Regulation surrounding buy-to-let
Buy-to-let properties provide an attractive, potentially lucrative way of boosting income for many would-be landlords up and down the country - if they do their research. The importance of being ready to own a buy-to-let property, and managing all the responsibilities that come with it, cannot be understated. For landlords with no awareness of the legalities surrounding buy-to-let, money could be lost rather than gained.
Beginning a buy-to-let journey
First if all, merely looking at a property and judging it to be adequate for living purposes is not enough. Rules and regulations surround the buy-to-let arena and tougher tests will have to be carried out before deciding whether the property is livable.
Landlords are obliged to provide Gas Safety, Energy Performance and Portable Appliance Testing documents under law, highlighting the safety of any property under their ownership. Each of these certificates lasts for 10 years and, since the 1 October 2008, an Energy Performance Certificate is compulsory.
All gas appliances need to be checked or serviced by a CORGI approved tradesman while all new furniture needs to comply with levels of fire resistance in line with regulation - laid down in the Furniture and Furnishings (Fire Safety) Regulations 1988.
However, those with specific insulation upgrades in their property - such as loft/cavity wall insulation - could be eligible for tax benefits, allowing landlords to save some money along the way.
Landlord and tenant law
First time landlords will also have to acquaint themselves with tenant law, specifically the Landlord and Tenant Act 1985. The Act sets out the rights and responsibilities of both landlord and tenant when it comes to maintenance and repair.
Generally, the landlord is responsible for all utility repairs such as water, gas, electricity and sanitation. The tenant tends to manage the accounts and payments of said utilities though some landlords do prefer embedding utility payments within rent. The landlord is also responsible for any structural problems that may occur such as guttering, roof, exterior pipes and drains.
On the other hand, the tenant also harbours some responsibility for the property during a tenancy agreement. The tenant must ensure the property is clean, is looked after through small maintenance works - for example, changing light bulbs, unblocking sinks - and left undamaged. Any damage could see repair costs recouped through the tenant's security deposit.
There are many other facets to the Landlord and Tenant Act 1985, so it is integral that first-time landlords read and draw up contracts to their own and the law's specification.
Rent Act 1977
For tenants who fail to hold up their end of the bargain by breaching the terms of the tenancy, buy-to-let landlords can repossess their property through a number of statutes laid out in the Rent Act 1977. The legal cases why a landlord can evict are set out in Schedule 15 of the Act and contain a number of grounds where a landlord can take possession. However, the notice a landlord will need to give under these grounds can vary from two weeks to two months.
The landlord will need to present a valid reason to evict a tenant. For example, a tenant sub-letting the property in question gives the landlord cause for eviction. However, if a landlord neglects the property in terms of repair or enters the property without permission, then a Judge may rule in favour of the tenant.
Clearly there are a number of laws and regulations for first-time landlords to research. Buy-to-let can be a complicated beast to tame but once first-timers get a grasp of the laws surrounding it, buy-to-let can be a very profitable venture.