Before letting your property, there are several responsibilities that you will need to address to ensure that the tenancy runs smoothly, and that you are complying with the law.


Getting Started

Landlord Registration

Private landlords in Scotland must register with their local authority. It is the owner of the property who must register. Owners must also declare any agent that they use to manage their property.

Orkney Leasing’s registration number is – 46905/330/26180

    There are two ways for you to register:
  • online by visiting the Scottish Government’s National Landlords Registration web pages were you will receive a 10% discount
  • or you can request a paper application form from the Housing Department at Orkney Islands Council by calling them on 01856 873535.

Energy Performance Certificate

Before you can market your property you have to have an Energy Performance Certificate (EPC). This report gives the property an energy rating, which shows how energy efficient the property is. This can give tenants an indication of how much it will cost to heat a property and help them decide whether or not to rent the property. From 9 January 2013 an energy performance indicator must be included in all advertisements. Our property brochures and website advertisements include this required information.

To help our landlords offer energy efficient properties then we recommend that they contact The Energy Saving Trust, Scotland who offer free help and advice on how to save energy in your property. They also provide information on grants and other funding available to landlords. Visit their website http://www.energysavingtrust.org.uk/scotland or call them on 0800 512 012

Mortgage Consent

Most banks and building societies require you to seek their permission to rent your property. If you do not have a buy to let mortgage then you must inform your mortgage lender that you want to rent your property. If you don’t, renting out the property may breach the terms of your loan and they may “call up” the loan resulting in repossession of the property. You should obtain written consent to rent the property from your mortgage lender.

TAX Implications

You should check with HMRC or your accountant about how tax is calculated on rental income. The Inland Revenue state that income from property is subject to taxation at standard rates, and your expenses on letting the property are generally tax deductible. It is your responsibility to inform the Inland Revenue of rental income received, and to pay any tax due.

Non-resident Landlords

If you will be living overseas during the tenancy, we are obliged to retain income tax from your rental received and forward this to the Inland Revenue. However you can apply for an exemption certificate by completing an Inland Revenue NRL1 form available online from HMRC.

Preparing your property for letting

The Repairing Standard

Rented property must meet the Repairing Standard before it is let and at all times during the tenancy. The Repairing Standard applies to almost all private tenancies in Scotland. You, or someone acting for you must inspect the property to make sure it meets the Standard. At the start of the tenancy (or earlier) landlords must tell tenants about the Repairing Standard and the Private Rented Housing Panel.

We provide free advice to landlords to help ensure their properties meet the Repairing Standard, and comply with safety regulations and other housing legislation. We also offer a service whereby we arrange for all required certification.

    A house meets the Repairing Standard if the following conditions are met:
  • the house is wind and water tight and reasonably fit for human habitation (taking account of the extent to which the house falls short of any building regulations, because of disrepair or sanitary defects);
  • the structure and exterior of the house (including drains, gutters and external pipes) are in reasonable repair and proper working order(having regard to the house’s age, character and prospective life and the locality). Where the house forms part of premises (eg, a flat), this requirement includes any part of the premises that the owner is responsible for maintaining, solely or communally, but the Repairing Standard only applies if any part of, or anything in, the premises that the tenant is entitled to use is adversely affected;
  • the installations in the house for the supply of water, gas and electricity and for sanitation, space heating and heating water are in reasonable repair and proper working order (including installations outside the house but serving it, and which the owner is responsible for maintaining, solely or communally);
  • any fixtures, fittings and appliances provided under the tenancy are in reasonable repair and proper working order;
  • any furnishings provided under the tenancy are capable of being used safely for the purpose for which they are designed; and
  • there is satisfactory provision of smoke alarms.

Gas Safety

If your property has a gas supply, you must arrange for an annual Landlord Gas Safety Record to be carried out by a Gas Safe registered engineer. Your tenant must receive a copy of this certificate.

We arrange for annual Gas Safety testing as part of our full management service.

Electrical Safety

Landlords should be aware that the Housing (Scotland) Act 2014 introduced the requirement in Scotland for landlords to have an Electrical Installation Condition Report (EICR) carried out on all electrical installations, fixtures and fittings within their rental properties. The requirement has been in place since 1st December 2015 for any new tenancies entered into but from 1st December 2016, all tenancies must have a valid EICR, a copy of which must be provided to the tenant.

The EICR lasts for 5 years and must include Portable Appliance Tests (PAT) for all electrical appliances within the tenancy supplied by the landlords. There is no requirement for a new EICR to be carried out when a new tenant moves in to the property, provided they are supplied with a copy of the most recent one carried out within the last 5 years, prior to moving in. The PATs will also be valid for 5 years, although landlords should take the advice of a qualified electrician, if a recommendation is given to test appliances more regularly.

The EICR should cover all electrical installations contained within the property and anything in the common area of the property that, directly or indirectly, serves the house and which the owner is responsible for maintaining (solely or in common with others).

An EICR must be completed by a competent person. This means that the person carrying out the EICR must be

  • Employed by a firm that is a member of an accredited registration scheme operated by a recognised body such as SELECT, NAPIT or NICEIC
  • A self-employed member of an accredited registration scheme operated by a recognised body, or
  • Able to complete the checklist at Annex A of the Scottish Government guidance which can be found on the Private Rented Housing Panel’s (PRHP) website here.

Any problems with an electrical installation identified within the EICR, must be rectified immediately.  This can be done by recording the work completed on a Minor Electrical Installation Works Certificate.

Failure to have a valid EICR in place may lead to the PRHP issuing a Repairing Standard Enforcement Order (RSEO) ordering the landlord to have the EICR carried out. Failure to comply with a RSEO is a criminal offence.

Please note the PRHP will be replaced on the 1st December 2016 by the First-tier Tribunal for Scotland Housing and Property Chamber.

If you require any further advice on your obligations as a landlord in Scotland feel free to contact a member of our team. 

Furniture & Furnishings Safety

Landlords must make sure that all upholstered furniture complies with The Furniture & Furnishings (Fire) (Safety) Regulations 1988. In practice, you should check that a permanent label is attached to all items of furniture. Any items not labelled may not conform to the regulations and will have to be removed from the property.

The Department of Trade and Industry have produced a leaflet with guidance on this regulation, including sample labels and it can be downloaded from http://www.dti.gov.uk/files/file24685.pdf

Fire Safety

By law, you must provide fire-detection equipment (e.g. a smoke alarm) for your property. You can find out more about fire safety requirements for privately rented properties on the Scottish Government website: www.scotland.gov.uk/tenant/info/forms

  • there should be at least one working smoke alarm on each floor of a property
  • Smoke alarms installed after 3rd Sept 2007 must be mains wired, including replacement alarms.

You also have a general duty to keep your property fit for tenants to live in and to ensure it does not endanger their health. This includes ensuring there are no fire or other hazards in your home, such as loose wiring or dangerous stairs.

The Scottish Government has produced a leaflet on fire safety in the home which is available at: www.scotland.gov.uk/tenant/info/forms

Presentation

Always present your property in the best possible condition. The more attractive your property, the greater your chances are of finding a tenant and keeping your property occupied throughout the year.

Good quality properties always rent quickly. When properties are obviously looked after and presented in the best possible condition, tenants are more likely to treat the property as if it were their own. If you don’t appear to look after your property, the tenant may do the same!

Decorating

Decoration should be in good condition, and preferably neutral colours.

Cleaning

At the start of a tenancy the property must be showroom clean, and at the end of the tenancy it is the tenant’s responsibility to leave it in the same condition of clenliness. We can provide you with a list of recommended cleaning contractors.

Furnishings

There is little difference in rental value between furnished and unfurnished. It is recommended that you leave only minimum furnishings, and that these should be of good quality. Personal possessions, ornaments, pictures, books etc. should be removed.

    The property should normally include
  • All kitchen “white goods” i.e. cooker, fridge/freezer and washing machine
  • Carpets, curtains or blinds and light fittings
    A fully furnished property would also include
  • Furniture, kitchen crockery & utensils, electrical appliances etc.

Make sure the furnishings reflect the quality of property, and the type of tenant you want to attract. Properties can be let down by the condition of furnishings.

Remember: whatever appliances are supplied, it is the landlord’s responsibility to maintain and replace them should they break down. The better the quality of furniture, the less maintenance and repair will be needed by you.

Garden

Gardens should be left tidy and rubbish free, with lawns cut. Tenants are required to maintain the gardens to a reasonable standard, provided they are left the necessary tools. However, few tenants are experienced gardeners, and if you value your garden, or if it is particularly large, you may wish to arrange maintenance visits by a gardener.

 

Preparing Information for Tenants

Household Folder

We require the Landlord to provide us with a folder of information for the tenants covering items such as operating the central heating, hot water system, appliances, fire detection system, refuse collection dates etc.

Inventory

It is very important that an Inventory of contents and schedule of condition be prepared, in order to avoid misunderstandings or dispute at the end of a tenancy. Without this, it will be impossible for the landlord to prove any loss, damage, or significant deterioration of the property of contents.

 

Tenant Information Pack

The Tenant Information Pack provides important information to tenants who rent their homes privately. The pack contains a summary of legislation relevant to private tenants. It includes information about the property, tenancy, landlord, and the responsibilities of both tenant and landlord.

Landlords have a legal duty to provide new tenants with this pack. All private landlords must comply with this legislation – failure to do so can result in criminal charges and may put your landlord registration at risk.

When we prepare tenancy documentation, we also issue the tenants with a copy of this pack.

For more information and a copy of this pack please see the following website- http://www.scotland.gov.uk/Topics/Built-Environment/Housing/privaterent/tenants/tip

Tenancy Deposit Scheme

The Housing (Scotland) Act 2006 and the Tenancy Deposit Schemes (Scotland) Regulations 2011 require any tenancy deposit accepted by a landlord must be deposited with an approved deposit scheme. Additionally, the landlord must ensure that certain information is given to the tenant, including details about the amount of the deposit and about the scheme where it is being held.

    Landlords who receive tenancy deposits have a legal duty to
  • pay deposits to an approved tenancy deposit scheme
  • provide the tenant with key information about the tenancy and deposit

The duty in relation to tenancy deposits apply to landlords, however you can employ an agent to act on your behalf. We have chosen to lodge tenant deposits with Safe Deposits Scotland, because they are a not for profit organisation.

Safe Deposits Scotland were impressed with the evidence we submitted for our first arbitration case and are using our material as an example of best practice for other landlords.