What are you Liable for as a Landlord in the UK

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With changes having been made in October 2015, it pays to make yourself aware of the liabilities expats and locals alike face as landlords in the UK. Here is a list to get you started on what you’re responsible for:

Basic Information

All landlords must provide basic information including their full name and address, the Energy Performance Certificate for the property.  The deposit must be protected via a UK government-approved deposit protection scheme. Without this, you can be subject to fines and reduced eviction rights. Straightforward but legally required!

General Safety

This includes a whole host if items which must be deemed safe before you can allow tenants to occupy a property. Including:

  • Gas – must be safely installed and maintained by a gas safe registered engineer, with a yearly inspection on each appliance and a copy of the record given to tenants before they move in;
  • Electrical – all appliances must be deemed safe;
  • Fire safety – smoke alarms and a carbon monoxide alarm must be fitted and working. Of course, if the property were severally damaged by fire (or flood or similar!), you cannot charge tenants for any repairs;
  • Health and safety inspections – Note that the Housing Health and Safety Rating system is used by the council to make sure properties are safe for tenants to live in, which means that local inspectors may take a look for hazards if there are hazardous properties in the area (or if your tenant requests an inspection).

General Financial

Landlords are required to pay income tax on rental income. They are also required to pay Class 2 National Insurance, if your rentals are classed as owning a business.  This means that being a landlord is your main job, you rent more than one property and you’re buying new properties to rent out. If all these apply and your profits are over £5,965 per year, you will need to pay Class 2 NI. Investigate possible claims to reduce your tax, as different rules apply for residential, furnished holiday and commercial properties.

Remember, if you have a mortgage on the property you seek to rent out, you are required to get permission to rent. Also, don’t forget about landlord’s insurance: property is an expensive investment, and if you have a mortgage, your broker will demand you have landlord’s insurance. Make sure to use a landlord’s building insurance policy, not just a standard household policy. This protects the capital investment from any external damages and protect your income stream, should your tenants fail to pay rent.

Houses in Multiple Occupation (HMOs)

Special additional liabilities apply to HOMs, which is any property in which at least 3 tenants live (constituting more than one household) and the toilet, bathroom or kitchen facilities are shared. This means you may require a licence, required if the property is 3 or more storeys and occupied by 5 or more people.

Additional liabilities apply, particularly if changes apply – you must report all changes you plan to make to an HMO, if you tenants make changes and if the tenants’ circumstances change.

Vetting your tenants

Making sure your tenant has a good credit record and no previous rental issues to their name is vital. But you also must ensure they have the right to remain in the UK (i.e. a valid visa, if they are from a non-EU nation). A mix of financial and character references will ensure you are selecting a good tenant, and often form part of the requirements for a rental guarantee insurance policy.

Repairs

Landlords have the right to make repairs with 24 hours notice to tenants before entering the property. Landlords are responsible for all repairs to property structure, sanitary fittings, heating and hot water, common areas and anything that might be damaged by the landlord’s workers during repairs.

Neglecting repairs may mean tenants can start a small claims case or carry out repairs, deducting the cost from their rent. Remember that if repairs are extremely disruptive, tenants can claim rent abatement, depending what becomes unusable in the property as a result of repairs.

Ending a tenancy

There are now different specific forms as a result of the October 2015 changes, which must be used for ending a tenancy with a Section 21 notice. There were also new measures put into place to prevent landlords carrying out retaliatory evictions of tenants. Be aware of your rights and review the terms of your contract carefully!

 

Read the official government guides for landlords here:

https://www.gov.uk/renting-out-a-property/landlord-responsibilities

https://www.gov.uk/private-renting/your-landlords-safety-responsibilities

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