Letting - being a landlord

As a landlord, you have a number of legal obligations:

• You need to pay income tax on the income from your rental property less any expenses from day to day running.
• You must also get permission from your mortgage lender if the property you want to rent out has a mortgage on it.
• If you are a leaseholder, you are already a tenant of the freeholder. If you decide to rent or let out your property, then your tenant is a sub-tenant from the freeholder’s perspective. As a leaseholder, it is important to be aware that you are responsible for ensuring that your tenant does not behave in a way that breaches your lease. It is up to you to notify them of the appropriate regulations.
• Once your tenant has moved in, you must respect your tenant’s right to privacy and arrange with them when you have access to the property (to carry out repairs, for example).

Landlord responsibilities

The most obvious of these is making repairs to the property and your repairing obligations as a landlord are set out in section 11 of the Landlord and Tenant Act 1985. As the landlord, you are required to keep the property, both inside and outside, in good repair throughout the tenancy. This does not mean that you have to make significant improvements to the property to suit the tenant.

You are responsible for maintaining:

• the structure and exterior of the premises, including the roof, drains, gutters, exterior walls and external pipes
• the water and gas pipes and electric wiring including, for example, taps, radiators and sockets
• the basins, sinks, baths and toilets

You will not have to repair any interior problems such as internal plaster, internal doors or skirting boards, unless the damage was caused because the outside of the property was not in good repair.

If your tenant causes any damage because they were not abiding by the terms of their tenancy, and was using the property in a way that breached their agreement, such a repair will not be your responsibility.

Some of your other responsibilities as a landlord include:

• removing and dealing with any health hazards in the property
• maintaining all gas and electrical equipment you have supplied including carrying out an annual gas safety check within twelve months
• making sure that fire safety regulations are complied with including on any furniture supplied to your tenant
• providing an Energy Performance Certificate (EPC) for the property
• registering the tenant’s deposit with a tenancy deposit scheme

Deposit schemes

You can pay the deposit to the Deposit Protection Service, which is a government-appointed custodial deposit organisation. The service is free to use because it is funded by the interest earned on deposits and any interest earned can be paid out either to you or your tenant. It offers a disputes service in case you and your tenant cannot agree over how much of the deposit they should get back.

Alternatively, you can pay a fee into an insurance deposit scheme. This allows you or your agent to hold on to the deposit. The fee you will pay insures the tenant’s deposit in case any disputes arise at the end of the tenancy. It also has a disputes service. Once you return the deposit, you must inform the scheme that protection for the deposit is no longer needed. You can pass the fee onto your tenant. There are two insurance-based schemes:

• MyDeposits, which is sponsored by the National Landlords Association and administered by Hamilton Fraser Insurance Services
• Tenancy Deposit Scheme, which is only open to landlords and letting agents who belong to a professional body and requires them to arrange client money protection insurance.

Carrying out repairs

If you need to carry out major repairs that would likely cause serious disruption, you can ask your tenant to move out while the repairs are carried out. You have to:

• tell them how long the work will last and when they can return to the property
• provide details of any alternative accommodation you have arranged for them

In some cases, the tenant may not have to move out but the repairs may still be very disruptive.  Here, your tenant may be able to claim a reduction on their rent. This is known as a ‘rent abatement’ but will depend on how much of the property cannot be used while the repairs are going on.

Disrepair claims

If you do not carry out repairs in line with your responsibilities as a landlord, your tenant may:

• carry out the repairs themselves and deduct the cost from their rent in some cases or let you know the cost so that you can refund them
• ask the local council to inspect the property under the Housing Health and Safety Rating System (HHSRS) if there is a health or safety hazard
• take court action against you

Increasing the rent

A general rule for increasing the rent on your property is that you must agree the increase with your tenant. The tenancy agreement will also normally state when this will be done and how.

If the tenancy agreement does not say how the rent is to be increased, you can:

• renew the tenancy agreement at the end of the fixed term, but with an increased rent
• agree a rent increase with your tenants and produce a written record of the agreement that you both sign
• increase the rent after the fixed term has ended where the tenancy has become periodic

If your tenants pay rent weekly or on a monthly basis, you have to give them a minimum of one month’s notice of rent increase but if they pay yearly, they need to be given six months’ notice.

Tribunals for rent disputes

Your tenant can ask a rent assessment committee to decide the rent amount if they think that the rent increase is not fair. A rent assessment committee is a group of independent people who have been appointed by the Government.  Some of them have legal, surveying or other property or relevant expertise, while others are laymen.

The committee that will make a decision on your case will be chosen from a panel of the appointed people. There are six panels which between them cover the whole of England and Wales.

Either you or your tenant may ask for a hearing which you may both attend. If there is a hearing, it will be informal and neither you nor your tenant will have to pay a fee. The committee may also decide an individual case by meeting and considering relevant papers.

Depending on where your property is located, you or your tenant will have contacted the relevant regional office and filled out the relevant form depending on the type of their tenancy. Details of the various regional offices can be found on Ministry of Justice website.

You can appeal to the High Court to challenge the decision of the tribunal but this must be done within 28 days of getting the full reasons for the decision from the committee. It is advisable that you seek legal advice if you are considering an appeal.

Evicting your tenant

If an assured shorthold tenancy has ended or your tenant has breached certain terms of the agreement, you can evict them as follows:

• if your tenant has an assured shorthold tenancy, you can cancel the tenancy at the end of the fixed term by giving your tenant two months’ written notice in the form of a notice to quit
• if the tenant refuses to leave by the date on the notice to quit, you must send them a ‘notice of intention to seek possession’ to let them know that you are going to apply to the court for a possession order
• a possession order gives you the right to evict your tenant and take possession of the property but you cannot physically remove your tenant
• if the tenant still remains in the property after you have been given a possession order, you have to apply for a warrant for eviction, which means bailiffs will be able to physically remove the tenant from your property
• you may be able to recover the court costs for possession order and bailiff's warrant from your tenant

If your tenants started their tenancy before 27 February 1997, they might have an assured or a regulated tenancy. In addition to giving your tenant notice, you will also need to provide sound reasons and proof in order for the court to issue a possession order.

The notice must be in writing, given on a special form stating the grounds on which you are seeking possession, as well as the earliest date that court action can start. The date will usually depend on the reason why you are seeking possession. Once the notice expires, you can start court action at any time up until a year after the date the notice expired. If you do not start court action with this time, you will have to serve a new notice.  

Reasons for eviction

There are two types of grounds that you can use to evict your tenant. These are mandatory and discretionary grounds.

Some examples of mandatory grounds include where:

• your tenant is more than eight weeks in arrears on the rent
• you wish to redevelop the property
• your property is being repossessed by your mortgage lender

Some examples of discretionary grounds are:

• persistent delays in rent payments
• some rent arrears
• breach of tenancy agreement

If you are using a mandatory ground for eviction, once the court is satisfied that the ground exists, it will have to make a possession order. If your application is based on a discretionary ground, the court will only make a possession order if it is reasonable to do so.

Your tenant will be given the opportunity to provide information to the court either by sending information or attending a hearing.

Once a court order has been issued, and your tenant does not leave the property, you can ask court bailiffs to remove your tenant.

If you do not follow the proper steps for evicting a tenant, you may be guilty of illegally evicting or harassing your tenant. This is a criminal offence.