Rising houses prices and interest rate hikes are the last things prospective home buyers want to see, though they seem to be coming their way. However, this gives investors a golden opportunity to rent out their flats at a higher asking price due to a surge in rental demand. While it’s worth taking time to choose a reliable tenant, don’t forget the stamping of the tenancy agreement.
The landlord should submit the Notice of New Letting or Renewal Agreement (Form CR109) to the Rating and Valuation Department for endorsement within 30 days after entering into a newly created tenancy or a renewal of tenancy, and pay for the stamp duty. A property can only be registered at the Land Registry once it’s stamped. If the unregistered flat is unfortunately rented to a rogue tenant, the landlord is not allowed to recover rent by bringing the case to court.
Moreover, late payment of stamp duty will incur a penalty. Depending on the length of the delay, the penalty could be 2- 10 times higher than the amount of the original stamp duty. Normally, the price of the stamp duty is equally shared by the landlord and tenant. If the landlord offers a rent-free period to the tenant, the total rental income per year and amount of the stamp duty will decrease. You can stamp a tenancy agreement via the Internet, by post or in person at the Stamp Office of the Inland Revenue Department.
If the tenant fails to pay the rent on time, the landlord should apply for payment of rent arrears or for possession of the property at the court. Even if it is originally your property, it is considered illegal to break into the flat.