As a landlord, there are a range of compliance obligations you must abide by, which grow by the year.
Failure to do so could lead to fines or even, in the very worst cases of non-compliance, prison, so it's not something to skirt around.
You have a legal and moral duty to keep your tenants safe and in a home of suitable habitation, with various rules covering fire safety, gas safety, energy efficiency and deposit protection.
Right to Rent checks
It has been a legal obligation since February 2016 for all private landlords in England to check that their tenants have the right to rent in the country. The policy is controversial, with some suggesting landlords are acting as de facto border guards, but the consequences for non-compliance can be severe.
The way Right to Rent checks are carried out has been changed thanks to the pandemic. You can find out more about the current adjusted process here.
Not all landlords need a licence, but an increasing number do. You, or your letting agent, should check with your local authority to see if you operate in an area where licensing is required.
The Mayor of London last year launched a property licence checker to enable tenants to see if landlords have properly licensed their homes.
Licensing is more common in big cities and towns or places with many tenants. Prices for licences vary, so it's best to check in with your local authority for more information.
Health and safety
As a landlord, you must ensure all home gas and electrical appliances are safely installed, maintained, checked, and tested regularly. Your home must also be safe and free from health hazards, with a responsibility to fit and test smoke alarms and carbon monoxide alarms in addition to following fire safety regulations for homes in a purpose-built block of flats or houses and property adapted into flats.
Meanwhile, councils utilise the Housing Health and Safety Rating System (HHSRS) to ensure that properties are safe and habitable for people to live there. The local authority may decide to carry out an HHSRS inspection if your 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 29 health and safety areas 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 – albeit you do have the right to appeal it if you feel you have just cause to do so. Possible hazards might include uneven stairs, loose wires or unsafe plug sockets.
If the council's inspection team find a severe hazard, they could issue an improvement notice, fix it themselves and bill you for the cost, or stop you or anyone else from using part or all of the property.
Since 2007, landlords have been legally obliged to protect tenant deposits in one of three government-approved schemes – namely the Deposit Protection Service, MyDeposits and the Tenancy Deposit Scheme.
You, or your letting agent on your behalf, must place it 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 in the latter case, you or your agent keeps the deposit and pay the scheme to insure it.
You must give the deposit to your tenants within ten days of you both agreeing on how much they'll get back. If there's disagreement over this, mediation from your letting agent or one of the deposit schemes may be required. In the very worst cases, this could even end up in court, but such disputes are thankfully very rare, and it's very much a last resort for all parties.
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 back a rainy-day fund to deal with any urgent maintenance issues or void periods.
A Rent Guarantee policy is also a good idea, as this will protect you should the tenant stop paying their rent.
You must provide an Energy Performance Certificate (EPC) of your property to tenants before they move in. The rules now state that any new or existing tenancy must have a home with an EPC rating of at least E, with 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 here.
The above are just some of the many things you need to consider. There are also obligations surrounding providing a how-to-rent guide to tenants, making sure all furniture and furnishings meet the required standards and are fully fire retardant, and maintenance considerations, amongst many other things.
Keeping on top of new regulations and legislation is also vital – whether it concerns tenant fees or houses in multiple occupation.
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. You can find out more about the benefits of landlord insurance here.