Landlords: Why prevention is cheaper than cure!

Posted by Robinson Allfree on 12th July 2019 -

You've just acquired a buy-to-let property, probably not your first. You've spent a significant amount of money simply acquiring the property with solicitor's, surveyor's, agent's and perhaps lender's fees. All you want to do is get on and let the property so that you can start to receive that rental income you desperately need to pay off your loans, contribute to your retirement, etc.

Unfortunately many landlords have come a cropper by launching in and not satisfying basic legal requirements. Don't become one of them!

Yes it costs money to comply, usually hundreds, but it is a minute investment compared with the fines and potential prison sentence you will land yourself if you fail to invest time and money in the basics. In the same way as owing a responsibility to your children, pets, etc, you also owe a duty of care to your tenant under the Landlords and Tenants Act 1985 so if your tenant is injured or dies as a result of your property being unsafe, you will be held responsible.

(1) Gas Safety

Have you made sure that gas equipment at your property has been safely installed, maintained, and checked by a registered engineer? Your duty stems from the Gas Safety (Installation and Use) Regulations 1998 which provides that you must arrange maintenance by a Gas Safe registered engineer for all pipe work, appliances and flues.

You must also arrange for an annual gas safety check to be carried out every 12 months by a Gas Safe registered engineer. You must keep a record of the safety check for 2 years and issue a copy to your tenant within 28 days of the check being completed.

You must also issue a copy to any new tenants before they move in. Breach of the regulations is a criminal offence and the Health and Safety Executive has the power to bring proceedings with the standard penalty being a £6,000 fine for each item and/or 6 months imprisonment. In addition, your insurance cover could be invalidated for non-compliance to the regulations.

(2) Electrical Safety

Have you ensured that the electrical wiring and any appliances supplied with the property are safe? You have a legal duty to ensure all electrical equipment in your property is safe and maintained. This responsibility covers light fixtures and plugs, as well as internal wiring.

Although an Electrical Installation Condition Report (EICR) in itself is not a legal requirement, your duty of care under the 1985 Act requires you to make sure the electrics are safe. Carrying out an EICR Test regularly will ensure reasonable measures have been taken to comply with the 1985 Act.

(3) Fire Safety

Do your tenants have access to escape routes at all times? Is there a smoke alarm fitted on each storey? Has a carbon monoxide alarm been fitted in any room containing a solid fuel burning appliance (e.g. a coal fire, wood burning stove)? Are any furniture and furnishings supplied with the tenancy fire safe? Pursuant to The Regulatory Reform (Fire Safety) Order 2005, you must carry out fire risk assessments in all areas of your property. This process will identify any fire hazards and who is at risk and decide if anything needs to be done to remove or reduce that risk. It is often best done by a fire safety professional to ensure it is done thoroughly but it is possible to do it yourself if you wish to do so and there are numerous templates online to assist with this.

(4) Houses in Multiple Occupation

Whilst HMOs may seem more attractive than one tenant properties given that they tend to be more profitable, bear in mind that because they come with their own special requirements (pursuant to The Management of Houses in Multiple Occupation (England) Regulations 2006 and 2007), your initial costs will be higher. I.e. you will incur additional fees for bringing your property up to the legal standards required for HMO properties and acquiring any necessary licence or planning permission. A property is a large house in multiple occupation if it’s three storeys high, at least five tenants live there (forming more than one household), and amenities are shared between tenants. You must meet HMO obligations and safety checks, including making sure the property is not overcrowded and that there are enough facilities for people living there. You are responsible for repairs to communal areas, i.e. corridors, stairways, the kitchen, bathroom. On a side note, make sure you have the correct property insurance as you will need a special policy for an HMO.

(5) Minimum Energy Efficiency Standard (MEES)

Pursuant to the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, you cannot grant an Assured Shorthold Tenancy if your property falls below an E - as shown on your Energy Performance Certificate. Currently the rules apply to the grant of a new AST but from 1 April 2020, MEES will apply to any subsisting AST. In addition, the Deregulation Act 2015 provides that you must provide your tenant with a copy of the EPC. If you fail to do so, you cannot then seek to evict the tenant using a section 21 notice (the "no fault" eviction procedure) and regain possession.

So to round off...

It pays dividends in terms of the lack of stress, fines and jail terms to have a fully compliant property from the outset. Yes it's costly, yes it takes time but in the long term, it's a no-brainer and a win-win situation!