Landlords
Intercity Accommodation has been
established since 1980.
We do not sell properties nor do we sell any
financial products. Consequently our experience of the letting
market and knowledge of the Housing Act 1988 and the 2004
Housing Act is not diverted in any way. Our levels of service
are maintained by our policy of strictly limiting the number
of properties managed at any one time.
Since 1980 our occupancy rates have averaged at over 90 percent
per annum with prospective tenants currently being referred
to our offices by the Housing Advice Center, Leeds City Council,
the Tourist Board and the Trading Standards Department to
name but a few. A judicious allocation of our annual advertising
budget attracts a sustained level of inquiries throughout
the year.
Many people are renting properties for the first time and
there may be questions that are particular to your circumstances
that you need assistance with, or perhaps you simply want
a general outline of our industry or a certain point explaining
a bit more. Please do not feel that by asking questions that
you are wasting our time.
LESA tax bills for those who claim
The deadline for tax returns is looming, but if you are a
residential landlord and have insulated your rental properties,
you can reduce your income tax bill by claiming a deduction
against your profits of up to £1,500 per property.
The Landlord’s Energy Saving Allowance scheme (LESA)
allows landlords to claim the cost of buying and installing
the following items:
• draught proofing
• loft insulation
• floor insulation
• cavity wall insulation
• solid wall insulation for hot water systems
When filling in the Land and Property supplementary pages
of your tax return, you should include the costs of these
items in box 5.36C.
Guidance on LESA can be found in the supplementary notes
for the Land and Property pages of your main self-assessment
return.
Visit www.hmrc.gov.uk/worksheets/sa105notes.pdf for further
details.
Landlords stirred but not shaken
by credit crunch
Buy to let landlords have not been shaken by the credit crunch,
the latest ARLA quarterly review has concluded.
Nine out of 10 landlords surveyed during the last quarter
of 2007 said they had no intention of selling their properties
for an average 17 years or so. Four out of 10 of them expect
to invest further in the Private Rented Sector this year.
“This is good news for the whole of the Private Rented
Sector and for the housing market, particularly as it comes
from surveys carried out well after the credit crunch had
begun to bite,” said ARLA’s Head of Operations,
Ian Potter.
“The rental sector is the lynchpin for all our housing
requirements and needs continual investment from private individuals
as it still suffers from a lack of investment from the institutions.”
Buy to Let investors borrowed an average of 70 percent of
the purchase price, down from 74 percent in the previous quarter.
More than one in six borrows less than half. The average life
expectancy of these Buy to Let investments is 16.7 years.
This figure has been fairly constant for the past three years.
Only one in 12 expect the investment to be less than five
years and a mere 2 percent see it as short term, i.e. less
than two years.
The publication of the Review and Index is supported by the
ARLA Group of Mortgage Lenders: Bank of Ireland, Cheltenham
& Gloucester, GMAC - RFC, Mortgage Express, NatWest and
Paragon Mortgages.
Although the majority of investors have bought existing properties,
in good condition and ready to let, 7.5 percent reported buying
off-plan during the last quarter.
“Buying off-plan flies in the face of the continuous
warnings given by ARLA and the ARLA Group of Mortgage Lenders
that this kind of property investment cannot make for a realistic
Buy to Let investment proposition,” said Potter.
“The rental market is too fluid to make judgements
on rental values and likely demand months or even years in
advance, for property that has yet to be built,” he
continued. “We cannot repeat this warning often enough.
The potential investor must take local advice from the professionals
about the property, the way it is furnished and the realistic
market rent.”
On average, Buy to Let investors have been residential landlords
for just over six years. Only two out of 10 have been landlords
for less than a year.
The Review and Index for the last quarter of 2007 shows the
average rate of return on a cash purchase of residential investment
property at 10.8 percent and for geared investments, assuming
a 75 percent mortgage, 21.43 percent.
The fourth quarter surveys were carried out too early to
judge any possible effect on the proposed changes in Capital
Gains Tax from next April. Should tax relief on mortgage interest
for residential investment be disallowed, a comparatively
high figure, 37 percent, said that this would not influence
them, although a further quarter said they would sell all
or some of their property investments.
Potter warned: “Any alteration in the reliefs could
seriously damage the Private Rented Sector. It is only with
the help of the refinancing by Buy to Let investors that the
sector has become properly viable again although, even now,
we are still experiencing a severe shortage of property.”
Furniture and Furnishings:
The Furniture and Furnishings (Fire)(Safety) Regulations 1988
These regulations came into force on 1st March 1993 for any
new lettings and 31st December 1996 at the end of the transitional
period.
The regulations set new levels of fire resistance for domestic
upholstered furniture, furnishings and other upholstered products
and act as secondary legislation under the Consumer Protection
Act 1987.
As many domestic fires start with soft furnishings igniting
through negligence and many deaths are caused from the subsequent
highly toxic fumes and smoke given off, these regulations
were introduced in order to reduce t he risk of death through
ensuring that furniture and furnishings conformed to a higher
standard and they have proved effective.
All furnishings must under go 2 tests: match test and cigarette
test. All furnishings must carry labelling as shown below,
proving that they have undergone and passed the test.
The regulations apply to:
Beds, headboards, mattresses, sofa-beds, futons and other
convertibles, nursery furniture, garden furniture, scatter
cushions, seat pads, pillows, loose and stretch furniture
coverings and other replacement furniture to be used in a
rental property.
The regulations do not apply to:
Antique furniture and furniture made prior to 1950, bed clothes
and duvets, pillow cases, curtains, carpets and sleeping bags.
Do not use fire retardant sprays as these only fire proof
the outside. It is the foam inside that must be protected.
Failure to comply can lead to a 6 month prison sentence or
a fine of £5000.00 and much more in the case of death!
What Is A Contract?
A contract is an agreement between at least two parties with
the intention to create a legal relationship. Within the contract
are specified terms and should either party break these terms
then they are in breach of contract. If one party decides
that the breach is important enough then they can rescind
the contract and seek compensation through the courts. If
the courts agree then they will award damages and maybe costs
to the party against whom the breach occurred.
Within the lettings industry a landlord will normally be
party to two contracts.
1. Landlord and Agent.
2. Landlord and Tenant.
Important to note that a contract can be either written or
verbal. Written is obviously the best form so that all parties
can see on paper what they are letting themselves in for.
A classic form of verbal contract is the landlord that agrees
with the tenants to provide them with a washing machine and
then fails to provide the appliance. The tenants can state
that the landlord is in breach of the contract that was formed
prior to moving into the property. Should the landlord use
the services of an agent and the agent tells the tenants that
the landlord will provide a dishwasher and then fails to inform
the landlord of this agreement then the agent could well be
liable as he made the agreement. I must admit that many agents
even today still promise things to clinch a deal and “forget”
to mention it to the landlord.
All terms of the let should be included in the contract so
as to leave no grey areas. Regardless of how small and trivial
it may seem it is always best to be safe.
Contracts appear in everyday life and we all abide by them
or impose them. For there to be a contract there must be an
offer, an acceptance and consideration.
For example the tenant offers to rent your property, you
accept and the tenant pays the money. The money is the consideration.
As a landlord you will come across statutes or laws which
are an Act of Parliament. No contract can overlook these and
they must be adhered to. The Housing Act of 1988 imposes many
statutes on the landlord and no amount of altering of contracts
can over ride these laws.
Above all always read the contract between you and the agent
and between you and the tenant. No matter how boring or long
they are. If in doubt ask! If you can not get a satisfactory
reply either seek legal advice or drop out of negotiations.
Referencing:
Referencing a tenant will help you establish the fact that
he/she is who they say they are.
What references should I ask for?
None - never ask the tenant to supply references - it is so
easy to make them up especially with computers and photocopiers
being as advanced as they are.
What referees do I ask for?
As an agent we always asked the tenant to supply the following
referees:
Bank - account managers name, address of bank, bank account
number and sort code and a telephone number (or look it up).
Employment - the name and address and telephone number of
the employer and the correct department as well as any employer
number.
Previous Landlord - a very useful one this, get the name,
address and telephone number.
Now if the tenant can not provide the above information,
look carefully as to the reasons given. Always be sceptical,
but never too nosey as that may well put the tenant off. The
tenant may have good reason.
What If?
The tenant has no bank account?
Then perhaps they have a building society account, if so then
ensure you get these details instead and request a reference.
The tenant is about to start work for the first time?
Tread carefully. Firstly you will need a reference from an
educational establishment that proves he/she attended there
and gained the qualifications required to get the employment
they have got. Secondly you will need a letter from the employer
or future employer confirming that the tenant has employment
and that the salary is sufficient to cover the monthly rent.
The tenant is about to start work for a new employer?
Get a reference from the previous employer, stating how long
they were with the company and that they would not hesitate
to re-employ the tenant in the future (letter enclosed a little
later) and get a letter from the tenants' new employer stating
that they are about to start work on a permanent contract
and that the salary is sufficient to cover the monthly rent.
Tenant has no previous landlord?
Then we always sought references from 2 professional people,
i.e. doctor, dentist, solicitor etc stating that the character
of the tenant was trustworthy and that they would be unlikely
to cause any nuisance or grief to the prospective landlord.
Always write to these people yourself, or if the tenant provides
you with written references ensure that they are true, by
contacting the person who has signed the reference.
Points to note:
If a potential tenant does not want to provide you with any
information then think twice about letting them becoming your
tenant.
Never judge people on appearances - yes, even I have been
duped into this one within the first year of my training -
cost the landlord a fortune!
Always check the references and that the referee actually
exists!
If the tenant does not have a bank account or building society
account, how are they going to pay you your rent? How do they
get paid from their employer? How can they prove to you that
they are financially stable and are not going to have a problem
with paying the rent?
Remember that references are given in the strictest of confidence
and you must not pass any of the information you receive about
the tenant onto any other person without the tenants' permission.
Bank references are the worst references. Not only do they
charge a fee of around £10 - £15.00 per status
enquiry, they take an age to deliver them. Our method was
to get the tenant to sign a standard letter, enclose a credit
card number or tick a box saying that the fee could be taken
from their account, saving you having to pay and send the
original to the bank. As I said we will enclose the letters
at the end of this document. Bank references can be bit confusing
when you get the reply. For example if the bank returns a
reply stating the person in question is good for the amount
of £……. Per month - no problem. If the bank
says they should be good for the amount, not a bad reference
really. Should the bank say they are surprised to see the
person in question having this amount of money taken from
their account watch out. However, if they say they are surprised
but as long as it is replacing current commitments then this
could be fine as long as the person in question does just
that. i.e. replaces one monthly rent with yours! Read the
reply carefully. Remember banks will never be derogatory about
the person they are replying about after all it is their customer,
but a lot can be read into them. So please check them carefully.
Consents:
Consents that may be required to let your property.
Freehold:
Always check your lease as even though you own the freehold
to your property there may be a clause that forbids the renting
out of the property. Many freeholds for example forbid the
right to use the premises as a business.
Pay attention to details. Consult your lease and see if there
is any clause that states that you need to have the agreement
of the freeholder before you can rent out your property. Some
freeholders will insist that they see the references and even
meet the prospective tenants prior to the let being allowed
to go ahead. Your lease may have clauses in it which will
inflict obligations on the tenant. Noise levels etc so it
is advisable to attach a copy of the head lease to your tenancy
agreement and get the tenant to sign the agreement on the
understanding that they have seen and read the said head lease.
You must seek the approval of your mortgage company to let
out your property. Failure to do so can lead to you being
in breach of contract. They will normally say yes as long
as you pay a small fee for their “administration”
work. It has been known for a mortgage company to raise the
rate of interest on a loan because they see it as a commercial
venture. When this occurred we argued on behalf of our landlord
that he had to rent out the property as it was too small for
his requirements and he did not need to sell it. Another good
way around this is to say that you are moving jobs and will
not be living in the area anymore but want to hang onto the
property. Make sure you inform them of any renewals that you
may negotiate – they will undoubtedly charge another
fee – but at least you have told them.
You must obtain permission from both the providers of your
contents insurance and your buildings insurance when you rent
out your property. They may try and raise your premiums, but
there are many providers out there who will provide you with
an excellent deal – such as the one on our web site.
All insurance policies should include third party cover. This
is required in case the tenant injures himself in your property
– if this is the case and you have the insurance in
place then the insurer should pay, as long as you have sort
consent from them.
Tenancy Deposit Schemes:
As of 6th April 2007 the way in which deposits are held for
Assured Shorthold Agreements changed.
By law a landlord will have to lodge the deposit with a scheme
that has been approved by the Government. Failure to do so
could lead to serious penalties as set out at the end of this
briefing.
The three schemes are as follows:
*The Deposit Protection Service:
This service we believe is probably the better one of all
three as it is free to use and although you have to send them
the deposit, any monies that are deducted from the original
sum will earn interest for you.
*Tenancy Deposit Solutions Ltd:
This scheme is an insurance based scheme and as such costs
the landlord money to not only have them insure the deposit
but also an annual membership fee is payable whilst they hold
the deposit. Their fees are: £58.75 for joining, £30.00
per deposit and £14.75 annual membership renewal. Although
you get to keep the deposit you are still having to pay which
is somewhat unfair on the landlord and also the tenant if
the landlord decides to pass on the charge.
*The Tenancy Deposit Scheme:
Quite frankly this is the most confusing of all the schemes
and it appears that they will charge a Landlord in the region
of £95.00 a year. However, they do not make it at all
ckear as to what any other charges may be made if any.
The system will work as follows:
At the beginning of the tenancy the tenant will in most cases
pay a deposit to the landlord who must then ensure that it
is protected. Where the landlord chooses to use the custodial
scheme (free of charge) he/she will simply send the deposit
to the scheme at the beginning of the tenancy. Where the landlord
chooses to use an insurance based scheme the landlord keeps
the deposit and pays a fee to the scheme providers.
Within 14 days of taking the deposit, the landlord mustprovide
the tenant with the following details regarding the deposit:
The contact details of the tenancy deposit scheme selected.
The landlord's contact details.
How to apply for the release of the deposit.
Information explaining the purpose of the deposit.
What to do if there is a dispute about the deposit.
At the end of the tenancy the landlord and tenant should
agree as to whether any deductions are necessary and apply
for the release of the deposit from the scheme. The tenant
should have the agreed sum returned from the scheme within
10 days.
It is unfortunate on the tenants that the people who thought
of the scheme did not take into account that many tenants
use their deposit as a deposit on the next property - nor
can the tenant have any say as to which scheme should be used
- it is totally up to the landlord.
In the event of a dispute and no agreement being reached
as to how the money should be divided up then the scheme holding
the deposit will provide a free resolution service. The disputed
amount will be held until resolution.
Failure to comply carries the following penalties:Where the
landlord does not inform the tenant of the whereabouts of
the deposit, the tenant can apply to the local courts. The
courts can then order the landlord to either repay the deposit
or get it protected. If the courts wishes are not carried
out within 14 days the landlord will be ordered to repay three
times the amount of the deposit to the tenant within 10 days.
Futhermore where the deposit has not been protected the landlord
can not evict the tenant using a Section 21. Therefore, by
not securing the deposit you will not be able to get your
house back and face a large fine.
Inventory:
This is going to be a vital document that should be drawn
up by professional inventory clerks. For more information
on inventories, please click here. We are curerntly putting
together a list of inventory clerks that you can contact.
Not an Assured Shorthold Tenancy:
Where your tenancy agreement is not an Assured Shorthold Tenancy
the Tenancy Deposit Scheme does not cover you and you will
continue to take deposits as you did before.
Guarantors:Some landlords plan to get around the Tenancy
Deposit Scheme by simply not taking deposits. This is a practice
that we ourselves often use for our student lets. The idea
is simple, instead of taking a deposit you get a letter of
guarantee from the parents, agree the inventory with them
and at the end of the tenancy agree the check out with them.
The guarantor has made a formal promise to reimburse you for
any breakages, non payment of rent and bills and of any unnecessary
wear and tear.
Cleaning:
As a Landlord you have a duty of care to your tenant to ensure
that the property you are renting to them is habitable for
humans. This actually includes ensuring that the property
is clean for when your tenants move in. Naturally, the cleaner
the property is at the start of the rental term, the more
likely the tenants are going to keep the property in a clean
condition.
It all depends on the sort of tenants you want to attract.
If you are looking for professional persons then I suggest
that you ensure that the property is in excellent condition
before you start to market the property. This will not only
entice potentially excellent tenants, but will also show them
that you are a landlord who takes pride in their property
and therefore they will believe and it is usually the case
that should they have a problem with the property in the future,
that you will assist them in a professional manner. Looks
do count!
The whole property should be cleaned thoroughly from top
to bottom. In our agreements we state that the tenant must
have the property professionally cleaned prior to their contract
terminating. An inventory clerk will be able to pick up on
whether this has been done or not.
In theory therefore you should be able to hire professional
cleaners in to clean your property just the once. Then the
tenants have the property cleaned prior to the next set moving
in. It is another expense, but it is worth it in the long
run. Besides it is far easier to get a professional company
in with all their strong detergents than have yourself scrubbing
away with the usual High Street brand names.
As I said, once you have had it cleaned, then the tenants
have to have it professionally cleaned by the terms of their
contract. If they fail to do so then you are within your rights
to have the property cleaned to a satisfactory standard at
the cost of the tenants. But you will actually only get away
with this if you have had a professional inventory done, both
make, and check out. Never cut corners, it can cost you a
lot of valuable time and money. Professional cleaning should
also include the cleaning of the carpets, where applicable.
Thus you can prove to the inventory clerk when he/she does
the make that there are no stains. When it comes to the check
out and the inventory clerk spots the stains, then you can
assure the tenant that it is their responsibility to get them
removed or that you will do it at their expense.
In short, we advise that you have the property professionally
cleaned prior to marketing the property to attract the best
sort of tenants. They will then have the property cleaned
at the end of their tenancy ready for the next set and so
you should not have to have the property cleaned at your expense
again. A clean property, a clean tenant! We hope!
Tenancy Agreements:
What is a tenancy?
A tenancy is the granting of the right to exclusive use of
a landlords property and land for a determined period of time.
The owner of the land, including buildings that may be on
it is called the Landlord. In return for the use of the land,
a rent is paid as agreed between the Landlord and the person
using the land known as the Tenant.
It is worth pointing out that the Landlord can often be a
Leaseholder. For example they own a flat on a long lease but
have to pay a ground rent themselves to the owner of the land
upon which the flats were built. The person owning the land
is referred to as The Freeholder.
So you often get the situation whereby the Freeholder is
paid rent by the Leaseholder (Tenant) who in turn is paid
rent by the Tenant. Let's not get too complicated.
All tenancy agreements must comply with statutory law. This
is law that is passed in parliament and is therefore legally
binding and enforceable without any argument at all.
The granting of a tenancy is done upon the agreement of two
parties, The Landlord and The Tenant. This can unwisely be
done verbally by both parties agreeing the length of time
the agreement shall be in force, the rent to be paid and a
notice period. This is so unwise we are not going into it
any further. All sensible landlords will have an tenancy agreement
in place if for no other reason than peace of mind should
the landlord have to take the tenant to court. Judges still
tend to side a little more with the tenant than the landlord
if they can! Anyone can draw up a tenancy agreement! But you
need to know what to say in it to ensure that you are complying
with the law of the land and are not being unfair to the tenant.
There are several types of residential tenancies currently
in force:
1. The Protected Tenancies Rent Act 1977 - tenancies entered
into before 15 January 1989 .<
2. Protected Shorthold Tenancies Housing Act 1980
3. The Assured Tenancy - introduced by the Housing Act 1988.
4. The Assured Shorthold Tenancy - introduced in 1988 but
modified by the 1996 Housing Act.
Protected Tenancies Rent Act 1977
Otherwise known as Regulated Tenancies, they are governed
by the Rent Act 1977 and the Housing Act of 1988 has absolutely
no effect on them whatsoever. In order for a tenancy to be
legitimately a Protected Tenancy under the 1977 Act, the dwelling
must be let as a separate dwelling under section 1 of the
Act and must not fall into any of the express exclusions under
Part 1 of the Act. A protected tenancy is a statutory tenancy
rolling on from month to month giving the tenant the right
to a fair rent, not a market rent! At no time can this type
of tenancy be changed to An Assured Shorthold Tenancy, even
if ownership changes or a new tenancy was granted after January
15th 1989 (please note new tenancy, not new tenant) .
Protected Shorthold Tenancies Housing Act 1980
This Act was introduced to encourage residential lettings
in the private sector. This type of agreement can not be created
nowadays, since the Housing Act of 1988 cam into force. Whilst
the tenant is still protected by rent control, the tenant
has no right to possession at the end of the fixed term and
the landlord can invoke mandatory grounds for possession,
as long as the landlord has abided by his statutory requirements.
A protected shorthold tenancy could be granted for a period
of 1 to 5 years. Note: a Protected Shorthold Tenancy could
only be granted if a service was served on the tenant prior
to the commencement of the tenancy and a protected shorthold
tenancy could not be converted to An Assured Shorthold tenancy
unless the fixed term came to an end after January 15th 1989
when the Housing Act 1988 came into force.
The Assured Tenancy:
This type of tenancy gives the tenant the right to possession
of the property even after the fixed term has come to an end.
The only way a landlord can get rid of a tenant is by court
order or the tenant leaves voluntarily. Note that the tenancy
must include at least one tenant for whom the property is
their principal home. If at any time this is not the case
then the tenancy ceases to become assured, It is however,
very difficult to prove this and the courts are not always
that favourable to landlords. Once the fixed term of the tenancy
comes to an end, unless the tenancy is renewed it becomes
a statutory periodic tenancy. This means that the tenancy
is governed by law to run from period to period. Period being
the term upon the rent is paid, usually monthly.
The following can not be Assured Tenancies:
1. The tenancy was created before January 15th 1989
2. A property who's rental value is in excess of £25,000
per annum
3. A tenancy where the rent payable is less than £1,000
per annum in Greater London and £250.00 elsewhere.
4. A let to a student granted by an educational establishment
5. A holiday let.
6. A let where there is a resident landlord. If a landlord
owns more than one flat in a block purposefully built as flats
(not a converted house) and the landlord lives in one of the
flats, then the landlord is not resident.
NOTE:
An increase in the rent can be proposed by the landlord once
every twelve months by serving a notice of their intention
to do so under section 13 of the Housing Act 1988. The tenant
can refer the increase to a fair rent board.
A landlord can not terminate an assured tenancy by refusing
to renew a fixed term that has come to an end by serving a
Notice to Quit. An Assured Tenancy can only be brought to
an end by the tenant leaving freely or in the courts.
Fortunately the strict regime of this type of tenancy was
altered by the Housing Act 1996. Since February 28th 1997
, the method of creating an assured tenancy is by:
1. Serving notice on the tenant at the commencement of the
tenancy stating that the tenancy will be assured.
2. include a clause in the agreement stating that the tenancy
will be assured.
3. serving notice on the tenant during the fixed period that
the tenancy will no longer be an assured shorthold tenancy
but will become an assured tenancy.
Recovering Possession Of Assured Tenancy:
For a periodic tenancy or a fixed term tenancy with a break
clause, the method prescribed in the Housing Act 1988 must
be complied with:
1. The landlord serves a notice of intended possession proceedings
on the tenant, using the notice shown in the Act under section
8
2. The landlord must have grounds for possession.
There are two types of grounds for possession:
a/ Mandatory - possession must be granted
b/ Discretionary - the court decides that there are reasonable
grounds - or not.
Grounds For Possession:
Mandatory:
1. A claim by the owner who has:
(a) lived in the property before it was let or
(b) wishes to recover possession because he needs it as a
home for himself or spouse.
2.A claim by a mortgagee whose mortgage predates the grant
of the tenancy who needs possession in order to sell the property.
A notice must have been served before the tenancy commenced
by a mortgagor who is an owner/occupier on the tenant.
3. An out of season let of a holiday home for a period of
less than 8 months. The property must have been let on a holiday
basis for the previous 12 months. Notice must have been served
by the landlord not later than the beginning of the tenancy
that the property may be recovered on this ground.
4. A tenancy of not more than 12 months and at sometime during
the preceding 12 months the property was let to a student
by an educational institution. A notice must have been served
not later than the commencement date of the agreement that
possession could be sought on this ground.
5. A let of a dwelling that has been used for ministerial
purposes and the courts are satisfied that it will again be
used for ministerial purposes.
6. The landlord wants to demolish or reconstruct the property
and needs possession so to do.
7. The tenant has died and possession has passed to a person
without entitlement. ( This is only applicable during a periodic
term).
8. Two months (8 weeks) rent arrears exist both at the time
of serving notice and on the day of the court hearing.
Discretionary:
9. The tenant has been offered suitable alternative accommodation
10. Some rent was due when the notice was served and at the
date of the proceedings.
11. The tenant has been persistently late in paying the rent.
12. Any other obligation in the agreement has been broken.
13. The behaviour of the tenant or someone living with them
has caused deterioration to the property or common parts.
14. The tenant or someone living with them is guilty of nuisance
or noise anywhere in the locality, or has been convicted of
using the property for immoral or illegal means.
15. The condition of the furniture has deteriorated through
ill-treatment by the tenant.
16. The tenancy was granted because the tenant was employed
by the landlord and such employment has ceased.
17. The tenant falsely induced the landlord into the tenancy.
Notice Of Possession Proceedings:
Apart from Grounds 3,4,8,10,11,12,13,14,15 and 17 where 2
weeks notice will suffice, 2 months notice must be given to
the tenant that you intend to seek possession through the
Courts. If you are seeking possession under Ground 8, (2 months
+ rent arrears etc) you must keep an accurate record of all
documentation, letters etc that have been sent to the tenant
and when. This is in case you have to revert to possession
under Grounds 10 and 11 (discretionary Grounds). Always ensure
that the correct notice form is used otherwise the proceedings
will be invalid. You must use a Section 8 of the Housing Act
1988.
Housing Act 1996:
This Act virtually made the Assured Tenancy extinct. The
Act relaxed the minimum period of tenancy for the tenant and
so now any tenancy agreement can be An Assured Shorthold Agreement
(as long as it abides by the other laws). The Assured Tenancy
is very unattractive to the majority of Landlords and should
they wish for An Assured Tenancy to be in place, they must
notify the tenant in writing prior to the tenancy commencing
that this is the case.
Assured Shorthold Tenancies:
A vastly better type of tenancy than the Assured Tenancy,
but be warned that this is still a type of Assured Tenancy.
Note that for an Assured Shorthold Tenancy these points are
vital:
1. The tenant must be an individual or group of individuals
for whom at least one the property is their principal address.
2. The tenancy commenced after January 15th 1989
3. The Landlord can not terminate the tenancy unless he has
given two months written notice in the form of Section 21
of the Housing Act 1988.
If the tenancy becomes periodic i.e. the fixed term has run
out, then the tenancy continues until the tenant gives one
months notice or the landlord gives 2 months notice. Such
notice should coincide with the rent date.
Possession of the property is guaranteed to the tenant for
a minimum period of six months. Possession will not be given
to the landlord unless the tenant has been in situ for a minimum
of 6 months. Be warned then that if you allow a friend to
stay in a property for a temporary period of 2 months and
that friend suddenly decides they want to stay - they can
for a minimum period of 6 months. The periodic tenancy can
continue for eternity - there is no time limit. The rent can
be raised by issuing a section 13 notice on the tenant - a
legal form that must be used in the proper manner and format
as prescribed by legal stationers. Plus also remember that
the rent can not exceed £25,000 per annum.
Company Lets:
A tenancy that is granted to a company is not protected under
the Housing Acts of 1988 or 1996. All agreements created will
fall under contract law. A different kettle of fish altogether.
I strongly advise that you employ a solicitor to look through
the contract. Companies that rent properties for employees
on a regular basis often have their own agreements and these
must be looked through in fine detail. The main points to
remember are :
Always reference the company.
Ensure the company has a valid registered address in the
UK
Ensure you have named occupiers - or that there is a clause
saying that the occupiers can not be changed without your
written consent. This prevents the company from using your
property as a stop over for employees and therefore increasing
the wear and tear as well as you not knowing how many people
are in the property at anyone time.
The company is the tenant and therefore you should only accept
rent from the company. If the company says that the occupier
is to pay the rent then make sure there is a clause in the
agreement that says the occupier is acting as an agent on
behalf of the tenant (the company).
Accepting rent:
Always ensure that you accept rent from the persons nominated
on the contract. Because an Assured Shorthold Agreement can
be made verbally as well as in writing, accepting the rent
from an unknown source could be seen as the making of a contract
between two parties and therefore the person paying the rent
could state that they have entered into an agreement to rent
the property from you, without you realising it. Horrendously
complicated I know, but true.
Section 21
The Housing Act of 1988 section 21, stated that a minimum
of two months notice must be served on a tenant. In 1996 the
Housing Act was amended slightly and under section 98 of the
1996 Housing Act it is stated that the notice must be served
in writing. If you need to go through the accelerated possession
procedure proof of notice is required so you must give notice
in writing.
Service of notice can occur at any time after the commencement
of the tenancy. Do not give notice before the tenancy has
started! However, you must allow the tenant to be in situ
for a minimum of 6 months.
Ensure the format of the notice is correct (as below).
All the tenants must be named on the notice especially in
the case of sharers. If you want to be really careful then
serve each individual with notice.
Please note that the serving of notice varies according to
the type of tenancy.
If notice is being served during the fixed term of the notice
then you can do it in any form as long as you give the following
details.
1. Name and Address of Tenants
2. Name and Address of Landlord or Landlords if there is
more than one.
3. Address of the property which is being sought for possession.
4. Date the notice is served.
5. Date possession is required.
6. You must state that possession is being sought under the
Housing Act 1988 section 21 (1) (b) or section 21 (4)(a) -
Remember that if notice is being served during the fixed term
of the tenancy then section 21 (1)(b) applies.
The best way to serve notice is to deliver it by hand or
first class mail. If you can, get the tenants to sign and
return a copy to you.
Periodic Tenancies:
These are tenancies that have gone past the fixed term and
are now into "periods". A period being the time
the rent is paid. i.e. every month or every 2 months etc.
Notice can be served on the tenants again you must give at
least 2 months notice, but you must ensure that the notice
period brings the tenancy to an end at the end of a rental
period. Therefore, if the rent is paid on the 25th of each
month, ensure the notice will bring the tenancy to an end
on the 25th of the month. For example I receive rent from
my tenants on the 25th of each month. Today is the 30th. I
have to give 2 months notice and bring the tenancy to an end
at the end of a rental period. As I have just missed the 25th
July I can give notice to the tenants for possession of the
property on the 25th October 2001 . If I had thought about
it I could have given notice to the tenants on the 20th of
July and had the property back on the 25th September 2001
.
Note if the rent is paid quarterly then you can only give
notice to run out at the end of the quarter.
Always keep a copy of the notice served and of any covering
letter.
Recovering Possession:
Mandatory:
1. A claim by the owner who has:
(a) lived in the property before it was let or
(b) wishes to recover possession because he needs it as a
home for himself or spouse.
2.A claim by a mortgagee whose mortgage predates the grant
of the tenancy who needs possession in order to sell the property.
A notice must have been served before the tenancy commenced
by a mortgagor who is an owner/occupier on the tenant.
3. An out of season let of a holiday home for a period of
less than 8 months. The property must have been let on a holiday
basis for the previous 12 months. Notice must have been served
by the landlord not later than the beginning of the tenancy
that the property may be recovered on this ground.
4. A tenancy of not more than 12 months and at sometime during
the preceding 12 months the property was let to a student
by an educational institution. A notice must have been served
not later than the commencement date of the agreement that
possession could be sought on this ground.
5. A let of a dwelling that has been used for ministerial
purposes and the courts are satisfied that it will again be
used for ministerial purposes.
6. The landlord wants to demolish or reconstruct the property
and needs possession so to do.
7. The tenant has died and possession has passed to a person
without entitlement. ( This is only applicable during a periodic
term).
8. Two months (8 weeks) rent arrears exist both at the time
of serving notice and on the day of the court hearing.
Discretionary:
9. The tenant has been offered suitable alternative accommodation
10. Some rent was due when the notice was served and at the
date of the proceedings.
11. The tenant has been persistently late in paying the rent.
12. Any other obligation in the agreement has been broken.
13. The behaviour of the tenant or someone living with them
has caused deterioration to the property or common parts.
14. The tenant or someone living with them is guilty of nuisance
or noise anywhere in the locality, or has been convicted of
using the property for immoral or illegal means.
15. The condition of the furniture has deteriorated through
ill-treatment by the tenant.
16. The tenancy was granted because the tenant was employed
by the landlord and such employment has ceased.
17. The tenant falsely induced the landlord into the tenancy.
Notice Of Possession Proceedings:
Apart from Grounds 3,4,8,10,11,12,13,14,15 and 17 where 2
weeks notice will suffice, 2 months notice must be given to
the tenant that you intend to seek possession through the
Courts. If you are seeking possession under Ground 8, (2 months
+ rent arrears etc) you must keep an accurate record of all
documentation, letters etc that have been sent to the tenant
and when. This is in case you have to revert to possession
under Grounds 10 and 11 (discretionary Grounds). Always ensure
that the correct notice form is used otherwise the proceedings
will be invalid. You must use a Section 8 of the Housing Act
1988.
Housing Act 1996:
This Act virtually made the Assured Tenancy extinct. The Act
relaxed the minimum period of tenancy for the tenant and so
now any tenancy agreement can be An Assured Shorthold Agreement
(as long as it abides by the other laws). The Assured Tenancy
is very unattractive to the majority of Landlords and should
they wish for An Assured Tenancy to be in place, they must
notify the tenant in writing prior to the tenancy commencing
that this is the case.
Section 21 - Notice of POssession Order.
The Housing Act of 1988 section 21, stated that a minimum
of two months notice must be served on a tenant. In 1996 the
Housing Act was amended slightly and under section 98 of the
1996 Housing Act it is stated that the notice must be served
in writing. If you need to go through the accelerated possession
procedure proof of notice is required so you must give notice
in writing.
Service of notice can occur at any time after the commencement
of the tenancy. Do not give notice before the tenancy has
started! However, you must allow the tenant to be in situ
for a minimum of 6 months.
Ensure the format of the notice is correct (as below).
All the tenants must be named on the notice especially in
the case of sharers. If you want to be really careful then
serve each individual with notice.
Please note that the serving of notice varies according to
the type of tenancy.
If notice is being served during the fixed term of the notice
then you can do it in any form as long as you give the following
details.
1. Name and Address of Tenants
2. Name and Address of Landlord or Landlords if there is
more than one.
3. Address of the property which is being sought for possession.
4. Date the notice is served.
5. Date possession is required.
6. You must state that possession is being sought under the
Housing Act 1988 section 21 (1) (b) or section 21 (4)(a) -
Remember that if notice is being served during the fixed term
of the tenancy then section 21 (1)(b) applies.
The best way to serve notice is to deliver it by hand or
first class mail. If you can, get the tenants to sign and
return a copy to you.
Periodic Tenancies:
These are tenancies that have gone past the fixed term and
are now into "periods". A period being the time
the rent is paid. i.e. every month or every 2 months etc.
Notice can be served on the tenants and again you must give
at least 2 months notice, but you must ensure that the notice
period brings the tenancy to an end at the end of a rental
period. Therefore, if the rent is paid on the 25th of each
month, ensure the notice will bring the tenancy to an end
on the 24th of the month. For example I receive rent from
my tenants on the 25th of each month. Today is the 30th. I
have to give 2 months notice and bring the tenancy to an end
at the end of a rental period. As I have just missed the 24th
July I can give notice to the tenants for possession of the
property on the 24th October 2001 . If I had thought about
it I could have given notice to the tenants on the 20th of
July and had the property back on the 24th September 2001
.
Note if the rent is paid quarterly then you can only give
notice to run out at the end of the quarter.
Always keep a copy of the notice served and of any covering
letter.
Landlord and Tenant Act 1987 - Sections 47 & 48:
A question that is arising quite often now is "what
is Section 47 and 48"?
THE ANSWER:
Section 47: Landlord's name and address to be contained in
demands for rent
Section 48: Notification by the landlord of address for service
of notices.
Basically the law calls for the name and address of the landlord
to be issued to the tenant for the purposes of serving notice
by the tenant. The tenant must have an address in England
and Wales for the landlord where they can serve notices.
For the purposes of Section 47 and 48 of The Landlord and
Tenant Act 1987 name and address of the landlord should be
included in the tenancy agreement and it should be stated
that this is in line with the relevant act etc.
As the courts see it, rent can not be demanded from a tenant
unless they have an address and name to which they can pay
the rent. Therefore, as a landlord you can not demand rent
from the tenant if you have failed to issue them with notice
of your address.
Is it important?
Yes, because at the end of the day you can not serve notice
of possession on a tenant whom you have not given notice of
your address to. i.e. the tenant says to the judge I did not
know where to send the rent to! Without notice, the rent is
not lawfully payable.
In short:
Always ensure there is a clause in your tenancy agreement
that states "that for the purposes of Sections 47 and
48 of The Landlord and Tenant Act 1987 the landlord's name
and address is:"
Section 11 - Repairing Obligations:
Repairing Obligations:
Under the Landlord and Tenant Act of 1985, the landlord is
responsible by law for certain repairs. We have enclosed the
wording of Section 11 which deals with the repairing obligations
of a landlord. However, generally speaking, as a landlord
you are responsible for repairs to the structure and exterior
of the property, sinks, baths and any other sanitary installations
within the property. You are also responsible for the heating
in the property.
By this, we understand that as a landlord you should ensure
that all the sanitary installations and heating including
pipes as well as boilers and radiators are in safe working
order at all times. Should a tenant complain that there is
a malfunctioning unit it is in your best interests to ensure
that it is fixed as soon as possible to ensure minimum risk
to the tenants health.
The Landlord and Tenant Act 1985 Section 11
1. Disclosure of landlord's identity
(1) In a lease to which this section applies (as to which,
see sections 13 and 14) there is implied a covenant by the
lessor -
(a) to keep in repair the structure and exterior of the dwelling-house
(including drains, gutters and external pipes),
(b) to keep in repair and proper working order the installations
in the dwellinghouse for the supply of water, gas and electricity
and for sanitation (including basins, sinks, baths and sanitary
conveniences, but not other fixtures, fittings and appliances
for making use of the supply of water, gas or electricity).
(c) to keep in repair and proper working order the installations
in the dwellinghouse for space heating and heating water.
(1A) If a lease to which this section applies is a lease
of a dwelling-house which forms part only of a building, then,
subject to subsection (1B), the covenant implied by subsection
(1) shall have effect as if-
(a) the reference in paragraph (a) of that subsection to
the dwelling-house included a reference to any part of the
building in which the lessor has an estate or interest; and
(b) any reference in paragraphs (b) and (c) of that subsection
to an installation in the dwelling-house included a reference
to an installation which, directly or indirectly, serves the
dwelling-house and which either-
(i) forms part of any part of a building in which the lessor
has an estate or interest; o
(ii) is owned by the lessor or under his control.
(IB) Nothing in subsection (1A) shall be construed as requiring
the lessor to carry out any works or repairs unless the disrepair
(or failure to maintain in working order) is such as to affect
the lessee's enjoyment of the dwelling-house or of any common
parts, as defined in section 60(1) of the Landlord and Tenant
Act 1987, which the lessee, as such, is entitled to use.
(2) The covenant implied by subsection (1) ("the lessor's
repairing covenant") shall not be construed as requiring
the lessor-
(a) to carry out works or repairs for which the lessee is
liable by virtue of his duty to use the premises in a tenant-like
manner, or would be so liable but for an express covenant
on his part,
(b) to rebuild or reinstate the premises in the case of destruction
or damage by fire, or by tempest, flood or other inevitable
accident, or
(c) to keep in repair or maintain anything which the lessee
is entitled to remove from the dwelling-house.
(3) In determining the standard of repair required by the
lessor's repairing covenant, regard shall be had to the age,
character and prospective life of the dwelling-house and the
locality in which it is situated.
(3A) In any case where-
(a) the lessor's repairing covenant has effect as mentioned
in subsection (1A), and
(b) in order to comply with the covenant the lessor needs
to carry out works or repairs otherwise than in, or to an
installation in, the dwelling-house, and
(c) the lessor does not have a sufficient right in the part
of the building or the installation concerned to enable him
to carry out the required works or repairs,
then, in any proceedings relating to a failure to comply
with the lessor's repairing covenant, so far as it requires
the lessor to carry out the works or repairs in question,
it shall be a defence for the lessor to prove that he used
all reasonable endeavours to obtain, but was unable to obtain,
such rights as would be adequate to enable him to carry out
the works or repairs.
(4) A covenant by the lessee for the repair of the premises
is of no effect so far as it relates to the matters mentioned
in subsection (1)(a) to (c), except so far as it imposes on
the lessee any of the requirements mentioned in subsection
(2)(a) or (c).
(5) The reference in subsection (4) to a covenant by the
lessee for the repair of the premises includes a covenant
-
(a) to put in repair or deliver up in repair,
(b) to paint, point or render,
(c) to pay money in lieu of repairs by the lessee, or
(d) to pay money on account of repairs by the lessor.
(6) In a lease in which the lessor's repairing covenant is
implied there is also implied a covenant by the lessee that
the lessor, or any person authorised by him in writing, may
at reasonable times of the day and on giving 24 hours' notice
in writing to the occupier, enter the premises comprised in
the lease for the purpose of viewing their condition and state
of repair.
What can the tenant do?
Unfortunately several landlords are of the impression that
they do not have to do anything. Well, you do because you
have a duty of care to your tenant! The term duty of care
is valid to just about everything we do in everyday life.
We all have a duty of care to each other! You must ensure
that the dwelling is safe, hygenic and that all the items
in the property are safe to use. We all know about the gas,
Electric and Furniture regulations, but bear in mind that
you should ensure that any other possible problem could be
put down to your negligence. For example, that gutter that
you have been meaning to fix for the last two years, suddenly
decides it has given up hanging on by its’ last hinge
and plummets to the ground, hitting the tenant as they walk
out of the door. Well, you will be liable! The tenant can
prosecute you for failing in your repairing obligations and
also seek compensation. Another very good reason to ensure
that you have the correct insurance policy for being a rented
property.
Many Landlords have asked us why they should repair something
that a tenant has damaged. The answer is because it is the
law.
As a landlord, it is often difficult to prove that the damage
was the fault of the tenant. You can get engineers in who
will say that the heating has broken down because it has been
on high all day for the last four months, but then there is
little you can do about this. The tenant has a right to heating
and if they are cold, then they are going to turn it on and
up. You have a duty to ensure that the heating is working
correctly at all times and it does not matter how the tenant
behaves.
We had an excellent case a few winters ago whereby the tenant
left the property for two months over Christmas and turned
the heating off. The pipes froze and burst and the water tank
split. The water tank was situated in the loft of a five storey
house that was being rented out for £2500 per month.
Upon the tenants return they rang the landlord and immediately
informed him of the disaster. The landlord rang us up in a
panic and asked what they should do. As we were arranging
for repair men to enter and replace carpets and decorate after
getting the dryers in it occurred to us to have a look through
the tenancy agreement. Sure enough, there was a clause that
stated that the tenant must inform the landlord if they are
going to be absent from the property for more than two weeks.
Plus we had also put in the contract that the tenant upon
leaving the property for any period of time must ensure that
the heating is left on so as to avoid the freezing of any
pipes. The tenant had failed on both counts and was faced
with a serious bill to pay. Fortunately they had the foresight
to take out insurance and we all lived happily ever after.
If you have a particularly difficult tenant who complains
the whole time about things that need mending, don’t
worry too much. At least you know the property is being looked
after! The term no news is good news, does not really apply
to landlords!
However, if you have a tenant who appears to be breaking
everything he touches, then your best course of action may
be to serve notice and deduct the cost of repair from the
deposit. Note however, that you will have to come to agreement
with the tenant and that it is unwise to just take the money
and run!
Safety Tips for Landlords
Personal Safety
Taking precautions applies to landlords and tenants and both
men and women.
Please take a few moments to read the following notes and,
to adopt these basic simple steps:-
1. Where possible arrange to be accompanied to, or at a viewing.
2. Communication is the key factor it is neither expensive
nor restrictive:-
• Ensure that you tell somebody where you are going,
who you are going with and what time and with whom you are
meeting.
• Tell them what time you expect to be back AND IF your
plans change let them know
3. Be prepared:-
•
Have a route planned to and from your destination.
• Make sure that you enough money for the journey and
check out parking facilities if you are driving.
• Carry your keys, travel card/ticket and phone card/mobile
phone in your pocket/separately give up your bag if necessary
- you are far more valuable than possessions, which can be
replaced.
• Carry a personal alarm - use it to shock or disorientate,
if you are in danger yell or scream - your voice is your best
defence
4. Be sensible:-
•
Avoid confrontation - do not meet aggression with aggression
• Look and feel confidant
• Avoid putting yourself at risk - trust your instincts
• Always be in control - drugs and alcohol dull your
awareness to danger!
What is an Agent?
An agent is a person who has the power to represent another
legal party (the principal) and brings the principal into
a legal relationship with a third party.
An insurance agent (or insurance broker) creates a legal
relationship between yourself (principal) and the insurance
company (third party).
What you must remember is that the insurance agent is your
agent, not the insurance company's agent. If she makes a mistake
completing your proposal it is your mistake, not the insurance
company's mistake.
Any loss therefore would be your fault, and your only redress
would be a claim on your agent for negligence.
Similarly, if your agent undervalues your property for an
insured sum, then an uninsured loss is your fault, not the
insurance company's fault.
How is an agency relationship created?
This may be brought about by a formal agreement (written
contract) but more usually by implication from the conduct
of the parties.
If you instruct an estate agent to sell your property, by
implication and custom and practice the agent is expected
to act on your behalf in his usual capacity - no written contract
is required.
Agent's duties to his Principal:
to follow instructions
to exercise due care and skill
to carry out instructions personally
to keep account of money owed
not to allow a conflict of interest
not to make a secret profit
not to take a bribe
The Agent's Legal Rights:
to claim payment for services performed
to claim expenses legitimately incurred
to exercise a lien (retain and hold goods pending payment)
over the principle's property
Payments made to, or by, agents
If an agent fails to pay a third party, the principal remains
liable
If an agent absconds with money paid by a third party:
If the principle is undisclosed (identity not known to third
party) he sustains the loss
If the principle is disclosed the agent must have had authority
to accept money, otherwise the third party is still liable.
Using an Agent
If you use an agent, and there are some very good reasons
for doing so, you need to be very careful how you select one.
From a landlord's point of view, selecting an agent is every
bit as important as selecting tenants.
Remember, you hire an agent to reduce the stress of letting
property, not to increase it. If this is not the case, find
another agent fast!
There are always unscrupulous agents and "professionals"
around who will take your money and give you a poor or non-existent
service. Some have been known to go bankrupt owing landlord's
thousands in rent payments and tenant's deposits. However,
with a little care and common sense these types are easy to
spot.
You may decide to use an agent to let the property for you
and then carry out the management of your properties yourself,
or you may opt for a full management package. Either way you
want a professional service which you can rely on.
What should you look for:
Membership of one of the professional associations - see
the list above - evidence from their shop window and their
stationery.
They have Professional Indemnity Insurance cover.
Bonded or secure Deposit Scheme.
Experience, reputation and expertise - how long have they
been in business?
Give good advice on the property, decor, tenant types and
market.
They have a racial equality policy.
Valuations with integrity - it's easy to give a favourable
valuation to gain business.
Knowledge of the local market and good contacts for tenants,
buyers and sellers.
Competitive fees, with need hidden costs and surprises but
remember, cheapest is not always best!
Tenant Verifying - they operate a through tenant checking
and referencing system including identity checks.
Tenancy Agreements which are modern and comply with the Office
of Fair Trading recommendations.
They use good reliable contractors for their property maintenance.
They are fully conversant with letting laws including the
requirements of the Housing Act 2004.
It's important that landlords as well as letting and managing
agents keep themselves up-to-date with changes in the letting
laws.
Enticing Tenants
When you've got a property to let you'll want to find a suitable
tenant as soon as possible to avoid losing out on several
rounds of rent. Unfortunately, if word gets out that your
property is less than desirable it may be weeks or even months
before a potential tenant is willing to even look at it. To
avoid this sad scenario, entice tenants with an amazing ad
and perfectly prepped property. Before you know it you might
be overrun with offers!
Advertising the Property
Whether you are running a private listing or working with
an estate agent, make sure that any advertisements for your
property are clear and concise. Remember, potential tenants
don't want to waste your time or theirs and vague ads are
terrible for trying to decide if they should view a property.
If you are writing your own ads, avoid simply listing viewing
times and instead give a brief summary of the property (even
as something as simple as "two bedroom, one bath apartment
with city views and working fireplace" can help entice
tenants). Also be sure to include the date the property will
be ready for new tenants, the expected rent per week or month
and contact information so that a prospective tenant can get
in touch to ask questions or set up an appointment to view
the property.
Any expected security deposits that are to be paid up front
should also be included, and if you are only holding open
viewings at particular times, make this clear in the ad. If
you are working with an estate agent to advertise your property,
make sure that you both agree on an honest and clear ad for
the property and a few flattering photos. These pictures will
be especially important if the property is being listed online,
as prospective tenants have come to expect such things when
browsing the listings. Also, regardless of whether the advertising
will be in print or online, produced by you or your estate
agent, be very clear about the type of tenants you are anticipating.
If it is a property meant for students just say so, but if
you are only considering young professionals or families,
make this clear too. Again, the more specific the ad the less
time wasted by enquiries that will ultimately go nowhere.
Preparing the Property
Once you've got your property advertised, begin to prepare
it for viewing by potential tenants. To begin with, make it
look as big as possible. Light coloured walls, plenty of sunshine
(or even artificial light) and clean floors all go a long
way towards "opening up" a room, even if it is fairly
small or has low ceilings. Cleaning out clutter, removing
unnecessary furniture and taking away unneeded ornaments will
also help make rooms look larger. In fact, if you are renting
a full furnished property, be sure to only show the furniture
that is included in the rental price during viewings. Do not
add extras to make the property look more homely only to later
take them away before a tenant moves in. If you want to make
a property seem more welcoming, consider simply burning scented
candles before a viewing or pulling the old seller's trick
of baking some bread of cookies prior to a viewing and making
sure the scent wafts around all the rooms. Of course, all
of these tricks will be useless if the property is not in
good shape. Before showing it to potential tenants, make sure
that all unsightly blemishes (holes in walls, soiled carpets,
etc.) are fixed and all plumbing, heating and electrical systems,
as well as large appliances, are in good working order.
Enticing tenants to your rental property should not be a
hard task, but getting them to sign on the dotted line will
require proper preparation. Put in the time now to show your
property off to its fullest, and you'll be glad you did later.
Your Rights as a Landlord
Being a landlord is never easy and there is often a lot more
work involved than people realise. If you are a landlord or
are thinking about becoming one, you need to make sure that
you know your rights as a landlord. Whilst the emphasis is
usually on tenant rights, landlord rights are just as important
for making sure the relationship between tenant and landlord
is a good one. If you don’t exercise your rights as
a landlord you could find yourself being taken advantage of
by tenants, and possibly not fulfilling your role as landlord.
Your rights are just as important as those of the tenant,
and it is important to use those rights to make the tenancy
a successful one.
Landlord Access
Landlord access is one of the most important rights you have
as a landlord. You or the agent representing you have the
legal right to enter your property at reasonable times of
the day to carry out repairs or to inspect the property. You
need to give 24 hours’ notice in writing in order to
inspect the property, and it is also useful to make sure you
have arrangements about access for getting repairs done set
out in the tenancy agreement. Although tenants have the right
to be left in peace, it is your right and duty as a landlord
to keep the property in good condition and make any necessary
repairs. It is also in your interests to inspect the property
every few months to make sure everything is still in good
condition. Although tenants might not always find this convenient,
if you give them the correct notice there should be no complaints.
If the tenant will not give you access then you should seek
legal advice immediately.
Possession of Your Property
You cannot gain possession of your property from a tenant
during a fixed tenancy term without sufficient grounds. However,
after any fixed term has ended you can repossess the property
without grounds as long as you give 2 months’ notice.
Also, immediate possession is possible if the tenant has broken
any of the terms of the tenancy agreement, such as a failure
to pay rent or damage to the property. It is your right as
landlord to make sure that you get the property back at the
right time and that the tenant doesn’t stay longer than
they are legally entitled to. If you feel that there are grounds
to evict your tenant, then you should seek immediate legal
advice or contact a landlord association who will be able
to go through the tenant eviction process with you in detail.
Deposits
Although there is usually no problem with the security deposit
you collect at the beginning of the tenancy, it is within
your rights to withhold this deposit if the tenancy agreement
has been broken. If at the end of the tenancy there is damage
to the property or the tenant still owes rent, you are legally
allowed to keep the money that you were given as security
deposit. To avoid confusion regarding this matter, make sure
a detailed inventory is included with the agreement, and make
it clear that if damage occurs or rent is owed then the security
deposit will be withheld. As a landlord it is your right to
have the property handed back to you with everything in the
condition you left it, allowing for normal wear and tear of
course.
Whilst your tenant’s rights need to be respected, in
order for a tenancy to run smoothly you need to know your
rights as a landlord as well. Exercising your rights is part
of being a good landlord, and the more you use your rights
to benefit both yourself and the tenant then the easier the
tenancy will be and the less problems you will have.
Consider Local Demand Carefully
Renting out a property can be a lot harder than it looks.
Long-term landlords need to treat rentals as a business and
run it professionally. You also need to be ready to tackle
several challenges in a competitive market – a company
such as IcA can help you overcome each of them. 20,000 Landlords
now have access to this highly competitive service.
The Let-Only service is particularly popular (3% of gross
rent).Available throughout the UK. For details call 0800 183
0070 or visit the website
Whilst the government’s targetof having 50% of childrengoing
through college by2010 will lead to a 2.5% increase
in student numberseach year, in the student marketthe supply
of student accommodationcan still changequickly.
A few new halls of residenceand swanky self cateringblocks
and the university losingits attractiveness can
quickly change the demandsupplybalance and makerents fall
and properties hardto let.So ask the AccommodationOffice and
at the Town Hall
Planning Office to find outabout future growth in studentnumbers
and to see whatnew developments areplanned.And don’t
think a“Rigsbyesque” house will do.It won’t.
Other landlordshave all raised the bar andnow provide good
quality
accommodation with broadbandconnections for all theircomputer
kit.Unite and Bournston are justtwo new companies that now
build and rent out a highquality of accommodationfor students
providing, forexample, broadband connection
in their room as well as asecure and safe environment.They
hope to take up theslack caused by the lack ofstudent accommodation
–
Savills research has shownthat the proportion of studentsin
university providedhalls has fallen from 33% to25% over the
last 10 years.
However, there’s alwayslikely to be good demand forwell
positioned houses (closeas possible to the universitycollege)
as students like toshare a house with friends.
Be aware of the rules
Be aware of the rules onhouses in multiple occupation(HMOs)
which say that all
shared houses in England and Wales which have 3 or more storeys
AND five or more tenants now need a licence.
In some areas of England and Wales and throughout Scotland
and Northern Ireland,licensing has been extended
by local authorities to smallers hared houses with only 3people
(at least two of whomare unrelated).Ask at your local authority’s
housing office to see if licensing has been extended in yourarea.The
rules lay down minimum amenity standards like the number of
loos and wash basins a property must have, and there are somequite
stringent fire safety measures such as hardwired alarms and
fire doors etc, but nothing you would not expect to find in
any safety conscious hotel. However, many who have been in
the business a longtime have been taking advantage of the
high property prices and getting out.This could be a good
opportunity for others to move into an established business,
providing you can buy in at the right price and you make sure
you budget for any up-grading you may have to do.One sore
point with many operators is the variation in fees charged
for licensing arrangements from one authority to another.
Fees for licenses vary for a couple of hundred pounds up to
£2,000 in some areas and there are fines of up to £20,000
andeven criminal charges for not complying.
Leasehold flat-owners
can heave a sigh of relief since the introduction of new rules
enabling them to
dismiss incompetent and dishonest Managing Agents.
However, the process is dependent on proactiveleaseholders
asserting their rights. Awareness is thekey
to fighting back against those
sharks in the property management industry.
There are thousands of Property Management Company’s
in the United
Kingdom, all of which fall into three categories: ‘the
good’, ‘the bad’ and ‘the
ugly’. ‘Good’ managing agents keep their
standards high and clients happy by
regularly attending training courses, maintaining routine
inspections and
maintenance programmes and simply by not overcharging on buildings’
insurance and other expenses. ‘Bad’ managing agents
have insufficient
understanding of leasehold legislation and do not understand
what is
expected of them nor how to achieve a satisfactory level of
competence.
‘Ugly’ managing agents understand all too well
what is expected of them yet
are set on exploitation and are responsible for appalling
management
practices. These are the sharks of the industry.
Until recently, the instruction and removal of managing agents
remained the
vanguard of the freehold owner of the property (the freeholder).
Even if
leaseholders were considerably unhappy about the way in which
their
property was being managed, there was next to nothing they
could about it
without the freeholder’s intervention.
Many critics have argued that the government should act to
regulate the
industry and prevent such abuses from occurring. Indeed the
ODPM’s Select
Committee in 2003 suggested that selective licensing might
serve to raise
standards throughout the sector. Other recommendations have
been to set
up an independent regulatory body with powers to suspend or
ban offending
culprits.
The effectiveness of either depends on what checks are carried
out, how
complaints are investigated and the sanctions imposed. Ultimately,
the
difficulty would be to obtain sufficient evidence against
the company to justify
the imposition of sanctions. Furthermore, licensing arguably
impedes small
companies establishing their property management foothold
thus causing a
healthy competitive market to stagnate.
The answer may not lie with regulation or licensing at all.
Since the
introduction of the new Right to Manage rules, flat-owners
are now free to
decide whether they want to dismiss their managing agents
and either
appoint an alternative or manage the property themselves.
They can do this using the Right to Manage procedure as long
as certain
conditions are met. These conditions relate to the type of
property, length of
lease and how long they have been resident in the property.
Also, at least half
the flat-owners must be willing to participate.
Although the Right to Manage procedure is not uncomplicated,
at least it is
not necessary to prove fault or blame. If there are any challenges
by the
freeholder or managing agents, these can be promptly resolved
in the
Leasehold Valuation Tribunal (LVT) without gross expenditure.
To conclude, Right to Manage may well prove the most powerful
net with
which to eliminate malpractice and dishonesty within the property
management industry. Certainly, it will be effective as long
as it is taken up
with vigour.
Landlord’s
Insurance for Beginners
Landlord insurance, also commonly known as buy-to-let insurance,
is something a
landlord should begin to think about even as early as when
they are considering the
purchase of a property. Failure to put in place insurance
on a property could leave you
with nothing to show for your money should something go wrong.
In some cases it can be extremely difficult or highly expensive
to put insurance in place
for a property. For this reason it is important to have a
structural and local survey done on
the property and look for appropriate insurance policies before
purchasing the property.
Failure to do so could result in inflated insurance premiums,
which ultimately could
severely impact on your profitability as a landlord.
Many landlords will mistakenly be under the impression that
their standard household
insurance will still cover the property while they rent it
out; this is often not the case.
Many household policies offer no cover for buildings, contents
and important landlord’s
(property owner’s) third party liabilities, while the
property is being let out. For these
reasons it is crucial to make sure you have a landlord policy
or that your current
household policy can offer this cover while the property is
let out.
Each insurance company offers different levels of cover. Generally
there are two options
available for buildings cover and two options for contents
cover. The first being standard
cover which generally covers the building and contents for
the following:
•Fire, lightning and explosion
•Riot civil commotion, strikes, locked-out workers or
malicious people
•Malicious damage by tenant
•Theft or attempted theft
•Earthquake
•Impact by aircraft, road vehicles or animals, falling
of trees, branches, telegraph
poles, lamp-posts or pylons or falling aerials
•Escape of oil
•Storm
•Flood
•Escape of water
•Subsidence, ground heave or land slip
•Property Owners liability up to £2,000,000
Some insurers will also include free additional cover such
as the following:
•Accidental breakage of sanitary fittings, fixed glass,
solar panels and ceramic
hobs
•Accidental damage to underground services which extend
from your home to the
public mains for which you are legally responsible
•Loss of rent or alternative accommodation
•Communal contents cover
The second option available is accidental damage for buildings
and/or contents. This is as
clear as the title: any accidental damage caused to the building
or contents by the tenant
will be covered. It is important to note that most insurers
charge extra for accidental
damage cover and many will not offer such cover for contents.
An example of accidental
damage to the building would be a tenant banging a nail into
the wall for a picture and
accidentally hitting (and damaging) a pipe.
As stated above, property owner’s liability usually
comes as standard with a landlord
insurance policy. This would cover you in situations such
as where the tenant holds you
liable for an injury, which was caused within your property.
The excess of on a policy is how much you must pay yourself
when making a claim. This
will vary between different insurers and a discount on the
premium is often offered in
exchange for a higher excess. For example, if the excess on
your policy was £100 then
you would have to pay the first £100 of any claim you
made, regardless of the final
settlement value.
The standard excess on a policy will often vary from £50
upwards while a subsidence
excess of £1000 is usual with most insurers. The type
of tenant you have in the property
can affect your excess. For instance, several students in
a property will often mean your
excess will be higher than if the property was occupied by
a professional family.
Something to be aware of when insuring the property is that
you need to insure it for the
reinstatement value and
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