As a student let landlord, you have responsibilities and legal requirements to adhere to. This chapter deals with general guidelines and legal aspects that you should be aware of. Like any dealings with tenants, be they student or professionals, landlords face three broad categories:

• contractual
• regulatory
• all-encompassing1.

Contractual requirements

This refers to the legal contracts that you must sign and adhere to if you wish to do business. You are expected to fulfil your legal obligations as outlined by the terms of the contract. Breach of terms could ultimately result in legal proceedings against you. As a landlord, you will enter into legal contracts with your lender, the tenant, the insurers and, possibly, the lettings agents.

Contracts with the lender

Prior to entering into a contract with a lender they have to know about you. The lender asks you a number of questions and expects the truth. If they find that you have misled then by any of your answers to their questions, they can demand repayment of the loan in full plus all recovery costs. They can also inform the police and charge you with obtaining finance by deception. This is fraud and you can go to prison.

Once the lender has established that you are a person worth lending to, you will have to sign their contract. As the lender has lent money to you it is their right to set the terms of the contract. Unless you are borrowing a large sum of money then you can never include any clauses in the contract based on your terms – that’s just the way it is. The key terms of the contract are:

• Payment. You have to pay the mortgage repayments on the dates the lender dictates. If you fail to do so the lender can repossess the property.
• Maintenance. You must keep the property in a good state of repair fit to be habitable.
• Occupation. You must not leave the property vacant for more than 30 days.

Contracts with the tenant

Several legal documents may be created in relation to your tenant:

• 1.An inventory.
• 2.An Assured Shorthold Tenancy Agreement.
• 3.An eviction order.

1. An inventory

An inventory is a list of all items that are in the property – it includes descriptions of items, quantities and condition. This list should be signed by both the tenant and the landlord. When the tenant decides to leave the property you can check the list to find out what is left in the property. If there are any omissions from the list you can charge the tenant to replace them. So, for example, if there were four dining chairs when the tenant moved in and now there are only three, you can deduct the cost of replacing the dining chair from the tenant’s deposit.

If you get an inventory done it will ensure that the tenant thinks that you care about the place you are letting and they will be less likely to damage the property. If the condition of the carpet is recorded then they are more likely to remove any stains made by them as they will fear that you will deduct cleaning costs from their deposit.

Professional inventory services can be found in the Yellow Pages or by visiting www.yell.com.

2. An Assured Shorthold Tenancy (AST) Agreement

An Assured Shorthold Tenancy Agreement is the most common type of contract with a tenant. These can be made for a specific period of time, such as one academic year, but they are not usually made for a period of less than six months.

You should ask the students who are sharing the house to sign a joint tenancy or a separate tenancy. If they sign a joint tenancy they will all be responsible for each other’s debts and damages. If they have their own contract and there are any discrepancies, the argument is between yourself and the individual student and should not involve the other students.

This AST agreement between the landlord and tenant binds both parties to certain duties and obligations. The main features of a tenancy agreement are:

• Rent. How much rent to be paid and the frequency of payment.
• Duration. An AST is for a minimum of six months and maximum of 12 months.
• Running expenses. It sets out who is liable for the running expenses of the property.
• Tenant’s obligations. It details the tenant’s obligations to the property and the landlord, such as maintenance, not to sublet, informing the landlord of problems in good time, and reporting damage.
• Landlord’s obligations. It details the landlord’s obligations to the property and the tenant, such as privacy and timeliness of repairs.

Both the tenant and the landlord have to sign, with both signatures witnessed by an independent third party.

Visit www.lawpack.co.uk for further information and links to obtain a ready-drafted AST. You can also obtain more information on legal matters and obligations by visiting www.landlordlaw.co.uk, run by specialist solicitor and Lawpack author Tessa Sanderson.

3. An eviction order

If you want to evict the student tenant(s) from your house then a legal process must be complied with before they can be evicted. This will include written notice and applying to the court for a possession order. If you evict the tenants without following the correct procedures you will be committing a criminal offence.

It would be advisable to try to get one tenancy agreement, whereby if one student leaves they will all be responsible for the full payment of the shortfall or finding a new flatmate.

A landlord must have a ‘ground’ for eviction and serve the proper notice on the tenant before any court action is started.

A landlord can evict a tenant and serve a Notice of Intention to Seek Possession (Section 8). A landlord can serve this notice and give a minimum of two weeks’ notice to the tenant for the following main reasons:

• 1.The tenant is 14 days in arrears.
• 2.Repeatedly late rent payment (even if the tenant is not in arrears at the time the notice is served).
• 3.Any breach of the AST.
• 4.Annoyance to neighbours.
• 5.It is found that the tenant has given false information to obtain the tenancy.

A landlord can serve this notice and give a minimum of two months’ notice to the tenant for the following main reasons:

• 1.You wish to reside in the property.
• 2.Mortgagees wish to repossess.

You can download eviction notices from our download section at www.prop-ertyhotspots.net.

If the tenant doesn’t leave then:

• 1.File copies of the notices sent to the tenant with the court. Sue for all rent arrears, legal costs and court fees.
• 2.Wait for 14 days’ for the tenant to reply.
• 3.If no response is made (which is likely) then a possession order is made giving 14 days’ notice.
• 4.If the tenant doesn’t leave then call the police to evict them as they are now in your property unlawfully.

We have to face a reality here though. This procedure will take a long time, give you stress and you can potentially lose up to six months’ rent. If you include court fees, solicitors’ costs and the threat of damage to your property the whole eviction process could cost you in excess of £3,000. If you want the tenant out of your property and they have ignored all your notices then offer to pay them to leave. This option could be cheaper. I would suggest one month’s rent as fair. This will pay the deposit for their next property.

Try to initiate a friendly separation. Do not add fuel to an already fiery situation by losing your temper and threatening immediate court action. Statistically only 2% of tenants tend to be bad ones – bad tenants being those who have no intention of paying the rent, not tenants who lose their job and can’t pay their rent. If a tenant loses their job they are more than likely going to get another. If they have been relatively good payers of the rent then be patient with them.

In my experience I would say that the 2% statistic is right. The majority of people wish to settle in a home and feel secure. The best way for them to feel secure is to pay their rent on time.

Contracts with an insurer

You will have to enter legal contracts with insurance companies to cover you against certain risks. Your insurance will only ever be valid if you have originally told the truth on your proposal form when obtaining the insurance. The main insurances you will take out when investing in property will be:

• Buildings insurance. The insurance you pay to cover the property against fire, vandalism, water damage or weather damage.
• Contents insurance. This is insurance for items such as carpets, furniture and other fittings that you have provided for the property.
• Rental guarantee. Insurance against your tenant defaulting on the rental payments.
• Emergency assistance. This insurance will cover the costs of any emergency repairs that have to be carried out, including all call out charges.

When filling out the form they will ask you about previous claims. If you have any previous claims then reveal them. If you do have to make a claim and you have not told them about a previous claim then they do not have to pay out. It is very easy for them to find out if you have had a claim as they have a central register of all claims paid out.

If you do lie and they catch you out you will find it difficult to get insurance in the future, as you may be put on a blacklist which is accessible to all insurers.

Contracts with letting agents

If you do decide to use a letting agent then you have to read their terms and conditions very carefully. Watch for:

• Timeliness of payment. Check to see how soon the letting agent has to hand over the money once it has been received from the tenant. I would not accept any period longer than three days.
• Get-out clauses. Check to see how easy it is to get out if you decide to no longer use the letting agent One agent tried to sue me for all the lost commission he would have earned even though I was now collecting the rent! If you have an idea of using a letting agent at first and then taking over in six months then inform the letting agent of this intention. You may be able to strike a deal where you have a realistically priced option to get out of the contract.

Regulatory requirements

I may have rattled on about how to best negotiate business with student tenants, but you should take note of the fact that there are, and rightly should be, stringent measures which will help to protect them.

Houses in multiple occupation (HMOs)

If you live in a shared house and you are not related to the each other, your home is likely to be termed as a house in multiple occupation or HMO. Because of the extra demands of sharing a house, HMOs are subject to additional controlling features.

The much talked about Housing Bill, which at the time of writing is in the House of Lords, will go some way to make things a bit more rigorous for a would-be landlord. New measures will make sure that landlords become registered and aim to clean up the market by weeding out the rogue landlords who are giving some students an unpleasant experience.

As part of the new bill, landlords with properties of three or more storeys and five or more people will have to be properly licensed. Despite this being welcomed by student union representatives throughout the country, it is fair to say that they are disappointed that the definition of an HMO does not include or cover all student properties. The National Union of Students (NUS) claims that:

More than half of students living in privately rented accommodation do not live in properties of three or more storeys and five or more people. This means that hundreds of thousands of students will not be covered by the new legislation and will remain at risk.

The key points of managing a HMO, which haven’t been addressed elsewhere, are these.

• Property management. The repair, maintenance and cleanliness needed for the wellbeing of the tenants and clearing any fire hazards before the students move in. A means of water supply and drainage and other hygiene factors such as provision of waste disposal arrangements. Also, the name of the landlord or the manager should be clearly displayed within the house.
• Fire safety. Using all means necessary to reduce the risk of a fire hazard. Fitting fire detectors and smoke alarms is a good move. You may also wish to provide a fire extinguisher, but should contact the university welfare office or the council before doing so for advice on what types are best. The council have a duty in helping you with fire safety, so you should get into contact with them for further advice. For more issues on fire safety, see below.
• Furniture. This is mainly to do with getting a written inventory and fire safety issues.
• Provision of amenities. Cookers, sinks, washbasins, toilets. The government is to publish a leaflet on a national code of guidance, which will be available at some point in 2004/2005.
• Size of bedrooms. The standard is an old one and is unlikely to be of much concern today; a room of only 70 sq ft, for example, is deemed large enough for one adult occupant and 110 sq ft for two.
• Gas and electrical safety. These are looked at below.
• Registration scheme. As outlined earlier.

Other points that are considered and should not be treated lightly by potential landlords are nuisances (e.g. damp) and vermin (rats, mice, cockroaches, etc).

To seek further detailed information, please access the NUS website at www.nusonline.co.uk.

Besides the HMO regulations, there are three main regulations governing the general renting of properties:

• 1.Gas safety.
• 2.Electrical safety.
• 3.Fire resistance.

1. Gas safety

By law, you will be regulated and responsible for making sure gas appliances (boilers, cookers, heaters) and pipe work are maintained in good order. You are required to carry out annual gas safety inspections using a CORGI registered engineer. The engineer will inspect:

• the central heating boiler
• oven and hob
• gas fire
• gas meters.

It cannot be stated strongly enough that such a simple task as ensuring safety for your tenants is in the best interests of everyone.

2. Electrical safety

All electrical appliances should be tested and have either a label on each piece of equipment or a certificate listing all the appliances that have been tested. Many landlords hold a NICEIC certificate, which proves that the property has had an electrical check within the last five years. Although this is recommended, it is not a legal requirement.

So it’s quite obvious – keep the number of electrical items to a minimum! The fewer electrical items you supply the less is likely to go wrong. This limits the reasons why your tenant can ring you up telling you about a problem. You don’t need your tenant ringing you up at 6am complaining about the kettle not working. An inspection will cover you against being sued if any electrical appliance were to harm your tenants or their guests.

3. Fire resistance

Fire issues should be one of the most important considerations for you as a landlord. The law is strict in this area and the old adage of it’s better to be safe than sorry certainly applies here. You must install smoke alarms and only use fire-retardant mattresses and furniture.

Furnishings

In January 1997 the final phase of the Furniture and Furnishings (Fire Safety) Regulations 1988 came into force. All upholstered furniture supplied as part of the tenancy must comply with the fire and safety regulations. Broadly, this means that both coverings and fillings should pass ignition resistance tests. Telling whether or not items of furniture meet the standards is not easy but check any labels in the cushioning. It is now standard that any furniture purchased after 1990 will automatically comply with all fire regulations. Carpets, curtains and duvets are not covered by the regulations.