1st time letting house. Help needed. Plz

Misteek

tacpot12 said:

If she is to rent the whole house out, she will need:

• an Energy Performance Certificate (EPC) and will need to make impovement is the property is rated at less than band E (although some exemptions are available).
• a Gas Safety Certificate covering any gas appliances and have any faults fixed.
• an Electrical Installation Condition Report (EICR) on the electrics in the property and will need to have anything that is dangerous or potentially dangerous (C1 & C2) repaired.
• any soft furniture she is leaving in the property to have fire safety labels. 
• provide smoke alarms and Carbon Monoxide Alarms.
• have any (portable) electrical appliances she is leaving in the property (including extension cords) tested as Portable Appliances. (fixed items such as boilers don't need testing). 
• provide the tenant with manuals for any appliances she is leaving in the property (these are generally available on line as PDF files)
• protect any security deposit she takes from the tenant in a Government Tenancy Deposit Protection Scheme
• review the risk of Legionella in the property 
• review the safety of the property using the Housing Health and Safety Rating System (HHSRS)
• provide the tenant with the Government's How to Rent booklet

Certificates generally only need to be provided to the local council if the house is being rented as a HMO (House of Multiple Occupation), i.e. it's being rented to more than one household.

In some areas, she may also need a licence to rent her home. If she has a mortgage, she will need her lender's permission to rent. She will need insurance for certain risks and obligations she has as a landlord. She may want to have an inventory of the items she is leaving in the property created - it is virtually impossible to make deductions from security deposits if there isn't an inventory that records the state of the property before the tenancy commenced. 

The checks are not more rigourous because the tenant is receiving help with their housing costs from Universal Credit, but the fact that the tenant is disabled means that your sister may need to make (reasonable) adjustments to how she runs the tenancy. See the link on Rights of Tenants with a disability. 

She will need to register for Self-Assessment to pay tax on any profit she makes. She will need to keep accounting records of her income (a record of the rent paid) and her expenses, including copies of all receipts. The deadline is that she has to report her profit in the tax year that it is earned, so the deadline is the deadline to submit a Self-Assement Return (31st October for paper returns and 31st Jan the following year for online return. There is also a deadline to pay any tax due (31st Jan of the following year). 

She will need to check with her bank if they will allow her to use her current bank account to receive rent payments. Most won't and she will need to open a business account.  

These links will help, but she needs to read them all and do everything they say is mandatory.

Domestic private rented property: minimum energy efficiency standard - landlord guidance - GOV.UK
Landlords' responsibility for gas safety - HSE
Guide for landlords: electrical safety standards in the private rented sector - GOV.UK
The complete fire safety guide for landlords | NRLA
Tenancy deposit protection: Overview - GOV.UK
Legionnaires' disease - Legionella and landlords' responsibilities
Housing health and safety rating system (HHSRS): guidance for landlords and property-related professionals - GOV.UK
How to rent - GOV.UK
Housing Law: the rights of tenants with a disability
Keeping your pay and tax records: Rental income - GOV.UK

She should probably look at joining a landlord association, such as the National Residential Landlords Association, as they can advise on most aspects of being a landlord. 

All that said, renting your house to friends is generally a bad idea. Such rentals seem to go wrong much more often than rentals to strangers. 

Renting a room in the house she lives in is much more straightforward. There is guidance here: Rent a room in your home: Becoming a resident landlord - GOV.UK

Some of the safety requirements such as Gas Safety Certificates and Smoke/Carbon Monoxide Alarms remain, but many fall away.

Thanks for the comprehensive advice there!

So once all the things like EICR, gas cert , EPC and everything in the bullet points you listed is completed. Aside from the tenant. Does she need to give the evidence copies to anyone else like council , DWP as her friend claims benefits.

She won't be asking for a deposit form her friend. So does she still need to do the deposit scheme thing you mentioned ?

We fully understand her friend will have full rights and can not be evicted just like that. As a family we're very supportive my sister will not be made homeless. 

But she is trying to use her resources to help her live a bit.

P.s there isn't any mortgage on the house.

elsien

If friend is claiming benefits for the rent, then she will show the tenancy agreement as proof. But as per my previous comment she does actually need to check how much rent she can get.

housebuyer143

Misteek said:

tacpot12 said:

If she is to rent the whole house out, she will need:

• an Energy Performance Certificate (EPC) and will need to make impovement is the property is rated at less than band E (although some exemptions are available).
• a Gas Safety Certificate covering any gas appliances and have any faults fixed.
• an Electrical Installation Condition Report (EICR) on the electrics in the property and will need to have anything that is dangerous or potentially dangerous (C1 & C2) repaired.
• any soft furniture she is leaving in the property to have fire safety labels. 
• provide smoke alarms and Carbon Monoxide Alarms.
• have any (portable) electrical appliances she is leaving in the property (including extension cords) tested as Portable Appliances. (fixed items such as boilers don't need testing). 
• provide the tenant with manuals for any appliances she is leaving in the property (these are generally available on line as PDF files)
• protect any security deposit she takes from the tenant in a Government Tenancy Deposit Protection Scheme
• review the risk of Legionella in the property 
• review the safety of the property using the Housing Health and Safety Rating System (HHSRS)
• provide the tenant with the Government's How to Rent booklet

Certificates generally only need to be provided to the local council if the house is being rented as a HMO (House of Multiple Occupation), i.e. it's being rented to more than one household.

In some areas, she may also need a licence to rent her home. If she has a mortgage, she will need her lender's permission to rent. She will need insurance for certain risks and obligations she has as a landlord. She may want to have an inventory of the items she is leaving in the property created - it is virtually impossible to make deductions from security deposits if there isn't an inventory that records the state of the property before the tenancy commenced. 

The checks are not more rigourous because the tenant is receiving help with their housing costs from Universal Credit, but the fact that the tenant is disabled means that your sister may need to make (reasonable) adjustments to how she runs the tenancy. See the link on Rights of Tenants with a disability. 

She will need to register for Self-Assessment to pay tax on any profit she makes. She will need to keep accounting records of her income (a record of the rent paid) and her expenses, including copies of all receipts. The deadline is that she has to report her profit in the tax year that it is earned, so the deadline is the deadline to submit a Self-Assement Return (31st October for paper returns and 31st Jan the following year for online return. There is also a deadline to pay any tax due (31st Jan of the following year). 

She will need to check with her bank if they will allow her to use her current bank account to receive rent payments. Most won't and she will need to open a business account.  

These links will help, but she needs to read them all and do everything they say is mandatory.

Domestic private rented property: minimum energy efficiency standard - landlord guidance - GOV.UK
Landlords' responsibility for gas safety - HSE
Guide for landlords: electrical safety standards in the private rented sector - GOV.UK
The complete fire safety guide for landlords | NRLA
Tenancy deposit protection: Overview - GOV.UK
Legionnaires' disease - Legionella and landlords' responsibilities
Housing health and safety rating system (HHSRS): guidance for landlords and property-related professionals - GOV.UK
How to rent - GOV.UK
Housing Law: the rights of tenants with a disability
Keeping your pay and tax records: Rental income - GOV.UK

She should probably look at joining a landlord association, such as the National Residential Landlords Association, as they can advise on most aspects of being a landlord. 

All that said, renting your house to friends is generally a bad idea. Such rentals seem to go wrong much more often than rentals to strangers. 

Renting a room in the house she lives in is much more straightforward. There is guidance here: Rent a room in your home: Becoming a resident landlord - GOV.UK

Some of the safety requirements such as Gas Safety Certificates and Smoke/Carbon Monoxide Alarms remain, but many fall away.

Thanks for the comprehensive advice there!

So once all the things like EICR, gas cert , EPC and everything in the bullet points you listed is completed. Aside from the tenant. Does she need to give the evidence copies to anyone else like council , DWP as her friend claims benefits.

She won't be asking for a deposit form her friend. So does she still need to do the deposit scheme thing you mentioned ?

We fully understand her friend will have full rights and can not be evicted just like that. As a family we're very supportive my sister will not be made homeless. 

But she is trying to use her resources to help her live a bit.

P.s there isn't any mortgage on the house.

Don't mix friends and finances in my opinion, it can very quickly turn sour. Being a lodger is definitely the safer option tbh and as she has no clue about being a landlord, it's going to be less of a minefield. 

What's the local housing allowance she will be entitled to? This determines how much rent she will be given from UC/HB - they don't always cover the full rent. 

You don't need to register a bond if she isn't taking one. Her friend would have to take contact to the council/UC to get rent portion paid. 

Misteek

elsien said:

If friend is claiming benefits for the rent, then she will show the tenancy agreement as proof. But as per my previous comment she does actually need to check how much rent she can get.

Thank you so much. Is there a tenancy agreement template she can use ? Or would she need a lawyer to draft it ?

elsien

It will probably be in the links that she has been provided with above.

With the reminder that a tenancy contract is very different to a lodger agreement and if she goes the lodger route she does not want to grant a tenancy by mistake!

Misteek

housebuyer143 said:

Misteek said:

tacpot12 said:

If she is to rent the whole house out, she will need:

• an Energy Performance Certificate (EPC) and will need to make impovement is the property is rated at less than band E (although some exemptions are available).
• a Gas Safety Certificate covering any gas appliances and have any faults fixed.
• an Electrical Installation Condition Report (EICR) on the electrics in the property and will need to have anything that is dangerous or potentially dangerous (C1 & C2) repaired.
• any soft furniture she is leaving in the property to have fire safety labels. 
• provide smoke alarms and Carbon Monoxide Alarms.
• have any (portable) electrical appliances she is leaving in the property (including extension cords) tested as Portable Appliances. (fixed items such as boilers don't need testing). 
• provide the tenant with manuals for any appliances she is leaving in the property (these are generally available on line as PDF files)
• protect any security deposit she takes from the tenant in a Government Tenancy Deposit Protection Scheme
• review the risk of Legionella in the property 
• review the safety of the property using the Housing Health and Safety Rating System (HHSRS)
• provide the tenant with the Government's How to Rent booklet

Certificates generally only need to be provided to the local council if the house is being rented as a HMO (House of Multiple Occupation), i.e. it's being rented to more than one household.

In some areas, she may also need a licence to rent her home. If she has a mortgage, she will need her lender's permission to rent. She will need insurance for certain risks and obligations she has as a landlord. She may want to have an inventory of the items she is leaving in the property created - it is virtually impossible to make deductions from security deposits if there isn't an inventory that records the state of the property before the tenancy commenced. 

The checks are not more rigourous because the tenant is receiving help with their housing costs from Universal Credit, but the fact that the tenant is disabled means that your sister may need to make (reasonable) adjustments to how she runs the tenancy. See the link on Rights of Tenants with a disability. 

She will need to register for Self-Assessment to pay tax on any profit she makes. She will need to keep accounting records of her income (a record of the rent paid) and her expenses, including copies of all receipts. The deadline is that she has to report her profit in the tax year that it is earned, so the deadline is the deadline to submit a Self-Assement Return (31st October for paper returns and 31st Jan the following year for online return. There is also a deadline to pay any tax due (31st Jan of the following year). 

She will need to check with her bank if they will allow her to use her current bank account to receive rent payments. Most won't and she will need to open a business account.  

These links will help, but she needs to read them all and do everything they say is mandatory.

Domestic private rented property: minimum energy efficiency standard - landlord guidance - GOV.UK
Landlords' responsibility for gas safety - HSE
Guide for landlords: electrical safety standards in the private rented sector - GOV.UK
The complete fire safety guide for landlords | NRLA
Tenancy deposit protection: Overview - GOV.UK
Legionnaires' disease - Legionella and landlords' responsibilities
Housing health and safety rating system (HHSRS): guidance for landlords and property-related professionals - GOV.UK
How to rent - GOV.UK
Housing Law: the rights of tenants with a disability
Keeping your pay and tax records: Rental income - GOV.UK

She should probably look at joining a landlord association, such as the National Residential Landlords Association, as they can advise on most aspects of being a landlord. 

All that said, renting your house to friends is generally a bad idea. Such rentals seem to go wrong much more often than rentals to strangers. 

Renting a room in the house she lives in is much more straightforward. There is guidance here: Rent a room in your home: Becoming a resident landlord - GOV.UK

Some of the safety requirements such as Gas Safety Certificates and Smoke/Carbon Monoxide Alarms remain, but many fall away.

Thanks for the comprehensive advice there!

So once all the things like EICR, gas cert , EPC and everything in the bullet points you listed is completed. Aside from the tenant. Does she need to give the evidence copies to anyone else like council , DWP as her friend claims benefits.

She won't be asking for a deposit form her friend. So does she still need to do the deposit scheme thing you mentioned ?

We fully understand her friend will have full rights and can not be evicted just like that. As a family we're very supportive my sister will not be made homeless. 

But she is trying to use her resources to help her live a bit.

P.s there isn't any mortgage on the house.

Don't mix friends and finances in my opinion, it can very quickly turn sour. Being a lodger is definitely the safer option tbh and as she has no clue about being a landlord, it's going to be less of a minefield. 

What's the local housing allowance she will be entitled to? This determines how much rent she will be given from UC/HB - they don't always cover the full rent. 

You don't need to register a bond if she isn't taking one. Her friend would have to take contact to the council/UC to get rent portion paid. 

housebuyer143 said:

Misteek said:

tacpot12 said:

If she is to rent the whole house out, she will need:

• an Energy Performance Certificate (EPC) and will need to make impovement is the property is rated at less than band E (although some exemptions are available).
• a Gas Safety Certificate covering any gas appliances and have any faults fixed.
• an Electrical Installation Condition Report (EICR) on the electrics in the property and will need to have anything that is dangerous or potentially dangerous (C1 & C2) repaired.
• any soft furniture she is leaving in the property to have fire safety labels. 
• provide smoke alarms and Carbon Monoxide Alarms.
• have any (portable) electrical appliances she is leaving in the property (including extension cords) tested as Portable Appliances. (fixed items such as boilers don't need testing). 
• provide the tenant with manuals for any appliances she is leaving in the property (these are generally available on line as PDF files)
• protect any security deposit she takes from the tenant in a Government Tenancy Deposit Protection Scheme
• review the risk of Legionella in the property 
• review the safety of the property using the Housing Health and Safety Rating System (HHSRS)
• provide the tenant with the Government's How to Rent booklet

Certificates generally only need to be provided to the local council if the house is being rented as a HMO (House of Multiple Occupation), i.e. it's being rented to more than one household.

In some areas, she may also need a licence to rent her home. If she has a mortgage, she will need her lender's permission to rent. She will need insurance for certain risks and obligations she has as a landlord. She may want to have an inventory of the items she is leaving in the property created - it is virtually impossible to make deductions from security deposits if there isn't an inventory that records the state of the property before the tenancy commenced. 

The checks are not more rigourous because the tenant is receiving help with their housing costs from Universal Credit, but the fact that the tenant is disabled means that your sister may need to make (reasonable) adjustments to how she runs the tenancy. See the link on Rights of Tenants with a disability. 

She will need to register for Self-Assessment to pay tax on any profit she makes. She will need to keep accounting records of her income (a record of the rent paid) and her expenses, including copies of all receipts. The deadline is that she has to report her profit in the tax year that it is earned, so the deadline is the deadline to submit a Self-Assement Return (31st October for paper returns and 31st Jan the following year for online return. There is also a deadline to pay any tax due (31st Jan of the following year). 

She will need to check with her bank if they will allow her to use her current bank account to receive rent payments. Most won't and she will need to open a business account.  

These links will help, but she needs to read them all and do everything they say is mandatory.

Domestic private rented property: minimum energy efficiency standard - landlord guidance - GOV.UK
Landlords' responsibility for gas safety - HSE
Guide for landlords: electrical safety standards in the private rented sector - GOV.UK
The complete fire safety guide for landlords | NRLA
Tenancy deposit protection: Overview - GOV.UK
Legionnaires' disease - Legionella and landlords' responsibilities
Housing health and safety rating system (HHSRS): guidance for landlords and property-related professionals - GOV.UK
How to rent - GOV.UK
Housing Law: the rights of tenants with a disability
Keeping your pay and tax records: Rental income - GOV.UK

She should probably look at joining a landlord association, such as the National Residential Landlords Association, as they can advise on most aspects of being a landlord. 

All that said, renting your house to friends is generally a bad idea. Such rentals seem to go wrong much more often than rentals to strangers. 

Renting a room in the house she lives in is much more straightforward. There is guidance here: Rent a room in your home: Becoming a resident landlord - GOV.UK

Some of the safety requirements such as Gas Safety Certificates and Smoke/Carbon Monoxide Alarms remain, but many fall away.

Thanks for the comprehensive advice there!

So once all the things like EICR, gas cert , EPC and everything in the bullet points you listed is completed. Aside from the tenant. Does she need to give the evidence copies to anyone else like council , DWP as her friend claims benefits.

She won't be asking for a deposit form her friend. So does she still need to do the deposit scheme thing you mentioned ?

We fully understand her friend will have full rights and can not be evicted just like that. As a family we're very supportive my sister will not be made homeless. 

But she is trying to use her resources to help her live a bit.

P.s there isn't any mortgage on the house.

Don't mix friends and finances in my opinion, it can very quickly turn sour. Being a lodger is definitely the safer option tbh and as she has no clue about being a landlord, it's going to be less of a minefield. 

What's the local housing allowance she will be entitled to? This determines how much rent she will be given from UC/HB - they don't always cover the full rent. 

You don't need to register a bond if she isn't taking one. Her friend would have to take contact to the council/UC to get rent portion paid. 

Oh thanks for that. Her friend needs a short term place anyway. As she is going to be moving back with her family . But their getting their house renovated ie extentions and structural changes.  She needs her family for support as she has joint and health problems. So she only needs somewhere to stay for a few months. Maximum 6 months. 

So this would give my sister some extra income and help paying some debts off.

What paperwork will she need tonprpare for lodger? If any.

elsien

She doesn't legally need a lodger agreement but it can be helpful so that everyone knows where they stand. There are templates online which she could amend if she wanted to. 
Obviously she has to still be living in the property herself as well. 

BonaDea

Lodger agreement template:  https://m.spareroom.co.uk/lodgeragreement

_Penny_Dreadful

If your sister's goal is to maximise her income then she needs to compare the money she would make taking in a lodger (excluded occupier) versus letting the whole property on an AST.  With the former your sister can used the rent a room scheme which means no tax to pay on the first £7,500 of rental income which is not available when you let the whole property.

As the friend is reliant on benefits it is likely the local housing allowance won't meet the market rate available for the property/room.  Your sister can check the LHA here: https://lha-direct.voa.gov.uk/

FlorayG

Honestly if it's only for 6 months it's not worth jumping through the hoops for renting out the house. I have a rental and I also have a lodger. Lodgers are much less legal work and as your sister already knows the potential lodger well, she surely already knows if they can 'cope' with sharing the house.
For a lodger you just need to provide a room for their own use - with fire safe furniture - and have a gas safety certificate which any gas engineer can do for you. You can charge whatever you like ( although obviously bearing in mind what they can claim) and make reasonable rules. Also, if it turns out you really don't get on, the lodger is usually as keen to move out as you are to be rid of them
Renting a room is also exempt from tax up to £7,500 a year. If she rents the whole house she will pay tax on the entire income ( less any costs)