18th December 2020
If you are renting out a property that you have previously lived in yourself, you will be required to apply for a buy-to-let mortgage. A property cannot legally be leased on an ordinary residential mortgage.
If you have lived in the property prior to wanting to let it out, first check with your lender, as there are some rules which may differ from lender to lender – for example, some lenders specify that you are required to have lived in the property for a minimum of 6 months, to ensure that you have not, in fact, bought the property with the intention of renting it out in order to cheat the system and avoid the fees and deposit required. So it’s a good idea to check this before you do anything else.
Check your lease
Something else that is easy to overlook is the lease. This applies if you are letting a leasehold property, usually a flat or apartment, but bear in mind that you will need to make sure that your lease allows you to rent out the property in the first place.
In addition to this, check that there are no other restrictions, such as allowing pets etc. If there are, these will need to be made clear to the prospective tenants when they view the property.
Make sure that you have the right kind and level of insurance, one which covers you for tenant related issues. Your ordinary home insurance will likely not do what you need it to do, so if you have a buy-to-let on the property, it’s essential that you have the right insurance product to match your needs.
If you don’t live in the property, the kinds of risks are very different, and you will need to cover yourself as a landlord for things such as loss of rent, malicious damage, and legal expenses. A more specialised insurance will take that into account.
When did you last review your Tenancy Agreement Documents? It’s so easy to keep regurgitating the same cut-and-paste document you’ve always used – but in reality, things change. If your current document is more than 6 months old, it’s worth going through it, as there have been updates in terms and regulations which you might need to revise in the text.
Remember; the Tenancy Agreement is there to protect you and the tenant, and so anything that’s missed off or out of date can and will land you in hot water if something goes wrong. Do not put yourself in this situation – get it checked, and get it updated.
An Inventory is not, as some landlords believe, just for furnished properties. It’s important that you list everything within the property to make sure that you are covered for any damages during the lifetime of the tenancy. This includes every aspect, from the condition of the walls, flooring, lighting and electrical furniture, doors and handles, windows, fitted appliances….
Your Inventory is the only evidence you are going to have if, at the end of a tenancy, you find that there is more than just wear and tear to the carpets, that kids have embellished their walls with crayon, or the kitchen units are damaged.
If you can, as well as a comprehensive list, take photos of everything within the property, so that you can prove the original condition of the property before the tenants move in.
You should sort out Deposit Registration BEFORE you rent out your property. Make sure that you have done your research, and looked for a suitable scheme in time for the start of the tenancy.
We’re often asked about the standard of free schemes vs paid ones; this really comes down to personal preference, there are some very good free schemes out there – just do your homework, ask for recommendations, and don’t rush in if you’re not sure.
Deposits must be lodged within 30 days of payment – in other words, you have 30 days from the payment date to lodge the deposit, and then you must issue the tenant with a certificate which lets them know the details of the company with which you have lodged their deposit. This should happen at the start of tenancy, and at the stage of renewal.
You as a landlord
How various landlords operate differs widely – from the types of properties they rent to how involved they are with management and upkeep. There is no one size fits all, but the one thing that all landlords should agree on is to make every effort to keep up to date with the lettings industry, with legislation, changes in the law, and current trends.
The more knowledgeable you are, the better prepared you are to deal with tenancy problems and queries down the line. Knowing current legislation can be the difference between a contented tenant and a spell in prison.
There are plenty of online communities and groups where you can go for help and advice, and if you personally know other landlords, it can be a great bonus to you. Seek them out, ask for their help and advice if you need it.
We run FREE monthly webinars that are purely for the benefit of landlords, all on specific legal advice and the latest updates in legislation. These are delivered by our compliance expert Dawn.
Click the link here to register for our next one, but be quick, as they are extremely popular and there are only a limited amount of spaces available!