Buy to let legal matters
Tenancy Agreements
Prior to 1989 most residential tenancies were based
on the 'rent acts' which gave tenants substantial
rights. This type of tenancy was known as a protected or
statutory tenancy and they still exist today.
Since 1989, landlords have been able to implement the
assured shorthold tenancy. Most mortgage lenders today
will ONLY accept this type of tenancy.
A shorthold tenancy provides the tenant with security of tenure for
the contract period (normally 6 months), but none thereafter.
If you are purchasing a property with sitting
tenants, it is important to establish the type of
tenancy and the rights it infers.
If you are letting a property for the first time, you
should put in place an assured shorthold tenancy
agreement. Take advice over the terms of the tenancy,
from a reputable letting agent or solicitor that specializes
in let property. This should ensure that
your interests are protected.
The tenancy agreement might include a 'break clause'
which would take effect after 6 months, this would allow
either party to terminate the agreement with 1 or 2
months notice.
Mortgage
If you intend to let your current property. You will
need to obtain the consent of your mortgage lender to
let. If you let the property without consent you will be
in breach of contract and the lender could demand full
repayment of your mortgage.
If your mortgage lender is unwilling to consent to
your application then you should remortgage to a
different lender that will allow you to let your
property.
Insurance
You will need to obtain the consent of your insurers
to let the property. If this is not available then you
should switch to another insurer.
Planning
If you are converting a property from one dwelling to
several flats then planning permission will be required.
Any building works will be subject to building control
approval
Safety
Gas appliances should be inspected every 12 months by
CORGI registered plumbers. A record of such visits
should be kept
Electrical fittings and appliances should also be
checked on a regular basis
If you are letting the property as furnished accommodation
then the furnishings should satisfy the fire safety
regulations. These regulations cover all soft
furnishings, mattresses etc.
There are no specific fire regulations unless the
property is classed as a house in multiple occupation
(HMO)
Houses in multiple occupation (HMO)
Where a property is let to several unrelated people,
for example bedsits with shared facilities then the
local authority may class this accommodation as multiple
occupation. This is likely to be the case where there
are over 4 unrelated occupants.
In this situation, it may be necessary to register
the property with the local authority. You may also need
planning permission to change the use from single to
multiple occupation.
The insurers should be told if the property is in
multiple occupation.
The landlord is responsible for the payment of
council tax.
There will be higher degree of management required
owing to the greater number of tenants.
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