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Legal obligations of a student property landlord

With more than 500,000 students choosing to go to university each year, the demand for student housing has continued to rise. Whilst renting to students can be an incredibly lucrative investment opportunity, it doesn’t come without risks.

As a student property landlord, you have a duty of care to your residents. The chances are, student tenants are going to be young, vulnerable and sometimes irresponsible – this is why you must take measures to protect your tenants, yourself and your assets.

The Legalities

As a landlord, it is important that you follow certain regulations and laws that apply to student housing. These can be health and safety regulations, tax laws and, more recently, the extension to Houses of Multiple Occupancy (HMO) licensing.

HMO Licensing

New regulations came into force on 1 October 2018; for licensing purposes, a property that is let to five or more people forming two or more separate households is now classed as an HMO. Prior to this date, an HMO license was only required in larger houses that were compromised of three or more storeys.

The changes to the regulations also redefine the minimum size of bedrooms and include a clause that states all landlords must provide suitable refuse facilities.

You should check with your local council to ensure you are complying with all new regulations.

Health and Safety Regulations

It is your responsibility as a landlord to follow standard health and safety procedures. Either yourself or an employed professional should fit and regularly test smoke alarms and carbon monoxide alarms throughout the building.  You should carry out a fire risk assessment whilst making sure that all tenants know what to do in the event of a fire and you should also ensure that all gas appliances are in working order and fitted correctly.

If you’re letting a property that is fully or partly furnished, you should make sure that all appliances and items comply with fire-resistant standards.

Council Tax

Whilst both you and your student tenants are exempt from paying Council Tax, you must be able to provide evidence that all residents are studying in higher education. Without this evidence, you could be held accountable and liable for these taxes.

Energy Performance Certificates (EPC)

Any property that you rent, whether to students or non-students, must display an EPC. You must obtain a certificate from an accredited assessor and ensure that it is renewed every ten years. Since April 2018, privately rented domestic and non-domestic property must reach an EPC rating of E or above.

Insurance

Requesting a guarantor for each student tenant (usually a family member) is an effective and practical way of ensuring rent is always paid, regardless of a resident’s financial situation. Some students also realise a few months in that university is not the right choice for them and having a guarantor in place ensures that rent will be paid until a suitable replacement is found.

It is essential to have student let insurance to protect your property, assets and finances. Just like any regular property or home insurance, student let insurance will protect the structure of a building and its contents. Exclusive insurance tailored specifically to student buy-to-let property does have additional cover that will protect from malicious or accidental damage or the non-payment of rent.

Tenancy deposits

As a landlord, you must also abide by rent deposit regulations by holding any rental deposits in a government backed tenancy deposit protection (TDP) scheme.

You must place the deposit into a scheme within 30 days of receiving it. If not, you could end up facing criminal proceedings and a heavy fine. There are three different schemes for placing your deposit in England and Wales:

  • Deposit Protection Service
  • My Deposits
  • Tenancy Deposit Scheme

You have a duty of care as a landlord and, when letting to young and vulnerable students, it is even more important that you take measures to ensure their safety.

If you are renting to overseas students, you have even more responsibilities including making copies of their passport and/or visa.

Student buy-to-let property can be a lucrative investment opportunity for professional investors and to avoid any legal complications, you should have the correct insurance, comply with all regulations and have a guarantor in place.

This article was contributed by Mark Burns, Hopwood House

DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances, and is merely a general comment on the relevant topic.

Published on 23rd October 2018
(Last updated 7th January 2019)

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