Guide to Letting Property

Your legal responsibilities as a landlord

Being aware of your legal responsibilities as a private landlord is important, even if the property is managed by a letting agent. These are:

Keep rented properties safe and free from health hazards.

Ensure water supply is properly connected according to health and safety legislation to protect tenants against Legionella.

Make sure all gas and electrical equipment is installed by a qualified engineer, maintained and checked annually.

Install a smoke alarm on each floor of the property (where applicable); provide a carbon monoxide detector or alarm near any solid fuel appliance such as a gas combi boiler, coal fire or wood-burning stove.

Make sure all furniture supplied meets fire-safety standards.

Provide an Energy Performance Certificate (EPC) for the property.

Protect your tenant’s deposit in a government-approved Tenancy Deposit Scheme (TDS).

Check your prospective tenant has the Right to Rent in England; landlords can face fines and/or up to five years in prison for non-compliance.

Have knowledge of House in Multiple Occupation (HMO) legislation. A property is occupied under HMO if five or more people form two or more households sharing facilities such as kitchen or bathroom.

Provide your tenant with a copy of the How to Rent checklist when they start renting from you (sending by email is fine).

Do your sums

Having realistic expectations is important, so what return are you expecting from renting out your property? There will be expenses, so our advice would be to set aside a portion of your rental income each month to cover your landlord expenses and other eventualities, such as:

  • Mortgage interest
  • Legal fees
  • Letting agent fees
  • Landlord’s and rent insurances
  • Annual safety checks of appliances and Gas Safety check certification
  • Redecoration, repair, replacement costs

And it’s good to bear in mind that you will have to declare your rental income for tax purposes on a Self-Assessment tax return. You don’t want to inadvertently land yourself in a higher income bracket and end up paying more tax, so make sure you or someone else does the tax planning.

Taking advice from your accountant would be a good idea, but if you don’t have an accountant then you could work out what you earn from pensions, salary, shares etc. and then add to that what the likely return, less expenses, is going to be from your rental. Much of the expense, including any of Andrews Residential’s services, is tax deductible.

Tenancy agreement

Short lease or long lease, fixed-term or periodic?

The sort of tenancy you provide is up to you, although your solicitor and/or managing agent can advise. Shorthold tenancies are ideal for professionals working on contract who have located temporarily (some even on a long-term basis). The tenancy agreement will need to state the duration of the tenancy and the terms under which the tenant is renting your property.

Andrews Residential provides a tenancy agreement preparation, arrangement and signature service. Please see the Full Fees Explanation.

Clauses you might wish to consider including are:

Pets?

You must have a tenancy agreement in place and this will include clauses such as the pet policy relating to your property. Demand for rental properties that accept pets is quite high, so this would be a good selling point for your rental, but do you want pets in your property?

Smoking?

This is another clause that is often in tenancy agreements. It’s your choice, but smoking on the premises could put up your insurance and may well involve a total redecoration after the smoker has vacated the property.

Responsibility for upkeep of the garden?

If there’s a garden, even a hedge, who’s responsible for the maintenance? You will want to factor in the cost of maintenance if the outside maintenance is up to you, and you will want to make it clear on the tenancy agreement if it’s up to the tenant to maintain the outside area and garden.

Annoying the neighbours

A clause about noise and disturbance is something else you might want to consider.

Particulars of the rental property

Furnished or unfurnished?

Whether to rent the property furnished or unfurnished is something to consider. Typically, all rental properties will include fixed furnishings in the bathroom and kitchen, and white goods are often supplied too. Fully furnished rentals attract a higher rent and can attract professionals on a fixed-term contract, where often the expense of renting is secondary to the security of a nice base. But there is the expense of the furnishings (which must all be fire safe), and maintenance and replacement issues can be bothersome too. Tenants’ liability insurance can protect tenants against breakage, and landlord insurance can protect landlords, but disputes over who’s responsible do tend to occur nonetheless.

Furnished rentals are popular with shorthold tenants or those relocating on work contracts. If renting a furnished property, the minimum requirements are:

  • Lounge: Sofa, chair, coffee table
  • Dining area or dining room: table and two to four chairs
  • Bedroom: bed, mattress, side tables, wardrobe built-in or freestanding or a rail; chest of drawers
  • White goods: cooker or hob and oven; washing machine; fridge freezer
  • Utensils: crockery, cutlery and pots and pans

Decoration and furnishings

Clean paintwork, a coat of neutral (satin) paint on the walls and clean floors will certainly improve the chances of securing a tenant. The décor, floors, condition of white goods, and fixtures and fittings, including the condition of furnishings, are something landlords should consider to attract good tenants.

A hard-floor covering is probably better than carpet, but you should lay the best-quality floor you can afford.

Andrews Residential can certainly advise and will look after most of the legal / statutory paperwork details for you depending on the type of arrangement we have. Here are some checklists:

Checklist for readying your property for tenants

  • Is the property clean and presentable?
  • Has the previous tenant arranged mail redirection?
  • Utility bills, are these being paid by the tenant or the landlord; have you notified the energy providers?
  • Council tax, is it being paid by the tenant or by the landlord; have you notified the council?
  • Instructions for all appliances, are they all together in a drawer or with each appliance?
  • Are all relevant appliances, switches, equipment labelled correctly?
  • Do you have house keys ready so that each tenant has a set?

Checklist of paperwork provided by landlord to tenant

  • Tenancy agreement;
  • Schedule 2 ground 2 mortgage notice (notification before a tenancy is granted that the rented property is subject to a mortgage and that the mortgage company may seek possession in the future);
  • Energy performance certificate, EICR report and Gas Safety Certificate;
  • How to rent guide;
  • Standing order;
  • Smoke / carbon monoxide detector or alarm;
  • Inventory.

Checklist for tenant handover

  • Final meter readings;
  • Carry out, agree and sign inventory;
  • Demonstration / instructions of how to use relevant equipment like security alarm, locks, appliances;
  • Location of fire-safety equipment, e.g. extinguishers, fire blankets;
  • Emergency contact details with written instructions on how to deal with emergencies on the property; key-holder details;
  • Opportunity to ask questions;
  • Key hand over.