Whether you are a committed, “professional” landlord with specific objectives for a buy to let business, or a so-called “accidental” landlord who happens to find themselves with a property to let, your activities are regulated by legislation – an increasingly extensive raft of legislation at that.
Naturally, you want to stay on the right side of the law – some of the penalties may be quite severe – and flagrant breaches might jeopardise the validity of your landlord’s insurance.
Here is an overview of the current legislation required as at May 2017. Please note that legislation is liable to change and so the following should be used as a guide only as to what is required.
Repairs and the general condition of the property
You have a general duty to maintain the let property in a structurally sound condition, without the need for major repair. This includes the absence of damp, which may cause a health hazard. You must also ensure that water storage systems pose no threat of the – potentially fatal – Legionella bacteria, which may cause Legionnaire’s Disease.
The property must have adequate lighting, ventilation and heat, together with a water supply, drainage, toilet, wash basin and shower or bath.
If repairs are necessary to keep these in good condition or if anything in the let accommodation is hazardous to health, you are required to arrange for them to be made. If you don’t, your tenants may complain and the local authority might issue an improvement notice requiring the repairs to be made under the Housing Health and Safety Rating System (HHSRS).
Unsurprisingly, there is a large body of legislation designed to ensure that your tenants live in accommodation free from threats to their safety from gas installations, electricity supplies or fire:
- you are required by law to have any gas supply and installation inspected and checked every year;
- the gas safety check is to ensure the absence of potentially lethal escapes of carbon monoxide, and during the course of this inspection, you might also want to have the gas supply pipework checked, suggests Stay Gas Safe;
- the inspection must be carried out by a registered Gas Safe engineer and a copy of the certificate he issues must be given to your tenants;
- penalties under the relevant legislation are severe – imprisonment or a fine of up to £20,000, or if the offence is heard by the Crown Court, imprisonment or an unlimited fine;
- the law does not require and annual inspection, but you still have a duty to ensure that the electrical installation and any appliances you supply are safe;
- it may be in your own interests, therefore, to have the installation and appliances checked by a qualified electrician periodically – and at least every 5 years;
- you must comply with all national and local fire regulations – including smoke alarms on every floor of the building and the installation of carbon monoxide detectors in any room with where there is a fuel-burning appliance;
- unrestricted access to fire escape routes must be available at all times.
“How to Rent” guide
The guide is published by the Department for Communities and Local Government, and you are required to give each a tenant a copy of it – emailing it, if you both agree.
Deposit Protection Scheme
If you demand a deposit from your tenants at the beginning of any assured shorthold tenancy (the most common form of tenancy agreement), the fund must be placed for safe keeping with an approved scheme and your tenants informed accordingly.
This is designed to help protect the tenants’ rights to recover any return of deposit due at the end of the tenancy and may help to resolve any dispute you have with a tenant about amounts that need to be deducted (to cover damage and breakages, for example).
If you fail to place the deposit in approved scheme, the tenant may apply to the courts for an order to return the sum involved or to place it immediately in an approved protection scheme.
The courts may also order that you repay your tenant up to three times the amount they originally gave you as a deposit.
“Right to Rent”
To help the authorities police the immigration laws, you also have a duty to confirm that any tenant, or member of his or her household, has the right to stay in the country and therefore a right to rent your property.
This involves checking the documents that confer a right of residence, making a copy of those documents and keep the copies for as long as they are your tenants and one year thereafter.
Once again, the penalties for failing to make these checks or for letting the property to someone who has no such rights, are quite severe and may result in a prison sentence or an unlimited fine.
Finally – and as with any other business profits – you have a liability for paying income tax.
As a result of the introduction of the so-called “section 24”, that came into effect in April 2017, there are major changes to the tax allowances available to landlords – principally the phased removal of income tax relief on mortgage interest payments.