From spring 2015, tenants will have the right to work from their rented accommodation and the news has a number of implications for landlords.
If you do rent out a property, the thought of a tenant using the place to operate some kind of profit-making business might give you cold sweats. After all, there have been a few horror stories circulating among the landlord crowd (at the coffee mornings you all go to) about tenants suing them for loss of income. Victoria Whitlock, a landlord in London and a writer has told of her surprise at being sued when a dodgy internet connection caused her tenant to lose out on some cash.
The official line from the government is that tenants are automatically allowed to work from rented accommodation apart from in “exceptional circumstances”. What those circumstances might be are, as yet, unclear. But we’re guessing (hoping) activities that include the use of forklift trucks, toxic chemicals or encourage cockfighting, are a no-no, for instance.
The Government will publish a model tenancy agreement next month that you can download. But there are a few other measures we recommend putting in place as soon as you can so you can keep things well managed, under control and reduce any risk.
Be open with new tenants
Ask people who have applied to move into a property how they plan to use it while they live there. If they do intend to work from home or run a business, it’s much better if you know from the beginning so you can make any necessary arrangements or take precautions.
Changes to your tenancy contracts
It’s wise to amend your contracts to state that you cannot be held responsible for any loss of income they may incur. This can include electricity problems, flooding or internet issues.
Internet and phone lines
It’s not been made clear yet whether you can specify that your internet lines or phone lines aren’t used for work. But you can ask tenants to put lines in their own name. This means not only are they responsible for the bills, but there is less risk to you if they do something illegal.
Consider separating your bills from rent, because if someone works from your property every day, those heating and electricity bills might take a steep and sudden jump.
Inform your insurance company
This might not be a legal requirement, depending on the terms of your home and contents insurance but a quick call to find out where you stand is a good idea. Telling your insurance company what the property is being used for and adapting any policy accordingly will reduce the risk to you.
If you own a property in a leasehold building you might need to read the agreement in the original lease to check what it says.
Additional wear and tear
This is why it’s good to know what your tenants will be getting up to while living at your property. A computer coder sitting at his laptop at the kitchen table all day is different to the next James Dyson shipping parts in and out while trying to build a new range of washing machines. Find out what they want to do work-wise and consider adjusting your fees accordingly to account for potential damage to walls, carpets and fittings.
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