Easy Guide to Landlord’s Legal Duties – Part 2

We are made wise, not by the recollection of our past, but by the responsibility for our future.

Following on from our previous article about the safety checks landlords need to carry out, part 2 covers your legal requirements.

YOUR LEGAL REQUIREMENTS

Energy Performance Certificate (EPC)

It is a legal requirement to have a valid EPC when marketing your property and a copy must be made available to prospective tenants free of charge. EPC’s are valid for up to 10 years. From 1st April 2018 all rented properties must have a minimum energy performance rating of E or above

Consents to let

Remember to obtain permission to rent the property from any co-owner(s) as well as permission from any mortgage provider or freeholder, if applicable. Ensure all property owners are named as ‘the Landlord’ on the lettings paperwork.

Local authority licensing

A HMO is defined as any property in which three or more people who form two or more ‘households’ share basic facilities, such as a kitchen, a toilet or a bathroom. A ‘household’ is either a single person or members of the same family who live together.

For HMO’s within England and Wales where there are five or more occupants in a property of three or more storeys and the tenants comprise two or more ‘households’, Mandatory HMO licensing applies. From October 1st 2018, the number of floors will be irrelevant, so any property with 5 occupiers from two or more households will require a Mandatory License.

Some councils have extended HMO licensing to include all HMO’s, irrespective of size. This is referred to as Additional Licensing.

And some councils have introduced licensing for all private residential (non-HMO) lettings too (Selective Licensing).

It is important to regularly check the website of the council your rental property falls within to ensure your ongoing compliance with local licensing rules. For properties in London boroughs, a fantastic resource of information on licensing (including Special licenses, Additional licenses and HMO licenses) is:
https://www.londonpropertylicensing.co.uk.

Always check whether you need to apply for a licence when letting your property. The costs and scheme rules vary significantly between local authorities.

HMO Management Standards

HMOs must also meet certain defined standards in safety, space and management. The Department for Communities and Local Government (DCLG) issued guidance for landlords and property managers of HMOs to understand what is required in order to be compliant which can be found at: https://www.landlords.org.uk/sites/default/files/librarypdfs/1/Licensing/HMO_Licensing_Miscellaneous_Regulations.pdf

Right to rent checks

These have been introduced as part of the Immigration Act 2014 within the private rental sector across England and place restrictions on illegal immigrants accessing rented accommodation. From 1st February 2016 the immigration status or ‘right to rent’ of all prospective occupants aged 18 and over must be proven by a tenant and confirmed by a landlord before a tenancy can be granted. The Immigration Act 2016 imposes criminal sanctions on landlords for non-compliance.

Tax on rental income

All rental income arising from property in the UK is subject to tax. UK residents can usually complete a HMRC Self Assessment tax return to declare this income. Overseas landlords have to be taxed at source, unless their agent has permission from HMRC to pay rent to them gross of tax.

Insurance

As a landlord you must have buildings and contents insurance in place at all times and these should be specific to your type of rental property.

Money Laundering Regulations

All estate agents are subject to the Money Laundering Regulations 2007 and the Proceeds of Crime Act 2002, so if you choose to rent through an agent, they will need to ask you for proof of identity and proof of address, and will require sight of all original documents or certified copies.