For landlords, student tenancy agreements can be some of the most lucrative ways to make money on a property. While this has many advantages, it’s worth remembering the extra responsibilities and set-up costs that may eat into your initial profits.
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In this article, we’ll discuss the regulations for HMO properties that relate to students and the responsibilities landlords have for ensuring safe accommodation.
Landlord’s legal responsibilities
There are many regulations for HMO properties that landlords need to know. These include:
• Landlord and Tenant Act 1985
• Housing Act 1988
• Deregulation Act 2015
• Immigration Act 2016 (the right-to-rent policy)
• Tenant Fees Act 2019
• Tenancy deposit protection laws
We won’t cover these in detail, as there’s already a lot of information out there. The key is to remember that, as a landlord, you have a legal duty to provide a safe property in which your tenants can live.
Importantly, this includes things like performing annual gas safety checks, having an Energy Performance Certificate, conducting electrical inspections, and installing smoke and carbon monoxide alarms.
HMO regulations for student properties
HMOs are one of the more effective ways to rent to students. If nothing else, the rental yields are higher (one study shows by as much as 20%!). However, there are specific rules you must follow that go above and beyond normal rental regulations.
First, set-up costs are usually higher for student HMOs. This is offset by the potential yield but it’s definitely something you need to consider when you’re budgeting.
Similarly, HMOs are governed by rules such as room size and the number of certain facilities, such as bathrooms and food storage areas. Make sure you’re aware of these before trying to register as a HMO landlord.
Finally, while tenant turnover is often lower, you’ll likely have an empty property over the summer months when everyone goes home. Make sure you factor this into your rent plan and adjust accordingly.
What to include in student tenancy agreements
You can offer either individual or joint tenancy agreements. The main difference is that in individual student tenancy agreements, each person is responsible for their own rent. In a joint agreement, everyone who signs is responsible for the entire rent.
As for the length of the contract, it’s common for short-hold leases to be 12 months. The Agreements often used to be 10 months, which they still are for most halls, although for standalone houses, 12 months is more common.
Make sure your rental agreement is clear, well-defined, and outlines important responsibilities for both you and your tenants. For example, you’ll want to include:
• The rent they pay each month and whether bills are included (which they usually are)
• Statements around student accommodation furniture – this can be listed separately in an inventory
• Conditions that breach the lease such as not paying rent, using the property for illegal activity, and so on
• Information about the Tenant Deposit Protection scheme – where their deposit will be held, conditions for you retaining some or all of the deposit, etc.
• Your right to entry into the property, such as for inspections and to perform repairs
Make sure you’re aware of your responsibilities, and get some legal advice if you’re not sure what applies to you and to properties.
When writing about student accommodation furniture in your lease agreement, you must make allowances for reasonable wear and tear: this covers things like scuffs and marks but it doesn’t stretch to breakages. It’s essential to be explicit in where you draw the line on this, as it’ll be the basis for any claims you might have to make.
Similarly, it’s important to provide comfortable, usable furniture for your tenants. It can be time consuming to source and buy all the bits you need, but you can simplify it by using student furniture packages that can be purchased from one reliable source.
As student accommodation furniture providers, Let Us Furnish provides bedroom furniture packages and other collections you might need to make your property comfortable and functionable. Along with making it more appealing, furniture packages make it far easier to keep track of any wear and tear issues that might pop up during the year. Considering landlords can be very busy with other jobs, this is one less thing to worry about!