6 Documents a Residential Landlord Should Keep

Letting property can be an excellent way to generate valuable extra income or to fund your retirement. But being a residential landlord means that you have both legal responsibilities to fulfil and tax liabilities. And that means paperwork.

You must retain all documentation relating to your property and the rental income that it generates. Nobody relishes dealing with paperwork, but it is essential to remain organised. Lost documentation will inevitably make any disputes with your tenants much more complex. It could mean you cannot prove you have fulfilled your legal obligations.

You must keep copies of numerous documents, and you should have instant yet secure access to these. Electronic versions of your documentation could prove helpful. Store them via Google Drive or a Dropbox account, and you will always have instant access to them via your smartphone or tablet. Retaining only paper copies leaves you vulnerable to loss or damage during a fire or burglary.

Here are six documents which it is vital to keep safe:

1 Tenancy Agreement

The tenancy agreement is a legally binding contract between you and your tenants. The most common form of tenancy is an Assured Shorthold Tenancy Agreement (AST), which gives you the right to repossess the property at the end of the agreed term.

The agreement will include your personal details and those of your tenant, the date that the tenancy will commence, the duration of the tenancy, the rent payable and any other expenses the tenant is liable to pay. It will also state the services that you undertake to provide.

2 Right to Rent Supporting Documentation

Landlords in England must not let their property to anyone who does not have the ‘Right to Rent’. Landlords who rent their property to illegal migrants face significant fines. Therefore, it is imperative to be diligent in checking your potential tenant and retain any supporting documentation.
Certain documents will be accepted to satisfy a Right to Rent check. The government has issued a comprehensive list of commonly available documents to check and retain copies of.

3 Inventory Report

Detailing the contents of the property, the condition they are in, and the condition of the property, this document could prove vital to resolving disputes regarding the return of tenants’ deposits. It is best prepared by an independent party on the day the tenant moves in and should be as detailed as possible. All parties should initial each page, sign the document, and receive a copy.

4 Tenancy Deposit Scheme

Since 6 April 2007, landlords have been required to protect their tenants’ deposits to make disputes more straightforward and to ensure that tenants get their deposits back when they are entitled to them. Deposits must be protected via one of the government-initiated schemes.

As a landlord, you must protect deposits within 30 days of receiving them. Failure to do so will mean that you cannot end the tenancy or regain possession of your property under Section 21 of the Housing Act 1998 until the deposit has been repaid or any dispute has been resolved. Tenants could be entitled to compensation of up to three times the value of the deposit if you do not protect it and you do not provide your tenant with the details of the scheme you have chosen.

5 Gas Safety Certificate

Poorly maintained gas equipment could lead to an explosion or carbon monoxide poisoning. You must provide your tenants with instructions for safely using any appliances. In addition, all gas-related equipment must be serviced at least once yearly by an approved engineer. You should record the checks and provide your tenant with an annual gas safety certificate. If you fail to do so, you are breaking the law.

6 Electrical Installation Condition Report

Regulations introduced in June 2020 require landlords to inspect the electrical installations in their properties by a qualified and competent person at least every five years. Following the inspection, you will receive a report detailing the observed results. Suppose any aspect of the property’s electrical system is deemed unsatisfactory. In that case, you must organise all necessary repair work to be carried out.

If your first report was defective, you do not need to have another full report carried out. Still, you must obtain written confirmation from the electrician who performed the remedial work as proof that all the required works have been completed.

You must supply a copy of the report to your tenant, and your local housing authority can also request a copy. When your next inspection is due, you must supply a copy of the previous report to the electrician conducting the inspection and testing.

Coping with the demands on your time

If you are a residential landlord, you are likely working full time, have a family to care for or have multiple properties to cope with. There will be severe demands on your time, making keeping track of your documentation and managing your portfolio difficult.

At Credential, our property management service will relieve the stress of being a landlord. You will be able to achieve the rental income you need without worrying about fulfilling your legal responsibilities. Contact us today.

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