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From The Times

February 23, 2007

The accidental landlord

A laissez-faire attitude to letting could be a problem if legal responsibilities are ignored

Paula Hawkins

THE accidental landlord is a very common figure. The National Landlords’ Association (NLA) says that 43 per cent of landlords came into the residential letting market by chance, choosing to let a property that they had previously lived in, inherited, or that had been purchased for another family member who had since moved on.

Accidental as they are, many of those landlords do not really see themselves as landlords at all, the NLA found. And while it is hardly surprising that people might not want to cast themselves in the Rigsby role, a laissez-faire attitude to letting property could be a problem if landlords fail to keep up with the detail of their responsibilities under the law. David Salusbury, chairman of the NLA, says: “In my experience, they often don’t see themselves as landlords. But even if they have just one rental property, they must remember that in the eyes of the law they are subject to the same laws and regulations as the portfolio landlord who may own fifty or a hundred properties.”

Unfortunately for landlords, there are plenty of laws and regulations to follow – the NLA estimates that there are now 50 Acts of Parliament and 70 separate sets of regulation affecting landlords – and new legislation comes into force all the time. Much of the new law is less than sympathetic to investors, according to David Whitaker, of Mortgages for Business, the buy-to-let broker. He says: “The past 18 months have seen a raft of legislation that ignores the interests of private landlords. We have seen an increase in housing authority pathfinder projects – whereby the Government now pays DSS tenants’ rents directly to the tenant rather than the landlord – and the changes in law relating to HMOs [houses in multiple occupation].” Landlords also need to keep abreast of the latest gas and electrical regulations, the safety of furniture and furnishings, and the provisions of the various landlord and tenant Acts.

So how is a landlord – particularly an accidental one – to keep up? Whittaker says that membership of a landlords’ association such as the NLA can be invaluable. “Smaller landlords should consider joining their local landlords’ association,” he says.

“They send their members information on changes to legislation, offer educational workshops and telephone helplines.” There is a charge for all this help, however: membership of the NLA, for example, usually costs about £70 a year. The property press should also alert you to any changes in regulation or legislation, and there is, of course, plenty of information to be found on the internet. The Department for Communities and Local Government (DCLG) website has a section on renting and letting, and the property website Your Move also has a wealth of information for landlords.

First, make sure that you have permission from all relevant parties to let your property. Furnishings must comply with fire safety regulations, and your gas appliances must be checked by a qualified Corgi professional. There is no statutory checking procedure for electrical appliances, but they should all be checked regularly by a qualified electrical engineer. As of 2005, domestic electric installation work must be carried out by government-approved contractors.

Landlords must keep the structure and exterior of the property in a good state of repair: the landlord must pay for this, although the potential cost of repairs can be passed on to the rent that is charged. If the landlord fails to maintain the building, the tenant is entitled to carry out the work and deduct the cost from rent.

If the property is an HMO, there may be additional safety regulations with which you need to comply. An HMO is defined as a dwelling of three or more storeys which is occupied by five or more unrelated persons, or five or more persons who form more than one household. If your property is an HMO, you are now required to be licensed by your local council. Whether or not the tenants can keep pets is up to you, but you should set out your conditions in your tenancy agreement.

You should also take a deposit, which will be held until the end of the tenancy, when it should be returned promptly less the cost of any damages. From April, a new Tenancy Deposit Scheme will come into place, under which landlords will no longer be able to hold deposits themselves but must hand them over to a government-approved tenancy deposit scheme.

DCLG: www.communities.gov.uk NLA: 020-7840 8937, www.landlords.org.uk Mortgages for Business: 0845 3456788, www.mortgagesforbusiness.co.uk Your Move, www.yourmove.co.uk/ lettings/landlords