Buy-to-let and dealing with tenants
Buy-to-let landlords: your rights and responsibilities.
Image: Sarma Ozol - Getty
Dealing with tenants is key to being successful as a buy-to-let landlord. Get it wrong and you could be faced with long-running and expensive problems
First, let’s look at what your responsibilities are as a landlord.
What you must do
Under the Landlord and Tenant Act, 1985, landlords must:
- Keep the structure and exterior of the property (including drains, gutters and external pipes) in repair
- Keep the properties water, gas, electricity and sanitary installations (including any basins, sinks, baths and WC's, but no other fixtures, fittings and/or appliances for making use of the said installations) in proper working order
All properties must be fit for human habitation. This means ensuring the property:
- Is free from serious disrepair
- Has an effective drainage system
- Is structurally sound
- Has a suitably located toilet, bath, shower and washbasin
- Is free from any damp “prejudicial to health”
- Has an adequate water supply
- Is fitted with adequate lighting, heating and ventilation.
Your responsibility does not end there. Other factors may contribute to an unsafe living environment. It is worthwhile checking with your local council to make sure your property complies with all necessary regulations.
Regardless of the legal position, it always makes sense to react quickly to any genuine complaints so as to avoid unnecessary legal consequences.
The tenant’s responsibility
Put simply, a tenant is responsible for paying your rent in on time and making sure that he or she does not damage the fabric of the building or your possessions within it. If he or she does, this damage must either be paid for immediately or the money should be taken out of the deposit paid to you before they move out.
Tackle them as soon as they happen. Your tenancy agreement should provide for rent to be paid regularly on a particular day of the week, month or year.
If any payment is missed, notify the tenant straightaway and request the immediate payment of all monies owed. If serious rent arrears occur, then the law enables landlords to regain possession of their property.
Fast repossession is the key to minimising losses but you must follow the right procedures.
Landlords can regain possession of their property in the following circumstances:
Serious rent arrears – are classed as owing 8 weeks’ rent, where rent is payable weekly, and 2 months rent where the rent is payable monthly.
You can apply to the court for possession and the court must grant them possession if the arrears are still outstanding. The court will also normally order the tenant to pay off all arrears.
Delayed payment – if your tenant is persistently late in paying rent, or if rent was owing when the tenant was issued notice of your intention to take proceedings for possession, and was still owing when those proceedings started, then the court may grant you possession.
The court may also in these circumstances grant you a suspended order of possession - the tenant will only have to leave if he or she does not pay off their arrears as ordered by the court.
Damage to the property – you can repossess a property if a tenant causes damage to it or the furniture, or if they are a nuisance to neighbours.
If a tenant is convicted of using the property for illegal purposes, or immoral acts, landlords may have them evicted as well. Landlords can also request the courts to grant possession if a tenant has broken any other obligation of the tenancy agreement.
Fixed term tenancies – if you let your property on a fixed term contract, you will only be able to gain repossession if any of the “bad tenant” clauses in the agreement are invoked.
Damage and deposits
When a tenant hands back the keys to a property, you should always carry out a check on your inventory that was already prepared before he or she moved in. It is preferable that such an inspection is carried out by an independent person, for example a letting agent. You should then obtain quotes for any replacements or repairs to the property. This is then taken out of the deposit that was paid at the start of the tenancy.
Note that tenants are NOT liable for fair wear and tear of the furniture, fixtures and fittings.
Harassment or unlawful eviction
This is a big no-no.
You MUST NOT attempt to evict a tenant without getting a court order first, no matter how obnoxious he or she is.
The following are treated as proof of illegal eviction:
- Physically throwing a tenant out of the premises
- Preventing him or her from gaining access to the whole, or any part of the property
- Changing the locks without the tenant’s knowledge or permission
If a tenant is unlawfully evicted without a court order, he or she is entitled to damages. These are calculated by taking the difference between the value of the property with a tenant and the value without a tenant.
In practice, the damages a landlord might have to pay can be around a third of the total value of the property. Harassment, if proved before a court, can result in up to 2 years’ imprisonment for the offending landlord. What defines harassment? The law says if you are keeping your tenant from “carrying out peaceful enjoyment of the property” you may be committing a criminal offence.
This may include:
- Entering the property without prior or adequate notification or permission. You should give 24 hours notice
- The removal or restriction of any utilities (water, electricity, or phone)
- Preventing a tenant from having visitors on the premises
- Physical or verbal threats
- Tampering with a tenant's mail or possessions
This is not an all-inclusive list: the term is ambiguous and there are other instances that may be construed as harassment. If a tenant accuses you of harassment get immediate legal advice.
Please note that articles on MSN Money do not constitute regulated financial advice, which recommends a course of action based upon the specifics of your personal circumstances. The articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances. You can search for an IFA in your local area. Any statement regarding financial services products and tax liability is based on legislation and tax practices as at 6 April 2011, which is, of course, subject to change. The value of any tax benefits or reliefs depends upon the individual circumstances of the investor. When investment performance is mentioned you should remember that past performance is no guarantee of future performance. Where products have an underlying investment content, in many cases the value of the investment can fall as well as rise. For with-profit based investments, there is no guarantee as to the level of bonuses that will be declared, if any. Where mortgages or secured loans are explained do remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. All mortgages are subject to underwriting, status and are not available to people under the age of 18.
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