Information for Landlords
There are a number of considerations when letting out property, please read our list below:
Furnished or Unfurnished
In our experience the majority of tenants prefer unfurnished properties.
However your property will be potentially more appealing if it is provided with a few fundamentals but your obligations in respect of electrical safety and on going maintenance must be considered:-
• Hob, oven or free standing cooker
• Fridge/freezer
• Washer/dryer or Washing Machine
• Dishwasher
• Blinds/curtains to all windows and carpets in good condition
If your property is to be let furnished, any soft furnishings must have the match test symbol attached to show they comply with The Furniture and Furnishing (Fire) (Safety)(Amended) Regulations 1993 – doesn’t apply to blinds, curtains or carpets.
Permission to Let
Before you consider letting, you may require consent from one/ all of the following parties:-
• Mortgage Company
• Insurance Company
• Any Joint Owner or Superior Landlord
Permission from your mortgage company may invoke a fee, but is required.
If permission isn’t obtained your lender may foreclose on the loan and issue possession proceedings if necessary for breach of terms.
Buildings insurance is vital and your existing policy may prohibit letting.
If so, we can put you in touch with specialist companies offering policies for tenanted properties.
If you own a leasehold property, then the freeholder and/or management company must be advised. They do not normally object but it would be disastrous if your tenant moved in and permission was refused.
Energy Performance Certificates
From 1st October 2008, all rental properties with a new tenancy in England and Wales is required to have an Energy Performance Certificate (EPC).
EPCs look similar to the energy labels found on domestic appliances such as fridges and washing machines.
The energy efficiency and environmental impact of your property will be rated on a scale from A-G (where A is the most efficient and G the least efficient). Current running costs for heating, hot water and lighting will also be shown on the certificate, together with a list of recommended energy saving improvements.
Leasehold Service Charges
You will still have to pay your service/maintenance charges to your management company; these are not paid by the tenant.
Leasehold Properties
If your property is leasehold, you will need to supply the following information:-
• The name and contact details of the freeholder or managing agent.
• A copy of the head lease or any freehold covenants as the tenant will be bound to comply with some of the requirements of the head lease, they should be given a copy.
• Details of bins and/or refuse storage areas, any communal areas, parking areas and restrictions.
Gas
A mandatory check must be carried out annually on all gas appliances (including bottled gas) which are in the property, whilst it is being let (Gas Safety (Installation and Use) Regulations 1998. This must be undertaken by a CORGI registered engineer and be available before the tenants move in. We can arrange this for you. If you already possess a current a gas safety certificate we require a copy prior to move-in day. Failure to comply with the Regulations is a criminal offence.
Electrics
All electrical equipment supplied (including plugs and sockets) must be safe. It is not mandatory to have electrical equipment checked each year, but failure to make sure that appliances and equipment are safe is a criminal offence (Electrical Equipment (Safety) Regulations 1994). It is very important to provide manuals for appliances supplied. Additionally Part P Building Regulations places duties on anyone carrying out electrical work in a property. Subsequently, if you intend to carry out any electrical work in the future it must be done by a competent person strictly in adherence with the Regulations
Viewings
Even if you live in the property which is to be to let, we will endeavour to accompany viewers where possible, so you need to supply us with a means of access, alarm codes or a note of any special procedures. We will vet prospective tenants prior to viewing, however it is usually only when we show tenants around, that we really find out the finer details and subsequently their suitability.
Condition
The more appealing your property is in its presentation and cleanliness the more tempting it will be for prospective tenants. Everything should be thoroughly cleaned, from oven to windows and skirtings. The contents and condition inventory will reflect this and the tenant is required to leave the property in the same condition at the end of the tenancy.
Credit/ Reference Checks
We use MARAS, a professional referencing company for our Reference/Credit checking. Under certain circumstances MARAS may recommend that the applicant has a guarantor.
The guarantor will also go through the process of reference and credit checks. An alternative to this issue is for the tenant to pay the whole term in advance. If you agree to this we will retain the sum in our clients account and transfer it to you monthly when it falls due.
Rental Guarantee and Legal Expenses Insurance
Despite every care taken with the letting and management of your property, the unexpected can happen. A tenant may be unable to pay the rent due to redundancy, accident, sickness, divorce, or even death. Not only might you suffer a shortfall in rental income but also legal costs are inevitably involved when a tenancy agreement is breached. Disputes can arise between landlords and tenants, for example, bringing action for unauthorised alterations to a property or unauthorised use of the property. Perhaps a tenant might withhold rent due to alleged deficiencies connected with the premises.
The MARAS Rental Guarantee & Legal Expenses policies are only available through letting agents registered with MARAS. These policies are available for both Managed and Let-Only properties.
The benefit of MARAS Rental Guarantee & Legal Expenses insurance is that legal experts can be brought in at the onset of a problem. This means that matters can be resolved quickly; if necessary, the property can be swiftly re-let and in the meantime, the landlord will have had the benefit of free legal advice, legal action and rental guarantee.
We are also able to offer Landlords Buildings and Contents Insurance with policies available for 6 or 12 months.
The Tenancy Agreement
It is best to be flexible on tenancy periods so as to appeal to as many potential tenants as possible. Some tenants prefer a 6 month initial tenancy period, very often families prefer 12 months. At the end of each tenancy period we can produce a new Tenancy Agreement (this is a renewal and there is a fee payable, please read ‘Landlords Schedule of Charges’) or you call roll over to a Statutory Periodic Tenancy. This is a monthly extension of the existing tenancy, the same notice periods apply.
Contents and Condition Inventory
As a result of Tenants Deposit laws introduced in 2007 we now insist you have an Inventory using an Independent Inventory Clark, who is a member of the AIIC - Association of Independent Inventory Clerks.
This document is as vital as the Tenancy Agreement itself. The inventory ensures that the contents and condition of your property are recorded fully and accurately.
Deposit
This is an amount of money which is held throughout the term of the tenancy.
All or part of this deposit may be used to return the property back to the condition in which it was provided. See Final Check-Out.
As a general guide, the minimum amount of Deposit held would be as follows;
• Unfurnished property – 1.5 x the rent
• Furnished property – 2 x the rent
Other amounts may be agreed on certain occasions.
We use an Insured Scheme run by Tenancy Deposit Solutions Ltd trading as mydeposits.co.uk. If we are holding the Deposit it will be held in a separate bank account called a Client Account. Additionally as members of the NAEA we have an obligation to insure this Account against fraudulent activity and adhere to strict operating and accountancy procedures. Interest is not payable on the Deposit.
Move-In day/Check-In
Before the move-in day, we will require keys. One set for each adult tenant and an additional set if we are instructed to Manage the property. If we have to have sets cut to comply with our requirements, unfortunately we will have to charge you accordingly.
The Inventory Clerk and/or a member of staff will meet the Tenant at the property at a pre-agreed time. Meter readings are taken and noted as are the appliance manuals supplied and a list of keys handed over documented.
Rent Payments
Rent payments are due monthly on the same date that the tenants move in.
If you choose our Management Service the payments are set up by standing order from the tenants’ bank account and can take up to 4 working days to arrive in our account.
The rent, less any fees, is then transferred to your nominated account, but again may take up to 4 working days to arrive.
Inspections
These are carried out every three months if you have chosen our Management Service. Tenants are given at least 24 hours notice of an impending inspection. We will send you and the tenant a written report, which will list any matters that need attending to. If any matters arising from our inspection are the tenants responsibility, and urgent, we may arrange a further inspection to verify rectification.
Maintenance Issues
If we are Managing the property, we will investigate any problem which arises, initially verbally then if necessary by a personal visit. One of our panel of contractors, or your preferred contractors, will be contacted for an assessment and a quotation.
We will ask for your approval before going ahead with any work. If there is an emergency, such as burst pipe, we would have to call out a contractor immediately to deal with the problem without consultation with you.
We do not obtain three quotations for every problem which arises, it would be too time consuming and inconvenient for all parties involved. We use trusted trades people who we believe offer an appropriate level of service at competitive prices.
Final Check-out
A Check-Out is a report on the condition of the property, and contents where applicable, at the end of the Tenancy and provides a comparison with the original Inventory report agreed at Check-In, taking into consideration fair wear and tear. It is carried out on the property as the Tenant moves out. The Inventory Clerk will meet the Tenant at the property at an agreed time, inspecting each room against the inventory and making notes as required. Suggested responsibility for any change of condition is assigned to the Tenant, Landlord, Maintenance or Fair Wear and Tear. The Landlord, Agent and Tenant then have a document on which to base any necessary negotiations regarding liability for damage.
Final meter readings are taken, the forwarding address for the tenant obtained and keys are reclaimed. On completion of the Check-Out, the property is locked and no further entry can be made by the Tenant.
Fair Wear and Tear
Allowance for fair wear and tear must be given when assessing damages. It is to be expected that while tenants are living in property. Fair wear and tear is based on the following factors; the number and age of the occupants at the property, the length of the tenancy, age and construction of items at the start of the tenancy and the reasonable usage and lifespan to be expected from items.
Focus
Our lettings software is a highly effective, specialised system called "RENT". It maintains detailed information on Landlords, Properties and Tenants allowing us to efficiently manage every aspect of the tenancy for your peace of mind.
Ombudsman for Estate Agents
The Ombudsman for Estate Agents (OEA) Scheme provides a free, fair and independent service for dealing with unresolved disputes between Member Agents and tenants and landlords of residential property in the UK.
The OEA is a member of the British and Irish Ombudsman Association and follows the standards and rules of the association. The Ombudsman is totally independent of the OEA Member Agent and reports directly to the OEA Council, which has a majority of non-industry members.
Find peace of mind with an NAEA Estate Agent
The National Association of Estate Agents (NAEA) is the UK's leading professional body for estate agency. Its 10,000 members both in the UK and overseas are bound by strict rules of conduct to ensure they offer you the highest level of integrity and service, while the Association's entry qualification means you can be sure you are dealing with an expert. By choosing an NAEA member you can feel secure in the knowledge that you and your property are in safe hands.
Tax Requirements for Overseas Landlords
The Non-resident Landlords Scheme is a scheme for taxing the UK rental income of non-resident landlords.
The scheme requires UK letting agents to deduct Basic Rate tax from any rent they collect for non-resident landlords. If non-resident landlords don't have UK letting agents acting for them, and the rent is more than £100 a week, their tenants must deduct the tax. When working out the amount to tax the letting agent/tenant can take off deductible expenses .
Letting agents and/or tenants don't have to deduct tax if HM Revenue & Customs (HMRC) tells them not to. HMRC will tell an agent/ tenant not to deduct tax if non-resident landlords have successfully applied for approval to receive rents with no tax deducted. But even though the rent may be paid with no tax deducted, it remains liable to UK tax. So non-resident landlords must include it in any tax return HMRC sends them.
We can supply the appropriate form (known as form NRL1) for completion and submitting to HMRC.
We will normally insist on receiving a completed NRL1 form before starting any tenancy where the Landlord is going overseas.
An Important Final Consideration
Remember that letting a property is a business. There maybe repairs to be undertaken and other maintenance issues; there maybe periods when the property is empty. Work your figures out carefully and set some money aside in a contingency fund.
