COMPLIENCE & PREPARING TO RENT
There is an awful lot to consider but leave it to us. When you employ Letting Solutions, we take care of everything. If is it that you would like to be more involved and you would like to know more, just ask. Simples!
Terms of Business
We will require the property owner to sign and date our agency agreement. If the property is jointly owned, we will require consent from all owners.
Client ID & Money Laundering
Under the provisions of The Proceeds of Crime Act 2002, it is a legal requirement that the agent must be able to identify their client. Therefore, all landlords are asked to provide Letting Solutions with their proof of identity, to be held on file in accordance with the Data Protection Act 1998. Again, when a property is jointly owned we will require identification from all parties. When the landlord is a company, at least two directors or a director and a Company Secretary must provide us with the relevant documents. Please remember, just because we are asking you for these documents, doesn’t mean that we suspect you of laundering your money, we are just being thorough and doing our job.
Proof of Identity
Only a full current passport, current UK driving licence, birth certificate, Firearms certificate or a Residence Permit issued by the Home Office will suffice as your personal proof of identity.
Proof of Ownership
We will need you to provide proof of ownership of your let property. For example, you could provide us with a mortgage statement, title deeds or documentation relating to the ground rent if your property is leasehold.
Proof of Address
A full or provisional UK driving licence, bank statement or a current council tax bill can all be used as proof of your current address.
If your property is mortgaged, you should obtain consent to let from your mortgage company. Please do not be alarmed if they ask you include any special conditions in your Tenancy Agreement, this is normal. Please advise us of any clauses and we can ensure these are included in the paperwork.
If you are a leaseholder, you should check the terms of your lease and obtain the necessary written consent before agreeing to let your property. Please provide us with a copy of your lease incase we need to include any additional clauses in your Tenancy Agreement.
We need to be supplied with all relevant keys, fobs and alarm codes. Alternatively, please provide us with access arrangements to your property. If your property is a managed property, we will require a second set of keys and fobs for your new tenants. One set of keys will be held at our head office for the purpose of inspections or in case of any emergencies.
Gas Safety Certificate
In accordance with the gas safety regulations of 1998, the Landlord is responsible for ensuring that the gas supply to the property, and any gas appliances within, are safe to use. This can only be achieved by having a gas safety check carried out by a Gas Safe registered engineer. A copy of the certificate must be provided to Letting Solutions before the commencement of the tenancy. Alternatively, you can authorise Letting Solutions to obtain a Gas Safety Certificate on your behalf. There will be a charge to the gas engineer for this service. This safety check must be carried out on an annual basis and previous certificates must be held on file by the landlord or their agent, for a period of 2 years.
Breach of the regulations is a criminal offence and could result in loss of life. If you do not comply, you risk being prosecuted, and this could result in you facing imprisonment or a fine of up to £20,000, or both, for each offence. If the case in then referred to the Crown Court, the maximum penalty may be imprisonment, or an unlimited fine, or both. It is also likely that any insurance cover could be invalid for non-compliance of the regulations.
Landlords with properties in England will need an Electrical Installation Condition Report (EICR) in order to let their properties.
An Electrical Installation Condition Report must be acquired before the commencement of any new tenancy. The checks ensure that all electrical installations in the property, such as light fixtures and electrical sockets, are safe before the tenant moves in. Properties that pass the EICR will keep the certification for five years. When the EICR expires, a new one will need to be obtained.
If the report requires the landlord to make repairs to ensure the safety of the property, then these repairs must be made by a qualified person within 28 days, unless the report specifies the work must be performed sooner.
Smoke Alarms & CO2 Detectors
From October 2015, the law states that any landlord must ensure that a smoke detector is fitted on each storey of your rental property. Checks must be made by or on behalf of the landlord to ensure that each alarm is in good working order on the day the tenancy begins. Carbon Monoxide detectors are recommended where there is a gas appliance present. However, this only becomes compulsory where solid burning equipment – such as a coal fire, wood burning stove or AGA, are present in the property.
Local Authorities, in our case Blackpool, Wyre or Fylde Borough Councils, can impose a fine of up to £5,000 if a landlord is in breach of these conditions.
Furniture & Furnishings
In accordance with the Furniture & Furnishings (Fire) (Safety) Regulations 1988 – amended 1993, a landlord is required to ensure all furniture within the property conforms to the 1993 amendments of this Act of Parliament. Manufacturer’s labels showing the use of fire resistant materials, match & cigarette resistance test pass results should be permanently attached to the relevant items which will include; armchairs, sofas, sofa beds, futons and all other convertible furniture. Beds, bed bases, headboards, mattresses, divans and pillows. Garden furniture that could potentially be used indoors. Nursery furniture. Loose, stretch & fitted covers for furniture, scatter cushions, seat pads and pillows. This regulation does not currently apply to carpets and curtains.
Non-compliance is a criminal offence and could result in a fire, imprisonment, or both. You also be liable for civil prosecution.
Energy Performance Certificate
On 1 st October 2008 Energy Performance Certificate’s (EPC’s) became a mandatory requirement for all new tenancies. A copy of the certificate must be provided to Letting Solutions or alternatively, we can obtain a report on your behalf. An additional charge will be made to the Energy Assessor for this service. An EPC is valid for 10 years.
In addition, as from the 1st April 2018 there is also a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E on an Energy Performance Certificate. The regulations come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption.
Failing to provide or make an EPC available when required, may result in a financial penalty. Further to this, for all tenancies starting after 01 October 2015, landlords must provide a copy of the EPC to any tenancy (and obtain proof of this) prior to your tenant moving in. Failing to comply may result in invalidating any Section 21 notice that is served.
While it is not a legal requirement to produce a Legionella water sample test certificate, a landlord may be liable to prosecution under the Health & Safety at Work Act 1974 (HSWA) if a tenant were to contract Legionnaires’ disease from the water system in their home. The landlord would then have to provide evidence to a court that they had fulfilled their legal responsibility under HSWA and COSHH. A written record of a Legionella risk assessment would be considered adequate evidence by a court.
Despite infections caused by Legionella being very rare in the UK, the risk attached isn’t one worth taking as a landlord, and we highly recommend private landlords take all necessary steps to ensure their properties and their tenants are kept safe. Please provide Letting Solutions with a copy of the Certificate, alternatively, Letting Solutions can obtain this report for you at an additional cost to the Assessor.
Right to rent checks
In line with the Immigration Act 2014, from 1 February 2016, all landlords of properties throughout England must check that someone has the right to rent before letting them a property. You must check all tenants aged 18 and over, even if:
They’re not named on the tenancy agreement
There’s no tenancy agreement
The tenancy agreement isn’t in writing
Landlords or agents who fail to do these checks correctly could be liable for a fine of up to £3,000 per occupier.
Letting Solutions take this stress away from you. We can confirm without exception that all tenants that we give a new tenancy to, has the right to rent a property in the UK and that their identification is genuine. When using Letting Solutions to source a tenancy for your property, you can have complete peace of mind that you are fulfilling your legal obligations thereby avoiding any unwanted fines.
If you own a rental property in the UK but your usual home is outside of the UK, then you need to comply with the Non-Resident Landlords (NRL) scheme, which sets rules around how you pay tax. The scheme requires UK letting agents to deduct basic rate from any rent they collect for Non-Resident Landlords. You can set this tax off against your own tax bill at the end of the year. However, Non-Resident Landlords can apply to the Inland Revenue for approval that will permit their letting agent NOT to deduct tax at source by completing the NRL1 form. Approval of a NRL1 does not mean that the rent is exempt from UK tax.
Of course, while we can offer basic advice when it comes to your rental income, we would always recommend that you seek advice from a professional. For an informal chat about all things tax, please contact our financial friend Tony Mills at Ma2 Accountants on 01253 862220.