If you've bought a buy-to-let property there are certain things you need to arrange before you can rent it out. There are legal obligations you must meet and the property management side of things to sort out in addition to tenant checks to organise, when you're in a position to rent your property.
Tenant background checks
To reduce the possibility of you choosing bad tenants who fail to pay the rent or look ater your property, you can do some background checks. These checks should include:
- proof of identity
- current address and previous address history
- credit history and income
- references from previous landlords and employers
If a letting agent's sorting this out for you, it's worth asking them what checks they're doing. If you're organising it yourself you may want to use an online company to do some of these checks for you.
Gas & energy efficiency certificates
You're responsible for ensuring your property has a:
- Gas Safety Certificate - an annual check by a Gas Safe registered engineer if you have gas appliances
- Energy Performance Certificate (EPC) - a rating of the energy efficiency of your property - you have to display this when you market it
You have a legal duty to ensure your property is safe. Any electrical equipment you provide has to be safe along with electrical fittings, such as light fittings, plugs and switches. From 1st October 2015, you're also required to install smoke and carbon monoxide detector alarms.
If you're providing soft furnishings these must be compliant with UK fire safety standards.
When you find tenants, you should get them to sign a tenancy agreement to protect both you and your tenant. This will usually an assured shorthold tenancy (AST) agreement.
An AST should state:
- the names of the tenants and the landlord
- the property address
- the deposit required
- the rent price and date of payment
- the length of the tenancy
- the tenant and landlord's obligations
You can find further guidance and a template for creating an assured tenancy agreement at www.gov.uk.
When you receive a deposit from your tenants, by law, you must to place it into one of the government-backed deposit schemes within 30 days and tell the tenants where it's held. If there's a dispute at the end of the tenancy the deposit will remain in the scheme until it's resolved. Further information on the tenancy deposit schemes is available on the www.gov.uk.
Your property needs to be kept in good working order throughout each tenancy; as the landlord you are responsible for ensuring that the property is habitable. This includes ensuring the property has a working boiler providing heating and hot and cold water, installed and maintained by a corgi qualified heating engineer. If anything goes wrong it's your responsibility to get it fixed within a reasonable amount of time.
Insurance to cover the breakdown of appliances which commonly go wrong, such as the boiler or fridge is a good idea. And, if the property you're letting out is freehold, landlord building insurance to cover the structure of the building is a must. You should also get landlord contents insurance too, if your property is furnished.
If you're looking for finance for a rental property, take a look at the buy-to-let products we offer.