For many, the thought of becoming a landlord is incredibly appealing. There is the potential to make ongoing rental income from a major asset that, in itself, has the potential to grow financially. However, entering into property investment without first researching your legal and other requirements. While it is a legal requirement that you have regular safety checks on electrical and gas appliances, there are some requirements that might not be legally required but should still be considered vital. Tenancy agreements, for example, can be oral, but this offers little to no protection in the event of dispute.
Appliance Checks And Energy Certification
All electrical and gas appliances must be safety checked to ensure that tenants and others are not put in any undue risk. These checks need to be carried out by certified professionals, should be conducted every year, and will provide you and the tenant with gas and electricity safety certifications. As a landlord, you need to provide your tenants with a copy of these certificates.
If you fail to meet these safety requirements, then you could face a prison sentence, as well as fines of up to £5,000 and £25,000 for electric and gas appliances respectively. Ensure that you use registered engineers to complete the check. Recent changes mean that CORGI registered gas engineers are not suitable; you must current use Capita registered engineers instead.
It is not yet a legal requirement to offer a specific level of energy efficiency in rental properties, but you must have an up-to-date Energy Performance Certificate and this must be made available to your tenants. The certificate should be provided along with gas and electricity safety certificates at the start of a tenancy agreement.
Furnishing And Furniture Safety Checks
Appliances aren’t the only elements of a property that need to be checked for safety, either. If you provide any furnishings or furniture with your home, such as chairs and sofas in the living room or beds in the bedroom, then these also need to be checked for safety levels.
If you have any furniture that does not comply with Fire and Safety Regulations then you could face a fine of up to £5,000 and even a prison sentence of up to six months. What’s more, if any damage is caused, you could be liable to pay for damages and losses to your tenants and even to other property owners and tenants in a building.
Even part-upholstered furniture is covered by this regulation, and all compliant furnishings should include a rectangular label that states that the furnishings have met safety standards.
It is now a legal requirement to ensure that tenants have the legal right to reside in the UK. This means conducting proper and thorough citizen and ID checks. Although not a legal obligation, credit checks and background checks should also be considered an important part of tenant checks. If you take on a tenant that has a poor rental payment history, then this means that they are more likely to miss payments or make late payments than a tenant with a perfect rental payment history.
A tenant referencing company will not only ensure that potential tenants have the legal right to stay in your property in the UK, but they will also check factors such as whether the rental of a property is affordable and whether a person has had any break in income over the past six months.
Having a professional service conduct your tenancy checks is a prerequisite for most rental guarantee insurance schemes too, and these can save you considerable money if a tenant does default.
Since 2007, it has been a legal requirement that all deposits paid by tenants to landlords are placed into a Tenancy Deposit Scheme. This is to prevent instances where tenants have been left out of pocket because they have only received a disproportionate amount of their deposit back following a rental. Legally, any tenancy deposit must now be paid into a TDS and the tenant provided with details of the scheme and how the deposit will be protected.
When your tenant decides to leave, it will be necessary to show the Tenancy Deposit Scheme that you are entitled to keep a portion of the deposit, if this is the case. This is meant as a means of protecting the tenant, but it does encourage tenant and landlord to come to an agreement on what is an acceptable amount.
In England and Wales it is not usually a legal requirement to have a written tenancy agreement in place; a verbal agreement is enough to meet legal requirements. In Scotland, a written agreement is a legal requirement; all landlords and tenants are advised to have any agreement written down and signed by both parties.
If there is a dispute, then a signed agreement not only helps ensure that you meet your legal requirements, and so does your tenant, but it can help avoid irreparable damage to the landlord/tenant relationship.
Strictly speaking, landlord insurance is not a legal requirement. You could make do with a standard buildings insurance policy, but there are many reasons to consider upgrading, not least the fact that most mortgage lenders will require that you have landlords’ insurance before allowing you to lease a property out or before accepting a buy-to-let mortgage application.
As well as having insurance for the property, and even for any building contents that you have, you should at least consider additional insurance protection. Rental protection insurance, liability insurance, and legal expenses cover will help to safeguard and protect your financial future. Otherwise, you could be left with a considerable outlay if the worst were to happen.
Meeting Your Legal Requirements
Not only do you need to consider the legal requirements that you need to meet when you first get property rental hertfordshire, but you should also set up reminders or arrange with professionals and professional services to conduct regular and routine checks. Bear in mind that you will need the permission of your tenant to enter the property even for things like gas and electric checks, you should allow reasonable time before the deadline, in order to complete these checks.
When you first take a tenant on, you should provide :
- Copies of the gas and electrical safety check certificates
- A copy of the energy efficiency rating
- Details of the Tenancy Deposit Scheme that you have used
- Also give serious consideration to using a written agreement, which offers greater protection over a verbal agreement
- Take out any insurance that you want
- Ensure that furnishings are checked and that they include the safety check label
Using A Letting Agent
Becoming a landlord can be lucrative and it can offer you a sizeable second income without having to manage multiple properties and dedicate yourself full time to managing tenants and properties. Using a professional and experienced letting agent like Home and Abroad Rentals Limited means that you don’t have to worry about annual safety checks or conducting tenant checks. Your letting agent will conduct all of the necessary checks while also ensuring that you maximise your rental income and the rental yield on your property.
Around a third of all people rent property in the UK, although this figure ebbs and flows according to the present state of the rental market, property market, and other financial markets. There is certainly nothing wrong with renting, and some people prefer the freedom that comes with it. You aren’t tied down to a single property for the next 10 or 20 years, for example. However, renting can prove more expensive than a mortgage on the same property, but there are ways that you can save money while renting, giving you opportunity to save up the money for a deposit, or simply allowing you to enjoy greater expendable income during the month.
1 – You Only Need Contents Insurance
It is the responsibility of your landlord to pay for building insurance on the property, which means that you don’t have to pay for it yourself. Check your policy, ensure that it doesn’t incorporate both building and content insurance, and make sure that you only receive quotes for the level of content insurance that you actually require. Do check your contract to ensure that you don’t need to arrange the buildings insurance, however.
2 – But You Should Definitely Have Contents Insurance
Contents insurance doesn’t have to be excessively expensive but it is important. It basically covers anything that would fall off and break if the house were turned upside down. You may not think that you have a lot of belongings, but you might also be surprised by how much it would cost to replace everything in the event of a major disaster. Estimate the value of your contents by taking an itinerary and ensure that you have enough coverage with your policy.
3 – Prepare Your Property To Get Your Deposit Back
If you’re moving from one rental to another, make sure that you take as many steps as possible to recover as much of the deposit as possible; ideally, you should receive all of the deposit back. Make any repairs, clean the house through, and take photos of the condition of the property before you finally vacate. You can use these photos if there are any disputes over the condition of the property.
4 – Join The Free Rental Exchange Scheme
Ordinarily, paying your rent on time has no effect on your credit score. Landlords do not report to credit reference agencies. However, if you’re a good renter that pays on time, then you can now take advantage of this by joining the Rental Exchange scheme. The scheme is free to join and it reports your regular rental payments to Experian, the credit reference agency.
5 – Get The Best Deals On Bills
You could be wasting £100s a year if you move into a property and settle for the energy, phone, and other bills. Similarly, if you take a contract with you from another property, this may not be your most affordable price either. Shop around, use comparison sites, and consider companies that don’t necessarily list their prices on the net.
6 – Negotiate On Your Rental Contract
Not everybody is comfortable bartering or negotiating, but if you can pluck up the courage to do so, then you could save a bundle of money every month. Even if you can negotiate so that some bills or costs, such as council tax, are included or partially included in your monthly bill, this could mean a greatly reduced monthly rental bill.
7 – Note Flaws When Looking Around
When viewing the property, don’t just give a cursory glance around and do consider more than whether there is enough room and whether the aesthetics of the building are appropriate for your needs. Look for damp patches, damage, and other problems. Point them out and you should either be able to have them fixed before you move in, or you could use this to help you negotiate a lower rental rate.
8 – Consider Your Travel And Other Costs
If you’re moving further away from work, or to a different area, consider any additional costs associated with travel and with other additional costs that you might incur. Travel costs may seem minimal on a daily basis, but they soon add up over the year. At least be aware of this when you are looking at potential properties.
9 – Compare Removal Costs And Consider DIY
When it comes to the day of the move, make sure that you know exactly when you are able to move in. Try to arrange for services and utilities to be turned on when you arrive, and try to minimise the gap between the first day of your contract and the day that you move in. If you are paying rent but unable to move in then you will be wasting money. Shop around for a competitive quote on removal costs and consider renting a van, getting some friends to help, and conducting the move yourself. It will save time, although it may be more work than you imagine, and you should include the cost of pizza and beers for those that do assist.
10 – Take And Submit Meter Readings
The day you move in is the first day that you should take a meter reading. Once you’ve taken the reading, submit it to your gas and electricity suppliers. Explain that you’ve only just moved in and give them your readings or you could end up paying for costs that were accrued before you moved into the house.
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