Checklist: Essential Responsibilities for Landlords
Many new DIY landlords worry about overlooking crucial tasks. To help, we’ve compiled a comprehensive checklist of the essential legal responsibilities you must fulfil when letting a property. Follow our guide to ensure that you cover all bases, making for a smoother letting experience.
Before You Find Tenants
Several responsibilities need addressing before you start renting out your property. Though some tasks could theoretically be completed within a week or two, allocating a few months to thoroughly complete and review all the steps is advisable.
1. Securing Permission
Mortgagers: If you have a mortgage, check the terms to see if there are any restrictions or conditions related to letting. Contact your lender to understand the necessary steps for consent. Sometimes, lenders require you to switch to a buy-to-let mortgage.
Leaseholders: If the property is leasehold, obtain permission from the freeholder. The freeholder may set conditions such as the duration of the let. Ensure your tenancy agreement incorporates these conditions.
2. Understanding Housing Licensing
Both the UK Government and local authorities may require property licensing before you can let it out. Familiarise yourself with the three types of licensing: Mandatory, Additional HMO, and Selective licensing. Local regulations vary, so contact your local council to determine if you need a licence.
3. Obtaining an Energy Performance Certificate (EPC)
An EPC evaluates your property’s energy efficiency and is required before letting. In England and Wales, the minimum EPC rating is currently E, but this is expected to rise to D by 2025. Scotland may require a rating of C by 2028. The EPC remains valid for 10 years.
4. Securing a Gas Safety Certificate
Annual Gas Safety checks by a registered Gas Safe engineer are mandatory. The check covers appliances, flues, and pipework, and you must address any issues before tenants move in. Always hire a certified engineer to perform these checks.
5. Conducting Electrical Installation Condition Report (EICR)
England, Scotland, and Wales all require an EICR at the beginning of a tenancy. Conduct remedial work within 28 days if the report finds issues, or you could face significant fines. A new regulation in Wales enforces EICR compliance for ongoing tenancies by December 2023.
6. Performing Portable Appliance Testing (PAT)
While PAT testing is not legally required, you’re responsible for the safety of electrical appliances provided to tenants. PAT testing ensures that all electronic items are safe and gives you documented proof of your diligence.
7. Installing Smoke & Carbon Monoxide Alarms
Install smoke alarms on every inhabited floor and carbon monoxide (CO) alarms in rooms using solid fuel in England. Wales and Scotland require interlinked smoke alarms and CO detectors in rooms with gas, oil, or solid-fuel appliances. Check local regulations for detailed requirements.
8. Complying with Fire Safety Regulations for Furniture
If you provide furniture, ensure that it complies with the Furniture and Furnishings (Fire Safety) Regulations. Check the labels or consult the manufacturer for compliance confirmation.
9. Assessing Risk for Legionnaires’ Disease
Legally, landlords must assess the risk of Legionnaires’ disease, caused by bacteria in stagnating water. For most domestic systems, the risk is low due to constant water circulation. If unsure, hire an assessor for a professional evaluation.
After Finding Your Tenants
Once you have found and referenced your tenants, several additional responsibilities must be fulfilled to ensure a legal and successful tenancy:
10. Conducting Right to Rent Checks
Verify your tenants' legal right to rent before they move in. This involves checking original documents in the tenants' presence to confirm their identity and right to reside in the UK. Perform this check on all tenants to avoid discrimination and severe fines.
11. Drawing Up a Tenancy Agreement (AST)
An Assured Shorthold Tenancy (AST) agreement outlines the terms, rules, tenant names, rental amount, and duration of the tenancy. Ensure all adult tenants sign the AST and that they receive a copy. Digital signatures are a legal and convenient option.
12. Registering the Security Deposit
Once you collect the security deposit, register it within 30 days in a Government-approved scheme. Different schemes are available for England, Wales, Scotland, and Northern Ireland, so choose accordingly.
13. Serving Prescribed Information for the Security Deposit
Provide tenants with information about how their deposit has been registered, including how they can dispute deductions, within 30 days of receiving the deposit. Failure to comply can affect your ability to issue a section 21 eviction notice.
14. Handing Over the How to Rent Guide
In England, you must deliver the How to Rent guide to your tenants at the tenancy’s start. Obtain a signed receipt or email confirmation to document this action. Non-compliance could hinder your ability to serve a section 21 notice.
15. Creating an Inventory
Prepare an inventory detailing the property's condition and content at the tenancy’s start. Have tenants sign the document to confirm agreement. This record serves as critical evidence for any security deposit disputes. Some landlords prefer employing professional inventory clerks for accuracy and impartiality.
16. Paying Tax on Rental Income
Declare rental income via a Self Assessment tax return if your profits exceed £2,500 annually. File the return by October following the financial year’s end in April. Preparing in advance can help you meet tax obligations and avoid penalties.
By ticking each item off this checklist, you’ll ensure compliance with all legal responsibilities, enabling a successful and issue-free tenancy.