Before Letting Your Property
The below checklist will help you to ensure that you have got everything in order and are fully prepared to let your property and becoming a landlord;
Confirm proof of identification
It is important for Mundys to receive confirmation that all property owners consent to the letting of a property.
Before being able to market your property we will require proof of ownership, signed Terms of Business and photographic identification in accordance with money laundering legislation.
If you have a mortgage on your property you should ensure that you obtain consent from your lender prior to the letting of your property.
Failure to obtain consent from your lender may breach the terms and conditions of your mortgage.
Energy Performance Certificate (EPC)
A valid Energy Performance Certificate is required for the marketing of your property in accordance with legislation. An EPC provides information on the energy efficiency of a building, giving the building an energy rating from A (the most efficient) to G (the least efficient).
It also makes recommendations on how a building’s energy use and carbon dioxide emissions could be reduced. Mundys can help you to organise an EPC if you do not have one in place and will also produce floor plans for the marketing of your property.
Simply advise our Valuer that you require an EPC and they will organise this for you.
Check Taxation Obligations
As a Landlord you are required to pay tax on the income that you receive, but the taxation level may vary depending upon your circumstances. If you are going to be living overseas whilst your property is let, you will need to register as a ‘Non-Resident Landlord’.
The Non-Resident Landlord scheme operates for rental income paid on or after 6 April 1996 and replaces the old rules under the Taxes Management Act 1970. If you rent your property through an agent the agent is required to deduct tax from your rental income (currently at a rate of 20%), unless written notification to the contrary is received from the Inland Revenue in the form of an Approval Certificate.
An approval certificate will allow you to receive all rental income due without deductions to cover tax liabilities and you can apply for this by completing an NRL1 form which Mundys can provide for you.
More information relating to taxation is available via the Inland Revenue or contact our Lettings team on 01522 556099.
Prepare for Deposit Protection
The Housing Act 2004 introduced Tenancy Deposit Protection for all deposits paid from the 6th April 2007. Landlords are required to ensure that deposits paid are registered with an approved deposit scheme and that the Tenant or the person paying the deposit (friend/ parent/ guardian) is issued with the appropriate Scheme Prescribed Information.
Mundys can assist with the registration of the tenancy deposit and currently uses the Deposit Protection Scheme (DPS) in accordance with this legislation. More information on the DPS is available at www.depositprotection.com
Confirm Building Insurance
It is the Landlord’s responsibility to ensure that the property and any contents are appropriately insured. You should make your existing insurance provider aware that you will be letting your property and your insurance should include comprehensive 3rd Party Liability and Occupier Risks & Public Liability cover.
A copy of your insurance certificate and policy schedule should be provided to the agent and Tenant in accordance with a Tenancy Agreement.
Obtain a HMO License
On 6th April 2006 licensing of Houses in Multiple Occupation (HMO) came into force. The legislation applies to shared houses and requires Landlords to have a HMO License dependent on the property type and its occupation.
Most commonly a HMO is required where a building or part of a building is set over three floors, in which five or more people live and for which rent is paid.
HMO licenses can also be required on a discretionary basis if let on a shared basis, with two or more households and occupants using as their main residence or required for a building converted into and consisting of self-contained flats if not compliant with the 1991 Building Regulations.
Install Smoke Detectors and Co2 Alarms
To ensure that your property is ready for the tenant to occupy it is recommended that you should install smoke detectors and carbon monoxide alarms for the safety of the tenant.
Landlord Safety Obligations
The following safety regulations must be adhered to prior to the letting of your property. Failure of a Landlord to comply with the below may allow legal action to be taken;
A Landlord must ensure that all gas appliances such as boilers and ovens are fully maintained and annually inspected for their safety and suitability.
In accordance with the above legislation, a Landlord’s Gas Safety Certificate must be carried out by a Gas Safe Engineer annually or at the change of tenants. A copy of this certificate should be given to every Tenant and the Landlord should retain proof of receipt of this certificate.
Records should be kept for a minimum of 6 years and, where possible, a copy should be put up in the property for all to see.
A Landlord certificate for electrical equipment within a rented property is not stipulated within the above legislation, but the Consumer Protection Act 1987 places the responsibility on a Landlord to ensure that a rented property must be safe for occupation (purpose).
It is good practice to have a Periodic Inspection to be completed prior to the letting of your property and every 5 years thereafter by a suitably qualified electrical contractor.
Annual PAT tests and visual inspections should be completed or at the change of each tenancy.
Furniture and Furnishings
The legislation requires that all furniture within a property is fire resistant and complies with current regulations. A compliance label is commonly fixed to furniture and will confirm if an individual item is compliant.
If no label is present you should check to see if the manufacture date is after 1st March 1989.
Furniture manufactured after this date will be compliant with the regulations.
The Landlord & Tenant Act 1985
A Landlord is required to make sure that both the outside and inside of a property are well maintained and kept to a satisfactory level of repair. The Landlord needs to comply with the obligations to repair the Premises as set out in sections 11 to 16 of the Landlord and Tenant Act 1985 (as amended by the Housing Act 1988).
Under this legislation the Landlord’s repair obligations include;
- To repair the structure of the premises and exterior (including drains, gutters and pipes)
- Some installations for the supply of water
- Sanitary appliances including basins, sinks, baths and sanitary conveniences
- Water heating; but not other fixtures, fittings, and appliances for making use of the supply of water and electricity
- Space heating
- Electricity and gas
It is important to recognise that the Landlord’s obligation for repair arises only after a related issue has been identified to the Landlord by the Tenant and that a Landlord is obliged to repair within a reasonable timescale.