There appears to be widespread confusion around the responsibilities that landlords have to the property they let and the tenants that live there. Many people become accidental landlords as a result of unforeseen circumstances and some estimates suggest this demographic could make up to 30% of all landlords.
A new survey by Gas Tag has found that many tenants and amateur landlords are confused over their responsibilities and legal obligations.
For example, by law, landlords must ensure that gas appliances are checked annually by a Gas Safe registered engineer and must provide their tenants with a Gas Safety certificate within 28 days of the check taking place.
Landlords must also install working smoke alarms, and carbon monoxide alarms in rooms with solid fuel appliances. However, the survey found that 28% of those surveyed either did not know or did not have a Gas Safety Certificate for the rental property, and 24% didn’t know when to install a carbon monoxide alarm.
Worryingly, 81% of respondents did not know a landlord is responsible for checking all electrical appliances every time a new tenant moves in, and 36 assumed that the tenant was responsible for the electrical safety.
Paul Durose, chief executive of Gas Tag, said: “Our findings reveal that there is a huge amount of confusion about what someone’s landlord is responsible for.
“This lack of basic safety knowledge means that thousands of people renting in the UK could be putting their lives at risk.
“The number of accidental landlords has soared in the UK in the last few years and we’re extremely concerned that many don’t even know their legal obligations to their tenants.”
Seeing as the status of the person letting out the property has changed from being a resident to a landlord, the type of insurance cover necessary also needs to change. Accidental landlords are often much more susceptible to the risks associated with lettings, such as tenants getting into rent arrears or damage to property. Check out the Just Landlords insurance page for more information.
Serious financial risk to those who let their property without telling their mortgage company
Mortgage lenders have got stricter in recent years, attempting to crack down on those who are letting out their homes without notifying the bank. The benefit of keeping quiet for landlords could mean their mortgages aren’t switched to accounts with a higher interest rate, or switched to a more expensive buy-to-let loan.
Borrowers have a contractual obligation to inform their lender if they want to let a property, with many facing a rise of 1 or 2% interest on the loan.
Not telling the lender about a change such as now letting out the property is a high-risk move, as it puts the accidental landlord in breach of their original mortgage contract. In a worst case scenario, the lender could demand a full and final repayment, which could force many borrowers to default on the loan.