Important buy-to-let landlord rules

Important buy-to-let landlord rules

Which? magazine reported last month that more than 300,000 landlords across the UK had been caught out by fines of up to £5,000 for breaking new energy regulations.

But when it comes to buy-to-let penalties, this is just the tip of the iceberg. Here, SMART Team look at the true cost of noncompliance with BTL rules.

 

Right to Rent – up to £3,000

Since early 2016, new regulations have meant that landlords are now responsible for making sure their tenants have the right to live in the UK before signing the agreement.

In the months that followed, more than 100 landlords in England alone were fined for Right to Rent breaches, with the charges totalling around £30,000.

Individual fines were relatively low on average but, for those found to be knowingly letting out a property illegally, the maximum penalty reached as high as £3,000.

 

How can you avoid these fines?

Managing agents usually conduct checks on potential tenants, including the right to live in the UK, before allowing them to move in.

If you don’t let your property through a managing agent, you can check if your tenant has the right to rent yourself. You can click here to see the government’s step by step guide.

 

Tenant safety

Making sure your tenant is safe whilst living in your property may seem like an obvious requirement.

But, last year, hundreds of landlords across the country were fined for failing to provide the most basic suitable accommodation for their tenants.

The most costly charges included failing to maintain gas safety, costing one landlord in Pembrokeshire £17,990, undertaking dangerous gas work, with a North Devonshire landlord being fined £12,000, and inadequate fire safety, heating and insulation, with £10,000 being charged to a landlord in Birmingham.

 

How can you avoid these fines?

Before you move anyone into your buy to let property, make sure you have a valid gas safety certificate and that all smoke detectors are fitted and functioning properly.

Ensure you have the gas safety certificate renewed each year by a Gas Safe-registered engineer, and that you always respond promptly to heating and water maintenance issues.

 

Licensing schemes

Depending on where your property is based, the local council may have their own licensing scheme in place. These mean you must agree to their set of regulations before you are able to let out the property.

Last year, individual fines for noncompliance with licensing schemes reached as high as £4,000.

Certain areas of the country only require licenses to landlords letting out more than one property or houses with multiple occupations.

 

How can you avoid these fines?

More and more councils are signing up to these schemes – with more than 300 either enforcing or forming a licensing scheme currently.

Make sure you check your local council’s rules on their website before letting your property. The registration fees can vary from council to council, but be prepared to pay as much as £1,000.

 

Evictions

When a tenant is not paying their rent, it makes sense that you would want to consider kicking them out. A tenancy is an agreement. They pay to live in your accommodation, and if they don’t uphold their end, then you may wonder why you should too.

Sadly, for many landlords, the law is never so simple.

In fact, a landlord in Stoke faced a £2,800 fine last year for changing the locks after a tenant defaulted on their rent.

Eviction is a complicated and drawn out process and, if you don’t follow the rulebook, you could be the one facing the consequences.

 

How can you avoid these fines?

Make sure you follow the government’s eviction process to the letter.

If your tenants are reaching the end of their term, you must give them a Section 21 notice in advance. If they have broken their contract somehow, you can use a Section 8 notice. Then, you can apply for either a standard or an accelerated possession order to take back your property.

Due to the many different factors involved in evicting a tenant, make sure you read the government’s full guide before you take action.

 

HMOs

Houses in multiple occupation (HMO) are properties with at least three people living there who do not belong to the same household. Shared and student housing usually fall into this category.

If your HMO is more than two stories high and is rented to five or more people, you will need to be granted a license by your local council to let it out.

A student landlord from Durham was left with a shocking fine of £5,700 last summer for letting out properties without an appropriate license.

 

How can you avoid these fines?

If you have any large HMOs in your portfolio, simply apply for a license through your local council. There are varying fees between councils, but they will be much lower than the fines you could face if you let the property without one.

 

Deposit protection

When you’re trusted with a tenant’s deposit, keeping it safe is absolutely vital.

If you don’t, not only you could face huge fines, but also criminal conviction.

In a case last year, an Essex-based letting agent was very nearly sent to prison for failing to suitably protect deposits worth more than £40,000.

 

How can you avoid these fines?

As soon as you receive a deposit from a tenant, you should place it in one of the three government-backed deposit schemes. These are:

When the tenancy comes to an end, you will need to apply to have the deposit released. You can take reasonable charges for any damages to the property but, if the tenant disputes your deductions, you may need to take advantage of the deposit protection scheme’s own resolution service.

 

Being a landlord…

…is not the easiest job in the world. To speak to our team to find out what help we can provide you with, please call 01202 577 500 or email us on info@yoursmartteam.co.uk.

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