To Let or Not to Let: Commentary on Property Law for Landlords

Thursday, April 19th, 2012

With the Olympics looming many property owners within a hop, skip and jump of the Olympic sites are racing to secure “holiday lets” and earn a packet.

But, is booting out your current tenants or letting out your home going to get you gold or leave you trailing the pack? Hanne & Co’s Housing Law solicitors can advise you every step of the way.

The following is an overview (a non exhaustive list) of some of the things you need to think about before jumping on the Olympic lettings bandwagon.

Re-selling Gas and Electricity

If your property is individually metered and you plan to charge customers for the energy they have used, the Maximum Resale Price (MRP) regulations means that you cannot charge more per kilowatt hour than you have paid. You can add a proportion of the standing charge. Further information can be found in “The resale of gas and electricity, guidance for resellers” from the Office of Gas and Electricity Markets (Ofgem) website.

Health and Safety

You must make sure that you comply with health and safety legislation. This means that your property must be ‘reasonably safe’ i.e. that the chances of guests having an accident are minimised so far as possible.

Fire Safety

You may need to comply with fire safety regulations. To comply with the law you will need to carry out a fire risk assessment and put in place fire precaution measures. These could include fire alarm systems and extinguishers as well as clearly signed escape routes.

Gas and Electrical Appliances

The Gas Safety (Installation & Use) Regulations 1994, as amended, require that if you have either gas or LPG installed in your property for cooking, heating or lighting you must ensure that any work done on the installation or on appliances is carried out by registered personnel recognised by the Health & Safety Executive.

The Electrical Equipment (Safety) Regulations 1994 require that all electrical equipment you supply in your property must be safe and any risk associated with electrical equipment reduced to a minimum. Electrical equipment and appliances (such as fuses, circuit breakers, cookers, kettles and washing machines) must be maintained in a safe to use condition, as should electrical cables, sockets and plugs.

The supply of goods occurs at the time of the tenancy contract. It is, therefore, essential that property is checked prior to the letting to ensure that all goods supplied are in a safe condition. A record should be made of the goods supplied as part of the tenancy agreement and of checks made on those goods. The record should indicate who carried out the checks and when they did so.

It is strongly advisable to have the equipment checked before the start of each let. It would be good practice to have the equipment checked at regular intervals thereafter. You should obtain and retain test reports detailing the equipment, the tests carried out and the results

Furniture and Furnishings

You must make sure that upholstered furniture and soft furnishings meet minimum fire resistance standards and display a permanent label confirming compliance

Other Pitfalls for Owner Occupiers

If you are thinking of renting out your home during the games then you also need to consider how that might affect your mortgage, contents and buildings insurance and whether you would be in breach of contract (for those who are leaseholders). Most household buildings and contents insurance policies do not cover commercial lettings so make sure you check with your current provider or consider obtaining additional cover for the period of the letting.

And of course, we must not forget the taxman as he will want his share of the income you generate.

Will you be stuck with your Olympic guest after the games are long gone…

What do you do if the holiday occupant does not leave. The occupier of a genuine holiday letting does not have the right to remain once their contractual term has ended. If the letting is for a fixed term then once the term has ended the landlord can peaceably evict. No court order is needed. If the letting was periodic ( ie week to week or month to month) then the occupation would first need to be brought to an end with a notice to quit. Once the notice ends the landlord can evict peaceably without the need for a Court order.

Whilst an overstaying let should not be a major obstacle for a commercial landlord, if you have let out your principal home then if the tenant does not leave when they should this could cause a great deal of inconvenience and disruption. It would be sensible to have a written agreement in place tailored to the particular letting to ensure that all parties are clear on all aspects such as rent, term, demise etc.

So, in answer to the question to let or not to let, well that depends on whether you are content to risk a potential “sea of troubles” for an “outrageous fortune”. The decision is yours.

Hanne & Co’s Housing Solicitors possess extensive experience in advising residential and commercial Landlord’s seeking to let their property. Our Housing law team are able to advise you on the wide range of legal matters relating to your letting or tenancy.

Please email info@hanne.co.uk or call 020 7228 0017 to speak to one of our housing law solicitors. Alternatively, we’re on Skype – Hannelegal and our solicitors are here to help.

By Housing Solicitor, Claire Wiles, published in Clapham Omnibus April 2012.