Lettings Legislation for Landlords

At LetsRent Bristol, we are aware that some of our landlords may be hesitant to rent out their homes without the help of a letting agent because they are intimidated by the intricacy of the renting laws and don’t want to break any rules. Since the private rental market is governed by almost 200 pieces of legislation, it is essential that we provide you with step-by-step instructions on how to rent out your house legally.

Consider renting out your home to make money. There are no secrets to compliance, best practices, or making expensive errors. For your entire peace of mind, everything is laid out in a simple, step-by-step manner for you to follow.

• You must first be the legal owner of the property, either as a freeholder, leaseholder, or mortgagee as listed on the title document. Any prohibitions on your title, such as restrictive covenants prohibiting you (or anybody you rent out your property to) from doing certain things, such as parking a commercial vehicle at the property or hanging laundry on the balcony, will be explained in your deed of ownership. Positive covenants may exist, requiring you to perform certain tasks on the land, such as maintaining the upkeep of an adjacent fence or having the front yard mowed. If you plan to rent out your property, you should inform the tenant of any covenants on the property, either by including the pertinent deed or schedule in their tenancy agreement or by including the clauses in the “negotiated clauses” section at the conclusion.
• Inform your mortgage company and your buildings insurance company of your decision to rent out your property if you own a leasehold property or have a mortgage on it. In case they need to place limits on you, it is best to ask these questions as soon as possible.
• Building insurance is likely to be a stipulation of any mortgage or head lease on your property.  It is important to notify your insurance company that the property is being rented out, as you will be liable for the cost of re-housing tenants in the event that something happens to make the property uninhabitable, and to pay for any damage from fire or water, all of which could be invalidated if you have not notified the insurers that the property is rented.
  It is also wise to have a contents insurance policy to cover any white goods, carpets, wall-coverings, light-fittings etc.  You can obtain public liability insurance as part of your contents insurance, which will cover your tenant or any guest at the property from unforeseen circumstances, such as trip hazards, falling roof tiles, broken tree branches etc.
• Last but not least, make sure the building has an E or higher energy performance rating.  Anything lower than E cannot be rented unless the building is listed and you have an exception certificate.

• Conduct checks to make sure your renters have the legal right to rent in the UK. If you rent in England, you are required by law to perform a Right to Rent check on your tenant or tenants. To do this, you must physically see their original biometric residence permit, biometric residence card, passport, or national identity card, as well as their “share code.” In Wales, Scotland, or Northern Ireland, you are currently not required to confirm a tenant’s eligibility to rent a property.
• Check tenant references:  Usually a credit check, employment reference, previous landlord reference, or guarantor references (if applicable).  It is usual practice to ensure that your tenants earn 2.5 x £annual rent.
• Negotiate any additional stipulations to the tenancy. You may have counter-offered and then gotten a higher offer at this point.
• Prepare the tenancy agreement:  This will most likely be an Assured Shorthold Tenancy unless the tenants are:
  • a limited company rather than individuals,
  • if you are a resident landlord (i.e., you live in another part of the property),
  • if the property is NOT going to be the tenant(s)’ primary residence (perhaps they will use it mid-week for work and go home at the weekend),
  • if the rent is higher than £100,000 pa, or if it is lower than £250 pa.
• Give a copy of the draft tenancy agreement to your tenant(s), and advise them to obtain legal counsel or visit their local Citizen’s Advice Bureau. We advise giving the tenant(s) a minimum of 7 days so they can read and comprehend the agreement and ask any questions.

Your property will be classed as a mandatory HMO if:

• It is let to 5 or more tenants who are not from one household (unrelated)
• They will share a kitchen and bathroom

You should check with the local authority to see if this would be considered an obligatory HMO or if you need a selective licence or Article 4 planning authorization – which is applicable in certain areas of Bristol for properties housing less than 5 unrelated people.

You must constantly make sure that two sharers do not suddenly ask their partners to “move in,” turning the property from a residential to an HMO status and subjecting you to a fine of up to £20,000 for breaking the House in Multiple Occupation legislation.

HMO properties need a lot more maintenance, and there are more rules in place for:

• Emergency lighting, fire safety systems, fire doors, and other fire safety gear (mains powered) supplying enough kitchen and laundry space for the number of tenants
• Additional arrangements for trash disposal
• Accessible egress points
• Typical bedroom dimensions
• Additional visits to the property and easy access to the property manager’s contact information (who must be a fit and proper person)

• Ensure the property complies with the Homes (Fitness for Human Habitation) Act 2018 by conducting a risk assessment, and pay close attention to any health and safety risks.
• Get a GSR (gas safety record) from a qualified gas engineer listed on the Gas Safe Register – these last for 1 year and it is your legal responsibility to continue to provide your tenant(s) a valid certificate every year.
• Identify any risks associated with legionella and asbestos.
• Find a qualified electrical engineer to provide you with an EICR (the electrical installation condition report) – these last for 5 years and it is your legal responsibility to continue to provide your tenant(s) a valid certificate every 5 years.
• Comply with The Furniture and Furnishings (Fire) (Safety) Regulations 1988 by making sure that all furniture and furnishings that were manufactured after 1950 (except mattresses and bed bases) are fire retardant and have labels attached to confirm this.
• Additionally, it is advised that you inspect any portable appliances to make sure they are in good working order before the tenancy begins.
• You must ensure that there are smoke and CO alarms in all relevant rooms and these regulations are enforced by the local authority with fixed penalty fines of £5,000 for non-compliance:
  • at least one smoke alarm is in place on each storey of the property where there is a room used as living accommodation.
  • a carbon monoxide alarm is placed in any room used as living accommodation which contains a fixed combustion appliance (excluding gas cookers).
  • smoke alarms and carbon monoxide alarms are repaired or replaced once informed and found that they are faulty.

Check the HHSRS (Housing health and safety rating system)

If the annual rent is LESS than £50,000 pa it is likely that you will take a security deposit equivalent to 5 weeks’ rent.  If the rent is more than £50,000 pa you are legally allowed to take a 6-week deposit.  To calculate the deposit, divide the annual rent by 52 weeks x 5 (or 6 if applicable).   There are also ‘no-deposit’ schemes available for those landlords who are willing to take an insurance policy instead of a cash deposit.

You will need to secure the security deposit into a Government plan within 30 days after you receive it (not from the commencement of the tenancy).
You must provide your tenants with the following information once you have secured their security deposit:

• the address of the rental property
• the amount of the deposit they paid
• how the deposit is protected
• the name and contact information of the tenancy deposit protection (TDP) scheme
• the name of the TDP scheme’s dispute resolution service

If a third party (such as parents or a guarantor) has paid the deposit, make sure that they also receive this information and that they understand what to do if there is a dispute over deductions at the end of the tenancy, and who to contact if they are unable to reach you for any reason.

Tenancy Deposit Regulations

You have a responsibility to check that the CO and smoke alarms are operational in front of the tenants on day one of the tenancy.  If you have employed an inventory clerk or managing agent, they can do this on your behalf. Thereafter, it is the tenant(s)’s job to make sure the alarms continue to function and that the batteries are changed (if they are not mains wired). We suggest using a smoke alarm tester spray, which can be purchased from major supermarkets for about £6.

You must give the following papers to your tenants:

• the most recent edition of the Government’s “How to Rent Guide”. If there is a new version published throughout the tenancy you must provide this to your tenants.
• a copy of each tenant’s Gas Safety Record (GSR)
• a valid EICR
• a copy of your legionella and asbestos risk assessment
• the deposit certificate and relevant scheme details
• copy of the tenancy agreement
• copy of inventory and schedule of condition

Under the Landlord & Tenant Act 1985, you have a responsibility as a landlord to keep the building’s exterior and structure in good condition.  Once your tenant has given you notice that repairs are necessary, you have a reasonable amount of time to complete them. All repair requirements must be in compliance with the Homes (Fitness for Habitation Act) and the Housing Health and Safety grading system.

You must also:

• Repair the goods or appliances that came with the property. You cannot agree to off-load this responsibility if you have provided the items. Any alterations to your tenancy agreement to that effect would be nullified by statute if challenged.
• Take care of any issues with the supply of water, power, and gas.  Respond quickly to urgent repairs for things like unsafe risks, cold or no hot water.
  Maintain the furniture and appliances you provided.
• Keep the house secure and livable. There are regulations in place that make this a requirement, and you risk fines or jail time if you don’t comply.
• Give tenants at least 24 hours’ notice before any visits, including those for inspections and repairs. You are unable to enter whenever you please as your tenant has the right to ‘quiet enjoyment’ of the property.  You do have the “right of reasonable access,” which entitles you to enter the property immediately in an emergency to perform whatever repairs are required to make it safe. This will be extremely uncommon and the emergency must pose a danger to personal safety, like a fire or a strong gas odour, for example.  If a tenant has given you notice to vacate, you can ask for permission to carry out viewings for new tenants but keep in mind to offer 24 hours’ notice and never visit without express permission.
• You cannot change the locks, remove any belongings, or try to relet the property if you believe that your tenant has “abandoned” or “surrendered” the lease. Instead, you must follow the proper procedures.  The Protection from Eviction Act, which also addresses tenant harassment, allows for the prosecution of those who attempt to evict a tenant without following the proper procedure.
• You must abide by the law if you want to raise the rent. This cannot be discussed during the first 12 months of an Assured Shorthold Tenancy, but it may be done after that using a Section 13 notice every 12 months.
• If the rent is paid weekly, you must give the tenant a rent book and explain when and how it should be paid. Any written demand issued to a tenant (i.e., a tenancy agreement) must include the following information:
  • the landlord’s name and address
  • if that address is outside of England and Wales, an address where the tenant may serve the landlord with notifications (including notices in legal proceedings).
• Common areas – If you are the owner of an apartment building, you are often in charge of maintaining communal spaces like staircases. Councils may ask landlords to address issues in common spaces or to make repairs to a tenant’s apartment after another tenant has harmed it.

Landlord and Tenant Act 1985