Our top tips for first time Landlords (and those who would like a recap!)
Have you ever wanted to rent out a property but you have wondered what you need to do first? Then this article is for you.
1. My first tip to Landlords is always to be a lazy Landlord. You want happy tenants who do not move, meaning you do not have any rent voids and you do not have to deal with any expensive litigation for arrears or damage. To achieve this, make sure you cover the other points below. 2. Get your property into a good condition.
a. You first need to check that it has a valid Energy Performance Certificate. These last for 10 years but after April 2018 you cannot rent out a property with a F or G rating. You need to have commissioned one before you put the property on the market to rent.
b. Any property with any gas appliances needs to have a Gas Safety Certificate from a Gas Safe Engineer. The Tenant needs a copy before they move in and you need to renew it every year.
c. You also need an electrical safety certificate and renew this every year as well.
d. From 20th March 2019 the Homes (Fitness for Human Habitation) act 2018 comes into force. This requires that residential accommodation is provided and maintained in a state of fitness for human habitation. It aims to improve the standards in private and social rented sectors by putting an obligation on landlords to keep their property in good condition and giving tenant’s rights to take legal action where the landlord fails to do so. This could be especially significant for properties with damp.
e. Fit and test smoke alarms and carbon monoxide alarms.
3. If the property is furnished, ensure that each piece of furniture has a label saying that it complies with the Furniture & Furnishings Fire & Safety Regulations Act 1988. If it doesn’t, don’t use it.
4. Insurance. You need specialist insurance if you are renting out your property. Get yourself a good insurance broker.
5. Mortgage. If you have a mortgage on the property you need your lender’s permission to rent out the property. There are specialist buy to let mortgages which you need to speak to a mortgage broker about.
6. You need to give the leaflet How to Rent to your tenant before you start the tenancy, otherwise you cannot ask them to leave at the end of the tenancy on two month’s notice (often referred to as a S.21 Notice).
7. You should use an Assured Shorthold Tenancy (an AST) agreement for the tenancy. Consider if you need a guarantor. Any deposit must be protected in a deposit scheme within 30 days. Consider a credit check against the tenant, although you need their consent before you do this.
8. You have a duty to keep personal details in a safe place so get a Data Protection Licence from the Information Commissioner’s Office to ensure that you comply with the Data Protection Act.
9. Get a good accountant who understands property lettings. You will need to pay income tax on rental income and also Class 2 National Insurance contributions if your work counts as running a business. From the start of the tax year in 2019 there are changes in how you offset the costs so you may find that your rental income is suddenly taxed at a higher income tax band than before.
10. Mix with other landlords so that you are aware of trends and changes in the law. Consider joining one of the national organisations that can provide support on all of the above. Most important of all, use a great lawyer like Sue Shaw-Toomey at Toomey Legal Limited so that you stay on the right side of the law and can be a lazy landlord!
