Protecting your buy to let property
We’ve all seen the horror stories.
Tenants From Hell make juicy headlines and compelling trash TV - even if you do find yourself watching it through knitted fingers.
And it’s not just tenants. Landlords at the slummier end of the scale have terrible reputations too.
As a new Buy to Let landlord you want to protect your investment if the worst comes to the worst - and you don’t want to fall foul of the laws governing rental properties.
We are going to tell you how to stay safe in the latest instalment of our Buy to Let series: covering insurance and the main things you must do to make sure your property complies with the law.
You need to tell any insurer that you require cover for a rental property. That is important. A standard owner-occupier policy may not cover a home being let to tenants.
Basic landlord insurance provides buildings cover to protect the structure, fixtures and fittings of your property. Insuring these will probably be a condition of your mortgage.
Some landlord policies also provide contents cover for furniture or electricals belonging to you. Optional cover is available on some policies for accidental damage, home emergencies, compensation claims and legal fees.
“You need to consider quite carefully what level of cover you need,” says Keith MacGregor, a Product Consultant for insurance provider RSA - a trusted partner of The Nottingham.
“A policy that covers legal expenses might be appropriate. If you need to evict a tenant for whatever reason it can be a long and costly process,” says Keith. “Bear in mind that you’re more likely to have a problem with a rental property than your own home. If your property is severely damaged you won’t be earning rent. If you’re not getting rent, you might struggle to pay your mortgage.”
Your insurer may want to know who you are letting to. Is it young professionals or students, for example? The answer may affect your premiums. Be honest with your insurer or you risk invalidating your policy.
Most policies also contain a clause which stipulates the property can only be unoccupied for less than 60 days in a row. If your property is vacant for more than a couple of months it is wise to inform your insurer. Failing to do so could compromise your policy.
Staying within the law
Before you rent or market your property you must obtain an Energy Performance Certificate (EPC) - and display its energy efficiency rating to potential tenants. If an EPC was provided when you bought the property you can re-use it. EPCs are valid for 10 years and can be used time and again for this period. The penalty for not providing an EPC is £200.
It is your legal responsibility as a landlord to get a registered Gas Safe engineer to check every gas appliance and flu in the property. The engineer will issue a Gas Safety Certificate which is valid for 12 months. A record of the annual gas safety check must be provided to your tenant within 28 days of the check being completed or to new tenants before they move in. Landlords must keep copies of the gas safety record for two years.
It is the landlord’s responsibility to ensure that the electrical installation and appliances in a property are safe when the tenancy begins and are in proper working order throughout the tenancy. It’s a good idea - but not a legal requirement - to have your property’s electrics checked by a qualified electrician every 5 to 10 years. The electrician will issue, depending on the requirement, an Electrical Installation Certificate or a Periodical Inspection Report (PIR).
It is a legal requirement for properties built after June 1992 to have hard-wired mains- operated smoke alarms on each level of the property. Landlords who have a pre-June 1992 property are advised to supply smoke alarms, even if they are battery operated. If you do supply battery alarms, make sure your tenancy agreement states that the tenant is responsible for regular testing and the replacing of batteries. Fire Doors and safe means of escape in all rental properties should comply with current building regulations. If you are in any doubt, contact the building inspector at your local council.
Read our series of buy to let stories