Legal Q&A: Is moving in with my girlfriend the answer to rising costs?

I own my flat but am struggling with the bills. My plan is to move in with my girlfriend, share her bills and rent out my apartment but I have been told that being a landlord can be difficult. What do I need to do?

Merrily Harper

Fiona McNulty17 January 2017

Question: Two years ago I bought my first flat. Since then the cost of living has gone up so much that I am struggling with the bills. My plan is to move in with my girlfriend, sharing her bills, and to rent out my flat. However, people are telling me that being a landlord can be a nightmare. How should I set about it, and what can I do to avoid costly mistakes?

Answer: If you have a mortgage, tell your lender about your plans because it’s probably a residential mortgage and not a buy-to-let mortgage — the latter being more usual when letting a dwelling.

Notify your buildings and contents insurers that the property is to be let. Consider specialist landlord insurance to cover things such as tenant disputes or lost rent.

If gas is supplied to the property, a gas safety certificate is necessary. You are also responsible for the safety of electrical wiring and appliances throughout any tenancy, so get those checked. You should enter into a tenancy agreement — such as an assured shorthold tenancy agreement — with your tenant and arrange a detailed inventory to record the condition of the property at the start of the tenancy.

An Energy Performance Certificate is required when letting any home, so be sure to get one of those.

Any deposit paid by the tenant must be placed into a recognised Tenancy Deposit Scheme, and you cannot simply pocket the rent. You have to pay income tax on rental income and capital gains tax may be payable when you eventually sell the property.

A reputable letting agent won’t come cheap but could make life a lot easier for you by finding a tenant and managing the letting.

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If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE. We regret that questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a legal director in the private wealth group of Foot Anstey.