The number of accidental landlords – people who are renting out property through circumstance rather than design – is on the rise, with a recent news report in The Times suggesting that the number has grown by 230,000 in the last few years. Other research carried out by Countrywide suggested that approximately 80,000 properties were put up for rent after failing to sell in 2017.
For these people, who have unintentionally become landlords either because they are having difficulty selling a home, have inherited a property they don’t want to sell or have a home that they can’t live in for work, family or other reasons, letting a home for the first time could be a daunting experience.
As a letting agent, you can help first-time and accidental landlords by guiding them through the rental process. Trade body ARLA Property mark has provided some top tips for those who have become landlords by accident – below, we take a look at what these are…
Landlords need to thoroughly check the credentials of prospective tenants to ensure they will be reliable, pay their rent on time each month and cause no stress. As a letting agent, you can take on the role of vetting tenants on your landlords’ behalf and outsource this to a specialist tenant referencing
firm, as well as managing compliance surrounding the Right to Rent legislation – which means landlords are obliged to check the legal right of tenants to reside in the UK.
Landlords must protect any tenant deposit in one of three government-approved schemes: the Deposit Protection Service (DPS), MyDeposits or the Tenancy Deposit Scheme (TDS). They need to protect the deposit within 30 days and then provide written evidence to their tenants to prove this has been done.
Equally important – especially in light of new minimum energy efficient standards (MEES, introduced in April this year) – is for your landlords to serve their tenants with an Energy Performance Certificate (EPC) before they start their tenancy. It’s now illegal to let out a property to new tenants if it has an EPC rating of below E-. If any of your landlords are guilty of doing so, they could face a fine.
A signed agreement
It’s highly recommended that you advise your landlords to sign a tenancy agreement with tenants, setting out the roles and responsibilities for both parties. A written tenancy agreement isn’t a legal requirement, but it is best practice and can help to drastically reduce the chances of disputes or issues at a later date.
Landlords should carry out regular inspections of their property to ensure there are no major issues, or major contraventions of the tenancy agreement. As a letting agent, you can take on this role for landlords, but if they decide to do it off their own back remind them that they are unable to enter the property without a tenant’s permission. Granting tenants 24 or 48 hours’ notice is generally considered best practice; how much notice is required should be laid out in the tenancy agreement to avoid any confusion or disputes.
Insurance, insurance, insurance
If a landlord doesn’t tell their buildings insurer that they are letting a property, they risk invalidating their policy. As most standard buildings insurers don’t offer the protection that landlords need, it’s well worth their while to consider taking out specialist landlord insurance to ensure they are adequately covered in the event of loss of rent, damage, liabilities or legal expense.
Landlords have a legal (and moral) obligation to keep their tenants safe, which includes a legal requirement to get all gas appliances checked over by a Gas Safe registered engineer each year. Tenants must receive a Gas Safety Certificate within 28 days of the annual check taking place.
What’s more, you can advise landlords that fire alarms will need to be fitted on every storey of the property, while carbon monoxide detectors must be in any room where a solid fuel-burning appliance is used. Both alarms will need to be tested on the first day of the tenancy and intermittently afterwards.
Do landlords in your area need a license? In some areas landlords will need a license to operate, although this varies from region to region. They will be able to find out from their local council if they need to worry about a license or not.
A tenant-friendly home
The best piece of advice you can offer accidental landlords is that a home will need to be rental ready from the get-go to appeal to tenants. Will the property be furnished or unfurnished? Do landlords want family tenants, who may be more likely to stay for longer, or young professionals looking for a more flexible arrangement?
Before viewings, landlords – accidental or otherwise – need to make sure their home is clean, tidy, attractive and welcoming, with all modernisation and DIY projects completed.
At Rentshield Direct we offer fast, reliable tenant referencing services, helping to take the weight off the shoulders of letting agents and providing a key link between agents, landlords and tenants.
For more information about what we do, please give us a call on 0800 035 8255.