There are around 2 million private landlords across the UK, renting out approximately 5 million properties. It can certainly be an excellent source of income, but letting out a property is not without its legal responsibilities. Every residential landlord in the UK has a set of obligations they must comply with in order to avoid landing in legal hot water. So, in this week’s blog we run through some of the things you need to consider when you’re letting out a property.
Rent Smart Wales
Many landlords are unaware of a change to the law that arrived in November 2016. If you are a landlord in Wales, it is mandatory for you and your properties to be registered with Rent Smart Wales, and depending on your circumstances you may need to acquire a landlord license as well. You can apply for these online via the Rent Smart Wales website.
A tenancy agreement is a contract signed by both landlord and tenant that sets out the terms and conditions of the tenancy as well as the rights and responsibilities of both parties. It’s essential to have an agreement in writing in order to sufficiently protect yourself as a landlord. Having a clear and well-drafted agreement in place can help keep a good relationship with your tenant and ensure you have solid legal standing, should any disputes arise later on.
There are a number of safety standards your property must meet in order to comply with the law. All landlords are obligated to:
- Provide working smoke alarms on all floors of the building
- Provide carbon monoxide alarms (only if there is a coal or wood burning stove in the property)
- Arrange a gas safety check by a registered gas engineer every 12 months
- Ensure all electrical appliances and furniture provided meet safety standards
‘Right to rent’ check
In February 2016 it became the law for landlords to check whether all tenants over 18 can legally rent their residential property. Ask your tenants for documents that prove they have the right to live in the UK, and take copies of these documents. It’s important to note that you must do this for all tenants, not just those you believe might not be British citizens.
When the tenancy begins, you must give the tenant your name and address, and your contact details for when they need to reach you. You’ll also have to provide your tenant with:
- An energy performance certificate for the property
- A gas safety certificate
- A copy of the government’s How to Rent booklet
Protect the tenancy deposit
When you take a deposit from your tenants, you are obligated to place it in a government-approved tenancy deposit protection scheme (known as a TDP). If you don’t do this, you could be fined and the court could make it more difficult to end the tenancy.
Carry out repairs
As the landlord, you will be responsible for maintenance and the majority of repairs. It will certainly be your job to look after the structure and fixtures of the property, such as the walls, roof, bathroom fittings, pipes, electrical wiring, windows and so on. However, smaller, day-to-day repairs and maintenance can be the responsibility of your tenant. To avoid confusion or potential disputes, it’s a good idea to include a breakdown of exactly what you and your tenant are individually responsible for in your tenancy agreement.
Give adequate notice when you visit
If you need to visit the property to carry out repairs or an inspection, it’s important to give a reasonable amount of notice to your tenant and arrange a suitable time with them, unless it is an emergency. Your tenant has a right to what’s called “quiet enjoyment” of the property, which means you can’t simply come and go as you please. However, as the landlord, you do have the right to reasonable access to the property. So, giving your tenants at least 24 hours notice will allow them the time to prepare for your visit. A clause within the tenancy agreement regarding this notice period will ensure that your tenant knows what to expect.
The rules for eviction
There are a number of reasons you might need to evict your tenant – perhaps they have breached the terms of the tenancy agreement, or you simply need the property back. Asking someone to leave can be an awkward thing to do, but it’s absolutely essential that you follow the correct process to evict a tenant, or you could find yourself in legal trouble and they could end up staying even longer. The usual procedure is the use of a ‘Section 21’ notice, but this can vary depending on the situation. If you’re not sure what to do, it’s best to take legal advice.
When you rent out a property, the profit you make from the rental payments is subject to Income Tax, with deductions known as “allowable expenses” for costs associated with letting the property, such as repairs and letting fees. The percentage of the profit you’ll have to pay will vary depending on which overall income tax bracket you fall into. To pay the tax, you’ll have to fill out a tax return form.
If you’re thinking about renting out your property, it’s essential to ensure you are at a solid legal standpoint. At Devonalds our expert property solicitors have extensive experience regarding all kinds of landlord and tenant issues and offer practical, straightforward advice. If you have any questions about your legal obligations as a landlord or need help with any issues related to renting out your property, get in touch with our friendly property experts today.