The loneliness of the accidental landlord
By Daniel Russell
Of the estimated 5.4 million private landlords currently letting properties in the UK, a significant number are what the property industry describes as ‘accidental’.
These are homeowners who, for whatever reason, find themselves in the position of either not needing to live in their main residence or unable to, but who need or want to recoup some or all of the outgoings associated with that property.
These might include people who own their own home but are now co-habiting with a partner, someone who has relocated a long distance for their job or people who have moved abroad but want to retain a property in the UK.
The problem for many accidental landlords is that there are now more than 150 laws with which anyone privately letting a property must comply, which makes the process of using a property as an income stream both daunting and complicated.
Just as we advise would-be tenants to use the services of an independent solicitor to review a proposed tenancy agreement, so we would also strongly recommend all landlords – regardless of their experience – to seek professional legal advice to ensure they are completely compliant with current law and that the tenancy agreement they are offering protects them as much as it does their proposed tenant or tenants.
At Carlsons we act for both tenants and landlords (though not both sides in the same let) and our specialist solicitors have years of experience in guiding both through the various challenges and pitfalls of a rental arrangement.
There are some obvious, non-legal things an inexperienced would-be landlord can do to optimise their chances of successfully letting their property: ensuring repairs and remedial works are carried out, decorating in neutral colours, researching similar properties to arrive at a competitive rent and appointing a reputable agent to manage the let if you’re not planning to manage it yourself.
You’ll also need to find out whether your mortgage provider will allow you to let your property. Beyond that, there are safety and energy certificates you’ll need to provide. You’ll also need to register with one of the Government-backed Deposit Protection Schemes.
If you’re going to appoint an agent to manage the let, he or she will be able to furnish you with all the information you need with regard to your obligation in terms of required documentation.
Where you may need expert help is in drawing up or checking a tenancy agreement and understanding your legal responsibilities once your tenants have moved in.
A comprehensive assured tenancy agreement is not designed to protect just your tenants, it is also there to safeguard your own capital and income interests, so it’s vital that this properly reflects the understanding and agreement you’ve reached with the people who are going to move into your property.
You’ll need to make sure that if more than one person is going to be living in the house that all tenants are named on the agreement.
You’ll also want to make sure that the tenancy agreement stipulates which of those people is ultimately responsible for making the monthly rent payment so that you have recourse to action should the worst happen. The worst thing in any instance of non-payment is when tenants start passing responsibility around – so knowing who is legally obliged to make the payment is useful if things go wrong.
It’s also important to note what your tenants are permitted to do and what they’re not permitted to do. For example, will you allow pets to live in the property? Are you happy for your tenants to redecorate without your permission? Can they plant shrubs or flowers in the garden? What notice will you need to give in order to visit the property? What is the agreed definition of fair wear and tear?
Having a clear understanding of these and any other possible bones of contention before your tenants move in minimises the potential for dispute further down the line.
If you’re letting your property on a furnished basis – perhaps to university students – then you will need to draw up a detailed inventory of everything that comes with the house – from teaspoons to tables and furnishings to fire extinguishers.
If you work to identify possible areas of conflict before your agent hands over the keys to the property, you’ll have fewer sleepless nights and be more likely to have happy, loyal tenants. And that’s worth its weight in rent.
If you’d like to find out how our specialist solicitors can help you navigate the legal requirements of being a landlord, please get in touch with us.