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Busting the myths - Part 2: “Be an investor, not a landlord” (and why this is completely wrong!)


Continuing on from my previous blog, if you have ever been to a property investment seminar, listened to property related podcasts or webinars, or read about ‘successful’ property investors in magazines or internet articles, another concept that is often bandied about is the idea that property investors are not landlords, and don’t need to concern themselves about being a landlord.



The idea is that landlords are busy people, running around doing viewings and inspections, arranging check-ins and check-outs, carrying out maintenance themselves, and generally looking after their properties and tenants on a daily basis. In contrast, those that claim to be property investors are entrepreneurs – finding deals, raising finance, creating wealth, delegating and outsourcing the low level and administrative tasks to letting agents, and basically distancing themselves from their properties and tenants so that they don’t have to deal with property maintenance or tenancy issues.


According to this theory, property investors run businesses, and have a ‘power team’ who help them with the management of their properties. The investor then focuses on adding more properties to their portfolio, or raising funds from angel investors or joint venture (JV) partners to continue building ‘passive income’ (which is another myth – see my previous blog!).


Whilst there may be some element of truth in the above, on the whole this is another myth. The reasons are simple and straightforward, but again they are not sexy and are not going to sell courses, mentorships or training programmes, which is the ultimate goal of people expressing these theories.


Whether you consider yourself a property investor or a landlord, two things you have in common is this:

1. Your name is always on the title register of the property i.e. you are the registered owner; and
2. Your name is always on the tenancy agreement with the tenant – and therefore you are the landlord.

These two reasons mean that you are legally (in the eyes of the courts, in the eyes of the law!) and ultimately responsible for the property and for managing the tenancy.


Whether you instruct a letting agent to manage your property (which in itself is not a ‘set and forget’ role!) or your look after your property yourself, you have the same legal obligations and are legally bound to comply with a number of regulations. Your property must be compliant with literally hundreds of pieces of legislation – if for any reason your property is found to be defective, hazardous, or causes injury to your tenants, it is not an excuse under the law to claim that you are an “investor” and that your managing agent is to blame! Property owners, whether they want to call themselves ‘investors’ or ‘landlords’, have a legal duty of care to their tenants – this cannot be delegated to agents. The agent should simply act on behalf of the investor, but they will not carry the can for every incident.


If you consider yourself to be a property investor who has instructed a letting agent, and your agent fails to carry out the annual gas safety checks to renew the gas safety certificate, and your tenant dies because of a gas leak or carbon monoxide poisoning, who is going to be liable? I would argue that it’s the property owner’s responsibility, irrespective of the agent’s failings! Part of the role of an investor and landlord is to ensure that all annual safety checks are carried out, all licence applications have been submitted and any licence conditions are satisfied, and all maintenance is carried out to ensure the property is safe and comfortable. An investor who uses an agent is equally responsible for these things – so they should not walk away and distance themselves if things go wrong.


Similarly, if you have a letting agent who fails to issue the correct paperwork at the outset of the tenancy, meaning that a difficult tenant cannot be lawfully evicted, who is the one suffering? The property owner of course, whether they consider themselves to be an ‘investor’ or a ‘landlord’.


Furthermore, with the introduction of the Homes (Fitness for Human Habitation) Act 2018 earlier this year, tenants now have the ability to sue their landlord if the property is not fit for habitation – that’s the person on their tenancy agreement! So an investor who holds his hands up and says that it’s the letting agent’s responsibility to deal with maintenance issues can still find themselves at the wrong end of a lawsuit due to the failings of the agent.


So the next time you attend a property event and hear the usual babble about how successful property investors are not landlords and don’t deal with the day-to-day issues, remember that they are still legally responsible for the property and will still ultimately face the law of the land if things go wrong!

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