Some people, who only let one property or who are letting a property on a short term basis, do not identify themselves as landlords. However, if you accept rent from anyone for accommodation and living costs, you are a landlord. Private landlords range from people who rent a room in their home to a lodger, through to people with vast property portfolios.
Regardless of how many tenants you have, there are certain legal obligations that you must carry out. Failure to stick to the legislation that governs the private rented sector can end up in a fine or imprisonment.
Your basic legal responsibilities
Unless you share a home and facilities with the people who pay you rent, these people are private tenants and have many rights protected by law. If you decide to let a property, you must familiarise yourself with your legal responsibilities to your tenants.
The main pieces of legislation which govern renting privately in Northern Ireland are the Private Tenancies Order (NI) 2006 and the Rent Order (NI) 1978. Both of these pieces of legislation have been amended by subsequent Acts. There is additional legislation in place which governs Houses in Multiple Occupation (HMO).
The most basic legal requirements of all landlords are:
- to register his or her details with the Northern Ireland Landlord Registrar
- to provide all tenants with a legally valid rent book (in most cases this must be provided free of charge and within 28 days of the tenancy beginning)
- to protect any deposit you receive with an independent deposit protection scheme, within 14 days of receiving it
- to serve your tenants with a list of prescribed information about their tenancy and their deposit within 28 days of receiving the deposit
- to ensure the property meets the fitness standard
- to carry out repairs as outlined by the default repairing obligations or the tenancy agreement
- to allow tenants to make a claim for housing benefit
- to provide tenants with valid Notice to Quit when beginning eviction procedures
- to inform all tenants of their right to due process in eviction procedures
- to refrain from actions that could be considered to constitute harassment or illegal eviction
- to adhere to all safety regulations relating to heating systems and furnishings provided
- to register with HMRC and pay tax on rental income.
In addition to these legal requirements, you should try to adhere to good practice. This means carrying out your business in a professional manner. You should keep accurate records of all correspondence relating to your tenancy and ensure the tenancy is managed efficiently. If you work full time or spend a lot of time out of the country, it may be easier to pay an agent to manage the tenancy.
These obligations don't apply to a lodger landlord who rents out rooms in the home that they live in.
Taking in a lodger
If you have a spare room in your property, it can be tempting to advertise for a lodger. Once you have a lodger in your home, you become a landlord. You need to get your mortgage lender's permission to let out a room in your house. You'll also need to inform the Inland Revenue and your home insurance provider.
You can earn up to £7,500 each year tax free by taking in a lodger under the Government's Rent a Room Scheme. You can find out more about this scheme from HMRC.
If you rent out rooms in the home that you live in, the people who are renting those rooms will be regarded as licensees rather than tenants. Licensees have fewer rights than tenants. Lodger landlords don't have as many legal responsibilities as other landlords. You don't have to comply with all the legal obligations listed above, but you should clearly agree your rights and responsibilities with your tenant.
If you are going to take in a lodger, you should draw up an agreement to prevent any disputes arising between you. The agreement should deal with these issues
- Does the rental payment include any other charges or will the licensee have to pay additional bills?
- Are there any house rules? Can your lodger have overnight guests?
- What are the arrangements for terminating the agreement?
- Are you providing any services, in addition to accommodation – cleaning, cooking etc?
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