Landlords Guide to Lettings Regulations
It is essential that the property is presented in a well decorated, clean and tidy condition, in order to let the property as quickly as possible and at the optimum rental value. Unless other arrangements are made in the tenancy agreement it is the landlord's responsibility to maintain the property in good order throughout the letting. A property can be let fully furnished, part furnished or unfurnished, but in all cases should include carpets and curtains (ideally professionally cleaned). Soft furnishings must comply with the Fire and Furnishings (Fire) (Safety) Regulations 1988 as amended in 1993. This Act has set new levels for fire resistance for domestic upholstered furniture and furnishings. All property let from 1st January 1997 must contain furniture which complies with the new regulations. Provisions are complex and we will advise you at the time of taking instructions whether or not any furniture in your accommodation needs to be replaced. It is an offence to breach these regulations and we suggest you obtain a comprehensive guide to the regulations including details of labels which indicate compliance from your Local Trading Standards Officer. Electrical appliances must be tested and serviced as necessary. Explanatory instruction notes regarding appliances and central heating should be left on display at the property, together with guarantees and service contracts. It is advisable to fit at least one smoke detector per floor to the property, a service which we can arrange for you at a cost to be advised. Fully labeled sets of keys should be provided to PROletuk.com at the commencement of the letting. However this can be arranged in house if necessary.
Am I liable to pay Income Tax on my
rental income?
The income derived for letting your property is subject to UK tax and your position varies considerably on whether you are regarded as a UK resident or a UK non-resident. We would advise you to obtain the necessary guidance from your accountants, however, as a general guide, if you are a UK resident you will receive the usual personal allowances applicable to your circumstances which may be offset against all or some of the taxable income. Members of the Foreign Commonwealth Office and Armed Forces are normally regarded as residents. Income from the letting of a property is subject to income tax at the basic rate on profit. The profit is assessed after deduction of outgoings from rent received such as:
- Insurance premium related to the cover of the premises and contents.
- Repairs but not replacements.
- Maintenance and contract payments.
- Agents fees including VAT.
- Mortgage interest, excluding tax relief.
- Fair wear and tear.
UK Non Residents
If you are planning to live abroad while your property is tenanted, under current legislation you are likely to be classified by the Inland Revenue as non-resident for tax purposes. In such circumstances, PROletuk.com will be held liable for income tax for tax due on income arising from rent received. The requirements and obligations for an agent in this respect are set out in the Taxes Management Act 1970. In order to meet this liability we are obliged to retain tax at the basic rate from rents received in accordance with the non-resident landlord’s scheme. However the final assessment must be agreed between the Inland Revenue and yourself or your accountant. PROletuk.com are able to recommend a number of UK accountants who can advise on specific tax requirements, or you may choose to employ your existing accountant. However, the Finance Act 1995 introduces new rules for the collection of tax arising on a nonresident landlord's rental income from the letting of UK property. The new rules took effect from 6 April 1996, when a non- resident landlord will be able to apply to the Inland Revenue for permission for his tenant to pay rentals gross, providing the landlord agrees to comply fully with the self assessment procedure for income tax purposes.
Should I inform anyone that I intend to let my property?
If you have a mortgage you should advise your bank or building society who provide the mortgage of your intention to let and provide details of the proposed letting. If required we can provide a sample letting agreement for this purpose. If the property is leasehold it may be necessary to obtain the consent of the freeholder to the letting; your lease will specify whether this is a requirement. In certain blocks of flats there can sometimes be a prohibition on letting; you should check your lease carefully to establish this point.
How will letting affect my insurance?
It is important that you advise your insurance company in writing that the property is let and ensure that you are covered for third party, public liability and defective premises risk. The landlord is responsible for both building and landlord’s own contents insurance during the tenancy. The tenants are responsible for arranging insurance cover for their own personal belongings taken into the property.
What happens about the Council Tax?
Whilst your property is let the tenant will be liable to pay Council Tax. You will become liable to pay the tax if the property is unoccupied between tenancies, subject to any current exemption arrangements. We will advise the Local Authority of the changes of occupation at the appropriate dates.
What about other aspects of maintenance?
The landlord is usually responsible for the payment of ground rent, any service charges, most repairs and maintenance of the property. We maintain lists of reliable contractors to cover all trades, However you may leave specific instructions with us to use nominated contractors of your choice. Alternatively you may opt for our PROfix maintenance service.
Are there different types of Tenancy?
The introduction of the 1988 and 1996 Housing Acts has resulted in greater protection for the landlord. Your PROletuk.com adviser will be able to recommend the most appropriate agreement to suit the circumstances, although the majority of lettings are on the `Assured Shorthold Tenancy' basis.
Who will prepare the Inventory/Schedule of Condition?
The property must be left ready for immediate occupation by a tenant at the time of making an inventory. This is an important document which lists all the contents of the property, together with details of the Schedule of Condition of the contents and decorations. PROletuk.com will arrange this on your behalf. The cost of an Inventory/Schedule of Condition depends upon the size of the property, although at the time of letting we will be able to give a clear indication of the costs involved.
Inventory Check
The tenant will be required to accompany our staff to the property and check the inventory at the commencement of the tenancy. A similar process will be carried out at the termination of the tenancy and the tenant will be required to hand over the keys and vacate the property. If necessary, during the term of the tenancy, inventory updates can be carried out if additional furnishings or items are provided to the property. In such circumstances the tenant will be required to sign the necessary amendments.
Will my property be checked?
Included within our Property Management Service are periodic visits to the property which enable us to ensure that the property is being cared for and appropriate action to be taken to overcome problems. From our experience we have found tenants' standard of care is considerably higher if they realise that the managing agents will be taking a real interest. We therefore recommend to you the facilities of the Property Management Service.
What do I do about Gas Safety Regulations
New regulations which came into force on 31 October 1994 compel landlords to have all gas equipment serviced annually and a landlord’s Gas Safety Certificate issued. PROletuk.com will be able to advise and provide you with more detailed information, however it is recommended that either a service contract is taken out with British Gas or a Corgi registered gas engineer, or that PROletuk.com arrange an annual check for safety purposes. The cost of this will be provided to you on request. Alternatively you may opt for the PROfix Maintenance service.
It is an offence to breach these regulations and we suggest you obtain a comprehensive guide to the regulations including details of labels which indicate compliance from your Local Trading Standards Officer.
Electrical appliances must be tested and serviced as necessary. Explanatory instruction notes regarding appliances and central heating should be left on display at the property, together with guarantees and service contracts. It is advisable to fit at least one smoke detector per floor to the property, a service which we can arrange for you at a cost to be advised. Fully labeled sets of keys should be provided to PROletuk.com at the commencement of the letting. However this can be arranged in house if necessary.
Landlord’s Guide to Residential Lettings
Residential landlords are responsible for the safety of their tenants and the Gas Safety (Installation and Use). Regulations 1998 enforced by the Health & Safety Executive (HSE) deal with the duties of landlords to ensure that gas installations, appliances, fittings and flues provided for tenants are safe.
What do I do about Gas Safety Regulations
All Landlords have a common law duty to ensure that gas installations and appliances supplied with their properties are safe. Tenants also have certain legal obligations when it comes to gas safety. In the case of residential properties, landlords (or their agents) have a statutory duty to arrange annual Gas Safety Checks by a registered CORGI installer. A copy of the CORGI safety certificate must be given to the tenant on entry and within 28 days of the annual check. A copy must also be retained by the landlord for 2 years.
- Landlords must implement a system of annual checks and maintenance
for all gas appliances and flues.
- Use only CORGI registered engineers for installations, maintenance
and gas safety checks.
- Ensure that all appliances meet the general regulation requirements,
in particular in bedrooms and bathrooms where appliances must be of the
room-sealed type.
- Ensure that tenants have emergency instructions and ready access to
the gas meter and the gas cut-off valve.
- Provide copies of all appliance operating instructions to your tenants.
- Ensure that fittings and flues are maintained in a safe condition.
- Have a safety check carried out on all gas appliances and flues annually,
or within 12 months before the start of a new tenancy.
- Check gas installations and appliances immediately before the start
of any new tenancy, even if a safety certificate is still current.
Carbon Monoxide (CO)
- Carbon monoxide (CO) is widely know as the silent killer. It is highly
poisonous and cannot be detected by the senses. You can't see, smell or
taste its presence. Exposure to even low levels of CO can cause brain
damage and death.
- Signs of CO are: yellow or brown stains around the appliance, pilot lights which blow out frequently and increased condensation inside windows.
- Symptoms: Fatigue, headaches, flu like symptoms such as nausea, chest pains, sudden giddiness when standing up, sickness, diarrhoea and stomach pains, erratic behaviour.
- If you suspect CO: switch off appliance, open doors and windows, visit your GP and call a CORGI installer.
Electrical Safety
There is no statutory obligation on landlords or agents to have professional checks carried out on the electrical system or appliances. However, under the Electrical Equipment (Safety) Regulations 1994, the Plugs and Sockets etc. (Safety) Regulations 1994, both of which come under the Consumer Protection Act 1987, there is an obligation to ensure that all electrical equipment is safe. It is advisable for landlords to have periodic checks done by a qualified electrician every 5 years. You are advised to make visual inspections yourself as landlord and to keep supplied appliances to a minimum.
- Make sure appliances supplied are complete and in working order - keep
purchase receipts.
- Pay particular attention to second hand equipment - always have these
items checked.
- Ensure that operating instructions and safety warning notices are supplied with the appliances.
- Ensure that flexes are in good order and properly attached to appliances and plugs.
- Ensure that earth tags are in place.
- Ensure that plugs are of an approved type with sleeved live and neutral pins.
- Ensure that plugs and sockets conform to BS1363 or BS1363/A for heavy duty uses.
- Ensure that all fuses are of the correct type and rating.
- Make sure that tenants know the location of and have access to the main consumer unit, fuses and isolator switch.
If you are in any doubt about the wiring or the safety of any appliances consult a qualified electrician. Fire Safety
Unless the rented accommodation is a House in Multiple Occupation (HMO) there are no specific fire regulations for residential tenanted properties in England and Wales. However landlords are under a common law duty to ensure that the property they provide is safe. All residential properties in England and Wales should comply with building regulations on the following.
- Means of emergency escape, particularly where sleeping accommodation is provided on 2nd and 3rd floors.
- Fire doors and emergency exits, passages and escape routes
- Fire alarms and fire extinguishers
As a minimum, landlords should remove potentially dangerous appliances and
heaters and fit smoke alarms. Fire Alarms
The building regulations require that all properties built after June 1992 must have mains operated inter-connected smoke alarm fitted on every level of the property. Older properties do not have to comply but landlords would be well advised to provide at least battery operated smoke alarms in the property.
Furniture and Furnishings
If you let your residential property furnished you must ensure that certain types of furniture and furnishings provided meet the current safety regulations. Failure to comply with the regulations is a criminal offence. As from 1st January 1997 all furniture in tenanted residential property must comply with the 1993 amendments to the Furniture and Furnishings (Fire) (Safety) Regulations 1988. Some items such as oil heaters, portable LPG heaters, DIY tools, glass furniture and garden tools are particularly hazardous - you would be well advised not to supply any of these. By keeping the items you provide to a minimum, especially upholstered furnishings and electrical appliances, you are reducing your risk considerably.
- Either let your property unfurnished.
- Make sure all your furniture and furnishings meet the regulations:
The regulations apply to:
- Arm chairs, three piece suites, sofas, sofa beds, futons and other
convertible furniture.
- Beds, Bed bases and headboards, mattresses, divans and pillows.
- Nursery furniture.
- Garden furniture which could be used indoors.
- Loose, stretch and fitted covers for furniture, scatter cushions, seat
pads and pillows.
Furniture which complies carries a manufacturer's label which must be permanent and non-detachable. TV License
If you provide a TV in your rental premises and your tenants use it then you can both be held responsible for paying for a license so it is advisable not to provide one. If the lease makes it clear that the tenant is responsible for buying the TV License then the landlord's risk is considerably r
educed, though not entirely - ultimately both parties are open to prosecution.
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