Landlords Guide to Renting
LANDLORD INFORMATION
Tenant Referencing
All prospective Tenants are required to view the property with one of our agents and then complete an application form before being recommended. If accepted, full referencing will take place via our ARLA approved referencing company. The referencing company will compile a report providing the tenants credit check, employment reference, previous landlord reference, ID and any other supporting documentation relevant to proving their affordability.
Security Deposit
Landlords are now required by law to register the security deposit with a government approved scheme within thirty days of the commencement of the tenancy. There are three schemes, The Deposit Protection Service (DPS), Tenancy Deposit Scheme (TDS) and MyDeposits. The penalties for not registering the deposit with an approved scheme and informing the tenants are severe; Landlords will be unable to use a FORM 6A to regain possession under notice. County Court has the power to order Landlords to repay the tenant the security deposit of up to THREE times the original value. Under our full Management Service we will log the Tenant’s security deposit with the Deposit Protection Service (DPS) and ensure the correct paperwork and prescribed information is in place.
Please note that we take a deposit equivalent to five week’s rent which is the maximum legal deposit amount.
Rent Payments
The first month’s rental is collected in advance. It will be up to the Landlord to collect any future rents from the Tenant if we are providing a Let only service. If you choose to use our Management service the rent is paid into our secure client account and then forwarded to your chosen bank account each time the rent is paid by the tenant as a service standard. We aim to transfer all the monies to you as soon as they are cleared funds.
Tenancy Agreements
A Tenancy agreement will be prepared for all Tenants to sign before moving into the property. The Agreement will include comprehensive terms for the Tenants to adhere to. Under the Housing Act 1988 (amended 1996) an Assured Shorthold Tenancy will be used, except in cases of a company let in which case the relevant company agreement will be drafted as with an assured tenancy.
Inventory & Schedule of Condition
An inventory should be prepared to ensure that all items of Furniture, Fixtures and Fittings left at the property are recorded and their condition noted with the condition of the walls and carpets. In our experience, if a Tenant disputes the deductions that a Landlord has proposed to take from the security deposit, and the Landlord has not provided an inventory at the beginning of the Tenancy, the adjudicator is likely to award in the Tenant’s favour regardless of the merit of the Landlord’s claims.
The Tenant’s deposit will be held against any damages or excess wear and tear shown against the inventory. The inventory can be provided by the Landlord or by us. Further detail of this service is provided in our Terms of Business.
Rent Guarantee Insurance
A Rent Guarantee Insurance policy offers the landlord a safeguard should the tenant be unable to pay the rent. Most policies will cover rent arrears of at least 12 months and legal expenses up to a certain amount. Our recommendation would be to use this service.
Mortgaged Properties
You should notify your Building Society or Bank if you have mortgaged the property, that you wish to let. It is usually one of the conditions of your mortgage that you apply for permission to let the property. We also recommend that your building and contents insurers are advised of your plans as they too may need to alter the policies to cover a third party residing at the property. (We can assist in recommending specialist insurance companies dealing with insurances for rented properties. Please speak to a member of the team).
Leasehold Properties
If the property is leasehold you may need the head Leaseholder’s or Freeholder’s permission to create a Tenancy. We advise Landlords check with the Freeholder that there are no restrictions or covenants which prevents you from letting the property and that the Tenants must adhere to during the Tenancy period.
Houses of Multiple Occupations
HMO licensing came into force on the 6th April 2006. Landlords will now have to apply for a license. The penalties for not applying for a license came into force on 6th July. From that date a Landlord who operates a licensable HMO without a license will be committing a criminal offence and will be liable to a fine of up to £20,000.
Generally for a HMO to require a license, the dwelling must consist of three or more floors and have Tenancy consisting of five or more Tenants. However there are exceptions. As the Landlord if you are in any doubt please seek further advice.
Short Term Lets
Any contract granting possession for a period of less than six months is a short term let and is outside the protection of the Housing Act 88 revised 96. The Landlord should check with the planning department of the local authority responsible for the rented property regarding the policy for short term lets. In the event that the Landlord is planning to let the property for less than six months, some local authorities may require Landlords to apply for a change of usage from residential to commercial. Planning breaches could lead to a fine of up to £20,000.
It is normal that Landlords pay for electricity, gas and water bills and the council tax during the Tenant’s stay in return for a rent at premium to the market. Permissions from the Freeholder, mortgage provider and insurers should also be sought before entering into a short term contract.
Stamp Duty Land Tax
Stamp duty land tax is payable on Tenancy Agreements where the value of the Tenancy is over £60,000 by the Tenant to the Inland Revenue Stamp office. It is our duty to advise Tenants that this duty may be payable and that they seek advice from the Tax Office/Inland Revenue as to the duty payable.
Non UK Resident Landlord
If you are going to reside outside the UK we are bound under the Taxes Management Act 1970, Section 78 and 83 to assess you at the basic rate of income tax (variable) due from rents we collect on your behalf if you are not “self assessing” your own tax.
We should receive a letter of confirmation from your Accountant and Tax Office confirming that they accept liability for payment of your tax. (Please see your Accountant for self-assessment advice).
Alternatively, we can instruct a Tax Specialist or Tax Adviser who can give you advice or can be employed by you to take care of your tax affairs whilst abroad. (See our Terms of Business).
UK Resident Landlord
Your rental income will be subject to UK tax with normal deductions, we do not do this for you, you would have to instruct an Accountant.
Keys
It is important to have several keys cut for the property so there are enough for each adult Tenant due to move into your property, plus a set for our Management Department (if applicable) for security and access if so required.
We need 3 sets of front and back door keys for Managed Properties, two sets of front and back door keys for Let Only properties.
Legal Costs
Should there be at any time any need to take legal action against the Tenant for whatever reason, the Landlord will be responsible for this action plus any necessary costs incurred. For managed property assistance will be given to the Landlord with regards to documentation and administration with reference to the tenancy.
Transfer of Services
Gas and Electricity
Inform them of the date of transfer to the new Tenants, plus their names, the meter reading and your forwarding address so they can send you a closing account.
Water Rates
Water Rates will become the Tenant’s responsibility in most cases, but please advise them of your new forwarding address. If your water charges are on meter, the Tenant is responsible and a meter reading and date of transfer needs to be supplied to the Authority together with your forwarding address.
Council Tax
Once again this is payable by the Tenant during the tenancy. Please advise the Local Authority the date of transfer to the new Tenant and of your forwarding address in order that they can send you a closing account.
Telephone
It is best to arrange the transfer for the actual day that your Tenants will be moving in. If there is a break between subscribers, there can be a charge depending on the length of time that the service has been disconnected.
Mail Redirection
The Post Office offers a service to redirect your mail, which we recommend you arrange prior to vacating the property for the term of the tenancy. You should also inform your bank, employers, friends and family who are likely to write to you and inform them of your new address.
SAFETY REGULATIONS
Landlords have the responsibility for the safety of both the Tenant and their own property during the tenancy. The following regulations must be adhered to without fail by the Landlord and as Agents we must ensure that they are carried out.
The Furniture and Furnishings (Fire) (Safety) Regulations 1988 (as amended in 1989 and 1993)
The original regulations introduced in 1988 ensured that all manufacturers, importers, suppliers and upholsterers of soft furnishings and furniture only supply items that use fire-retardant filling materials and fabrics. In addition, all furnishings sold or supplied must carry a permanent label. The amendments in 1993 included furniture supplied in rented accommodation. The regulations apply to the following items: beds, mattresses, sofas, armchairs, nursery furniture, cushions, seat pads, pillows and loose and stretch covers for furniture. Items of furniture made prior to 1950 are termed as antiques and as such are excluded from the regulations.
The Gas Safety (Installation and Use) Regulations 1998
These regulations apply to all domestic properties and make it mandatory for Landlords to have all gas pipe work, equipment and appliances safety checked annually by a CORGI registered gas engineer on an annual basis. This includes such items as Gas Fires, Central Heating boilers, Gas cookers and other gas appliances. It also insists that flues and chimneys are clear of obstructions and in the correct place. A Landlord’s Gas Safety Record must be provided to the Tenants prior to the tenancy commencement. In addition these documents and details of any work carried out must be recorded and kept. Any items that fail to comply with the regulations must be fixed or removed immediately.
The Electrical Equipment (Safety) Regulations 1994
These regulations require that all Electrical equipment left at the property be ``safe and of no risk or injury to people or pets``.
They should be checked that flexes, fuses and electrical out put are safe and correct. Items that must comply are all portable electrical items such as electric cooker, fridge’s, washing machines, kettles, toasters etc.
As agents we cannot guarantee which items are safe or not and will recommend that a qualified electrician checks these items (a charge will be made). Your own electrician can carry this out.
Electrical Installation Condition Report (EICR) 2020
As of the 1st June 2020, new regulations were introduced by the government making it a legal requirement for Landlords to have the electrical installations in their properties inspected and tested by a person who is qualified and competent, at an interval of at least every 5 years. These standards are set out in the 18th edition of the ‘Wiring Regulations’, which are published as British Standard 7671. Landlords are required to provide a copy of the EICR, and confirmation of any subsequent remedial work completed that resulted from the EICR (if applicable), to their tenants, and to their local authority if requested.
Energy Performance Certificates 2008
From the 6th of October 2012 prospective Tenants must have the opportunity to see a valid Energy Performance Certificate prior to agreeing and signing a new Tenancy and from the 1st of April 2018, rental properties must have no lower than an E rating for Energy Efficiency.
The Energy Performance Certificate will be valid for 10 years Houses of Multiple Occupation with shared kitchens and bathroom facilities will require an Energy Performance Certificate for the whole building. Where rooms or studios have individual facilities an Energy Performance Certificate will be required for each individual dwelling.
Failure to comply with any of the above regulations could lead to prosecution and a large fine and/or imprisonment. This legislation may seem daunting and must be taken seriously, however as a professional Letting Agent we will help guide you to ensure that you comply with the Landlord’s obligations and to ensure that your property is safe for Tenants to occupy. Compliance need not be expensive and we can arrange the relevant checks on your behalf.
Important Note
This is only a brief guide to the regulations. Our team will be happy to provide you with any further information and to discuss our Terms of Business.
Further information and details are provided in our Terms of Business and by asking a member of team.