All-encompassing requirements

You will also be legally bound by the normal all-encompassing laws of the land. These include:

• 1.The law of tort: negligence and personal injury.
• 2.Criminal law.

Everyone is bound by the above two laws, not only property investors.

1. The law of tort

Even though you may have all the safety records in place you still owe a duty of care to your tenant and anyone who enters your property. If it can be shown that you were negligent in any way then you could be sued and ordered to pay damages. As a landlord you are liable for any damages if all of these conditions are satisfied:

• i)your tenant or anyone entering your investment property suffers an injury and
• ii)you owed a duty of care to the person entering your investment property who suffered the personal injury and
• iii)you breached that duty of care.

So for example if Zak, the landlord, failed to fix the cooker socket in the kitchen and the tenant’s guest, Liz, suffered an electric shock burn then Zak would be liable to compensate Liz for her injury. This is because:

• i)Liz suffered injury.
• ii)Zak owed a duty of care as it is realistically to be expected that a tenant would invite a guest into their property.
• iii)Zak breached that duty of care as he did not fix the socket when asked to by the tenant.

2. Criminal law

Threatening your tenant or being violent to them because they haven’t paid you any rent have no justification in the eyes of the law and are deemed criminal offences.

If the landlord interferes with the tenant’s peace or comfort with unannounced visits, does not fulfil his or her responsibilities for basic repairs, or disconnects utility supplies, etc. this may amount to harassment – which is also a criminal offence.

Also, you should give prior warning of at least 24 hours to the tenant if you wish to enter the property to carry out legitimate maintenance checks and repairs.

Investing in property can sometimes challenge your ability to remain calm and situations can become quite heated. You have to be a responsible person and realise that if you want to take investing in property seriously then you have to act lawfully in every way.

TV licences

Just so it’s clear, if the tenants bring a television into the rented property, then they are wholly responsible for paying the TV licence. However, if you supply a TV with the property, then you share responsibility with the tenant for ensuring that there is a TV licence. So in order to avoid a hefty fine, either:

• Don’t provide a television.
• Do provide one and on the lease agreement make it clear that the tenant is responsible for the TV licence.
• Buy an annual licence and add the cost to the rent or service charges, but make sure that they are aware of this.

I usually opt for the second choice and let them sort out the TV licence.

The house requires only one licence as long as the tenants have a joint tenancy agreement. However, if the tenants have separate agreements with you, then they will need separate licences.

Deposits and holdings

You should ask for a deposit as security in case any of your tenants damage the property or furnishings. It can also be used to cover unpaid bills, rent or missing items. Most landlords will ask for a sum equivalent to four weeks’ or a calendar month’s rent but the maximum a landlord can charge by law is two months of the annual rent payable. The deposit should be refunded normally within 28 days after the student has left the property, assuming there are no problems with the condition of the house or its furnishings. This is another good reason why it’s good to complete a full inventory prior to the signing of any agreement. Remember that as part of the AST agreement the tenant must take due care of the property and its furnishings and this should give you confidence when exchanging documents.

As with most deposits, the tenant may lose any holding deposit (forming part of the normal deposit) and may not be refunded if they decide to withdraw before the contract begins.

Tenancy deposit scheme (TDS)

The government has in principle agreed to put forward a tenancy deposit scheme (TDS) to be brought in to ensure that students and landlords are properly protected. Students pay the money they owe for any necessary reparations and landlords release deposit money that students paid when they moved in.

The scheme looks set to act to protect deposits through the housing bill. When and if it comes into effect is another matter.

Retainers

If you are to hold the property for the student tenants until the beginning of the academic year, then a retainer could form part of the contract. This means that the prospective tenant is assured that the property will not be leased out to anyone prior to his or her arrival. You may wish to use the time to redecorate or undertake maintenance work. The normal retainer figure is half-rent charged as per normal for the duration.

A retainer counts as rent, and confers certain rights and obligations. If you charge a summer retainer, the property must be habitable and it is important to stress that you may not let the rooms to other people, as it is illegal to charge rent twice. It is normal to allow students certain rights to the property if a retainer has been paid, such as occasional use (by prior arrangement) and storage facilities.

Checklist

Ask around	You’ve read this book so far – great! Now you have a good knowledge of how to go about purchasing a student buy-to-let property. However, you should do other important research in that particular student area you intend to invest in (see next chapter). Ask the lettings agents what the demand is like; speak to the students’ union or university accommodation office and see what they say; read around the local and university press to see what the latest reports are.
Check property dimensions	With the Housing Bill set to affect thousands of student homes, make sure your property is habitable. There’s no point in buying a house that states three bedrooms but with one being the size of a cupboard. The best properties are those with lots of rooms of fairly equal size because nobody wants the box room. Also, two reception rooms are considerably better than one long reception room as you can convert it to a bedroom and improve yields.
Do your sums	If the going rate around the area is £50 per week, and you have to charge £65 a week to make any profit, you should ask yourself if it’s worth it. Assess your sums both short-term and long-term. You cannot always be assured of a full 12 months rent, so take that into account.
Find the best buy-to-let mortgage	The best way to do this is to speak to a broker. Feel free to contact my broker on 01708 443334. Mention my name to get a discount on the fees.
Furnishings	It’s good to furnish the place, but remember not to fill your house with junk or old items from a charity shop that could be a potential fire hazard, e.g. old cushioning that isn’t fire resistant. The higher the quality of the products, the more desirable they are, the more you can justifiably charge for rent.
Safety checks	Follow the guidelines as outlined in the legal section and get more in-depth information from the local council if you are unsure of anything.
Timing	Students tend to look for their new homes just after the Christmas holidays, so make sure the property you are to buy is let-worthy around this period.