Things to think about before you let

Our Full Management Service

We offer a ‘Full Management’ service which aims to completely remove the hassle of managing your property. This includes inventorising the property, checking it regularly, overseeing maintenance, advising utilities of changes etc, as well as rent collection, production of statements, management of arrears collection etc. In some situations where the landlord wishes to retain full control of the management of the property we can arrange to find and present a fully referenced tenant for the property

How long will it take to find a tenant?

There is always a good demand for quality properties that are sensibly priced, however, market conditions, location and time of year can all have an impact to the time taken to find a tenant for the property can vary.

How can I decide the appropriate rent for my property?

We are happy to offer a no-obligation rent assessment. We will advise you of the rent we believe is achievable and realistic for the current market conditions. There may well be improvements and alterations which could help ‘place’ the property and secure a swifter let. The actual amount of the recommended rent will be a product of location, condition, facilities and level of equipment/furnishings.

Furnished or Unfurnished?

There is generally not a significant difference in the achievable rent for a furnished property over an unfurnished one, however, both will attract different types of tenant. You will need to consider, for instance, whether you are prepared to be flexible enough to store your furniture in order to secure a tenant who wished to rent an unfurnished property? Smart furnishings and attractive fittings will make your property more marketable and we will be pleased to advise on this.

Inventories

We prepare detailed inventories at the start of the tenancy. These include internal and external condition reports as well as the traditional ‘contents’ inventory. These are signed by us, as your agent, and the tenant. We retain a signed electronic copy and use this for checking the property during any interim inspections and at the end of the tenancy. Inventories are sent to the tenant electronically and, if not signed and returned within 7 days are deemed to be agreed.

Taxing Problems!

All income received from your property rental is taxable. There are, however, some expenses which may be treated as tax deductible. Some of these are shown below but it is important that you consult a tax expert or the Inland Revenue, for further advice.

• All Agency Fees (including inventory charges and advertising expenditure)
• Charges for postage, telephone calls etc made to your agent.
• 10% of total rent received against wear and tear of furnishings.
• The costs of all structural repairs and renewals (decorating, safety testing etc)
• Insurance Premiums
• Accountancy and professional fees.
• Water rates if these are applicable, utilities, ground rents and service charges.
• Services (including gardening and cleaning)

If you are not normally resident in the UK (for tax purposes), your managing agent or any person receiving rents on your behalf, is responsible to the Inland Revenue for your income tax payments. Unless Inland Revenue approval is obtained to receive rental income with no tax deducted, money will need to be withheld to meet this liability. You are still allowed to claim the allowances highlighted above. We would suggest you consult a tax expert for a definitive view and are pleased to offer this additional service should you require it.

Informing your Building Society/Lender

You must usually inform your Building Society/Bank that you intend to let your property. Failure to do so may invalidate the terms and conditions of your mortgage. You may also need inform anyone who provides insurance for your property or its contents. You must provide us with copies of letters confirming permission to let from your lender and insurer, together with details of any special conditions they apply.

Rules and Regulations

Before you let your property you will need to consider a number of regulations and rules. We cannot let your property if you do not comply with the three main areas highlighted below

1. Fire Safety

The Fire and Furnishings (Fire) (Safety) (Amendment) Regulations 1993 require that all soft furnishings, upholstery or upholstered furnishings, including mattresses, beds, pillows, sofas, armchairs, cushions and bean bags (not exhaustive) conform with fire safety regulations. They must comply with three tests (Cigarette test, Match test and Ignitability test) which measure the flame retardant properties of the furnishings.

All properties must have working and in-date smoke alarms at the start of the tenancy and if the property has gas burning or solid fuel appliance, a Carbon Monoxide alarm (or alarms) should be provided. We will keep a record of all alarms, their expiry date and status and will arrange to change alarms which are nearing the end of their life. This will usually be on a like for like basis, however we now use sealed units with a 7 or 10 year life as these require no battery changes. Where we inspect a property and we cannot determine the age of the alarm, we will change it for a new unit.

2. Gas Safety

All landlords who let property with gas appliances must comply with the Gas Safety (Installation and Use) Regulations 1998. This includes gas fires, boilers,
cookers, hobs and portable heaters. If your property contains gas appliances, they must be serviced on an annual basis and any remedial work done to bring the appliance up to standard. A GAS SAFE registered engineer must supply a record of the inspection and part of this must in turn be supplied to the tenant. If you have a service agreement, it may or may not include the provision of a landlord gas safety certificate. Additionally, the inspection must occur just prior to the first tenancy and again annually, but contact your service contractor supplier for more details.

As your agents, we can arrange the initial service and subsequent annual certificate renewals. If we do this for you, we will obtain the certificate and supply the tenant with their copy. You may of course undertake to arrange this test yourself. If so, please use a GAS SAFE registered contractor and ensure they supply the necessary certificates. You will need, in turn, to supply us with the certificates before the tenancy is taken up.

3. Electrical Safety

The Electrical Equipment (Safety) Regulations 1994 require that all electrical equipment over 50 volts must be safe and satisfy requirements relating to sleeving of pins on plugs, mains lead colour coding, labelling of cabling and fuse information. Whilst it is not a legal requirement to test electrical equipment, there is a statutory requirement to ensure that it is safe and we will usually arrange periodic inspections of any portable appliances on your behalf. Portable Appliance Testing must be carried out before the property is let the first time and we will be happy to arrange this for you. You should also be aware that following changes to the law in January 2005, it became illegal for unqualified persons to alter or connect domestic wiring to the electrical mains.In addition to the above, it is now a requirement that the landlord supplies any new tenant with a record of electrical installation inspections. If your property is new, this will have been provided by the developer and will normally last 5 or 10 years. Re-inspection should normally be carried out every 5 years and we will schedule and arrange for these checks for you.

4. Energy Performance Certificates (EPC)

All properties made available for letting must have a current EPC before they are advertised for letting. Additionally, the landlord must provide the tenant with a copy of the EPC before the tenancy starts. Since 2017, it has only been permissible to let a property which has an EPC rating of E or above. All other properties (those rated F or G) will need to be improved and retested before they can be let. We will be pleased to advise or arrange on works necessary to achieve this.

Risky Business?

Everything we do for you is aimed at minimising the risks however things can still go wrong and you need to be aware of this. Letting your property is a speculative venture and your tenants may not adopt the same ‘TLC’ as you would as an owner occupier. There is also a risk of the occasional rogue tenant who will default, despite previous good references. You will need to set this against the benefit of having what is generally viewed as a sound capital investment as well as a potential income opportunity. We strongly recommend that you take out legal and rent protection insurance and there are a number of specialised companies who provide this.

When you let… Finding your tenant.

Advertising

We will undertake to find a suitable tenant for the property, within as short a time as possible using a wide range of media. We have an excellent regularly updated website and circulate to major organisations in the vicinity on a regular basis. We advertise in the local press and use the www.rightmove.co.uk internet property portal. We will use other local advertising, including posters and ad-boards where appropriate. All these measures are aimed to give your property the widest possible exposure but you must note that we cannot be held liable for any losses incurred through the inability to secure suitable applicants. We would ask that you ensure that any information you give us regarding the property is accurate as we may be liable under the ‘Consumer Protection from Unfair Trading Regulations’ if we make any misleading statements or omissions.

Selecting the tenant

We take all reasonable steps to research the background of prospective tenants. This starts when we first meet the prospective tenant for a viewing of the property. We then use a national agency to complete credit checks and to take references from banks, employers and previous landlords and to confirm identity and the tenant’s ‘right to rent’ as defined within current government legislation. Unless you instruct us otherwise, the final decision to select a tenant lies with you, the client. We will advise you of the applicants outline details and results of references in order to obtain your confirmation to proceed. We cannot discriminate against any tenant, through our advertising, nor by any other means, on the basis of gender, race, pregnancy or maternity, sexuality, disability, age, religion or belief and also, since April 2019 against tenants who may be in receipt of state benefits. We will however, help you to select the most suitable tenant for your property based on the results of the referencing.

Pets?

It's your call at the end of the day but our standard tenancy agreement does not permit the keeping of pets. If you wish to waive this clause or specify what pets would be acceptable to you, let us know. Quite often this question only arises when a prospective tenant asks us.

Viewing

We will accompany prospective tenants to your property once we have some preliminary information and have confirmed their identify. Information we give out on properties is limited initially, for security purposes.

Do tenants have to pay a deposit?

All tenants will have to pay a deposit equivalent to five week’s rent, or such other amount as may be agreed with you. This is held by us in a separate client account and will only be returned to the tenant upon the termination of the tenancy providing all the terms and conditions of the tenancy agreement have been met. If any costs are incurred (e.g. through damage etc.) then these must be reimbursed by the tenant. If they are not, then they may only be deducted from the deposit after the tenant has vacated the property.

The government rules regarding tenancy deposits stipulate that all tenancy deposits must be protected in either a custodial or insurance based scheme. We generally use an insurance based scheme and we must by law register the deposit within 30 days of the start of the tenancy. The deposit must be returned within 10 days of the end of the tenancy unless any portion of it is being withheld as discussed above. If the tenant disagrees with this then they can apply to the scheme administrator who will adjudicate the dispute. There is a small charge (currently £12 inc VAT) to register and insure each deposit held on your property and this will be invoiced to t the start of the tenancy.

As an alternative to the traditional deposit, tenants can elect to use a 'Nil Deposit' service. This is operated by our referencing agents, 'Let Alliance' and tenants opt into the scheme during the referencing process. Tenants pay a non refundable service charge to Let Alliance, usually equivalent to one week's rent + VAT. The Nil Deposit service covers payment of any arrears or damages for which the tenant is liable, up to the value of 6 weeks rent, via ourselves. Additionally, it is a condition of the Nil deposit service that tenants have liability insurance in place, covering damage to your fixtures and fittings. More detailed information is available on request.

Tenancy Agreements

We generally use Assured Shorthold Tenancy Agreements, with a minimum fixed period of 6 months. The model agreement we use is supplied by the Association of Residential Letting Agents (ARLA), contains all the recommendations from a recent Office of Fair Trading enquiry into Letting Practices, and will be acceptable to all building societies/lenders. The model agreement can be modified to meet your needs and we will discuss these with you. Landlords have a statutory requirement to ensure certain facilities are available to the tenant but outside these requirements, there is some latitude to determine additional clauses to the tenancy agreement. It should be considered, however, that more restrictive conditions may limit the marketability of the property. Other types of agreement are available, for instance, for lets to companies.

After we have let….. During the Tenancy

Money Matters

All rents are due monthly in advance and rents received by us (we generally insist on standing orders) will be transferred into your nominated account within 10 working days of us receiving the cleared funds. We will forward by post or e-mail a monthly statement detailing the rent collected less our commission (+ VAT) and any expenditure incurred whilst acting as your managing agent. You will receive your statement early in the month following the payment we have made.

We have a strict arrears procedure and will contact the tenant in an attempt to retrieve payment, if rent is overdue by 3 days. If rent is still not received within 7 days of the due date we will contact you and write to the tenant to continue to try to retrieve the payment. After 14 days we will again write to the tenant. Interest is now payable on the outstanding amount and we will take all reasonable steps to demand and recover all rents and sums of money due. Should payment continue to be withheld, we would advise you to instruct a solicitor at around day 25. By day 32, two months rent is due and, depending on the default, an appropriate notice can be served on the tenant to instigate eviction proceedings. It will also be necessary to have notified the insurance company if cover is held for legal and rent protection.

Should it be necessary to go to Court to secure an eviction, we can assist in preparation of any witness statements and supporting documentary evidence. This is however, not covered by the normal management fee. You should also note that we cannot accept any responsibility for unpaid amounts due.

Increasing the Rent

There are certain rules regarding the increasing of the rent for the property and even some conditions when the tenant is entitled to request a review of the rent from the Rents Tribunal although this should not be an issue providing the rent sought is representative of the market rate. Our tenancy agreement provides for annual rent reviews and we will discuss this with you and of course negotiate on your behalf at the appropriate time.

Utilities and Utility Bills

Your tenants are responsible for paying the gas, electricity, water, council tax, telephone etc during the period of their tenancy. With the exception of telecommunications companies who will generally only accept instructions direct from their customers, we inform all the relevant utility companies of tenancy changes, dates of occupation, forwarding addresses and meter readings taken during our inspection. If the property is empty at any time, you will be responsible for paying the standing charges in this period and we can, if you wish, arrange to continue making payments on your behalf, reconciling these on your monthly account.

Building and Contents Insurance

It remains your responsibility to ensure that your property and its contents are adequately insured whilst being let. It is important that you advise your insurers that the property is being let although they may impose an additional charge. Failure to advise may well invalidate your policies. There are several companies offering specialist lettings-related insurance products and we would be please to provide you with contact information so you may discuss your needs with an expert and make an informed decision. Your tenants are responsible for all of their personal goods and possessions. These will not be covered on your policy should they suffer any loss or damage. We would recommend that you keep a minimal contents insurance policy active even if the property if to be let unfurnished. Whilst this covers any white goods and curtains that might remain at the property, these policies also usually contain third party liability cover which will offer additional protection against litigation by the tenant were he or she to injure themselves whilst living in the property.

Looking after the Property

We make periodic visits to the property to visually inspect it and will quickly advise you of any issues or any maintenance matters that are outside the scope of our Management Agreement with you. We will also visit the property to follow up on any late or non-payment of rent, investigate any tenant reported problems or if we suspect a breach of the tenancy agreement.

Absent/Overseas Landlords

There may occasionally be times when your property is empty, either because you do not wish to rent it at a particular time or because we are unable to find suitable tenants. If you are living away from your investment property, in a different part of the UK perhaps, or overseas, then we can still look after it for you. Indeed, it is important that you are aware of any specific insurance related conditions that exist should the property be unoccupied. We can arrange to visit the property periodically, to check security, condition, services etc, in your absence, for an additional fee. We can also prepare your property for your return, supervise reinstallation of stored furniture and effects and even restock your larder and fridge with groceries and goods. Please enquire for this bespoke service.

Service/Maintenance Contracts

You need to make sure that any service contracts you have, remain in force during the tenancy. In particular, central heating, washing machine, fridge, freezer, gas fires and other items prone to breakdown should be considered. We keep a record of all maintenance and can, if you wish, arrange to pay your premiums when they are due, deducting the costs from rents due.

Repairs and General Maintenance

Generally, you are responsible for all costs incurred in maintaining and repairing the property. We have a list of accredited contractors we use or if you prefer, we can use your nominated contractors. It is important that we discuss this with you when we take on your property. We will need to agree a threshold limit for carrying out minor works on your behalf without referral to you and a limit above which multiple estimates should be obtained prior to starting works. We will obtain estimates, issue works instructions to appropriate contractors on your
behalf, oversee the works and settle invoices as part of our full management service, for works up to £500. Over this amount we charge a commission to
carry out this service for you. In all cases we will not issue any works instructions without advance payment for the works. In order to allow the smooth running of our management service to you it will in many cases be advisable to establish a cash float to cover minor works. Any expenditure will be replenished from rent received and detailed to you on the monthly statement. We would suggest that a sum of £200 would be an acceptable amount in most instances

Garden Maintenance

It is a condition of the tenancy agreement that the tenant is responsible for the garden and its maintenance. It is important therefore, that you supply sufficient tools, in good working order, as part of the inventory, so that this can be done. If the tenant fails to carry out this maintenance, we will arrange for the work to be done by a professional and charge them for it. It is probably worth noting that tenants with more than a passing interest in horticulture are few and far between so it is probably unreasonable to expect any more than grass cutting and border weeding. If you wish to maintain the garden to a higher standard, please speak to us.

Visiting the Property during the tenancy.

You can visit the property at any reasonable time during the tenancy, however, in order to maintain the tenant relationship we ask that prior arrangement are made through us, so we can notify the tenant, in writing, of your intentions.

At the End of the Tenancy……

Regaining Possession

In the majority of tenancies, obtaining possession is a straightforward matter which occurs at the end of the fixed term of the tenancy. There are however grounds for ending the tenancy during the fixed term such as rent arrears, breach of terms and conditions of the tenancy etc. Possession is effected by serving the correct notices and we will deal with the service of these notices on your behalf in most instance or advise when a solicitor is required. If the tenant refuses to vacate the property on the due date, it is likely that Court proceedings will have to be brought. Whilst recent legislation went someway to streamlining this procedure, this will still be time consuming and expensive. We would strongly recommend Legal Expenses Insurance and would be pleased to discuss this with you.

It is important that you give us three months notice in writing that you require possession, even if this is within the fixed term. The legislation for 'no-blame' evictions requires that the tenant is given at least two months notice. This cannot be given before the start of the second to last month of the fixed term of the tenancy (for example, the start of month 5 of a 6 month tenancy).