5 Things Landlords Need to Know Before Letting Property

November 08, 2018

Whether you have bought an investment property, have moved in with a new partner or you have inherited a house, you may be thinking about renting it out to tenants. As with all investments, letting property can achieve some good returns but you have to be prepared to take the risks. Even if you hire a letting agency to manage the process for you, you still need to know what is involved:

Landlords legal responsibilities

A key responsibility of all landlords is the health and safety of the property’s occupants. It is a strict requirement that smoke and carbon monoxide alarms are fitted in appropriate numbers and places throughout the building. All gas appliances must be serviced and cleared as safe to use at least annually by a Gas Safe registered engineer. The electrical system and any electrical appliances supplied for use by tenants must also be safe. There are further requirements for houses under multiple occupancies, such as student homes.

It’s not just health and safety law that you need to consider though. There is a whole range of applicable laws and responsibilities around all aspects of renting out property, failure to meet them could result in heavy fines or even imprisonment. Whether you choose to manage your lettings individually or prefer to use a letting agent, it is always the property owner who is ultimately responsible for ensuring conformity with the law so make sure you seek professional legal advice. A good estate agent will be able to put you in touch with the right people to give you the very best advice and help to make your let a success.

Tenancy Deposits

At the start of a tenancy, you may charge a reasonable sum of money, separate from the rent payments agreed, to hold as a deposit. This acts as security to cover the costs incurred from damage to the property or if the tenants leave without paying. The law does not specify how much, but it is usual practice to seek the equivalent to one or two months rent.

However, UK laws introduced in 2007 state that this money must be placed into a Government backed tenancy deposit scheme for the duration of the tenancy. The available schemes may vary depending on which part of the UK the rental property is located within, so always check first. Again, your estate agent will likely have an arrangement with one of the scheme provider and will be able to point you in the right direction for further information.

Outgoing tenants are entitled to have their deposit returned providing they have met three criteria: they have met the terms of their tenancy agreement, they have not damaged the property and they have paid all rent plus bills they are responsible for. In the event of any dispute, the scheme will continue to hold the deposit sum until it is resolved. Any disputes are now generally looked after by arbitrators within the deposit holding scheme, meaning that court proceedings over deposits can now be avoided in most cases.

Only tenancy deposits as described above are covered by the schemes. If you are considering charging any form of additional deposit to tenants, seek further professional advice to ensure legal conformity.


As a property owner, you will be familiar with home insurance to cover the building and contents but you should be aware that standard policies usually only cover owner/occupiers – they probably won’t cover you once you let the property out to tenants because the risk is higher. Insurance is not compulsory by law, but not protecting your assets with the right level of cover could leave you with heavy financial losses if things go wrong.

Landlord insurance is designed specifically to cover damage to the building and your contents (not the tenant’s possessions), while it is being rented out and is highly recommended. These policies can also offer various other services such as covering unpaid rent but they vary widely as to what is or can be covered, so check and compare carefully to decide what suits you.

It may also be in your interests to request that the tenants take out an insurance policy to cover accidental damage to fixtures and fittings.

Energy Performance Certificates (EPC)

Energy Performance Certificates (EPC’s) are a legal requirement in the majority of tenancies although there are some exceptions based on the building and type of residency. Landlords and/or letting agents must have an EPC completed within 7 days of advertising the dwelling. This should be made available to all prospective tenants, without charge.

From April 2018, it became law in England and Wales that all private landlords must ensure their properties reach a minimum EPC rating of ‘E’ before letting to a new tenant or renewing an existing agreement. Failure to meet any EPC requirements could result in heavy fines or create problems when trying to evict tenants.

Tenancy Agreement

Under the law, tenancy agreements can be purely verbal and both parties have rights and responsibilities regardless of whether the agreement is in writing or not. However, should a dispute arise, it can be very difficult to resolve without proof. Written contracts help to protect all parties to the agreement.

Any written contract must be fair and comply with the law. It has to state the landlord’s full name and address and the tenant’s names. It should outline all the relevant details of the tenancy such as the length of the tenancy, review periods, rent payment amounts and frequency. It should also detail whose responsibility it is to pay which bills, maintain outside space and other obligations.

Many letting agencies, landlord associations and other professional practices can offer assistance in writing contracts or templates for reasonable costs. It really is important to make sure you protect yourself and your investment against unforeseen problems because if anything can be guaranteed, it is that the unexpected will happen.

At Zaza Johnson & Bath of Shrewsbury, we have been looking after landlords and tenants across Shropshire for over 40 years and pride ourselves in providing exceptional customer service. To find out more about our letting services, call us today on 01743 248351.