A pre-tenancy checklist is a must for landlords and agents to make sure all the legal, and other necessary and sensible tasks have been completed when setting up a new tenancy – act in haste with this process and repent at leisure.
Using a sensible system and method to follow will help you to minimise letting risk, and considerably (you can never eliminate the risk completely) reduce the likelihood of having problems once the tenancy is under way. You should not be embarrassed to request stringent checks, far better this than suffer the consequences of not doing so, later.
Most landlords will be familiar with the items on this list and it’s not exhaustive, but it will pick-up and remind you of the majority of the information points you need to be aware of. If you want to avoid being a victim of the next landlord horror story, pay attention to these points.
1 – The Advertisement – Make sure your advertisements spell out exactly the type of tenancy and the type of tenant you deem suitable for the accommodation, making sure you are not in breach of any discrimination laws. That way you are on safe ground and you are not wasting anyone’s time.
2 – The Application – your tenant/s should complete a detailed application form which gives you all the background information you need and forms the basis of the referencing checks that the tenants must be subjected to. Make sure the tenant applicant is aware that acceptance is subject to successful references and credit checks. Also, remember you can no longer charge the tenant admin fees for any of your administrative costs.
3. Photo ID and documents verified – besides a growing indecence of identity fraud you need to meet the requirements of the Right to Rent Checks. Some tenants, if they know they have a poor credit history record, try to obtain a tenancies using a false ID, often that of a willing friend or relative. Taking a telephone phone ‘photo is quick and easy and is a useful comparison with the passport photo, which is also useful for future records purposes. Most people also carry a photo-card driving licence which can be copied or a digital ‘phone photo can be taken. Suspicions should be aroused if people are refusing these simple methods of identification.
4. Have a guarantor – more frequently these days landlords are requesting a guarantor, so most tenants are comfortable with this process, a friend or relative, preferably a house owner, would be the obvious choice of guarantor. Your tenancy agreement and/or a separate guarantor agreement must be legally sound and up to speed with the latest tenancy rules and regulations. The guarantor must agree to this and be kept informed in writing if there are any developments or problems, such as rent arrears, which they may eventually be responsible for. If you don’t follow the correct procedures with guarantors, you will not be able to enforce the guarantor agreement.
4. Referencing and IDs – the tenant/s and the guarantor should be IDed, credit checked and referenced, which means that an employer and any previous landlord should be approached for references. If you skip the guarantor checks you will be exposing yourself to unnecessary risk. It is very easy for tenants to refer you to a friend of relative to give a reference, so care should be taken to establish the identities and bona fides referees.
5. Have an inventory and property condition assessment – ideally use an independent inventory clerk to prepare a detailed in-going inventory report with included photos. Without this any deposit disputes arising later will very likely go in the tenant’s favour through lack of documentary evidence.
6. Health and Safety – make sure that the furniture and furnishings comply with the fire safety regulations, that the gas and electrical safety checks have been carried out and that the certificates are issued to the tenants at the start of the tenancy – any later than that and you could fall foul of the this requirement when if it comes to an eviction. You must also issue the tenant with an EPC and the current version of the government’s How to Rent Guide. Make sure the smoke alarms, and when necessary the Carbon Monoxide alarms, are installed and tested, noted on the inventory.
7. Buildings and landlord’s contents insurance – make sure you have a comprehensive landlord’s (not a houseowner’s) insurance policy with contents and replacement costs set at the appropriate values. Make sure you are covered for third party claims and ideally things like flood damage and alternative accommodation should the worst happen.
8. Consider rent guarantee insurance – it’s low cost and covers the landlord’s rental income should the tenant fail to pay, especially important if you have a mortgage to pay, and most policies also cover legal costs for evictions.
9. Inform the council and all the utilities of the start and end of your tenancies – otherwise you could find yourself liable for costs which should otherwise fall on the tenant/s. Do this in writing or via email so you have a record.
10. Protect the deposit – make sure you protect the deposit when appropriate in one of the approved schemes and serve the necessary documentation on the tenant. This must be done within 30 days of the tenancy start date. Failure to do so could incur a 3-times the deposit fine and it would make the process of evicting a tenant very difficult.
11. Document all your property income and expenses – keep a record of all your income and expenses, so no matter how small the expense, the general guideline for what is “tax deductible” is whether the cost is wholly and exclusively for the purpose of the rental business. Keep your records organised and you will minimise the trouble and expense if you use an accountant to prepare your self-assessment tax return.