SECTION 2 – RESPONSIBILITIES BEFORE LETTING YOUR PROPERTY
Before signing a tenancy agreement or even looking for your first tenant, there are 10 things for you to consider and confirm.
1 – Tenant Fees
The Tenant Fee Act 2019 made it illegal for landlords or letting agents charge specific fees to tenants. Local authorities can charge fines of up to £5,000 for breaching the rules. If landlords commit further breaches within 5 years, fines of up to £30,000 can be charged.
2 – Working With A Letting Agent
You may find it helpful to work with a letting agent to find your tenants and manage your property for you, particularly if you don’t have the experience, time or inclination to manage your property yourself.
If you work with an agent, you should check the agent:
- Complies with relevant regulations
- Is a member of a professional body
- Has a written agreement that sets out what your agent will do on your behalf
- Complies with the tenant fees act
3 – Renting a Leasehold Property
If you are a leasehold owner, check your lease, some leases require you to obtain the freeholder’s consent before letting your property. If the property is a shared ownership property, subletting is not usually allowed.
4 – Renting a Property With A Mortgage
If you have a buy to let mortgage on your property, you will have the mortgage provider’s consent to let.
If you intend to let the property with an existing owner-occupier mortgage, you must seek your mortgage provider and insurance provider permission.
5 – Property Licensing and Houses in Multiple Occupation (HMO’s)
A small HMO is a property occupied by three or more unrelated people who share facilities such as the kitchen or bathroom.
If you operate a HMO you must comply with the HMO Management Regulations. HMO regulations not covered in this guide, and you should contact your council, who will let you know more about your responsibilities.
We have a free HMO guide on our website you can download.
A large HMO is a property occupied by five or more people in two or more households who share facilities such as a kitchen or bathroom. This property must be licensed with the local authority under mandatory national licensing.
Failure to license a relevant property is a criminal offense.
6 – Tax Obligations
Letting a property can increase your income affect benefits you may receive, and you may be taxed. Tax treatment is beyond the scope of this video. I recommend speaking to an accountant to understand the implications to you.
7 – Accreditation Schemes
Consider joining a landlord accreditation scheme. Among the benefits, it signals to the tenant that you meet a set of professional standards. If you are using a letting agent, they should already meet the set of professional standards.
8 – Product Safety
Check regularly to ensure that all products are safe, and there has been no product recalls.
9 – Blinds and Cords
Blinds should be safe and not have looped cords, which is especially important in a child’s bedroom.
10 – Letting agent rules and regulations
Letting agents must abide by relevant legislation and business rules. Letting agents must be a member or government-approved redress scheme to ensure both landlords and tenants can make complaints to an independent, expert body.
The name of the redress scheme must be displayed at the office or on the website.
Letting agents who hold client money are required to belong to a government-approved client money protection scheme. The name of the scheme and certificate must be displayed in the office and website.
The letting agent must publicise the fees they charge, so landlords and tenants are aware of the cost of renting through that agent.
