This guide will help you be a model landlord – and stay on the right side of the law.
There’s an ever-growing labyrinth of dos and don’ts in the private rented sector. So if you’re a landlord – or considering making some extra income by becoming one – it’s important to stay on top of your legal obligations.
Together with ARLA Propertymark, the professional body for letting agents, we’ve pulled together nine top tips for landlords, whether you're letting a studio apartment or a 10-bed mansion.
1. Find out if you need a landlord licence
Before you look for prospective renters, check with your local council to see if you need a landlord licence to earn rental income from your property. Legislation was introduced in 2006 and some areas have implemented selective licensing to clamp down on rogue landlords.
2. Stay on top of tenant checks
That means being rigorous with tenant referencing on rental applications to make sure they are reliable and responsible tenants. This tenant screening includes checking their credit eligibility, getting references from their previous landlords and ensuring they have the right to lawfully live and rent in the UK.
You risk a fine or even a jail sentence if you fail to carry out Right to Rent checks in England under the Immigration Acton 2014. However, this may change as Right to Rent has been challenged in the High Court as a breach of human rights.
3. Protect your tenant's deposits
You must protect tenants’ deposits safely in a government-accredited scheme within 30 days of receiving it. And once you’ve done that, you’ll need to give your tenant the Deposit Protection certificate and Prescribed Information.
You have a choice of three schemes: Deposit Protection Service (DPS), MyDeposits or the Tenancy Deposit Scheme (TDS), who also help deal with deposit disputes over potential damage to the property.
Since the June 1, 2019 when Tenant Fees Bill landed, the amount of deposit you can take from a potential tenant is capped at five weeks' rent or six weeks' if the rental costs are more than £50,000 a year.
4. Provide a valid EPC
Make sure your property is up to scratch in terms of its energy performance – and hand a copy of the Energy Performance Certificate (EPC) to your tenant.
As of April 1, 2018, your property must be rated at least ‘E’ in the EPC. If you’re rumbled arranging a new letting without ensuring your property is up to this standard, you may be fined.
In addition, since April 6, 2018, you risk being banned from managing your property. That would mean your local council would take control of your property and collect the rent. But you would still be liable for repayments to your mortgage lender and any other costs, such as maintenance.
5. Do your safety checks
You are legally required to have all gas appliances in the property checked by a Gas Safe-registered engineer every year – and provide tenants with a Gas Safety Certificate within 28 days of the annual check.
But that’s not all. It's is also a landlord liability that smoke alarms should be fitted on every floor of the property from the start, and carbon monoxide detectors must be in any room where solid fuel, such as wood or charcoal, is used. Test both alarms on the first day of the tenancy.
You must make sure that your rental property in England is fit for human habitation. If you fail to comply with standards set out under the Housing Health and Safety Rating System, it is a criminal offence and your tenants can take legal action against you. It is also good practice to respond to any maintenance requests in a positive and efficient manner
6. Draw up a tenancy agreement
It’s not a legal requirement but getting a tenancy agreement drawn up and signed by both you and your prospective tenants is really crucial, especially when it comes to things such as rent arrears. Make sure it's an Assured Shorthold Tenancy Agreement as that's the type of contracts that renting rules and legislation applies to.
7. Carry out regular inspections – with permission
It’s a good idea to regularly check the state of your property. But you are legally forbidden from entering without the tenant’s permission. It’s best practice to give your tenants 24 to 48 hours’ written notice – and this should be stipulated in your tenancy agreement.
8. Get the right insurance
A good landlord insurance policy will cover loss of rent, damage, legal expenses and liabilities.
Remember that most standard building insurers do not provide the protection you’ll need as a landlord so it’s worth hunting around for specialist landlord cover. If you don’t tell your buildings insurer that you’re renting out your property, you risk invalidating your policy.
9. Get the property ‘rental ready’
Think about who your target tenant is – and make sure the property is ready for them. If you are offering your property as a furnished home, make sure it's modern decor with wide appeal. Also, don't be shy in promoting its key features - a south-facing garden, terrace, off-road parking or good transport links. Above all, it must be clean, tidy and safe.
You may also be interested in...
- Understanding rental yield
- What are your tax liabilities as a landlord?