This guide has been written by RICS and explains the basic legal and practical issues involved in letting a flat or house. Giving you a checklist of the process you will go through, it also explains how RICS letting agents can help if you need any professional advice.
Many letting agents throughout the UK are RICS members. Here are the advantages of using an RICS regulated firm:
Look out for firms that are ‘Regulated by RICS’ and that follow the standards set out in the RICS UK Residential Property Standards. Agent firms that are regulated by RICS are easy to spot as they use ‘Regulated by RICS’ on their stationery and promotional material.
Once you have your property to let, it is worth remembering that it could take several weeks for a suitable tenant to be found.
There are a number of issues to consider before you are able to put your property on the market to let.
Using a professional letting agent – who has client money protection, belongs to an approved redress scheme and operates to recognised standards is advisable. Employing an RICS agent will help ensure you obtain a suitable tenant on an appropriate tenancy, efficient management of your property and will ensure you don’t fall foul of legislation.
What is an Assured Shorthold Tenancy and when should I use it?
If the rent on the property is less than £100 000 per year and you rent your property to private individuals, the tenancy automatically becomes an Assured Shorthold Tenancy (AST) unless you have an agreement for an assured tenancy. An AST usually lasts for six to 12 months, unless you wish to agree a different fixed term for the tenancy in advance with your tenant. Sometimes landlords are prepared to grant a longer tenancy, particularly to reliable tenants on renewal.
When the fixed term of the tenancy has expired the landlord is able to gain back possession of the property provided they give two months written notice to the tenant. In addition, if the tenant owes at least two months or eight weeks rent on the property you can apply through thecourt to seek a possession order.
What about Tenancy Deposit Protection?
Anyone holding a tenancy deposit (either as landlord or managing agent) must belong to an authorised scheme. The scheme protects the deposit during the tenancy and deals quickly and independently with any dispute over its return at the end of the tenancy. You or your managing agent must tell your tenant within 14 days of them handing you their deposit which authorised scheme the deposit is protected by and provide details of the scheme. Failure to protect the deposit can result in a fine of up to three times the amount of the deposit and loss of eviction rights.
Is my property subject to Houses in Multiple Occupation license provisions?
Landlords are required to apply for a licence from their local authority if the property they manage falls under the government’s Houses in Multiple Occupation (HMO) license provisions and may require planning permission.
In England an entire house or flat let to three or more paying tenants who form two or more households is subject to mandatory HMO licensing.
However, licensing requirements differ between local authority areas. Landlords should contact their local authority to find out if their property is subject to HMO licensing but an RICS letting agent will be able to advise you on this tricky area. For more details please visit the Department for Communities and Local Government website
What is the Housing Health and Safety Rating System (HHSRS) and what action do I need to take to comply with it?
The HHSRS provides an analysis of how hazardous a property is through assessment of 29 potential hazards found in housing. Landlords have to maintain their properties to provide a safe and healthy environment. The HHSRS is enforced by local authorities.
What are the health and safety requirements?
Before you let your property you must make sure by law that it and its contents comply with various safety regulations, including:
Visit www.gov.uk/government/publications/letting-your-home for more details.
Landlords are required to produce certificates meeting these regulations where appropriate and should ensure that a Portable Appliance Testing (PAT) for all electrical appliances is undertaken.
You can advertise and manage your property yourself, but it can be stressful and requires specialist knowledge. Therefore many landlords use an agent to market and/or manage their property.
An RICS agent will provide written confirmation of their terms, conditions and costs for acting on your behalf. Ensure you have these from your chosen agent before signing anything.
RICS agents must follow strict rules of conduct and be part of an approved redress scheme. They also belong to a client money protection scheme.
Most tenants look for properties through letting agents. Agents who are RICS members follow the correct legal procedures to find a suitable tenant.
In general, an RICS letting agent will:
Landlord registration is being introduced in some parts of the UK and an RICS letting agent will be able to advise you if this applies in your area.
Once you are ready to market your property and if you have employed a letting agent to undertake the letting for you, they will discuss the type of tenant you would like to attract and the terms on which you would be advised to let it to meet your individual needs.
The letting agent will also discuss the rent to expect from the let, taking into consideration the type of property, age and the fixtures and fittings to be included in the let.
You cannot discriminate on the grounds of sex, race, sexual orientation, age, religion, marital status or disability.
Once you have confirmed your instruction to the agent he will commence the marketing and will advertise the property on your behalf in order to find suitable tenants. An RICS letting agent will undertake the viewings and ensure that the property is let without delay.
If you employ an agent to undertake the letting, you will need to sign an agreement with them which outlines their charges and the length of the contract. It is important that you understand the contract before you sign as you should avoid a lengthy tie-in.
When you have found suitable tenants for your property you will need to agree the terms and conditions of the let with them.
Essentially, it is at this point that you must determine who is responsible for what. Here are a few of the more usual responsibilities:
Letting agent is responsible for:
All domestic properties being let require an Energy Performance Certificate (EPC). The EPC is broadly similar to the labels now provided with domestic appliances such as refrigerators and washing machines.
Its purpose is to record how energy efficient a property is as a building. The certificate provides a rating of the energy efficiency and carbon emissions of a building from A to G, where A is very efficient and G is very inefficient.
EPCs are produced using standard methods with standard assumptions about energy usage so that the energy efficiency of one building can easily be compared with another building of the same type. This allows prospective tenants to see information on the energy efficiency and carbon emissions so they can consider energy efficiency and fuel costs as part of their investment.
An EPC is always accompanied by a recommendation report that lists cost effective and other measures to improve the energy rating of the home. The certificate is also accompanied by information about the rating that could be achieved if all the recommendations were implemented.
Your agent will need to know if there is a Green Deal finance agreement on the property as prospective tenants will need to be told.
Gas and electrical testing
You will need to ensure that an authorised engineer has tested all gas and electrical appliances to ensure they comply with current safety standards. This will need to be undertaken by a qualified professional and there will be charges made for this service.
Insurance
You need to ensure that you have insurance on your property and make sure you know exactly what is covered in the policy. You will need to advise the insurers that the property is being let.
Letting agent’s charges
There are likely to be fees incurred for employing an agent to undertake the administration and management of your property. Charges vary from one agent to another, so it’s worth checking on fees in your area but remember when using an unregulated agent there may be hidden fees and an RICS agent may provide better service and save you money in the long run.
Repairs and maintenance
Any repairs or maintenance that is required on the property will need to be paid for by the landlord, unless it is damage caused by the tenant.
Storage
You may have to pay for some of your furniture and furnishings to go into storage if you are to let the property unfurnished.
Tax
Landlords are liable to pay tax on income received from rent. Further informationcan be obtained from the Tax Office. Visit www.hmrc.gov.uk
Tenancy Deposit Protection
You will need to ensure that you or your agent belongs to a scheme to protect tenants’ deposits.
Navigating property decisions - whether it's choosing the right survey when buying a home, resolving boundary disputes, or improving energy efficiency - can be overwhelming. RICS has created a library of free, easy-to-understand consumer guides to support confident, informed choices.
Please note that not all firms listed on the "Find A Surveyor" website are RICS Regulated Firms.
Find a surveyor in your local area on ricsfirms.com
Check whether your surveyor is regulated by RICS by checking our list of RICS members
Read how RICS regulation helps consumers in our firm regulation consumer guide
Here are some useful website addresses for advice when you’re letting a property