An ‘Accidental Landlord’ is someone who didn’t set out with the intention of being a property mogul, but has a property to rent out for other reasons. Circumstances vary: perhaps you have acquired a property through an inheritance, or have bought a new house with another homeowner and now have one vacant property, or maybe you are struggling to sell your house and want to generate some income from it while you wait.
ARLA is the UK’s foremost professional body for letting agents and has some great advice for people who find themselves in the position of being an Accidental Landlord. To start you off, here are some of Arla’s top 10 tips:
1. Landlord License
Step one is to contact your local council to check if you need a license before your property can legally be rented out. This legislation was introduced in 2006 with the aim of ensuring landlords maintain their rental properties to a good standard.
2. Tenant Referencing
Who you are renting to is really important for a number of different reasons! The obvious one is that you want to make sure your Tenant is reliable and able to make their rent payments so credit eligibility, employer checks and previous landlord reference are a really important, but it goes further than that too. Landlords have an obligation to make sure all their Tenants have the right to lawfully live in the UK. Failure to undertake a Right to Rent under the Immigration Act 2014 can result in a fine or even a jail term, so it’s important they are conducted thoroughly.
3. Tenancy Deposit Protection (TDP)
Deposits are a way of protecting your property in case of damage from your Tenants. If you take a deposit from your tenants you must protect it in one of the Government-authorised Tenancy Deposit Protection schemes. There are three available: Deposit Protection Service (DPS), MyDeposits or the Tenancy Deposit Scheme (TDS). You will need to protect the deposit within 30 days of receiving it and provide the Tenant with both the Deposit Protection certificate and completed Prescribed Information. Failure to do so could result in you not being able to evict your Tenant plus the full return of the deposit and a fine of up to three times the value of the deposit.
4. Energy Performance Certificate (EPC)
You must serve your Tenants with an Energy Performance Certificate also known as an EPC for short. As of the 1st April 2018, new legislation has been introduced to ensure that your property is at least EPC band E before letting it out. If you arrange a new let without ensuring your property is up to these standards, you could be fined. For more details about this change, click here to read our article about EPC requirements from April 2018: https://www.hop-property.co.uk/epc-requirements-from-april-2018/
5. Safety Checks
As a Landlord, you are responsible for ensuring the property is safe for your Tenants, and as a part of this, you are legally required to get all gas appliances checked by a Gas Safe registered engineer every year. You must then provide Tenants with a Gas Safety Certificate within 28 days of the annual check taking place. In addition to this, fire alarms should be fitted on every storey of the property from the start of the agreement, and carbon monoxide detectors must be in any room where solid fuel is used. Also both alarms have to be tested on the first day of the Tenancy.
6. Written Tenancy Agreement
A Tenancy Agreement is a document between Tenant and Landlord that sets out the terms of the Tenancy. Although written agreements are not a legal requirement, it is best practice so both the Tenant and Landlord are clear on what their rights and responsibilities are.
7. Regular Inspections
Regular inspections of the property are essential so that you can head off any potential issues with Tenants or repairs. Remember that you cannot enter the property without the Tenant’s permission as this is classed as trespassing and is illegal. It is best practice to grant them at least 24 hour’s written notice, and this should be stipulated in your tenancy agreement.
8. Landlord Insurance
If you do not inform your insurer that you are renting your property out, you risk invalidating your policy. Most standard buildings insurers do not provide the protection you require as a landlord, so it is worth taking out specialist landlord insurance. A good policy will cover loss of rent, damage, legal expense and liabilities.
9. Get the Property Rental Ready
Think about the type of tenants you want and consider whether you want to offer the property as furnished or unfurnished. If you are offering your property as a furnished home, think carefully about what you can provide and maintain. Before anyone comes to view your property, make sure it is clean, tidy and you have completed any modernisation or DIY projects.
10. Partner with an ARLA Propertymark Protected Letting Agent
There are a number of legal obligations that a Landlord has, accidental or otherwise, and the easiest way to make sure you are compliant is by partnering with an ARLA Propertymark Protected letting agent. This way there you will have expert guidance to navigate all the rules and regulations that apply and stay up to date with any changes legislation.
Let Leeds is proud to be a holder of the Arla Propertymark so if you have found yourself an Accidental Landlord, or even a planned one, we can help you manage the obligations that come along with it.
For more details, click here to visit the Arla website.http://www.propertymark.co.uk/advice-and-guides/landlords/top-tips-for-accidental-landlords/
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