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The rise in so called ‘accidental landlords', a new breed of landlord that lets out their property to avoid selling at a loss, could be renting out their homes without adhering the numerous rules of rental regulation.

According to Paragon Mortgages, many of these landlords may be ignorant of the large number of regulations involved in letting property. It is estimated that there are more than 50 Acts of Parliament and 70 sets of regulations governing the private rented sector and these new landlords risk fines if they let out their property without complying with all the necessary legislation.

Paragon Mortgages managing director John Heron says: "The onus is on the landlord to make sure they comply with all regulations and they are liable if something goes wrong, even if they employ the services of a letting or managing agent. Ignorance of legislation is not a defence.

"People that are letting out property they have been unable to sell are unlikely to have a detailed understanding of the legal requirements they have to comply with. For example, do they have an Energy Performance Certificate for the property or do they have a Gas Safety Certificate? What have they done with the tenant's deposit and have they got adequate insurance in place? Failure to comply with certain regulations could not only result in heavy fines, it could also mean a custodial sentence."

Also, the lender warns of the growing problems of accidental landlords renting out their property without informing their mortgage lender, which could go again the mortgage contract. If their lender does not know they are letting their property, which could have a knock-on impact on tenants if the property was repossessed.

Heron concludes: "The only solution is for landlords – accidental or experienced – to ensure they have a thorough understanding of relevant regulations. Getting help with this is not difficult. It would make sense to join the National Landlords Association, which provides a wealth of information and advice to their members. Also using the services of a professional letting agent, preferably ARLA registered, will make sure that an experienced individual is on hand to guide you through the process."

SOURCE: Paragon, 09/04/09

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