When you become a landlord, you aren’t just handed a licence to print money. In fact there are strict rules and regulations in place on how landlords are expected to care for their properties, along with seriously dire consequences for chancers who care only about squeezing tenants.
Of course, there are always landlords who try to flout these laws. After all, maintenance costs money, right? Some may even get away with it, at least at first.
However, with organisations like Shelter working to educate tenants on their rights, and with the widespread use of camera phones and online portals making it easy to take and submit evidence, fewer and fewer rogue landlords are managing to avoid the courts. All it can take is a single complaint to the local council for a landlord to suddenly be held accountable for the conditions of their properties, at which point simply being told to pay for repairs can be one of the least painful possible outcomes.
That is not to say that all landlords are rogues, just as not all builders are cowboys. Still, for those unfamiliar with running a rental property it can be easy to let things slip through the cracks. You may end up having to pay fines simply because you were not aware of the rules you were breaking.
Landlords are not fined mere pennies for breaking the law. While typical fees often range between around £500 and £3,000, it is not uncommon for serial offenders with multiple properties to be charged six figures (peppered with hefty prison sentences).
Don’t make the mistake of leaving yourself vulnerable. Here are some of the most common fines faced by landlords and how you can avoid them.
If you want to be a successful landlord, your properties must be safe to live in. This means offering well-maintained utilities and appliances while also making sure that your tenants have both clear instructions and a way out in the event of an emergency.
In terms of gas safety, a landlord must ensure that any appliances and flues are regularly maintained and safe to use. It is also the landlord’s responsibility to arrange for an annual gas safety check for each of their properties with a plumber or heating engineer.
You will receive a gas safety record following this check, a copy of which must be provided to your tenants within 28 days (or, if they are new tenants, when they move in). The record will be valid for 12 months, though it will be worth keeping your own copy for at least two years.
While tenants are responsible for gas appliances which they provide, the landlord is still responsible for the connecting pipework and flues (unless it is solely connected to the appliance).
Only Pros on the Gas Safe Register are even permitted to carry out gas work. When you hire someone, always ask to see their GSR ID!
Finally, landlords must let their tenants know what to do in the event of a gas leak. This includes pointing out where they can turn the gas supply off or providing instructions on how to evacuate the property and who to contact in the event of an emergency.
With electrical safety, a landlord is responsible for their property’s ‘system’ (including plug sockets and wiring), along with any provided appliances. Everything electrical must be properly maintained and safe to use throughout each tenancy.
The legislation about electrical safety checks is nowhere near as stringent as with gas. The Electrical Safety Council advises that landlords book a periodic inspection at least once every five years. For HMOs, this is mandatory.
With fire safety, there really is no room for error. To start with, a landlord must provide a smoke alarm on every storey and a carbon monoxide detector in any room with a solid fuel burning appliance. CO2 detectors should also be checked the day a tenancy starts. Any furniture or fittings which the landlord supplies must be fire safe and tenants will need clearly marked and unobstructed escape routes at all times.
An important thing to keep in mind about fire safety is that the laws are even stricter if your property is a large HMO. In this case, you would need to provide fire alarms and extinguishers on every floor.
The rules are even MORE strict if you live in Scotland:
If you are a new landlord, this one might sound a tad confusing, especially if you are not planning any major home improvement work anytime soon. However, planning permission can also come into play when you want to facilitate a material change in the use of a building.
What does this mean in practice? Well, in this case we are referring to changing a property from a C3 classification to C4. In other words, converting a single household/ dwelling into a HMO.
Technically speaking this would be considered ‘permitted development’. However, local councils now have the ability to withdraw this right, necessitating a planning application.
Rules can vary significantly between locales, so be sure to check with your own local council to be absolutely certain.
There are also a number of additional rules which come into play when managing a HMO, particularly ‘large HMOs’ which require a licence to even let.
Some of these rules include:
This is not merely about dodging fines. If you have poor conditions in your HMO, you risk upsetting all of your tenants. For your HMO to be successful, your tenants will need to at least tolerate each other!
It is also worth pointing out that depending on where you live, you may also be subject to ‘additional’ or ‘selective’ licensing laws. Again, this is all at the discretion of your own local council, so be sure to check!
Given how low rental yields can be, it is not uncommon for a landlord to ask whether or not they can fit more tenants in a property. Social areas like living and dining rooms are certainly expendable, at least with certain tenants, but it is important not to go overboard.
Why? Because if you treat your tenants like cheap sardines, you could end up losing tens of thousands!
Luckily, there are clearly defined legal standards regarding overcrowding: the ‘room standard’ and the ‘space standard’.
A property is ‘overcrowded’ if two people of differing genders have no choice but to sleep in the same room. Couples are exempt, as are children under the age of ten.
This standard offers a definite list of how many people can fit in a property with a certain number of rooms. Keep in mind that children between 1 and 10 only count as half a person, while babies younger than this are not factored in. A ‘room’ is also defined as being at having at least 50 square feet or 4.6 square meters of floor space, and must be either a bedroom or living room.
While there are no strict laws on precisely how to measure your rooms, your local council will have the right to take its own measurements if necessary.
When it comes to renting property, tenants do not merely have the right to safety; they are also protected from ‘illegal evictions’ by their landlords.
An ‘illegal eviction’ could be:
It is important to note that this is not just a matter of paying a fine for booting someone out. Illegally evicting a tenant is considered a criminal rather than civil offence and guilty landlords can face jail time and a criminal record in addition to substantial fines.
The process for legally evicting a tenant is varied. If you simply want your tenants gone at the end of a fixed term, you would serve them a Section 21 notice. However, if they had broken the terms of the tenancy, you would serve a Section 8 notice.
If your tenants do not leave by the date specified on your notice and they still owe you rent, the next step will be to apply to the court for a standard possession order. If you are not trying to claim any rent, you can apply for an ‘accelerated possession order’.
After this point if the tenants still will not leave you will need to apply for a ‘warrant for possession’. This will allow bailiffs to legally remove them from the property.
Remember, bailiffs are the ONLY ones who can legally evict a private tenant.
The bad news is that evicting someone in this way usually costs around £2,000!
‘Energy efficiency’ has become a hot topic over the last decade, with the UK government having taken on strict targets to make the country greener by 2050. So far, this has included a national rollout of smart meters (your energy supplier may already have contacted you about installing one free of charge).
However, this drive has also had an impact on rental properties. As of April 2018, any properties on the market must have an EPC (energy performance certificate) rating of E or higher, or they cannot be legally let.
This is another instance where simply trying to ignore the rules won’t get you very far. If your council suspects that your property is not compliant, it can issue you with a ‘compliance notice’. This is not a notice that will require you to make changes; instead, it will ask for proof that you have already made your property compliant. If you cannot provide this proof, or if the proof is insufficient, the council can issue a ‘penalty notice’.
These ‘penalties’ can add up to the value of £5000. However, further penalties can be issued when the tenant at the property changes, or if new regulation comes into effect.
Any experienced landlord will tell you that a good tenant is worth their weight in gold. After all, paying on time, cleaning regularly and not causing any problems are characteristics that can be surprisingly rare in the current market!
Finding this kind of tenant often takes a careful screening process. Exactly how much detail you choose to go into is up to you, but there is one thing that you cannot afford to overlook: making sure that your tenant has the ‘right to rent’ in the UK.
You must check this for everyone. You cannot discriminate against a potential tenant simply because you suspect that they are not a British citizen.
You should be particularly cautious if you have reason to belief that a tenant:
If a landlord fails to make these checks they can be held legally accountable. It is not enough to argue that a tenant lied to you. In fact, you can be fined for failing to show proof that you checked a tenant’s right to rent.
There are civil as well as criminal penalties to consider if you are tempted to rent to an illegal tenant. Exactly how serious the fines are will depend on the type of accommodation, as well as whether or not you have offended in the past.
Despite what the chancers and cowboys out there might think, when a landlord receives a tenant’s deposit it does not become their money. Instead, it is essentially insurance in cast that tenant causes damage or allows a property to fall into disrepair.
Putting your tenants’ deposits into a government-approved scheme is not simply recommended, it is mandatory. Not only will the scheme take care of the money, it can also act as an adjudicator if you and a tenant come to blows over deductions.
When you receive a deposit, you have 30 days to place it in an appropriate scheme. You will also need to provide a few pieces of information to your tenants:
Because using a deposit protection scheme is mandatory, landlords who attempt to get around the law open themselves up to heavy scrutiny. Tenants can even seek compensation between one and three times the size of their deposit!
At this point it is worth pointing out that these penalties do not just apply once a tenancy has ended. In fact, a landlord can face significant penalties during a tenancy if they:
Keep in mind that you do not simply need to worry about fines here; extreme violations across multiple properties often result in prison terms!
If you have served your tenants with a Section 21 notice, it will be invalidated should you break any rules regarding deposit protection.
We have already spoken about a landlord’s responsibilities regarding gas, electrical and fire safety. However, there are a number of potential hazards in a property which do not fall into these categories. As you might expect, should one of these hazards cause any problems, it is the landlord’s responsibility to solve them.
The ‘Housing Health and Safety Rating System (HHSRS)’ is used by local councils to assess potential problem properties. It includes 29 hazards, which will be addressed during a HHSRS inspection.
You may be wondering why anyone would book such an inspection for your property. The answer is that your local council may conduct an inspection, regardless of whether or not you approve, if your tenants complain about the state of their living conditions.
Should the council find that a hazard is putting your tenants’ health and safety in immediate danger, it will classed as a ‘Category 1’ hazard.
At first the council will try to deal with the problem by serving you with a ‘hazard awareness notice (check)’, letting you know what they have found. They can also give you an ‘improvement notice’ which will outline the steps required to bring the property up to standard.
Do not simply ignore these notices. If necessary, the council may prohibit the use of all or part of your property, or even restrict the number of occupants permitted to live there.
Failure to comply with an improvement notice is classed as a civil offence with a penalty of up to £30,000. The council can also take immediate action to improve a property, leaving the landlord with the bill.