Key Takeaways:

• Compliance and risk management is the process of identifying and mitigating legal, financial and operational threats that can compromise a rental property’s performance.
• Regular inspection and testing (e.g. electrical safety, gas checks) is part of a landlord’s responsibility to ensure a property is safe and adheres to all standards before it is legally occupied.
• Proper legal documentation serves as a liability shield by keeping all important documents and certifications updated, thereby protecting the property and preventing legal vulnerability.
• Technology-driven systems streamline monitoring and eliminate errors, ensuring all certificates and documents are renewed on time.
• Compliance protects profits by protecting a property’s ability to operate as a rental unit, validate insurance claims and attract reliable tenants.

What is Compliance and Risk Management

London is a city that enjoys a high demand for rental properties. The huge revenue opportunity has attracted property owners and landlords to invest in the rental market, prompting the local government to impose strict rules and regulations.

While all the legal restrictions are there to safeguard the private rental sector, these regulations put landlords in a challenging position. For some, navigating and keeping up with the ever-changing rental landscape in the city proved to be challenging. Failure to stay compliant comes with huge penalties that compromise the profitability of rental properties.

This is why compliance and risk management are an integral part of rental operations.

Compliance and risk management do not just help you avoid penalties. It preserves your property’s operational license so you can keep earning through your rental business.

It’s a landlord’s responsibility to ensure their rental property adheres to the legal rules and regulations in London. It’s not just about complying with the law. It’s about ensuring the rental property is up to property standards and safe to be occupied.

With all the statutory laws and regulations in the city, how can landlords keep up and ensure 100% compliance?

This is where expert property management companies can help. Companies like City Relay provide compliance and risk management services to help landlords ensure that rental properties and associated operations comply with London’s strict rules. Working with reputable property experts can minimise the burden and liability that landlords will face in case of non-compliance.

3 Basic Compliance and Risk Management Services

Staying compliant goes beyond keeping up with a checklist. You need a system that ensures your property is always compliant. After all, safety checks and certificates are usually renewed. Failing to renew them on time might lead to penalties and unnecessary charges that could have been avoided if you kept up with the renewal schedules. You also have to consider other restrictions, such as the 90-day short-let limit or the looming implementation of the Renters’ Rights Bill.

Keeping up with all the compliance requirements becomes easier if you have access to 3 basic compliance and risk management services.

Inspection and testing

This service takes care of the physical compliance of the property. The regular inspections and testing should be done on schedule and by the right professionals. This maintenance responsibility will keep the property compliant with the Decent Homes Standard and other regulations, such as the minimum EPC rating, EICR check, and gas safety certificate.

With a seasoned company like City Relay, you can expect proactive notices and scheduling to avoid the expiration of previous certificates or checks.

Legal documentation

Rental property documentation includes tenancy agreements, compliance certificates, emergency guidelines, tenancy deposit “Prescribed Information”, etc. There are quite a number of documents to produce, and it can be confusing for some landlords.

A legal documentation service will not only ensure you have the complete paperwork, but it will also maintain all required documents. This will help your property stay compliant and updated in accordance with the latest regulations. This will protect you from potential liabilities.

Did you know: 

Failing to provide a tenant with the prescribed information for tenancy deposit protection within 30 days legally prevents landlords from serving a Section 21 notice and could result in penalties of up to 3x the deposit amount.

Streamlined monitoring

Finally, compliance and risk management should include a streamlined monitoring service, ideally something that’s digital and accessible 24/7. Manual tracking of all documents, compliance schedules and such is prone to human error.

Cutting-edge systems like the Opago platform used by City Relay streamlines compliance management through automated reminders and task alerts. The platform ensures nothing falls through the cracks and that all certificates and documents are updated. This type of system also securely stores digital copies of documents so landlords can easily retrieve their copy, 24/7.

This provides a transparent and recordable compliance history, ensuring it never compromises the rental operations of the property involved.

Benefits of a Fully Compliant Rental Property

Compliance is more than just avoiding penalties and legal punishment. It’s a strategy that protects the long-term profitability and preserves the premium value of a rental property.

Being fully compliant brings the following benefits:

• Financial security. Proactive compliance reduces the risk of fines and penalties. It ensures you don’t have to pay unnecessary fees during renewals. This protects your profit margin and keeps your costs low.
• Legal rights. Compliance is mandatory to implement specific landlord rights, like serving notice to a tenant. You might compromise your right to regain possession of your rental property if it’s proven that you’re not legally compliant.
• Insurance claims. Most insurance companies will void your policy or settlement if it’s proven that you are not compliant. For instance, claims for property damages caused by a gas leak or a fire incident would be null and void if it’s proven you weren’t compliant with gas and fire safety rules to begin with. Compliance ensures your property is insurable.
• Tenant retention. A compliant property means it’s safe and well-maintained. This increases tenant satisfaction, which in turn reduces turnover rates. This will minimise vacancy periods and maximise occupancy rates and rental income.

FAQs About Compliance and Risk Management

Why is compliance and risk management more challenging in London?

The high demand for rentals in London has prompted the government to impose restrictions to balance the supply of shortlets and longlets. The unique regulatory layers make compliance in London more complex compared to other areas in the UK. Some boroughs even have specific licensing schemes, so landlords should do their research to ensure they comply with location-specific regulations in London. Constant monitoring is also needed to ensure complete compliance amidst the ever-changing rules in the city.

Why is technology-driven compliance and risk management better?

Manual compliance and risk management rely on human memory, which means it’s prone to mistakes. Renewals and expiration dates might be forgotten, and it could lead to unnecessary fees and penalties.

Technology-driven platforms like Opago provide automatic notifications and issue alerts way before the renewal date. This ensures human oversight won’t compromise your property’s compliance.

How does the new Renters’ Rights Bill affect compliance in London?

The Renters’ Rights Bill is set to abolish Section 21 ‘no-fault’ evictions, set the Decent Homes Standard for all private rental properties and impose new pet-friendly rules, among others. If you have Assured Shorthold Tenancy agreements, you need to review them to ensure they’re compliant with the new legal framework. You should also consider the changes needed in the rental operations to keep your property compliant.

What is the benefit of City Relay’s Opago platform in compliance and risk management?

When it comes to compliance, the main benefit of the Opago platform is the digital security and automation features. It ensures your documents and certificates are securely stored and easily accessible. The platform can also be programmed to automatically send notifications for renewal schedules. This eliminates the need to manually track expired certificates and documents, so rental properties remain compliant.

How can a fully compliant property help attract reliable tenants in London?

The highly competitive rental property market in London means landlords should be proactive in making their rentals stand out. Staying compliant is one way to do this. Professional tenants look for safety and trust when it comes to rental properties. A fully compliant property can offer these and more.

By attracting reliable tenants like professional ones, you can enjoy on-time rental payments, lower tenant turnovers, minimal void periods and a well-maintained property.

Enjoy Stress-Free Rental Property Operations in London

Managing a competitive and sought-after rental property means keeping it 100% compliant with the many regulations imposed in London. It’s not just about following the rules. When your property is compliant, it means it meets the high standards and safety measures legally required by the local government.

This makes for a high-value property that will attract reliable tenants and ensure a steady stream of rental income. It provides a solid foundation for your rental business.

This is why compliance and risk management are important. With the constantly evolving rules and regulations in London, it can be tedious to keep up with all the changes.

Partnering with a company like City Relay, which offers compliance and risk management, makes it easier to keep your property 100% compliant. We’ll take care of the inspections, testing, legal documentation and monitoring of renewal schedules so you can focus on growing your property portfolio.

Find out how City Relay can help secure your rental property. Get a free rental estimate now.