Renting out Property
If you want to increase your income, you may be considering renting out property. However, because this process can be far from straightforward it is very important that you completely understand each stage involved.
Hiring a solicitor is the best method to avoid legal problems because they can significantly help you by explaining what you are responsible for and create a tenancy agreement that suits you. With their guidance you will know precisely what your rights and responsibilities are as a landlord, reducing the likelihood of time-consuming disagreements with your tenants.
The tenancy agreement is the primary area for problems, and as such it is vital that you consult with a solicitor to cover every possible aspect. They will listen to your demands and concerns to make sure that you receive the deal you want, helping your experience as a landlord go as smoothly as possible.
This is the most crucial and complex stage in renting out your house, which makes it imperative that you consult with a solicitor so that everything is covered thoroughly in your tenancy agreement. They will ensure that the agreement is written, because although a verbal contract is legal, nothing can be proved if a dispute arises.
There are numerous agreements to choose from, and your solicitor will go through them to assess which is the best option for you. However, there are two types of tenancy agreement which are more common than any other; an assured tenancy, and an assured shorthold tenancy.
- An assured tenancy is primarily used by (but not restricted to) public-sector landlords. It details how you can end the tenancy and provides your tenant with more rights if they want to stay on past the previously agreed end date.
- An assured shorthold tenancy restricts the rights that your tenant has to stay on at the end of the previously agreed end date. It usually lasts for at least six months but it can last longer if both parties want to extend it.
Your solicitor will be able to take care of the agreement and guide you on how to view tenant references. This way you can be sure that your tenant knows exactly what is expected of them, and you have confidence that they are able to complete their payments on time. You are also showing to your tenant that you understand you have certain responsibilities.
You will need to fulfil a number of requirements to ensure you are meeting the standards expected of landlords, and they should be stated in the tenancy agreement. For all of these topics your solicitor will be able to provide comprehensive guidance.
Health and safety – Your property must be safe and fit to live in. To guarantee this you need to check that all of the gas and electrical equipment is correctly installed and maintained, follow all fire regulations and provide an Energy Performance Certificate.
Deposits – You will need to use one of the three government-approved deposit schemes for your tenant’s deposit, and then notify them of the specific details. They will need to know how much the deposit is, when it will be paid in and paid back, and also what issues would result in you keeping their deposit.
Rent – The price, dates of payment and what is included in the cost needs to be clearly established, along with the consequences of late payments. It is important to state if you intend to increase the rent at any point so that the tenant is prepared if you choose to do so.
Restrictions – The number of tenants, playing loud music and having pets are all subject to your approval, so you should explain what limitations you want to have in place.
Repairs and services – If you do not intend to offer services such as meals or laundry then state it. As the landlord it is your responsibility to maintain the property’s condition, so any damages will need repairing. With 24 hours’ notice you can enter the property to fix a problem, but should you refuse or the repair is inadequate then the tenant could make a claim. Repairs can be a complicated topic so for a full understanding, an in-depth discussion with your solicitor will help you greatly.
Taxes – To avoid a penalty you need to inform HMRC that you are renting out property. You may need to pay tax on the income you receive, so to make sure the correct fees are being paid, confer with a solicitor. If your property has a mortgage then you will need the permission of your mortgage lender before you can rent it out.