Renting out a property can be a rewarding business venture with many fantastic benefits. This includes – an additional income from tenants, revenue potential from property growth, and the opportunity to invest your money in a relatively low-risk manner. However, you must know what steps you need to take in order to ensure that your property meets the minimum legal requirements. With this in mind, here is everything you need to know if you’re planning on renting out a property in Glasgow.
Complying with EPC Regulations
An Energy Performance Certificate (EPC) has been legally required on all rented properties in England and Wales since 1 October 2008. An EPC provides information on the energy performance of a building, along with recommendations on how to reduce energy use and save money. All properties are assessed by a fully accredited energy inspector and given a rating from A-G (with the most energy-efficient properties scoring an A and the lowest-performing properties being rated G). Changes were brought into force in April 2018 – landlords must now achieve a minimum rating of ‘E’ on the EPC to rent their property. If the property receives a rating below E, then the landlord must make the necessary changes to improve efficiency before obtaining a new EPC. It is always the responsibility of the landlord or owner of the building to obtain an EPC. Typically, you must obtain an EPC before you market your property to rent and have a copy of the document available to show potential tenants.
Registering your property
You must register your property with the relevant council before you can rent to tenants. This ensures that your property meets all of the minimum requirements under the law. It’s illegal to rent out a property that has not been registered with the local council and you could face a fine of up to £50,000 for non-compliance. There are three types of landlord registration fees to be aware of. These are – principal fee: £65, property fee: £15, and late application fee: £130. You may be applicable for various discounts if you own properties in more than one local authority area or are joint owners, for example. There are also several exceptions where you would not have to register with a council to rent out your property. It is therefore worth contacting your local council to check whether any reductions or exceptions apply in your situation. Keep in mind that you will also need to apply for a house in multiple occupancy (HMO) license if you want to rent your property out to more than three people and the tenants are not related, i.e. when renting to a group of students. According to the Scottish Government – “The purpose of HMO licensing is to ensure that accommodation offered within a shared property is safe, of good quality and is well managed.” Again, it is a criminal offence not to have a HMO license and you could face a fine of up to £50,000 for failing to comply.
Gaining landlord accreditation
You must be registered as a landlord in Scotland before you can legally rent out a property in Glasgow. However, you also have the option to apply for accreditation. While this is not essential, it may help you attract and retain tenants and secure a steady income. Applying for accreditation is quick and easy. Simply contact Landlord Accreditation Scotland and complete their online application form. You will then be granted accreditation so long as you meet the minimum criteria outlined in the form. It’s important to be aware that your landlord license is only valid for 3 years from the date of issue. You must have this renewed if you want to continue letting your property after this date. Your local council should send you a reminder a few months before your license is due for renewal, but it’s advisable to keep a record of this yourself as well. If you renew your license after it has already expired, you risk having to pay a late payment fee.
Informing your mortgage and insurance providers
You must inform both your mortgage and insurance provider if you’re planning to rent out your home. Keep in mind that the terms of your policy may change when you start renting your property to tenants. For instance, some mortgage lenders have strict rules regarding who you can rent to and some insurances may consider your policy void if you start letting your property. In these situations, you may be required to change providers. Hence why you must always discuss your plans to rent your property with your mortgage provider and insurance company before taking any action.