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How to avoid legal pitfalls when letting out a property

Many more people are looking at the option of letting a property as a long-term investment. It can be a profitable enterprise, but there are a number of regulations and legal considerations to be observed.

Here, Amanda Hyam, a Senior Associate with Mander Hadley, who specialises in property letting and dispute matters, explains the key points landlords need to be aware of:

Starting a tenancy

The property must be safe and include at least one smoke alarm installed on every floor and a carbon monoxide alarm in any room containing a solid fuel-burning appliance.

In addition, electrical outlets must be checked and all gas appliances and flues need an annual gas safety check.

Other responsibilities include:

Providing an EPC

Properties in England and Wales are required to have an Energy Performance Certificate (EPC) which shows how energy efficient the property is. Failure to provide this before the tenancy starts can affect the ability to evict a tenant.

A Right to Rent check

Landlords and letting agents must determine immigration status by checking ID (and their right to rent in the UK) before the start of the tenancy, according to the 2016 Right to Rent scheme.

This includes UK passports, European Economic Area passports or identity cards, permanent residence cards or travel documents showing indefinite leave to remain.

Arranging a tenancy agreement

The most common tenancy type is an Assured Shorthold Tenancy (AST), which includes the basic information of the tenant, landlord and property and should include:

  • The names of the parties involved
  • The start and end date of the tenancy
  • The rental amount and the method of payment · The initial deposit amount and how it will be protected
  • An outline of tenant or landlord obligations

Detailed inventory

An inventory is evidence of a property’s condition before and after a tenancy and makes sure everything is accounted for. At the end of the tenancy, compare the property’s condition to the initial inventory to distinguish any deductions that could be made from the tenant’s deposit. The report should act as proof to help avoid disputes.

Insurance

To protect an investment, it is vital to have property insurance coverage. It covers different risks from normal home insurance, including buildings, contents, accidental damage, loss of rent, liability and even rent guarantee.

If you would like more information on the legal issues relating to property letting, please get in touch with us.

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