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Are you thinking of becoming a private landlord?


If you are thinking of becoming a private landlord, there are several things that you should think about before you let out your property.   This page is just a guide and does not cover all the issues you may need to consider.

Newcastle under Lyme Borough Council has joined Stoke on Trent City Council, Stafford Borough Council and Staffordshire Moorlands District Council to form a Landlord Accreditation Scheme.   membership is voluntary and offers a range of benefits, help and support for landlords including a Landlords Manual which covers all aspects or private renting.  Visit www.landlordaccreditation.co.uk for further information or contact the council’s Housing Services team on 01782 742543

What rent should you charge?

Before marketing your property, it is important to be realistic about what rent you can expect – if its too high you may have high turnover in tenants and void periods. The rent will depend on several issues such as property size, condition and location.  Look to see what similar properties are fetching in your area.

If you are willing to take tenants who are in receipt of certain benefits or on a low income, they may be eligible to apply for Local Housing Allowance (LHA) (a new way of calculating housing benefit) to help with the rent. The is paid direct to the tenant who then pays you the rent.  How much will depend on the size of the household, number of bedrooms etc. but if the LHA does not cover the full cost of the rent, the tenant will have to make up the difference themselves.  This may put financial pressure on the tenant who is unable to maintain this long term.  To find out the current rates that are payable, contact the council’s housing benefit team on 01782 715500 or visit the web page above. 

Is the property in good condition?

Avoid problems by checking that your property is in reasonable condition and meets current legal standards such as the Housing Health & Safety Rating System before you rent it. Check for things like damp patches, burnt electrical sockets, damaged doors and frames, broken windows etc. 

The property should have a fixed form of permanent heating that is efficient. Old heating systems will also cost a lot to run and can be prone to break down in the winter.  With high call out charges consider installing a new boiler

Staircases must be well lit with a firm handrail, should not have gaps small children can slip through and floors must be level to avoid trips or falls. Check that there are enough bolts and locks on doors and windows for security. It is advisable to fit new locks after a change of tenancy. Ensure the kitchen has sufficient storage, preparation and cooking space.

Letting & Managing Agents

High street letting and managing agents can manage your property by finding new tenants, drafting tenancy agreements and advertising properties available to rent but make sure that you ask them first about what they charge and what this includes.  Charges can include registration fees, Credit Reference checks, set up fees, legal fees etc.

Before using an agent, check if they are members of the National Approved Lettings Scheme (www.nalscheme.co.uk)  the Association of Residential Letting Agents (www.arla.co.uk)  or the Royal Institution of Chartered Surveyors (www.rics.org/uk) so you can contact them if you are not happy with the agent.

References

Most landlords ask for a character reference from a tenants employer, college, bank and/or other responsible person or even a reference from a previous landlord. You may also want a copy of wage slips or other forms of identification. You can also use a Credit Reference agency to check if your prospective tenant has any debt history.

Some landlords also ask for a ‘guarantor’

Tenancy Agreement

A tenancy agreement is a legal document that means you are agreeing, among other things,  that you will fulfil your obligations to keep the property in good repair at an agreed rent  for the duration of the agreement – usually 6 or 12 months. Assured shorthold tenancies are the most common type.

Having a signed tenancy agreement which details the terms and conditions of rental, will make it easier to deal with any disputes. Check the agreement thoroughly before signing and make sure you give a copy to the tenant.

You should ensure that the tenancy agreement does not contain any ‘unfair terms’.  Visit the Office of Fair Trading for further guidance at  (www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft356.pdf)

Assured Shorthold agreements are available either free or for a small charge on the internet or you can use a Solicitor or law firm which specialises in rental agreements.

Deposit

At the start of the tenancy you will usually ask for a deposit (normally equivalent to 1 months rent) as well as a month’s rent in advance. Under new legislation, the Tenancy Deposit Protection,  you are required by law to protect the deposit under one of the following government approved protection schemes, They are:

You are required to notify the tenant within 14 days of how and where you have protected the deposit.  If you do not follow the rules you can be ordered by the Courts to compensate the tenant  with three times the original deposit, plus the deposit itself. For more advice visit www.direct.gov.uk/en/TenancyDeposit/index.htm

To avoid disputes at the end of the tenancy, perform a room by room inventory check of the property, with photographs and agree this with you tenant at the start of the tenancy

Houses in Multiple Occupation

If three or more people who are not related are sharing a property, this will be a House in Multiple Occupation (HMO).  Any HMO will need to have extra protection regarding Fire Safety as they are considered to be higher risk than an ordinary family home.  HMO’s are usually student type properties but can also be ‘bed sit’ type accommodation

If the property is a large HMO and has three or more storeys and houses five or more people who are not related, the landlord by law must obtain a licence from the local council. If you fail to get a licence you can be taken to court and, on conviction, fined up to £20,000. If this happens then the tenants can apply for a Rent Repayment Order from the Residential Property Tribunal Service (www.rpts.gov.uk)  to reimburse them for some or all of the rent.

Energy Performance Certificates

When marketing your property for rent, a landlord must give any potential tenant an Energy Performance Certificate (EPC) to help them decide if the property will be efficient to live in and therefore save them money on fuel bills.  For further information, visit http://epc.direct.gov.uk/index.html

Gas Safety

Carbon monoxide leaks from faulty gas appliances and can kill. By law, you must hold a current and valid landlord’s Gas Safety Certificate before you allow anyone to move in. You then should have an annual check of all appliances in the house, from a registered Gas Engineer. From 1 April 2009 all gas engineers must be registered with the Gas Safe Register (www.gassaferegister.co.uk) which has replaced Corgi.

Electrical Safety

A Landlord has responsibility to keep the electrical installation in a safe condition.  However, there is no legal requirement for you to perform an electrical safety inspection, this is just best practice and advised to be done every 5 years or if you suspect there may be a problem.  It is also advised that all portable electrical appliances should be tested every year.  This is called PAT testing and relates to any appliance which has a plug fitted i.e. kettle, washing machine, microwave etc.

Some Facts & Myths

  • You do not have the automatic right to enter the property without the tenants consent
  • You are usually responsible for repairs to the property and any fixed appliances
  • You cannot prevent the tenant access to the property by changing the locks
  • You cannot purposely cut off the gas, water or electricity supply
  • You cannot remove tenants belongings without following certain procedures
  • You can only evict a tenant by going to Court
  • By following certain procedures, a tenant can withhold rent if there are disrepair issues
  • You probably will suffer some form of damage to the property or its contents
  • You have to allow for ‘reasonable’ wear and tear
  • If you are letting the property as furnished, make sure you comply with the Fire & Furnishings Regulations

See what constitutes Illegal Eviction & Harassment

If things go wrong

If you need help with any issues such as rent arrears, anti social behaviour, eviction etc it is advisable to join a landlords scheme such as the North Staffs Landlords Association www.nsla.co.uk  or to seek legal advice.

If you need help or advice on property standards then contact the council’s Housing Services team by phoning 01782 742543.  We offer free inspections to give you advice and would prefer that you got it right without your tenants having to make a complaint

For additional advice on private renting visit www.direct.gov.uk/en/HomeAndCommunity/index.htm.

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