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The
following will answer some of the broader frequently asked questions we
get from landlords. Anyone involved in letting a property would benefit from reading
about, and considering, all of the topics in more detail. We would be delighted
to advise you on any concerns you may have, please do get
in touch if you need help.
- Do
I need to let my mortgage lender know I plan to rent out my
property?
A number of requirements must be met before you can let your property. If you have a mortgage, you will usually have to obtain permission from your Building Society (or Bank) before you let the property. Some Building Societies have
stringent requirements. If you are planning to let a leasehold property,
there will usually be clauses relating to what you can and cannot
do - check your head lease. Your buildings and contents insurance
may be affected by letting. Be sure to inform your insurer, or your
cover may be negated. Government legislation imposes certain safety
regulations on property intended for letting. Safety checks must
be done to ensure your property complies.
- Why
should I use a Letting
Agent, can't I just do it myself?
Very
few landlords have the expertise, time, patience and resources to manage
their property themselves. Paying
to advertise your property, fielding calls, being available for
viewing, vetting tenants and drawing up contracts can be a costly
and time-consuming business. If you want peace of mind, it’s well
worth using an agent. Reputable Agents such as RE/MAX Property Services
provide specialist letting
agreements, and will advise on your obligations under safety regulations.
And we also have access to a professional credit referencing
agency, to check the tenant can afford the rent and does not have
county court judgements. If required, we can also offer specialist insurance
to safeguard your rental income. We field all calls relating
to the let, and are adept at weeding out time wasters - something
you would very quickly find out can be an extremely time consuming
and frustrating experience! Managing the property only begins
with finding a tenant - there are numerous other issues which
can and often do arise, and many reasons why we you should choose
us to manage your property.
-we have professional
contractors on hand who are approved, competitive,
reliable and insured - saving you time consuming calling round for
repairs. Swift repairs
help landlords meet some of their obligations
to tenants under the Landlord &
Tenant Act legislation
-Clients can remain
at arms length from the tenant whilst
still being informed
-No need for you to visit
the property - we inspect the property and keep an eye on its condition
-No unwelcome
interruptions anytime of day
or night
-You do not need to worry about collecting rents, we send you a
statement of account for your tax records
-Any late rent payments
will automatically chased
- How do
you estimate the rental value of my property?
Be
wary of any agent who just asks you the price you want for your
property and then enthusiastically agrees with your figure. Any
reputable letting agent will be able to
demonstrate why they think your property could achieve the valuation
price they state - we are more than happy to provide you with evidence
showing how we arrived at our estimated rental value. While
some properties can be quite accurately valued without
seeing the property (eg where there are many similar properties
in a street with several already let), we will also visit
you at
your property to have a look around, and carry out what’s known
in the industry as a Competitive Market Analysis (CMA). This is based
upon a number of criteria: general market demand from tenants, the
popularity of your area (shops, schools, transport etc), current
‘To Let’ price of similar properties nearby, prices recently achieved
for letting similar properties nearby and finally significant works
/ improvements
carried out to the property. The CMA will give you an estimated
market rental. From this, we can decide on the rental
price.
- What if I want more rental than the agent’s valuation?
We
will give you a price we feel is achievable under the current
market conditions. If you feel the rental value should be higher,
we can discuss testing the market if appropriate with a higher price, then lower the price if
need be. Remember, we have nothing to gain by under valuing your
property; the value directly affects our fee after all!
- I’ve
seen several
letting agents. How do I choose between them?
Sometimes people
immediately plump for the agent who puts the highest value on their
property, similar as they would do when selling a property. But,
as with selling, this is almost always the wrong choice, and
simply an easy way for the agent to get your signature on the
dotted line. You should never be swayed by valuation alone -
if a
valuation is exaggerated, you could lose weeks of rental income,
while your property languishes on the market unlet. We suggest you
look at the bigger picture. We can promise you polite, friendly and well-trained staff,
a modern office with plenty of footfall, a specialist dedicated to letting,
clear
and helpful advice literature, a well-maintained website with full
property details, an efficient, computerised administration system
with timeous invoices issued to you, a comprehensive
marketing program for your property e.g. To Let boards, presence
on severak websites in addition to our own, and lastly, thorough
aftercare, monitoring
your property and tenants throughout the tenancy.
- Are
There Any Rules About What Comes With A Property If Its Fully Furnished,
Furnished, Part Furnished Or Unfurnished?
No, there are no strict rules but both expectations and reality can vary within different sectors within
the local market (this even varies from area to area). Generally, a property offered as “fully furnished” would
come with all the main fixtures, furnishings and fittings, white goods etc.,
plus the standard crockery, cutlery, glassware, pots and pans etc., that a
reasonable tenant would normally use on a day to day basis. Do not leave any
personal effects such as vases, ornaments or pictures that may
be damaged or even lost.
At the other end
of the scale, an “unfurnished” property would normally be provided only with
such basics as carpets, curtains and light fittings. YOu may choose to include
standard white goods, which will may make the property more
attractive to tenants.
Clearly, there are
infinite variations between these two extremes of what might be included.
Therefore, the critical aspect, whether you are a landlord or tenant, is to make
sure that everyone clearly understands what main items are, or are not, included
before finalising the tenancy agreement.
- How
long will
it take to find a suitable tenant?
In general the
letting process can take anywhere between a few days to
several weeks. Influencing factors will be market demand
and the standard and number of other properties available. Obviously,
the more widespread the advertising for your property, the better
chance there is of securing a suitable tenant quickly.
- How do you go about
vetting a potential tenant?
We
fully vet all potential tenants in the most thorough
way we can. We carry out a professional
credit and fraud check, and obtain employer and previous landlord
references if applicable. The
credit check will confirm whether or not the prospective
tenant has any county court judgements against
them, and the tenant’s ability to afford the rent.
- What
About Safety Regulations For Rented Property?
There are specific legal obligations and responsibilities on a landlord with
regard to Fire safety for Furniture & Furnishings; Gas supply and
appliances; plus Electrical wiring and appliances.
- What
About Insurance?
Landlords and tenants should take care to review any existing policies when
renting or letting a property for the first time as some standard insurance
products will either not provide cover, or might place restrictions on cover,
for rented property and/or its contents. A failure to inform your insurer that
you are renting/letting a property could invalidate any subsequent claim. It
is up to a landlord to insure the building and his/her contents, fixtures and
fittings. We do encourage tenants to take out contents cover, both for insuring their own possessions
and yours.
There are various specialist insurance products designed for landlords and
tenants and rented property: - Buildings, Contents, Legal Expenses, Emergency
Repair cover, Rental Guarantee cover etc. [it is illegal for a letting agent (or anyone else) to advise on or sell such
general insurance products unless they are authorised by the Financial Services
Authority (FSA), or, directly regulated by a broker registered with the
FSA]
- What
About An Inventory/Schedule Of Condition?
This is an absolutely essential document that provides a written benchmark,
which should be amended, updated and recreated before the beginning of each new
tenancy. A properly constructed Inventory/Schedule of Condition details the
fixtures and fittings and describes their condition and that of the property
generally.
- What Is A Tenancy Agreement?
A tenancy agreement is a legally binding contract between a landlord and
tenant that sets out both the legal and contractual responsibilities and
obligations of the two parties. It should be written in plain and intelligible
language (no unnecessary jargon!) and its terms and clauses should be fair and
balanced, taking account of the respective positions of the parties and should
not mislead about legal rights and responsibilities.
- What Kind Of Tenancy Agreement Will Be Used?
The most common form of tenancy agreement used is an “Assured Shorthold” (an
AST) under the 1988 Housing Act (amended 1996). This type of tenancy offers the
most flexibility to both landlord and tenant; has straightforward notice
procedures for bringing the tenancy to an end and a special Accelerated
Possession court procedure should tenants fail to vacate.
If certain specific
conditions are met relating to the proposed letting, a “contractual” non-housing
act tenancy must be created. One example of this would be what is commonly
referred to as a Company Let where the tenant is a bona fide registered company,
another would be where the annual rent equates to over £25,000.
Very rarely,
a prospective tenant may be offered a full “Assured” tenancy that gives very
significant and potentially long-term security of tenure to a tenant and, for
which a landlord can only get possession in very limited circumstances.
Most
ARLA members will have their own “in-house” agreements which are usually much
more comprehensive than ones bought in a local stationers or Post Office etc.
Following lengthy consultation with the Office of Fair Trading, ARLA created and
now sells a model Assured Shorthold Agreement to both members and
non-members.
- Joint
And Several - What Does That Mean?
Mostly, where there is to be more than one (adult) person living in the
property, the tenancy will say they are “jointly and severally” responsible.
This expression means that, jointly, the tenants are liable for the payment of
all rents and all liabilities falling upon the tenants during the tenancy, as
well as any breach of the Agreement.
Individually each tenant is responsible
for payment of all rent and all liabilities falling upon the tenant, as well as
any breach of the Agreement until all payments have been made in full.
- What
arrangements
do I need to make for tenants moving into my
property?
It is essential
that the property is left in a clean and tidy condition before
handing it over to the Tenants. It also helps
if all instructions, manuals and guarantees are left in one place, preferably
in a ring binder. You should supply a set of keys for each
Tenant., we can arrange this for you if required. We will read all
utility meters in the property when the tenant moves in, and
notify the relevant supply company accordingly. We will also
notify the relevant council of the tenants details for Council
tax purposes.
- What
About The Tenancy Deposit?
It is common for a deposit of an amount equivalent to between four to
six weeks rent to be required to be held during the tenancy against the
satisfactory performance by the tenant of all the various obligations under the
tenancy agreement - but mainly, those relating to the cleanliness and condition
of the property. We usually request one months rent plus £100 as a deposit.
The relevant clauses in the tenancy agreement should set out
who is to hold the deposit (e.g. agent or landlord), whether interest is to be
paid or not, what the deposit can be allocated for and the end of tenancy
procedures and timescales for its refund.
The best way for a tenancy deposit
(bond) to be held during the tenancy is by the ARLA member agent as
“stakeholder” between the parties (landlord and tenant). This means that at the
end of the tenancy the agent should get the agreement of both sides before
making any deductions for damage, cleaning etc.
- How
Often Can The Rent Be Put Up?
In general terms, rent of an existing tenancy can only be increased once
every twelve months. Where an assured shorthold tenancy holds over as a
statutory periodic tenancy, a specific prescribed form (a section 13 notice)
must be used to notify tenants of a proposed increase in the rent.
It is
usual, if creating a longer fixed term tenancy at the outset (or one with a
binding option to renew), to include a clause that allows for an increase of the
rent on an annual basis, typically linked to, or as a multiple of, something
like the Retail Price Index (RPIX) or similar.
- What
About Rights Of Access To The Property, What Are The Rules?
A landlord, or his agent, or someone authorised to act on his behalf has a
right to view the property to assess its condition and to carry out necessary
repairs or maintenance at reasonable times of the day.
The law says that a
landlord or agent must give a tenant at least 24 hours prior notice in writing
(except in an emergency) of such a visit. Naturally, if the tenant agrees, on
specific or odd occasions to allow access without the 24 hours prior written
notice, that is acceptable.
[A clause in the tenancy agreement which tries to
diminish or over-ride a tenant’s rights in this respect would be void and
unenforceable.]
- Are
Tenants Entitled To Know The Name And Address Of Their Landlord?
Yes, there are two or three bits of law
covering this and it is a criminal offence for an agent (or whoever is
collecting the rent) to fail to provide, without reasonable excuse, this
information within 21 days of formal written request by the tenants.
- Repairs
& Maintenance Issues
A landlord, in very general terms, has a
legal responsibility to repair the structure and exterior of the property,
including drains, gutters and external pipes; to keep in working order the
installations for the supply of gas, electricity and water; and, for the
installations for the provision of space and water heating. The landlord also
has other legal responsibilities relating to the safety of such items as gas,
electricity and furnishings as well as the general standard or fitness of the
property for habitation.
A tenant has an implied covenant to act in a
“tenant-like manner”. Broadly, this means to report disrepair promptly; to take
reasonable steps to ensure that neither the tenant nor guests damage the
property, its fixtures and fittings; to do the minor day to day things any
home-occupier would normally do e.g. replace light bulbs, fit a new battery in a
smoke or CO2 detector, tighten an odd screw which has come loose on a door
handle etc.; to keep the property reasonably warm and aired to help prevent
condensation or freezing of pipes; to leave the property secure when absent from
it; to keep the garden and other areas reasonably tidy and free from
rubbish.
- What
About Renewals And Extensions Of A Tenancy?
This is a very common situation and the
ARLA Agent will normally negotiate between the parties and prepare the necessary
formal documentation for a replacement tenancy or fixed term
extension.
If no further fixed term is created to follow on from the
end-date of original term, and assuming notice to end the tenancy has not been
served, the tenancy can simply hold over as a “periodic tenancy” e.g. rolling on
with basically the same terms and conditions and in line with how the rent is
due to be paid. This is usually monthly.
- How Is A
Tenancy Terminated?
The law around ending a tenancy is
relatively straightforward as long as the right timescales and procedures are
followed, along with the use of the correct format of notice. The timescales,
procedures and format will vary dependent upon the type, and the status of the
tenancy at the time you wish to end the tenancy. Your ARLA agent will be able to
provide guidance.
- What
Happens If The Tenant Doesn’t Move Out After The End Of A Tenancy?
First, try to quickly establish the
reasons why. However, if a tenant does not move out after a tenancy has been
lawfully terminated then the landlord can apply to the Courts for a possession
order. Under the Accelerated Possession Procedure (which can be used where the
tenancy was an Assured Shorthold) the process is usually fairly quick and
inexpensive.
- Agents’
Fees And Charges
These will vary dependent upon local
market conditions and the particular services being provided by the Agent.
However, whether dealing with a landlord or a tenant, an Agent should provide
clear information on what costs would be incurred, including any potential
future financial liabilities to the agent that are reasonably foreseeable and
quantifiable.
Disclaimer
- The information given above is believed
to be accurate, however, it should not be relied upon in place of formal legal
advice. |
