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Landlords Obligations & Legislation

Gas Safety (Gas Safety (Installation and Use) Regulations 1994 - As Amended)

This is the most important and strictly policed of all the Landlord's obligations. All appliances including boilers, fires and cooking appliances must be tested to ensure they do not emit noxious gases and that flues are in a good and sound condition. The test must be carried out prior to the tenancy and annually thereafter by a member of the GAS SAFE REGISTER, and a certificate issued to the Tenant. Both Landlord and Agent are responsible.

Oil and Solid Fuel Boilers

We recommend that all oil and solid fuel boilers (including Aga cookers) are serviced and tested prior to tenancies and annually thereafter, as they can emit deadly carbon monoxide. Again, both Landlord and Agent are responsible.

Electrical Safety (Electrical Equipment (Safety) Regulations 1994)

Unlike the Gas Regulations, the rules concerning the safety of electrical installations do not require the Landlord to have an annual safety certificate. However, Landlords must ensure that the electrical equipment and installations are ‘safe'. Basically, visual inspections should be made for obvious faults, plugs and sockets should be checked for appropriate shields, and if there is any doubt an electrician should be asked to carry out a full test. We recommend an electrical test for any property with wiring over five years old.

Furniture Regulations (Fire and Furnishing (Fire Safety) Regulations 1988 - As Amended)

These regulations apply to all soft furnishings. Your property must meet the regulations and compliant furniture should have conforming labels attached. Non-compliant furniture must be removed or replaced. It should be noted that it is easier to let an unfurnished property and the rent should not be adversely affected.

Smoke Alarms

Although it has yet to become a legal requirement to have smoke alarms installed in all rented property, we ask all Landlords to install at least one alarm on each floor of the property as a duty of care to the Tenant. Monthly checking and replacement batteries can become the responsibility of the Tenant by agreement.

The Landlord's Obligation to Repair (Section 11 - Landlord & Tenant Act 1985)

As Landlord it is your legal responsibility to repair the structure and exterior of the property, including drains, gutters and external pipes; to keep in working order the installations for the supply of gas, electricity and water, and the installations for the provision of space and water heating. The Landlord also has a responsibility for the general standard or fitness of the property for habitation.

Deposits

As a general procedure within the private sector, a deposit is collected by the Landlord against possible non-payment of rent or damage to the property. When a tenancy comes to an end, there is usually no disagreement about the return of the deposit. But sometimes there is, and this can cause much hardship and inconvenience to both the Landlord and the Tenant.

The Housing Act 2004 made provision for both the protection of tenancy deposits and the resolution of disputes over their return. From April 2007, all Assured Shorthold Tenancies must be covered by a tenancy deposit protection scheme.

The Tenancy Deposit Scheme (TDS) has been developed to ensure that the deposits they hold are protected and that disputes about their return are settled inexpensively and impartially. Under the Scheme:

  • The deposit will be protected during the tenancy.
  • Where there is no dispute at the end of the tenancy, the deposit will be returned promptly.
  • Where there is a dispute about the return of the deposit it will be dealt with fairly by the Independent Complaints Examiner (ICE).

Under the Scheme, the Landlord will be required to place deposit monies with an authorised scheme within 14 days of receipt. Provided that there is no dispute at the end of the tenancy, the deposit must be refunded to the Tenant.

The use of a tenancy deposit scheme is mandatory and strict penalties can be enforced upon Landlords who do not comply. Landlords who take a deposit and who are not a member of a prescribed scheme will face the following:

  • They will not be able to recover possession of the property by serving the usual two months' notice under the Section 21 Notice.
  • The Tenant will be able to go to court and obtain a court order requiring the Landlord to safeguard the deposit or alternatively return the deposit to the Tenant.
  • The court must also order the Landlord to pay to the Tenant a fine of three times the deposit amount.

Woolley & Wallis is registered under the Tenancy Deposit Scheme. Landlords can participate in this, or can choose to register the Government's alternative schemes.

INSURANCE

When letting a property, it is essential that you have in place adequate buildings and contents insurance and that your insurance company is informed. In many cases insurance can be rendered invalid if the insurance company has not been advised of the rental position.
It is also advisable to ensure that accidental damage by the Tenants is included in the insurance policy. Contents insurance is also vital in the event of a flood or fire.
Woolley & Wallis take every care to ensure that Tenants are suitable and can meet their financial obligations. However, on rare occasions and sometimes through no fault of their own, Tenants can face difficult times such as sickness and redundancy, which can obviously affect their ability to pay the rent. In such circumstances the Landlord may suffer from loss of rental and legal fees. Therefore, to safeguard your interests, you may wish to select a comprehensive rental and legal insurance scheme.
The following insurances are available through Homelet:

  • Landlord's Comprehensive Buildings Insurance
  • Landlord's Full & Limited Contents Insurance
  • Landlord's Emergency Assistance
  • Landlord's Rent Guarantee & Legal Expenses
  • Landlord's Legal Expenses

INCOME TAX

Allowable Expenses

The rental income that you receive on your property is known as un-earned income and is therefore liable for tax. However, certain expenses can be offset against tax and these are listed as follows:

  • Landlord's management expenses such as postage, stationery, etc
  • Buildings and contents insurance premiums
  • Leasehold expenses such as ground rent and service charges
  • Agent's fees and advertising
  • Legal fees for tenancy renewals
  • Normal repairs and redecoration
  • Garden maintenance
  • Water rates
  • Inventory preparation
  • Mortgage interest on capital borrowed
  • Cost of valuation for insurance purposes
  • Building Society letting charges

Depreciation

Where the property is let on a furnished basis, you can allow for the depreciation of the contents of the property by deducting 10% of the rental or deducting payments for replacing furniture, fixtures or fittings in that year.

Non-Resident Landlords

If you reside overseas for more than six months in any tax year, it becomes the responsibility of the letting agent to pay tax on the rental income on your behalf, unless the letting agent receives instructions from the Inland Revenue stating otherwise.
The letting agent is bound by law to declare to the Inland Revenue any income received on behalf of any Landlord in any given tax year. By law, we must deduct 22% of the net rental income as the tax element and forward it quarterly to the Inland Revenue.
However, non-resident Landlords may apply to the Inland Revenue for a certificate of exemption confirming that they are entitled to receive the rental income with no tax deducted. Download our NRLI form.