Thinking of Letting Out Your Property? Consider These Things First

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This quick guide covers those who are considering renting a flat or house on an assured shorthold tenancy (AST). Many of the tips should equally apply for those in a shared property. However, in some instances, legal rights and responsibilities will vary. This quick guide does not cover tenants where the property is not their principal or only residence, lodgers, nor people with licences.

1. What Compulsory Improvements Must Be Made

Before someone goes through renting out their property, they must be sure the property has been updated to meet regulations. For example, as of 1 April 2018, private rental properties in the UK must meet a minimum energy performance rating of E on an Energy Performance Certificate (EPC). But before any efficient improvements are made, the landlord must apply for consent.  

Some other responsibilities a landlord must oversee include:

  • Keep the property free from health and safety hazards
  • Ensure electrical equipment and gas appliances are installed well, operating safely, and maintained regularly
  • Provide the rental property with an Energy Performance Certificate
  • If the property is in England, be sure that the tenant can legally rent property in the country
  • Furnish each tenant with a copy of the “How To Rent” checklist – it can be emailed to them if need be

The reader can visit GOV.UK to learn more about all of the responsibilities and requirements expected of landlords. If capital for renovations or improvements is lacking, Habito based in the UK is able to assist property owners in remortgaging their homes so they can afford to get their future rental property up to code.  

2. Assured Shorthold Tenancy (AST)

When a landlord or property owner enters an AST – the most common property rental agreement in the UK – they are entering into a contractual arrangement. The AST contract provides property owners with essential rights, as well as requires them to undertake equally important responsibilities.

Under the Housing Act 1988, any property that is let out automatically becomes an AST by definition, unless the landlord has agreed to another form tenancy in writing. In short, an AST means:

  • The landlord has a legal right to have their property back after a six month period
  • They can charge rents according to the market norm
  • If the tenant fails to pay rent after six months, the landlord has a right to get the property back before the six month period is up

Other factors to consider are as follows:

  • Always use a formally written AST agreement – informal oral contracts may lead to problems
  • Landlords who were paid a deposit on or after 6 April 2007 have the responsibility of using a tenancy deposit protection (TDP) scheme
  • In most cases, responsibility for all major and minor structural repairs fall on the landlord
  • Safety checks of gas installations and appliances should be conducted at least once a year, and are the responsibility of the landlord as well
  • Landlords are advised to keep an inventory to avoid disputes with tenants in the future

3. Tenancy Agreement Should Be Signed Prior to Renting

Landlords should ensure future tenants sign a written AST agreement before they move in. Informal oral agreements lead to problems and damage landlord/tenant relations. Additionally, the landlord’s reputation could become tainted if a dispute over an informal verbal agreement gets out of hand and goes public.

This rule applies to friends and family members as well, since a large number of problems surrounding rental properties stem from informal oral agreements with friends and family.

After a tenant has occupied the premise, the landlord cannot force them to sign an agreement that differs from the original terms of the tenancy, making it essential to have it signed before the tenant makes residency. Formal agreements allow for special clauses to be inserted that protects the landlord’s position by regulating the tenant’s use of the property.

One example of a particular clause is “No smoking tobacco inside the unit. Damage or orders caused after the tenant’s occupation will lead to cleaning or repair fees being deducted from the deposit.”

4. Tenancy Agreement Repair Clause

Some instances allow for the landlord to add obligations to the tenant when it comes to maintenance and repair. One example could be that the tenant is responsible for damage that occurs to the exterior or interior of the property outside normal wear and tear. The clause could also require that the tenant decorate and keep the place in good shape. Other terms could restrict what repairs or renovations the tenant can or cannot do themselves if any at all.

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