Rented Property Focus January 2012

Renting out a property for the first time can be a daunting task. Stephanie Robinson kicks off the New Year with a checklist for new landlords who wish to make the most of their investment...

I am a rented property novice. What are the key points I should remember?

People rent out properties for various reasons. Some are temporarily relocating and want to cover the cost of their mortgage, while others purchase property solely for investment.
  
As a landlord, you should identify your primary reason for renting and act accordingly. If you are going to be an ‘absent landlord’ it would probably make sense to use a management service, however, if you aim to become a property tycoon, you might want to go it alone! 
  
Before advertising your property to let you should:

• Ensure your mortgage company is happy for you to rent out your property. They will normally say yes, as long as you pay a small administration fee.
• Even if your house is freehold, there may be a clause that forbids you from renting, whilst owners of leasehold properties may need the consent of the freeholder. In both cases, always check your deeds.
• Obtain permission from your contents and building insurers. All policies should include third party cover, in case the tenant injures himself in your property. You should also take out letting insurance.
• Have gas appliances checked by a Gas Safe registered engineer to ensure they are safe. All gas appliances and flues in rented accommodation must be checked within 12 months of being installed and at least annually thereafter. A copy of the gas safety certificate must be given to the tenant on entry. Failure to comply with the regulations can lead to prosecution, fines and possible imprisonment, whilst your insurance cover could also be invalidated.
• You must ensure any electrical equipment supplied with the property is safe. Written instructions should be left for all electrical appliances and a safety check carried out annually or when the tenancy changes. You should provide the agent and tenant with written proof of the safety check prior to the tenancy commencing.
  Check furniture complies with the fire safety regulations. All items must carry a label proving they have passed match and cigarette tests.
  Provide an Energy Performance Certificate for the property.

Before your tenant moves in:

• Check your tenant’s references. It is usual to ask for three – from a bank, employer and a previous landlord. The latter is particularly useful and you should look carefully at your tenant’s reasons if he cannot provide contact details for his last landlord.
• Have the lease and tenancy agreement reviewed by a solicitor and signed by all parties.
• Give the tenant a receipt for the first rental payment and the bond, make sure it is secured with one of the Tenancy Deposit Schemes and give the prescribed information to the tenant.
• Complete an inventory with the tenant of goods at the property and their condition, which you both sign. It will help you establish whether your tenants are looking after the house.
• Redirect mail, arrange for all meters to be read and the accounts transferred and alter the name on the council tax register.

The day your tenant moves in:

• As a landlord, you have a duty to ensure the property is habitable. Naturally, the cleaner it is at the start of the rental term, the more likely the tenants are to keep it that way.
• Leave manuals for appliances and cleaning instructions for any special furnishings.
• Ensure all connection points for gas, water and electricity are labelled.
• Demonstrate security devices to the tenant – alarms, window locks, etc.
  Provide emergency phone numbers and explain fire extinguishers, smoke alarms and other safety equipment.
• If a telephone line is available, make sure the tenant is aware of the number and the account is transferred.
• Provide a written procedure for emergencies explaining whom to contact first and when you wish to be notified.

Stephanie Robinson is a solicitor specialising in property and commercial litigation at Sheffield’s Taylor&Emmet LLP. Telephone 0114 218 4000 or visit www.tayloremmet.co.uk and www.landlorddisputes.co.uk.