08 October 2014
Managing a rental property
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Managing a rental property
Mrs M inherited a second property and would like to rent it out. As she lives close to the property, she is keen to manage the letting herself. Legal expert Chris Hardy, who specialises in residential property issues at Gerrards Cross-based law firm B P Collins LLP, outlines the steps she needs to take.
Q. I’m not keen on using a managing agent so I need some advice on how to put a proper legal agreement in place with the tenant. What do I need to think about?
A. Many landlords do choose to manage the letting process themselves, but be warned, it can be quite time-consuming.
The most important aspect is to ensure you have a written agreement in place between yourself and the tenants. Without one, you may have great difficulty in evicting your tenants or enforcing your rights if the tenants fail to meet their obligations.
An assured shorthold tenancy agreement allows you to regain possession of the property at the end of the rental period, which is typically a fixed period of between six months and three years. You can also put in a break clause so either yourself, or the tenant, can terminate the agreement early.
There are some circumstances where this type of agreement wouldn’t be suitable, such as a holiday or business let, so check with your lawyer.
If the property is quite large and you’re likely to have several tenants, you need to ensure the tenancy agreement makes them jointly and severally liable for the rent and any damage caused. That way, if there is a problem and any of them leave or can’t be traced, you can take action against those that are left, or that you can find, for the whole amount.
You are required by law to use a tenancy deposit scheme to protect the tenant’s deposit. There are three government-authorised schemes for this purpose and you have 14 days to provide the tenant with the relevant information.
It’s essential to comply with this legislation because if you don’t, you lose your right to recover possession of the property simply by giving notice to the tenant, and you’re liable to pay a fine.
You also need to think about issues such as:
- preparing an inventory of contents
- insuring and maintaining the property
- providing any services agreed
- ensuring tenants are up to date with payments
- making sure they do not breach the terms of the rental agreement
- dealing with tenants’ complaints and problems
- dealing with termination of the rental
If you decide this all appears too onerous and opt for a managing agent instead, look for one who is a member of one of the trade bodies: the Association of Residential Letting Agents (ARLA), the National Approved Lettings Scheme (NALS) or the National Association of Estate Agents (NAEA).
This advice is written in general terms only and should not be relied upon in individual cases where specific legal advice will be required. The writers accept no liability for any direct or indirect loss arising from any reliance placed on replies.