'Accidental' landlords put themselves at risk
Homeowners who have become landlords to avoid selling for a loss on their properties are taking serious risks if they let out their property without complying with the necessary rules.
Simon Gordon, head of communications for the National Landlords Association, said: "New landlords, especially those who hadn't planned on starting a lettings business, must make themselves aware of the rules and regulations so they can operate their tenancies successfully."
It is estimated that there are more than 50 Acts of Parliament and 70 sets of regulations govern the private rental sector - and many new 'accidental' landlords are ignorant of these laws.
Paragon Mortgages' managing director John Heron said: "The onus is on the landlord to make sure they comply with all regulations and they are liable if something goes wrong, even if they employ the services of a letting or managing agent. Ignorance of legislation is not a defence."
New landlords also need to consider details like the terms of their mortgage before lending, as a specific buy-to-let mortgage is needed to allow for the leasing out of a property.
Sarah Robson, spokesperson for the Council of Mortgage Lenders (CML) said whether a lender will let a home owner switch to a buy-to-let mortgage will depend on the provider.
"It's going to be a decision for the individual lender," she said.
"But it's vital homes owners let their mortgage lender know, otherwise they are in breech of their mortgage contract."
Another problem is home insurance - basic policies do not cover the rental of property and failing to disclose a change in occupancy will be looked upon a fraud.
"Home owners also need to let their insurance provider know they are renting or their insurance policy could be invalidated," Ms Robson warned.
In addition, a landlord is responsible for making sure the property complies with gas and fire safety requirement, providing an energy performance certificate, and protecting tenants deposits, according to the NLA.
An owner will also be responsible for responding to tenant requests and maintenance problems.
Mr Heron said: "The only solution is for landlords - accidental or experienced - to ensure they have a thorough understanding of relevant regulations.
"Getting help with this is not difficult. It would make sense to join the National Landlords Association."
Common regulations in the private rented sector:
Gas and electricity: Boilers must be checked annually by a Corgi-registered tradesman, who will issue a Gas Safety Certificate. Tenants should be given a copy when they begin the tenancy and within 28 days of an annual check. All electrical items and fittings should be checked regularly as landlords could be liable if a tenant is harmed by an electrical item provided.
Fire safety: If the property was built after June 1992, tenants must have an adequate means of escape and a mains-operated inter-connected smoke alarm should be fitted on every floor. It the property is a furnished let, furniture and furnishings made after 1950 must meet fire resistance regulations.
Regulator Reform (Fire Safety) Order: Landlords who own flats in a block are required to liaise with the managing agents and other homeowners to ensure that a fire risk assessment of the common parts is carried out.
Energy Performance Certificates: From October 2008 it became a legal requirement for landlords to make an Energy Performance Certificate of the property available to prospective tenants when letting a property. Failure to do so can result in a £200 fine and the landlord being prevented from marketing the property until the EPC is obtained.
Tenancy deposit protection: From 6 April 2007, all deposits (for rent up to £25,000 per annum) taken by landlords and letting agents for Assured Shorthold Tenancies in England and Wales, must be protected by a tenancy deposit protection scheme.
HMOs: Rental homes spread over three stories or more and occupied by at least five tenants in two or more households are classed as Houses in Multiple Occupation and require a license by the local authority.
Johanna King
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