What paperwork do landlords need and for how long?

As legislation has increased dramatically for the lettings industry over the past 15 years or so, the administrative burden on landlords has also increased. Every area of ensuring that both a rental property and tenancy are legally compliant involves more processes and paperwork, all of which has to be very carefully checked and filed because the consequences and maximum penalties for landlords who are found to be in breach of the law are now so severe.

Something as simple as failing to prove you’ve given a new tenant the latest version of the government’s ‘How to rent’ guide could prevent you from being able to serve a valid section 21 notice to evict them; meanwhile, if you can’t provide evidence to the council that your property passed a gas safety check within the last 12 months, they could fine you anything up to £30,000.

And in terms of the information that you hold on tenants, most of which will be gathered for the referencing process, you must ensure you comply with data protection laws. For more information on this, see our ‘legal focus’ article on the top 10 data requirements for landlords.

Here, we’ve put together a round-up of the key information you should file, by category. Even where you have hard copies of documents – such as the tenancy agreement, and gas and electrical safety certificates – it’s worth scanning and holding everything digitally. Providing you have a back-up, such as ‘cloud’ storage of some type, that will ensure nothing goes missing and any document can be located and emailed easily, as and when required.

• You may want to look back at certain details yourself, so file the information in such a way that you can quickly find what you’re looking for
• Your local council may request copies of things like safety certificates
• Your tenant or accountant might ask you for copies of documents they’ve misplaced
• If you have to go to court – e.g. to regain possession of your property or because someone is pursuing you for compensation - you may need to prove that you acted legally and took all required steps to ensure the property was safe
• When you come to sell or pass on the property, the process will be a lot smoother if all the documentation has been filed in a clear and comprehensive system

Note: The legally required documents cited below are correct for England; these may vary for the rest of the UK.

Tenancy

• Personal information about the current tenant/s, including proof of identity
• Referencing checks – including written confirmation that each tenant is happy for credit checks to be done
• A copy of your data protection notice (advising tenants how you will be dealing with their data)
• Proof that right to rent checks were carried out
• The signed tenancy agreement
• A copy of the check-in inventory, signed by the tenant – including confirmation that the smoke alarms were tested and working properly at the start of the tenancy
• Deposit protection documentation
• Evidence that the tenant was provided with all the legally required documents at the start of the tenancy:
• The latest government ‘How to rent’ guide
  • Current gas & electrical safety certificates
  • A copy of the EPC
  • Deposit protection prescribed information
• Correspondence with the tenant during the tenancy, including texts and other messages
• Careful records relating to evictions, including evidence that the tenant was served correctly and any court correspondence

Tip: Follow up significant conversations in writing via email and always request a ‘read receipt’ to prove that the tenant has received and opened the email.

Property certificates

• Any documentation relating to planning permission
• Any Building Regulations approval
• Warranties for building work
• The annual Gas Safety certificate (must be kept for at least two years)
• The latest Electrical Installation Condition Report
• Licence information (if required)

Property inspections

• An up-to-date risk assessment (must be carried out annually for HMOs)
• Records of alarm testing
• Notes on maintenance and repairs identified, along with photographs
• Council correspondence relating to any inspections

Maintenance & repairs

• The regular maintenance schedule
• Quotes, invoices, receipts and guarantees for works carried out
• Warranties and guarantees for appliances, etc.

Finances

Spreadsheets or bookkeeping/accounting software that details:

• Income and expenditure balance sheet
• Long-term maintenance budget and schedule
• KPIs – updated regularly for yield, profit and return on capital invested
• Tax forecasts: income tax and CGT
• Income tax returns

Property value & financing:

• BTL mortgage details, including end dates of special rates
• Most recent valuation from a surveyor or market appraisal from a local agent

 

If you have a managing agent that logs all property paperwork and administration on a 24/7 access portal, as we do, you won’t need to file a lot of this information yourself. Whatever filing system you use, remember that it’s always best to err on the side of caution, so if you’re not sure whether to hang on to paperwork, do!

Ideally, all paperwork should be retained until seven years after the end of the tenancy because:

1. If HMRC carry out a tax investigation, they can call for documentation up to seven years after the event, and
2. Your tenants can bring proceedings against you up to six years after they leave, so you need to hold on to proof that you acted legally.

As always, we’re here to help, so if you have any questions or would like some advice about administering your let, just get in touch with your local Reeds Rains branch.

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