Owning a commercial or private property that you rent out can be an incredibly rewarding and lucrative investment, but it does come with some responsibilities you might be unaware of. By renting out your property you take on a number of responsibilities and duties, some of which are legally mandated and enforced rigorously by the authorities. Managing a building and your tenants can sometimes be difficult to keep up with, so this month we wanted to remind you of some of your main responsibilities as a landlord to the government and your tenants.
As a landlord you have some basic duties towards your tenants to ensure their safety and security whilst in your property. These include:
Keeping your rented properties safe and free from health hazards
Making sure all gas and electrical equipment you supply to the property is safely installed and maintained
Follow all fire safety regulations (you can find a PDF of the regulations here)
Provide an up to date energy performance certificate for the property
Protect any deposit from your tenants in a government approved scheme
Health & Safety
Health and safety in rented properties is regulated by the Housing Health and Safety Ratings System, and this is the system your council uses in order to make sure that your property is a safe place to live. To ensure you are adhering to the regulations, the council inspect your property and score the property accordingly. The council may carry out an inspection if your tenants have requested one, or if they believe the property might pose a hazard. If you fail the basic health and safety requirements the council can issue you with a notice to make improvements to the property, or even carry out the works themselves and bill you for the costs.
As a landlord, you are under a legal obligation to pay income tax on the income you make from your rental property to the government. Renting out a residential property without declaring this income is a criminal offence, and could result in legal action. In addition, if you have a mortgage on the property you're renting, you must get permission from your mortgage lender, or convert to a buy to let mortgage. In addition, if you have the same tenants in your property for over 2 years and you decide to sell the property while they are still in residence, you must give your tenants the right of first refusal to buy the property.
Repairs and Maintenance
As the landlord you have the legal right to enter your property to inspect for damage and carry out repairs, providing you give your tenants at least 24 hours notice (unless there is an emergency issue). As the owner of the property it is your sole responsibility to maintain and carry out repairs to:
The structure of your property
Any basins, sinks and other sanitary fittings
Heating and hot water systems
Any damage you cause in attempting repairs
Any common areas (staircases etc) in a block of flats or similar property
If your property is seriously damaged through act of god (fire, flood of other natural disaster) then you aren't under any obligation to repair or rebuild the property. However, if you do decide to repair the damage, you can't charge the tenants for the cost f those repairs.
Depending on the type of tenancy you have arranged with your tenants, there are different ways to deal with rent increases (both in general as a result of property improvements). If your property is temporarily unusable or unliveable due to repairs, your tenants are able to claim a reduction in their rent costs known as a 'rent abatement'. However once the improvements are made you do have the right to increase the rent, in accordance with the type of tenancy agreement you have in place. For periodic tenancies (e.g. rolling week by week or month by month), you can't normally increase the rent more than once per year without their agreement. With a fixed-term tenancy (run for a set period), you can only increase the rent in your tenants agree to it. If they refuse, then you can increase the rent only when the fixed term ends.
Licensing (For Commercial Properties Only)
If you are renting or managing a commercial property, then you need to make sure you have the correct licenses in place. you must have a license if your property is both:
Guillaumes property solicitors in Weybridge can help you find out if you need a license for a property.
If you're a landlord leasing to a business and are in need of support, our commercial property solicitors are in the best position to assist you in your dispute. Let us know how we can help today.