Tips for New and Aspiring Landlords12 December 2015
So, you have bought a property and you’d like to rent it out. But you aren’t sure of your rights as a landlord and how you can keep things under control. Here are some tips on how you can protect your position legally:
You should always make sure your tenants sign a lease. Leases are effectively contracts between the landlord and the tenant, and set out all the terms of occupation. A lease can cover everything from the date that rent must be paid to the number of times that the tenant must clean the windows.
Leases give rights to you and the tenant. You must be aware that a lease will give the tenant the right to occupy the property, and to exclude all others from it. This means that you cannot just turn up and inspect it without giving the tenant notice. However, it is still your property, so the tenant cannot go and build an extension or turn it into a chip shop. These restrictions are called “covenants” and will be set out in the lease.
The main advantage to a lease is that it creates a minimum term – usually 6 or 12 months – and this guarantees you a regular income from rent. It also entitles you to a deposit which you can keep until you are satisfied that the property has been left in good condition when the tenant leaves.
2. Dealing with Rent Arrears:
Whilst most tenants pay rent by standing order, many landlords find that their tenant will fall into arrears. When this happens, you are required to write a warning letter first to tell the tenant to get their act together. If this doesn’t work, you can then take steps to evict the tenant and sue them for the arrears.
It is often sensible to try and agree some sort of payment plan with a defaulting tenant – evicting can be a drawn-out process if all doesn’t go to plan, and if the tenant is struggling financially, you are less likely to get the money very quickly anyway. Having said that, don’t let it get out of hand – you can always find other tenants who will pay.
One way of ensuring you don’t lose out is to ask the Tenant to provide a guarantor, who will guarantee payment of rent when the Tenant has squandered too much money down the pub. The guarantor will often be a parent or relative, and they can be pursued if the Tenant cannot pay.
3. What if the Tenant breaches his/her lease?
There are many ways in which a tenant can become a problem. Aside from not paying rent, there are occasional tenants who might wreck the property, disturb the neighbours, or try to cultivate cannabis plants. As the property belongs to you, the tenant is required to maintain it and pay for any damaged items. You have to allow for fair wear and tear however, particularly when you provide furniture and the tenant is in there for many years.
If the Tenant is acting inappropriately, a solicitor’s letter giving them a 7-day warning will sometimes prompt an end to the offending behaviour. If this doesn’t work, then depending on the breach, you may be able to take steps to evict them. You have to give notice first, and specify a time in which they must leave. If they do not do so then you may have to go to Court for a warrant before you send a bailiff round to forcibly eject them. The costs are usually recoverable but if the Tenant defends his/her position, it can become expensive.
Breaches of a lease can’t be taken lightly – as the property owner you are liable if a neighbour wants to bring a claim, and you should always keep a close eye out to make sure that the property is being treated well.