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Guide To Self Managing

Congratulations on wishing to self manage. You may think that with over 170 Acts of Parliament to keep track of it you are entering a veritable minefield, particularly if you are one of the many 'accidental landlords'. If you manage to comply with all of the legislation, it is very rewarding navigating the minefield to come out the other end successfully and with happy tenants who look after your property and always pay on time.

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The success or failure depends very much on your preparation and planning before letting your property. Acquaint yourself with your responsibilities, determine your preferred type of tenants, and address any necessary property adjustments beforehand to help prevent potential issues in the future. This will prepare you to conduct thorough screenings of prospective tenants. Statistics indicate that less than 10% of tenants experience rental arrears within a year, and only a fraction of tenancies (less than 1%) result in landlords resorting to legal action. By diligently researching and vetting your potential tenants, the likelihood of finding responsible individuals significantly increases. Items below in red print may result in fines, penalties, rent repayment orders (going back up to 2 years) and even imprisonment in some circumstances. Failure to comply with some, and in the correct order and with the correct timing, may prevent you from regaining possession of your property with a Section21 notice. Take heed! It is easy to comply, but non-compliance is taken seriously and can have rather serious consequences.

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1. Pre-Tenancy

Before you can let your property, think about:​

Your Market 

You could let to students, single families or working people for example. Each group will have different needs, different rules and will demand a different approach from you.

  

Your legal obligations

As a landlord you have a number of responsibilities relating to the condition of your property and your conduct towards your tenant.

If you are renting to a family, the key responsibilities are:

  • Your property must have a valid EPC rating of A to E and must be made available to the prospective tenant at the earliest opportunity. Either when the tenant requests any written information about the property such as letting particulars, or when the viewing is conducted, or before entering into the contract.

  • You must have an in date gas certificate from a competent person showing your gas installations are safe to use

  • You must have an EICR, valid for 5 years, from a competent person showing your electric installations are safe to use

  • The property must be fit for human habitation and in a good state of repair.

  • Smoke alarms should be fitted on every floor of the property with CO alarms in every room with a fuel burning appliance

  • You must carry out a legionella risk assessment.

  • You should carry out PAT testing - this is not compulsory, however landlords and property managers are responsible for ensuring that the electrical appliances provided to tenants are safe to use and PAT testing shows that they have done what they can to ensure the tenants safety..

  • You will need to provide a privacy notice explaining how you will use, store and dispose of any prospective tenants data.

  • If you require a mandatory or additional HMO licence you must have at least applied for one before you operate and you must comply with The Management of Houses in Multiple Occupation (England) Regulations 2006 and The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018

 2. HMO Duties 

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  • The Housing Act 2004, a comprehensive legislation concerning housing matters, also encompasses regulations for HMOs. As an HMO landlord, you have specific legal obligations, some of which include:

  • Licensing: Depending on the location and size of your HMO property, you may need to obtain a mandatory HMO licence from the local authority. In Exeter mandatory licensing applies to all HMOs with 5 or more occupiers living in 2 or more households, sharing an amenity such as a kitchen, bathroom or toilet, regardless of the number of storeys. The storey requirement was removed from the previous definition on 1 October 2018. Some flats, including those over shops, will also require a licence if they are occupied by 5 or more people, from 2 or more separate households.

  • Property Standards: It's your responsibility to ensure that your HMO property meets health, safety, and amenity standards. This encompasses requirements for fire safety, heating, sanitation, and overall property maintenance.

  • Gas and Electrical Safety: Regular inspections and maintenance of gas and electrical installations and appliances by qualified professionals are crucial. Gas safety inspections should be conducted annually and a copy given to each tenant within 28 days of the inspection. Failure to comply can lead to a penalty of up to £6,000 and even a prison sentence and you will not be able to regain possession of your property using a Section 21 notice.

  • Electrical installations require inspection every five years. Landlords who neglect to carry out an EICR (along with any suggested work) prior to the start of a new tenancy may face a fine of up to £30,000. The enforcement of these regulations falls under the jurisdiction of local authorities, as outlined in the Housing Act 2004.

  • Fire Safety: Adequate fire safety measures must be implemented, including the installation of fire alarms, fire extinguishers, and fire doors. Clearly marked and accessible fire escape routes are also essential.

  • Amenities: Your HMO property should offer sufficient bathroom and kitchen facilities to accommodate the number of occupants. And bedrooms must meet the minimum sizes. Each local authority issues their own guidelines in this respect so check with them.

  • Tenant Information: Provide your tenants with essential details about their tenancy, rent, and your contact information.

  • Repairs: Promptly address and carry out necessary repairs to maintain your HMO property in good condition.

  • Tenancy Deposits: Protect your tenants' deposits in a government-approved tenancy deposit protection scheme. This must be done within 30 days of receiving the deposit. You must also give them the prescribed information, within 30 days,  and this must be given after the deposit is protected, not before. Failure to comply can lead to a £5,000 fine and you will not be able to issue a Section 21 notice to regain possession of your property.

  • Please be aware that HMO regulations and requirements can differ between regions within the UK, as housing matters are devolved. To ensure compliance with specific rules and regulations in your area, we advise you to consult your local authority or seek professional advice.

  • If your property is located in a selective licensing area, don't forget to apply for a selective license to meet the local requirements. Our team is here to assist you throughout the process and answer any queries you may have about HMO duties and regulations.

Staff of Hartland Residetial Lettings, working on property management in Exeter
Staff of Hartland Residential Lettings, Exeter letting agent and property management, meeting two prospective tenants for HMO rooms
3. Data protection

As you are holding your tenants' personal information you will need to follow the rules around protecting their data as set out in the Data Protection Act 2018.

Under these regulations, landlords and letting agents who handle tenants' personal information are considered "data controllers" and must comply with various principles and obligations. Some key points to note include:

  1. Lawful basis for processing: Landlords must have a lawful basis for processing tenant's personal data, such as fulfilling contractual obligations, complying with legal requirements, or obtaining explicit consent when necessary.

  2. Data subject rights: Tenants have certain rights regarding their personal data, such as the right to access their information, rectify inaccuracies, erase data under certain circumstances, and restrict processing.

  3. Data security: Landlords must take appropriate measures to protect the security and confidentiality of tenants' personal data to prevent unauthorized access, loss, or disclosure.

  4. Data transfers: If tenant data is transferred outside the European Economic Area (EEA), specific safeguards must be in place to ensure an adequate level of protection.

  5. Data breaches: In the event of a data breach that poses a risk to tenant's rights and freedoms, landlords must notify the relevant authorities and affected individuals.

Failure to comply with these data protection regulations can result in significant fines (£millions. Yes, really!) and penalties. Therefore, landlords and letting agents are responsible for handling tenants' personal data with care and ensuring compliance with the Data Protection Act 2018.

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4. Before marketing

    Ensure the following checklist is complete - do not skip any items.

  1. Obtain an Energy Performance Certificate (EPC) for the property. (You cannot even market a property to let if there is no valid EPC)

  2. Conduct a thorough risk assessment of the property to identify and address any potential hazards - including compliance with the 29 risks listed in the HHSRS (the Housing Health and Safety Rating System as specified in the Housing Act 2004), Fire Regulations and Legionella requirements

  3. Install smoke alarms on every floor of the property.

  4. Place carbon monoxide detectors in every room with a fuel burning appliance (except gas cookers)

  5. Apply for or obtain any necessary licences required for the property.

  6. Ensure you have a current Electrical Installation Condition Report (EICR).

  7. Pat testing complete

  8. Room sizes meet the regulations

  9. Privacy notice

  10. Obtain a valid Gas Safety Certificate.

  11. Prepare a draft tenancy agreement that covers all relevant terms and conditions.

  12. Create a draft guarantor agreement, if required, to secure additional support for the tenancy.

  13. Determine your approach to handling deposits: whether to take a traditional deposit, utilise a deposit alternative, or opt for a deposit-free arrangement.

Staff of Hartland Residential Lettings, Exeter letting agent and property management, meeting two prospective tenants for HMO rooms
Staff of Hartland Residential Lettings, Exeter letting agent and property management, meeting two prospective tenants for HMO rooms
5. At the viewing stage

Provide all prospective tenants with –

  1. The Energy Performance Certificate (EPC) for the property to inform you about its energy efficiency.

  2. The Data Protection Act 2018 privacy notice (note this has replaced the GDPR regulations), ensuring that your personal data is handled responsibly and in compliance with the law.

  3. Detailed information about the property, including any applicable fees such as rent, deposit, holding deposit, and any other charges.

  4. A tenancy application form to facilitate a smooth and efficient process for applying to rent the property.

6. Once you have identified a potential tenant​

It is crucial to conduct thorough checks on potential tenants' credit and rental history and this can include personal references, job references and previous landlord references. For a belt and braces approach you can also ask for a guarantor, but remember to also do referencing on them too!

It is customary, but not necessary, to request a holding deposit from the prospective tenant while the referencing checks are being conducted, which must not exceed one week's worth of rent.

Staff of Hartland Residential Lettings, Exeter letting agent and property management, meeting two prospective tenants for HMO rooms
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7. Creating The Tenancy

Before you enter into the agreement

Under the Immigration Act 2014, landlords and agents are responsible for verifying the immigration status of all adult tenants, which includes checking their identity documents, such as passports or residence permits. 

It is essential for landlords and agents to comply to avoid potential penalties, fines, or even imprisonment if they fail to conduct the necessary checks properly.

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Under the Housing Act 2004, If you or your agent have received a deposit, or a partial one before signing the agreement, it will trigger certain deposit requirements. You must protect this deposit within a Government-approved scheme within 30 days of receiving the payment. Additionally, within the same timeframe, you must provide the prescribed information and any other necessary details required by the scheme's rules to all tenants and anyone who contributed to the deposit. 

If a landlord fails to protect a tenant's deposit in a government-approved tenancy deposit scheme, they may face penalties under the Housing Act 2004 and the Tenancy Deposit Protection (TDP) regulations. The specific penalties can vary but may be

  1. Financial Penalty: The court has the authority to order the landlord to pay the tenant a penalty of between one to three times the original deposit amount. 

  2. Loss of Section 21 Notice: the landlord's ability to evict the tenant using a no-fault eviction process could be restricted.

  3. Court Costs and Legal Fees: The court may also order the landlord to cover the tenant's court costs and legal fees 

  4. Repayment of the Deposit: In addition to potential penalties, the court can also order the landlord to protect the deposit and return it to the tenant or transfer it to a government-approved deposit scheme

If you require a guarantor as a condition of granting the tenancy you also need to provide them with a guarantor document and a copy of the agreement prior to signing the agreement. This needs to be completed in full and returned to you before you agree to enter into the tenancy.

8. Prior to agreeing the tenancy

Before finalising the tenancy agreement, there are important steps to take once you've found a suitable prospective tenant:

  1. Secure a Holding Deposit: You can request a holding deposit from the tenant, equivalent to no more than a week's rent, to secure the property while the tenancy process progresses.

  2. Conduct Tenant Referencing: We will conduct thorough tenant referencing to ensure the suitability of the prospective tenant for the tenancy.

  3. Share Draft AST: The prospective tenant will be provided with the draft Assured Shorthold Tenancy (AST) agreement for their review and consideration.

  4. Arrange Guarantor (if needed): If required, we can assist in arranging a guarantor to provide additional support for the tenancy.

  5. Comply with Right to Rent Legislation: Before proceeding with the tenancy agreement, we will ensure compliance with the right to rent legislation, as required by law. Fines or prison sentences may result from non-compliance!

These steps are crucial in creating a smooth and secure tenancy process for both landlords and tenants. Our letting agency is here to guide you through each stage, ensuring a successful and legally compliant tenancy agreement.

Staff of Hartland Residential Lettings, Exeter letting agent and property management, meeting two prospective tenants for HMO rooms
Happy HMO tenants of Hartland Residential Lettings, Exeter letting agent and property management
9. Assured Shorthold Tenancy Agreements (AST)

(The Renters Reform Bill is currently making it's way through Parliament when ASTs ad Section 21 notices may be abolished!)

What is an assured shorthold tenancy?

The assured shorthold tenancy (AST) is the most common form of agreement in the private rented sector (PRS).

It should be used wherever the following conditions are met -

  • The rent is between £250 and £100,000 per annum

  • The tenants are people rather than an organisation such as a company

  • The property will be the tenants' main home

  • The landlord does not live in the same property as the tenant.

10. Joint Assured Shorthold Tenancy (AST) for a House in Multiple Occupation (HMO)

There is nothing unusual about issuing ASTs to tenants in HMOs. Groups of tenants may be issued with a Joint AST. This is the norm with groups of friends or students who will be renting for the same period of time. They would be joint and severally liable for the terms of the contract which may or may not be inclusive of bills. Tenants who do not know each other may be offered a standard AST.

An AST - assured short term tenancy agreement for tenants renting poerties, flats, house, shared living and HMOS in Exeter from Hartland Residential Lettings who offer property management and lettings to landlords
Staff of Hartland Residential Lettings, Exeter arranging guaranteed rent for Exeter Landlord's HMO portfolio
11. Entering into the agreement

When entering into an agreement with your tenants, it is essential to establish a written tenancy agreement that outlines mutually agreeable terms -  the standard Assured Shorthold Tenancy Agreement being the most commonly used.

In addition to the tenancy agreement, there are certain documents you must provide to your tenant:

  1. The current gas safety certificate should be given to the tenant before they occupy the property.

  2. The current electrical safety certificate must also be provided (EICR)

  3. An Energy Performance Certificate (EPC) demonstrating that the property has an energy efficiency rating of A-E.

  4. The latest copy of 'How to rent: a checklist for renting in England.'

It is crucial to maintain a record of these documents to demonstrate that you have fulfilled your legal obligations. Moreover, keeping such records will be necessary should you need to pursue any legal actions or seek possession from your tenant. 

Before your tenants move into the property, it is recommended to send them a warm welcome letter containing all the necessary information they should know about the property and the tenancy. Additionally, just before their occupation, conduct a thorough inspection and create an inventory and schedule of condition, that documents the condition of the property. This inventory serves as protection for you as it clearly illustrates the condition in which the property should be returned to you at the end of the tenancy, and it can be presented to both the tenant and the deposit schemes as evidence if needed.

 12. Signing and Move-In Process

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  1. Sign the Tenancy Agreement: Work together with the tenant to sign the tenancy agreement, setting out the terms and conditions of the tenancy.

  2. Receive Rent and Deposit: Concurrently with signing the agreement, collect the first rent payment and the full deposit or proof of deposit alternative payment from the tenant.

  3. Protect the Deposit: Within 30 days of receiving the deposit, you must place it in a government-approved deposit scheme and provide a copy of the prescribed information, scheme leaflet, and deposit certificate.

On the Day the Tenancy Agreement Starts:

  1. Provide Essential Documents: On the day the tenancy agreement commences, furnish the tenant with the following:

    • A copy of the Electrical Installation Condition Report (EICR).

    • A copy of the gas safety certificate.

    • The latest version of 'How to rent: a checklist for renting in England'.

    • Your contact details for the tenancy.

  2. Hand Over Keys and Manuals: give the tenant the keys for the property and any necessary appliance manuals to ensure a comfortable living experience.

  3. Inventory and Alarm Information: A completed inventory and schedule of condition of the property and any relevant alarm codes or additional information should also be provided to the tenant.

In Addition to the Above:

On the day of occupation, you must ensure that the smoke and carbon monoxide detectors are in proper working order and demonstrate this to the tenant.

Staff of Hartland Residential Lettings, Exeter letting agent and property management, handing the keys to a tenant for a rental property n Exeter
Happy tenants of Hartland Residential Lettings, Exeter letting agent and property management, moving in to their new rental HMO in Exeter
13. After The Tenants Move In

After your tenants have moved in, it is essential to maintain regular communication with them. This includes arranging periodic inspections, renewing gas safety certificates, EICRs as needed, and vigilantly monitoring for any potential repair issues that may arise during the tenancy.

When you need access to the property for inspections or other legitimate reasons, it is crucial to provide written notice at least 24 hours in advance. This ensures that your tenants have sufficient time to prepare for the visit. However, it's important to remember that even with proper notice, the tenant retains the right to refuse access if they wish to do so. Respecting their privacy and boundaries is vital throughout the tenancy.

14. Legal Obligations

As a landlord, your responsibilities extend far beyond property ownership and tenant acquisition. You must adhere to various legal obligations to ensure the safety and well-being of your tenants. Here are the key obligations you must fulfill:

  1. Property Repairs: It is your duty to promptly address and carry out necessary repairs to the property, including the structure, heating, hot water systems, and sanitary fixtures such as basins, sinks, baths, and toilets.

  2. Gas and Electrical Safety: Ensure the safety of all gas and electrical appliances within the property by conducting regular inspections and maintenance carried out by qualified professionals.

  3. Fire Safety: Provide fire-safe furnishings as outlined in the tenancy agreement.

  4. Habitable Property: Ensure that the property is suitable for habitation, meeting the HHSRS standards for a safe and comfortable living environment.

  5. Heating Systems: Regularly inspect and maintain heating systems to ensure they are in proper working order, providing sufficient heating during colder months.

  6. Shared Properties: If the property is shared by multiple occupants, you must also maintain common areas to create a safe and pleasant living environment.

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This is a guide and as such is not exhaustive. If you have any questions, please get in touch and we will be happy to discuss your obligations as a Landlord.

Map of Exeter showing the rental properties and HMOs managed by Hartland Residential Lettings for Landlords in Exeter
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