Letting Out an Apartment: The Landlord Checklist
This guide is written from the landlord side. It does not repeat what the law requires of every residential tenancy, but concentrates on what the landlord has to do: check the tenant, build securities that can actually be called on, document the property, and settle the tax on the income.
Checking the tenant
Most tenancy problems start here rather than in the agreement. What is worth checking before signature:
- Identity and identity document of the tenant and of everyone who will live at the property. A copy, not just a glance.
- Ability to pay: payslips or proof of income, measured against the level of the rent.
- References from a previous landlord, a short call establishing whether payments were made on time and whether the property came back in good order.
- The guarantors: who they are, what they can pay, and whether they understand what they are signing.
The checking should be proportionate and to the point. Gathering information beyond what the letting requires, or asking about matters unrelated to ability to pay and care of the property, is not appropriate.
Securities that can be called on
A security that cannot be called on is not a security. Three rules:
- Stay within the statutory cap. In a residential tenancy the total securities are capped at the lower of three months rent or one third of the total rent for the whole term. A demand beyond that is ineffective.
- State when they may be called on. The agreement should set out the circumstances, the notice required, and the order in which the different securities are used.
- Choose a security that works in practice. A properly signed promissory note with a guarantor can be lodged directly with the enforcement authority. A bank guarantee is called on with the bank. A deposit is set off as the agreement provides. An open cheque with no contractual framework is a source of dispute.
Payments and who bears them
The agreement should set out not only the rent but who bears each associated payment. The statutory default is that the tenant bears the running payments arising from his use of the flat, such as municipal rates, electricity, water, gas and building committee fees, while the landlord bears payments relating to the property itself, such as building insurance and payments for improvements to the building.
Alongside that it is worth settling: the indexation mechanism if any, the payment date and how it is made, what happens on late payment, and how the accounts are transferred into the tenant name at the electricity company and the local authority and when they are transferred back.
The handover protocol
This is the cheapest document to prepare and the most expensive to be without. It is made on the day the tenant moves in and contains:
- Photographs of every room, of the state of the paintwork, the flooring, the kitchen and the bathrooms.
- Meter readings for electricity and water, as figures.
- A list of the equipment handed over with the flat, and its condition.
- Existing defects, recorded expressly so that they are not put down to the tenant at the end.
- Signature of both parties on the same document.
At the end of the tenancy a matching protocol is made and compared with the first. That is the only way to tell reasonable wear, which is the landlord responsibility, from damage, which is the tenant. Without a protocol, that dispute nearly always ends in a compromise.
Tax on the income
Income from residential rent must be reported, and there are three tracks to choose from. The choice is made annually and does not bind future years.
| Track | What it is | Expenses deductible |
|---|---|---|
| Exemption up to a ceiling | Full exemption where monthly income from all the apartments does not exceed the ceiling. Above it a partial exemption calculation applies | Only against the taxable part |
| Ten per cent turnover tax | Tax on the whole of the income, with no brackets. Payable within 30 days of the end of the tax year | No |
| Ordinary track | The income joins other income and is taxed at marginal rates | Yes, including depreciation |
Which track is preferable depends on the level of income, the number of apartments, the expenses actually incurred and the marginal rate. Choosing wrongly costs money every year, so it is a check made before the end of the tax year rather than after it.
Insurance and responsibility
Two separate policies, not one. Building insurance is the landlord and covers the property itself. Contents and third party insurance is the tenant and covers his possessions and damage he causes to a third party. The agreement should require the tenant to hold such cover and to produce confirmation of it.
Alongside insurance, the duty to repair needs settling: in a residential tenancy to which the Law applies, a defect that is not urgent is repaired within 30 days of the tenant request, and one preventing reasonable use within three days. A landlord who does not respond exposes himself to the remedies the Law gives the tenant.
Finally, visiting the property: permitted, on reasonable advance notice, and without intruding on the tenant privacy. Entering without consent and without notice is not appropriate even though the landlord is the owner.
Before you sign, talk to us. Our office drafts the agreement for you, conducts the negotiation and represents you through to completion of registration. Our real estate department has accompanied transactions for over 15 years, alongside an architect, a surveyor and a property valuer. Call 02-5953322, send a WhatsApp message to 050-4411343 or leave your details in the form below, and we will get back to you as soon as possible.
What people ask most often
Which tax track should I choose on rental income?
How much security may I ask for?
The tenant left damage. How is that proved?
The tenant has asked for a repair. How long do I have?
Does the flat need insuring, and who insures what?
All Real Estate Department pages
Before you let the flat
We draft the lease from the landlord side: real securities, repair and vacation mechanisms, and the right track for taxing the income. Tell us about the property, and a lawyer from the department will draft the agreement for you.