Residential Letting and Property Management Services

Transcription

1 Residential Letting and Property Management Services An Introduction for Landlords

2 Philippa Jackman-Day, Tara Oliver, David Hall MARLA Nicola Holz-Lloyd and Jane Samuel. T E W rentals@samuelwood.co.uk

3 This booklet provides a general introduction to our Residential Letting & Property Management Service and, as such, cannot provide full details of all that is involved in this complex field. You may be about to work abroad, or in another part of the UK for some time. In your absence you will need a Property Letting and Management Service of high calibre. Alternatively, you may already be managing property yourself. If so, you will recognise the time and effort you have to spend. With Samuel Wood & Company you are assured of a professional service. We pride ourselves on offering a professional but personal service in the letting and management of your property. We will be happy to inspect your property and discuss your requirements, giving helpful advice about letting, rental levels, the Housing Acts, etc and discuss a realistic rent for the property. If you do not wish to proceed further, there will be no charge and no obligation. Free Assessment Finding the Tenant Our tenant vetting procedure is extremely comprehensive which includes credit referencing, employers references and previous landlords references (where available). We will only proceed with a tenancy once your instructions have been received. We will always respect your wishes concerning pets, smoking and children, etc, as appropriate. Energy Performance Certificate (EPC) With effect from 1 October 2008, it is Statutory Law that, prior to the marketing of any residential property to let, an Energy Performance Certificate must be available to a prospective purchaser, upon request. We can provide you with assistance in commissioning an Energy Performance Certificate, if you require. 1

4 Deposit & Deposit Registration Tenants make a deposit equivalent to one month s rent, which we will hold, if we are instructed to manage your property, until the end of the tenancy. This provides appropriate cover for the cost of any dilapidations or rent arrears, etc. Tenants have a responsibility to maintain your property in good order. If we act as Managing Agents, we hold the deposit in our company s Clients Account and the deposit is registered with the Dispute Service (which is our nominated Tenant Deposit Scheme) in accordance with Statutory Law. If you wish us to act as your Letting Agent only, we can arrange for the deposit to be forwarded to you for you, but it is vital that you provide your registration details of the Tenant Deposit Scheme of which you are a member. We cannot release deposits until this information is received. Alternatively, we may be able to arrange to hold the deposit on your behalf. Inventories 2 We will prepare a comprehensive inventory of the fixtures and fittings and a general schedule of decorations before the commencement of the tenancy. This document is prepared in a format which is approved by ARLA (Association of Residential Landlords) and the TDS (The Dispute Service), which is the nominated Tenancy Deposit Scheme used by our company. This schedule is then signed by the tenants and landlord/agent and serves as an agreement of the condition of the property at the commencement of the tenancy. Money Laundering Regulations We are obliged to comply with the Money Laundering Regulations 199 & 200 and Proceeds of Crime Act 2002, which requires us to retain on our files, proof of identity of clients. Therefore, you would need to provide us with sight and photocopy of your Passport or UK Photocard Driving Licence and recent bank statement or utility bill to confirm your postal address. Office of Fair Trading Guidelines Is there anything about your property which a prospective tenant should know before viewing or entering into a contract to rent? This would include, for example, history of flooding, subsidence, structural defects or boundary disputes, Restrictive Covenants, Agricultural Restrictions or Planning Restrictions to name a few. If this is the case, in order to comply with current guidelines, it is very important that you make any relevant details available.

5 The Tenancy Agreement Your property will normally be let on an Assured Shorthold Tenancy as introduced by the Housing Act 1988 and amended by the Housing Act Under such a tenancy the landlord has a right to a vacated property at the end of the tenancy. Such tenancies are suitable for either furnished or unfurnished properties. The initial fixed term is usually for at least six months and there is no maximum. The landlord must serve at least 2 months Notice (expiring at the end of a rent period of the tenancy) in order to terminate the tenancy. The tenant must serve at least 1 months Notice (expiring at the end of a rent period of the tenancy) in order to terminate the tenancy. The tenancy cannot be brought to an end by either side before the end of the initial 6-month term, except in certain circumstances such as non-payment of rent. When the initial 6-month term ends, if the landlord has not served notice, the tenant may hold over in the property under terms of the Tenancy Agreement. The landlord may at any time after the initial 6-month period serve 2 months notice to recover possession and the tenant can service 1 months notice to vacate the property, but the agreement can continue indefinitely if both parties agree. Generally, the landlord is responsible for repairs to the structure and exterior of the property (including drains, gutters and external pipes) and for repairing and maintaining the installations for gas, water and electricity, sanitation appliances and space and water heating appliances. Rent will be payable by the tenant, monthly in advance; due on the corresponding day to that from which the tenancy is commenced. The tenant is responsible for the payment of water rates, council tax, gas and electricity and telephone bills in addition to the rent. These are paid direct by the tenants to the relevant authorities and the landlord should ensure termination of his own account with each authority on the day he vacates. The landlord is responsible for Buildings Insurance. The tenant is required to take out insurance to cover both his possessions and matters for which he is responsible as a tenant. We cannot undertake to ensure that tenants have taken out the necessary insurance, but this does not relieve them of their repairing obligations. Occasionally, but very rarely, for some reason tenants may refuse to vacate a property despite their tenancy being terminated correctly. In such a case, once the Notice terminating the tenancy has expired, an application must be made to the Court for an Order for Possession. This can take some time. Solicitors and Court costs involved in such an action, if they cannot be recovered from the tenant, will be payable by the landlord.

6 What to Leave Landlords have very varied ideas on what to leave in a property. In reality, it depends on the nature of that property and its location. We generally find in this area, at the moment, that unfurnished properties simply equipped with carpets and curtains and presented in reasonably good decorative order, will attract good tenants prepared to pay a good rental, because it saves them the cost of additional furniture removal. Further, a poorly equipped property may require continual maintenance and repair throughout the letting resulting in a reduction in the net income to the landlord. Unfurnished properties naturally do have lower maintenance costs, as there are no appliances and furniture to be maintained. However, we will always be pleased to provide a letting service tailored to your own needs, whether furnished, part furnished or totally furnished. You should, however, remember that your property will be subjected to the stresses and strains of everyday living. It is particularly essential that you remove items not easily replaceable or of particular value. It is the landlord s responsibility to ensure that all items left in a property are maintained in working order, thus even repairs or replacements to old equipment must be paid for by the landlord. Therefore, it may well be better to remove old items before the tenancy commences. Post We strongly recommend that you advise the Post Office of your forwarding address so that they can redirect any mail going to the premises for the period of time you are away. Special re-direction services are available. We cannot accept responsibility for re-directing mail. Gas Safety The Gas Safety (Installation and Use) Regulations 1994 now make it a criminal offence if annual inspections and any necessary repairs/maintenance are not carried out. It is necessary to obtain an annual safety check certificate as proof. We will be happy to arrange for such a safety check by an appropriately qualified contractor and will provide further information on this matter if required. We will be required to obtain copies of the certificates relating to the safety check annually. Smoke Detectors Although not obligatory, we strongly advise that smoke detectors/alarms should be provided. Also, any chimneys with open fires should be regularly swept. Carbon Monoxide Monitors/Detectors Although not yet a legal requirement, as safety is of paramount importance, we strongly recommend to all landlords that they arrange to have fitted and maintained suitable carbon monoxide detection within the property. 4

7 Water Testing (Legionella Risk Assessment) This will apply particularly if the water is via a non-mains supply. It is advisable to commission an annual water test report (Legionella Risk Assessment). We can arrange to supply you with contacts of various contractors who would be able to prepare this report for you. Electricity It is the landlord s responsibility to ensure that the electrical installation and all electrical appliances are safe and in full working order, complying with all relevant regulations. If in doubt, we can arrange for an NICEIC registered electrician to check these matters for you. KEYS If the Property has been previously rented or recently purchased, you may wish to consider having the locks changed. In any event, we would recommend that it is advisable to have the locks changed after every change of occupier. The Furniture and Furnishings On 1st March 199 the Furniture and Furnishings (Fire) (Safety) (Amended) 199 Regulations came into force. The Regulations aim to improve safety by requiring all furniture and furnishings in rented properties to pass the cigarette test. Most new furniture is marked with a ticket to show that it passes the test. All upholstered furniture and furnishings in accommodation, now made available for letting, must meet the Fire Resistance Requirements. The regulations apply to all upholstery and upholstered furniture and loose fittings, permanent or loose covers to include beds, mattresses, pillows, settees, armchairs, scatter cushions and beanbags. This is not, however, an exhaustive list. Particular exclusions to note are carpets and curtains. Furniture that was manufactured before 1st January 1950 does not need to comply with the regulations, as apparently the defective flammable materials were not in use prior to This therefore exempts period or antique furniture. All furniture and furnishings introduced into a let property must comply with the regulations. The offence for non-compliance carries a punishment of 6 months imprisonment or a level 5 fine, currently 5,000 or both. These penalties are only for non-compliance. Should there be a fire at the property and it can be proven that the noncompliant furniture aggravated the fire, the landlord could be held liable, and the penalties greater. 5

8 Insurance You should advise your Insurers, both Buildings and Contents, of your intention to let the property. They may advise on any additional cover or exceptions that are necessary. Some Insurance Companies have restrictions on properties rented to tenants who are in receipt of Council benefit. A commercial rate premium may be charged or no cover offered at all in some cases. We can offer advice from a range of Insurers upon request. Legal Protection Insurance: We thoroughly check all prospective tenants for suitability and satisfactory references are taken prior to the tenancy commencing. It is, however, a fact that tenants personal circumstances can change during the term of a tenancy. Should it prove necessary to pursue tenants for unpaid rent, damage or dilapidations or to regain possession of the property, legal costs will be incurred. We can provide a Homelet Legal Protection Policy to cover all legal costs up to 50,000 for a modest annual premium. Landlord s Contents Insurance: Many mainstream insurance companies will no longer cover properties which are let. A few companies will continue cover on a restrictive basis, usually with an increased premium. We must advise that failure to disclose that the property will be let will render the existing policies void if a claim has to be made. We can arrange a New For Old Homelet Contents Policy specifically designed for let properties. The premiums are competitive and simply rated on the property postcode and number of bedrooms. Instant quotations are available from us. Landlord s Buildings Insurance: As with the Contents, only a limited number of Companies are prepared to cover let properties and non-disclosure will often allow an existing insurer or mortgage lender to avoid a claim. We can arrange a Homelet Building Policy for properties up to 00,000 rebuilding value, rated on the property postcode and rebuilding value. Tenant s Contents Insurance: We can also provide cover for tenant s personal possessions with an optional All Risks extension. The Legal Protection Policy is underwritten by Sun Alliance and the Contents and Buildings Policies by Cornhill. 6

9 Income Tax Income from letting UK property is subject to UK income tax even if the landlord is resident abroad. Tax retention -Only for non-uk Resident Landlords We recommend you have an accountant to deal with your taxation affairs in the UK and that you provide us with his name and address. With effect from 6 April 1996 under the Inland Revenue s new Self-Assessment Rules, overseas landlords tax treatment changes. Under the Taxation of Income from Land (Non-Residents) Regulations 1995, the rentreceiving agent (or where there is no agent, the tenant) will be required to deduct 25% tax from the rent (after taking deductible expenses paid out into account) and to pay the tax to the revenue each quarter. However, the overseas landlord can apply to the Revenue for exemption from this requirement. Provided his tax history is good and his tax affairs are up-to-date, the overseas landlord will be issued with a certificate, with a copy sent to his rentreceiving agent. This will authorise the agent to pay his rent to his landlord without deduction of tax. The necessary application forms for this purpose can be obtained online and these should be completed once we are instructed to act for you, and returned to the Inland Revenue FICO Office in Bootle, Lancashire, with a copy to ourselves. Neither your rentreceiving agent nor your tax adviser can file this application on your behalf - it must be done by you. Failure to return the form at the earliest opportunity may result in the exemption certificate not being issued early enough, in which event, we would have no alternative but to make the 25% tax deduction before remitting rents to you. Where we have to retain from the rent to cover the tax liability, it should be noted that we cannot undertake clients tax computations or agree/dispute assessments on your behalf. We will liaise with your accountants who should agree the tax due with the Inland Revenue. We will remit the tax demanded and your accountant should re-claim any overpayment that is subsequently agreed. We will account to you for any surplus of funds. Any interest earned on monies retained will be used to offset the additional administration costs involved with non- UK resident landlords. 7

10 Summary of our Letting Service A letting charge equivalent to one month s rent, subject to a minimum of 250 (exclusive), is charged each time that a new tenant is found for the property. This fee covers the following: Arranging for prospective tenants to view property Processing applications and obtaining appropriate references Preparation of inventory and schedule of condition Arranging for solicitors to draw up tenancy agreements Overseeing the signing of agreements Collection of first month s rent Setting up Standing Order for rent payments Informing services and local authorities of change of occupier Ensuring a successful start to the letting Summary of our Management Service The staff at Samuel Wood & Company are extremely helpful and efficient. A service to be recommended. 8 In addition to finding a suitable tenant for your property, if required, we can also provide a full and professional management service. Our fee for this is 10% (exclusive) of the monthly rental for management and a letting fee of half a month s rent (exclusive). This fee covers the following: Monitoring and collection of all rent payments Regular quarterly inspections of the property Dealing with repairs appropriately Dealing with tenants over all aspects of the tenancy so that landlords need not become directly involved Dealing with necessary notices to serve towards the end of the tenancy Arranging for extension of existing tenancy in appropriate cases with no additional letting charge Checking outgoing inventory Administering the return of the tenant s deposit

11 Further Information If you require any further information or clarification, please contact David Hall ARLA or Nicola Holz-Lloyd ( ) to discuss matters in greater detail.

12 2 Shoplatch, Shrewsbury, Shropshire SY1 1HF Offices also at Ludlow Craven Arms Church Stretton Oswestry Mayfair (London)