There is a need to recycle homes

Transcription

1 Initiative Bring empty properties back into use Make your property work for you There is a need to recycle homes

2 1 MISSION STATEMENT Gwynedd Council will endeavour to bring empty homes back into use. Our aims are to contribute to the well-being of the neighbourhood, increase the supply of housing, reduce homelessness or the potential for homelessness, and at the same time, reduce the pressure on the Council s Housing Waiting List

3 2 INTRODUCTION In a society where thousands of households are empty and hundreds of thousands of prospective tenants are waiting for rented accommodation, empty properties, quite simply are wasted resources. Gwynedd council believes one way of easing the growing problem is to use and adapt what is already available to us. Focusing on empty properties unoccupied for more than six months the aim of the initiative is to work with not against the owners of empty homes to encourage the reuse of their property as quality housing accommodation. This brochure contains information on the following: Selling your property Letting/Renting your property Refurbishment Legal enforcement measures available to the Council This informative brochure has been produced to give practical information and advice to empty property owners to help them bring their property back into use.

4 3 SELLING YOUR PROPERTY ESTATE AGENTS You may wish to sell the property either privately yourself or through an estate agent. With so many estate agents around it can be difficult to decided which one to choose therefore make sure you shop around to find the right company for you. All Estate Agents are bound by the Estate Agents Act 1979, however by choosing a company that is a member of a trade organisation you will have an indication of the standards they will follow in their work. The Royal Institution of Chartered Surveyors (RICS) The National Association of Estate Agents (NAEA) and The Guild of Professional Estate Agents are trade organisations. There is no obligation to sell when getting your property valued and it is recommended you obtain three valuations for a balanced view. It is also possible to contact your local land registry to get an idea of the house prices in your area. When selling through an estate agent you will be required to sign a legally binding contract, ensure you read it carefully and understand it as the terms of the contract must be adhered to and failing to do this may result in you being taken to court for breach of contract. Remember to ask is there is a cancellation penalty and how long the contract will run. The contract should allow enough time to market the property and find potential buyers. Please be aware there are different types of agency contracts that you can enter into. These include:

5 4 Sole agency: One estate agent will be responsible for selling your home for an agreed commission. Joint agency: Two or more estate agents will sell your property and will share the commission when the sale goes through. Multiple agency: An arrangement where you instruct independently two or more agents and whoever sells the property gets the commission. In most cases, it is compulsory that you provide buyers with a Home Information Pack at the point of marketing the property (even if you choose not to use an estate agent); it allows buyers to see important information on the property. The pack will include local searches and other legal documentation plus an Energy Performance Certificate (EPC). AUCTION HOUSES If you decide to put the property on the market, please remember it can take anything from several weeks to several months to sell if a chain is involved. Therefore you may wish to consider selling at auction. Selling through an Auction house can be an extremely effective way of disposing of property. Auctions have a targeted audience of developers, investors, portfolio landlords and cash buyers; the fact that a property is empty may be extremely appealing to these types of buyers.

6 5 Quick and efficient way of selling A catalogue will be produced to feature the properties to be sold at the forthcoming auction. Selling a property at auction has several advantages For peace of mind a reserve price, agreed by the seller and the auctioneer, will be set to ensures the minimum acceptable price is obtained Maximum exposure of the property No outstanding negotiations - purchasers must bid on the day or lose the property Encourages the best offer for the property Certainty of an unconditional sale: When the hammer falls at an auction there will be an unconditional sale creating a binding contract between buyer and seller. There will be no chain sales to worry about, no last minute change of mind and no arguments on the price. A percentage of the total sale price of the property will be payable on the day with the remainder usually payable within 28 days. This is great for those needing to release capital quickly. Charges are similar to estate agents

7 6 A well respected national auction house has agreed special lower fees on sales of empty properties introduced by the council. Please contact us for more information. CAPITAL GAINS TAX (CGT) CGT is a tax on capital gains. If when you sell or give away an asset it has increased in value, you may be taxable on the gain (profit). For more information on Capital Gains Tax please visit the HM Revenues & Customs website at If you know which Tax Office deals with your tax affairs, then you should contact that office. The telephone number can be found on recent correspondence - tax forms or letters by the tax office. LETTING/RENTING THE PROPERTY Letting a property could provide the owner with significant additional income, it could also provide a much needed home. If all or part of the property is empty, it is an asset that is being wasted. Many people consider letting their property, but are not sure of the steps they should take to do so. Prior to letting your properties there are certain issues to consider, it is important to know your rights and obligations to ensure that you let the property effectively and avoid any problems. Previously the law caused apprehension as to the rights of the landlord however following changes within the law letting a property is much less complex!! The removal of rent controls it is now possible to charge market rents and in addition landlords now have many more rights with regard to evicting tenants, as long as they follow certain procedure. Unless the

8 7 rental income is over 25,000 the tenancy will automatically become an Assured Short hold Tenancy (AST) and will usually last for 6 to 12 months. In Wales, there is a national landlord accreditation scheme which provides existing and prospective landlords with access to training and information. Landlords must attend a landlord development session and sign a code of conduct to become accredited. If you require further information visit the Landlord Accreditation website (see or the National Landlords Association (see Before letting a property you may be required to contact and/or obtain consent from: Your mortgage lender The Local Authority Council s Housing Standards or Enforcement Team. These teams ensure that privately rented accommodation complies with the requirements of the Housing Acts and related legislation and will give advice as to whether any works are required to ensure compliance. The Local Authority Council Tax Department Your property insurance company Your Tax Office or accountant This is merely basic information for your consideration and does not cover everything that you need to know.

9 8 GWYNEDD COUNCIL S PRIVATE SECTOR LEASING SCHEME Gwynedd Council is seeking owners of empty residential properties and who are interested in leasing them to the council. The property should be located where there is good access to public transport facilities and / or be within walking distance of local services, such as schools, shops and health care facilities. The PSL scheme is whereby Gwynedd Council leases the property for a fixed term (initially 12 months) and then uses it as temporary accommodation for homeless households. If you are interested in joining the scheme, please contact us. MANAGEMENT AGENTS For those who are interested in renting but do not wish to become involved in the detail of being a landlord, many estate agents offer a letting or management service. There will usually be a one off payment for advertising the property and where they act as a management agent they will charge between 10-15% of the weekly rental income. Fees will vary between agencies so ensure you shop around and you must be clear what services you want them to provide and whether they are able to do so, be sure to read the contract thoroughly. Please be aware that you the owner will be responsible for insuring the building and major repairs and maintenance. It is recommended that you use the services of a registered agent. The

10 9 National Approved Letting Scheme (NALS), Association of Residential Letting Agents (ARLA), the National Association of Estate Agents (NAEA) and the Royal Institution of Chartered Surveyors (RICS) all trade organisations and operate schemes to ensure that letting agents provide professional standards of service to both the landlord and the tenant. A management agent may provide some of the following services: Advertise the property Arrange viewings Collect references Collection of rent Dealing with repairs Periodic inspections Schedule of condition Serving notices for the tenant to leave when necessary Ensuring that the tenancy conditions are complied with Arrangements of Safety Checks If you need assistance in finding a tenant, we are able to assist you by nominating those on the council house waiting list, please be aware this would then be a private tenancy between you and the tenant. Please contact us for more information.

11 10 COUNCIL TAX Please note Gwynedd Council will no longer be offering a 50% Council tax discount on term empty properties, which means after 6 months of a property being empty it will no longer be except. This is a liability you will pay yourself if the property is unoccupied however if there was a tenant in the property they would be responsible for paying the council tax and any utility bills!! It is imperative that owners keep in touch with the Council Tax department and inform them when a tenant is occupying the property. RENOVATION If your property is in a poor state of repair there are several ways in which you can obtain financial help to fund the renovation needed. It may be possible for you to raise finance privately through equity release or re-mortgaging the property. A limited grant is available from the Council to help meet the costs of renovation and conversion of empty properties. We are able to provide a grant to cover 75% of renovation/conversion costs up to a maximum of 20,000 for a house, 10,000 for a flat and 15,000 per flat conversion. If successful in obtaining an Empty Properties Grant certain conditions must be adhered to. The primary condition is that the property is then let to a local tenant at a fair rent for a 5 year period. (please see conditions at the back of the brochure).

12 11 Please be aware that the number of applications exceeds the amount of grant money available it has therefore been decided that properties that are little more than a shell will be treated differently to those that require far less work to bring them back in to use. A scoring matrix is used to decide which properties will benefit from the grant. This will allow the Council to assist more owners in bringing their vacant property back in to use. With regard to council tax, an unoccupied and unfurnished property which needs or is undergoing major repairs or structural alteration can be except from paying council tax. This exemption is limited to a maximum of 12 months. An exemption will last for 6 months after the work is finished, but only to a maximum of 12 months exemption as a whole. For more information on this please contact the Council s Tax department. Planning permission and Building Control If you are changing the use of your property you will need planning permission. Restrictions may apply if the property is in a conservation area or if it is a listed building. It is imperative that you do not undertake work before planning permission is obtained!! Planning permission should not be confused with Building Regulations. The legislation concerning Building Regulations covers both the technical standards that need to be met and the procedures that need to be followed. It applies to all types of buildings, from new developments to an extension or alterations to your home. It is always recommended

13 12 that you discuss your proposals with Building Control before starting any building work. Choosing a builder When choosing a builder ask people you trust (family, friends, neighbours and so on) if they can recommend anyone. If you cannot find a personal contact, then use the Federation of Master Builders. These builders follow a code of practice. You can also reduce the risk of hiring a cowboy by using the government Trustmark scheme. Anyone with the logo is part of the scheme (see It is important to choose the right builder; a big problem that faces private consumers is price versus quality. Please be cautions as the money you think you will save by taking a cheap quote, you might have to end up spending, often along with a lot more to get another builder to correct the mistakes made by shoddy workmanship using sub-standard material. You need a builder that will do a quality job at a sensible price. Remember to get estimates from two or three different builders and be clear about what you want done. Use a contract; independent bodies like the JCT (see have produced a standard contract for use between you and the builder. It sets out clearly what s expected of both parties, it should detail what work should be carried out, when it is to start and finish and how much it will cost. A reputable builder will have no qualms about using such a document. A good builder will: Probably belong to a trade body therefore will conform to a code of conduct

14 13 final payment before work starts! Have current public liability insurance Will write you an estimate in writing Will have the work agreed in writing Not ask for unusual payment methods avoid dealing in cash and agree staged or Do not be rushed in making a decision, it s important to choose the right builder! VAT The Government has recognized that renovations can be extremely costly and have therefore introduced a number of tax changes which could reduce costs and encourage bringing empty properties back into use. VAT can be zero rated on the sale of homes which have been empty for 10 years or more. It can be also reduced to 5% for refurbishment works on empty homes where no one has lived for 2 years immediately before the work starts. Refurbishment works include: - Repair - Maintenance e.g. redecoration

15 14 - Improvement e.g. building an extension or installing double glazing - Provision of water, electricity and drainage. The following services must be standard VAT rated: - Installing non building materials e.g. carpets - Scaffolding - Landscaping - Professional Services e.g. architect, surveyor - Building control and planning consent For both the zero and reduced rates of VAT evidence must be provided. You could provide details from the Electoral Roll or Council Tax records, Utility Companies, or from the Empty Homes Team.. Please note that this information is correct at the time of writing but may change. Please contact HM Revenue and Customs or visit for up to date information.

16 15 POSSIBLE ENFORCEMENT PROCEDURES As noted above there are a wide range of services available to help empty property owners make the most of their property. However, where there are problems bringing the properties back into use, if it is causing a nuisance or hazard, or where the owner will not engage with the Council constructively, the Authority as a last resort will have no option but to look at a range of legislative options to resolve the issue. The following are a few options available to the council: Enforcement action to improve the condition of the property Enforced sale to recover charged place on the property when the council has had to do works in default as the owner has not cooperated Compulsory Purchase Order whereby the Council has the legal authority to purchase the property without the owners permission for the benefit of the general public. Empty Dwelling Management Orders to take over the management of a property PLEASE NOTE: This guide is not exhaustive nor does it give and authoritative interpretation of the law. If you are doubt about your legal rights or obligations you should seek information from your local Council Housing Advise Section, The Citizen Advise Bureau, or see a

17 16 Solicitor. Shelter Cymru supports local authorities, their partners, developers and owners of empty homes to make more effective use of privately owned empty homes to meet housing need, by providing free advice and information. In November 2009, Shelter Cymru launched its new website which enables you to notify your local council of empty homes in your area. This is part of Shelter Cymru's campaign for more affordable housing. The web site helps makes it easy for you to get empty homes in your area back into use. You can view reports of empty homes and responses from the Local Authority as regards to what is being done about them. For more information please visit or If you require any more information regarding your empty property or to report an empty property in your area, please do not hesitate in contacting the Empty Properties Team. We will endeavour to assist you in any way we can. Empty Homes Officer Swyddfa r Cyngor, Ffordd y Cob Pwllheli, LL53 5AA

18 17 EMPTY DWELLING GRANT ASSISTANCE CONDITIONS - 1. Payment of the assistance is conditional on:- a) the eligible works being executed to the satisfaction of the Council within 6 months of the date hereof. b) the production of proper invoices, demand or receipt for payment 2. The amount of assistance may be reduced if the Council ascertain that the aggregate of the cost of completing the works and the costs and expenses incurred with respect to preliminary and ancillary services and charges is or is likely to be, lower than the estimated expense. 3. Should the property be sold after the assistance is approved, but before the completion of the relevant work, the assistance approval will be cancelled and the Council will demand repayment of any monies paid to date. 4. The property should be let for a period of 5 years from the commencement date of the first tenancy agreement. The property should be let within 6 months of the completion date to persons either from the Private Sector Leasing scheme or to persons from the Council s housing waiting list (or Gwynedd Community Homes waiting list). Failing the above two options, the Council may consider allowing the owner to let the property to a local family at the local housing allowance level of rent. This should be done in consultation and agreement with the Council.

19 18 Should the property be sold during the first year of the condition period then the Council will demand full repayment. If the property is sold within the second year of the condition period, then 80% of the assistance would be repayable, 60% for the third year, 40% for the fourth year and 20% for the last year. 5. The dwelling will be let or be available for letting as a residence, but not as a holiday let, in accordance with the Private Sector Housing Policy The landlord must provide the Council with a copy of an acceptable Tenancy Agreement. 6. It is also a condition of the assistance that the Council may by written notice require the owner to provide within 21 days a statement showing how conditions 4 and 5 above are being fulfilled. 7. In the event of a breach of the assistance conditions, the Council will demand the repayment of the assistance and reserve the right to charge interest on the amount paid. 8. The applicant is responsible for the following: Asbestos survey Party Wall agreement Mortgagee consent Structural insurance consent Joint owners consent Compliance with Planning and Building Regulations Listed Building consent Conservation Area consent National Park consent Compliance with any other relevant British Standards or regulations.