Investing in the housing market isn’t a new concept. Still, with an ever-changing compliance landscape, any prospective new landlord needs to know what’s involved.
There’s much more to it than dealing with repairs, including fire safety rules, deposit security, and potential licensing, depending on the buy-to-let accommodation you purchase.
In this guide, we’ll look at the requirements applicable to rental properties to ensure any investment decisions you make are backed by an awareness of the regulations in place.
Landlord Licensing for HMO Homes
An HMO (or house of multiple occupants) means any property with numerous unrelated tenants or households sharing kitchen and bathroom facilities.
That general term applies to most house shares, such as student accommodation or professional housing.
New landlords are well-advised to seek guidance from an experienced law firm before buying an HMO since the licensing rules vary considerably between regions.
A landlord licence means that your property has been inspected, meets all the standards (such as minimum bedroom sizes) and that your council has granted a permit that verifies that you are ‘of good standing’ to manage an HMO rental.
It’s also possible you’ll need an alternative landlord licence as every council has jurisdiction over setting specific licensing rules.
Energy Efficiency in Rental Properties
The next element is your Energy Performance Certificate (EPC). Landlords must provide a copy of a valid certificate to tenants before they move in or before the tenancy agreement is finalised.
Your EPC assesses whether your rental property meets minimum energy efficiency standards.
Rental homes without a passing mark require improvements or modifications. While your EPC remains valid for a decade, you must book a reassessment if you make any major changes.
The Rules for Managing Tenant Deposits
Every landlord expects the tenant to pay a deposit – usually equivalent to a month’s rent. The deposit acts as a contingency buffer if the tenant chooses to leave without giving sufficient notice or causes damage to the property that the landlord needs to repair.
The rules around deposit management are strict, and it is illegal to withhold a deposit without justification.
Landlords can choose between three approved deposit protection schemes backed by the government:
- MyDeposits
- The Tenancy Deposit Scheme
- The Deposit Protection Service.
Deposits must be maintained separately from general rental income, and registering the deposit is a legal requirement.
Property Safety for Rented Homes
Rented properties need to meet threshold safety standards, often evaluated against the Housing Health and Safety Rating System.
Conditions that fall below standards must be addressed, as any health hazard such as mould, dampness, poor wiring, or unsuitable locking mechanisms can give the tenant a legal claim.
Other safety considerations include:
- Excessive cold due to inefficient heating or unsealed windows and doors.
- Asbestos materials present in areas intended for use.
- Overcrowding, or facilities that aren’t designed for the number of tenants.
- Unsafe water supplies, including contaminants and bacteria.
If you’re considering buying a rental asset, it’s therefore worth having a look at any earlier inspections to identify whether there are any potential concerns.
Landlord Gas Safety Requirements
Buy-to-let properties with gas boilers or cooking appliances require an annual gas safety check carried out by a registered gas engineer.
The landlord must share a copy of the report with their tenants and demonstrate that there aren’t any hazards.
Some insurance companies provide Gas Safety Checks and CP12 Certificates for no additional cost, along with their landlord cover policies.
Landlords are also obliged to ensure that every rented property has a safe cold and hot water supply, without a health risk associated with bacterial growth and Legionnaires disease.
Verifying Tenant Rental Rights
If you use a lettings agent, they’ll often manage all the verification checks when vetting new tenants – but if not, you’ll need to ensure that your tenants are legally entitled to rent out your property.
To sign a tenancy contract, an applicant needs to be a British citizen or have a valid right to live in the UK through a visa or permit.
Right to rent checks are essential since the responsibility for such appraisals is deferred to private landlords.
There are several ways to run a right to rent check, including looking at a passport, permanent residency document or other travel visas showing indefinite leave to remain.
Failure to check your tenant’s legal status can lead to significant fines.
Fire Prevention for Private Rentals
Along with gas and water safety, as a landlord, you are required to take appropriate steps to mitigate any fire hazards, such as:
- Installing smoke alarms on every storey of a rental building.
- Fitting carbon monoxide alarms if the property has a fuel burner.
- Carrying out alarm testing on the first day of the tenancy.
- Repairing faulty alarms and replacing batteries.
Landlord Repair Rules for UK Rentals
You’re likely aware that a landlord needs to carry out repairs, to deal with damage or deterioration to the outside of a property, walls, and any fixture or fittings associated with utility supplies. In case of appliance malfunctions or breakdowns, it is essential to seek assistance from certified appliance repair experts to ensure the proper functioning and safety of the appliances provided by the landlord.
These laws are covered in the Landlord and Tenant Act, and you’ll need to inform your tenant in writing if you intend to carry out repairs and agree on the timings for property access.
These responsibilities need to be set out clearly in your tenancy agreement, so there’s never confusion about who is responsible for which repair works.
Rental Property Insurance Laws
Finally, let’s talk about insurance. While this isn’t covered as a legal statute in any of the mentioned regulations, landlords need to take out suitable insurance.
Landlord insurance products come in a huge array of policies, and you can supplement your cover with rental guarantee insurance.
Mortgage lenders for buy-to-let purchases often require proof of insurance as fundamental eligibility criteria, and renting without insurance has the potential to become very costly indeed.
If you’re confident that your rental property – or intended investment – complies with these regulations, you’re good to go!
However, it’s also necessary to remember that compliance rules change continually, so staying on top of your legal responsibilities is vital to becoming a successful landlord.
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