Along with a significant potential to earn a good income from property investment, it also comes with several legal obligations.
Energy Performance Certificate (EPC)
All tenancies require an Energy Performance Certificate (EPC) before you can even market the property. Their purpose is to determine how energy efficient homes are on a scale of A-G. The
certificate uses the same scale to define the impact a home has on the environment.
The certificate includes recommendations on ways to improve the home’s energy efficiency to save money and help the environment.
An EPC lasts for 10 years and is a one-off fee to produce.
My Deposits Protection Scheme
A rental deposit is taken from tenants to protect against breaches of tenancy including failure to pay rent or bills, damage to the furniture and property.
All Letting Agents and landlords that take a deposit are required to protect it in a government-authorised deposit protection scheme. The law states that the deposit must be protected within 30 days of receiving it from the tenant.
Right to Rent
In 2016, the Right to Rent Act was brought in as part of an ongoing reform to the immigration system to make it harder for people to live in the UK illegally.
This means all private landlords, or their agents, will have to check that new tenants have the right to be in the UK before renting out their property.
Evidence of any new tenant’s right to rent in the UK (for example a passport or a biometric residence permit) has to be seen and a copy obtained before that property can be rented out.
Landlords who don’t make the checks could face a civil penalty of up to £3,000 per tenant if they are found to be renting out a property to someone who is in the UK illegally.
The Gas Safety (Installation and Use) Regulations 1998 say landlords must ensure that gas appliances, fittings and flues are safe for tenants’ use and that installation, maintenance and annual safety checks are carried out by a technician registered with the Gas Safety Register.
The landlord must keep a record of the safety check for two years then issue a copy to each existing tenant within 28 days of the check being completed and issue a copy to any new tenants before they move in. As part of the Fully Managed Service, we organise the safety check and ensure that the tenants receive a copy.
This is not a legal obligation to have professional checks carried out on the electrical appliances but there is an obligation and expectation that all electrical equipment is safe.
All electrical certification should be carried out by an electrician who is registered with the National Inspection Council for Electrical Installers and Contractors (NICEIC). There are two types of electrical certificates:
- Electrical Installation Condition Report (EICR)
- Portable Appliance Testing (PAT)
We suggest that you conduct a PAT test annually if you rent a property with appliances and an EICR every 5 years.
Smoke Alarms & Carbon Monoxide
All properties must have interlinked mains-connected or battery operated smoke detectors/alarms on each floor of the property. Smoke alarms must be checked prior to a tenancy commencing to ensure that they are in full working order.
In 2015, it has also become a legal requirement to provide carbon monoxide detectors where you have open fires.
The Furniture and Furnishings (Fire) (Safety) Regulations 1988 (as amended in 1989 and 1993) sets minimum fire resistance standards for domestic upholstered furniture, furnishings and other products containing upholstery that remain in a dwelling during the course of a tenancy.
These include any of the following which contain upholstery:
- furniture intended for private use in a dwelling, including children’s furniture
- beds, head-boards of beds, mattresses (of any size)
- sofa-beds, futons and other convertibles
- nursery furniture, garden furniture suitable for use in a dwelling
- scatter cushions, pillows, seat pads and loose and stretch covers for furniture
The Regulations do not apply to:
- furniture made before 1950
- sleeping bags
- bed-clothes (including duvets)
- loose covers for mattresses
For items that do apply, a suitable label must be attached to the furniture in a prominent position so that the label will be clearly visible to a potential purchaser of the furniture and the wording on both sides can be read with reasonable ease.
Overseas Landlords and Income Tax
The scheme requires UK letting agents to deduct basic rate tax from any rent they collect for non-resident landlords. If non-resident landlords don’t have UK letting agents acting for them, it is their responsibility to inform the Inland Revenue of rental income received, and to pay any tax due. Non-resident landlords can apply at any time for approval to receive rent with no tax deducted.
Check if your property is legally compliant by calling us on 01604 644449.