Landlords are seeing a big increase in regulation. Over the last few years, there have been many changes to housing licenses, minimum property standards, immigration checks and more.
Many landlords fear that they have forgotten to do something important. So we’ve made a checklist of legal landlord responsibilities you must perform when letting a property. The checklist ensures that you can easily check whether you are fully compliant with the law.
Tick off everything on this new landlord starter checklist, and relax – you’ll have done everything you need to do when setting up a new tenancy!
Summary of Checklist
Before You Find Your Tenant
- Get permission
- Housing Licensing Schemes
- New rules from 2018 & 2020
- Gas Safety
- Electrical Installation Condition Report
- Portable Appliance Testing
- Smoke & Carbon Monoxide Alarms
- Fire Safety & Furniture
- Legionnaires’ Disease
After You Find Your Tenant
- Right to Rent
- Paying Tax on Rental Income
- Registering the Security Deposit
- Serve the Prescribed Information for the Security Deposit
- Draw up a Contract
- Serve Prescribed Information: the How to Rent Leaflet
Before You Find Tenants
There are some landlord duties you need to get working on well before renting out your home. We’d advise adding a few months to your timetable to make sure you can fully complete and assess all the following points, but in theory, they may only take a week or two to conquer!
1. Make Sure You Have Permission
If you do not own your property outright (i.e. if you have a mortgage) and as a freehold, then you will need to make sure that you have permission from your lender and/or freeholder before you rent it out.
If you have a mortgage on the property, then you will need to go through its terms to check for conditions about letting and residence. Contact your lender to find out what you need to do.
You don’t have to have a buy-to-let mortgage to rent out a property, but your lender may want you to change to one, or to reach some other kind of arrangement before they consent to letting the property to tenants.
Be sure to check the terms of any new mortgage agreement you reach, since it could limit the kind of tenant you are allowed to let to.
Secondly, if you own your property leasehold (with or without a mortgage), then you may need permission from the freeholder to let the property.
The freeholder might give consent with conditions: such as a limit on the amount of time you can let it for. You’ll have to make sure any conditions are properly built into the contract you draw up with your tenant.
2. Housing Licensing
The UK Government and local authorities can both require rented homes to have a license before they can be let. Licenses are only required if the property meets the conditions set out in the schemes.
There are three types of licensing.
Mandatory licensing operates at a national level, and is required by any large HMO in the private rental sector. Then, on a more regional scale, local authorities can require further licensing. There are two kinds: Additional and Selective.
So which schemes apply to you and do you need a license? The answer to this detailed topic can be found in our fantastic guide to HMOs and housing licensing!
In short, if your property is an HMO in a city, there’s a very good chance you will need a license. You’ll need to contact your local council to find out for sure, since every area has its own rules.
3. Energy Performance Certificate (EPC)
The EPC is an assessment of how energy-efficient your property is. You will need one whenever you are renting (or selling) your property. In England & Wales, you must have one ordered to show potential tenants before you let the property. In Scotland, you need to have a completed EPC available to be seen along with your property advert.
Once you have one for the property, it remains valid for 10 years.
New EPC Rules from 2018 and 2020
From 2018, there will be a new minimum rating that properties must pass before being let. In April 2018, properties that are newly-let or renewed with the two worst ratings, F or G, could face fines of up to £5,000.
Then, after 2020, this will apply to all tenancies – even ones that have been running since before 2018. At this point, all rented property in the England & Wales will need an EPC rating of E or above.
There are some exceptions. You can read about them, and learn more about EPCs here.
4. Gas Safety Certificate
You will need to have a Gas Safety check performed on your property every year. The check includes appliances, flues and pipework. It must be performed by a Gas Safe engineer. The engineer will advise what work, if any, is recommended after the check.
You should follow their advice and fix any issues before the tenants move in. All of OpenRent’s gas engineers are Gas Safe registered.
5. Electrical Installation Condition Report (EICR)
Obtaining an Electrical Installation Condition Report is a legal requirement for all HMOs. Note: that this really does mean all HMOs, not just licensable HMOs. Confused? Check out our complete guide to HMOs here.
Even if your property is not an HMO, ensuring the safety of the str
ucture of the property is a responsibility of all landlords. The electrical installations of the property are considered part of that structure, and therefore you are responsible for them being safe.
We believe that the best and most responsible way to ensure you meet this legal duty for your tenants’ safety is to have an EICR performed on your property. An expert will report on the safety of your property’s electrical installations, and then give you a report of their findings.
This is important because it ensures a competent person will be assessing your property. But secondly, should something go wrong during the tenancy, you will be able to demonstrate that you took professional action in accordance with your duties as a landlord.
You can order an EICR here.
6. Portable Appliance Testing (PAT)
Performing Portable Appliance Testing is not a legal requirement for landlords prior to renting a property, though has the same benefits as described above. You are responsible for the safety of electrical appliance that are supplied to the property for the tenants’ use, so making sure they are all safe should be a priority!
PAT testing is a great way to do this, while also ensuring you have a record of the steps you took to protect your tenants’ safety.
7. Smoke & Carbon Monoxide Alarms
In England, landlords must install a smoke alarm on every inhabited floor of the property.
Legally, you also have to install a carbon monoxide (CO) alarm in “any room used as living accommodation where solid fuel is used.” We, however, would very strongly recommend that all landlords provide all their properties with an audible CO alarm.
You must ensure both kinds of alarm are working at the start of every new tenancy. Here’s a guide by the Fire Safety Advice Centre on installing alarms.
8. Fire Safety & Furniture
If you are supplying furnishings to your property, you’ll need to make sure that they meet Furniture and Furnishings (Fire Safety) Regulations. The regulations apply to a wide range of furniture including sofas, chairs, beds and mattresses. You can find the complete list here.
As a private landlord, you will need to ensure each item you supply to the property is compliant with these regulations. You can do this by looking at the labels and asking the supplier/manufacturer.
9. Legionnaires’ Disease
Assessing properties for the risk of Legionnaires’ disease is a legal requirement. Legionnaire’s is a disease caused by bacteria which can grow in stagnant water. You do not need to hire someone to do this – usually landlords will be competent enough to assess their own properties.
In most homes, the risk will be low, because domestic water systems are typically in constant use, so the water will not be stagnant for long. Further, UK homes tend not to have water storage tanks; the hot water tends to be heated enough to kill bacteria, and the cold water is supplied by the mains, which in the UK is treated to prevent bacterial growth.
If your property is atypical in its water system and you feel it is at a higher risk, or you don’t feel competent in making the assessment, you can hire an assessor.
Find more information on landlords’ Legionnaires’ disease responsibilities here.
After Finding Your Tenants
Once you have found and referenced your tenants, you’ll have more legal duties to carry out. These are your duties after finding tenants and becoming a landlord.
10. Right to Rent
Landlords now need to check that their tenants have the ‘right to rent’ i.e. that they can legally reside in the UK.
You’ll need to perform a Right to Rent Check on your tenants before they move in. This is an inspection of the original, physical documents proving the tenants’ right to rent, in the presence of the tenants (so as to be able to verify photo ID in person).
We have put together a full guide to checking right to rent here.
Remember: it’s illegal to only check tenants you suspect are not British! There are also large penalty fines of up to £3,000 if the Home Office finds you have let to an illegal immigrant.
Here is a Government guide to checking your tenants’ Right to Rent documents. You will also need to keep copies of the documents.
11. Paying Tax on Rental Income
If you expect to have taxable profits from your rental income, then you’ll need to prepare to pay income tax on that money.
The way to do this is via the property section of a Self Assessment tax return. The return should be completed by 5th October of the following financial year. This gives you about five months after the end of the financial year in April to complete the return.
This only applies if your rental income after expenses is over £2,500, so doing the maths on this before your tenancy will help you avoid stress – and a tax penalty – later should you fail to complete your tax return in time!
Find out what costs can be claimed here.
12. Registering the Security Deposit
When you take the security deposit as part of the move-in process, you need to register it in a Government approved scheme. There are three in England & Wales, and different schemes in Scotland and Northern Ireland.
13. Serving Prescribed Information for the Security Deposit
After registering the deposit, you’ll need to give your tenants information about how you have registered their deposit and how they can contest deductions, etc. From the date the tenant pays you, you have 30 days to do this.
If you don’t give your tenants the prescribed information about their deposit, then it may impede your ability to serve a section 21 eviction notice. Read more about section 21 evictions here
14. Draw Up a Contract (AST)
You’ll need to set up a proper Assured Shorthold Tenancy agreement (AST) in order to specify the rules, terms, length, tenants and rent of the tenancy. We provide a free-to-download AST to our landlords if you want to see what a good AST looks like.
It’s essential that every adult that will be living in the property signs the AST and that you make a copy available to all tenants.
Our Rent Now service lets you add customised clauses and also get the contract signed digitally. Digital signatures have been a legally sound way of signing contracts for many years and are usually much more convenient for all parties than signing by hand.
15. Serve Prescribed Information: the How to Rent Leaflet
In England, landlords have to give their tenants a leaflet called How to Rent The Checklist for Renting in England. Give it to your tenants when they move in and then get a physical, signed receipt or an email to confirm that you have completed this duty.
Just like the deposit information, if you don’t give your tenants the How to Rent booklet, then it may impede your ability to serve a section 21 eviction.
An inventory is a report of the condition and contents of your property. You should perform one, ideally, on the first day of the tenancy, and then get the tenants to sign it to show they agree with the report’s assessment of the property.
It’s OK to give them a few days to volunteer amends, but the sooner you get it signed by all parties, the better. Achieving this quickly reduces the chance that damage will occur after the move-in, but before the inventory is agreed.
Although the law doesn’t require you to undertake an inventory of the property, it is very much advisable. Aside from being a great record of what is in your property and its condition, it is also invaluable if you need to make deductions from the security deposit at the end of the tenancy. It can be used to compare condition before and after, and justify any deductions.
You can perform an inventory yourself. Download our free inventory template here.
Many landlords prefer to get a neutral third party in to perform the inventory. Professional inventory clerks know what to look out for and make the inventory digitally accessible – and thus able to be signed digitally – which is often much preferable.