Latest Information

Landlords beware!

28/08/2008

Novice landlords face legal minefield The Bolton News

LEGAL experts have been warning novice landlords of the pitfalls of renting out their properties.

According to the Royal Institution of Chartered Surveyors, the slump in house sales is forcing many more people to become either landlords or tenants. In July, RICS members saw new instructions from landlords rise at their fastest rate on record. However, property solicitor Claire Dawson from Bolton firm Kippax Beaumont Lewis said: “They need to make sure they get a proper agreement drafted up so that everything is set in stone. “That can cover things like having an inventory, setting out what tenants can and can’t do in the property, making sure they agree the condition of the property with lists and photographs, and possible inspection of the property throughout the term to make sure that it is all in good nick and the tenants are not just running wild. “And then there are things like checking out your tenant, references, maybe credit checks — you can do that through an agent.”

Claire said that for prospective landlords with no experience of the business, expert advice is crucial to make sure they do not overlook the small details. “The people who have never done it before need to make sure they speak to their mortgage lender and get their consent — some people don’t think about that but then they rent the property out that’s one of the conditions in the mortgage. “Similarly they will need to speak to their insurance company. “Sometimes it’s just the little things that you take for granted that you need to be aware of.”

In fact, the potential legal pitfalls are so great that failure to comply to some — for example health and safety legislation — could result in a fine, or even a jail sentence. For that reason, all novice landlords are advised to use a letting agent to manage their leases. Roger Basnett, manager of Belvoir Lettings in Bolton, said: “Our advice would be to leave everything to an agent, who can provide all the services they need. “There are legal implications in everything they do. Because it’s a legally binding contract that they’re entering into, if they don’t now what they’re doing then there’s potential to be sued or in a very worst case scenario, regarding gas, electrical and fire safety regulations, if they don’t comply they can be jailed if anything were to go wrong.”

Robert Jordan, chairman of Jordan’s and founder of the Rent-2-Buy scheme that helps first-time buyers and novice landlords, said: “New buy-to-let investors should ensure that they have a proper lease drawn up before they rent out a property. Failure to comply with the assured short hold tenancy legislation could result in not being able to evict tenants who could gain security of tenure. “Novice landlords should also use a professional letting agent, either member of the RICS or ARLA. They will ensure the landlord’s money is bonded so if the agent goes bust the landlord will get their money.

There are lots of estate agents offering rental services who are not members of these organisations and landlord’s money could be at risk.” Claire Egerton, residential property partner at national law firm Lewis Hymanson Small, said landlord and tenant laws are complex: “First and foremost, potential landlords need to check with their lender whether they’re able to let out the property before even considering becoming landlords. “Landlords new to the game must recognise their legal responsibilities. For example, all gas appliances must be properly maintained and an annual safety check should be carried out by a CORGI approved contractor. The landlord should keep a record of these checks and any remedial work carried out, for at least two years. “Landlords must provide a copy of the gas safety certificate to the tenant at the commencement of the tenancy. Landlords could still be liable for property damage or personal injury to the tenant. “For tenants, of course, this is good news as, with an increasing number of properties on the rental market, rents are likely to be reduced considerably”

ENDS For more information, please contact Gill Hart or Kirsty Carss at KBL on 01204 527777