Managing risk and minimising liability in your rental business

As the owner of a rental property, you have certain responsibilities to keep your tenants safe, but you also want to protect your investment at the same time. From negligent tenants to structural problems, there are many things which could go wrong in a buy-to-let that could leave you with costly repairs and expenses.

In this guide, we’ll take you through some of the ways you can protect your rental property and minimise liability for accidents and repairs, from considering upgrading your security measures to knowing when it’s best to let a professional handle repairs.

Make smart investment choices

Due diligence should start well before you begin renting the property out—in fact, if you want to reduce risks, it should start with comprehensive checks at the buying stage. In addition to having detailed property surveys carried out on any property you’re considering purchasing, Squarepoint Surveyors suggest that you should also “find out about planned future expenditure for the building as a whole and whether a sinking fund exists to cover future works. If there isn’t one and the building is in a state of disrepair, this should be a cause for concern”.

Conduct thorough risk assessments

It’s important that risk assessments aren’t treated as a one-and-done exercise. While they should be carried out before letting tenants into the building, they should also be scheduled annually afterwards too. These should include fire safety assessments and electrical checks, especially if there are appliances supplied as part of the tenancy.

Protect the exterior of the property

We often think of ways to protect the interior of our homes, but the exterior is just as important because it’s subjected to risks in much the same way. If there is a large area at the front of your rental that falls within your responsibility, concrete barriers are effective at managing vehicle traffic but also for preventing unauthorised access to the front or rear of your property. It provides an additional layer of security for your tenants, preventing trespassers and vandals from making their way inside.

Take a multi-layered approach to security

To keep tenants safe, and ensure no unauthorised people can make their way into the building, you need to take a multi-layered approach to your security. This means using physical barriers like durable locks and alarm systems, along with upgrading old windows and doors. Similarly, CCTV surveillance outside the premises with access controls to ensure only you and your tenants can gain entry are worthwhile considerations, incorporating smart home controls that will protect everyone.

Have the property checked for Legionnaires’ disease

Legionnaires’ disease can be fatal, and it’s caused by inhaling small droplets of contaminated water containing legionella. Any hot or cold-water system can be an environment where legionella can grow, so it’s vital that your property is checked for any sign of this issue. Make sure you hire a specialist contractor every year to carry out a bacteria risk assessment for the plumbing systems, and keep records of these checks so you know your tenants are protected.

Cover the building with comprehensive insurance

No landlord should go into a buy-to-let investment without insurance—it’s essential for protecting your property, but also for minimising liabilities should anything go wrong. Make sure the policy you choose is reasonable and represents fair value for money, but also gives you protection against damage and accidents that might occur. It may seem like an unnecessary expense each month, but the costs of a claim will be far higher, so don’t neglect this crucial step.

Keep detailed records

You never know what the future has in store, so get into the habit of keeping receipts, quotes for repairs, and any other documents that show how you’re managing and maintaining the property. It’s also a good idea to keep a diary of any conversations you have with tenants—ideally, have an email process in place for any tenant requests or issues so you have evidence of what’s been spoken about. It makes it much easier to find proof of any issues if they arise again in the future and prevents the situation devolving into it being your word against theirs.

Build better relationships

The more people you have on your side, the better. So, get to know local tradespeople like electricians, decorators, gas specialists and plumbers who will be able to help you in an emergency and can be relied upon. It’s also a good idea to have a good, dependable solicitor that you can call if a situation escalates, and you need professional advice. A network of reliable contractors who are certified and deliver professional work will help you keep your rental property in order and mean you can rest easy that they aren’t going to cause further problems.

Hopefully these tactics will help you develop strategies to manage your property investment properly, keeping your investment and your tenants safe from harm and reducing unnecessary expenses. Risk assessments and surveys, implementing comprehensive insurance cover and working with certified professionals you can trust are just some of the ways you can mitigate risks and reduce your liability as a landlord.