Landlord’s legal obligations: If you read only one thing on this website, read this
As soon as you let a property you’re a landlord. And if you’re a landlord you’re running a business. And if you’re running a business, you have certain legal obligations. There’s no getting away from it, there’s quite a bit of legal stuff you need to be aware of, so here’s what you MUST do, including some recently introduced obligations:
The first step is to check with your local council to see if you need a licence to let the property or if they have imposed any restrictions on the type of let you can offer. A growing number of councils are introducing selective licensing schemes that affect some or all of their boroughs. If you need a licence, expect to pay around £500 for each property and apply asap, there’s bound to be a lot of paperwork to fill out.
Note that Wales has introduced compulsory registration for landlords and those who let and self-manage their properties must also apply for a licence to Rent Smart Wales.
If you let your property to three or more tenants who aren’t related, it is a House in Multiple Occupation – an HMO – and you might need a licence. Contact your local council to find out if this is the case as rules vary from borough to borough. If your property has at least 3 floors and you have 5 tenants or more, a licence is compulsory. If you bought a property that was previously a licensed HMO, you will still need to apply for your own licence as they aren’t transferable.
Get your gas appliances (boiler, cooker, fires) tested by a qualified Gas Safe-registered plumber, who will issue you with a Gas Safety Record. This must be renewed at least every 12 months. It’s a legal obligation. Expect to pay about £60 for two certificates for 2 appliances (in London). Letting agents will charge you more. Landlords must keep one copy themselves for two years and they must give the other copy to the tenant when they move in or within 2 weeks of the latest gas safety check.
Since October 2015, landlords can’t end a tenancy unless they have provided tenants with a valid Gas Safety Record.
Get an Energy Performance Certificate – EPC – which shows how energy efficient your property is(n’t) and estimated energy bills. By law, you must have arranged an assessor to visit your property BEFORE you or an agent starts marketing it, and you must have the EPC within 7 days of placing an ad. All adverts must include the first page of the EPC. Expect to pay about £70. Letting agents will charge you more. See Money Saving Tip, right.
Once again, since October 2015, landlords must issue tenants with an EPC before they can start re-possession proceedings.
Since October 2015, every rental property must have at least one smoke alarm on every floor. See safety tip, right. Heat detectors aren’t mandatory, but it’s best practice to install them in kitchens, and carbon monoxide detectors will be required in all rooms with solid fuel burners. The law doesn’t specific these should be installed in rooms with gas boilers, but we’d suggest installing them anyway. Better to be safe than sorry and all that.
Frustratingly for landlords there are no hard and fast rules about any other type of fire safety equipment you must install as this varies depending on the size of the property, the layout and even the type of tenants. For example, if you intend to let to more vulnerable tenants such as those with a mental or physical disability, tenants with a drug or alcohol addiction or the elderly, you might need to take more fire safety precautions.
Essentially it’s your responsibility to make sure your property is safe for the type of tenant who will be living there, so it is advisable to carry out a Fire Risk Assessment of your property every 12 months to identify any potential fire hazards. Once identified, you must deal with these hazards.
You can carry out your own fire risk assessment but if you have an HMO (even if it’s a small one that doesn’t require a licence) it is advisable to have a professional do it. Expect to pay £200 to £360, depending on the size of the property. However, I doubt many landlords bother to do this.
You can get a good idea of what fire safety devices might be required in your property by reading the latest advisory on lacors.gov.uk, which gives examples of different types of properties and the recommended fire safety equipment for each.
Ensure all soft and upholstered furnishings, including mattresses and sofas, are fire retardant. They should have fire safety labels attached, but if they don’t contact the manufacturers to find out if they comply with fire safety regulations. This is a legal obligation. The fire regulations don’t apply to antique furniture, made pre-1950, but I’d suggest if your furniture is that old it might be time to think about replacing it, or if it is a genuine quality antique you need to ask yourself whether you really want to risk leaving it in a rental property. Unless your pad is top-end, I’d suggest not.
Bed clothes, duvets, curtains and carpets don’t need to be fire resistant either (unless your property is a licensed HMO, in which case you might need fire resistant flooring).
If you have any other furnishings that don’t comply, you have no option but to remove them, otherwise you are committing a criminal offence and could face a fine of up to £5,000 for each item plus a prison sentence of up to six months and any landlord insurance policy you might have might not be valid.
You don’t necessarily have to replace furniture as unfurnished properties are just as popular as those let empty – about 50% of tenants are looking for unfurnished properties – and, in general, you won’t get any more rent for a property just because it’s furnished. You certainly won’t get any more if the furniture is hideous.
Check the property for any obvious or hidden hazards – if the tenant has an accident on your property, say they trip on a loose bit of carpet and fall down the stairs, you could be held responsible.
Check all your electrical installations, including fixed wiring, are safe and well-maintained. Unless your property is an HMO you don’t need to have the electrics tested by an electrician, but bear in mind that if a tenant is injured as a result of a faulty appliance that hasn’t been checked, you could face a criminal conviction and you could be sued. It’s best practice to have the fixed wiring tested every five years, fixed appliances such as cookers tested every two years and portable appliances such as lamps tested every year. For this reason, I don’t supply electrical items such as lamps, toasters, vacuums etc.
You’ll find more information about a landlord’s legal duties with regard to the health and safety of their tenants on this government website. There’s been a lot of guff talked by letting agents recently about Legionella’s disease and landlord’s obligations to ensure their properties are legionella-free. Now it is true that landlords are responsible for making sure their tenants aren’t at risk of this water-born disease, but they aren’t obliged to pay for a (expensive) professional investigation. Most landlords just need to test that the hot water in their properties is hot (over 50 degrees) and the cold water is cold (under 20 degrees), and that water is stored in sealed containers, also that there are no old, redundant pipes. Also, if properties are left empty for a long period, the showers and bath and sink taps should be flushed out (i.e. by running the taps for a while) and the shower heads washed in household disinfectant. You can read more about Legionella assessments on the government website.
If you intend to take a deposit from a tenant on an Assured Shorthold Tenancy, you need to register with one of 3 schemes to protect the funds (see article on Protecting Tenants Deposits) and you must provide the tenant with information on where and how their deposit is safeguarded.
You can’t start eviction proceedings unless the deposit has been protected.
Since October 2015, you must give new tenants a copy of the Government’s How to Rent guide, which lays out yours and their responsibilities and obligations. They won’t read it, but if you haven’t given them a copy, either on paper or by email, then you can’t evict them. Ever. So best download a copy now.
Before accepting a tenant, you must make sure they have a Right to Rent in the UK. If you don’t you risk a hefty fine and even a prison sentence. You will need to check their photo ID and, if they don’t have an automatic right to live here, you’ll need to check they have a valid visa. If you use a letting agent they should do this for you but it’s your responsibility so check that they have.
Let your mortgage lender know you’re planning to let the property – not all lenders permit lettings, some charge a higher interest rate and some place restrictions on the type of letting and tenant.If you property is leasehold, check with the freeholder that lettings are permitted.
Don’t forget to register with the Inland Revenue for tax purposes and fill in a tax return every 12 months, even if you have no profits to declare.
So, just to recap, when tenants move in you need to give them:
- a valid Gas SafetyRecord
- a copy of an up-to-date EPC
- prescribed information about their deposit protection
- a copy of the How to Rent guide
Not one of the landlord legal obligations, but vital..
Buy specific landlord insurance. This is different to normal household insurance. Landlord insurance isn’t a legal requirement, but you’d be crazy not to have it.
From April 2018, it will be against the law to let a property with an energy rating of F or lower. If you are considering buying a rental property with a rating of F or G, you might want to re-consider – or at least check how much it will cost to improve it.
Make sure tenants realise they’re responsible for changing batteries in smoke alarms by including a clause in tenancy agreements. As most of my tenants don’t bother, and simply pull the old batteries out when they start to make that annoying beeping noise to indicate they’re running low, we recommend spending a little extra to buy alarms with 10-year batteries.