2019 saw a big year of change and this didn’t escape the rental market, amendments in legislation now mean more risks for landlords. The Homes (Fitness for Human Habitation) Act that came into force in March 2019 applies to the social and private rented sectors and makes it clear that landlords must ensure that their rented property, including any common parts of the building, is fit for human habitation at the beginning of the tenancy and throughout.
If landlords are found in breach of the Homes (Fitness for Human Habitation) Act, then they can be taken to court and even prosecuted. 2020 could see further changes to these legislations so be aware! However, in light of the most recent changes we’ve put together 20 tips for 2020.
Tip 1) Always carry out a reference/background check on a potential tenant, if the tenant can not provide details of their previous landlord or if they are just moving out of home ask the tenant for a guarantor. By having a guarantor you can contact them for any rent arrears problems that may occur during the term of the tenancy. A home owner and/or someone in stable employment is a good guarantor to fall back on if required. Credit check the guarantor(s).
Tip 2) Always complete a tenancy agreement, remember you can tailor it also. For example if you would like to be able to complete inspections throughout the tenancy (subject to 24-48 hours written notice given prior) then ensure that is stipulated in the agreement.
Tip 3) Protect the tenants deposit immediately upon receiving, it must be deposited safely in a government-accredited scheme. You have a choice of three schemes: Deposit Protection Service (DPS), MyDeposits or the Tenancy Deposit Scheme (TDS), who also help deal with deposit disputes over potential damage to the property. And once you’ve done that, you’ll need to give your tenant the Deposit Protection certificate and Prescribed Information. Remember since the June 1, 2019 when Tenant Fees Bill landed, the amount of deposit you can take from a potential tenant is capped at five weeks' rent or six weeks' if the rental costs are more than £50,000 a year.
Tip 4) Provide a valid EPC Make sure your property is up to scratch in terms of its energy performance – and hand a copy of the Energy Performance Certificate (EPC) to your tenant.
As of April 1, 2018, your property must be rated at least ‘E’ in the EPC. If you’re rumbled arranging a new letting without ensuring your property is up to this standard, you may be fined. In addition, since April 6, 2018, you risk being banned from managing your property. That would mean your local council would take control of your property and collect the rent. But you would still be liable for repayments to your mortgage lender and any other costs, such as maintenance.
Tip 5) Complete your safety checks, you are legally required to have all gas appliances in the property checked by a Gas Safe-registered engineer every year – and provide tenants with a Gas Safety Certificate within 28 days of the annual check. But that’s not all. It's is also a landlord liability that smoke alarms should be fitted on every floor of the property from the start, and carbon monoxide detectors must be in any room where solid fuel, such as wood or charcoal, is used. Test both alarms on the first day of the tenancy. You must make sure that your rental property in England is fit for human habitation. If you fail to comply with standards set out under the Housing Health and Safety Rating System, it is a criminal offence and your tenants can take legal action against you. It is also good practice to respond to any maintenance requests in a positive and efficient manner
Tip 6) Complete an inventory (photographic) and make sure the tenant (s) sign to agree the condition of the property. If they do not sign the Inventory, write to the tenant(s) and give them 7 days to confirm back, otherwise it will be taken that the Inventory is agreed by both parties.
Tip 7) Make sure you are appropriately insured, appropriate Insurance should be in place for Building, Public Liability and Rent Guard (rent insurance).
Tip 8) Check you need a licence. You almost certainly will need at least one licence in Wales but in England you should check with your local authority if you do not have a mandatorily licensed HMO.
Tip 9) Decide if you are going to provide furnishings. If you do have an itemised list of everything to be included in the inventory but also have a copy for yourself with monetary value of each item just in case the worst should happen and the charge can be taken out of the deposit.
Tip 10) Do you want to allow pets? You must stipulate this in the tenancy agreement beforehand but if you do allow pets make sure it is understood any damage caused is charged back to the tenant.
Tip 11) Ensure rent is collected via a standing order. You may choose to partner with a letting agent in which case the checks, tenancy agreement, payment of rent etc would be handled by them but if you choose not to, make sure the tenant sets up a standing order for the rent and any bills to be taken out electronically.
Tip 12) Check if you need to pay any tax. When you begin renting out your property, you should inform HMRC as tax may be payable on your rental income. Failing to do this could result in a tax penalty and if left too late, the tax bill for your rental property could be a nasty surprise. Informing HMRC from the off will give you more time to prepare saving up for any tax bill, record outgoings, and work out how you are going to submit your tax return.
Tip 13) Don’t paint over any problems, of course you should give the property a fresh lick of paint but do not paint over to hide any serious problems like damp and/or mould. Painting over damp and mould doesn’t solve the issue even when using a mould paint and since the 2019 legislation updated landlords can be taken to court as a result of failing to provide accommodation which is fit for human habitation.
Tip 14) If you have the time it might be worth personally staying the night in the property before your tenant moves in. Trying things out like the shower, taps and heating should hopefully pre-empt any potential issues your tenant would encounter.
Tip 15) Ensure you are GDPR compliant with your tenants personal details – failure to do so can result in a fine of up to £500,000.
Tip 16) Make it clear on contacts, as previously mentioned you may use a letting agency to handle all and any matters with the tenant. However, you will need to make it clear between all parties who contacts who in an emergency, for example if a pipe bursts should the tenant contact a specific out-of-hours plumber? Even if the letting agency has agreed to handle this matter as well you should know what they are instructing the tenant to do.
Tip 17) Keep your records accurate. As a landlord we strongly recommend that you keep accurate records of all income and expenditure. Be careful to hold separate files for each property so that you can easily access records for both yourself and in the event that any authority may want proof of a transaction or certificate. Remember HMRC are able to request records of up to 7 years. You will also need to hold accurate records regarding all rental payments, deposit payments, tenancy agreements, insurance policies and appliance warranties.
Tip 18) Get the property market ready – to give yourself the best chance of the best tenant you need to put the effort in with the property. Think about who your target tenant is – and make sure the property is ready for them. If you are offering your property as a furnished home, make sure it's modern decor with wide appeal. Also, don't be shy in promoting its key features - a south-facing garden, terrace, off-road parking or good transport links. Above all, it must be clean, tidy and safe.
Tip 19) Create a welcome pack, as touched on your tenant will need access to a variety of information. You should provide all of this information in one easy to read folder and it should detail; where the stopcock is, where the gas valve is, alarm code details, appliance details i.e. cooker, washing machine etc. Finally emergency contact details and what to do in the event of a gas leak etc. You may feel some information is common knowledge but your tenant may have just moved away from home and have not experienced independent living before. Additionally, you may want to include extra information such as ways to keep on top of condensation as this will help look after the property and we have provided such advise in this handy sheet.
Tip 20) Finally if you are using a letting agent and won’t meet the tenant consider leaving a welcome card to help foster good relations. If you are handling the whole tenancy arrangement personally make sure you are polite and conscientious. As a landlord you should start as you mean to go on. This means acknowledging the fact that property is like any other business and as such has customers at the centre of it. By looking after your customer you can help secure an income for many years to come. You will also find it easier to negotiate any potential rental arrears, rent reviews, set tenant viewings in the event that your tenant serves notice to leave and obtain help with contractor appointments.
Being a landlord can often seem like a lonely and isolated role but don’t forget there are resources you can utilise. Propertychecklists was founded by Kate Faulkner, who is widely regarded as one of the UK’s leading independent property experts. Having already helped tens of thousands of people across the UK with their property problems, through seminars, workshops and the media, she realised there was a need for an online resource. The checklists are sponsored by trusted companies that have been carefully selected by Kate, in order to allow you to enjoy free, unlimited access.
EnviroVent has a whole blog dedicated to providing advise on damp, mould, condensation, air quality and ventilation and we are always on hand to offer advice on these issues and even provide a free home survey to really asses your rental properties ventilation issues and ensure the best product is advised.
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