Our users tell us that one of their main worries as landlords is to stay on top of their legal responsibilities. We wanted to help, so we’ve asked Tessa Shepperson at Landlord Law Services to come to the rescue with a “how to rent checklist”.
The result is the “Landlord duties” series, five articles to provide guidance for landlords at different stages of their tenancy. Each article is an abbreviated version of the content available on Landlord Law Services: if you want to delve deeper, you can access the full content by signing up to their service.
This third article is about how to start a new tenancy.
This is an important stage and you can suffer penalties if you fail to follow all the steps. So read this article carefully!
The things you should have done already
- Protected your property at the Land Registry
- Checked the condition of your property and dealt with any issues (as discussed in the first checklist article)
- Checked out your tenants thoroughly (as discussed in the second checklist article)
- Obtained and served a gas safety certificate (this needs to be served on tenants BEFORE they sign their tenancy agreement and move in, so it is best that this is done at least one day in advance)
- Obtained and served an Energy Performance Certificate – if this is not served before the tenancy starts, penalties will apply
- Prepared your inventory / schedule of condition – this will (if done properly) take some time so ideally it should be prepared in advance
- Carried out all the electrical checks – these are now mandatory
- Provided your tenants with a notice under the Data Protection rules setting out how you will be dealing with and protecting their data
- Carried out ‘right to rent’ checks. If the applicants fail the test they should not be allowed to occupy the property – even if they are not going to be the actual tenant. All occupiers should have a right to rent, otherwise you should rent to someone else
- (If your property is in Wales) Registered with Rent Smart Wales. If you don’t do this, you can be prosecuted and fined.
Make sure that you’ve ticked off all items on the list above and that you are in a position to prove that you’ve done it, if challenged later.
Once you are sure you are compliant, move on to the next steps in how to start a new tenancy.
Things to do at or just before signing the tenancy agreement
- Prepare your tenancy agreement. This needs to be suitable for the type of tenancy concerned. If you are not sure, there’s a free guide available at Landlord Law Services.
- Depending on the circumstances of the let, you may also need to serve notices, such as a ground 1 notice (if you are renting out your own home or a retirement home). There are special forms for Landlord Law members to use if you are going to allow your tenant to keep a pet, run a home business from the property or have a lodger. These forms incorporate additional clauses into the tenancy agreement to protect your position.
- If your tenants are providing guarantors – you need to get the guarantee forms signed at least one day before your tenant agreements are signed by the tenants. Otherwise, they could be invalid.
- Make sure you have put in place arrangements for the rent to be paid to you. Most tenants will pay by standing order. You will need to check regularly to ensure that the payments have been made – or you can get a Hammock account and get automatic notifications for all rental payments!
- If you have taken a deposit, make sure it is protected in a scheme and that you have served the ‘prescribed information’ within 30 days of receipt of the money. Note that service of the scheme leaflet and deposit protection certificate is not enough to satisfy the prescribed information rules. Find out more about this in the article here. There is a cap now on the amount of money you can take which is (in most cases) limited to 5x the weekly rent. You will find a calculator you can use here. NB If your tenant cannot afford to pay a deposit, there are some organisations which provide a deposit guarantee service for tenants.
- Print out a copy of the current How to Rent booklet and give it to your tenants.
- Provide copies of all manuals for the appliances at your property. Make sure you retain the originals yourself – you may need to copy them again if your tenants lose the copy provided!
- Consider providing ‘house rules’ or a ‘home information’ guide. This is useful for property specific information which is not suitable for tenancy agreements – such as any conditions in your HMO license or insurance policy.
- Do meter readings. You need to be clear on this so that tenants are charged the correct amount and/or so you can see if they are overusing services. Landlord Law members have access to Meter Reading Notification forms (or you can draft up your own).
- Make sure you have sufficient sets of keys. Ideally there should be one set for each of the tenants plus it is important that you retain a set for yourself. This is so you can gain access in case of emergency and so you can easily have copies cut if (or maybe when!) your tenants lose theirs.
Be very careful to ensure that all these things have been dealt with. Renting property is subject to numerous rules and regulations and if you fail to comply this can result in fines and penalties. Make sure this does not happen to you!
Once you are sure you are compliant, you can finally get to the last steps to and have the new tenancy started.
Have a ‘handover’ meeting at the property
Not everyone does this but there is a lot to be said for having a proper meeting with your tenants at the property so you can get everything signed up, check over the property with the tenants and so on. Take care during COVID-19 times: make sure you practice social distancing, wear masks and take all reasonable steps to ensure you and your tenants all safe.
So, what should you do at this meeting?
- Check over the inventory with the tenants and get them to sign a copy as correct
- Check the smoke and CO alarms while they are there and get them to sign to confirm that this has been done
- Serve any remaining documentation on them and get them to sign a receipt to confirm that they have had all the documents necessary (ideally you should also get them to sign and date copies of the documents served and keep this with the receipt document – there is a form for this on Landlord Law)
- Arrange for the tenancy agreement to be signed. Ideally, go over it with them first to make sure that they understand it.
Then, assuming they have paid the first rent payment and the deposit, you can hand over the keys and let them in.
There is one, or possibly two further things you will need to do:
- Arrange for any outstanding repair or other work to be done promptly. It is best not to delay with this and ideally everything should be done within the first month. A common complaint by tenants is that landlords promise to do work and then as soon as they have moved in, fail to do it. Be aware that if you don’t do things you promised to do, this may give the tenants a reason to ‘unwind’ the tenancy and claim all payments back. They have the right to do this under the Consumer Rights Act 2015, provided they comply with the time limits.
- Set a date for your first inspection visit – ideally in about a months’ time. You can use this visit to check that any works have been done properly and make sure that your tenants have settled into the property properly and are happy there.
And that’s it. Next time I will be looking at the things you need to do during the tenancy.
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