Thinking about letting your home or investing in a buy-to-let property? The process can be a complex one i.e. the legal procedures, but the rewards can be handsome if you get everything right.
Notify your lender – If you already have a residential mortgage, you are obliged to inform your lender that you are intending to let your property. Your lender needs to give you formal ‘Consent to Let’ before you can do this. Your decision to let may mean that you are put on a higher Buy-to-Let interest rate. If you fail to notify your lender that you are letting out your property, this will put you in breach of your mortgage agreement. You may also need to obtain permission elsewhere. For example, from your leaseholder, if the flat is held on a long lease.
Planning permission – Before any alterations are made to your property in preparation for tenants, make sure you have the necessary planning permission. This may be needed if you are converting a property to an HMO (i.e. a house in multiple occupations). This is something you should consider if you are going to have more than two tenants, who are not members of the same family, in the property.
Building Regulations – If you are going to do any building work to the property, it is vital to check whether you need approval under the Building Regulations. Your builder or architect will be able to advise you on how to comply. Be aware that Building Regulation approval and planning permission are not the same and, therefore, have to be applied for separately.
Gas safety – As a landlord, you have legal responsibilities to your tenants regarding gas safety. Landlords’ responsibilities are included in the Gas Safety (Installation and Use) Regulations 1998. This law aims to ensure that all gas appliances, fittings and flues featured in the property are safe. As a landlord you have three main responsibilities:
- Maintenance Pipework, appliances and flues must be maintained in a safe condition.
- Gas safety checks A 12-monthly gas safety check must be carried out on every gas appliance and flue.
- Record You must provide your tenant with a record of the annual gas safety check within 28 days of the check being completed, or to new tenants before they move in.
Energy performance – Where a dwelling is being let, an Energy Performance Certificate (EPC) will be required. The certificate will show the energy efficiency levels of a property, so a prospective tenant is able to determine and compare the relative financial running costs of renting your property. A copy of the certificate must be given to any tenant who moves into the property. To obtain a certificate, your property must be assessed by an accredited energy surveyor. There are plenty of providers who offer an EPC – simply shop around online to find one that suits you.
Fire safety – As a landlord, it is your duty to follow the required safety regulations. You must provide a smoke alarm on each storey and provide a carbon monoxide alarm in rooms with a usable fireplace or wood burner. It is your responsibility to ensure tenants have access to escape routes at all times. If you are letting your property as furnished or semi-furnished, it is also your responsibility to make sure the furniture and furnishings supplied are fire safe. Finally, if the property is a large HMO (house in multiple occupations) you must provide fire alarms and extinguishers.
Electrical safety – Where a property is provided with electrical appliances, it is the landlord’s responsibility to make sure that they are safe at the outset of letting.
Insurance – As a landlord, a standard home insurance may not provide sufficient cover, so it’s worth looking into landlords’ insurance. Also known as buy-to-let insurance, it typically includes buildings insurance to cover against events such as fire, flooding and subsidence. And if you’re renting out a furnished property, you might want to consider contents insurance as this can protect everything from your furniture to the TV you provide to your tenants.
Keep records – Essentially, you are running a business and therefore it is important that you keep clear records. Not only will it mean you’re organised and up to date, but you’re also required to keep certain documents by law and for tax purposes. As well as any receipts, bank statements and invoices, you must remember to keep a logbook of all gas and electrical safety certificates, the property’s energy performance certification, safety information regarding the property’s furniture and furnishings, plus a fire safety risk assessment form if applicable.
Know the law – The private rental market is a legal minefield. In today’s ‘compensation culture’, it is vital that you are fully aware of your legal obligations, and remain up to date with legislation which is forever changing. The Association of Independent Inventory Clerks is still experiencing frequent enquiries regarding new legislative changes, such as those involving smoke alarms (refer to Fire safety for further guidance). While it’s important to comply with trading standards to welcome new tenants, it’s also essential that you adhere to a strict process when evicting current occupants. Failure to use the correct methods will result in significant delays and consequent rental losses. It is recommended to always seek legal advice first.
Choosing an agent – Letting agents can help new and experienced landlords with every aspect of the letting process. Some landlords will choose a letting agent to simply market a property and then take over the management of their rental property once a tenant is in place. Other landlords prefer the entire process and would rather take on all of the responsibilities themselves.
Agents usually charge letting fees on a monthly basis. Letting fees are usually payable in advance of the term of the agreement. The size of the fee depends on the level of service required and is usually a percentage of the rent.
At Ben Siggins Estate Agents, the team has developed the highest quality letting service in Maidstone and the surrounding Kent region. If you have any questions or would like more information about their fully insured letting service, please do not hesitate to contact the office where a member of the team will be happy to help.
We explore consumer attitudes towards estate and letting agents in a previous blog post, you can read more here.