Landlord Insurance -Tips for Landlords when letting out a rental property

TIPS FOR LANDLORDS (also see our Advice for Landlords for much more detailed information)

KEEP IT CLEAN 
If your property is clean, tidy and has a reasonable standard of decoration it will be more attractive to good quality tenants and easier to achieve a good level of rent. Think carefully about whether you would want to live there or not. See Our Guide on how to present a property for rental for advice to make the property more appealing.

TO FURNISH OR NOT TO FURNISH? 
Property can be let fully furnished, part furnished or unfurnished. Which of these is appropriate will depend on the type of property and the local market conditions. As a minimum you will need to provide decent quality carpets, curtains and light fittings. Remember, you need to accept that there will be wear and tear on the property and any items provided. Do not leave items which are irreplaceable or have personal sentimental value.

DO I NEED TO TELL ANYONE THAT I AM LETTING THE PROPERTY? 
If you have a mortgage bond or loan on the property you must inform your lender in advance of any letting and, in some cases, get their consent. If you do not do this you may breach your mortgage bond conditions with potentially serious consequences. If your property is sectional title you may need the consent of the trustees of the body corporate. Keep copies of any such consent's obtained safe, as you may need to provide them later.

WHAT ABOUT INSURANCE? 

You must inform your insurance company of any proposed letting as your cover and or premiums may be affected. Failure to tell your insurers might mean they refuse to pay any subsequent claim. You will need to ensure that your policy covers you for third party/ public liability so that you are covered for claims against you following accidents etc due to defects at your property. You might want to consider one of the various specialist insurance products for landlords, which could include protection against rent arrears, or for legal expenses if you have to take legal action against your tenant.CLICK HERE FOR MORE DETAILS

Make sure you are covered if this happens?

INVENTORY 

A suitably detailed Inventory or Schedule of Condition for the property its contents is absolutely essential. The inventory should be provided to the ingoing tenants on the commencement date of their tenancy. Ideally the tenants should check, sign and return a copy of the Inventory to confirm their agreement with it. Without a good inventory a landlord is, legally, in a very vulnerable position if he subsequently tries to deduct money from a tenants deposit for alleged damages. 
Don't forget, when changing tenants you will need to provide an updated inventory to the new set of tenants. See also

INFORMATION FOLDER

It's good practice to leave a folder of information at the property for tenants. This might include:  details of rubbish collection days, nearest schools, shops.Photocopies of any manuals/ instructions for appliances, location of fuse boxes/ meters/ stopcock- useful and emergency contact numbers (plumber, handyman, electrician etc.)

SAFETY MATTERS 

As a landlord you have a legal obligation to provide a safe property for the tenants to live in. Specifically, this means that any electrical equipment provided, plugs, sockets etc must be safe. You should also ensure that all equipment is serviced regularly and provide instructions or user manuals so tenants know how to safely operate appliances and equipment.

MAINTENANCE AND REPAIRS 

As the owner and landlord you will generally be responsible for maintaining and or repairing the fabric or structure of the property. Your agent will be able to explain your specific legal obligations in more detail. 

HOW DO I RECEIVE MY RENTAL INCOME? 

You will need to agree with your letting agent the anticipated timescale for the rent to be paid on to you after the tenant has paid it to the agent. There are a number of factors that influence this and you should discuss these with your agent so there is an understanding on both sides. Make sure your agent is a member of a reputable organisation such as ARLA who have a mandatory and comprehensive client money protection (Bonding) scheme for its member firms; requiring them to adhere to specific rules relating to dealing with clients money and submit to audits by external accountants.

If the rent is paid directly to you by your tenants, it is advisable to check your bank statement a few days after the rent should be paid. e.g. Rental due on the 15th of month should be in your bank account by 18th or 19th (depending on weekends and bank holidays) If your tenants happen to bank with the same bank as you do, it might even reach your bank the same day. Don't wait for your monthly statement - only to find that the rent has not been paid. You will have lost a couple of valuable weeks to "chase" your tenants. Quite often your tenants can rectify the problem quickly and on line banking can help.

RECORD KEEPING FOR PROPERTY OWNERS

As a Landlord you are required to maintain complete records of all expenses incurred and the income received from your properties.(see Landlords Letting Advice ) This means that you must hang onto every relevent receipt and keeping details of any personal assets you used for the property business. An example of this would be to note down the details of all journeys you make concerning your property's business, the portion of your home used tp process related paperwork and time spent on your computer carry out work for the property.

You should retain all bank statements and all records have to be retained for five years after the tax return filing date. Any receipts regarding property improvements should be kept for six years after the end of the tax year in which the property is sold. If you don't keep tax related records you could face a UK fine of £3,000.

DEPOSITS

N.B. From April 2007 under the 2004 Housing Act Landlords will no longer be able to hold deposits with AST tenancies unless they have them registered with a specific scheme. See Tenancy Deposit Scheme

N.B. This information should not be relied on for accuracy and is presented here without the responsibility of jml Property Service and the website it is being displayed at. ©jml property Services 12-04

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