Changes to mortgage interest relief and a surcharge on stamp duty for second homes has made many landlords to reconsider whether they should be renting or not. It would seem that property price growth has slowed in recent years, making buying to let more risky than it has been in the past.
However, it seems the attractiveness of a buy to let investment still shows no sign of slowing. In the meantime, there are many regulatory aspects to comply with. Failure to do so can result in fines or issues in regaining possession resulting in adverse marketability. The list below is intended as a summary only and is no substitute for obtaining specific advice to your property:
At the outset:
(a) You must have an Energy Performance Certificate less than 10 years old showing a minimum category of E. There is a possibility that this will in the future tighten requiring at least category C. The cost of necessary works to achieve that grading can be significant.
(b) Where applicable a gas safe certificate must be provided.
(c) Smoke Alarms must be present within each storey used as living accommodation.
(d) Carbon Monoxide alarms are required where there is a solid fuel burning appliance.
(e) Electrical Tests on the wiring, plug sockets light fittings and fuse box although not on the actual appliances themselves must be shown to have been done every 5 years. A suitably qualified electricians report should be given at the outset, or within 28 days where updated.
(f) The right to reside in the UK needs to be checked. Often this is done by requiring production of a passport for every adult occupier. That needs to be checked and a copy retained. Due to Data Protection rules it would be wise to obtain a tenant consent to retaining a copy and as to when that might be used by proving a copy to third parties such as managing/selling agents/buyers.
(g) A Rent Book is needed where rent is paid weekly.
(h) If there is a deposit this needs to be protected within an approved scheme and certain prescribed information as to the deposit and scheme supplied to the tenant and, if the deposit is paid by a third party, to them as well.
(i) The prescribed How to Rent booklet ought to be provided.
While not required you might consider:
(a) Providing an inventory of contents or even a photographic record of condition for agreement at the outset to avoid or reduce future potential disputes.
(b) If furnished you ought to ensure that any soft furnishings comply with fire safety standards.
(a) There should be an annual check of the gas appliances and flue.
(b) While there is presently no requirement to do so, checking the smoke and carbon monoxide alarm would be good practice.
(c) 5-year electrical tests should be undertaken. While there is no obligation to do so testing the actual appliances themselves would be considered good practice.
(d) If the Right to reside in the UK was limited in time by the visa arrangement ensue that is updated.
There are different rules applicable in Wales and more onerous requirements for a House in Multiple Occupation (where there are three or more people who form at least 2 households and share facilities, such as a kitchen.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.