Red tape needn't be daunting for landlords

For new landlords, the red tape can at times seem impossibly confusing. About 70 Acts of Parliament, and innumerable orders and regulations apply to buy-to-let nowadays. But the situation is, in fact, a lot simpler, say the organisations that represent the sector.

Only two documents need to be provided to the tenant to legally let an unfurnished unit - a properly drafted tenancy agreement and a valid gas safety certificate. The only other legal requirement is to take two forms of identification from the tenant to comply with anti-money laundering regulations.

If the property is furnished, there is one addition: the soft furnishings must display labels showing they have been fireproofed.

Property professionals tend to dismiss the anti-money laundering regulations as an unnecessary irritation, but today's standard tenancy agreements are regarded as strong protections of the rights of both landlord and tenant, and the safety rules have helped to push up standards in an industry with a poor history for customer service.

"All the legislation been for the benefit of the market," says Caroline Cope of the Association of Residential Letting Agents and a director of Simmons & Sons. "You can see the standard of property going up."

She harks back to the 1970s when landlords were virtually unregulated and the private rented sector was dominated by slum landlords. And after the Ronan Point disaster, when the corner of a tower block in East London fell off after a gas explosion, no one disputes the need for a current gas safety certificate.

"With things like the gas and electricity checks, specialist firms soon spring up to do the work at reasonable cost," Cope says. "It is a bit of paperwork, yes, but it is not difficult." An electrical inspection is also advisable and can usually be done by the gas inspector for a combined fee.

Some lesser legal requirements deal with financial irregularities. Anna Cuthbertson of Jackson-Stops & Staff points out that every tenant must provide two forms of identification (usually a passport and a bank statement) to comply with the Money Laundering Act. Landlords based overseas must provide a Non Resident Landlord form if they want the rent passed on without tax deductions.

"The only legal requirement that is a bit silly is the Money Laundering Act," Cuthbertson says.

The legal documentation is about to get more complex, with the arrival of the Tenancy Deposit Scheme (TDS) this year and Home Information Packs (HIPs) for rented properties next year. It is also likely that electrical safety certificates will become compulsory.

Letting agents are now uniformly backing the TDS, partly because it removes them from an awkward position as middle men in many disputes over deposits.

Chris Town of the Residential Landlords Association, is concerned by the tide of regulation coming into force in the next few years, particularly for owners of houses in multiple occupation (HMOs). "People are getting snowed under, especially by the HMO licensing forms, which come to about 30 pages for each property," he says. "Energy performance certificates [in HIPs] are coming soon, which will be another source of problems and it is likely to cost £200."

But help is at hand. Copious advice, including ready-drafted forms, are available on the websites of landlords' associations and the Government.

Association of Residential Letting Agents, www.arla.co.uk

Residential Landlords Association, www.rla.org.uk

National Landlords Association, www.landlords.org.uk

Department of Communities and Local Government, www.communities.gov.uk

Be prepared

* Legal requirements

Tenancy Agreement (Landlord and Tenant Act);

Gas Safety Certificate (Gas Act);

Tenant identification (Money Laundering Act);

HMO registration if appropriate (Housing Act);

Fire safety labels on soft furnishings (Fire Safety Regulations).

* Soon to be legal requirements

Tenancy Deposit Scheme documentation;

Home Information Pack (with Energy Performance Certificate).

* Good practice

Inventory;

new accounts for utilities;

references;

credit check;

mortgage consent form;

insurance certificate;

non-resident landlord form (if appropriate).

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