So, you have inherited a property that you have decided to keep and let out. Or, you have taken a lodger in to your home where you also live. May be you have had to relocate for personal or work reasons but don’t want to sell your home – so you need to get a tenant in to cover your outgoings.
Whatever the reason why you are an accidental landlord, it is likely driven by circumstance rather than an active business decision.
This means that you could accidentally overlook some of the legal and financial obligations you must meet when having someone live in your property – whether you yourself live there or not.
Here are 7 mistakes that you need to be aware of …
- Not advising your mortgage provider
When you bought your property, typically it would have been on an owner-occupier basis. If you are now letting all or part of your property, you do need to inform your mortgage provider.
If you don’t and they find out further down the line, not only could you be forced to repay all your outstanding mortgage balance in one go, but you could face a charge of fraud.
- Not advising your insurer
Similarly, with your home buildings and contents insurer, this policy was taken out on the basis of you – and your family only – living there.
If you take in a lodger or let the whole of your property, you typically will need landlords insurance cover. This provides financial protection for the additional risks faced by your property and you.
If you don’t tell your home insurance provider, then try and make a claim, not only is it likely that your claim will be rejected but your policy will also become invalid too.
- Not meeting the safety obligations required by law
As a landlord, you have a legal obligation to provide a safe and healthy environment for your tenant. As part of these obligations, you will need to have annual GasSafe checks carried out, regular electrical checks as well ensuring your property meets with the conditions stipulated under you landlord insurance policy.
To find out more, visit the Government website here.
Failure to do any of these things could see you face a financial penalty, potentially imprisonment (depending on the nature of the issue) and invalidation of your insurance.
- Letting unpaid rents accumulate
If you are new to the landlord business, then you may trust that because you have a contract with your tenant, they will pay their rent in a timely manner. This isn’t always the case.
Letting unpaid rents accumulate not only sends out the wrong message to your tenant (ie. You don’t mind that the rent isn’t being paid) but could seriously see you out of pocket if they leave without ever paying what they owe.
Be polite but firm. If rents are building up and your tenant is two or more months in arrears, you can evict them. This Guide from consumer champions Which? explains the process for claiming unpaid rents
- Failing to protect the tenant’s deposit
Once the tenancy agreement has been signed, you need to put the tenant’s deposit in to a tenancy deposit scheme.
You are legally obliged to do this. If you don’t, you could be taken to Court.
- Not drawing up an inventory
An inventory lists everything that you are supplying for the tenant’s use. It can include things such as utensils right up to furniture. Drawing up an inventory means that when the tenant leaves, they will replace or get repaired anything they have damaged.
This makes sure that you are not footing the bill if your tenant damages something you have provided for them as part of your tenancy agreement.
- Not carrying out proper checks
If you have accidentally fallen into being a landlord, you may not have given much thought to who your tenant is. Under upcoming laws, you are legally required to check the immigration status of any tenants. This is called the Right To Rent Scheme.
You may also wish to arrange your own private checks on a potential tenant. After all, do you want a serial rent absconder in your home? Or someone even worse? There are companies that carry out these checks on your behalf, so you can feel confident there aren’t any skeletons in your tenant’s cupboard.
In summary, to avoid any problems further down the line, make sure that you have carried out these 7 key tips as soon as you can. That way you can feel assured that while you may be an accidental landlord, you are a savvy one.