Are you sure they are looking after it properly?
Are you sure that there are no unauthorised occupiers living there?
Your property is probably one of the most expensive things you own. But in order to get an income from it, you have to hand control of it over to tenants.
This means that you do not know what is happening there. For example:
- Has there been any damage done which needs to be repaired before it gets worse?
- Are the tenants using the property for an illegal purpose which would impact on you or its value?
- Have they allowed other occupiers to move in without telling you – which could make you liable for HMO licensing?
You may think that your tenants are trustworthy – and maybe they are. But they may not be telling you everything
- They may have lost their job and be in receipt of benefit. For some landlords, this could invalidate their insurance
- They may have accidentally damaged the property and not told you because they are worried about the cost of repair
- They may have taken in a lodger because they need the extra money
Sometimes these things may not be a problem for you. Sometimes they will be a big problem. But you need to know about them.
So how do you find out?
By doing regular and detailed property inspections
One BIG potential problem:
Is your property an HMO?
No? Think again
If your property has
- Three or more tenants, who form
- Two or more households
It will automatically be an HMO – and subject to the HMO management regulations. It may also be liable for licensing if your Local Authority has a scheme.
But if it has:
- Five or more tenants, who form
- Two or more households
it will automatically be liable for mandatory HMO licensing
. Meaning that you will need to apply (and pay for) an HMO license – and do any required works – otherwise, you will be renting your property illegally.
If you are found to be renting a property which is subject to HMO licensing without a licence this means that:
- You could be prosecuted and fined
- The Local Authority could serve a penalty charge notice on you for up to £30,000
- Your tenants (or the Local Authority if rent is being paid by some form of benefit) can apply to the First Tier Tribunal for a rent repayment order for up to 12 months worth of rent
- If you are prosecuted and convicted, the Local Authority can apply for a banning order.
Hopefully, none of these things will happen to you. Probably they won’t. But they could do. You need to make sure that they don’t.
Property Inspections are key
The only way you can really know what is happening at your property is to go and see for yourself.
You will be able to
- See if any repairs need doing
- Check who is living there, and
- Make sure that your tenants are not doing anything they shouldn’t
Ideally, property inspections need to be done every three months – or at least every six months with a visual inspection of the exterior every three months. However many landlords only do them once or twice a year – and some don’t do any inspections at all.
This is madness. For example, if your property is found, when the tenants leave, to have been converted to a cannabis farm (which is far more common than most people think) – even if you are covered by insurance for this loss, your insurers will almost certainly be entitled to reject your claim. Because they will expect you to have done regular inspections and picked up on this earlier.
Doing inspections the proper way
Then even if landlords carry out regular inspections, they are often not keeping proper records.
It is essential that you have a comprehensive record of your inspection visit – with photographs – so that:
- You can prove, if necessary, to your insurers that you have inspected the property regularly
- If you find that there is a breach of your insurance conditions you can either deal with the problem (if this is possible) or contact your insurers and upgrade your cover
- You can prove who was living at the property at the inspection date if the Local Authority accuse you of running an unlicensed HMO
- You can prove to the Local Authority – if the tenants are breaching fire regulations by blocking fire escapes – that you told them not to do this (which will give you a defence if they bring a prosecution)
- If you need to arrange for repair works to be done, you can get details and take photographs to give to your contractors
If this all sounds a bit daunting – do not worry. I have something to help you.
Developing a solution
I’m Tessa Shepperson, a specialist landlord & tenant lawyer. For many years I ran my own solicitors firm and now I provide training and information services to landlords and letting agents.
I have been concerned for a while about the problems that landlords face if they fail to do proper inspections and so fail to realise that their property has become subject to mandatory HMO licensing due to unauthorised occupiers living at the property. It prompted me to start work on developing a kit to help.
However, once I started, I realised how important regular property inspections are for other problems, not just those to do with unauthorised HMOs. For example, we now have legislation making it mandatory for a property to be fit for human habitation during the tenancy. You need to check that this is the case. Or you can be sued.
The kit I have developed is fairly comprehensive and it includes:
- Instruction pages
- Standard forms and
- Draft letters for you to use
If you follow it carefully you should have a fairly complete record of the property at the time of the inspection visit which you can keep in case it is needed.
In short, the kit:
- Gives you a plan to follow
- Helps you, via the forms and checklists, so you don’t forget anything
- Makes the whole thing easier to manage, and
- Reassures you about your rights
What the kit contains
Here is an outline of the main content.
- A guidance section on how to use the kit
- Part 1 – Why inspections are necessary
- A discussion of the main issues with
- Videos looking at some special issues (e.g.HMOs and cannabis farms)
- Part 2 – Preparing for your inspection visit
- With forms and letters, and
- A checklist of things to take with you
- Part 3 – The Inspection visit – which covers
- Dealing with tenant negative attitudes
- Completing the inspection forms
- Taking photographs (with video guidance on your rights), and
- Things to watch out for
- Part 4 – Following up, which includes
- Sorting out your paperwork and photos and
- Standard letters for you to use.
- Part 5 – What to do if tenants won’t let you in, with
- Letters to send to your tenants, and
- Discussion what you should do next
If you buy the Plus version you also get access to some of my special documents from Landlord Law (see more on this below).