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There are a number of things that you must check before letting your property.
If you have a mortgage (or standard security) on your property, you must obtain permission from your mortgage lender before letting your property. Remember if your property is leasehold it may be necessary to obtain permission to sublet from the freeholder.
Always remember to check with your insurance company. In many cases letting your property will invalidate your insurance - be on the safe side and check. Guardian Residential Lettings & Sales LLP offer specialist landlord insurances at very keen rates if your current insurer is not happy to extend cover for letting.
DECORATION
Properties must be in good decorative order. We will advise on any work needed to make the property more attractive. These works should be completed before the property is shown to prospective tenants.
A property offered in good condition will achieve an optimum rental figure and is more likely to be well maintained and cared for by the tenant.
WEAR AND TEAR
The highest market rent are achieved by properties in first class condition, these properties attract the best tenants and do not suffer from extensive empty periods.
After your property has been let for 2-3 years modest wear and tear will begin to show. Guardian’s approved tradesmen will be glad to advise and estimate for economical improvements.
Your Guardian Property Negotiator will also be able to assist you where furnishings require replacement - from a single bed to an entire house, furnishings can be supplied to suit both the property and your budget.
CHOOSING BETWEEN FURNISHED OR UNFURNISHED
Since the introduction of the 1988 Housing Act with the Assured Shorthold Tenancy Agreement, it does not make a difference to the landlord’s or tenant’s legal rights if a property is furnished or not. There will be no extra rent received on the property whether it is furnished or unfurnished. However, if your property is located close to Harlow's Princess Alexandra Hospital, a furnished property is always preferable.
There is a high demand for both furnished and unfurnished properties. Where possible, it is advisable to keep an open mind until the time when a tenant is identified and secured. When a tenant is found who wishes to pay the appropriate rent, can provide satisfactory references and appears to be an ideal candidate then it may be a good idea to consider providing, for example, a bed, should they require one. Having flexibility often leads to securing the model tenant in the minimum amount of time.
An unfurnished property would normally include carpets, curtains and light fittings. Partly furnished can cover a wide range of possibilities, ie it may mean unfurnished with only kitchen appliances, or it may be nearly completely furnished but lacking for example a sofa.
The cooker, washing machine, dryer, dishwasher, fridge, freezer and the heating system should be in good working order, serviced and clean. If the property if vacant the fridge and freezer should be defrosted and left with the door open.
We would recommend that items such as televisions and Hi-Fi systems are not provided, as the majority of tenants will provide their own. It is also important for the property to look presentable and welcoming. In addition, it is advisable that any items of sentimental value are not left at the property.
The landlord should ensure that any items being left at the property are sufficiently insured.
SAFETY
Landlords have always had a duty under common law to ensure the safety of rented property and contents so that no injury or damage is caused to the occupants, neighbours or public. There are, however, many regulations which apply to let property and these must be attended to by landlords.
REGULATIONS
THE GAS SAFETY (INSTALLATION AND USE) REGULATIONS 1994
The Gas Safety Regulations 1994 cover all gas appliances and pipework installed in all let properties. All landlords must ensure that such appliances and pipework are maintained in safe condition. Landlords must ensure that each appliance is checked at least once every twelve months by a CORGI registered engineer, and a Gas Safety Certificate must be supplied and be available to pass on to the tenant at the start of the tenancy.
FURNITURE FIRE (SAFETY) REGULATIONS
All furniture and soft furnishings situated in a rented property must pass the “match and cigarette test” and the appropriate labels must be in place. Any furniture that does not comply with these regulations must be removed from the property. Carpets, curtains and furniture manufactured prior to January 1950 do not have to comply with the regulations. It is important to note that to meet the regulations, each item must have a permanent sewn in label.
ELECTRIC
The Electrical Safety and the Consumer protection Act 1987 was created to ensure the safe supply of consumer goods, which includes goods supplied in the course of business, as in the case of rented accommodation.
It is crucial to ensure that all items are in a safe condition to use, with all relevant safety guards. They must comply with the P.A.T. test (Portable Appliance Test). To comply with the P.A.T. test they must meet the following requirements:
a) the flex must not show any exposed wires
b) the plug must be fitted with the correct rated fuse for the appliance
c) it must be a modern plug with “shielded” prongs.
To ensure peace of mind, it is recommended that all electrical appliances are checked, and major appliances are serviced at least annually by a competent electrician. Also that any of the defective items are not left at the property at the start of the tenancy.
Letting agents acting for their landlords are equally responsible for ensuring all the above regulations are adhered to.
SMOKE ALARMS
The Building Regulations 1991 require that all properties built since June 1992 must have mains operated interlinked smoke alarms fitted on every floor. There are no such regulations regarding older property, but we recommend that smoke alarms be fitted to all properties.
INSURANCE
It is essential that insurance protects landlords against loss while the property is either vacant or tenanted. We work in connection with Homelet. who provide comprehensive policies designed to cover all the risks associated with letting property for the private and professional landlord.
• Buildings cover
• Contents cover (limited contents cover for part furnished properties)
• Legal protection insurance (covering any legal expenses the landlord incurs should the tenant default on the Tenancy Agreement)
• Rent guarantee - credit check
We also recommend contents insurance for tenants, which would protect their possessions, and also the tenant’s liability under the Tenancy Agreement for damage to landlord’s possessions. Therefore it can protect the tenant's deposit.
TAX IMPLICATIONS
The income derived from letting your property may be subject to tax. There are numerous deductions that can be made from the rent received which are tax deductible, as follows:
• Guardian’s agency commission
• Buildings and contents insurance
• Maintenance, service charge and ground rent on leasehold properties
• Interest on mortgage or loans for purchase or improvement of property.
• Repairs and improvements, although not capital expenditure
• Accountancy charges
• Depreciation of furniture or fittings
• Council Tax while the property is vacant
• Wear and tear allowance for furnished properties
• VAT on all charges
The above would be deducted from the rental income, leaving an amount that may be subject to tax. We would recommend that advice from an accountant is gained regarding this matter.
COUNCIL TAX
Tenants are responsible to pay Council Tax for the period of the tenancy. When a property is vacant it is the landlord’s responsibility.
OVERSEAS LANDLORDS
Special rules apply to landlords who reside overseas for more than six months at a time. The letting agent must deduct tax at the rate of 20% (which may be subject to change each time a budget is announced by the government) from the landlord’s net rental income, which is paid to the Inland Revenue. Should the landlord fill in an NRL1 form and send to the Inland Revenue Overseas Landlord scheme, the Inland Revenue should issue the letting agent with an Approval Number. Once the agent receives this number, no overseas tax needs to deducted from the landlord’s rent. We can assist you with your Overseas Landlord Tax form, please speak to one of our experienced lettings negotiators.
SERVICES AND UTILITIES
From the start of the tenancy, the tenants are responsible for all utility bills including gas, electric, water rates, Council Tax and telephone. The new tenant should change all of these into their name upon move in. Meter readings will be taken where appropriate when the inventory is carried out. The landlord is still responsible for paying the service and maintenance charge if the property is leasehold, and would be responsible for the utilities should the property become vacant between tenancies etc.
TELEPHONES - INTERNET - SKY/CABLE
Landlords should request a closing account before leaving the property. Tenants are required to make their own application for telephone reconnection.
KEYS AND ALARMS
There should be a sufficient number of door keys for each occupant, and an additional set to be held by Guardian. It is always advisable for the landlord to also retain a set.
With regard to burglar alarms, it is crucial that clear instructions are given for turning the alarm on and off, together with the appropriate code. It is a good idea to have a twenty-four hour service contract for the system should the tenant encounter a problem.
GARDENS
The tenant is responsible for the upkeep of the garden throughout the tenancy, therefore it is a good idea to provide the relevant gardening equipment.
It is the responsibility of the tenant to ensure the garden is left in the same condition as it was found at the start of the tenancy. It is therefore important to ensure the garden, as with the inside of the property, is given to the tenant in a tidy and presentable condition.
For large or special gardens, it may be worth considering the employment of a gardener, as tenants cannot be expected to be expert or specialist gardeners.
MAIL
Arrangements should be made by the landlord for the forwarding of their post. This can either be carried out via the Post Office, or arrangements can be made directly with the tenant - although it is not the tenant’s legal responsibility to forward mail. To ensure efficient forwarding of mail, we would always recommend using the service provided by the Post Office.
BOUNDARIES
Damaged walls, fences and trees can present problems from time to time. As your agent, it is useful to inform Guardian of the boundaries you are responsible for.
MARKETING THE PROPERTY
The marketing process would begin immediately after permission to proceed has been given by the landlord. There are a number of main forms, the most important of which is our list of prospective tenants who are looking for property. Our Negotiators are in constant contact with these people and have a thorough knowledge of which type of property they are looking for. It is common when speaking to a new landlord about marketing their property, that our Lettings Negotiators may already have a tenant in mind for the property. These tenants will be contacted immediately, receiving a detailed description of the property and encouraged to view.
Another very important form of advertising is to have a “To Let” board outside the property. Although some people feel these are unfavourable, they play a very important role in encouraging enquiries from prospective tenants who drive or walk past the property.
We also advertise in our central shop front window in Harlow Town Centre.
Advertising in the local newspapers plays an important role, although many properties have already been let by the time the advertisement comes out in print.
Our website will have details of all properties which we have to offer at any particular time, and can be accessed from any location, immediately showing exactly what is available. The website provides general information about ourselves, encouraging good quality tenants to use our services on the basis that we are holding and offering good quality properties with responsible landlords. We also advertise on Rightmove.co.uk, the largest homes portal currently used.
VIEWINGS
Guardian’s Negotiators often view a property with prospective tenants in mind, using their experience to match home to tenant. They are always aware of companies who will be needing properties for staff relocation.
SELECTION OF TENANTS
Once a property has been selected, we send for a number of references. These would normally be from an existing employer confirming salary level, a previous landlord confirming they have been good tenants in the past, a previous employer and character reference. In addition to this we would ask the tenant for a bank reference or copies of bank statements. If a potential tenant is self employed, financial references can be obtained from their book keeper or accountant. If at any time we are not happy with the tenant of the references did not come back to our satisfaction, this would be discussed with the landlord and tenant immediately. A guarantor can also be gained should this be deemed necessary.
THE MOVE IN
Once the process of the tenancy selecting a property is complete and a move in date identified, a number of things must take place. Drawing up Tenancy Agreements, drawing up an inventory, preparation of a Gas Safety Record, ensuring the property is presented in a clean and tidy condition, referencing and vetting procedure completed etc. Once all this has been carried out satisfactorily for landlord and tenant, we would collect the first month’s rent in cleared funds, together with their dilapidations deposit. After this, and once the Tenancy Agreements have been signed and the keys handed over, the tenant would be given access to move into the property on the first day of the tenancy.
THE TENANCY AGREEMENT
The majority of tenancies are run on Assured Shorthold Tenancy Agreements. The industry normal minimum period of time is six months, although legislation has been altered to allow for a shorter term should both landlord and tenant agree.
Our policy would be to initially set up the Tenancy Agreement for a twelve month period, with a clause within the agreement that allows either party to give two rental months notice after the four month stage, thus giving flexibility for both parties yet providing a minimum six month agreement.
With the agreement of both landlord and tenant, the tenancy can be renewed for future periods for as long as required beyond the initial twelve months. If an Assured Shorthold Tenancy is allowed to continue in this way, the landlord retains the right to seek possession of the property at any time by giving the tenant two rental months notice of their intention to do so (the court must grant you possession of your tenant refuses to vacate when required).
Potential landlords are sometimes afraid that their tenant might damage their property or the furniture, or be a poor neighbour. The Assured Shorthold Tenancy Agreement allows you to control this, as it allows you to repossess your property should the tenant damage it or your furniture, if he or she is a nuisance to your neighbour, or if the property is being used for illegal or immoral purposes. Possession can be gained should the tenant break any obligations of the Tenancy Agreement.
This works both ways. Should the tenant keep within the rules of the Tenancy Agreement, then he or she must be allowed to live at the property without interruption or un-necessary disturbance from the landlord.
THE INVENTORY
Prior to the commencement of the tenancy, a detailed inventory will be taken. This will take account of any items of furniture left at the property and their condition, and a description of the type and condition of the carpets, light fittings, wall coverings, fixtures and fittings, ie bathroom and kitchen.
It is important that the inventory is as detailed as possible to avoid any differing opinions when checking the tenants out of the property. Guardian will carry out all inventories, property inspections and final inspections “in house” by our Management Department, as we believe this provides consistency.
The tenant should sign the inventory on the start date of the tenancy and then has a further ten days in which to check the inventory thoroughly at the property, ensuring nothing has been missed or overlooked. Should the tenant not return the inventory within ten days with any adjustments, then it is assumed the original copy is accurate. A copy of the inventory and any adjustments are forwarded to the landlord.
COLLECTION OF RENT AND ARREARS
Collection of rent on the specified rent due date, dispensing the rent by BACS service to the landlord to their chosen account. We pride ourselves in administering your rent as swiftly as possible, usually within twenty-four hours of receipt, allowing for weekends and Bank Holidays.
In the event of rent arrears we make every effort to act swiftly and efficiently. Although Guardian as the agent are not liable for the rent, our fully computerised accounts system will advise when a tenant is late with their rent by three days. At this stage a gentle reminder is all that is generally needed to encourage the rent to be paid. Occasionally further action is needed, this can range from letters, calls or personal visits. The landlord is always informed fully of the situation. We encourage all tenants to advise us if they are likely to have any difficulty with rental payments, so this can be discussed in an amicable and friendly fashion. If this approach is taken we would normally reach a solution to any problems to the satisfaction of both landlord and tenant.
PROPERTY INSPECTIONS
Our fully managed service obviously includes formally checking the property every 10-12 weeks, at which time a written report will be supplied, ensuring your continued peace of mind. This report is counter signed by the tenant.
The checks also help us highlight any maintenance work required to keep your property in good order. In all instances routine or major works would be fully informed and quotes obtained prior to your authorisation. We will agree with you before letting your property a sum which we can authorise repairs on your behalf, usually £100.00 - this allows us to deal quickly and effectively with emergencies which may occur, avoiding more serious loss or damage.
TENANCY RENEWALS
For the Fully and Non Management services, a letter is sent to the tenant and the landlord to advise them when there are two months remaining of the current Tenancy Agreement. The landlord’s letter also includes an up to date market valuation of the calendar monthly rent. It is at this stage the landlord and tenant have the option to renew and review the details of the tenancy. For example it would be the landlord’s opportunity to request a rent increase. Should both parties be happy to renew the tenancy, a new Assured Shorthold Tenancy Agreement will be drawn up to the new specifications. This is then signed by both landlord and tenant.
AT THE END OF THE TENANCY
On the final day of the tenancy a Final Inspection will be carried out. Ideally the tenant, landlord and a representative from Guardian should be present at this appointment when the condition and contents of the property are checked off against the original inventory. Should the property be found in satisfactory condition, taking into account fair wear and tear, and if the rent is paid in full up to and including the end of tenancy date, the deposit will be returned to the tenant, usually within seven days.
Should there be any outstanding items such as stained carpet or general cleaning to be done, this would normally be agreed at the Final Inspection. Guardian would then gain appropriate quotes from our recommended tradesmen to rectify these items, and the cost would be deducted from the tenant’s deposit. We always take care to ensure that the quality of work carried out on behalf of the tenant is to a high standard, and the cost is kept to a reasonable level. Thereafter the balance of the deposit would be returned.
If a property is due to be re-let, it is imperative that the amount of time between tenancies is reduced to a minimum. Our objective is to have no more than a two to three day gap between tenancies, thereby providing the landlord with seamless rental income. The main objective is to provide a fifty to fifty-two weeks per year occupancy. When re-letting the property we will also try to provide information on improvements that may be required at the property to ensure it is still attracting the highest calibre tenants and maximum market rent.
WHICH SERVICE DO YOU REQUIRE?
We understand that every landlord will have specific objectives in mind when planning to instruct a letting agent. We can tailor a service to meet any landlord’s requirements and long term objectives, and pride ourselves on being able to provide the service you require. As a general guide, our service fall into three categories which are listed below:
FULLY MANAGED:
This is the most thorough and comprehensive service, looking after all the landlord’s requirements. We will provide the following: Market your property to registered tenants and on-going applicants. Arrange and accompany prospective tenants’ viewings. Vet and screen prospective tenants. Obtain employer, financial and personal references where appropriate. Negotiate and agree terms of your tenancy, including the rent, furniture and any specific requirements of landlord and tenant, and ensure that both landlord and tenant are joining a tenancy which is clearly understood which will lead to a harmonious and trouble free tenancy.
Collect and hold dilapidations deposit. Prepare the Tenancy Agreement. Prepare an inventory immediately prior to the tenant taking up occupation, ensuring the inventory is thorough and detailed, and ensure the landlord and tenant have the opportunity to check the inventory. Collection of rent on the specified rent due date, dispensing the rent by BACS service to the landlord to their chosen account.
Carry out property inspections every ten to twelve weeks, sending a written report to the landlord which is counter signed by the tenant. We will discuss any and all problems found with the tenant, ensuring the tenancy continues to run in a smooth running fashion. Making available landlords’ and tenants’ insurances. Assisting the landlord to complete documentation for “Non Resident Landlords” in respect of the Inland Revenue.
Our Management team will take calls on behalf of the landlord to discuss any aspects of the property or Tenancy Agreement. This can sometimes involve extensive communication with the tenant, ensuring they are fully aware of the property and how it should be looked after in terms of the services, appliances, gas installation etc. Deal with any rent arrears should this occur.
Send out appropriate letters and formal notices towards the end of the tenancy, to ask if both parties wish to continue the tenancy, discuss and arrange the continuation of the tenancy, which may involve advising the landlord of any rent increase which may be due and negotiating and agreeing this with the tenant. Renew the Tenancy Agreements as and when required.
When the tenancy ends we will inspect the property with the landlord and tenant, ensuring the property is checked thoroughly after the tenant has left and removed all belongings and left the property in clean and tidy condition. At this point we refer to the original inventory and discuss this with landlord and tenant. If the Final Inspection is satisfactory, we endeavour to return the tenant’s deposit with immediate effect, usually returned within seven days. If there are any problems at the property these are discussed immediately with both parties, again to ensure an agreement is reached and any problems are attended to efficiently and simply on behalf of both parties under the legislation of the Tenancy Deposit Scheme. At this point we would have taken instructions from the landlord at the notice moment to ensure the property is re-marketed on their behalf, and if is the case to the best of our endeavours ensure the property is re-let without any vacant period.
NON MANAGED:
This service would follow all the criteria listed in our Fully Managed service, however we would not be on call in respect of maintenance or enquiries from the tenant. The tenant would have direct access to the landlord who would manage this aspect of the tenancy. In addition to this we would not carry our property inspections. This would need to be carried out by the landlord. This service would suit landlords who wish to be more involved with the tenancy and take a more “hands on” approach. All other aspects of our service would remain the same as Fully Managed.
INTRODUCTION ONLY:
This service is appropriate for landlords who wish to manage all aspects of the tenancy. We would follow our usual procedure for marketing the property and securing a tenant including gaining references. The Tenancy Agreement would be prepared, although an inventory would not be included. The first month’s rent and deposit would be collected from the tenant and forwarded to the landlord less our agreed Introduction Only fee. All further matters relating to the Tenancy Agreement ie rent collection, property inspections, preparation of inventory, maintenance and organisation of tradesmen and Final Inspection would be carried out by the landlord.
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