Recently, we've had lots of enquiries from people looking to become landlords. One question that seems to come up a lot is 'what responsibilities will I be taking on?'.
So, this article intends to answer that question...
1. Making sure your property is ready to rent
Your property will need to comply with letting legislation, such as fire safety standards and energy performance ratings.
It is therefore important to seek professional letting advice from qualified agents and tradesmen to ensure that the property is compliant for letting it to tenants.
Landlords will also need to make sure that they are permitted to rent their property out. They should confirm that their mortgage provider knows about the proposed property use and permits it.
It is also important to ensure that you take an inventory before the tenants move in, noting any existing damage to the property and the standard of any white goods already there.
2. Finding responsible tenants
Landlords should be certain that their proposed tenants would be a good fit for the property.
They should also check that the property will be suitable for their use, and that the tenants have the ability to pay the proposed rent and not quickly fall into arrears.
Landlords should preferably agree with their tenants that there will be a guarantor in place in the event of arrears or damage to the property.
3. Having all of your prescribed documents in place at the outset of the tenancy
Housing legislation is very prescriptive, and landlords are subject to providing numerous documents to their tenants at the time of entering into the tenancy agreement.
These include, but are not limited to, the following:
- Energy Performance Certificate
- Gas Safety Certificates (require annual renewals)
- Government How To Rent Guide
- Deposit protection Certificate (discussed at 5)
Landlords may be barred from relying upon certain eviction notices if prescribed information was not provided to their tenants at the outset of the agreement (as well as annual renewals).
Landlords can also be fined substantial sums in the event of key legislation breaches.
4. Agreeing to a suitable Assured Shorthold Tenancy Agreement (AST)
It is crucial to landlords that the AST they provide their tenants with at the outset of the tenancy agreement is detailed and suitable for their needs.
This document is a contractual agreement between the parties. It will set out:
- Who will be responsible for maintenance
- When and how much rent is to be paid
- Whether the landlord can recover legal costs incurred in evicting their tenants
- Whether pets are permitted etc.
AST agreements are available online, however these are often brief and only address the basics.
We therefore recommend that you obtain one from a reputable letting agent or through a Solicitor.
UPDATE: ASTs are soon to be abolished altogether, as set out in the Renters' Reform Bill. Find out more here.
5. Protecting the Deposit
If a landlord takes a deposit from the tenant, they will need to protect it within the prescribed timeframe.
It will need protecting in one of the approved Government backed schemes, and the protection certificate will need to be provided to the tenants and the individual that paid the deposit (for example it could have been paid by a parent of a tenant).
The deposit schemes will be able to provide you with further assistance with this, including the time-frames that it must be protected.
Landlords can be fined up to 3 times the deposit for not protecting it properly, so it is key you understand the requirements before agreeing to the tenancy.
6. Ongoing maintenance and management of the Property
Tenants are not robots – damage will occur and white goods may require replacing.
It is important that the landlord understands their obligations – normally set out in the tenancy agreement – and that they work with their tenants in a prompt manner to fix issues and arrange for qualified contractors to make repairs.
Landlords need to ensure that there is not a damp problem at the Property, and if they are served with an improvement Notice from the Council, that they comply with its requirements.
7. How to deal with issues during the tenancy
If your tenant is not getting on with their neighbours, there are reports of anti-social behaviour, or your tenant falls into rent arrears, you will need to act promptly in a bid to mitigate these issues.
Early intervention into neighbour disputes often helps resolve the problems. In respect of rent arrears, work with your tenants to try and reach a payment plan.
However, if your tenants simply cannot pay their rent and arrears continue to mount, you may need to consider the appropriate eviction procedure.
If your tenants are displaying extreme anti-social behaviour, such as drug dealing or violent behaviour at the property, seek immediate legal assistance.
8. Ending the tenancy – checkout and deposit
At the conclusion of the tenancy, refer to the inventory taken at the outset of the tenancy and discuss any damage to the property with the tenant.
Attempt to agree a deposit settlement with them and ensure that the property is properly cleaned.
9. Evicting tenants and disposing of their possessions
Unfortunately, there are occurrences where landlords will need to evict their tenant.
If you find yourself in this situation, it is important to take immediate legal advice. This will involve advice on the relevant eviction notice to use, along with likely costs and timescales for progressing to Court.
If your tenant leaves possessions or furniture at the property, either after voluntarily vacating or after bailiff intervention, it is important to follow the correct procedure on disposing of the goods.
This may include the use of a Torts Act Notice to ensure you do not dispose of goods and consequently become responsible for refunding the tenant for their value.
10. Preparing for your next tenants
It is important to learn from each tenancy to avoid the same mistakes in the future.
Ensure that the property is cleaned, an updated inventory is taken, and the prescribed information documents are all updated, along with the AST, before placing new tenants in the Property.
Property Litigation Specialist Solicitors
Housing legislation and letting to residential tenants is more prescriptive and complicated than ever.
If you feel that you would benefit from specialist landlord advice, please feel free to contact the Property Litigation Team here at Frettens.
Anna Curtis would be happy to assist with enquiries of this nature including AST drafting and eviction related enquiries.