9 Steps to Setting Up a Tenancy
Getting a tenancy off to a strong start is so important. It not only ensures compliance, keeping your tenants safe and yourself out of any liability, it provides reliability and helps build trust between yourself and a landlord and your new tenants, which in itself can pay dividends down the line.
So what do you need to do to get your tenancy off to a strong start?
1. Certified safety checks
Tenant safety is a priority when it comes to lettings with greater requiremements in place than for owner-occupied homes.
As a landlord you will need to provide a valid electrical installation and condition report (EICR) and where applicable a gas safety certificate. Your property will also need to meet minimum standards in relation to potential hazards and energy efficiency.
Potential cost of getting it wrong: failing to provide an EICR can incur up to £30,000 in civil penalties, or £40,000 plus two years in prison if there's no gas safety certificate.
2. A compliant listing
Under the Digital Markets Competition and Consumers Act (DMCCA) 2024, property must be marketed in a transparent way, including providing potential tenants with information that allows them to make an informed decision. This particularly includes anything that could have a financial impact on renting a property.
The pricing of a property has also become increasingly important under the Renters' Rights Act, as a property cannot be let for more than the advertised price. Price too high and you're risking void periods that could cost you more than a slightly more favourable rent. Price too low and you could be losong out on monthly income. Local market knowledge is essential here.
Potential cost of getting it wrong: breaches under the Renters' Rights Act can be up to £7,000. A breach of the Digital Markets Competition and Consumers Act can result in a fine of up to £300,000 or 10% of your global annual turnover if this is higher.
3. Tenant selection
The Renters' Rights Act reinforced laws around discrimination, including a ban on discrimination against applicants in receipt of benefits or who have children or pets. This doesn't mean you don't have any choice in who you rent your property to, but having an open mind to who your choice of tenant might be puts you in good stead of making the best choice, and prevents you from breaching these laws.
Potential cost of getting it wrong: breaching anti-discrimination laws under the Renters' Rights Act could incur a £7,000 fine in civil penalties.
4. Tenant referencing
As a landlord, you want to be sure that you're choosing a reliable tenant before you hand over the keys to your property. Referencing that includes credit checks, employment history and affordability can give you peace of mind.
As a landlord, you are also obliged to carry out a Right to Rent check on any adult living in your rental property. The process for this depends on the nationality of your prospective tenants, and will also depend on their staus.
Potential cost of getting it wrong: accruing rent arrears can soon get into tens of thousands of pounds, especially when the eviction process can take over a year to compete to bailiff stage. Right to Rent breaches can be fined at £10,000 per occupier for a first-time breach, £20,000 for subsequent breaches.
5. A compliant Assured Periodic Tenancy agreement (APT)
An APT must include statutory wording included in a Written Statement of Terms, as well as including clauses relating to other pieces of legislation outside of the Renters' Rights Act. Additional terms must be fair, however, in order to stand up if relied on in court.
Potential cost of getting it wrong: civil penalties of £7,000 applies here too, as well as having your case thrown out of court if a term is deemed unfair.
6. Processing of payments
The Renters' Rights Act also brought in new requirements around the processing of payments.
Rent cannot be collected until the tenancy agreement has been signed by all parties and lump sum payments of up front rent can no longer be a condition of the tenancy (although they can also be accepted if the tenant offers).
Understanding the legislation and having robust, evidence-based, processes in place is essential to ensure that everyone is in agreement with the expectations put upon them.
Potential cost of getting it wrong: again, under the Renters' Rights Act, civil penalties of £7,000 would apply for a breach.
7. Deposit protection
This isn't anything new - mandatory deposit protection has been a requirement since 2007 - but it's an area landlords often get wrong.
Security deposits must be registered with a government-approved scheme within 30 days of receipt of any money towards it and tenants must also receive prescribed information relating to their deposit within this timeframe too.
Potential cost of getting it wrong: failure to protect a deposit correctly means that the tenant can claim 3x the amount back and the landlord will be unable to evict the tenant until this happens.
8. Creating an inventory that counts
An inventory needs to be able to predict the unpredicatble. Even reliable tenants can cause accidental damage and leave a landlord with costs to cover at the end of a tenancy. The inventory is the single most important piece of evidence used in deposit disputes. Because the deposit legally belongs to the tenant, the onus is on the landlord to prove that damage has occured, so it's vital that the inventory is robust.
Potential cost of getting it wrong: failure to get the cost of damages deducted from the deposit at the end of the tenancy.
9. A move-in pack that helps the tenant settle in
Every home takes time to settle into, especially when the property ultimately belongs to someone else.
Providing the tenant witrh everything they need to know up front, how things work and how to report any issues gives a clear point of reference, which in turn means that any problems are less likely to escalate. Clear information and good cimmunication can pay dividends in the long run.
Potential cost of getting it wrong: problems are more likely to fester and there are more likely to be unwelcome surprises at the end of the tenancy when the tenant doesn't know where they stand.
Having to put so much work in isn't necessarily for the faint-hearted! But neither is the cost of getting it wrong.
But that's why at Brittons Lettings we're here to help.
If you're a landlord with property to let in King's Lynn or West Norfolk, we've got you covered. Not only have we been operating in the local area for more than three decades, Natasha and Kayleigh as both qualified and experienced letting agents who undersatnd that a successful tenancy is built on compliance and trust. We have the processes in place to ensure nothing is missed, and contacts with reliable local contractors to provide you with the certificates you need.
We make it our job to keep you compliant. So for a letting agent you can ttrust, let Brittons let for you.
