Letting a flat - what are the legal obligations?
Discussion
Chaps,
We have a flat we are thinking of letting formally. It's been used by friends on an informal basis for a few years, with written agreements to do with rent and looking after the place but no formal contracts.
The people who are in there at the moment are leaving, and we are thinking of moving the arrangement with whoever replaces them onto a more formal footing - i.e. letting with a contract.
We understand this places a number of obligations on us - what are they? I think I have a copy of an Assured Shorthold Tenancy contract from when I last rented a place, but has the wording of such contracts changed in the last 10 or so years? Also,
1. What are the precise requirements for registering the deposit with a suitable authority? I understand there are some fairly sticky consequences for us as landlords if we fail to do this.
2. Do we need to have an electrical safety certificate for the flat if it is let? (There is no gas there.)
3. Is there anything else we need to know?
We're on the case with BTL and permission-to-let mortgages.
(There may be good forums for this sort of thing; if so, please do point me to them.)
Thanks,
Oli.
We have a flat we are thinking of letting formally. It's been used by friends on an informal basis for a few years, with written agreements to do with rent and looking after the place but no formal contracts.
The people who are in there at the moment are leaving, and we are thinking of moving the arrangement with whoever replaces them onto a more formal footing - i.e. letting with a contract.
We understand this places a number of obligations on us - what are they? I think I have a copy of an Assured Shorthold Tenancy contract from when I last rented a place, but has the wording of such contracts changed in the last 10 or so years? Also,
1. What are the precise requirements for registering the deposit with a suitable authority? I understand there are some fairly sticky consequences for us as landlords if we fail to do this.
2. Do we need to have an electrical safety certificate for the flat if it is let? (There is no gas there.)
3. Is there anything else we need to know?
We're on the case with BTL and permission-to-let mortgages.
(There may be good forums for this sort of thing; if so, please do point me to them.)
Thanks,
Oli.
Hi Oli,
Whilst I have to admit to being in the trade, I do think you are wise to move to a more formal footing, even if you want to do all the arrangements yourself. As the world gets more litigious, and more requirements come in, the harder it is to do things informally. Although I would always try to keep a common sense approach as well.
Anyway, to your points. You can get up-to-date tenancy agreements online, which will ensure they cater for all relevant legislation. They are not necessarily huge, and usually cheap to buy. I would recommend it over using an "old" one. You might think it worthwhile joining the National Landlords Association, which gives you access to that sort of thing, as well as support and advice. It costs me £110 a year, I think.
There is no specific law that makes you have the electrics tested (as you say, there is one for gas), but there are many laws that say you must make sure the electrics are safe at any one time, and I am increasingly interpreting that as having a minimum "10%" check carried out before each new tenancy. This involves an electrician visually inspecting, and randomly testing 10% of the electrics. Depending on the outcome, that might be it, but if problems arise, s/he will do more tests. It can be expensive, but not half as bad as if you have a law suit thrown at you for something going wrong...
On that cheery note, I recommend checking your landlord insurance includes reference to protection for you as a landlord, in case someone injures themselves on your property and tries to sue you for it. However good you are as a landlord, the law and insurance worlds are such that they will probably find a case to argue, and you need to be protected.
You have to register the deposit with a government-backed agency. You can either create a designated account, and register on line to say you have "protected" the money that way, or you can send the money direct to a government agency to lock it away for you. Both have different cost implications. Again, the NLA can help you with that. Their deposit scheme preference is mydeposits.co.uk.
You will need to have an Energy Performance Certificate done - usually around £50, as part of your marketing.
It's not law, but I always recommend having a minimum 2kg fire extinquisher and a blanket in the property.
Those are the main things. I hope that helps. You can get some more chapter and verse from a handbook you can download free from ANUK.org.uk
Jamie.
Whilst I have to admit to being in the trade, I do think you are wise to move to a more formal footing, even if you want to do all the arrangements yourself. As the world gets more litigious, and more requirements come in, the harder it is to do things informally. Although I would always try to keep a common sense approach as well.
Anyway, to your points. You can get up-to-date tenancy agreements online, which will ensure they cater for all relevant legislation. They are not necessarily huge, and usually cheap to buy. I would recommend it over using an "old" one. You might think it worthwhile joining the National Landlords Association, which gives you access to that sort of thing, as well as support and advice. It costs me £110 a year, I think.
There is no specific law that makes you have the electrics tested (as you say, there is one for gas), but there are many laws that say you must make sure the electrics are safe at any one time, and I am increasingly interpreting that as having a minimum "10%" check carried out before each new tenancy. This involves an electrician visually inspecting, and randomly testing 10% of the electrics. Depending on the outcome, that might be it, but if problems arise, s/he will do more tests. It can be expensive, but not half as bad as if you have a law suit thrown at you for something going wrong...
On that cheery note, I recommend checking your landlord insurance includes reference to protection for you as a landlord, in case someone injures themselves on your property and tries to sue you for it. However good you are as a landlord, the law and insurance worlds are such that they will probably find a case to argue, and you need to be protected.
You have to register the deposit with a government-backed agency. You can either create a designated account, and register on line to say you have "protected" the money that way, or you can send the money direct to a government agency to lock it away for you. Both have different cost implications. Again, the NLA can help you with that. Their deposit scheme preference is mydeposits.co.uk.
You will need to have an Energy Performance Certificate done - usually around £50, as part of your marketing.
It's not law, but I always recommend having a minimum 2kg fire extinquisher and a blanket in the property.
Those are the main things. I hope that helps. You can get some more chapter and verse from a handbook you can download free from ANUK.org.uk
Jamie.
Speaking as someone who has to clear up the legal mess when landlords need to get rid of tenants who are not paying the rent, or who just want their property back then I'd echo the sentiments of Jamie's post. Get a proper specimen AST from one of landlord's organisations and make sure you deal with the tenancy deposit. Keep good records of all communication with the tenants and of all repair work requested and carried out. I'd also suggest you plan on inspecting the property every few months to make sure that there's nothing the tenants should have reported and haven't. Inspect and document the condition of the whole of the property before the tenants move in. Make sure your buildings insurers know the property will be let out and also that they know when it's unoccupied.
Hopefully you'll get good tenants who'll pay on time and won't trash the place, but it's best to be prepared for the opposite!
Hopefully you'll get good tenants who'll pay on time and won't trash the place, but it's best to be prepared for the opposite!
I have been a landlord for more than 15 years now, if you require any samples of legal documents, for example Assured Shorthold Tenancy Agreements, Section 8 and Section 21 Notices etc. etc., together with advice on registering/protecting a tenant’s Deposit and other legislation on fire regulations, gas and electrics annual checks etc. just e-mail me and the info will be sent to you by return.
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