Landlords Legal Responsibilities
Buy to let investment is not just a matter of purchasing a property, putting in a tenant and leaving the house to run itself. Taking on the job of a landlord means taking on other responsibilities as well:
Health and safety
Landlords have a direct responsibility for the safety of their tenants and have to make sure their properties comply with standards laid down by law.
Gas appliances and supply pipes must be checked every year by a qualified engineer who certifies the supply as safe. Tenants should have a copy of the certificate by law.
Electricity supplies must be checked and certified as well – but not as often as gas supplies. Every five years or so should be sufficient.
Shared houses, or Houses in Multiple Occupation, have additional safety regulations to meet, including fire safety. Many HMOs require licensing by the local council, which monitors the standards.
A buy to let property is taxed like a small business although renting out property is technically an investment. Tax laws require a landlord to keep adequate financial records, like a log of rent received, receipts for expenses and repairs.
Landlords must tell HM Revenue and Customs that they have a letting business within six months of the date of letting their first rental property. If a property investor sells a buy to let property, they also have to tell HMRC about the sale in case capital gains tax is due. To find out more visit our page on buy to let tax.
Landlords have to arrange buy to let buildings insurance under the terms of their mortgage, but should also include liability insurance (for a few pounds more to cover) the risk of claims for injury from tenants. Other types of insurance are available, such as rent guarantee insurance. To find out more visit our page on buy to let insurance.
Tenant deposit protection
Landlords or their letting agents musty make sure that any money a tenant hands over as a deposit is protected under an approved, independent scheme. The deposit belongs to the tenant, not the landlord.
Deposit protection also offers an arbitration service for handling disputes over retaining all or part of the deposit if a property is damaged during a tenancy.
Landlords must not contravene tenants’ rights, especially when entering a property or evicting a tenant for failing to pay rent.