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UK landlords are urged to be careful and not fall foul of the law
New buy-to-let landlords are being urged to consider the legal implications of managing their tenancies to avoid falling foul of the law.
The advice comes after a recent report showed landlords who borrowed to purchase a buy-to-let property made significantly higher returns than those who paid in cash.
Samantha Blackburn, residential property lawyer at Slater and Gordon said: “As demonstrated by recent reports owning a buy-to-let property can lead to solid returns for landlords, however there are some important legal issues to consider when renting out your property.”
For example, anyone who lets out a property to a residential tenant must keep any deposit they receive in a tenancy deposit scheme (TDS). This has been the case since April 2007.
The scheme was introduced to protect both landlords and tenants.
Samantha Blackburn said: “As a landlord, you must bear in mind that penalties for non-compliance with these requirements are severe. A court can order the landlord to pay the tenant up to three times the amount of the deposit.
“In many circumstances, a landlord will appoint an agent to act on its behalf. If an agent receives a deposit without protecting it, it may be liable to pay the penalties itself. However, the tenant may still decide to pursue the landlord. Even though the money is being held by the agent, the landlord may still be liable to pay the penalties.”
Residential landlords and their agents should start planning ahead now for the new requirement to conduct pre-letting checks into the immigration status of all proposed residential occupiers. This scheme is currently being piloted in the West Midlands, but is expected to be introduced across the UK in the coming months.
Samantha Blackburn: “If residential occupiers cannot produce satisfactory evidence of their right to rent in the UK, landlords should not rent to them. Landlords who rent to illegal immigrants without carrying out the checks will be liable to fines of up to £3,000 per illegal occupier.”
To protect themselves, landlords should check all tenants and any adult occupiers at the property, whether or not they are named in the letting document. The checks should be carried out before the letting arrangement is entered into and documentary evidence of the occupiers’ immigration status should be retained. Codes of practice, soon to be issued, will list the documents that can be accepted as proof of status. These are likely to include passports, national ID cards and biometric residence cards.