GUIDE FOR LANDLORDS
Thank you for making an initial enquiry concerning letting your property.
The process can seem daunting at first and we have therefore set out some information that we hope will be helpful to you.
What are the pros and cons of letting?
These vary obviously from person to person, but generally:
- Income towards a mortgage or as an investment.
- The property is kept warm and aired.
- An empty property can increase insurance costs.
- Responsibility for Council Tax, water rates, gas, electricity or telephone bills whilst the property is let is passed to the tenant.
- Wear and tear.
- Small risk of damage.
Why do I need an agent?
The letting of residential property is governed by legislation and failure to comply with a legal requirement may result in criminal prosecution or at the very least a costly legal bill. There is of course nothing to stop a landlord acting without an agent but our staff are trained to understand the legal requirements and we have procedures in place to ensure that they are complied with, giving the landlord complete peace of mind.
Our Tenancy Agreements have been drawn up by experienced solicitors and are updated regularly to keep up with current legislation. We also have access to tenant vetting procedures that an individual landlord may not be able to obtain.
Accounting procedures are dealt with at Harrisons, 6 Cornmarket, Pontefract, WF8 1BJ. Tel. 01977 781280. E-mail: firstname.lastname@example.org.
What services are available?
We are local independent letting agents and are able to tailor the service we offer to the landlords requirements. Some landlords wish to be actively involved with the management of their properties and others, in particular those living overseas or some distance away, prefer to leave the every day repairs etc up to us.
The most popular options are:
- Find a tenant only.
- Full management.
Can I get a mortgage to buy a property to let?
Many lenders are now recognising the investment potential of residential property and are able to provide mortgages, subject to status and certain requirements.
We can introduce you to Mortgage Advice Bureau for financial service advice and an appointment at any of our offices – Boultons in Huddersfield, Kirkburton or Harrisons in Pontefract.
If you would like to discuss letting your property or would like a free, no obligation, market appraisal please call us as soon as possible.
How much rent will I get for my property?
Supply and demand, amenities, location, accommodation and condition must be taken into account when considering a rental value. Our staff are always willing to visit your property and provide a free market appraisal based on their knowledge of the market place.
How is the rent paid?
Tenants can pay rent by standing order, direct debit or cheque through the post, cash at any of our offices or by credit or debit card (unless you use our find a Tenant Only option).
Our fully computerised systems mean that once the monies have “cleared” through the banking system, the rent is paid by BACS directly into the account of your choice, either monthly or quarterly. A detailed statement of account is then forwarded to you for your records.
What sort of agreement is used?
There are different types of agreement that should be used depending on the circumstances of the tenants, the landlord and the property.
In the majority of cases it will be what is called an Assured Shorthold Tenancy for a fixed period. Our staff are trained to ensure that the right Tenancy Agreement is used for the circumstances and will be able to explain the different types of agreement.
Whilst allowing the tenants to have a property they regard as home, our Tenancy Agreements place obligations on them to ensure that you as a landlord can be confident your property will be returned in as good a condition as when it was first let (allowing of course for fair wear and tear).
Do you hold a deposit or bond?
Yes. The minimum deposit we require from our tenants is equivalent to one month’s rent plus £100. Where we manage the property the bond will be registered with the Tenancy Deposit Scheme (TDS).
What is an inventory and do I need one?
Inventories and Schedules of Condition are prepared and used as a benchmark by which the state of the property and its contents are judged at the end of the tenancy before the deposit is returned.
It is just as important to have an inventory for an unfurnished property as the fabric of the building as well as the fittings, fixtures and any white goods and appliances need to be detailed.
What do I do if the property is damaged?
When the inventory is checked off at the end of a tenancy (if our Full Management option is chosen), the contents and conditions are carefully monitored against the inventory. We would then contact you with a list of any damaged, the estimated costs for repair/replacement and recommendations with regard to the amount to be deducted from the tenant’s deposit.
Upon receipt of your acceptance or comments we will approach the tenant for their agreement. When agreement has been reached the money will be paid to the relevant parties. If agreement cannot be reached the matter will be settled by the T.D.S.
HOW WILL RENTING OUT MY PROPERTY AFFECT ME?
What are my costs?
These will usually include:-
- Mortgage payments.
- Insurance – Buildings & Contents (as a minimum) plus legal expenses if desired.
- Repairs to the property and contents – unless damage caused by tenant.
- If leasehold, the ground rent and service charges.
- Managing agent fees.
- When the property is vacant, utilities, services and council tax.
Does my mortgage lender need to know?
You must obtain permission from your lender before letting – failure to do so may result in a breach of your agreement with them and may invalidate any insurances you have.
Will I be liable for tax?
You will be liable to pay tax on any profit generated from letting your property – the amount of tax you pay will depend upon your circumstances. Many expenses, such as repairs and management fees can be offset against tax. If you reside permanently in the UK, you will need to complete a self assessment form.
If you are overseas for more than six months of any tax year, you will be regarded as a non-resident landlord. The current legislation requires us to deduct and pay over to the Revenue income tax at the basic rate unless we are in receipt of an exemption from the Inland Revenue.
Please note that where there are joint landlords (including married couples) an exemption is required for each landlord.
Our management accounts adviser will be able to discuss these arrangements with you.
Will letting affect my insurance?
Possibly – you must inform your insurance company that you intend to let your property otherwise you may find your insurance is invalid. If your existing insurance company is unable to provide property owner’s insurance for let properties, or seek to increase your premiums, we can recommend alternatives.
Please ask our staff for further details.
What if my property is leasehold?
You must advise your freeholder or managing agent if you intend to let your property as it may affect the buildings insurance.
There may also be terms of your head lease that your tenant must comply with (ie. no pets, particular parking arrangements etc).
Who looks after the garden?
The maintenance of the garden is normally the responsibility of the tenant. However, not everyone has green fingers and if you have a particularly large garden or plants that need special care, it may be advisable to employ a gardener. Even in an unfurnished property it is advisable to provide tools for maintaining the garden if possible.
OBLIGATIONS AS A LANDLORD
Do I have to provide furniture and furnishings?
No, in most cases we have found that there is very little difference in rental values between furnished and unfurnished lettings.
If you specifically want to let furnished, you have to bear in mind whether your furniture complies with the Furniture & Furnishings (Fire Safety) Regulations 1988 (as amended. Our staff will be happy to advise you on this point. If the items do not comply then they must be removed from the premises. Selling or giving these items to the tenants is not acceptable.
Whether the property is furnished or unfurnished also has no bearing on getting possession of the property. The rules are exactly the same.
Do I need to have the gas appliances checked?
It is a legal requirement under the Gas Safety (Installation and Use) Regulations 1994 (as amended to have the gas supply and all gas appliances (either portable or fixed) checked at least once every 12 months by a GAS SAFE registered operator. This must be done at your expense prior to letting a property and a copy of the inspection record given to the tenant.
We can arrange for these checks to be carried out and a gas safety record obtained prior to letting a property. Our full management service includes ensuring that a check is carried out each year. In all other circumstances, the responsibility will fall to you.
Failure to have the safety checks carried out and any relevant works completed could result in criminal prosecution.
Does the same apply to electricity?
It is not a legal requirement to have annual checks. However, there is currently a requirement under the Electrical Equipment (Safety) Regulations 1994 to ensure that all appliances supplied are ‘safe’. We would recommend that all appliances are checked by a qualified electrician on an annual basis. We are able to arrange this on your behalf.
Are smoke alarms required?
Smoke alarms have to be installed in any new properties or conversions. We would strongly recommend that you install at least one alarm per floor at your property, preferably wired into the mains electricity.
What am I responsible for repairing?
As a landlord you have a legal obligation under the Landlord and Tenant Act 1985 to maintain the structure of the building, the sanitation and the supply of services. In addition, should an item in the property require replacing or repairing through wear and tear then you would be expected within the terms of the Tenancy Agreement to deal with this.
How are tenants selected?
All our applications are properly vetted through a credit referencing procedure to ensure that the applicants have the financial ability to meet their rental commitments.
In some instances we will recommend that you ask for a Guarantor who will be vetted in the same way and be required to sign an undertaking of responsibility.
Can I decide who moves in?
When we have found potential tenants who appear suitable, we will discuss the matter with you and take your instructions. However, whilst we are happy to take your instructions with regard to restrictions on smokers, children, pets or any other specific requirements you have, we will not permit discrimination on grounds of race, colour, creed, age, disability etc.
Please also bear in mind the greater the restrictions the longer it is likely to take to let.
What does the tenant pay?
In addition to the rent, the tenant is responsible for the council tax, gas, electricity, telephone charges and water in most cases. As part of our Full Management Service we will arrange for the relevant details to be notified to both the Council and the utilities (except for the telephone, which is the responsibility of both you and the tenant).
What if the tenants do not pay their rent?
Whilst we take all possible steps to ensure that tenant are financially secure, there may be the odd occasion when a tenant falls into arrears. Our accounts manager monitors the payment of rents so that if there is a problem it can be addressed quickly. Often a letter, telephone call, text or e-mail prompt will quickly resolve the problem – however, if the rent is persistently late or in severe arrears there is an effective course of redress through the courts. Please note that should it be necessary to take legal action, the cost of doing so is bourne by the landlord. However, to minimise any loss or inconvenience in the event of such a situation, we are able to offer protection.
What do I do if tenants will not leave?
Although it is extremely rare, if the tenants refuse to leave at the end of the tenancy then the matter will need to be settled through the Courts. By the use of the Accelerated Possession Procedures (APP) for certain circumstances, the process can be dealt with in a matter of weeks. However, for greater peace of mind we are able to offer you a protection policy that will cover legal costs. Please note that our fees and charges do not cover issuing legal proceedings and should this be necessary you will be responsible for your own solicitor’s costs.
What if I no longer want to rent out the property?
Our Tenancy Agreement will usually be for a fixed term period. Unless you choose our ‘Find a Tenant Only’ option, we will contact you approximately three months before the end of the tenancy to take your instructions as to whether you wish to continue with an existing let by extended agreement for a further fixed term, re-market the property or regain possession of your property.
If you want to end the tenancy we will arrange to check the property against the inventory and seek your instructions for settling the deposit.