Letting Your Property? Keep it Legal

Many people ask me, “What is the Key to Success in Letting?”

The answer is surprisingly simple and starts with finding a good tenant. You must be confident your tenant is reliable and will look after your property so using an experienced, local letting agent is clearly the easiest solution. They’ll advertise your property online and through local press, they’ll conduct viewings and they’ll undertake thorough referencing to ensure the tenant has a good credit history. All done at no costs to you – you only pay the agent when you accept their tenant – so very little risk on your side. And if you’re hoping to attract a corporate tenant, it’s important to note that most organisations require that a property is let and managed through a professional agent.

But if you’re letting your property more informally, maybe to a friend or colleague, you still need to protect yourself against something going wrong. So if you’re ‘going it alone’, what should you do to safeguard your property?

1. Ask Permission
If you have a mortgage, you need to obtain your lender’s written permission to let the property and ask for permission from your insurance provider.

2. References
Check your tenant can pay their rent. Do a credit check and get references from their bank, their employer, a professional referee and maybe a previous landlord. If they are a student then make sure their parents act as a Gauarantor.

3. Take a Deposit
You must comply with regulations concerning the holding of tenancy deposits. Be sure you visit www.thedisputeservice.co.uk for more information. I would recommend taking 6-8 weeks rent as a deposit. Unfortunately it’s not as simple as putting the deposit in your bank and then if the tenant breaks anything you can simply deduct, you need to follow strict procedures.

4. Tenancy Agreements
Decide which type of tenancy agreement is suitable – assured shorthold tenancies are most common. The tenant must comply with the rules of the tenancy agreement which may range from not taking in lodgers to not keeping pets. The tenancy agreement should also contain a clause allowing the landlord to repossess the property if the rent is not paid or if any other terms are breached. You cannot insert unreasonable things such as the Tenant has to clean the oven every week or cannot have friends round to stay, but if you have any specific things which are reasonable then ensure you include them and get the tenant to initial next to each point agreeing to them.

5. Inventory
Get an independent inventory made of the property with photos showing the condition. This must be very detailed and specifically detailing cleanliness. The document then needs to be signed by the Tenant accepting it. This is vital as without this you will have no grounds to ask for deductions from the deposit at the end of the tenancy.

6. Rent Arrears
You should have a clear procedure in place for collecting rent, which should be payable on a specified day of the week or month. Act immediately if the tenant falls behind and inform the tenant that he is in arrears.

Letting is not a bed of roses – there are many pitfalls which can cause even experienced landlords issues which is why an experienced professional agent is such a key part to success.

We have comprehensive information on these and other issues for landlords wishing to manage their property themselves. Follow the link https://www.benhams.com/landlords/ to the landlords’ section of our website for more information. Or if you have a specific query, please post a question on this blog.