Its all very well investing in property and you can indeed get a very good return from it. However your income will be obtained from renting the property out to tenants – and thats when your problems will start!
Because tenants are classed as consumers and renting property to tenants is a consumer service. And it is heavily regulated.
So you will only make any money if you avoid the penalties and prosecutions that can trap the unawary landlord – particuarly those ‘giving it a go’ without doing proper training first.
Training is essential therefore – that or using a decent letting agent. And even that is not a given as some agents are dreadful. Many are brilliant of course – but sometimes it is hard for landlords to tell the good from the bad (tip – a posh office and a bloke in a sharp suit are not infallable signs).
Training can help you here too – as if you know a bit about the subject, you should be able to spot the agents who are ‘winging it’ and don’t really know what they’re talking about.
Its all about the law
But there is no getting away from it – renting propety involves a lot of law:
- There are legal regulations surrounding the condition of the property and its fixtures and fittings
- There are also rules about advertising property to let, and
- Any details obtained from applicatnts are covered by data protection rules
- The renting of property is a legal contract which has to be properly drafted and completed
- Money paid has to be dealt with properly – particuarly if it is a deposit
- If you rent to sharers this can create an HMO which will make you liable for horrendous penalties if you don’t comply with the HMO regs
- There are also strict rules about ending tenancies and
- If the tenant refuses to go, the only way you can get your property back is through the courts
Thats a lot of law!
So its no good thinking that just becuase you are a nice person with morals and a positive attidue you are going to avoid problems.
Keeping out of trouble
Although enforcement against non compliant landlords is not inevitable, you don’t want to risk it. Plus tenants can now bring First Tier Tribunal claims against landlords for Rent Repayment Orders for many landlord lapses – including
- failure to apply for an HMO,
- failure to comply with an improvement notice and
- harassment and illegal eviction.
The maximum award that can be made for a Rent Repayment Order is 12 months worth of rent – which is not going to do much for the profitablity of your landlord business!
Many Local Authorities are also getting more active in enforcement now they can keep ‘penalty charge’ fines for themselves rather than pass them on to the government.
So you really need to have somewhere reliable you can go to get proper legal advice to help you avoid these pitfalls. But this is not always easy.
Problems with getting legal advice
The most important point is where do you go to get your advice? A bloke down the pub is NOT a good idea!
The obvious choice is ‘a solicitor’ but you need to be careful WHICH solicitor you use. Landlord and tenant law is a fairly specialised and esoteric area of law which most normal solicitors will not be familar with.
So its no good going to the solicitor who did your house conveyancing or your divorce.
You really need someone who specialises in this area of law – otherwise you risk paying for the solicitor to look things up!
Then, solicitors are expensive. It is not unknown for specialist solicitors to charge up to £300 per hour or more. You can easily rack up a massive bill. So not a good idea to pop in whenever you have a tricky point to decide.
But often it is those ‘quick questions’ that can cause big problems down the line if you don’t get things right. Ideally you need to have a solicitor on tap who can answer questions as and when.
But where will you find that?
The Landlord Law solution
The answer is of course my Landlord Law service!
I set this up over 20 years ago to be a place where landlords can go for answers to legal questions and although I say it myself, the information there is very detailed and comprehensive. I have been working in this field as a solicitor for well over 25 years so should know what I am doing by now!
I’m also there for all members on our members discussion forum, to answer tricky questions. Which I quite enjoy doing and which I know members value. It’s why so many of them have stayed with us for so long.
Where else can you put a question to a specialist landlord and tenant solicitor and get an answer usually within 24 hours at no extra cost to your membership fee?
I also try to make my comments helpful. There is a way of answering legal questions where your answer is 100% correct but is actually very little help, practically, to your client. I try not to do this!
The forum is probably the most valuable feature of Landlord Law. It has years of advice and discussion for you to read even if you just want to ‘lurk’ and not ask any questions yourself.
However the other information on the site will also help you stay on the right side of the law – such as our invaluable checklists. Plus we have many helpful documents (including tenancy agreements).
Telephone advice for more complex problems
Not all issues are suitable for forum advice. Which is why we also have our telephone advice service.
All the solicitors on our panel are top notch landlord and tenant firms, and they have all agreed that the advice will be provided by one of their solicitors (so you won’t be fobbed off with a trainee or paralegal).
There is a general advice service (where the panel includes a Welsh firm, Newbold solicitors), along with our popular HMO Helpline and the Rent Repayment Order advice service provided by Anthony Gold.
The advice calls at the time of writing are £130 for a 30 minute call or £115 if you are a Landlord Law member. We also have a special article to help you get the most value from your call.
The sucess and profitability of your landlord business (and being a landlord IS a business) depends on you getting things right and not making expensive mistakes.
To do this you need proper advice. And for legal issues, this really needs to be advice from a qualified and experienced solicitor.
So let Landlord Law be your landlords comfort blanket – somewhere you can go when you are worried or have woken up in the middle of the night panicking about a mistake you may be about to make.
You can find out more about our service here and here, and you can sign up for membership here.
Membership starts at £25 pcm for Basic membership but annual Business Level members (at £300 per year) can claim a free telephone advice call with me.