This guide is intended to provide a broad outline of the legal rights and responsibilities of both landlord and tenant, an overview of current legislation applicable to the private sector rental market.
However, this is not a comprehensive guide. If you need further advice on any issue – we’re here to help!
By granting a tenancy you are entering into legal responsibilities towards your tenant, who has the right to ‘quiet enjoyment’ of the property. So, for example, you cannot just walk in whenever you want, without prior permission – other than in exceptional circumstances. You must keep the structure maintained along with the sanitary equipment and heating systems. Any electrical goods supplied must be repaired or replaced as necessary. Buildings insurance and cover for any contents other that the tenant’s personal possessions are also your responsibility, as is the payment of service charges and ground rent if you are letting a flat.
Your tenant is in a legally binding contract with you which imposes obligations that must be kept - including paying the rent in full and on time for the full term agreed. He or she must not damage or alter the property.
The most common type of agreement is the ‘assured shorthold tenancy’. This will protect landlords and tenants by creating binding rights and responsibilities on both parties.
An assured shorthold tenancy is designed for individuals and families renting privately owned, self-contained property. Although there is no legal minimum term the usual initial contract is six months, serving as a probationary period. Renewal terms can then be negotiated.
At the end of an assured shorthold tenancy the landlord has an absolute right to recover the property, subject to a proper Notice Requiring Possession being issued two months in advance. Serving the appropriate Notice is part of our service.
As an alternative to a fixed term renewal contract a tenancy can be left to run on a rolling month to month basis. This is known as a ‘periodic assured shorthold tenancy’ and can be ended at any time by either party. A landlord must give two months’ notice, and a tenant must give one month.
A company let is similar in most general respects to an assured shorthold tenancy but does not have the same notice requirements. It will end automatically on expiry of the term unless a new contract has been negotiated. From the landlord’s perspective the most important difference is that the company tenant has the right to change the actual people living in the property without reference to the landlord.
Whether to let furnished, part furnished or unfurnished is largely a matter of preference or convenience for the landlord, although locally the greatest demand is for unfurnished accommodation. An unfurnished let should still include carpets. A fully furnished property will usually achieve a very slightly higher rent, but bear in mind that you will be responsible for maintaining everything that you provide.
If you have a mortgage on your property you must obtain the prior permission of your lender. Most lenders readily grant permission as long as there are no arrears but there may be an administration fee. Depending on the length of the proposed let (and on the individual lender) it is possible that you will be charged a commercial mortgage rate.
If you are planning to let a flat permission is needed from the Lessor or Freeholder. Again, this is usually readily granted but it should not be overlooked otherwise you could contravene the terms of your lease.
You must inform your buildings and contents insurers that you intend to let. Some insurers may withdraw cover on a rented property but there are many alternative providers in the market. The tenants are always responsible for insuring their own contents.
Since 1st April 2018 it has been a legal requirement for new tenancies in the private rented sector to have a minimum energy performance rating of ‘E’ with few exceptions. This also applies to renewals of existing tenancies as they become due. Since 1st April 2020 all tenancies must comply even if they haven’t been renewed on a fixed term but are continuing on a periodic basis. Landlords will be unable to enforce their rights in the courts if they do not comply.
The law requires that an Energy Performance Certificate (EPC) be available to all prospective tenants viewing your property. The EPC is supplied by an accredited Domestic Energy Assessor and will provide a grade from A to G, with A being the most efficient. The Certificate is valid for ten years but if you carry out energy efficiency improvements within this period you may wish to provide a revised Certificate to reflect the improvements in your property. We are able to offer and EPC assessment in house.
A proper inventory is a vital part of the letting process since it minimises the risk of later disagreement over contents and condition. At the start of the tenancy we take a full inventory which the tenant is asked to sign, and which then forms part of the tenancy agreement. We then re-inspect the property on your behalf at the end of the tenancy and liaise with you should there be any discrepancies. We will carry out periodic inspections during a tenancy to ensure your property is being looked after, this will also allow us to advise on any maintenance issues that arise.
A deposit equivalent to 5 weeks rent is paid by the tenant at the beginning of the tenancy, since the Tenant Fee Ban, we can no longer ask for extra deposits for a Pet, however we are able to ask a monthly rental for the pet to cover any damages or cleaning that may need to be arranged. You must allow for fair wear and tear but beyond this deductions may be made from the deposit to compensate for failure to comply with the tenancy conditions.
To safeguard tenant deposits the law requires them to be protected under a Government-approved scheme which provides an independent arbitrator to adjudicate on unresolved deposit disputes. It is an offence to fail to protect a damages deposit. Howes Estates are members of The Deposit Protection Service custodial scheme.
We normally set up a standing order for monthly rent payments in advance from the tenant’s bank account, unless other arrangements are agreed at the outset.
Tenants are responsible for paying their own council tax, gas, electricity and telephone bills. They are also responsible for water charges unless specified at the outset. For Fully Managed tenancies, we always notify all services when a tenant takes occupation and submit the appropriate readings. A landlord has no legal liability for a tenant’s unpaid bills.
At the end of the agreed tenancy your tenant must surrender the property provided a proper Notice Requiring Possession has been issued. This is done as part of our service. It is very rare for a tenant to refuse to leave. However, in this eventuality it would be necessary to obtain a court order to regain possession. The court must grant an order in the landlord’s favour and no secure tenancy rights will have been created. Unless you have rent protection in place all costs associated with court proceedings fall to the landlord and not the agent.
A major cause of dispute between landlords and tenants is over final cleaning. The simple fact is that people have different standards. Experience dictates that this can be effectively pre-empted by having the property thoroughly cleaned to a high standard at the outset, including carpets and ovens. Tenants cannot then claim that they inherited soiled carpets and fittings as an excuse for inadequate final cleaning.
The importance of compliance cannot be overemphasised as any failure to do so which results in injury or death can attract heavy penalties, including imprisonment.
Where gas heating and/or appliances are supplied the landlord must arrange for an annual gas safety certificate to be issued by a Gas Safe registered heating engineer. We can arrange this for you. The tenant must be supplied with a copy. NOTE: A service contract such as British Gas Homecare cover does not comply. However, it can be advisable to take out a service contract in order to minimise inconvenience and unexpected repair bills.
Any electrical appliances that you supply must meet the insulation and safety standards under these regulations. From July 2020 for all new tenancies an Electrical Safety Certificate must be provided to all tenants, from 2021 all current tenancies must have this in place.
Any upholstered furniture you supply must comply with the fire resistance requirements under the Fire and Furnishings (Fire) (Safety) Regulations 1988 and 1993. All modern furniture is clearly marked with a permanent label stating that it meets the regulations. Older furniture will not meet the requirements and cannot be supplied to tenants.
Properties built since June 1992 have at least one mains operated smoke detector on each floor. In the case of older properties the required regulations from the 1st October 2015 are they are to have at least one smoke alarm installed on every storey of their rental property which is being used as living accommodation and a carbon monoxide alarm in any room used as living accommodation where solid fuel is used. The Landlord must make sure the alarms are in working order at the start of each new tenancy.
Troublesome locks that require a particular knack to open, radiators that only become lukewarm, taps with poor water flow, noisy airlocks in heating systems - many of us live quite happily in our own homes with minor faults like these. Tenants paying a full market rent will rarely be so forgiving and will expect repairs. You need to be aware that tenants can withhold rent to carry out repairs themselves if you do not co-operate. So, it is much easier and cheaper to resolve any such issues before the property is let.
The law prohibits discrimination in providing rented accommodation on the basis of age, sex, disability, race, religion and sexual orientation – the so-called “protected characteristics.” So, for example, we cannot lawfully refuse rented accommodation to young adults who otherwise meet all criteria; neither can we advertise for female tenants only.
Outside these protected characteristics, however, you are free to exercise your preferences – so, for example, you can refuse pets, stipulate employed tenants, decline groups of sharers, or advertise for non-smokers only.
Please note, however, that the Act does not affect your right as a landlord to refuse any potential tenant - including those with protected characteristics – if they have a poor credit report or insufficient income.
Profit (not income) from a rented property is subject to taxation. It is the landlord’s responsibility to declare lettings income and expenses on their annual tax return and to pay any tax due. There are various allowances which may be offset against income, including agent’s fees, insurances and repair and maintenance costs. An accountant should be consulted for definitive advice on this subject. All agents complete an annual return to HMRC listing the landlords they act for and random verification checks are made against the list.