If you are considering letting a house or a flat you should take legal advice before embarking upon the advertising of the property for let.
To ensure that as a landlord you enjoy all the protections available to you under the applicable law, it is imperative that your lease agreement with your tenant is documented formally in writing. Your aim should be to ensure that the tenancy acquires the status of a SHORT ASSURED TENANCY. The Housing (Scotland) Act 1988 introduced the Short Assured Tenancy, a distinct form of assured tenancy for a minimum term of six months. Under a Short Assured Tenancy, the Landlord's rights in respect of regaining possession of the property are enhanced. Warning - a strict criteria must be adhered to to ensure that the lease meets the requirements of a Short Assured Tenancy. In particular, there must be specific documentation for recording the terms and conditions of the Tenancy and notice must be served on the Tenant prior to commencing of the Tenancy in statutory form intimating to the Tenant that the Tenancy is a Short Assured Tenancy. The notice will also summarise the Tenant's rights. Private property letting can be a profitable business provided you take professional advice at the outset to ensure that you secure all of the rights and protections available to private Landlords under current legislation.
The following are some of the areas you should give careful attention to :-
- Residential landlords must apply for registration with the local authority covering the area in which the property being let out is situate.
- If the property you are letting is subject to a mortgage, you will have to obtain the consent of your mortgage lender to the letting out of the property. Further, you must stipulate in your Lease Agreement that the Tenancy may be terminated in the event of repossession of the property by the mortgage lender.
- Any gas appliances in your property must be checked on an annual basis by a qualified person.
- A Carbon Monoxide Detector with an integrated long life battery must be fitted in the property by Residential Landlords. Additionally, landlords must ensure that there is a carbon monoxide detector fitted in any room that is used partly or wholly as living accommodation which also contains any appliance which burns, or is capable of burning, solid fuel. This would include log and coal burning stoves and open fires, even if they are not normally in use, but does not include gas and oil boilers. If an open fireplace is purely decorative and not useable then it is not covered by the regulations. Gas is not a solid fuel and so there is no requirement to fit one near a gas boiler. It is still advisable as best practice however.
- If the property is let out on a furnished basis, all furniture and furnishings must carry a permanent label which states that it has been manufactured in compliance with government flammability tests.
- From 1st December 2015 Private Landlords are responsible for ensuring that an electrical safety inspection of their property is carried out by a registered electrician at least every 5 years and that anything which fails to pass the inspection is replaced and/or repaired immediately. At minimum, an electrical safety inspection must be carried out (a) before a tenancy starts and (b) during the tenancy at intervals of no more than 5 years from the date of the previous inspection. A copy of the most recent electrical safety inspection reports must be provided to both new and retained Tenants. The person conducting the checks must be employed by a firm that is a member of accredited registration scheme recognised by the Scottish Government for example NICEIC or Select.
- Please note that any new Tenant must receive their Electrical Installation Condition Report (EICR), which was formerly known as the Periodic Inspection Report (PIR), covering the safety of electrical installations, fixtures and fittings if they take up the tenancy after 1st December 2015. Any existing Tenant must receive a copy of their EICR before 1st December 2016 (unless their tenancy will end before that date).
- Any EICR produced after 1st December 2015 will also include a Portable Appliance Test (PAT) report on any portable appliances provided by the Landlord.
- If the property is let on a multiple occupancy basis (for example, individual rooms are let to students), the local authority will probably have published a code in respect of the proper standard of management required and in respect of matters such as the adequate provision of bathroom facilities which will be determined in relation to the number of occupants.
- Fire regulations may apply to the property creating a requirement for a separate means of fire escape, provision of fire doors internally etc.
- Always focus on insurance aspects such as the insurance of the building and of those contents belonging to you as landlord. An insurance policy specifically to a property which is being let must be secured. Standard household buildings and contents insurance will ordinarily not be sufficient.
- You should draw up a detailed list of any furnishings, appliances and equipment provided by you for use by the tenant. It is wise to include a provision in the Lease Agreement documenting the fact that your tenant has examined all furnishings, appliances and equipment and has satisfied her or himself that these are in good condition. If minor defects exist in any of the items, it is best to acknowledge these within your Lease Agreement. This will demonstrate that you took care to examine all of the items at the commencement of the Tenancy and should avoid a situation arising where, if serious damage is caused to any of the items, the tenant claims that the damage was already there at the commencement of the tenancy.
- TENANCY DEPOSIT SCHEME. From 2nd July 2012 landlords and letting agents in receipt of a tenancy deposit are obliged to transfer the deposit funds to the care of a Scottish Government approved scheme. This scheme holds the deposit funds until they are requested by the landlord, letting agent or tenant at the end of the lease. Before these funds are returned the scheme will seek both party's agreement to any deductions proposed by the landlord or letting agent. In the event of a dispute each approved scheme provides dispute resolution services, failing which the parties involved can progress to legal proceedings. For detailed information of requirements, deadlines and available approved schemes please visit The Scottish Government's website.
- Always consider local private rental market conditions. We shall advise you on the level of demand for private rentals in Ayrshire. We can advise you of the sort of properties and of the areas for which there is high demand.
- Do you require the services of a letting agent? Letting agents offer a wide range of services fron the securing of a tenant to the management of the Lease to include the collection of rent, arrangement of repairs etc. We will discuss with you in advance the probable cost of employing a letting agent.