Setting up the perfect tenancy is crucial to ensure a smooth and stress-free rental experience. Whether you are a first-time landlord or have been renting out properties for years, there are several steps you can take to make sure your tenancy runs smoothly from start to finish.
Having a managing agent manage your property can save you time and take the hassle out of your hands, especially if you have never let a property before or you don’t have the time to manage it yourself. The benefit of a managing agent is that it is their job, they manage properties day in day out, so you should feel comfort in knowing that they have the experience and knowledge in order to properly take care of your property. When looking for a managing agent it is important to check they comply with all the relevant regulations and they are a member of a professional body. It is also crucial you have a written agreement with your chosen agent that states everything they will do on your behalf.
Getting the Property Ready
To ensure the property is ready to let, it is necessary all the specific requirements are completed:
-All gas appliances and flues need an annual gas safety check, which should always be carried out by a suitable Gas Safe-registered engineer. When the checks have been completed you will receive a landlord gas safety record. You must provide this to a current tenant(s) within 28 days and to a new tenant(s) as soon as their tenancy agreement starts.
Failure to provide a gas safety certificate will affect a landlord’s ability to recover possession on a section 21 Notice.
-Electrical installations must be inspected and tested by a qualified and competent person at least every 5 years, you must provide tenants with a copy of the electrical safety report once completed.
-You must ensure that there is at least one smoke alarm on each floor of a rented home where there is a room used as living accommodation as well as a carbon monoxide alarm in any room used as living accommodation, which contains a fixed combustion appliance.
-In most cases, as a landlord you must provide a potential tenant(s) with an Energy Performance Certificate at the earliest opportunity. Currently rental properties have to have a minimum EPC rating of E, however this is changing. You can read our blog here on the upcoming changes to EPC ratings for landlords.
Tenants should be provided with a written tenancy agreement that is reviewed before they sign. The terms of the agreement must be fair, but must also sufficiently protect you as a landlord. There are terms that are implied into every tenancy that are set out in legislation and these terms you cannot contract out of. For example, a landlord’s repairing obligations are included in every contract.
You should also consider if a guarantor is required for the tenancy. For example, if the tenant fails referencing, do you have confidence he/she has an ability to recover any arrears? Guarantors that own property are advised, as they have added security if the tenant were to default on the rent. It is very common that guarantors will seek to dispute the validity of the guarantor agreement if tenants fall into arrears, so it is important to ensure that guarantor agreements are properly drafted to ensure they are valid. We also encourage early communications with the guarantor as soon as the tenant defaults as they can usually help to settle these arrears early and get the tenant back on track. Or they are able to facilitate an early surrender to prevent any further liability.
Right to Rent Checks
As a landlord, you should be carrying out right-to-rent checks to ensure a tenant is aged 18 or over and can legally rent in England.
There are 3 ways a right-to-rent check can be carried out;
- A manual document-based check
- An online check using the Home Office right to rent services
- A digital Check using identification verification technology via an identity service provider
You can also use the Landlord Checking Service if an individual has an outstanding immigration application, administrative review, appeal, or if their immigration status requires verification by the Home Office.
Failure to perform this check can lead to serious consequences, with fines of up to £3000 per occupier without a right to rent check, or potentially a prison sentence of up to five years.
You may ask the tenant to pay a deposit before moving into your property in case of any damage or unpaid bills at the end of the tenancy.
You, or the agent acting on your behalf, must protect the deposit in one of the schemes within 30 calendar days from the day the deposit is received. Within those 30 days you must also provide the tenant with details (‘prescribed information’) of how their deposit has been protected.
Failure to do so means the tenant can take you to court and you will be liable to pay them between one and three times the amount of the deposit. If you fail to register a deposit in time, you will not be able to gain possession from them using a section 21 notice unless you refund the deposit first.
Deposits must not exceed 5 weeks rent if the annual rent is less than £50k, or 6 weeks rent if the annual rent is more than £50k.
Checklist for landlords:
A Landlord must provide the tenant with:
- Up-to-date ‘how to rent’ guide
- Energy performance Certificate
- Gas safety Certificate
- Copy of the electrical installation condition report
- Their contact details
- An address that tenants can serve notice on the landlord (this can be the managing agent’s address)
- Deposit scheme prescribed information
The landlord must:
- Ensure the installations for the supply of water, gas, electricity and sanitation are in proper working order
- Ensure installations for the heating of space and water are in proper working order
- Keep the property fit for habitation at the outset and for the duration of the tenancy
- Keep the structure and exterior of the property in repair
- Carry our repairs within a reasonable period once you become aware that work is needed
- Maintain any appliances and furniture you have supplied
- Fit smoke alarms on every floor and carbon monoxide alarms in rooms with combustion appliances and make sure they are working at the start of the tenancy
- Arrange an annual gas safety check by a Gas Safe engineer
- Arrange an electrical safety check by a qualified and competent person every 5 years
- Get a licence for a property if it is licensable
- Complete right-to-rent checks
Landlords should also consider:
- Rent and Legal Protection in the event of arrears
- Buildings and Contents Insurance to cover the costs of any damage from floods or fire
- Make your tenants knows how to operate the boiler and other key applications
Working with a managing agent means all of your responsibilities are completed, your documentation is all in one place for yourself and the tenant and you have an audit trail that includes everything you may need if a claim were to arise. However, understanding where your responsibility lies is essential.
There is a considerable amount of legislation that applies to the private rented sector. It is a complex and quickly evolving area of law that can be extremely technical. Landlords are advised to seek legal advice when renting out a property to ensure that they do not unknowingly fall foul of the law as penalties for non-compliance can be substantial. Landlords can also run into problems evicting tenants later down the line if their paperwork is not up to scratch or they have not served the tenant with certain documents. At Woodstock we can help to get all paperwork in order to protect a landlord as much as possible when renting an asset.