Last week, I wrote about the potential pitfalls of putting property out onto the market as a short-term let. As well as the very real potential that damage to a property wrought by short-term tenants will take the shine off any increased income, there are a number of different points that anyone considering letting out their property for a short period of time should consider before making the decision to put a property up for let.
One of the prime points is that there are different insurance and legal requirements for letting out a property. These include third party liability and damage cover, loss of rent cover and the rules around taking back possession of a property. Even if only renting out a property short-term, if the property is available to let for more than 140 days a year it will be rated as a self-catering property and valued for business rates.
If a tenant is considering subletting a room or property, it is vital to first run the idea by the landlord. If the tenant fails to do this before sub-letting a property, he / she could run into a number of legal complications. Similarly, if the property is mortgaged, before considering a let, the home owner should first read the small print, as some mortgage contracts may prohibit short-term letting.
When letting property, trust is vital. Its best to start looking for a tenant that is known, or that is recommended by friends or family members. Posting an advertisement should be a last resort; since itll be easier to let it to someone the householder is familiar with and trusts.
It is vital that before letting or sub-letting a property, the householder conducts a thorough interview process for potential candidates; much as a traditional landlord would do before renting a property. The householder needs to be aware of the persons employment and income status, as well as who will be living at and visiting the apartment.
Its also a good idea to understand why that person is looking for a short-term housing option, and why theyre not signing their own lease on a rental property. This could be a potential red flag.
Following these preliminaries, its vital to create a written agreement. There are numerous websites that provide standard sublet agreements. These should be completed even if subletting to a friend or family member. Items to include in a sublease agreement are the dates the property will be vacated and the responsibilities of the tenant or subtenant. Its important that any potential damages are considered ahead of time. The householder may want to include stipulations over damages in the written agreement. For peace of mind, its also worth considering charging a small, refundable security deposit.
Finally, it would be wise to leave contact information and encourage the tenant to get in touch if there are any questions or concerns he or she may have during their stay in the property.
Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.
Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 40 people serving private and corporate clients. For further information:www.latimerhinks.co.ukor call 01325 341500.