Residential Lettings - Landlord Obligations
One of the key reasons for appointing a professional agent to manage your rental property is the ever increasing implications of Legislation and Regulation faced by Landlords. It is our job to keep abreast of changes in requirements affecting Landlords ensuring they are fully informed and able remain fully compliant.
Apart for the general requirements to keep your property is a good state of repair there are a number of specific legal obligations that Landlords must comply with in order to ensure your property provides a safe environment for a tenant. Failure to comply with these obligations brings serious consequences including the potential for substantial financial penalties and in some case imprisonment. Particular statutory obligations that affect Landlords are:
Landlords are obliged to ensure that all Gas installations, including Boilers, Pipes and Flues and Appliances are maintained in a good order so as to prevent risk or injury to any persons. The Regulations require for all Gas Installations and Appliances to be checked and certified annually by a GASSAFE registered Engineer. The written report (The Landlord’s Gas Safety Certificate or LGSC) must be made available to the tenant and be kept at the property at all times. The Landlord or The Agent must also keep a copy for a minimum of 2 years.
Where Award Property Management Ltd is instructed on a Full Management basis, we will ensure compliance with this obligation by arranging the annual safety check on the Landlord’s behalf. Usually this will be combined with an annual service of the boiler and any appliances at the same visit. If a Landlord fails to provide an LGSC at least 48 hours before a first tenancy is due to commence, The Agent will arrange this to ensure the Landlord is compliant.
A Landlord is required to ensure that all electrical appliances and the electrical supply are ‘safe’ and will not cause risk or danger. This requirement includes both second-hand and new appliances including items such as immersion heaters, toasters, washing machines and kitchen appliances, cookers and showers. From the 1st January 1997 all new electrical appliances must carry a ‘CE’ mark.
Landlords are also responsible for providing instructions in the use of appliances at a rental property and for ensuring there are maintained or replaced when included within the terms of the rental agreement.
Award Property Management Ltd recommend that in order to ensure electrical safety is assured, rental properties should be checked by a qualified electrician regularly. For the supply and property wiring this should be through the provision of a Domestic Electrical Installation Certificate prior to the first tenancy and every 5 years subsequently. For appliances provided as part of the rental agreement, Annual Portable Appliances Testing should be undertaken. In this way Landlords can demonstrate appropriate risk management to ensure safety. Award Property Management Ltd will normally undertake these checks on a Landlord’s behalf on a rolling basis whilst the property is under Full Management.
These Regulations cover all upholstered furniture that is included in the rental agreement or supplied with the property, including beds, mattresses, padded headboards, suites and chairs/sofas and items with loose or fitted covers. Children’s furniture, cots, cushions and pillows and garden furniture that can be used indoors are all also included. Most furniture manufactured after 1983 will probably comply and carry the relevant label ‘Carelessness causes fire’. Genuine antique furniture made before 1950 is exempt in most cases.
If in doubt whether an item is compliant then it is better to remove it from the property prior to letting. If in any doubt Award Property Management Ltd can inspect and advise accordingly.
Whilst it is important that all properties are provided with smoke alarms, all properties built since June 1992 must be fitted with mains operated interlinked smoke alarms or detectors on each floor. Since October 2015, it has been mandatory for all rental property to have provided a smoke alarm on each floor and a carbon monoxide alarm in any room containing a 'solid fuel' heating source. It is also recommended as good practice for carbon monoxide alarms to be fitted in any room containing a gas boiler. These alarms must also be checked by the Landlord on the first day of any new tenancy.
Although it is up to tenants to check any alarms provided during in their tenancy, it is important that they are tested regularly to ensure they are operating satisfactorily and Award Property Management will undertake this check prior to each new tenancy and as part of the Annual Portable Appliance check on Fully Managed properties.
It is also notable that smoke and other alarms generally have a 'shelf' life (normally 10 years) and so need replacement at regular intervals. Again as part of our ongoing checking process we can advise and take care of this on behalf of our clients.
Landlords of residential accommodation have responsibilities for combating Legionnaires Disease. Health and safety legislation requires that landlords carry out risk assessments for the Legionella bacteria which cause Legionnaires Disease and thereafter maintain control measures to minimise the risk. Most rented premises will be low risk but it is important that risk assessments are carried out and control measures introduced.
We are no longer able to market your property for rent without a current Energy Performance Certificate in place. A Certificate is valid for 10 years and often if a property has been purchased in the recent past then a Certificate will already have been provided. A quick check on a national register can ascertain whether a current certificate exists for your property, if not then Award Property Management Ltd can supply this prior to the initial marketing.
ADDITIONAL LANDLORD RESPONSIBILITIES
In addition to those obligations that place certain duties on Landlords to ensure the safety of their rental property, there are other general responsibilities that a Landlord needs to consider and act upon in order to ensure they remain fully compliant and above board:
Landlord’s responsibilities extend to keeping the property in a good state of repair and are covered in the Landlord and Tenant Act 1985 as amended by The Housing Act 1988 Sections 10 and 11.
Section 10 – Fitness for Human Habitation imposes certain requirements on Landlords to ensure that a dwelling house (including the whole or parts of a house/flat) remains fit for human habitation. The areas where a property may be deemed unfit are where defect are present in:
- State of repair
- Freedom from Damp
- Internal Arrangement
- Natural Lighting
- Water Supply
- Drainage & Sanitary
- Facilities for preparation of food and disposal of waste water
Section 11 - Repairing obligations in short leases, specifically requires:
- To keep in repair the structure and exterior of the dwelling house (including drains, gutters and external pipes)
- To keep in repair and proper working order the installation in the dwelling house for the supply of water, gas and electricity and for sanitation (including basins, sinks baths and sanitary conveniences and appliances for making use of the supply).
- To keep in repair and proper working order the installations in the dwelling house for space heating and heating water.
There are of course other implied maintenance responsibilities for a Landlord during a tenancy which are not specifically included above which may lead to dissatisfaction and even claim from a tenant if not addressed. The adage that ‘a well maintained property is likely to attract a better tenant who is more likely to look after and respect it’ is certainly true. Award Property Management Ltd recommends that all arrangements are made for all maintenance and repairs to be carried out in a timely manner to ensure the property remains in good condition. Through our regular inspection regime on Fully Managed properties we can recommend on both short and long term maintenance requirements so that a planned approach can be undertaken to both work and cost implications.
CONSENTS TO LET
There are a number of potential implications to consider prior to letting your property and these include:
MORTGAGE PROVIDER OR LENDER
If your rental property is subject to a mortgage or other loan, then it is important to advise your lender and obtain their consent prior to letting the property. It is also important where a lender imposes any covenants or restrictions over the letting that we are notified so that these can be incorporated in to the tenancy agreement as necessary.
HEAD LEASEHOLDER OR FREEHOLDER
If your rental property is owned under a leasehold agreement, then you should obtain the permission of the head leaseholder or freeholder prior to letting and ensure any restrictions are complied with.
Insurance considerations for rental properties are quite different than those for an owner occupied dwelling, as well as ensuring buildings cover is in place, contents, accidental damage, rent guarantee, legal expense and public liability cover are all important things to consider. Most Insurance providers require that you inform them if the property is to be let or if it is likely to remain vacant for any period of time.
Award Property Management Ltd can offer cover for all these aspects. Please talk to us for further information.
Under the Housing Act 2004 certain properties that are used by ‘sharers’ or where individuals are living as more than one household are defined as Houses in Multiple Occupation (HMOs). In some instances HMOs will also require mandatory licensing by the Local Authority and Award Property Management Ltd can advise on the implications of complying with this requirement, please speak to us for assistance.
A Landlord must notify the HMRC that they are letting a property as any rent received is likely to be considered for taxation. We would advise that you speak to a qualified accountant or financial adviser to ensure you properly address the tax implications of rental income.
OVERSEAS (NON-RESIDENT) LANDLORDS
In particular under the Finance Act 1995 agents are required to make arrangements for rent received where a Landlord resides overseas, including deducting tax at the basic rate from rental income and forwarding this to the Inland Revenue on a quarterly basis.
Within this Act there is a scheme for overseas (or non-resident) landlords to self-assess and apply for an exemption under the Non-Resident Landlords Scheme (NRL). Award Property Management Ltd would advise Landlords to make an application under this Scheme and we can provide relevant forms for you to complete to obtain your exemption reference number.