UK LANDLORD COMPLIANCE CHECKLIST

UK Landlord Compliance Checklist

UK Landlord Compliance Checklist

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Every year there are a range of new and existing compliance obligations that landlords must abide by. Failure to do so can lead to fines and in the very worst-case scenario’s prison. As such, for any UK landlord ensuring you are fully compliant with the law is essential.

You have a legal, but also moral obligation to keep any tenants in your property safe and in a home that is of suitable habitation. It must, at all times, cover rules on fire safety, gas safety, energy efficiency and deposit protection.

Here are the key checkpoints that a landlord must cover to be compliant in UK law:

Right to Rent checks
Since February 2016 it has been a legal obligation for all private landlords in England to check that their tenants have the right to rent a property in this country. This policy is controversial as some people suggest landlords are being overzealous, but the consequences for non-compliance can be severe if not adhered to.

Note: Right to Rent checks are now carried out in a different way since the pandemic. So it is worth checking that you are still aware and compliant with current procedures. To understand the current process visit the government website by clicking here.

Landlord licensing
It is not true that all landlords need a licence, however an increasing number do. You should check with your local authority to see if you operate in an area where licensing is required. For example, The Mayor of London last year launched a property licence checker which allows tenants to see if landlords have licensed their homes correctly.

Such licensing is more common in big cities and towns or places with many tenants. Prices for licences do vary, so it is best to check with your local authority to see if your area and property requires it.

Health and safety
As a UK landlord, you must by law make sure all gas and electrical appliances in the property are safely installed, maintained, checked and tested regularly. Your home must also be safe and free from any health hazards. You have a responsibility to fit and test smoke alarms and carbon monoxide alarms in addition to following fire safety regulations for homes. This can be different depending on the type of dwelling you are renting out, but applies to all, whether detached or semi-detached, purpose-built blocks of flats or houses and properties adapted into flats.

Furthermore, councils utilise the Housing Health and Safety Rating System (HHSRS) to ensure that properties are safe and habitable for people to live in. A local authority may decide to carry out an HHSRS inspection if tenants have asked for one, or if the council has done a survey of local properties and thinks your property could be hazardous.

Inspectors analyse health and safety and score each hazard they find as category 1 or 2, relating to its seriousness. If you receive an enforcement notice from your council, you MUST take action, and you do have the right to appeal if you feel you have just cause to do so. Possible hazards include uneven stairs, loose wires or unsafe plug sockets.

If council inspectors find a severe hazard, they could issue an improvement notice, fix the issue themselves and bill you for it, or stop you or anyone else from using part, or all, of the property.

Deposit protection
Since 2007, landlords have been legally obliged to protect tenant deposits in one of three government-approved schemes. These are the Deposit Protection Service, MyDeposits and the Tenancy Deposit Scheme.

You must place the property in one of the above schemes within 30 days of receiving it. There are separate tenancy deposit protection schemes in Scotland and Northern Ireland.

Schemes are either custodial or insured, with the former meaning the scheme holds the deposit for free, while the latter means you or your agent keeps the deposit and pays the scheme to insure it.

You must give the deposit to your tenant within ten here days of you both agreeing how much they will get back. If there is disagreement, mediation from your letting agent or one of the deposit schemes may be required. In the worst cases, it will end up in court, even though such disputes are rare.

Financial considerations
As a landlord, you must pay income tax on your rental income, minus your day-to-day running expenses, as well as Class 2 National Insurance if renting out property counts as running a business.

You may also want to keep a pot of money for ‘rainy-day funds’ to deal with any urgent maintenance issues or void periods. A Rent Guarantee policy is also a good idea to protect you if the tenant stops paying their rent.

Energy efficiency
You must provide an Energy Performance Certificate (EPC) of your property to tenants before they move in. The current rules state that any new or existing tenancy must have a home with an EPC rating of at least E. This expected to rise again over the coming years as the UK looks to reach its net-zero targets

You can find out more about EPCs, minimum energy efficiency standards and your obligations on the government website.

In the above article we have discussed the main checklist items that landlords must consider for compliance when renting out a property. However, there are other obligations too such as making sure all furniture and furnishings meet required standards, maintenance considerations, and many other things. Keeping on top of new regulations and legislation is vital.

With all this in mind, it can be a wise move to partner with a letting agent or a professional property management company to take the hassle and stress of letting away from you.

Insurance is also an important consideration to ensure you and your property are fully protected.

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