If there's one trait that all successful landlords have in common it's the ability to communicate effectively. Excellent communication is paramount in order to create a good relationship with tenants and is, in my opinion, the key to being a good landlord. It is also very important to manage tenants expectations of you and your property so that no misunderstandings arise. In order to achieve this it is a good idea to consider writing down a Guide for Tenants on the steps they must take to rent your property, which you can give to them with your rental application. I would also recommend creating a Statement of Rental Policy which will make it clear how you select tenants and what you expect from them when they finally move into your property. Writing this all down in advance will go a long way to reduce misunderstandings and make the whole process a great deal smoother. There is a great deal to consider when renting your property and I hope, that if you are becoming a landlord for the first time, you will find the following guide to setting up your new rental property very helpful.

Mortgage

If you don't have a formal Buy to Let Mortgage (i.e. you have an ordinary residential mortgage and are moving out), you must obtain the written consent to the letting from your lender or you may invalidate your mortgage conditions. They may require additional clauses in the tenancy agreement which should be adhered to at all times. There is also likely to be a charge for this consent.

Insurance

To ensure that you are suitably covered for letting your property you must have buildings and contents insurance. Failure to inform your insurers may invalidate your policies and potentially result in financial hardship if the damage to your property is severe and the insurers won't pay out. It is a good idea to obtain dedicated Landlords Legal Protection and even rent guaranteee insurance which will pay out to evict your tenant and recover lost rent. One insurance you must have is Public Liability Insurance which is usually included in dedicated Landlord Policies. A lot of landlords do not bother with contents insurance which I believe is a mistake. It is more common to need to make a claim under contents insurance and it is very surprising how much it costs just to reinstate the contents alone.

Council tax, bills and utility accounts

It is vital to ensure that the council are informed of your new tenant for council tax purposes and that you ring in the electricity and gas readings to finalise your utility accounts at the property. On check in please don't forget to note the gas and electricity account readings with your tenant and also put a note of them in the inventory which will act as a formal record of them for both you and the tenants. Never be tempted to leave accounts running. In my experience this usually results in very large bills and a difficult mess to sort out. Don't forget to also cancel your phone accounts and any internet or television packages.

Mail Re-direction

If you are renting out your home, it is strongly advisable to re-direct your mail to your new address for at least a period of six months. Most tenants will not have the time, nor the inclination to keep forwarding mail to you, some of which may be important. This is not an expensive service.

Income tax

If you are resident in the UK, it is entirely your responsibility as the landlord to inform the Inland Revenue of the annual rental income you receive , and to pay any tax due at the required intervals. The Inland Revenue will strongly penalise you if you don't declare this income on your annual tax return and pay what is required. If you are domiciled outside the UK during a tenancy, you should take advice from an accountant or ring the Inland Revenue.

The Lease

Most landlords in Scotland opt to have a Short Assured Tenancy which runs for six months and then continues on a month to month basis thereafter (called tacit relocation). I normally recommend six months as you never know when your circumstances as a landlord will change and you need to get possession of the property back. A great lease may be obtained from the City of Edinburgh Council's wonderful "Letwise" team and is one of the best I've seen. It is also free. When filling in your lease please make sure that the end date you choose is a day after the six month period. This will ensure that the period is for a minimum period of six months. If you find this confusing, it may be a good idea to seek professional advice or contact us at Rent in Scotland.com.

The inventory

It is critically important that a comprehensive inventory of contents and a schedule of condition is prepared, in order to avoid misunderstandings or disputes at the end of a tenancy. Without such records it is almost impossible for a Landlord to prove any loss, damage, or significant deterioration to the property or its contents. The courts generally prefer an independent third party to have carried out the inventory and therefore it is always worth considering employing an independent Inventory Clerk. It is also a very good idea to take lots of photos of the property and it's contents and have them signed and dated by the tenant. This photographic schedule can then be incorporated into the formal inventory by referring to it in the Inventory and Lease.

General Property Condition

Electrical, gas and plumbing systems, along with all appliances, must be in good, safe working order and comply with all current legal requirements. It is best practice to have all the systems checked out by a qualified person before the start of every tenancy. Repairs and maintenance are generally at the Landlord's expense, unless it can be established that the tenants were unreasonably careless in their use of the property or it's contents. Landlords must now be aware of and comply with the new Repairing Standard in Scotland which is discussed more fully later on. Interior decorations should always be in good condition and preferably plain, airy and neutral. Please do not assume that everyone will like your style of decoration - play safe and paint it neutral so that your property will appeal to the widest possible market.

Furnishings

You can let your property either fully furnished, partially furnished or unfurnished. Which of these options you decide on generally depends on the type of property you're letting and what's happening in the market at that time. Generally in Scotland, one bedroom starter flats are let fully furnished, whereas large family homes are unfurnished to allow already established families move their own furniture in. If you don't want to go to the trouble and expense of fully furnishing your property you can always advertise it unfurnished and then furnish it if there are no takers. As a bare minimum, however, you will need to provide Kitchen appliances, good neutral carpets, curtains and light shades. Also don't forget to supply a fire extinguisher, fire blanket and Carbon Monoxide Detector as appropriate. Remember that there will be wear and tear on the property and the furnishings you supply, so the general advice is to either go down the cheap route to Ikea, or, if it's a very top end property, make sure the top end furnishings you supply are extremely robust and not of sentimental value. Please ensure that any furnishings you supply comply with fire safety regulations more fully discussed below.

Personal Items

All your personal possessions, ornaments and pictures should be removed from the property, especially those of real or sentimental value. All cupboards and box rooms should be fully emptied for the Tenant's own use. Please don't be tempted to leave anything important that may be damaged.

Gardens & Exterior

Gardens should always be left neat, tidy and rubbish free. It is sensible to provide in the lease the the tenants are required to look after the gardens to a reasonable standard. However, not all tenants are experienced gardeners, and if you value your garden, or if it is particularly large, you may wish to arrange your own garden maintenance with the tenant's agreement.

Cleaning

At the commencement of a tenancy the property must be in a thoroughly clean condition paying particular attention to the Kitchen and Bathroom. Your lease should stipulate that at the end of the tenancy it is the Tenants' responsibility to leave the property in a similar clean condition. A proper clean can take several hours, so be realistic and hire a cleaning company if you can't afford the time.

Information & Safety Pack for the Tenant

It is important to leave the tenant an "information pack" containing all appliance manuals and/or written instructions on operating the central heating, washing machine, alarm system and even the day refuse is collected etc. This will not only keep tenant enquiries to a minimum but also ensure that all appliances are operated properly and safely. It is also a good idea to include the numbers of the local Doctor, Dentist and Police Station and even the location of the nearest supermarket which will be helpful to those unfamiliar with the area. I also recommend that tenants are given a "safety pack" too, containing instructions on how to maintain smoke and carbon monoxide alarms, how to switch off the gas, electricity and water, and general fire, electrical and gas safety advice. Who to phone in the case of emergency is also important to include. Leaflets on safety in rented accommodation can easily be obtained from the internet and placed in the tenant pack.

Keys

You should provide a set of keys for each tenant and give them a spare set too, just in case they lock themselves out. Generally and contrary to popular belief, you are not entitled to just keep a spare set of keys. It is best practice to have the tenants sign a "key agreement" which will keep you on the right side of the law. You can obtain a copy of a key agreement from our information centre on this site. It is also vital to explain to the tenants in writing your policy for lost keys and at what times your are able to come out in the event they lock themselves out.

Important Legal & Safety Requirements for Landlords Landlord Registration in Scotland

Part 8 of the Antisocial Behaviour, etc (Scotland) Act 2004 requires most private landlords to apply for registration with their local authority. Registration is currently £55 per landlord plus £11 per property (July 08). Registration is valid for 3 years after which you must re-register. Please note that you have a legal requirement to keep your contact details up to date.

For more information on Landlord Registration log on to www.landlordregistrationscotland.gov.uk

Repairing Standard in Private Sector Tenancies

Since September 2007 disputes relating to repairs can now be determined by the Private Rented Housing Panel (PRHP). The Repairing Standard for all rented properties in the private sector is contained in the Housing (Scotland) Act 2006. It is essential that landlords ensure their properties meet this standard at all times so that a tenant never has cause to lodge a complaint with the panel. For further information log on to www.prhpscotland.gov.uk

Energy Performance Certificates (EPC's)

From 4^th January 2009 all private landlords in Scotland will be required to have an EPC when letting or RE-LETTING properties. These certificates are required by European Law and will expire after ten years. They will contain information on the property's energy use and insulation standards and also include recommendations on what could be improved. Properties will be graded from A - G (very good to poor) a bit like the way new appliances are graded in terms of their efficiency.

House of Multiple Occupation - HMO properties

These are effectively rented properties with three or more unrelated persons/tenants. Strict rules and regulations govern and control HMO's and advice should be sought from your local council as to how to comply.

Mains connected Smoke Alarms

The Repairing Standard mentioned above requires that there is at least one operational smoke alarm on each floor of a property. Any new smoke alarms must now be mains wired and it is possible that a Building Warrant is necessary before installation. Contact your local council for advice. If you already have battery operated alarms these must be replaced with mains wired ones when they break, or when they have come to the end of their recommended life. (All properties built since June 1992 must have been fitted with a mains powered smoke detector alarm from new.)

Carbon Monoxide Detectors

Not a statutory requirement yet- but should be. It's possible, however, that under the common law (i.e. judge made law) that you have a duty of care to provide one. Always provide one and make sure the tenants have the instructions. It's a good back up and extra peace of mind.

Fire Extinguishers & Fire Blankets

Again it's possible that there is a common law duty of care to provide such equipment and you would be foolish not to provide such. Please note that Fire Extinguishers are pressurised devices and you must check that they are correctly pressurised at regular intervals. Extinguishers should be suitable for all kinds of domestic house fires (including electrical fires). Fire Blankets should always be provided in Kitchens.

Health and Safety - Gas

Annual safety check
Under the Gas Safety (Installation and Use) Regulations 1998 all gas appliances and flues in rented accommodation must be checked for safety within 12 months of being installed, and thereafter at least every 12 months by a competent engineer (i.e. a GAS SAFE registered gas installer/engineer). Remember that even if you only have a gas meter and no gas appliances, you still need an annual gas safety certificate.

Maintenance
There is a duty to ensure that all gas appliances, flues and associated pipe-work are maintained in a safe condition at all times. Ensuring the Gas Safety Certificate is annually obtained and also providing a boiler breakdown insurance service will help ensure you maintain these safely and  lawfully.

Carbon Monoxide Detectors
All properties with an appliance which burns fuel, gas or otherwise, should have a working audible CO Detector which sounds if poisonous gases are present. This will provide extra peace of mind to yourself and the tenants. Make sure they have the instructions.

Records
Gas Safety Certificates must be kept for at least 2 years after the inspections of each appliance and flue. Always keep receipts and records of remedial works too.

Copies to tenants
A copy of the gas safety certificate issued by the engineer must be given to each new tenant before their tenancy commences, or to each existing tenant within 28 days of the check being carried out.

Gas Cookers - Flame Supervision Devices (FSD's)

From 1^st June 2008 all NEW installations of flueless gas appliances (for example a gas oven) must comply with guidance given in IGE/G/5 Gas in flats and other multi-dwelling buildings.  What this means for landlords is that any new gas cooker fitted in a flatted property after the 1^st June, 2008 must have a flame supervision device fitted as standard which will automatically cut off the gas supply if it detects that the flame has been extinguished.

Health and Safety - Electrical - PAT's and PIR's

Under the Electrical Equipment (Safety) Regulations 1994, and certain other regulations, electrical appliances and equipment provided in tenanted properties must be safe. It is therefore necessary to make regular visual checks to ensure that all electrical items, plugs and leads appear safe and undamaged, and to remove or replace any faulty items. All landlords should therefore obtain an annual Portable Appliance Test Certificate and a 5 year Periodic Inspection Report of the properties fixed wiring, carried out by a competent and fully qualified electrician. 

It is recommended that old fuse boxes are replaced with 17th edition compliant consumer units which will proved Residual Current Device (RCD) protection to all circuits in the property. This will provide a better level of protection for occupants and shut off the electricity quicker than the old types should a fault develop.

Furniture and Furnishings - Fire Safety

The Furniture and Furnishings (Fire) (Safety) Regulations 1988 (amended 1989 & 1993) provide that specified items, supplied in the course of letting a property, must meet minimum fire resistance standards. The regulations apply inter alia to all upholstered furniture, beds, headboards and mattresses, sofa-beds, futons, nursery furniture, garden furniture suitable for use in a dwelling, scatter cushions, pillows and non-original covers for furniture. They do not apply to antique furniture or furniture made before 1950. All landlords should obtain a copy of these regulations and systematically check for compliance labels on all furniture supplied during the tenancy. It is also sensible to make a written record of this check.

Items which comply will have a suitable permanent label attached. Non-compliant items must be removed before a tenancy commences.

Home Security - Locks

Wooden doors front and back should for insurance purposes have at least one five lever mortise lock conforming to British Standard 3621. If in any doubt we recommend contacting your insurers. All ground floor windows should have windows locks. Window and door locks should always be easily opened from the inside to ensure quick escape in the event of a fire or other emergency. When carrying out inspections, locks should always be checked for fire escape purposes.

Tenant Adaptations for the Disabled

Since the 4^th December 2006 under the Housing Act (Scotland) 2006, landlords cannot reasonably refuse disabled tenants who ask to make adaptations to the property they are renting. Landlords may impose conditions in the lease that adaptations are removed at the end of the tenancy.

I hope that this general guide is useful to landlords preparing their property for rent, especially for the first time. There is alot to think about and comply with. If you are in any doubt as to whether you comply, please don't take any unnecessary chances and seek professional advice.

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David Wheater is a property developer, landlord and non-practising solicitor based in Edinburgh. He can be contacted at www.rentinscotland.com or emailed at mail@rentinscotland.com

Copyright David Wheater 2009
The moral right of the author has been asserted.
All rights reserved. This article is intended to be a general guide only. The author cannot accept liability for any errors or omissions contained herein nor liability for any loss to any person acting as a result of the information contained in this article. This article offers advice on the basis that readers contemplating letting, or carrying out work, on their own property obtain further professional advice tailored to their own individual needs and requirements.