In the London rental market, as a landlord, compliance is critical for protecting both the value of your investment property and ensuring tenant wellbeing.
Compliance can be dull and easy to overlook but missing documents could reduce the value of your investment by thousands of pounds, and at the extreme, it could be the difference between life and death. This is why it is so important for all landlords to check they have access to the necessary documents when they need them.
Here’s a detailed checklist that Rocket Property Management follows to make sure our landlords meet all compliance requirements hassle-free:
Landlord Compliance Checklist:
1. Confirm Property Ownership
- Verify Ownership on the Land Registry: Making sure the right owner is on record is important. Ownership disputes or tax complexities can arise if names on the title don’t align with financial contributors or landlords. Sign up to the free land registry property alert system to protect yourself from fraudsters.
- Establish a Deed of Trust: If a property is in someone else’s name, a Deed of Trust clarifies that the property’s benefits belong to another party, preventing tax and liability complications.
2. Energy Performance Certificate (EPC)
- Minimum EPC Requirement: Properties need an EPC rating of E or above for rental eligibility. With planned updates, this threshold will increase to a C by 2030, so consider proactive energy efficiency improvements.
- Improvement Tips: Upgrading to energy-efficient lighting, double glazing, loft insulation, and efficient heating systems are top recommendations for improving EPC ratings.
3. Gas Safety Check
- Annual Gas Safety Record: For properties with gas, an annual gas safety inspection is mandatory. Tenants must receive this certificate upon moving in, as non-compliance can invalidate eviction notices (Section 21). It’s also worth making sure the Gas Safe certificate is issued by a Gas Safe registered engineer which can be checked online.
4. Electrical Safety Certificate (EICR)
- Five-Year Validity: Electrical systems must be inspected every five years, unless an inspector advises more frequent checks. Non-compliance in providing an EICR can result in Section 21 eviction issues. Again, make sure the electrician is appropriately qualified with an online check.
5. Tenant Documentation
- Provide How to Rent Guide: This government-issued guide gives tenants an overview of renting rights and responsibilities. Always make sure they have the latest version for full legal compliance.
- Reference Checks: Screening tenants thoroughly provides security for landlords, and issuing clear agreements means both parties understand their obligations.
6. Right to Rent Checks
- Verify Tenant’s Legal Right: All tenants must provide proof of residency or citizenship in the UK. Make sure that each tenant’s ID is current and provides a right to rent in England, as penalties can include a prison term of up to 5 years, and fines of up to £10,000 for renting to unqualified tenants. The fines increase if there are multiple offences.
7. Smoke and Carbon Monoxide Alarms
- Day-One Test: Make sure smoke, heat, and carbon monoxide alarms are functional on the first day of the tenancy, as this is important for tenant safety and liability protection.
8. Maintenance Responsiveness
- Proactive Repairs and Regular Inspections: Timely maintenance response helps keep tenants happy and protects against “retaliatory” non-compliance claims that can void eviction attempts.
9. Deposit Protection
- Deposit Registration: Landlords must register tenant deposits within 30 days of receiving them and provide tenants with a deposit certificate and prescribed information to avoid legal challenges and fines.
10. Inventory and Condition Report
- Detailed Documentation: An initial inventory provides a baseline that protects landlords in deposit disputes by detailing the property’s condition at move-in.
11. Licensing Compliance
- Check Local Licensing Requirements: In addition to mandatory HMO licenses for properties with five or more occupants, many London boroughs have stricter requirements under Article 4 directives and selective licensing schemes.
- Stay Informed on Licensing Changes: Non-compliance with licensing can result in significant fines, rent repayment orders, and required property updates.
12. Furniture Compliance
- Fire Safety for Furnishings: Any furniture in the property must meet safety standards. Labels from manufacturers indicate compliance, which is essential in case of a fire-related incident. Recording the furniture labels in an inventory protects the landlord in the event of a fire.
13. Overseas Landlord Considerations
- Register with Non-Resident Landlord Scheme: Landlords based outside the UK need to be registered under the Non-Resident Landlord (NRL) scheme to avoid automatic tax deductions on rental income.
Real-World Examples
Compliance issues aren’t just theoretical - they can impact property values and sales.
Recently, we assessed a property where missing gas and electrical certifications, inadequate smoke alarms, and incorrect tenancy documents delayed the landlord’s plans to sell.
Having an updated compliance record can be the difference between a smooth sale and a significantly reduced property valuation.
Landlord Compliance in Action
Property compliance is essential for rental and resale value protection. By addressing compliance issues, landlords not only safeguard their property’s financial worth but also create a positive tenant experience, which benefits the landlord-tenant relationship.
If you’re unsure about your property’s compliance or want to make sure you are fully adhering to London’s rigorous rental requirements, contact Rocket Property Management.
We work with property experts and compliance professionals to make sure your investment stays both profitable and compliant.
