A guide for landlords


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A guide for becoming a landlord with hints and tips on every aspect of being a landlord. Know what the best practices are and how to make sure your landlord experience is a beneficial one in everyway.

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A guide for landlords

  1. 1. A Guide for Landlords
  2. 2. A Guide for Landlords Find a Tenant You Click With One of the most important parts of being a landlord is finding the right tenants. When you have a reliable, trustworthy tenant who you have a good relationship with, being a landlord should be free from hassles and headaches. You also will avoid the cost of having to find a new tenant or loss of rental income inbetween. In this guide you will find valuable tips for choosing the right tenant as well as information that will help you to be a good landlord. It contains practical advice for finding the right tenant and maintaining a positive relationship with them.
  3. 3. A Guide for Landlords Make a Good First Impression When your tenant first sees your property, they will make a judgement based on their first impression. This is why it is important to make sure that your property is clean, welcoming and appealing. Before your tenants see your property, you should take the time to make sure that everything looks as good as it possibly can. If your property looks untidy, you could have trouble renting it out and it could be unoccupied for a very long period of time while you lose out on rental income. It might seem like obvious advice, but you would be surprised how many landlords fail to hoover, tidy and clear out the property before showing it to prospective tenants. Make sure that you also maintain the surroundings of the property, such as your garages, sheds and guttering. Mow the lawn and make sure that your trees, shrubs and bushes are always neatly landscaped.
  4. 4. A Guide for Landlords Know Your Rights When you become a landlord, it is your responsibility to learn about the rights applicable to yourself and the tenants renting your property. You will need to know how things work when it comes to eviction and the responsibilities involved in keeping the property in good shape. It is important to let your tenants know the rules when they move in, because they can’t follow them if they don’t know them. Before renting out your property, you need to decide what your target market/audience is. Are you renting out an entire property or just a room with shared facilities within your home? Will you rent to couples or students? You will be subject to different insurance needs and laws depending on the type of tenants you are renting to. For example, in a situation where you are letting out one room in your home rather than a whole property, you will not need to give as much notice when ending the tenancy.
  5. 5. A Guide for Landlords What is a Resident Landlord? If you live with your tenant in the same building, you are a “resident landlord”. This term also applies when you live in a flat within a house that has been turned into flats. Unless it is a purpose built block of flats, the arrangement will not be classified as an assured shorthold or assured tenancy. You don’t have to share accommodation with your tenant for this term to apply; you only need to live in the same building as your tenant. This is important in the eyes of the law because your rental property is also your primary home. If you are a resident landlord you will fit into one of two categories:   Excluded Occupier – You share facilities with your tenant. Occupier with basic protection – You don’t share facilities with your tenant but you live in the same building. If you are not sure which of these categories you fit into, seek advice before you decide to enter into a rental agreement.
  6. 6. A Guide for Landlords Sharing Your Home with a Tenant If you rent out part of your home and share it with a tenant, it is important to choose your tenant carefully to ensure that you trust them and get along with them. Make sure that you outline the house rules clearly so that everyone is on the same page. You want to choose someone that you will get along with because you will have to interact with this person a lot. If you don’t find yourself clicking with them at the start, this might be a bad sign later on. If you lay down the rules and your tenant seems to not understand or to not agree with any of them this is a red flag that should not be ignored. Be sure to address all issues right away to ensure everyone knows where they stand. If you have to sell the property or you need your tenants to leave, it is fair to give them as much possible advance warning as you can so that they have time to find alternative accommodation. Try to give at least four weeks’ notice. Your tenant will have greater protection under the law if they occupy a part of the property that you live in but don’t share any facilities (such as kitchen or bathroom) with you. Make sure that both you and your tenant understand your responsibilities and rights, so that there is no confusion over bills for amenities and services.
  7. 7. A Guide for Landlords What are Your Rights as a Landlord? As a landlord, what rights do you have? You should know what to expect from your tenants.           Charge a rent according to market value. Ask for a damage deposit, which can offset repair costs if the tenant leaves the property in bad shape. Before the tenancy begins, fix the agreement terms. Be paid rent when it is due. Be notified when the property needs repairing. Be given notice from a tenant if they will be leaving. Have access to inspect the property by making an appointment in advance with reasonable notice. Ask for the rent to be paid in advance. Choose who they let out their property too. (Unless discriminating in regards to sex, race or religion. Such discrimination is prohibited by legislation.) A Court Order if the tenant refuses to leave during the notice period (applicable when the tenant does not share facilities in the case of a resident landlord)
  8. 8. A Guide for Landlords What are the Rights of a Tenant? Any tenant who stays in your property has the following rights:       Be fully aware of the terms of the agreed upon tenancy. Know their landlords address and full name. The property must be safe and at a decent level of repair. Have an atmosphere of “Quiet Enjoyment” during their stay at the property. Be given notice when the landlord would like to inspect the rental property. Be given notice when the landlord would like the tenant to move out.
  9. 9. A Guide for Landlords How to Choose the Right Tenant Demand for rental properties fluctuates, but if you present your property correctly and follow tips in this guide you are more likely to have many different tenants to choose from. Take your time and meet with each tenant in person before selecting, as it is important to find the right one. Don’t ignore your gut instinct, it is important to get a good and trustworthy feeling from your tenant. Ask your potential tenants to provide references from previous landlords and follow these up. Also, run a full credit check so that you can assess whether they have been able to manage their money and keep up with rent in the past. We offer a full range of tenant referencing services at affordable rates, so that you can get a glimpse into the history of your prospective tenant. There are many different background checks that landlords can make before choosing a tenant, such as checking the tenant’s existence on the electoral roll and their existing credit agreements. You can also search for any bankruptcy, IVA data and CCJs. With a full profile you will be able to make an educated decision on any potential tenant. Remember, you cannot discriminate on tenants based on factors such as religion or race, as this is outlawed by the Equality Act of 2010. This act covers 9 protected characteristics, which are: sexual orientation, sex, religion, race, pregnancy or maternity, marriage or civil partnership, gender reassignment, disability and age. If you refuse to rent out your property to a person because they are disabled, you will be violating the Disability Discrimination Act of 1995. You also cannot charge higher rent based on a disability. While you are not legally obliged to renovate your property in order to accommodate someone with a disability, you must not stop them or prevent them from making reasonable changes or alterations to the property with the intention of improving access.
  10. 10. A Guide for Landlords What is a Tenancy Agreement? It is important to have a tenancy agreement that is legally binding and was created and officially signed by both yourself and the tenant – even if they are a family member or friend. This contract will protect both of your rights and ensure that there is no confusion or disagreement later on, so be extra careful when writing it. This agreement should include all of the details of what the tenant is allowed to do, such as whether they can have pets and so on. It should also state when the rent is due and outline who holds responsibility for the maintenance and on-going upkeep of the property. There are templates available online you can follow. It is important to make sure that your tenant signs and dates each page of the tenancy agreement, that way both parties know everything has been understood and read. A copy of the agreement should be kept by both parties in a safe place.
  11. 11. A Guide for Landlords All About Deposits Always take a damage deposit. It is standard practice for a landlord to take an advance damage deposit, so that they have protection in case the tenant breaks the agreement. The landlord can then keep the deposit if the tenant fails to pay rent or causes damage to the property and furniture. As of April 2007, all deposits taken by landlords in England and Wales on an “Assured Shorthold Tenancy” must be protected in a government deposit scheme. This must be done within 30 days of the tenant giving the deposit. If there are multiple tenants living within the same property let the group of people elect one person among themselves to put their name on the deposit protection, rather than choosing someone yourself. This will demonstrate that you have a certain level of respect and trust for them. It is also a good idea to secure a guarantor for your tenants, this will help to protect you especially if they are unemployed, not starting work yet or are students. The guarantor should be background checked as well and they will be responsible for providing rent if the tenant cannot. You could even have the guarantor become a joint tenant on the rental agreement, until the main tenant has the ability to pay the rent on their own.
  12. 12. A Guide for Landlords Create an Inventory It is a good idea to create an inventory of all items on the premises before you let out your property. This includes all items in outside areas, gardens, sheds and garages as well as household items including kitchen supplies and furniture. When you make a full (and honest) inventory of these items and their condition, you will have proof if there are any disputes later on. You should also take photographs of the inside and outside of the property right before your tenants move into the property. These photographs can be date time stamped so that they offer further proof.
  13. 13. A Guide for Landlords Choose the Right Insurance Cover As the landlord, you are responsible for insuring the rental property so make sure that you get the right landlord insurance appropriate to your situation. For example, you will need different cover if you are renting to students (or taking DSS payments) compared to renting to professional singles or couples. Don’t forget to consider Legal Expenses or Rent Guarantee cover as well. For example, a student let with more than five students and more than three floors is described as an HMO and will have its own insurance requirements. This will cost you more money to insure and will require you obtain a special license. Also, you can advise your tenants to purchase contents insurance. They may not know about it and they will appreciate your guidance. For more information and FAQs on Landlord Insurance – http://www.discountlandlord.co.uk/landlord-insurance-faq.html
  14. 14. A Guide for Landlords Tips for Dealing with Tenants Keeping a good relationship with your tenants requires you to be professional, considerate and courteous, so make sure that you uphold your side of the tenancy agreement. If your agreement says that you will replace broken appliances and furniture when the damage is not the fault of the tenant, you should do so quickly and ensure the replacement is of the same quality. Also, if the property starts to reveal that it is deteriorating due to age and damage (such as exhibiting mould, cracks or crumbling brickwork) it is your responsibility to fix these issues. If your property is in a state of disrepair for the long time, your tenants will move on and you will have to find new ones, which will be difficult due to the damaged state of the property. Also, this unrepaired damage will affect the resale value of the property. About a month after your tenants move in, check with them to see if they have any concerns. Checking in can also give you a chance to correct any bad habits before they form permanently. Always deal with any reported repairs and concerns swiftly, which will prevent your tenants from becoming resentful of you, as well as saving you money in the long term. You should also always give your tenants at least a 24 hour notice prior to visiting their property, unless it is an emergency. Even though you own the property, you cannot let yourself into their living space unannounced. When you treat your tenants with respect, they will have a positive experience renting from you and they will be likely to extend their contract at the end of the agreement lease.
  15. 15. A Guide for Landlords Upkeep of the Property It is the responsibility of your tenants to keep the property clean and to carry out a basic level of maintenance. This means they will need to change the light bulbs and the batteries on the smoke alarm. If your agreement specifies nosmoking, they should not be smoking in the property. You are the one who is responsible for most types of home maintenance and repairs, but you will be able to claim money back for the damage that is caused by your tenants. It is not rare for renters to cause damage to a property, whether accidently or on purpose. You can’t charge your tenant for natural “wear and tear” which applies to carpets and furnishings, but you can charge them for other serious damage that will cost you money to repair this can also be taken out of the deposit. Your tenants must also adhere to the terms of the agreement when it comes to owning pets such as cats and dogs. If any damage is caused because of this, you can deduct the cost from the damage deposit. You must be able to prove that the damage was caused during the time when the property was lived in by your tenants, which is why taking photographs before they move in is a good idea. It is also important to have written proof of the repair quotes, in case the tenant disputes the figure.
  16. 16. A Guide for Landlords Be Careful When Increasing Your Rent Sometimes landlords will let their greed take over and they will increase their rent unscrupulously. However, this should only be done when rising costs or inflation makes it necessary. When you are setting your rent you can base it on the options available in the local area and the quality and location of your property that way you can find a good balance. Be careful not to make your rent too low or too high, compared to other properties on the market.
  17. 17. A Guide for Landlords Dealing with Tenant Disputes If your tenant has damaged the property to a point where it is beyond reasonable ‘wear and tear’ and they are refusing to pay for the repairs, you have the right to evict them. You can retain the damage deposit that they have paid in order to pay for the expenses of the repair. You could also use the legal method to insist that the tenant deal with and fix the damage themselves, but this can result in expensive legal costs. There are eviction services out there that can help you with the process. In your original tenancy agreement, you should have outlined a length of notice that you will give to your tenants when it is time for them to move out of the property. After this amount of time, you have the right to make an application to the court for a possession order. If the tenant still doesn’t comply after this, you will then be able to get a county court to serve an eviction warrant and the bailiffs will be sent in. Unfortunately, over the last year a total of 59% of landlords in the UK have had tenants who did not pay their rent. Make sure that you have an emergency fund so that you can continue to make your mortgage payments in the event that this occurs. It is also a good idea to invest in Rent Guarantee and Legal Expenses insurance. This is a service that will provide you with coverage for any missed rent payments up to £2,500 per month. It can also help with the legal expenses caused by tenant disputes.
  18. 18. A Guide for Landlords Dealing with Evictions If you are in a situation when you require the eviction of your tenant, it is important to understand what your rights are. No one wants the situation of a messy eviction, which is why you should set up a guarantor who can pay the rent when your tenant is unable to. If you can set up a positive, trustworthy, professional and honest relationship with the tenant when you start, you will be able to avoid a possible eviction in the future. If your tenants refuse to leave your property even after the agreed upon time, you have the right to send in a notice of intention to inform them that you will seek court possession. However, if the tenants still refuse to leave even after the court order, you will be able to seek help from the courts. Bailiffs will be sent to evict the tenants for you. Again, be sure to warn your tenants of what you intend to do in advance. If you are renting out a room in your property, you only need to give your tenant notice equal to the length of the time period for which they pay their rent. For example, if your tenant pays rent by the week, you only need to give them one week’s notice. If they do not leave after one week, you have the right to have the locks changed on the door to the room. Of course, every situation is different so always check the particular laws and verify your rights before you proceed.
  19. 19. A Guide for Landlords Safety Tips Make sure that you have the appropriate safety features at your property such as fire blankets, smoke alarms, fire extinguishers and a known escape route. This will be very important in the event of an emergency and will protect not only your tenants but also the property itself. It is important also to keep the property well maintained, as the safety of your tenants depends on it. Make sure that you have a budget set out for these kinds of issues. The safety of the property is your responsibility as a landlord.
  20. 20. A Guide for Landlords Fire Safety All of the furniture needs to meet the criteria from the Fire Safety Furniture and Furnishings Regulations of 1988. This means that any upholstered items need to be made with fire resistant filling and be able to pass a test proving their resistance to matches and cigarettes. Most of these household items will have a code on them to prove that they have already been tested for fire safety. Be cautious with items purchased before the year 1988, as they might need to be removed and replaced with newer and safer items. This applies to any sofas, beds, nursery furniture, pillows and chairs but not to antique furniture that was made before the year 1950. It also does not apply to carpets, duvets or curtains. Gas Safety As a landlord, it is your responsibility to check that your gas boiler has been serviced at least once per year. You must keep a record of the gas safety checks and the condition of the equipment. It is also your legal responsibility to provide your tenant with a copy of your official annual gas safety certificate. This service is performed by a Gas Safe contractor, according to the Gas Safety Regulations of 1998. Electrical Safety It is important to ensure that your smoke alarms are well fitted and are in full working order. If your wiring was installed more than 15 years ago, it should be inspected carefully. You should call upon a professional electrician who has been approved by Part “P” of the Competent Person Scheme. The law that regards electrical safety when it concerns landlords is the Smoke Detectors Act of 1991 and the 1994 Electrical Equipment Safety Regulations. It is very important to follow these regulations, because faulty wiring can be very dangerous and can result in electrocution or fire. These safety concerns should not be ignored, because they could save your tenant’s life someday.
  21. 21. A Guide for Landlords Energy Performance Certificates Landlords are legally obligated to provide a copy of their Energy Performance Certificate documents to potential tenants. This will let the prospective tenant know how ecologically sound and energy efficient your property is. This will help them to understand the impact that your property has on the surrounding environment, because the better your rating is the lower your CO2 emissions will be. As an EPC is valid for 10 years, you don’t need to apply for a new energy certificate every time you re-let the property.
  22. 22. A Guide for Landlords Have Fun Being a Landlord! Being a landlord can be a great income earner and an enjoyable and fulfilling side project. The tips in this guide will help you to be thorough, organised and professional as a landlord, ensuring that the experience is a positive one. When you treat your tenants with respect, your relationship with them can be mutually beneficial. If you are looking to find more advice on landlord issues, be sure to visit this website: gov.uk/government/publications
  23. 23. A Guide for Landlords Discount Landlord Ltd The Business Exchange 26/28 Hammersmith Grove London W6 7BA Call Us Freephone Fax Us Email Us Website: 020 8847 8000 0800 294 4522 020 8847 8001 http://www.discountlandlord.co.uk The information con tained i n this gu id e is for gen era l in formation purpos es on ly. The in formation is p rovid ed by Discoun t La ndlord an d whilst we end eavour to keep the informa tion u p -to-d ate an d correct, we w ill not b e h eld liable for any loss or damage to th e p rop erty or finan cia l los ses you may occur.