Being a landlord comes with a range of legal responsibilities and requirements that must be adhered to. Here, we list some of the most important ones.
Financial and legal responsibilities
There are a number of financial and legal factors to take into account before letting a property. You’ll need to check that your proposed tenant has the right to rent your property (if it’s in England), and you will also have to protect your tenant’s deposit in a government-approved scheme.
See also: How to be a Good Landlord
You’ll also have to pay income tax on your rental income—excluding your day-to-day running expenses—and if your letting of the property counts as running a business you’ll also have to pay Class 2 National Insurance. If you have a mortgage on the property you want to rent out, you must get permission from your mortgage lender.
As a landlord you must ensure your rented properties are kept safe and free from health hazards, and that all gas and electrical equipment is safely installed and maintained. You will also have to provide an Energy Performance Certificate for the property. Fire safety is also part of your remit, so you will need to fit and test smoke and carbon monoxide alarms.
Be aware that your local council may decide to carry out a Housing Health and Safety Rating System inspection to make sure the property is safe for tenants to live there.
See also: Getting Started as a Landlord
It’s your responsibility to keep your property in good condition. If you need to make a repair, you do have a legal right to enter the property to inspect it or carry out repairs, but you must give tenants at least 24 hours notice—aside from emergencies, when immediate access may be possible.
As a landlord you’ll be tasked with repairs to the structure of your property, plus basins, sinks, baths and other sanitary fittings, as well as heating and hot water systems. If you own a block of flats you’ll typically be asked to repair common areas, like staircases.
It’s important to attend to repairs quickly and thoroughly. If you don’t, tenants are entitled to start a claim in the small claims court for repairs under £5,000. Alternatively, tenants can carry out the repairs themselves and deduct the cost from their rent. If you fail to make repairs to remove hazards, tenants can request a HHSRS inspection (see ‘Safety’).
If the repairs you need to make are major, you can ask tenants to move out, but before this happens you should agree in writing how long the works will last, the tenants’ right to return and details of any alternative accommodation. Remember that you can’t repossess a property to do repairs, but if you are planning major works or want to redevelop the property then you can apply for a court order for your tenants to leave.
Finally, if repairs are highly disruptive tenants can claim a reduction on their rent—but this will depend on how much of the property is unusable.
Rent increases and disputes
You can only increase rent once a year for a periodic tenancy, while for a fixed-term tenancy you can only increase the rent if your tenancy agreement permits this. Otherwise, you will have to wait until the term ends. The rent increase you put in place must be in line with current rental prices on the open market. If your tenants judge your rent increase unfair, they can ask the First Tier Property Tribunal to rule on the right amount.
In the event of a dispute, start by speaking to tenants and if this doesn’t work, write a formal letter detailing the issue. As a last resort you can usually take your tenants to court, but it’s often cheaper and quicker to use a mediation service.
For more information visit: gov.uk/renting-out-a-property
See also: Changes to Buy-to- Let Property
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