Not long now till the London Olympics and it’s all getting very exciting, especially (I imagine) for those lucky peeps who’ve succeeded in letting out their homes at fabulously inflated prices so they can get away from London as soon as the flaming Torch arrives.
Now I don’t want to spoil the party, really I don’t, but I’d just like to ask all those people whether they’ve thought of the legal implications of letting their homes? You see, as soon as you let a property, even if it’s your own home and even if it’s just for a week or two, you’ve turned it into a business and that brings with it a few rules and regulations.
Tempting as it is to ignore these, I wouldn’t. Well, not all of them anyway. OK, I expect people living in any of the six London boroughs that insist homeowners apply for a licence for a short let (at a cost of up to £400) probably aren’t going to bother. I imagine they’ll just wing it and hope the neighbours don’t snitch on them, as it’s a special occasion and all. However, there are some rules I think you should definitely stick to.
At the very least, I’d go along with the legal requirement to get a gas safety check from a registered Gas Safe (previously Corgi) engineer for any property connected to a mains supply. Gas safety checks don’t cost a lot (about £60 in London, more if you do it through a letting agent) but you wouldn’t want your Olympic guests getting blown up or succumbing to carbon monoxide poisoning, would you?
I’d also get all electrical appliances such as microwaves, kettles and vacuum cleaners tested by a qualified electrician, who will carry out a PAT (portable appliances) safety test from about £40, depending on the number of appliances. It’s not a legal requirement to carry out the test, but if you don’t and the tenant gets a nasty shock, you might be held responsible. Definitely chuck out any dodgy-looking appliances.
Buying special landlord insurance is a good idea too. Again, it’s not a legal requirement, but your home insurance isn’t likely to cover the property while it’s let. Admittedly, it’s a bit of a faff changing insurers for just a few weeks, but think of the consequences of not being properly insured. What if the place was burgled, or your occupants let the bath overflow and brought down the ceiling? That could cost you more than you’d be making on the rent.
I’d also suggest taking out public liability insurance in case your tenant has an accident in the property for which you might be held responsible. They could trip on a loose bit of carpet and fall down the stairs, or get an electric shock from some faulty wiring you hadn’t spotted and sue the pants off you. Public liability insurance isn’t expensive; some landlord insurance policies include it as standard and — given you’ll be making shed loads of profit — you can afford it.
Technically, you ought to tell your mortgage lender what you’re up to, although as some lenders will use it as an excuse to crank up the interest rate or charge an “administration fee”, I reckon some homeowners will “forget” to do this.
You mustn’t “forget” to declare any income you make on letting your home to Her Majesty’s Revenue and Customs, or they might track you down and fine you. If you’ve let your property via an agency, it won’t take them long — and a nasty letter from the tax office is guaranteed to spoil the Olympic party.
Victoria Whitlock lets three properties in south London
* Find homes to rent at www.homesandproperty.co.uk/lettings