First time landlord - some questions

djblack

Hi Folks

My elderly mother has moved into sheltered housing, and we are going to rent out her "home" to keep the funds coming in.

We are in Scotland if it makes any difference...

I have seen a few letting agencies around that promise renatl income even if the property is empty. I assume the regular rental amount is much lower with these guys as they need to cover all months. Should I avoid that kind of deal?

Insurance - I see there is landlord insurance. I am assuming that covers me for public libility (and if the tennant injurs themselves in mums property) and also covers the building and the contents as rented. Am I right? Does the tenant need insurance too for their contants or does my insurance have to cover theirs too?

Insurance again - the few online quotes I looked for asked if the tennant was DSS funded. Does this make a big difference? Sounds like the risk goes up!

Last insurance - typically - if the house is not occupied for any length of time, do you need to inform the insurer as you would if its was your own residence? I am sure most domestic insurances say that max unoccupied duration is something like 30 days.

Lastly - what should I look for in an agents deal, or more importantly, what should I make sure is NOt in the contract?!?!

Many thanks for the help.

David

theartfullodger

Sorry to hear about your mum..

Yes, Scotland makes a huge difference... most advice on't web is about English law - BEWARE it is very different.. (I rent property out in both England & Scotland...)

Two simple examples...

a) Deposits - don't have to be put into a Deposit protection scheme in Scotland (yet)
b) Landlord registration - You MUST be registered as a landlord in Scotland (can be criminal offence if not..) but not (usually) in England..


Is the house owned by mum or you?? That would decide who is registered.. see...
www.landlordregistrationscotland.gov.uk/


Whilst there are some good agents many are not... so I would STRONGLY suggest joining SaL
http://www.scottishlandlords.com/
and learning through them and possibly through...
http://www.landlordaccreditationscotland.com

Just to give you an idea of mow complex the legislation on renting is in Scotland I wrote a wee source of useful info over here...
http://www.landlordzone.co.uk/forums/showthread.php?32525-Sources-of-useful-information-Scottish-law
and that included the following list of legislation a landlord may be done under... (there are more...!!)

Interesting/Relevant Legislation

(To look up the text of any Act, see http://www.legislation.gov.uk/ )

Small Landholders (Scotland) Acts 1886 to 1931
Accommodations Agencies Act 1953
Conveyancing and Feudal Reform (Scotland) Act 1970
Sex Discrimination Act 1975
Race Relations Act 1976
Tenant's Rights. etc (Scotland) Act 1980
Civic Government (Scotland) Act 1982
Rent (Scotland) Act 1984 (Premiums in charges to tenants illegal, eviction may be criminal: S22 – Harassment, fine and/or up to 2 years jail
Housing (Scotland) Act 1987
Housing (Scotland) Act 1988 (Assured tenancies, Short Assured Tenancies, written tenancy: Compensation of unlawful eviction/harrassment)
Furniture & Furnishings (Fire) (Safety) Regulations 1988
Electrical Equipment (Safety) Regulations 1994
Disability Discrimination Act 1995
Requirements of Writing (Scotland) Act 1995 (signed tenancy, with witness)
Protection from Harassment Act 1997 (A UK-wide Act, note sections 8-11, Scotland in particular)
Town and Country Planning (Scotland) Act 1997
Gas Safety (Installation and Use) Regulations 1998
Data Protection Act 1998 S35 – Date not protected if a court case..
Unfair terms in Consumer Contracts Regulations 1999
Civic Government (Scotland) Act 1982 (Licensing of Houses in Multiple Occupation) Order 2000
Mortgage Rights (Scotland) Act 2001
Homelessness (Scotland) Act 2001 (Landlord must notify council if evicting)
Housing (Scotland) Act 2001 – Secure tenancies etc.., Abandonment of Secure tenacies in S17 & S18.
Community Care and Health (Scotland) Act 2002
Homelessness etc., (Scotland) Act 2003.
BUILDING STANDARDS (SCOTLAND) REGULATIONS 1990 (AS AMENDED)Building Regulation Note 1/2003 (Windows)
Building (Scotland) Regulations 2004.
Criminal Procedure (Amendment) (Scotland) Act 2004
Tenements (Scotland) Act 2004 (How to sack a factor)
Antisocial Behaviour etc. (Scotland) Act 2004 –(Landlord Registration)
Disability Discrimination Act 2005
Fire (Scotland) Act 2005
Housing (Scotland) Act 2006 (HMO Licensing, Repairing Standard, etc.) see guide at

http://scotland.shelter.org.uk/getad...tland_act_2006
The Private Rented Housing Panel (Applications and Determinations) (Scotland) Regulations 2007
Energy Performance of Buildings (Scotland) Regulations 2008 (Affix EPC to Dwelling!)
Home Owner and Debtor Protection (Scotland) Act 2010
Equality Act 2010 (implementing from 1/10/2010 onwards...)

Insurance: SaL membership (£90-ish, tax-deductible..) gets you a discount ..

I've used the following two...
http://www.alanboswell.com/landlords-insurance/

http://www.hamiltonfraser.co.uk/landlord/

You MUST have it. It will cover Buildings insurance, public liability and may cover (your owned) contents. It is entirely up to the tenant if he wishes to insure his contents..

Even if a tenant is not on benefits when they move in they may be later (loss of job, sickness, family crisis..).

Re contract I'd ask to see the agents standard contract (if they won't show you walk away) but I'd recommend SaL's standard one, downloadable as a member... Tenancy must be written (doesn't have to be in Engerland, must be witnessed (also not in England), and you MUST be able to prove you served an AT5 on the tenants before the tenancy is signed - or it ain;t a SAT it is an AT and they will be harder to get out if you need the place back.


IMHO any rent guarantee scheme should be treated with great suspicion...

Hope it works out...

MX5huggy

I looked for asked if the tennant was DSS funded.

I wonder if you can say no to this as the DSS has not existed since 2001?

djblack

Hi theartfullodger

MANY thanks for taking the time to compile such a detailed reply and giving me a heap of relevant reading.

As you can imaging, its a gamble re renting out her home and selling - and given that property is slow moving and down on price, the renting became more of a sensible option.

I think it will be short term pain to "get moving" and be better once I find my feet.

Many thanks

David

theartfullodger

No probs, best of luck! Post again if you need help...

djblack

Hi

I am back again, not rented out yet, still "doing things up" as cash and time permit! I am nearly there however.

Question re electrical and fire regulations - dio I need to get all appliances PAT tested? I have used PAT testers before at work - do I need to show I have had training to use it myself?

Do all furniture items need to have fire saftey labels on them...? Are there any exclusions?

Do I need to get an energy "review" and rating?

Lastly, am I able to recover some costs of refurb/kitting it out against tax?

Many thanks in advance.

David

m_13

Much of the expenses incurred to prepare a property for letting are totted up and are taken off CGT when it's sold.

I find Landlordzone's forums to be a good source of information.

I think it's only soft furnishings that have have the fire labels. We provide a fire blanket in the kitchen as it's less easy for the tenant to accidentally discharge it during a party!

The flat we rent out has electric heating and we had all the heaters and appliances tested. PAT is only for portable appliances - kettles, toasters etc. Do you have any of those?

theartfullodger mentions EPCs in their excelellent, informative post. I know you need one in England though much notice people take of them. My colleague wants to buy a house with the worst rating I've ever seen - 6!

djblack

m_13 wrote: »

The flat we rent out has electric heating and we had all the heaters and appliances tested. PAT is only for portable appliances - kettles, toasters etc. Do you have any of those?

Yes, have kettle, toaster etc...AND electric storage heaters.

Not sure re PAT testing a storage heater as they are hard wired into the wall, ie, no plugtop to remove and test. I could obviously remove it and pat test it then...

David

m_13

Out electric panel heaters were tested at the same time as the sockets etc to make sure they were safe. Not PAT tested. It formed part of the landlord's electrical check we had done.

The heaters had not been earthed properly when installed and this had be sorted out.

djblack

m_13 wrote: »

The heaters had not been earthed properly when installed and this had be sorted out.

Thnaks for the update. I hope that storage heaters dont need separate earth bonding... that would be a pain!

David

m_13

That was we had to have done. Earth bonding to each heater and then a small piece of bonding wire inside the metal case to stop it becoming live when under load. This was because they weren't earthed sufficiently for the load - some are 2kw and others are 1kw.

We bought a repo (bought off plan originally) that was never finished by the developers. They went bust and I don't think they realised how much it was going to cost to convert a factory in a conservation area into flats.

Another set of builders finished the flats just enough for them to be sold and the management company then started fixing the outstanding list. The electricity and plumbing can only be described as quirky!