Trust, but always verify, here’s a landlord's guide to periodic inspections 

By Tom Entwistle, LandlordZONE

A recent report cites the case of a landlord renting to a tenant who secretly converted the rental property to an HMO. It was occupied by several tenants, a situation that would normally require a compulsory HMO licence.

The landlord believed he had found the “perfect tenant” and left him undisturbed for several years. It was only after the local council intervened that it was discovered that his four-bedroom family home had been quietly turned into an unlicensed HMO. 

The rent had always been paid promptly, and the tenant always answered phone calls. Nothing seemed out of place or raised suspicions. No one was checking on him or the property. 

It’s a salutary reminder that periodic, well-documented inspections are not an ad hoc luxury to be disregarded at will but a necessity in today’s devious world where not everyone is what they seem. Regular inspections are a real safeguard that landlords should never ignore, for several important reasons.

A cautionary tale

Despite the tenancy agreement clearly stating that the tenancy was for a single household and expressly prohibited subletting, the tenant converted reception rooms into bedrooms and fitted locks to all the internal doors.

The rooms were let out individually to unrelated tenant occupiers, making the property a licensable HMO. Rent was collected by the scammer tenant, who collected all the rents and managed the tenancies without the owner's knowledge.

This arrangement proceeded without an issue for several years, lulling the landlord into a false sense of security. The scammer tenant even dealt with repairs, even paying for them himself to avoid tradesmen entering the property on the landlord’s behalf.

The deception came to light when the local authority began investigating, with the local council officers interviewing the occupiers. They identified the tenant, not the owner, as the person who had let them their rooms, collected their rent money and managed the property.

This article relates to the law in England. The position may differ in Wales, Scotland and Northern Ireland. It is intended as general guidance and does not constitute legal advice; landlords facing a specific dispute or investigation should seek advice from a qualified solicitor.

A serious matter

The council wrote to the owner-landlord (a company) and went on to consider financial penalties. The charge was having control of an unlicensed HMO, under the Housing Act 2004. Lucky for the landlord, it ultimately managed to avoid the penalties even though the government has clearly stated that not having knowledge of the occupants is no excuse.

Fortunately, the landlord could show with the tenancy agreement and the occupiers' own evidence that the tenant, not the landlord's company, had created the deception and controlled all the tenancies. 

The company was deemed to have a “reasonable excuse” for not knowing about it. This outcome depended on the strength of the evidence produced and the discretion of the council. Perhaps a landlord with a weaker paper trail would not have been so fortunate, as fines for this lapse would now be considerable, or there could even be a criminal prosecution. 

The lesson here is obvious. You cannot simply “let it and forget it”. You have to carry out regular inspections, and that’s even more important under the new legislation of the Renters’ Rights Act. At the heart of the case is a straightforward assumption. A so-called perfect tenant may not be all they seem; they cannot be relied on as such – you simply must do your due diligence. 

Four reasons to inspect

It helps to think of periodic inspections as serving three checkboxes: 

Safety compliance is the main priority, as that’s what the legislation focuses on under the HHSRS regime. Landlords must carry out their statutory duties to keep safe exits, gas appliances, electrical installations and other fire precautions such as fire doors safe and in working order. Inspections (checklists and risk assessments) are the practical means of meeting your obligations, and what’s more, gathering the paper-based and, where appropriate, photo evidence to prove it.

Checking on occupancy and usage checks as in the above case. An inspection is the landlord's opportunity to confirm that the property is being used as agreed and that the number and identity of occupiers match the tenancy agreement. You want no unauthorised subletting or HMO conversions to be taking place. 

It is sometimes the case that you need to follow up on the Right-to-Rent compliance when visa dates have lapsed, etc., and requests for repairs are always a good opportunity to inspect unobtrusively.

Insurance protection is another important reason why you must inspect. Landlord insurance policies commonly stipulate conditions involving regular inspections and require updates on any changes such as additional occupants or long unoccupied periods. Any change of use such as undisclosed HMO conversions could leave a landlord subject to a claim being rejected. 

Safety inspections and risk assessments

Statutory safety checks are non-negotiable and should be carried out as required by law. Risk assessments, though not necessarily required in every instance, are a good precaution to take. They give excellent evidence: 

Every gas appliance, flue and piece of pipework must be checked annually by a Gas Safe registered engineer, with a copy of the certificate given to the tenant within 28 days.

An Electrical Installation Condition Report (EICR) is required at least every five years, or sooner if a previous report recommends it, and must be provided to tenants at the start of the tenancy and whenever it changes hands.

Smoke alarms are required on every floor, with carbon monoxide alarms wherever there is a solid fuel or gas fire appliance. Any HMOs and commercial premises with common areas carry additional duties. These include fire doors, extinguishers and providing clear escape routes. A fire risk assessment is required under the Regulatory Reform (Fire Safety) Order 2005 for HMO common parts and similar higher-risk settings.  

Landlords or managing agents responsible for HMOs and commercial properties should carry out or commission these risk assessments and may wish to invest in recognised training, though it is said in the government guidelines that a “competent person” should be able to do this.

The Fire Protection Association's Level 3 Certificate in Fire Risk Assessment, a foundation-level qualification, aligns with the competence framework fire risk assessors are expected to meet. 

None of these checks needs to wait for a periodic inspection, but a periodic visit is the natural point to confirm certificates are current and nothing has changed since the last check. 

LandlordZONE's earlier guide to carrying out risk assessments covers the documentary evidence principle in more detail. A comprehensive check-in inventory followed by properly recorded periodic checks is, in the event of a dispute, the single most valuable evidence a landlord can produce.

What should an inspection look for?

A periodic inspection is not simply a tour of the property. It should be a methodical, recorded check, preferably using a comprehensive inspection checklist and report (risk assessment).

You are establishing who is actually living at the property, whether its use has changed, and whether anything has been altered structurally or otherwise and, importantly, safety issues along HHSRS lines.

Signs worth noting for closer questioning include more beds than the number of named tenants; locks fitted to internal doors; occupiers who you do not recognise the name on the tenancy agreement; unusually high volumes of post addressed to different names; a tenant who is unusually keen to prevent visits or want to handle repairs personally rather than allow a contractor onto the property.

Notice, access and the tenant's rights

Inspections must be carried out within the law. Tenants have a right to "quiet enjoyment" of their home, meaning freedom from disturbance by anyone, including the landlord, or an agent acting for them. 

You have no automatic right to enter or force entry without consent, but landlords have a legal right to enter to view the condition and state of repair of the property, provided proper notice is given. At least 24 hours, but ideally more, in writing, and entry at a reasonable time of day, offering the tenant the option to be present.

Set out an inspection schedule written into the tenancy agreement, and confirm it again when the tenant moves in. Inspections should become routine rather than a surprise.

If access is persistently refused without good reason, the landlord's options are to explain the statutory basis for the visit, particularly where a safety certificate is due, and, only as a last resort, to seek a court injunction or eviction. 

The only circumstances in which a landlord may enter without notice or consent are genuine emergencies such as a gas or water leak, a fire or a danger to the structure of the property.

In Rogerson v Bolsover District Council [2019] a council tenant was injured when a corroded drain cover gave way. The Court of Appeal held that section 4 of the Defective Premises Act 1972 does not impose a blanket duty on landlords to inspect every part of a property routinely. 

What it does require is reasonable care where a defect ought to have come to a landlord's attention, and the extent of any inspection regime will depend on the known or likely risks at that property.

When it goes wrong

Operating an HMO without the required licence is a serious offence under section 72 of the Housing Act 2004 subject to criminal prosecution. Whether the landlord knew of the arrangement, as in the above case, or not, the responsible person managing the property as well as the landlord, if different, share the responsibility. 

Local authorities can prosecute, with an unlimited fine on conviction, or impose a civil penalty of up to £30,000 as an alternative. Tenants, or in some cases, the local authority itself, may separately apply to the First-tier Tribunal for a rent repayment order (RRO) requiring the landlord to repay up to twenty-four months' rent.

A landlord who did not know about an unauthorised HMO conversion may have a reasonable excuse defence, as in the above case. But the burden of establishing the facts fall on the landlord. The strength of evidence will depend heavily on the tenancy agreement's terms, the inspection history and the quality of the surrounding records.

Insurance is the often-overlooked casualty of an undisclosed change of use. Buildings and contents cover is typically written on the basis of a declared type of occupation, and an undisclosed subletting arrangement or unauthorised HMO conversion can leave a policy useless.

The bottom line

Periodic inspections are an important part of managing tenanted property. They protect you, the landlord, and the tenant’s safety and fulfil your insurer's requirements.

Make sure you keep proper records of every inspection as a vital component of a defence against prosecution, a rent repayment order or a personal injury claim for negligence on your part. 

See also: LandlordZONE — "Doing Risk Assessments" https://www.landlordzone.co.uk/news/doing-risk-assessments