5 Things All First Time Landlords MUST Know
The Landlords we work with at Hannells became Landlords for a variety of different reasons. Some made the decision to become a Landlord for business reasons, others found themselves becoming an “accidental Landlord” after inheriting some unexpected property or moving in with a partner…
Whatever your reason may be, there are a whole host of things you’ll need to know.
Some are from a legal standpoint and the difference between knowing and not knowing could be the difference between receiving a large fine, or even ending up in prison – it happens!
The rental sector has received a lot of focus from the Government and as time goes on, it’s becoming more and more heavily regulated.
For example, did you know that as a Landlord, there are over 150 pieces of legislation that you need to be aware of to keep you on the right side of the law?
Others are some top tips that our Landlords have shared with us that can help you to save both time and money.
So, regardless of why you might be thinking of taking the plunge into investing in property, check out our five top things you need to know and make sure you don’t get caught out!
1. Inform your Mortgage Company
Before purchasing a property, be mindful of the fact that you will need to get the right mortgage product. In most cases this will be a buy to let mortgage, but be aware, because most lenders feel there might potentially be a higher risk with a let property, they will usually charge a higher interest rate or request a higher deposit.
Similarly if you find yourself in a situation where you would like to rent out your existing property, be sure to check the conditions of any existing mortgage. Most lenders require you to get permission from them before you can rent your property out and the lender is not obliged to grant their consent.
They may increase the interest rate or require an alternative deal to be taken which could mean switching to a buy to let mortgage.
Make sure you get all the necessary details before deciding whether renting your property out is the right way to go.
Not telling your lender of changing the use of your property will breach the contract. If the lender does find out, it could make significant charges and in theory, it could call in your mortgage, that is, demand you pay it in full and leave.
Here at Hannells we have a great team of Mortgage Advisors that can give you all the information you need.
Just click HERE to arrange an appointment or contact your nearest local Hannells Branch.
2. Landlord Insurance
Although not currently a legal requirement, if you decide to rent out your property, we highly recommended that you take a look at your insurance cover.
As a Landlord you will require extra cover for things that may not be included in standard buildings and contents insurance, such as non-payment of rent, damage to your property by a tenant, liability for accidents in your property causing injury or loss of earnings/rehousing costs if your tenants have to move out following an insured event.
Landlord’s insurance is recommended in the majority of cases as it will provide the extra cover you need to make sure you’re not left out of pocket, but be advised, as with any insurance cover it is important to check the small print. For example, some of the products available from well known brokers won’t settle a claim unless ALL of the documents/procedures and legal requirements have been adhered to, so make sure you understand what your responsibilities are to avoid a costly mistake.
Hannells insurance can give you all the advice you might need and find you the most cost effective and suitable policies. Just click HERE to find out more.
3. EPC (Energy Performance Certificate)
Any property that is put on the market either for sale or to let is required by law to have an Energy Performance Certificate or “EPC” for short.
An EPC essentially tells you how energy efficient a building is and gives them a rating from A to G.
EPC’s will also state what the energy efficiency rating could be if improvements are made (to find out more about EPC’s click HERE) The important thing to know is that as from the 1st of April 2018 it is a requirement for any properties rented out in the private sector to have a minimum energy performance rating of E on an Energy Performance Certificate.
What’s more, unless there is an applicable exemption, a civil penalty of up to £4000 will be imposed for breaches.
Make sure you understand your obligation and contact our Lettings team, they can give advice and arrange for an EPC to be carried out on your property, just click HERE.
4. Make sure you get a Gas Safety Certificate
By law, if you’re renting a property out, that property MUST have an annual Landlord Gas Safety Certificate.
Making sure the gas appliances in your home are safe and in good working order is of paramount importance not just from a safety point of view for the tenants living in your property, but also from a legal standpoint, the penalty for not adhering to the law is a £6000 fine for each item and/or 6 months in prison!
To find out more click HERE or contact our Hannells Lettings team, who will be able to give you all the information you need to know and arrange for your Gas Safety check to be carried out.
5. Smoke Detectors
Something often overlooked by potential Landlords but which is a legal requirement, is to have smoke detectors on each floor of the property.
From the 1st of October 2015 there has been a legal requirement to make sure smoke alarms are installed on every level of the property and that a carbon monoxide detector is placed in any room with a solid fuel burning appliance.
Once these are installed the Landlord (or someone working on their behalf) must ensure all alarms are in working order at the start of each new Tenancy.
After this point your Tenants should take responsibility for their own safety and test the alarms regularly. Our Lettings team are fully informed on what’s required and arrange for smoke alarms and carbon monoxide detectors to be installed.
So, there we have it, 5 important things to bear in mind before you begin your journey to becoming a Landlord.
One final bonus tip (and this one may be the most important) always seek professional advice and support.
We mentioned earlier the countless pieces of legislation that all Landlords have to be aware of to avoid financial penalties and prison sentences, and it’s being added to all the time.
Just keeping up to date with your legal responsibilities as a Landlord is becoming a full time job!
Our Lettings team have all the knowledge, experience and skill to make sure that not only does your jump into becoming a Landlord go smoothly, but that you always stay on the right side of the law.
Contact them now to find out how they can help you.
You can get in touch on: 01332 294396 or email: firstname.lastname@example.org
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