety certificate. It must be carried out by a gas safety engineer. This is to ensure that the installation is correct. It also ensures that the boiler has no carbon monoxide emanating from it which means that it could kill. You must provide a copy of this certificate to the tenants and have it acknowledged within 30 days of the gas safety taking place. This is now law.
EICR reports i.e. electrical installation condition reports
These start to become compulsory from the end of the year and landlords should ensure that they do. The check is to ensure that all electrics i.e. lights, sockets, and wiring follow the electrical equipment safety regulations. They need to be carried out by a qualified electrician every five years.
It is the law to now install smoke alarms on every floor of the property. A Co2 detector is also required in any room that has a solid fuel burner. This does not mean a boiler i.e. a gas combination boiler but it is always safe to do so. If the property has an HMO license i.e. a house in multiple occupation. It may require fire alarms and fire extinguishers. Each individual local council will let you know what their regulations are.
If you are renting out a furnished property. Then you must ensure that all soft furnishings adhere to the furniture and furnishing regulations. This includes such items as beds, sofas, and mattresses and even cushions. Each item must have a carelessness causes fire label attached to ensure that they are compliant. This is critical to ensure that you are legally compliant.
Energy Performance Certificate
All rented properties now must have an energy performance certificate (EPC) which lasts for a period of ten years. This outlines the energy efficiency rating and whether the property requires any improvements if any. It contains information on energy costs and energy efficiency. Together with recommendations on resuming energy consumption. They are carried out every ten years. At present there is a rule for landlords to have a minimum rating of E. This will change over the next few years and you need to ensure that you are compliant.
Tenancy Deposit Protection
All Deposits paid by tenants are now put into a tenancy deposit scheme. This was introduced in October 2015 as part of the Housing Deregulation Act. There are various schemes that are all backed by the Government. Legal documentation must be served on the tenant to ensure that they are aware of their requirements. It is critical that landlords understand what needs to be served on tenants.
If for instance, you wish to evict a tenant in future the paperwork has to be correct. In the case of Cardon Property limited –v- Monty Shooltz. The court held that a Section 21 Notice could not be served on the tenant unless all the other documentation was carried out first. In this case, a gas safety had not given to the tenant at the start of the tenancy before the tenant took up occupation. The court held that the tenant did not have to follow the Section 21 Notice as the landlord had not served the gas safety at the time.
It is so critical if you are unsure of what you should be serving on a tenant when they take the property. Or when they go on to a month-to-month contract i.e. at the end of their term. That you check with your solicitor or your letting agents.
You need to have a correct tenancy agreement. These are normally known as assured shorthold tenancies. They must be served on the tenant together with a rent guide that is provided by the government. The rent guide has various outlines the duties of landlords to the tenants. Such as repair, fire safety and many more. Many private landlords do not understand that you must serve this on the tenant. It will outline that the landlord now must have an electrical installation condition report served on the tenant. This must be done before they move in. This is now compulsory and must be done every 5 years. It confirms that they must have carbon monoxide detectors at the property.
There will be a lot more clauses in the tenancy agreement. Landlords should check they are correct and not illegal.
You will need to insure the whole building. This will include the bricks and mortar, roof, and foundations. There may be a certain number of contents which will need to be accounted for, such as carpets and blinds or curtains. Tenants will need to insure their own contents separately. There will be insurance for third party liability i.e. where something falls off the building and hurts or injures somebody. It is important that you are aware that as a landlord you are responsible for insuring the building on a comprehensive basis.
Landlord insurance will cover fire, flood, accidental damage and malicious damage. If you lived there before then your current home insurance would not cover you. It is important that you are aware of the actual insurance that you need. If you are buying a property on a buy to let basis then you will need the correct landlord insurance. To make sure that you are covered and to provide this to your mortgage company before you let it out and complete. Why not talk to us to discuss your requirements and to get you the best policy at the best rate.
Right to rent your property
Part of landlord responsibilities is right to rent. You must check that a tenant or lodger can legally rent your residential property in England.
Check with the home office if a tenant is a commonwealth citizen but does not have the right documents – They might still have the right to rent in the UK.
Before the start of the tenancy, you must check all tenants are aged 18 and over and even if
- They are not named on the tenancy.
- There is no tenancy agreement.
- The tenancy agreement is not in writing.
Check all new tenants. It is against the law to only check people who you think are not British citizens. You must not discriminate against anyone of where they are from.
If the tenant is only allowed to stay in the UK for limited time, you need to check in the 28 days before the start of the tenancy.
You need to check the tenants in these types of accommodation;
- Social housing
- Care home, hospice, or hospital
- Hostel or refuge
- A mobile home
- Student accommodation
You also do not need to check tenants if they live in accommodation that;
- Is provided by the local authority.
- Is provided as part of their job.
For instance, did you that know that people from Ireland still need to provide some sort of documentation.
The government has implanted that EU Settlement Scheme known as (EUSS) to give EEA citizens residing in the UK a new immigration status in the UK after Brexit.
High risk citizens are eligible to apply for a status under the EUSS however, the government has advised that they are not required to apply for status as their residence is guaranteed under the CTA after Brexit. The government announced a new immigration bill in the Queens Speech on the 14th October 2019. The briefing notes from the Queens Speech suggest that the bill will contain provisions to clarify immigration status of Irish citizens. This means that Irish citizens will generally not require leave to enter or remain in the UK.
Non-Irish and Non-British family members of Irish citizens living in the UK will generally need to apply to the EUSS, even if their Irish citizens family member choses not to apply under the scheme.
You should read the governments documentation on this as it is part of landlord responsibilities.
There are various new rules and regulations regarding the right to rent and you should keep yourself advised of these especially after June of 2020.
There are various updates in relation to the landlords responsibilities and we deal with these as follows;
Building insurance and insurance quotes.
With the ever increasing cost and living expenses going up landlords don’t understand that often their building insurance will be index linked. We find that landlords often take this off.
You need to understand that if you underinsure your property then there is a high likelihood your insurance company may not actually pay out. It is therefore important that you understand you insure your property for the correct amount. If it is underinsured then there is a high likelihood that insurance companies might not pay out the full requirements on your property.
For instance, if a claim was for £100,000 but you underinsured it by £20,000 then they can take £20,000 off your claim.
The gas safeties have always been a requirement but landlords don’t understand that they need to within 30 days also ensure that they are served on the tenant. The tenant also has to acknowledges they have received it. We often take over cases where landlords or lettings agents have not taken this into account.
These laws will change again when the new rents reform bill comes into force and landlords should always keep an eye out for all of our updated versions.
Energy performance certificates.
These require all landlords to have in excess of an E rating for all types of properties.
These will be changing. There are set requirements for EPC’s to be improved further by landlords but the changes are being phased in. With a potential change of Government these could be changed again. Make sure you keep yourself updated through our news letter.
Electrical installation condition reports.
These needs to be updated every 5 years and any requirements should be immediately done by the landlord. They then need to be reserved on the tenant and acknowledged by them to ensure that they have accepted the contents of it.
We suspect that these will change again over the next few years as soon as the full Grenfell report has come out. We understand that this could well be part of the report requirements of further upgrading required.
Since Grenfell the Government have been looking to try and update the safety requirements for properties.
New fire safety regulations have now been bought into place in order to ensure that landlords deal with new fire regulations from the 1st January 2023. These are being done under Regulation Article 24 of the Regulatory Reform (Fire Safety) order 2005. They will require responsible persons who deal with multi occupied residential building of a high rise buildings as well as those over 11 metres in height provide additional safety measures. Why not read our information here in this regard.
New pet clauses.
The Government have now put a new clause in their own tenancy agreement that states that they are now happy to accept pets at properties. This is what they require landlords to do. Under renters reform bill this will be a major change for all landlords and they will need to comply with it. However, if it is a flat you would have to still check with the freeholder if you are allowed to have pets in the property as there are legal requirements for the freeholder. We are hoping we will be able to help in future for insurance for landlords to be able to deal with this. It is not compulsory for landlords at this moment in time but will be in future and it is something they should be made aware of.