When it comes to managing a property, landlord liability has increased almost-exponentially over recent years. That means, for landlords looking to manage their own properties, something which has become an increasingly popular option recently, you need to really be clued into the dos and don’ts of property management, lest you want to fall foul of any legislature, and find yourself on the receiving end of a hefty fine, or worse.
First, though, let’s look at some of the advantages (and disadvantages) of self-managing a property as a landlord.
The Advantages Of Property Self-Management
Undoubtedly, one of the main advantages of managing a property yourself as a landlord is the flexibility and freedom it gives you. As a landlord managing your own property, you’re not beholden to anyone other than yourself; that means you can set your own terms, provided they fall within the requisite legal parameters, of course, and have complete agency over decisions regarding tenancies, contract lengths, the rent stipulated, and more.The other main benefit of managing your own property is that it enables you to save a bit of money; the alternative, a letting agent/property management agency will take a fee on their management services. That said, however, the cost is typically only 10-12% of the total rental income, so it’s well worth considering - as we’ll come onto shortly…
The Disadvantages Of Property Self-Management
Whilst there may be a few positives to self-managing property, as outlined above, we’d argue that these are far outweighed by the potential disadvantages there are to self-managing a property as a landlord. Firstly, self-management is time-consuming; just think of all the tasks that a landlord needs to carry out when managing a property themselves. These duties include:
- Collecting rent
- Carrying out maintenance
- Carrying out repairs
- Preparing (as well as, when needed, adjusting) the lease/tenancy agreement
- Enforcing the lease (and evicting tenants when necessary)
- And more…
As you can see, there are lots of responsibilities involved when managing a property yourself as a landlord, and that’s far from an exhaustive list, either. We’ll go into more details about each of these points later within the article.
Now, this is laborious enough if you’re just managing one property, but what if you’re the landlord of five properties, ten, or even more? Keeping abreast of all these responsibilities isn’t just time-consuming, however, it requires a great deal of (constantly changing) knowledge, too.
What’s more, most landlords aren’t full-time landlords; that’s to say, they’re letting out their property purely as a means of earning some additional income. That means you’re having to therefore manage all of these complex facets of being a landlord, all whilst getting on with your own normal life at the same time.
A Cost-Benefit Analysis
In short, it’s a lot of hard work for what you get out of it. That’s not to say it isn’t worth your while, but unless the property (or properties) you’re letting out is really raking it in for you, it’s worth carrying out a cost-benefit analysis as to whether self-managing your property is really worthwhile. Utilising a letting agent
, by contrast, as opposed to self-managing your property, will leave you to focus on either expanding your property portfolio, or pursuing other non-property-related activities and interests. A property management agency will take care of all of the day-to-day management aspects, as well as the broader tenancy arrangements.
It’s their job to stay on top of legislation and licensing, so you’ll arguably be in safer hands handing off your property than you would be trying to manage it yourself. They’ll also handle disputes, complaints, as well as management systems designed for landlords with multiple properties. All of the benefits, with none of the stress.
What Does a Property Need to be Considered Fit for Human Habitation?
This isn’t just a general principle you should follow out of the goodness of your heart, though obviously you should, ensuring your home is fit for human habitation falls under the statute of a relatively new (introduced in 2019) UK law. The law, called The Homes Act 2018, indicates that, for a home to be considered ‘fit for habitation’, it must:
- Be free from (serious) disrepair
- Free from severe damp
- Supply adequate potable water
- Provide adequate light, heat and ventilation
- Be structurally stable
- Feature a W/C (suitably located) and the provision of a shower/bath, and hand basin (with both hot and cold running water)
A Landlord’s Legal Responsibilities
According to the UK Government, landlords have a legal obligation to: keep rented properties free from hazard; make sure gas/electrical equipment is safely installed and maintained; provide the property with an EPC (Energy Performance Certificate); use a Government-supported scheme to protect a tenant’s deposit; ensure a tenant has the ‘right to rent’; make sure your tenant has been given a copy of the “How to rent” checklist (procured from the UK Government’s website).
Further to this, there are responsibilities pertaining to fire safety, health and safety inspections and financial responsibilities:
With regards to fire safety, a landlord’s main responsibilities are to fit (and subsequently test) fire and carbon monoxide alarms. For flats/apartment blocks, the landlord must also outline and follow appropriate fire safety regulations.
Health and Safety Inspections
The council has the right to carry out inspections on all properties within its, according to its Housing Health and Safety Rating System (HHSRS). Such a check may be requested by a tenant, or simply carried out on a property the council suspects of being unsafe/hazardous in some way.
Looking at almost 30 different areas and criteria, the health and safety inspector will score a property, and should there be a serious failing, they may do one of the following:
- Resolve the issue themselves (then bill you for any costs)
- Issue a repair notice
- Forbid the property from being used (by you or anybody else)
To see the criteria against which these assessments are carried out, click here. As a general rule, however, landlords need to ensure the property they’re renting out is free from Category 1 HHSRS hazards.
Any rental income earned from letting out your property is subject to Income Tax; if the property you rent out falls under the running of a business, then you must also pay Class 2 National Insurance.
Finally, if the property you’re looking to rent out has a mortgage, then you must have permission to do so from the mortgage provider, themselves.
What Licence Does a Landlord Require?
The short answer is that it depends. Here in England, Local Authorities (LAs) determine landlord licencing rules; the only compulsory licence nationwide is for houses in multiple occupation (HMO)
. Besides that, the ‘selective licensing’ approach by which LAs operate will set you back around the £500 mark every five years, or so.
As a landlord, when you apply for a licence (or license set) it’s important that you watch out for several things, including: making sure to disclose as much information as possible, double-checking that you are actually compliant with the licence conditions, the turnaround time for applications from your LA, and finally, whether there are any hidden costs.
If you are going to manage a property yourself, then you need to be well-informed as to the various regulations, legislations, and legalities that such a responsibility entails. Alternatively, you could save yourself the hassle by outsourcing that burden to a letting agent, freeing you up to do whatever you want, whether that be to pursue more property interests, or simply to spend more time with your family.
If you want to find out more about our letting agent service, then get in touch! Contact Dwell Estate & Letting Agents today on 0113 246 4860, or by emailing us at firstname.lastname@example.org