If you are considering becoming a landlord, it is important to understand your responsibilities and legal obligations. If not completed properly, a landlord can face significant fines and even time in jail!
The initial stages of renting out a property are typically the most stressful, particularly for those renting out a property for the first time. Whilst keeping on top of your responsibilities might sound daunting, with the right information and support from your expert agent, you can make the landlord letting process as smooth as possible.
On this page we have provided a valuable overview of all the key areas which you ought to consider if you want to rent out a house as a landlord. With this information, you can create a checklist to run through with your lettings agent as you prepare your property for the rental market and manage your responsibilities as a landlord throughout the tenancy.
What Does a Landlord Need to Do Before Renting?
Renting out a property is undoubtedly a big undertaking. As more people consider the possibility of generating a second income through becoming a landlord, it is more important than ever to set out what a landlord needs to do before renting a property (and throughout the tenancy).
Before you welcome a tenant into their new home, you will need to make sure:
- The property’s Energy Performance Certificate is up to date
- The property is safe for your tenants
- You have conducted a right to rent check
- You have referenced the tenant/s
- You have provided a How to Rent Guide
- You have a tenancy agreement to provide to the tenant
- You have protected your tenant’s deposit in a government-approved tenancy deposit scheme
- You have conducted an inventory of the property
- You have cleaned the property
- You have appropriate insurance on the property
- You have approval to let your property from mortgage company, head lessor and insurance company
- You have up to date safety certificates for Gas/EICR/Smoke and Carbon Monoxide Alarms
- Any furniture or soft furnishings being left in the property comply with furniture and furnishings regulations 1988
Now we will go into more detail about the landlord checklist for renting a property.
What to Include in a Landlord Checklist for Renting a House
The very first step in a landlord checklist is to ensure that you are legally entitled to rent out your property. If you bought a property as a buy-to-let investment you will be able to let your property out but you still need to check if there are any restrictions on the terms of a tenancy you offer or the type of tenant you are allowed to let to.
Those who have bought a property with a standard residential mortgage will almost certainly not be able to rent out the property, as standard mortgages are given on the basis of the property being used for owner occupation. Temporary approvals are sometimes possible but you must make contact with your lender before taking any action to let your property out.
If you choose to move to a buy-to-let property, be aware that this is likely to cost more and will typically incur redemption fees.
Arrange an EPC Inspection of the Property
As a landlord, you are legally obliged to hold a current Energy Performance Certificate (EPC) of the property before you can market the property to let. An EPC is a certificate which indicates how energy efficient the property is, graded from A to E, with A being the most efficient. A property is graded after an energy performance assessment has been conducted by an accredited assessor. By law, domestic properties must meet a minimum of an E rating before they can be rented out.
If you don’t already have an EPC for the property, you must arrange for an energy performance assessment to be conducted (and get an EPC) before you put the property on the market. You will need to provide a copy of the EPC report to your tenants too.
If the grade is below an E, then works will need to be undertaken before the tenancy. These works can often be supported by your lettings agent.
Ensure The Rental Property is Safe
A property’s safety is one of the most important areas to consider in your checklist as a landlord. The property must be safe to live in and compliant with the law throughout the tenancy. If you fail to maintain the property’s safety for your tenants, you could receive large fines and even imprisonment.
Installation of Alarms
Given the importance of safety for the tenant, a smoke alarm should be installed in every room which is being used for living space. Also, a carbon monoxide detector should be installed in every room where there is a solid fuel-burning appliance. If your property is classified as an HMO, there will be additional requirements you must also adhere to.
Safety Requirements for Gas and Electrics
The landlord is responsible for ensuring that all gas appliances and electrical equipment meet all necessary regulation standards.
The Gas Safety (Installation and Use) Regulations 1994 sets out the safety regulations which landlords must adhere to when renting out a property. It is also the landlord’s responsibility to provide the tenant with all the appropriate documentation which prove these standards. These certificates must be completed every year.
All gas appliances and the gas supply must be in a safe condition and should be checked every year by a Gas Safe registered engineer. Any safety concerns which are raised must be addressed. This applies to all gas appliances including pipework, gas boilers, gas fires, gas water heaters and gas cookers.
As of July 1st 2020, all new private tenancies in England are required to conduct electrical inspections and tests by a qualified person before a tenancy starts. The electrical installation condition report (EICR) is used to identify defects, damage and general risks, as well as recommendations for improvements. These certificates must be completed every 5 years.
Landlords could be liable for fines of up to £30,000 if they do not conduct the necessary electrical checks.
Fire Safety and Furniture
The Furniture and Furnishings (Fire Safety) Regulations 1988 states that all landlords must ensure that any upholstered furniture or soft furnishings provided is fire resistant. If the relevant label is not attached to the furniture, then it must be removed from the property.
Give the Property the Right Exposure
It goes without saying that if you want to attract tenants to rent your property you ought to advertise your property in an appealing manner.
What to consider:
- Well-written and concise information which sets out the property’s positives, including any unique features
- Include information about the property’s location, transport links and facilities
- Photos should be high quality and taken in good light
To maximise the visibility of your property you will want to advertise it through a lettings agent. Private adverts for tenants remain possible, but since lettings agents do not charge tenants fees, the majority of tenants will chose to rent through an agent due to the additional security and confidence it gives vs responding to a private listing in a paper or online.
Here at Chancellors, we can help you to create the right style of advertisement for your property to attract those who are looking to rent.
With a wealth of experience in the housing and letting markets in many areas throughout the United Kingdom, we can offer invaluable advice.
Contact us now on 0330 1911 131 to find out more about our specialist services for landlords.
Provide a How to Rent Guide
The How to Rent Guide was first introduced by the Deregulation Act 2015. You must provide all new tenants with this guide before they move into the property. Ultimately, the How to Rent Guide provides a checklist which tenants can use to understand their rights and responsibilities.
Tenants are legally entitled to know who you are and where you live, and you must provide tenants with this information within 21 days of the start of the tenancy.
Conduct a Right to Rent Check
Private landlords are under a legal obligation to check the right of prospective tenants to be in the country. This applies to standard tenancies as well as well as those who sub-let or take in lodgers. Essentially, this means that you must check the identity of anyone who is over 18 who is expected to live in the property. These checks can be carried out by the letting agent rather than the landlord.
The forms of identification which the tenant can provide includes:
- A UK passport
- Certificate of registration or naturalisation as a British citizen
- Confirmation of EU settled or pre-settled status
- Confirmation of Indefinite Leave to Remain status
- Home Office immigration status document confirming a current UK visa/immigration permission
Bear in mind that failure to carry out right to rent checks and keep them updated during the course of the tenancy could result in hefty fines.
Reference Your Tenants
As this landlord checklist shows, landlords are required to fulfil a number of obligations. Still, a key element in any successful tenancy is the behaviour of the tenant too.
Whilst it’s not legally required for you to reference prospective tenants, doing so can provide you with peace of mind. We particularly recommend doing a basic tenant reference check on prospective tenants who are renting for the first time.
A tenant reference check might include:
- Basic details of the tenant
- Previous or current employment details
- Open Banking or copies of bank statements to prove income
- Credit checks
- Reference from current landlord
- Reference from employer or college (mainly for first-time renters)
Check out our guide for questions to ask tenants for more information.
Arrange a Tenancy Agreement
Once you have conducted any references and checks and are happy to proceed, you will need to draw up a tenancy agreement. Tenancy agreements must be easy to understand and not contain any hidden and unfair terms or conditions. It must be fair and appropriate to the tenant as much as the landlord. If it is too onerous then, if challenged, it would be found unenforceable by the courts. A tenancy agreement indicates that the tenant has a right to live in the property, and that you have the right to collect rental payments from them.
Some of the information which is typically contained within a tenancy agreement includes:
- Names of all people involved in the tenancy
- Property address
- Tenant and landlord obligations
- Date tenancy begins
- Rental price and breakdown of payments
- Information about billing arrangements
- Notice periods should either party wish to terminate the contract
- Deposit amount and how it will be protected
- Who is responsible for repairs
You must inform the tenant/s if you want to make any changes to the tenancy agreement and receive their approval too.
Check Landlord’s Insurance
Typically, standard home insurance products do not cover rented properties. Therefore, it is important to take out appropriate insurance which is designed for landlords and covers both building and contents insurance.
Insurance is vitally important to cover you should anything untoward happen, such as costly repairs which need to be made as well as things that are out of your control, such as flooding.
Rent guarantee insurance is a form of insurance which provides cover should your tenant fail to keep up with rental payments. This form of insurance will typically cover you for a tenant refusing to leave the property, deliberate damage and disputes over repairs and renovations too. As with all insurance it will come with forms to fill in and excesses and this is why Chancellors has developed our own Rent Guarantee scheme that is included in our fully managed service and ensures our clients receive their rent within 10 days if the tenant payment isn’t made.
Make sure you understand exactly what you are covered for with your insurance and that any restrictions on the type of tenancy or tenant are not breached.
Protect Tenant’s Deposit
Since April 2007, landlords have been obliged to protect their tenant’s deposits in a government-approved tenancy deposit protection (TDP) scheme. Information on where the deposit has been safeguarded must be shared within 30 days of the start date of the tenancy.
The three government-approved schemes are:
Failure to register a tenancy accurately can lead to significant claim by the tenants and/or fines and as such your agent will have a mechanism to ensure your deposit is registered successfully.
Deposits are also now limited in size with a maximum of 5 weeks rent for most tenancies. If you require additional protection then deposit replacement schemes are available with Chancellors, one where the landlord secures and controls the scheme under our company policy, providing increased protection and confidence.
Ensure the Property is Clean
It is important to give a good first impression to tenants when they move into the property through making sure the property is clean. After all, nobody wants to move into a dirty property.
Give the property a thorough clean and tidy before the tenants move in. Clean all furnishings, carpets and windows and make sure you tackle any DIY tasks too, including removing mould marks which are both unsightly and potentially dangerous to health.
Also, it goes without saying that you should remove any items of personal value from the property.
Conduct an Inventory
One of the most important items on your checklist is inventories. We highly recommend conducting an inventory before and after a tenancy. This will help you to account for any changes or damage which you notice in the property.
Unfortunately, disputes are not uncommon in the world of lettings, and many of these disputes occur as a result of damage made to the property and its fixtures and fittings. With an inventory, these disputes can be solved much more smoothly.
You can record the inventory yourself or ask your letting agents to do it for you. Clear photos or videos should be taken and items inside the property should be listed. The tenant should sign the inventory to confirm that it is representative of the property in its current state.
Ensure You Understand Taxation on Lettings Income
Any profit which is made as a landlord after allowable expenses have been deducted is subject to UK taxation. Profits must be reported in a Self-Assessment Tax Return by 5th October following the tax year in which you received the rental income. You must pay taxation on rental income whether you live in the UK or abroad.
In some situations, you may be able to claim tax relief, including if you have replaced certain domestic items. For more information about taxes, self-assessment and possible tax reliefs as a landlord, please refer to the gov.uk site.
Have a System in Place to Deal with Late Rent or Rent Arrears
It is important to have a system in place which is designed to ensure late payments are avoided and that late payments can be chased swiftly. If your tenant falls into arrears, you must serve the correct legal notice and at the correct time.
When using a lettings agent, you have the benefit of rental payments going through them, so visibility on what has and has not been paid is much clearer and their credit control processes will escalate matters to the tenant very quickly.
Maintenance of the Property
As alluded above, you will need to maintain responsibilities as a landlord throughout the tenancy period. This includes regular gas and electric checks and a commitment to repairing any problems in the property as set in the tenancy agreement. Someone should be on call for any emergencies and to deal with maintenance issues too. This does need to be 24/7 in case of emergencies and a property cannot be left without emergency cover while you are away on holiday or business. Here the lettings agent’s local contractor panel becomes a vital service in any unfortunate time of need.
What Landlord Services Does Chancellors Provide?
Here at Chancellors, we offer comprehensive lettings services to landlords. With our Managed Service, we will do all the necessary referencing of your tenants before they move in and arrange a professional, independent inventory too. During the tenancy period, we will arrange and conduct all necessary annual checks in your property, including gas, electrics, refurbishment and planned maintenance.
With our services, you can take away a lot of the stress of managing a tenancy, safe in the knowledge that we will ensure all legal obligations and responsibilities are adhered to from before your tenant moves in to the day they leave the property.
Our services are continually updated as the regulations applying to lettings across the UK change. With the private rented sector being of keen interest to government regulators, and with high profile tenant interest groups lobbying government, it is vital that all landlords keep updated with new initiatives and regulations as they are applied to ensure that their property investment is maximised financially while minimising risk to themselves. With a long term relationship with Chancellors, we believe landlords are best placed to achieve this.
Alternatively, if you would prefer to handle landlord responsibilities yourself, you could choose our Tenant Find Only Service, but if choosing this service, you should be sure that you are knowledgeable enough not to put yourself at risk of fine or jail.
To find out more about all our lettings services for landlords, please do not hesitate to contact us.