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Key laws you need ‘to know’ when letting a flat

Posted 13/02/2019 by Reeds Rains
Categories: Landlords

With so many different ways of letting property, we thought it would be useful to explain each month some key laws you need to be aware when letting.


1. Lease length

If you’re buying with a mortgage, lenders usually require around 80 years remaining and at least 35 at the end of the term. Below 70-75 years, you’re likely to find rates may rise and if you need to sell, the value is adversely affected especially if it can only be sold to a cash buyer. 

Whether you own with cash or with a mortgage, always know whether you can extend the lease and how much that would cost.


2. Does your lease permit letting?

Some leases state that the flat must be lived in by the owner and ban sub-letting; others refuse letting to students and some state that the freeholder has the right to meet and interview prospective tenants. Make sure you tell the legal company handling your purchase how you intend to let to make sure it’s allowed.


3. What other restrictions does the lease impose?

Some dictate that you must have carpets, rather than hard flooring; some don’t allow any internal change of layout – i.e. you might not be able to put up or take down any walls to achieve the configuration you need to let it as you intended.


4. Are pets allowed?

Some leases state no pets, some specify that dogs are not allowed. And with an increasing number of tenants looking for animal-friendly homes, if you have a choice between a flat allowing pets and one which doesn’t, you may be better securing the pet friendly one.


5. Do you need a licence?

Licensing by local authorities may mean if you own more than one flat in a block, or the whole block, you need to apply for a licence. If you are letting a larger flat as a House in Multiple Occupation to 5 or more unrelated people, you will need a House in Multiple Occupation (HMO) licence.


6. How much is the service charge/cost and ground rent?

What is it today and is there a limit on how much it can increase over time? The amount you have to pay to the management company and/or freeholder can make a big difference to your profits and you can’t necessarily simply put up your tenant’s rent if your costs increase.


7. ​You’ll probably have to top up the insurance.

In most cases, the freeholder or management company pays the buildings insurance and you pay your share though the management charge. However, this is likely to be standard residential insurance, rather than landlord insurance. Contact the existing provider to check cover and you may need to speak to another specialist provider about topping up for things like malicious damage and liability insurance.


8. Is the block or building secure front and back?

You have a duty of care to protect your tenant, so only consider flats in blocks that have excellent security. Some flats are difficult to let if rubbish is left in communal areas or security is poor and people end up using them to sleep in.


9. Who is responsible for maintaining communal areas?

Sometimes it’s a management committee of all owners; sometimes a third party (freeholder or managing agent) is responsible for lighting and cleaning in halls and stairways, etc. Regardless, you as the landlord have an obligation to keep your tenant safe and ensure escape routes are clear and well lit. As this may not be directly under your control, so you have to be sure you can respond quickly to any tenant complaints.


10. Are there sufficient waste & recycling bins?

As the landlord, you are responsible for the waste coming from your property. Regardless of the number of flats in the block, make sure there are the right number of bins allocated for your tenants and remind them of collection day and frequency.


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