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LANDLORD LEGAL ESSENTIALS – Part 2

02. Preparing your Property To Let

Alphaletz and Landlord Law are delighted to bring you Landlord Legal Essentials. Tessa Shepperson, solicitor and owner of the landlord information service, Landlord Law, gives advice to landlords in this six-part series of articles. This second blog addresses preparing your property to let.

As you will discover in this series of articles, renting property is heavily regulated.  Many of the regulations relate to the condition of your property – and the penalties for non-compliance can be fierce.

So, it makes sense to ensure that your property is in good condition before you rent it out:

  • You will avoid the unwelcome attention of the authorities and the fines and other penalties that they can impose.
  • You will be safe from claims from your tenants for compensation, or in some circumstances, a rent repayment order
  • It will be much easier to get necessary works done while the property is empty, and
  • You will be able to charge a higher rent if your property is clearly in tip top condition.

So, lets take a look at the main things you will need to deal with when getting ready to let.  Starting with a couple of really important things.

Protect your property at the Land Registry

This is SO important.  You need to ensure that if any attempts are made to sell your property or register a charge against it – you will be informed.

In many, many cases the address the Land Registry will contact is the property address itself.  Meaning that if you have inadvertently let to fraudsters – they will not tell you and you won’t find out (for example if they have transferred the property into their name) until it is too late.

You could lose your property or have to pay off a mortgage you did not take out and where you never had the money.

For example, see this video where solicitor David Smith discusses the problems that can arise.  The government website David refers to is here.

If you have not protected your property yet, please go and do this NOW. 

Register with the ICO

The Information Commissioners Office (ICO) enforces the data protection rules which all landlords must comply with. You also need to be registered with the ICO and pay the annual fee (currently £35 if you pay by direct debit).

This is necessary even if you only have one property and even if your property is managed by an agent, unless you hold no data whatsoever about your property – which is unlikely.

If you are self-managing you will also need to serve data protection notices on your tenants. 

There is an article here with more information plus there is a huge amount of guidance on the ICO website.  If you want more there is a book by solicitor David Smith which you can read about here.

Is your property in Wales?

If so, you need to register with Rent Smart Wales. If you don’t you can be prosecuted and fined. 

If you want to manage your property yourself you must also be licensed – which means undergoing training (their training, not any old training).  If you don’t want to do this, you must employ a licensed letting agent to manage your property.

It is really important that you do this.  For example, you will not be able to serve a valid eviction notice for a property in Wales unless you are properly licensed.

Are you going to use a letting agent?

If so, your letting agent should (if they are any good) be able to advise you on what you need to do and will be able to carry out many of the checks and inspections that need to be done (more on these below).

However, be aware that although most agents are good and some are fantastic, there are also many agents who are not very good and a few who are downright criminal.  If you are new to renting it may be hard for you to know which is which.

Some good signs are:

  • Membership of one of the agents’ bodies such as Arla Propertymark or RICS
  • A clearly visible notice setting out their charges, details of their client money protection scheme and the Property Redress scheme that they belong to (all agents are supposed to display this information in their offices and on their website)
  • Cheerful and knowledgeable staff, who ideally will have industry qualifications.
  • A long-established business

Its best NOT to choose the cheapest agents as this is not a good sign! 

See if you can speak to any of their clients to get feedback and if you are a member of a landlords’ association have a word with members to see who they recommend.

If you are not sure whether you should use a letting agent or not, take a look at this guide (you may need to scroll down the page a bit) which sets out some of the things you need to take into account.

The rest of this article will be on the basis that you are managing your properties yourself.

Get an HMO license, if necessary

An HMO is a House in Multiple Occupation and refers (more or less) to any property where three or more unrelated people share living accommodation.

If you are going to rent to sharers and if you are going to need a license, you should deal with this sooner rather than later.

The reason for this is that Local Authorities often impose conditions on licenses which frequently involve extra works at the property.  If you are going to have to do this, it is best that you do it at the same time that you do all your other works as it will be cheaper and less disruptive overall.

Or alternatively just speak to your Local Authority and ask them what they will require.  Keep a written note of what they say, and the name of the official saying it, just in case they change their mind later!

You can find out more about the rules relating to HMOs in this free guide here.

Ensure that your property is safe

All landlords will want to make sure that tenants are as safe as they can be.  To ensure this, government have over the years introduced regulations to provide for this:

Gas safety – you must get your property inspected by an installer registered with the Gas Safe Register and serve the Gas Safety Certificate on your tenants – both before they move in and after the subsequent annual inspections

Electrical safety – you must have your electrics checked by a qualified and competent electrician at least every five years and provide a copy of the report to your tenants (and if they request it, the Local Authority)

PAT (portable appliance testing) is a good idea for any appliances which are not new although it is not a legal requirement.

Fire safety – you need to carry out a fire risk assessment if your property is an HMO (and it is strongly recommended even if your property is not an HMO) and ensure that your property is fire safe.  There is a clear guide to fire safety published by RICS here.

Energy efficiency – you must obtain an Energy Performance Certificate (EPS) before your property is let and copies must be provided to prospective tenants, and your property must have an EPC rating of not less than E.  This is scheduled to go up to C in a few years time so do as much as you can to improve the insulation of your property now to make things easier later.

Smoke and CO alarms must be installed and tested on the first day of the tenancy – smoke alarms must be placed on every storey of the property which is being used for living accommodation and CO alarms in all rooms with a solid fuel burner.

Legionella is a disease which comes from standing water stored between 20 and 45 degrees.  Landlords are required to carry out risk assessments.

Furniture must be compliant with the Furniture and Furnishings (Fire) (Safety) Regulations 1988, which means it must be fire safe and carry the proper labels.

These are the main things you need to do.  However landlords are vulnerable to being inspected by Local Authorities and fined, or sued by tenants under the fitness legislation, if your property fails to meet the standards under the Housing Health and Safety Rating system which you can read about  here.

Other things to do:

Tenancy deposits – Decide whether you will be taking a deposit or not, and if you will, set up an account at one of the tenancy deposit schemes:

Inventory – this is absolutely essential if you are taking a deposit as if you don’t have one you will have little chance of successfully making any deductions for damage or loss (as you will not be able to prove the condition of the property at the start of the tenancy).  If you are self-managing, it is recommended that you use a professional inventory company.

Set up a system for keeping records – one of the secrets of successful property management is proper record keeping.  Your membership of Alphaletz will be invaluable here.  See also this article about record keeping.

Make sure you have proper insurance – ordinary household insurance will not do!  Take a look at this free mini-course which has guidance on all aspects of landlord insurance.

And finally

That’s all for this article on preparing to let.  In my next article, I will be giving tips on one of the most important aspects of managing rented property – choosing your tenants. 

In the meantime, if you need further information, please visit my website Landlord Law at www.landlordlaw.co.uk

Tessa Shepperson

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