Landlord obligations for a buy-to-let property
If you’re a new landlord then there are some UK legal requirements you need to be aware of. They’re not designed to provide a barrier to renting, but to protect both you and your tenant.
The following is an outline list of legal obligations for England and Wales, there are some slight differences in Scotland. If you are unsure about any of these you should seek further information from your letting agent or other expert:
Skipton International recommends that its customers let their property on an Assured Short Hold Tenancy basis. You can find examples on the UK Government’s website. There is a growing interest in tenancies that have a longer fixed period, eg, three years. These can give tenants greater security and stability, particularly young families, and also offers greater certainty on the rental income for landlords. It reduces the times when a property could be vacant and the costs that come with finding a new tenant. Obviously there are circumstances in which either party might need to break the tenancy and there should be break clauses included for where certain conditions apply.
Tenancy Deposit Scheme
Since 2004 there has been tenancy deposit protection for all shorthold tenancies in England and Wales where a deposit is taken. Those deposits must also now be protected, within 30 calendar days of receipt by the landlord, so as to ensure the money is ring fenced and able to be returned (subject to any damage/rent arrears) on completion of the tenancy.
There are three different options for tenancy deposit protection and dispute resolution: The Deposit Protection Service which offers custodial or insurance-based protection, My Deposits which allows you to hold the deposits in your bank account, and the Tenancy Deposit Scheme, which is an insurance backed protection scheme. Of course there is no obligation to ask for a deposit and some landlords will avoid the paperwork and costs by not asking for one.
One piece of advice if you do go down the deposit route is to ensure you have taken photos or undertaken a survey of the property before the tenant moves in. This can act as a record of condition so as to prevent any deposit disputes. Also keep detailed records of all correspondence.
This is required by your mortgage company and will protect your investment as standard household policies are usually not suitable or applicable to rented properties. Landlords insurance can also include rental guarantee insurance.
You must have any gas appliances checked once a year by a registered gas engineer. This is compulsory and you need to keep records of this. You should also give your tenant a copy of the safety report. For those who have been out of the UK a few years you should also note that the old CORGI system has been replaced and gas engineers are now required to be registered with Capita Group.
Before allowing any tenants into your new property you must have an electrical safety check carried out by a qualified electrician to ensure the supply and any equipment or appliances are safe. An electrician will bring portable testing equipment so that even fixed electrical appliances such as cookers and heaters, can be tested. You must also ensure you have instruction books for each appliance on the premises so that the tenant can use them safely.
Smoke Alarms and Carbon Monoxide detectors
These are not legally required, but it is best practice and should there be a fire or a failure with a gas appliance that releases carbon monoxide, the fact you have provided protection will not only morally ease your conscience, but will show you have done all you can to keep your tenants safe. If you have a large house in multiple occupation then fire alarms and extinguishers are obligatory.
If you are providing a furnished property remember that all furnishings provided must comply with the latest fire regulations. Failure to do this is a criminal offence.
It is now a legal requirement that landlords have an up-to-date Energy Performance Certificate and that tenants have access to this. The certificate will take into account insulation, heating and water systems etc and fuels used to compare the property’s energy efficiency and carbon dioxide emissions. If you don’t provide an Energy Performance Certificate you could incur a £200 fine.
In addition to the above there are certain rights tenants have:
- The property must be in a safe and good state of repair
- Deposits should be returned when the tenancy ends
- Excessively high charges can be challenged
- Tenants have the right to know who their landlord is
- The right to live in the property undisturbed
- Be protected from unfair eviction and unfair rent
As a landlord you too have rights:
- Tenants must take care of the property
- Pay the agreed rent, even if in dispute or repairs are needed
- Pay other charges as agreed, ie Council tax or utility bills
- Repair for any damage they or their visitors cause
- Not sublet unless agreed.