When it comes to property legislation for new landlords, there can be a lot of information to wade through.
As a seasoned property professional, I get it, and I’d like to help make things a little clearer.
Property legislation for new landlords can often be buried amongst lots of other info when all you want to do is find the information you’re looking for quickly and easily.
In this blog I’ve selected what I think are the most important aspects of property legislation for those of you who are considering buy-to-let as an investment strategy, or have recently purchased their first property.
For the purposes of this blog, and to keep things simple, I’ll be talking about Scotland as property legislation for new landlords is different for the rest of the UK.
First things first – register as a landlord
Of all the property legislation for new landlords, this is the one you should take first. Without a landlord registration number you cannot legally advertise your property and you can be fined up to £50,000 for operating as an unregistered landlord.
You can register online on the Scottish Landlord Register website or approach your local authority in person.
Hire a good letting agent
Unless you’re self managing, your letting agent will be the first point of contact for tenants, so they need to be reliable and trustworthy
Although a good letting agent should be up to speed on property legislation for new landlords, you should always do some research of your own by checking their website and testimonials.
One of the reasons you need to be confident that a letting agent is a good fit for you, is their thoroughness in checking a potential tenant’s financial situation.
If you’re self managing you will want to see past bill payments, payslips, and any available proof that the tenant is capable of paying rent on time.
In this unprecedented situation we find ourselves in with the cost of living crisis, it’s important not to allow tenants to get into debt when there are clear financial red flags.
A willingness to pay several months rent up front, for example, may obscure a lack of regular income so it’s important that you adhere to your moral duty to provide your tenant with safe, secure accommodation.
***Important*** Even if a letting agent is taking care of all aspects of the buy-to-let, legal liability rests with you, so make sure everything is done right.
The tenancy agreement
The tenancy agreement sets out both the landlord and tenants responsibilities, including rent payment, maintenance and codes of conduct, but should also make allowance for potential financial difficulty by permitting a payment plan to be set up if need be.
I’m sure I don’t need to stress the importance of this document, nor the fact that it should be signed by you and your tenant. However, you may not know that you can create a tenancy agreement with a form available on the Scottish Government website.
If you provide your tenant with a copy of their tenancy agreement as shown here in model form by the Scottish Government, you should also supply a copy of the accompanying easy-read notes.
You are free to use a different tenancy agreement but must give your tenant a copy of the Private Residential Tenancy Statutory Supporting Notes.
It’s a good idea to provide the tenant with an information pack alongside the tenancy agreement detailing all the significant points in the property that they may need to know about for safety reasons such as fuse box, stopcock and boiler shut-off valve.
EPC Rating
The legislation around Energy Performance Certificates (EPC) was recently changed to require all properties to have a minimum EPC rating of C at change of tenancy by 2025.
Going forward, all PRS properties should reach a minimum rating of C by 2028.
Currently, as at Autumn 2022, the minimum permitted EPC rating for existing tenancies rated before April 2022 is E. New tenancies after April 2022 must be rated at least D.
This means if you purchase a property for the purposes of renting it out it may not meet the new criteria by 2025 without significant alterations. You can check the current rating of a property using the Scottish Energy Performance Certificate Register.
So, a property that ticks all the boxes right now may not be a good long-term investment for you. Care will need to be taken to ensure that you assess any potential upgrades or adjustments the property may need to meet the coming changes.
To ensure you do your due diligence, check the Scottish Government website for any exemptions which may apply to the property. You can also look for any grants or funding that may be available to make your property more energy efficient
As a landlord, it is your legal and moral duty to make sure that your property meets at least the minimum rating requirements.
A property which is not energy efficient by EPC standards means your tenant will pay higher fuel bills and put them at higher risk of financial difficulty.
You should also have the EPC clearly displayed or in an accessible place on the property, such as the fuse cupboard or utility area.
Health and safety certificates & compliance
Although these are a legal requirement, it’s important to remember that they are also an important way to keep your tenant safe, so make sure you are up to speed on what is required.
Currently, you will need the following:
- Gas Safety Certificate
- Electrical Installation Condition Report (EICR)
- Portable Appliance Testing (PAT)
- Carbon monoxide detectors
- Legionella risk assessment
You will also need suitable fire protection devices including interlinked smoke detectors, a heat alarm and fire extinguishers.
Advice from a property professional
The above may seem like a lot of information to take in, but it’s completely worth it to ensure that you are not only protecting yourself legally but also providing your tenant with a safe, secure home that is affordable to heat.
Many landlords choose to have a letting agent to deal with the majority of the above. This can work very well as long as you do your due diligence, including ensuring that your letting agent is registered with the Client Money Protection Scheme (CMP)
If you are self-managing, take as much time as you need to make sure you have everything in place. When drawing up your tenancy agreement, remember you have a moral as well as a legal duty of care towards your tenant.
It is ultimately in your best interests to bring your property to the highest legal standard, because keeping up to date with electrical and gas safety requirements and fire safety gives you and your tenant peace of mind and safeguards the property for the future.
Conclusion
Thanks for reading. I hope I was able to shine some light on property legislation for new landlords. We all have to start somewhere, and clear concise information is important when looking for guidance on buy-to-let property.
If you have any questions about things I’ve discussed in this blog, you are welcome to get in touch. You can book a free, a no-obligation consultation at your convenience.
Written by John Nicol
Founder, Ascension Property Investments
Get in touch on 01383 603091 or email me via [email protected]
