The pressure on buy-to-let landlords continues to grow and they have more legal obligations than ever before. If you are thinking about getting into buy to let, these 9 top tips will help you stay on top of your responsibilities.
1 Find out if you need a licence
Before you get started, check with your local council to see if you need a landlord licence. In 2006, some areas introduced the licensing process to clamp down on rogue landlords.
You will also need a licence if you plan to rent out individual rooms to five or more people in the same property (e.g. as student accommodation). These types of property are known as Houses in Multiple Occupation (HMOs) and come with extra responsibilities.
2 Get a valid EPC
As of April 2018, any property being let must have a valid Energy Performance Certificate. Your property must also have a minimum EPC rating of ‘E’. If you arrange a tenancy without one, you could face a hefty fine and may even be banned from managing your property. This would leave you in a position where you could not collect rent but would still be liable for mortgage repayments and maintenance costs.
3 Prepare the property for tenants
Think about the type of person you want to attract and have them in mind when you are getting the property ready for letting. If you are planning to rent the property as furnished, ensure you choose modern furniture with a wide appeal.
When you market your property, focus on promoting its most attractive features – the garden, off-road parking etc. Most importantly, make sure it is clean, tidy and safe.
4 Get the right insurance
You will need cover from a landlord insurance policy that ideally includes loss of rent, damages, legal expenses and liabilities.
Most standard buildings insurance will not provide the level of protection you need, so it’s worth shopping around for specialist cover for landlords. If you fail to tell your buildings insurance provider that you’re renting out your property, your policy will be invalid.
5 Stay on top of safety checks
Landlords are required by law to have all gas appliances in the property checked by a Gas Safe registered engineer every year. You must provide your tenant(s) with a Gas Safety Certificate within 28 days of the annual check.
You will also be responsible for ensuring that smoke alarms are fitted on every floor of the property. Carbon Monoxide detectors should also be installed in any room where solid fuel (such as wood or charcoal) is used. Test all alarms on the first day of the tenancy to make sure they are working properly.
Your rental property must be fit for human habitation. Any violation of the Housing Health & Safety Rating System is classed as a criminal offence and your tenant(s) could take legal action against you.
6 Draw up a tenancy agreement
A tenancy agreement is not a legal requirement, but we can’t stress the importance of having a contract between you and your tenant – especially when it comes to issues like rent arrears. Make sure it is an Assured Shorthold Tenancy Agreement and ensure that it is legally binding. If you need advice on drawing up a tenancy agreement, please contact Sharon Rigden, Client Manager at RfM Legal Services.
7 Stay on top of tenant checks
Under current rules, you could be fined or even face prison if you fail to carry out Right to Rent checks. However, this could change in the future as Right to Rent has been challenged in the High Court. Protect yourself by ensuring that rental applicants are both reliable and responsible. This means checking their credit eligibility and getting references from previous landlords.
8 Protect your tenants’ deposits
You must protect your tenants’ deposits safely in a government-accredited scheme within 30 days of receiving them. Once you’ve done so, you can provide your tenant with the Deposit Protection Certificate and Prescribed Information.
As of 1 June 2019, the amount of deposit you can take from a tenant is capped at five weeks’ rent – or six if the rental costs amount to more than £50,000 a year.
9 Carry out regular inspections – with permission
It’s a good idea to check on the state of your property regularly. If you want to do this, you should set this out in the tenancy agreement. It is best practice to give your tenant(s) 48 hours’ written notice prior to an inspection. Remember, it is against the law to enter the property without the tenant’s knowledge and consent.
Ready to move into letting?
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