If you’re considering renting out your property, you should be up-to-date on all the rules and regulations involved. Doing so will ensure that renting out your property goes smoothly.
Being a landlord is not as simple as just letting people move into your property in exchange for payment. You need to ensure that any property you let is safe and in good condition; as a result you have a number of responsibilities to your tenants.
Your responsibilities as a landlord include:
- Carrying out certain repairs on your properties and ensuring that they are safe and in a good condition to live in.
- Protecting your tenants’ deposits in an approved tenancy deposit protection (TDP) scheme and providing the prescribed information to them (see below).
- Following fair procedures when dealing with your tenants.
- Property safety checks and energy certificates.
Before you rent out a property, you will need to carry out certain checks on it to ensure that it is safe for tenants to occupy.
You are responsible for the following areas:
Your property needs to be free of avoidable fire risks and there must be an escape route in case a fire does break out. You should also ensure that fire alarms are fitted and in some cases provide fire extinguishers (depending on the size of the property).
You must also provide a smoke alarm on each storey and provide a carbon monoxide alarm in any room that has a solid fuel burner. You will also need to have a risk assessment carried out to ensure that your property is fully compliant with the necessary fire safety regulations, as well as making sure that the furnishings and furniture is fire safe.
Before you rent out a property, you will need to carry out certain checks on it to ensure that it is safe for tenants to occupy.
You are responsible for arranging an annual inspection of any gas equipment or appliances you provide on the property and ensuring that any necessary maintenance is carried out. These tasks will need to be done by a Gas Safe registered engineer. You will need to provide a copy of this gas safety check to your tenants before they move in, or within 28 days of the safety check being carried out.
You must ensure that the electrical system of the property, as well as any electrical appliances you supply, are safe to use.
4. Energy Performance Certificate (EPC)
As well as the above safety checks, you will also need to get an Energy Performance Certificate (EPC), which provides information about the energy efficiency of the property.
Landlords are responsible for arranging an annual inspection of any gas equipment or appliances you provide on the property and ensuring that any necessary maintenance is carried out.
To get one, you need to arrange for a domestic energy assessor to visit the property and carry out an evaluation. They will then provide an EPC, which you should show to your tenants at the outset of their tenancy and on each renewal.
Please also note that as of 1 April 2018, you will be required to ensure that all private rental properties have an energy efficiency rating of “E” or above before granting a new tenancy or a renewal of a tenancy. As of 1 April 2020 all existing tenancies must have an energy efficiency rating of “E” or above.
Creating a tenancy agreement
Before taking on tenants, it is usually best to draw up a tenancy agreement for your tenants to sign, ensuring that both parties are aware of the terms and conditions of the tenancy and that they understand their rights and responsibilities. This is a requirement if your tenants are signing up to a fixed-term tenancy lasting more than 3 years.
The tenancy agreement should include:
- The names of everyone involved;
- The address of the property you are renting;
- How much rent you are charging;
- How your tenants should pay the rent;
- The process you will use if you wish to increase the rent;
- which bills the tenants must pay, if any;
- The cost of the tenants’ deposits;
- How you will protect tenants’ deposits;
- The situations in which you would deduct money from their deposits;
- When their tenancy begins and ends;
- Any specific responsibilities on the part of the landlord and tenant.
You should be careful not to put any terms in the tenancy agreement that could be considered unfair or could breach the law. You cannot take away your tenants’ rights even if they sign an agreement which attempts to restrict them.
It is common practice to have your tenants pay a deposit to cover any financial losses you may suffer due to their occupancy. However, there are extremely strict rules on protecting these deposits, which you must follow otherwise you could face a hefty fine and potential restrictions on removing your tenants from the property. These rules apply if you are renting your home out on an assured shorthold tenancy (the most common type).
You should be careful not to put any terms in the tenancy agreement that could be considered unfair or could breach the law.
Within 30 days of receiving the deposit, you will need to place it in a government-backed tenancy deposit protection (TDP) scheme. The intention of a TDP is to ensure that any deductions you make from your tenants’ deposits are fair and reasonable. The schemes available in England and Wales are:
You must also supply the following information to your tenants within 30 days of receiving their deposit:
- Your name and contact details;
- The address of the property you are renting to them;
- The amount of the deposit they have paid.
- If a third party paid the deposit, you should include the third party’s name and contact details;
- How the deposit has been protected, including the name and contact details of the TDP, as well as information about its dispute resolution service;
- How they can get their deposit back when the tenancy ends;
- Reasons you might deduct money from their deposit;
- What they can do if they cannot contact you at the end of the tenancy;
- What they can do if they disagree with you over the return of the deposit and any deductions made.
You do not need to protect any deposits you have received from future tenants in order to ‘hold’ a property (that is, to ensure that nobody else can become a tenant in that property instead). However, once they become tenants, this is no longer a holding deposit and you must protect it within the 30 day time limit (beginning from when their tenancy starts).
If you fail to protect your tenants’ deposits, the county court may force you to pay them up to three times the original deposit amount in compensation
If you fail to protect your tenants’ deposits, the county court may force you to pay them up to three times the original deposit amount in compensation. It may also be more difficult to get the tenants to leave the property when their original tenancy ends, as you may be prevented from serving notices on the tenants until such time as their deposit is protected or repaid.
During the tenancy
While you have tenants in your property you have certain responsibilities to them, one of the most important of which is to carry out certain repairs when necessary. Your tenants have the right to live in a property which is safe and in good condition, so you need to ensure that you take action if they contact you over any issues.
You are considered responsible for repairing or arranging repairs to:
- The property’s exterior or overall structure.
- Sanitary fittings such as sinks, baths and toilets.
- The pipes and drains of the property.
- Heating equipment and the hot water supply.
- Gas appliances.
- Flues, chimneys and ventilation.
- Electrical wiring.
- Damage to shared areas such as entrance halls or common staircases.
- Any damage you cause to the property yourself if you are attempting to repair things.
If your tenants contact you requesting a repair, you should let them know when they can expect it to be completed. You may choose to allow tenants to carry out repairs in the tenancy agreement, but you cannot make them repair anything which is meant to be your responsibility.
When there are tenants living in the property, you need to give them notice if you wish to visit it, whether to carry out an inspection of the premises or to do repairs. You should give them 24 hours’ notice, or whatever time period is specified in the tenancy agreement if this is different, and arrange your visit for a reasonable time. However, if you need to carry out emergency repairs on the property, you do not need to give your tenants notice.
Another issue you may face during a tenancy involves raising the rent. Usually the tenancy agreement will set out the procedures you will follow in order to increase the rent. However, there are likely to be limits on this.
If your tenants are on a periodic tenancy (i.e. one which rolls from week to week or month to month), you can usually only increase the rent once a year. If there is no procedure for doing this in the tenancy agreement they signed, you could decide upon a new rent with your tenants and all parties would then sign an agreement to this effect, or you can use the government’s ‘Landlord’s notice proposing a new rent’ form.
When there are tenants living in the property, you need to give them notice if you wish to visit it, whether to carry out an inspection of the premises or to do repairs unless it is an emergency
If your tenants are on a fixed-term tenancy (i.e. one which lasts a set period of time, such as six months), you cannot increase the rent during this period unless your tenants agree to it. Once the fixed term is up, however, you will have the opportunity to raise the rent. This will simply involve having your tenants renew their tenancy agreement with the cost of the rent changed.
If your tenants pay their rent weekly or monthly, you must give them one month’s notice about any increase in rent. If their tenancy is yearly, you must give six months’ notice.
It is important to note that you are expected to only raise the rent by a fair and reasonable amount and if your tenants feel that a rent increase is excessive, they may go to a rent assessment committee to challenge this.
How to take back your property
Getting your tenants to leave at the end of their tenancy is not usually difficult, but you still need to follow certain procedures in order to ensure that you do things fairly.
If your tenants are in a fixed-term Assured Shorthold Tenancy (AST), and you wish to take back the property when their agreed period of tenancy comes to an end, you need to provide a “notice to quit” at least two months before the end date of the tenancy.
You can only end a fixed-term AST before the end of the tenancy period on certain grounds. These include factors such as your tenants failing to pay the rent or engaging in anti-social behaviour or criminal activity
This is a written notice which states that you wish to take back your property. Once the tenancy period expires, the tenants should leave the property.
You can only end a fixed-term AST before the end of the tenancy period on certain grounds. These include factors such as your tenants failing to pay the rent or engaging in anti-social behaviour or criminal activity.
If your tenants are on a periodic AST, you will also need to give them two months’ notice if you want them to leave the property, and their tenancy must have started no less than six months ago. For periodic AST’s the day on which the notice expires is important as it must be at least 2 months in duration and end on a last day of the period of the tenancy.
If you follow these procedures and your tenants fail to leave the property, you will then need to apply to the courts for a possession order. You also need to have notified your tenants that you are looking to do this. If you are granted a possession order but your tenants still do not leave, you can apply to the court for a warrant of possession, which will see the tenants removed from your property by bailiffs.
Alternatively, you can speed up the eviction by applying to transfer the warrant from the county court to the High Court. A high court enforcement officer will then carry out the eviction and has more extensive powers for removing tenants from a property.
When a tenancy comes to an end, you will have to decide if you need to make any deductions from the tenants’ deposits and attempt to reach an agreement with them on how much they will get back. Once you reach an agreement, the deposit must be returned to the tenant within 10 days of this.
If your tenants are not happy about the amount of deposit you plan to return, the TDP scheme will withhold the deposit until you have reached an agreement or the TDP scheme have made an adjudication.
In these cases, you may use the TDP’s free dispute resolution service to help negotiate a solution which is acceptable to both parties. They will not release the funds until a decision is made, whether by you and your tenant, an ADR scheme or even the courts.