Investing in property and becoming a landlord, either as a full-time career managing multiple properties or as a one-off investment has many benefits. Bricks and mortar have always been a desirable investment, there is always demand for rented homes and it can be a stable source of monthly income and a flexible asset which you can sell as and when required.
However, it is important as a landlord to know your rights and responsibilities. Whether you are a brand-new Landlord, considering renting out a property or have been a landlord for some time, this simple guide can act as a reminder of your duties.
We will cover your financial responsibilities, health and safety issues and also some best practice when it comes to protecting your landlord and tenant relationship.
Financial Responsibilities
- As a landlord you are required to pay tax on your earnings, including national insurance, if you run your property rentals as a business. You must declare and pay income tax on all earnings and can claim back expenses before the tax is determined.
- You must adhere to the rules on rent increases. You must give your tenants reasonable notice if you wish to increase their rent and cannot make increases during a fixed term agreement. There is not a restriction on how much rent can be increased by, however it must be deemed ‘fair and realistic’, essentially in-line with the market rate for similar properties.
- Landlords are required to place deposit money taken from their tenants into a tenancy deposit protection scheme (TDP) and serve the certificate from the scheme on the tenant. This is to protect the tenant and ensure the money is returned at the end of the tenancy, providing their terms are met. TDPs also protect landlords as the funds are available for use should repairs be needed or rent is missed.
- A landlord will be responsible for most repairs to a home and must respond quickly to their tenants’ issues. Any damage or issues with plumbing, electrics, gas, heating, structural elements will usually fall under the responsibility of the landlord. You may also be responsible for appliances, fences, furniture and decorative issues depending on your agreement.
Health & Safety Responsibilities
- Landlords must arrange for an Energy Performance Certificate before leasing any property and it must have a rating of ‘E’ or above. From 2025 all newly rented properties will be required to have an EPC rating of ‘C’ or above, existing leases will have until 2028 to become compliant. To avoid non-compliance or costly bills, it is worth putting a plan in place to bring your properties up to standard over the coming years.
- Landlords have a duty of care to their tenants and must make sure their rented property is free of any health hazards. Any issues must be dealt with as a matter of urgency. Issues to be mindful of include; mould or damp, vermin, trip hazards, leaks, exposed wiring, dangerous boilers or poorly secured doors and windows.
- It is your duty to ensure that all gas sources and appliance are in safe, working order. This includes having gas safety checks carried out annually by a Gas Safe registered engineer, keeping a Landlords Gas Safety Register which should be made available to tenants within 28 days of the gas safety check and at the start of any new lease and keeping on top of maintenance of all gas pipework, appliances and flues. Tenants should also be made aware of how to turn off the gas supply and who to contact in an emergency.
- From October 2022 landlords were required to provide a carbon monoxide detector in every room where there are gas appliances, other than those used for cooking. These detectors must carry a British or European approval mark and should be checked regularly.
- Landlords are responsible for fire safety which will depend on the type of property. Working fire / smoke alarms must be installed throughout the property and checked regularly, replacing batteries as and when required. If renting a property as furnished then all furniture should be fire-safe. If the property is in a block of flats or a multiple occupation property, then you must check with the local authority that you are meeting regulations. This could include providing fire extinguishers.
Legal Requirements
Landlords need a different type of insurance than regular property insurance, given that they are not personally in the property on a day-to-day basis and are open to more risks. There is a range of different insurances that need to be considered.- Landlord Liability Insurance (protects against any compensation claims from damage or injuries)
- Landlord Building Insurance (covering accidental damage to the property)
- Landlord Contents Insurance (covering white goods and furniture against damage or theft)
- Loss of Rent Insurance (pays out in the event of your property being unrentable for a period of time)
- Unoccupied Property Insurance (cover during times where your property/s are not leased)
- Landlord Home Emergency Insurance (provides you with 24/7 access to emergency plumbing, heating or drainage issues)
- Legal Expense Insurance (provides cover for legal expenses associated with your property)
- It is strongly advised that all landlords should have a written tenancy agreement drawn up to set out duties, be clear about terms and protect their property. An agreement also gives a tenant peace of mind and protection. Tenancy agreements can be either fixed-term or periodic. The agreement should set out the names of the landlord and tenant, the rental amount and when it is payable, information about how the rent will be reviewed, details of how the deposit is managed, state any landlord or tenant obligations, outline what bills each party is responsible for and details for the start, end or renewal of the tenancy. If you take over a property with a tenant in occupation you need to serve notice of change of landlord on the tenant.
- Landlords should be checking that their tenants are legally eligible to rent property in the UK. They must check the immigration status of adult occupier by having sight of their passport or their permission to be in the UK. It is also sensible to carry out some financial checks by asking to see recent payslips, check their employment status and run a credit check. You must obtain permission from the individual/s before doing this. To be on the safe side, you could also request references from a previous landlord or their employer to check that they are a trustworthy tenant.
Creating a Harmonious Landlord & Tenant Relationship
It is important to create a successful landlord and tenant relationship for a number of reasons. Having a good, working relationship with your tenant will put your mind that you tenant is going to pay their rent on time, respect your property and meet the terms of their tenancy agreement.
It also helps to have a good relationship should you need to attend to the property, make repairs, carry out inspections or make any changes to your tenancy agreement.
To be a good landlord ensure that you;
- Attend to problems quickly
- Charge a fair and reasonable rate of rent
- Communicate well
- Keep the property in good repair
- Provide a safe home for your tenant and their family
- Respect your tenant’s privacy
- Be approachable and contactable
- Have all your documents, certificates and insurances in place
Landlord and Tenant Disputes
Should things go wrong, or you find yourself having issues with your tenants then it helps to have stringent legal advice to hand. Disputes can include unpaid rent, disputes over property repairs or damage, breach of contracts, noise complaints, harassment and disputes over deposits.
Settling disputes early can help to maintain a working relationship with your tenant, protect your property, keep your legal fees down and avoid your landlord income being hit.
If you find yourself embroiled in a dispute with a tenant, it is important to stay calm and avoid getting into any heated arguments or making threats. If you cannot solve the problem between yourselves then you may need to instruct the help of a Solicitor or Mediator.
From helping with official letters, warnings and debt collections, to hosting mediation sessions and representing a landlord in court, our Litigation Team at Lamb Brooks can help with a wide range of property or tenant disputes.
For more information or to book a Fixed Fee appointment with an experienced Litigator, please call our team on 01256 844888, email enquiries@lambbrooks.com or alternatively speak to our online chat assistant who can take your initial details and direct your enquiry to the most suitable person.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.