Being a landlord isn’t easy. With all the tenant horror stories out there, it can be quite scary. You want to generate more income, but need reassurance you’re doing it right. These 12 Frequently Asked Questions are for landlords lke you who know it’s important to be prepared.
1. Should I Tell My Mortgage Lender I’ll Be Letting My Property?
You’ll need their permission before letting a property. Depending on your personal circumstances, they might require certain conditions to be met. Remember to ask about buy-to-let mortgages, which offer benefits including interest only payments.
2. What Is the Right to Rent?
The Right to Rent scheme means landlords must confirm each tenant is in Britain legally. All tenants aged 18 and over must be checked. You’re required to see their original documents, confirm they’re genuine, make copies and record the date checks were made. Housing illegal tenants could get you an unlimited fine.
The Home Office explains the Right to Rent here:
3. Should I Register the Deposit?
Landlords must register deposits with an insurance-backed deposit scheme. The scheme protects the deposit and offers impartial dispute resolution. Three large deposit schemes include:
- Deposit Protection Service
- My Deposits
- Tenancy Deposit Scheme
The best one for you depends on your personal preference and circumstances.
4. How Can I Prevent Property Fraud?
There are two ways to stop tenants from registering your property in their name:
Option 1: Anti-Fraud Property Alerts
The Land Registry grants access to a free monitoring service. You’ll be emailed if someone tries to change the register, so you can stop them.
Option 2: Anti-Fraud Restriction
The Land Registry blocks any property changes made unless a solicitor or conveyancer certifies you made the changes. This option shows tenants you mean serious business when it comes to fraudulent claims against your property.
5. Is the EPC Mandatory?
An Energy Performance Certificate (EPC) shows how energy efficient your property is. Certification ratings range from A (the best) to G (the worst). From 1st April 2018, properties must have a minimum E rating. Landlords can raise their rating with small changes, such as energy efficient bulbs, to costlier changes like installing solar panels. If your property doesn’t meet EPC standards, you might pay a £4,000 fine.
This short video shows an EPC survey:
6. Do the Gas, Electrics and Furniture Need to Be Compliant?
All electrical and gas devices in your property must be safe. You can confirm this using Portable Appliance Testing (PAT) or Installation Surveys. Carry out regular checks on all appliances you provide and don’t hesitate to replace faulty goods – they’re a fire hazard.
Position furniture to keep exits clear so tenants can escape in an emergency. Warn tenants of any fire hazards you see. They’ll appreciate the concern.
7. Is an Inventory Worth It?
An inventory proves what condition your property and possessions were in before tenants arrived. Inventory should be written, dated and signed – include photos and videos. If tenants do damage beyond normal wear and tear, the inventory will prove why you deserve their deposit.
Shelter, a housing and homelessness charity, provides a free inventory checklist here and here. Without a signed inventory, you’ll lose some or all of the deposit because proving your tenants caused damage is much harder.
8. Do I Need Insurance?
Landlords wish they’d been insured when a tenant stops paying rent. Evictions aren’t easy or quick. Jessie Day at Simply Business says: “If you’re doing it legally, nearly £2,000 in court eviction fees. And if rent arrears are outstanding, you could also be forced to pay further fees to get these back.”
Evictions take anything from four months to a year if tenants get legal assistance. Angry tenants might destroy property before leaving, so prepare for those extra costs. This is why rent protection insurance is highly recommended. The insurer will pay the rent and cover legal costs while you regain your property.
9. Do I Have to Pay Council Tax and Income Tax?
Unless it’s included in the rent, tenants pay their own council tax.
Whether you live in Britain or abroad, your rental income is taxed. The amount owed increases based on your profit after deducting expenses. Please see HMRC’s income tax page for more information. Consult with an accountant if necessary.
10. Can I Make Routine Property Visits?
We’ve all seen horror stories where landlords visit their property after a long period of time and realise it’s been destroyed. You can make routine visits, but follow the correct notice for requesting access, as stated in The Landlord and Tenant Act 1985.
The Tenants’ Voice website lists the following as reasonable notice for tenants:
- The notice is served and accepted at least 24 hours before the landlord enters
- The landlord visits at a reasonable time and allows tenants to be present
- The notice states who will enter the property and why.
11. When Should I Do an Inspection?
Give at least 24 hours’ notice and inspect the property BEFORE tenants leave. This isn’t the final inventory inspection, it’s a brief, practice run. An early inspection gives you a chance to see what needs to be fixed or replaced, so you have time to make arrangements. Tenants also have advance notice so they can act now instead of losing their deposit.
When tenants leave, do the final inspection as soon as you can. Make sure they’ve left nothing behind. You must store forgotten goods for at least 14 days. Tell tenants their belongings are being stored but will be disposed of if not collected.
Remember, it’s illegal to withhold belongings if your tenant owes money.
12. Who Should Contact the Council and Energy Suppliers?
Both landlords and tenants. During inventory, document utility readings with photos and video footage otherwise you might be liable for tenants’ bills.
Tell the council you are the resident again and will be paying council tax. You might be eligible for an empty residence discount of up to 50%. You can find more information here.
To save time, consider including utilities in the rent. Tenants won’t have to pay multiple bills. You won’t have to contact the council and energy suppliers every time tenants move in and out. There could also be financial benefits to including utilities in the rent. Watch this quick video for more information:
My Question Isn’t Here? What Should I Do?
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