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Most flats are purchased with a view to subletting them and most leases will allow this with the permission of the freeholder. The lease is the overriding document an landlords not only have to abide by all the covenants (promises) they make to the freeholder but they also have to abide by landlord and tenant legislation (such as how to evict their tenants correctly and protect tenancy deposits for example) and maintain rental standards. These standards are governed by the overarching legislation of Part 1 of the Housing Act 2004, specifically under the Housing Health and Safety Rating System (HHSRS). So they must also keep their rental properties gas safe, electrically safe and smoke and carbon monoxide safe. They must also obtain a landlord licence from their local authority if one is required, carry out immigration checks on their tenants under the Right to Rent Scheme and ensure that their Energy Performance Certificates do not have a rating of less than F or G as it became illegal to rent or market such properties in April 2018.

Landlords have three options as to how their rental properties are managed:

1: Lettings Only/Landlord Management

In this option the letting agent will carry out the following:

  1. The marketing of the property;
  2. Providing advice about what rent the landlord should ask for;
  3. The finding of a tenant and subsequent reference checks if required;
  4. Providing the tenancy agreement.

The landlord then takes on all the management of the property when the tenancy starts. The agent will usually charge a one-off fee for their work in getting to this stage. The payment will usually be based on the rent (usually one month) and they are also likely to charge the tenant an administration fee (for the same reason). Both the landlord and agent must be in agreement about what the tenant deposit should be and make sure that the tenants receive protection for the deposits they hand to landlords. The landlord will then have to give proof to the tenant that the money is in one of the three government-approved deposit protection schemes (2 insurance-based and 1 custodial-based).

They will ensure their properties are electrically safe (before and during a tenancy) gas safe, and smoke and carbon monoxide safe. They will also be aware of how to legally evict their tenants, whether it is a case of wanting their properties back (with no breach of the tenancy having been commited by the tenant) or by the tenant having committed one or more tenancy breaches, with the main one usually being rent arrears.

They will also need to aware of their repair obligations.

2: Tenant Finder/Rent Collection

Self explanatory and again whilst the agent will usually charge a one-off fee they may also add a small monthly percentage for collecting the rent. The landlord will deal with repairs, and regaining possession at the end of the tenancy if the tenancy is not renewed.

3: Full Agent Management

This covers all aspects of management including repairs that can either be carried out without requiring the permission of the landlord or those which the landlord prefers to deal with. Rent collection, commencement of the tenancy and the first steps of bringing a tenancy to an end such as serving notice (but not proceeding to court action) are also provided. This level of service will naturally be the more expensive option.

ACCREDITATION AND TRADE BODIES

If landlords want to stand out from the crowd (and there are over 2m of them in operation in the PRS) then gaining landlord accreditation is a good idea as it provides some form of protection and redress to tenants. Scheme members will be required to take a mandatory training course and once accepted, will need to get regular continuing professional development (CDP) as a condition of membership. Members will also sign up to the scheme’s code of practice which then allows them to be recognised as ‘fit and proper persons’. This is a very important point for tenants as such landlords are also more likely to keep their properties ‘fit and proper’ for renting, not just during the tenancy but in preparation for the next tenant.

Local authorities usually run these schemes, along with landlord bodies such as the National Landlords Association (NLA). Other trade bodies are the Guild of Residential Landlords, and the Residential Landlord Association (RLA). The largest accreditation scheme is run by the London Borough of Camden, which is that of the London Landlord Accreditation Scheme.

There is also the Accreditation Network UK (ANUK) which is a central resource for tenants, landlords and scheme operators interested in accreditation of private rented housing. ANUK provides support, expertise and promotes best practice for scheme operators.

Landlords should also ensure they take out the correct insurances of which there are a considerable number available.

Abiding by all these requirements may seem daunting but they are legal necessities to ensure that not only do landlords let their properties successfully but tenants also feel safe and secure in the homes that these PRS landlords provide.

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