Converting your property into a rental is a good way to make money and at the same time, increase the value of your asset. However, as a first time landlord, there are some legal aspects of the rental business that you need to know about and comply with to protect you from costly and time-consuming court litigations.

* Inform your mortgage lender that you are renting out your property. Failure to do so could violate the terms and conditions of your primary mortgage agreement.
* Check that the prospective tenant is legally allowed to live in the UK. Renting out to a tenant who doesn’t have the right to rent is punishable with an unlimited fine and imprisonment of up to 5 years.
* Make sure that your insurance not only covers the building, “but any potential claim by your tenants or visitors to the property”.
* Make sure that your property meets the safety standards. Smoke alarms must be installed on every floor of the property. Carbon monoxide detectors should be placed in rooms where coal or wood is burned. Gas safety certificates for each gas appliance must be available within the property. The furniture must meet the safety standards and the appropriate labels displayed to reduce the risk of fire. Electrical devices must be safe for use and a Installation Survey or Portable Appliance Testing (PAT) for guaranteed compliance. And to protect the tenants from Legionella, the water supply must be working properly.
* Documentation of the condition of the property at the beginning of the tenancy. Without this, a landlord can hardly prove the original state of the property and the damages incurred once a tenant checks out, leaving no grounds for deductions from the deposit.
* Take a meter reading of the gas, electricity, and water at the time the tenant checks in and to make sure that all the utilities paid for by the tenant is in the tenant’s name to make sure that if they leave without paying the bills, you don’t end up paying for it.
* Take the time to read the fine print and amend anything you see fit or necessary.
* If your property is going to be rented by three or more tenants that do not belong to the same household, a House in Multiple Occupation (HMO) license is required. Such license is valid for five years and only valid for one HMO household.
* Register the deposit. Landlords are required to put all the deposits they receive into the government supported deposit scheme if the property was rented out on an assured shorthold tenancy which started after April 6, 2007. Failure to comply has very expensive consequences like paying back the tenant’s deposit three times its original value. And once the deposit is registered, you are legally obliged to provide your tenant the Prescribed Information (The information would contain the amount of the deposit, the address of the property, the name, address, and contact details of the administrator of the tenancy deposit scheme where the deposit is being held, the name, address, and contact details of the landlord, tenants, and any third party who had a hand with the deposit.) within 30 days.
* Give notice three months before the contract ends to determine what the tenant plans to do. But regardless of, if the agreement ends and the tenant doesn’t move under their own volition and stays longer than they should, you cannot evict without a court order, so prepare yourself for a court proceeding to get them off the property.
* Upon checking out, make sure that the process is “completed carefully and by a reputable company”. You or your agent should be present at the property when this takes place so that the damages incurred by the tenant is properly addressed and deducted from the deposit. However, in the event that a settlement cannot be reached, “make sure you know the rules of the tenancy deposit scheme and follow them accordingly”.

But when in doubt, it still is best to seek expert advice.


Create your free trial account today or contact us to arrange a demo.