If you’re thinking of renting out your property and becoming a landlord, read the advice below to ensure that you’re doing it the right way.
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- Not everyone can be a landlord
You can’t just rent out your property; you’ll need to check with your mortgage lender and insurance company first, you may also be required to obtain a landlord licence. If you don’t get permission first and you go ahead with renting out your property, you could face an expensive fine. Before you put any plans in place for renting your property seek help from a reputable source of legal information. You’ll receive advice on how to ensure that you’re covered and that you’re following the correct legal processes.
- Safety matters
If you’re going to let a property, you need to make sure that it is safe for tenants to live in. That means ensuring that all electric supplies work, that you arrange an annual gas safety check which must be carried out by a Registered Gas Engineer and that the structure of the property is safe. Since 1 October 2015 it is now a legal requirement for landlords to supply a smoke alarm for each floor of the house that is used as living accommodation. Carbon monoxide alarms must also be present in rooms which have solid fuel appliances.
If you’re planning on furnishing your property for tenants then the furniture will need to comply with the Furniture and Furnishings Regulation and be fire resistant.
- Record your work
Keep a record of everything to do with your property – it’s better to have a record of everything, than a record of nothing. Before you start the process, invest in a strong, sturdy and waterproof folder that includes a paper version of everything you’ve invested in and organised and then keep a back-up digital version too. By doing this you have proof of everything that you’ve done with the property and you can prevent or clear up any problems that could arise in the future, allowing you to protect you and your tenant.
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- Protect the tenant’s deposit
Ensure that you protect your tenant’s deposit in a government-approved tenancy deposit scheme (TDP). You must do this within 30 days of receiving the deposit providing the tenant with the details and you must return the deposit to your tenants within 10 days of reaching an agreement on how much the tenant will receive when they leave. If you fail to put your tenant’s deposit in a TDP scheme they can take you to the county court at any time during the tenancy – you could then be ordered to pay back the tenant’s deposit, and in the worst case you could be required to pay back three times more.
- Pay the right amount of tax
Be sure to let HM Revenue and Customs know that you are letting out your property as you may need to pay income tax. You especially need to let HM Revenue and Customs know about your property if you’re planning on using it as a business as you may be required to pay Class 2 National Insurance (this is what you pay when you’re self-employed).
- Manage your finances
Renting property can provide you with extra income, but first you need to be confident that you’ve got enough money to pay for any extra repairs on the house. It could be a new boiler, a replacement fridge, dealing with an infestation or decorating the house so it’s presentable for new tenants. Whatever it is, you’ll need to have enough money to pay for it.
- You cannot discriminate against your tenants
That doesn’t mean that you can’t choose who rents out your property – of course you want them to be reliable and friendly. However, according to the Equality Act 2010 you cannot discriminate against:
- Gender and gender reassignment
- Sexual orientation
- Civil partnership
Being a landlord has plenty of advantages, but before you decide to join the property ladder you should first make sure that you’re happy to work outside of normal hours – tenants work too and you will often be required to make evening or weekend visits. You cannot enter the property whenever you please while a tenant is living there. Enlist the help of professionals to ensure that you’re following the correct processes and procedures, and be comfortable enough in your finances to be able to make any necessary repairs. But most of all, take pride in what you do and enjoy it!
This article was provided by Jessica St Pierre on behalf of Law on the Web.