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.
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 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 any references from previous landlords and ensuring they have the right to lawfully live 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 Acts 2014 and 2016.
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, and the Government’s How to Rent guide.
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 1 June 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 1 April 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.
Here's more details on Energy Performance Certificates.
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 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. It’s also a good idea to install carbon monoxide detectors near gas appliances, although it is not compulsory.
New electrical safety regulations that came into force on 1 June 2020 mean that you also have to have every fixed electrical installation inspected and tested at least every five years by a qualified electrician.
You need to obtain a report of the results of the inspection and test, supply it to each tenant within 28 days, and retain a copy until the next inspection.
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 Homes (Fitness for Human Habitation) Act 2018, your tenants can take legal action against you. It is good practice to respond to any maintenance requests in a positive and efficient manner too.
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 contract 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.