Landlords Ongoing Responsibility
Once you’ve made your buy-to-let investment and found your tenant, you may think that all you have to do is sit back and watch the cash roll in. No savvy landlord should forget their ongoing responsibility, if you are not to have a hefty fine that eats up your profits.
Buy to let investment is based on purchasing a property that you believe will see considerable capital growth, plus renting it out in the meantime to cover your costs or, if you are really lucky, to make a monthly profit along the way. Many landlords, however, run the risk of falling foul of the many laws and regulations that they have to follow, if they are not going to end up with a large fine which could all but wipe out any profits.
Most landlord and tenant relationships are governed by a tenancy agreement; this does not release a landlord for many of their responsibilities.
The key areas for which a landlord is responsible include structure and exterior, means of access, fixed heaters, water and gas pipes and electricity power lines.
2004 Housing Act
In 2004 a new Act, the Housing Act, came into being, which changed the system for determining safety levels as applied to rented accommodation. Now, landlords have to consider the impact, if any, of 29 different hazard areas. These include issues such as damp, excessive heat or cold, lead, lighting, intruders, noise, hot surfaces, ergonomics, food storage and crowding.
From an investor’s point of view, the important thing to remember is that whilst you may be purchasing a property that has been a perfectly safe family home, if you intend to let the property, it will have to comply with a rigorous set of tests that would otherwise not be an issue.
When viewing properties, it is well worth having a copy of the requirements under the Housing Act so that you can look at a property from a buy to let perspective. Even a property in good repair may still need considerable works before it meets the criteria required for a letting property. Failure to take these potential costs into account could mean that you find yourself paying out more, initially, than you had intended.
Having outstanding work that needs to be done on a property is a good negotiation tactic for a price reduction. However, a vendor will not be sympathetic towards work that needs to be done solely for rental purposes.
Most of the requirements follow a principle of reasonableness. For example, a property should have potential exit points from every bedroom and there should be sufficient heating and ventilation, throughout the house. What is considered sufficient does vary from house to house and local expertise should be sought from either the council or an experienced letting agent.
Some of the responsibilities that are set in law, however, are very clear and either you or your agent must comply with these.
Safety
The Gas Safety (Installation and Use) Regulations 1994 requires that landlords arrange for the gas appliances and installations to be checked by a CORGI registered engineer, every 12 months. Records that these checks have been carried out should always be kept. If you are using an agent, make sure that it is clear whether they will arrange for the check, or whether you are responsible for them.
The Furniture and Furnishings (Fire) (Safety) Regulations 1988 (as amended in 1989 and 1993) requires landlords to make sure that any furniture or furnishings that are supplied with the property are fire resistant and meet with the criteria laid down in the regulations.
As well as ensuring that furnishings are safe, a landlord must also place at least one battery operated smoke detector in the hallway on the ground floor and one on every landing. The tenant should be asked to check the alarm, on a weekly basis; it is wise to include this requirement in the tenancy agreement, or at least a signed letter stating that the tenant is aware of the requirement. A landlord should change the battery at least once a year.
Electrical installations should be checked every five years by someone who is a member of the National Inspection Council for Electrical Installation Contractors or the Electrical Contractors Association, to ensure that they are safe. Individual installations will all be issued with their own certificate of safety; in some cases, the certificate will require that the installation is tested before five years is up, so keep a record of the frequency that checks are required.
Many of these requirements may be met by the agent who is managing the let of your property. Despite this, it is still important that, as a landlord, you consider these issues before you purchase, before you let and at least on an annual basis, when the gas and fire checks are required. Tenants are also entitled to expect that repairs are undertaken in a timely fashion. For example, any issue with central heating should really be resolved within 24 hours. With this in mind, it is vital that you discuss who will provide this cover, with your agent.
It is possible to see how these obligations can cause a real headache if overlooked. Nevertheless, with a bit of thought and some methodical planning, it need not turn into a migraine!
If you would like more information on ongoing landlord obligations, then take a look at these resources:
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