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Information For Landlords
As an existing or prospective landlord here is a summary of some of the key issues you need to consider, the key responsibilities involved and an outline check list for the things you need to do before renting out your property for the first time or even as an experienced landlord.
Belvoir can take care of all these requirements and arrangements for you or just help with those specialist areas, with the aim of making sure you satisfy all of the legal obligations involved with being a landlord.
Further information about being a landlord is available on The Scottish Government’s website and there is a link to this and all other requirements and issues highlighted elsewhere on this website in the links section.
BECOMING A LANDLORD
Selling property in the current market can be challenging and letting may be a solution if you want to or have to move home. Longer term keeping your property can be a good investment buying you space until such times as the selling market recovers and of course you will benefit from rental income in the meantime.
If you have a mortgage on your property you need to secure the permission to let from your mortgage lender and you should speak to them at an early stage as possible as there may be a cost involved in this. Belvoir can help with this process and if your lender requires, verify likely achievable rental income and give advice on meeting any other conditions or requirements your lender specifies.
BUY TO LET
Alternatively you may have bought, or are considering buying a property to let as a long term investment and benefiting from short term yields by way of return on your investment. Belvoir are a local letting expert and can guide you through this process from identifying properties that would be ideal buy to let prospects, to helping you let and manage your property.
One of the key areas landlords require protection for is property insurance. As a landlord you need to put in place specialist landlord buildings and contents cover instead of your existing domestic insurance cover if you previously lived in the property. Belvoir can help in this regard by offering you cover under our own bespoke landlord insurance, but naturally you can also make your own arrangements.
All private landlords in Scotland are required to register with the relevant local authority where they are or will be renting outing property. Such registration is valid for 3 years and it is a criminal offence not to register. Belvoir, who are of course a fully registered and accredited agent and can help with this application process on your behalf. If Belvoir manage your property as opposed to solely finding you a tenant, our address can appear on the public register rather than your home address.
THE REPAIRING STANDARD
As a landlord in Scotland there are legal obligations upon you as a landlord amongst other things to ensure that ;
>The property is wind and water tight and reasonably fit for human habitation
>The structure and exterior of the house are in reasonable repair and proper working order
>The installations in the house for the supply of water, gas and electricity and for sanitation, space heating and heating water are in reasonable repair and proper working order
>Any fixtures, fittings and appliances provided under the tenancy are in reasonable repair and proper working order
>Any furnishings provided under the tenancy are capable of being used safely for the purpose for which they are designed
>There is satisfactory provision for detecting and giving warning of fires
As a landlord, before the start of each tenancy, you need to ensure that the property meets this condition or make arrangements to bring it up to standard. During the course of a no obligation appraisal of your property Belvoir will carry out a risk assessment on your behalf and will inform you of any appropriate work needed to meet this standard and also identify any essential or desirable presentational improvements to maximise the marketing potential of your property in a very competitive market.
If Belvoir are managing your property we offer a response maintenance service on your behalf but you should be aware that as a landlord if necessary repairs go unattended, your tenant has the right to make a representation to the Private rented Housing Panel (PRHP) who can force you to carry out the necessary repairs within a reasonable time or face financial penalty.
In addition to the general requirements of the Repairing Standard listed previously, if there is any gas installation or appliances in your property, as a landlord you have an obligation under health and safety legislation to provide an annual gas safety certificate to your tenant. A landlord gas safety inspection can only be carried out by an appropriately registered gas engineer who appears on the Gas Safe Register.
CARBON MONOXIDE SAFETY
In addition to the requirement to carry out a gas safety inspection it is recommended that landlords supply and fit a carbon monoxide detector beside all open flue gas appliances such as fires etc.
Every electrical installation deteriorates with age and to satisfy the requirements of the Repairing Standard it is recommended that an Electrical Inspection Condition Report (EICR) is carried out every 5 years. In addition there is a requirement that all portable electrical supplied by a landlord for use by a tenant be PAT Tested (portable appliance test) annually.
The Repairing Standard requires all rented properties to be fitted with one functioning smoke alarm in every room which is frequently used by the occupants for general daytime living purposes , one functioning smoke alarm in every circulation space, such as hallways and landings and one heat alarm in every kitchen. All alarms should be hardwired and interlinked
It is recommended that a fire blanket be fitted in the kitchen of all rented properties. Fire extinguishers are acceptable, but not recommended, as they require to be serviced annually.
Any furniture or soft furnishings supplied for use by a tenant must comply with the Furniture and Furnishings (Fire) (Safety) Regulations 1988. This can be verified by checking furniture labelling.
It is a compulsory legal requirement for landlords to commission an energy performance inspection of the rental property. The Energy Performance Certificate (EPC) states the energy efficiency of a property allowing prospective tenants to compare performance with other dwellings.
THE TAX POSITION OF LANDLORDS
Rental income is taxable and landlords become responsible for assessing their own tax. Income tax is payable on letting income whether the landlord lives in the UK or abroad, however non resident landlords can apply to receive UK rental income without deduction of tax.
There are provisions for claiming expenses on unlet properties and relief can be claimed for repairs & maintenance, insurance, management and other fees, depreciation of furnishings etc. For fuller tax and accounting advice it is recommended that landlords source more specialist advice.
PROCEDURES AT THE START OF A TENANCY
Most lets in the Private Rented Sector in Scotland are done so on a Short Assured Tenancy (SAT) basis which guarantees a period of occupancy for at least 6 months and can allow for a continuation on a periodic basis thereafter, usually month to month.
To correctly create such a tenancy a legal AT5 Notice must first be served on the tenant informing them that the tenancy about to be created is a SAT. There is a legal requirement thereafter to provide a written tenancy agreement setting out the terms of the let.
PROCEDURES AT THE END OF A TENANCY
There are certain legal procedures that must be followed when a landlord wants their property back. A Notice to Quit (NTQ) must be served along with a Section 33 Notice. A landlord can recover their property on 2 month’s notice but not before the end of the initial fixed period.
TENANCY DEPOSIT SCHEME
From July 2012 all new tenancy deposits and unlike in England when a similar scheme was introduced, existing deposits also, have to be paid into a custodial tenancy deposit scheme for safe stewardship for the duration of the tenancy.
Belvoir Lettings preferred scheme provider is Safe Deposits Scotland, a not for profit company supported by amongst others by the Scottish Association of Landlords (SAL) and the Association of Residential Letting Agents (ARLA).
Belvoir Lettings are accredited through Landlord Accreditation Scotland (LAS) a voluntary best practice scheme through which landlords and letting agents can assure tenants that the tenancy arrangements they have, adhere to the high standards outlined in the Scottish Core Standards for Accredited Landlords, above minimum legal requirements.
Belvoir are also members of The Association of Residential Lettings Agents (ARLA) and have full Client Money Protection (CMP) bonding for all client’s money held.
Belvoir Lettings aim to offer a specialist and professional customer service and have two options available for landlords, who can choose between ‘ Tenant Find Only’ and ‘Full Management’. The front end of either process is exactly the same with the same standards of due diligence applied to each preference.
Both service options involve start up tasks including all advertising, accompanied viewing, tenancy referencing and all tenancy set up administration.
When Belvoir go on to manage the property, the principal ongoing tasks include rent collection, regular property inspections and a response maintenance service.
Please feel free to ask for fuller detail of all the practicalities involved and costs of the various services.
Nothing in life that is worth doing is risk free so it would be unrealistic for Belvoir Lettings to claim to eliminate all of the potential risks a landlord faces.
Belvoir are confident however, that through the exercise of specialist experience, professionalism and customer service, reasonably foreseen risks are managed down to close to zero by means of appropriate risk assessment, the application of specialist insurances and best practice, together with the adoption of appropriate safeguards.
Much fuller detail can be added to all of these strategies during a no obligation property appraisal, to ensure that a landlord’s return on their investment is maximised and that the stewardship of their property asset will be of the highest standard .