Latest figures from the Land Registry show house prices have fallen 15.9% since last year. Meanwhile, residential rents are rising. This has persuaded many owners to ride out the current recession by renting property rather than selling it. According to The Telegraph, "renting is the new elastic ... no longer the preserve of the can't-haves and students, it's being favoured by families, job movers and young executives." Before you dip your toes into the rental market, however, you need to know the law:
1. Check your mortgage agreement
You may need consent from your mortgage lender to let the property.
2. Screen tenants
3. Prepare a formal tenancy agreement
Having a signed tenancy agreement will make it easier to deal with any disputes, should they arise. Find a solicitor who specialises in landlord-tenant law for advice.
4. Obtain an Energy Performance Certificate
5. Find out whether you need a property license
Houses in Multiple Occupation are subject to mandatory licensing by local authorities. Rules vary by jurisdiction. Click on a link below for further information:
6. Find out whether you need to register with your local authority
Scottish landlords must register with their local authorities. For more
information, visit Better Renting Scotland.
England, Northern Ireland, and Wales do not have mandatory landlord registration schemes, but that could change soon.
7. Get all gas and electrical appliances checked
Landlords must maintain all gas appliances and arrange and pay for an annual safety check by an engineer certified by Gas Safe (Great Britain and the Isle of Man) or CORGI (Northern Ireland and the Channel Islands). For more information, read Gas Safety Regulations.
In addition, landlords should ensure the electrical system and all appliances
are safe to use. For more information, read Guide to Electrical Safety.
8. Minimise the risk from fire
All landlords must comply with UK fire safety regulations. For more information, read Furniture and Furnishings Fire Safety Requirements and LACORS' Fire Safety Guide.
9. Carry out repairs and maintenance to ensure your property is habitable and presents no risk to your tenants' health and safety
Rules on repairs and maintenance vary by jurisdiction:
- For property in England and Wales, read: (1) Assured Shorthold Tenancies; (2) Repairs; and (3) Housing Health and Safety Rating System.
- For property in Northern Ireland, read: (1) Private Tenancies; and (2) Repairs.
- For property in Scotland, visit the Private Rented Housing Panel website and read: (1) Private Renting; (2) Repairs; and (3) if common property is an issue (e.g., you own a tenement ), Common Sense, Common Property.
10. Place rental deposit (if any) in a Tenant Deposit Protection Scheme
In England and Wales, almost all deposits should be protected by a Tenancy Deposit Protection Scheme (TDPS). For more information, visit Directgov.
Scotland passed legislation to introduce mandatory TDPS in 2006; however, the Scottish Government has delayed implementation and encouraged landlords to join a voluntary accreditation scheme instead.
Currently, there is no mandatory TDPS in Northern Ireland, but the Northern Ireland Executive recently announced it is being considered.
11. Consider using a property management company
Most of the above legal responsibilities have to be dealt with before you can let your property. If you do not have time to do everything, you should consider paying a property management company to do it for you.
12. When in doubt, always contact a solicitor who can tailor advice to meet your unique circumstances