A lot of people and businesses have invested in property and buy to let is potentially very lucrative. However, it is important to be aware of the legal issues around this industry in order to make sure you satisfy your tenants as well as fulfilling legal obligations.
Gas and electrical
As a landlord, you are legally required to check gas supplies and appliances using a registered engineer. If you don’t do this, you could be fined £25,000. You should also ensure that tenants have written reports on the conditions of the appliances.
Qualified electricians are also required to check electrical equipment before a tenancy starts and you need to include instruction books for the safe use of the equipment (this should be PAT tested to ensure they are safe). If you don’t follow the regulations on electrical checks you may be fined up to £5,000.
A property should also have an energy performance certificate to provide information on its energy efficiency.
Since 2007 landlords have been required to put deposits in an approved account or insurance scheme and you must inform tenants within 14 days how their deposits have been stored. In the event of any disputes a third party must hold onto the money before it is resolved (either returning funds to the landlord or tenant).
You need to inform your insurer if you let out your property – this is important because it helps to make sure you have the correct cover for your property, protecting your investment in the process.
There are a number of policies that are specifically for tenants and it is best to use these as this will give you the right kind of cover – for example, it is possible to get coverage in the event of a property not being occupied for a specific period of time.
All furniture must comply with fire regulations – if you are found guilty of not adhering to these rules you could be fined £5,000 or be imprisoned for six months. The reason is pretty simple – people staying in your property need to be protected and you could potentially be liable for anyone injured or killed in the event of a fire due to something you could have prevented.
A tenancy agreement is important as it clarifies the duty you have to your tenant and likewise the tenant has responsibilities they take on as well. While it is possible to have an oral agreement in lieu of a document a tenant can ask for written information on when a tenancy began, the rent payable and the arrangements involved in the agreement.
Buy to let can potentially be lucrative but equally it can be a risky investment. Complying with the law may require some initial costs but it is better than the potential costs that come with not complying.
If you are concerned or are looking to invest in buy to let and more information relating to it contact us today and we will be happy to discuss your personal situation in more information and help ensure you are meeting the legal needs of your business and your tenants.