Landlord’s Guide To Letting

This information is intended as a basic guide to the letting of your property.

We invite you to read through and then to make arrangements to discuss the letting of your property.

The Advantages of Letting

If you are leaving the country or residing elsewhere in the UK, by letting an otherwise empty property you are helping to deter burglars, squatters and avoid the inevitable deterioration that occurs when a home is unoccupied.

Consider the alternatives

  • If you sell      -           the fluctuation in house prices could put a similar property beyond your reach on your return or selling your property for less than it is currently worth, leaving you dissatisfied with your investment
  • If left empty  -           inadequate supervision could lead to deterioration and increase the ever present risk of vandalism
  • If you let your property -           you maintain an asset which should show capital appreciation.  The income generated should cover your expenses and the property will be occupied, maintained and regularly inspected by an experienced member of staff.

Where do we start?

Initial visit to your property

Advice on its current rental value based on our experience of the market place at that time.  At the same time we will make recommendations regarding which items should or should not be left in the property in compliance with current legislation.

When formally instructed to act on your behalf, we will prepare details of the property and place advertisements in the local press, and the websites, www.valerierose.co.ukand Rightmove.  In most cases, advertising is not necessary as many local employers and prospective tenants make contact direct and we keep a comprehensive mailing list which is distributed weekly.  Technology is now an asset in quick and accurate communication.

Choosing the right tenant

There is usually no shortage of applicants to rent residential property and care is taken to ensure that the best possible choice of tenant is made.  The introduction of a qualified, responsible tenant is the first step to ensuring a successful tenancy.  All applicants are interviewed before introducing them to selected properties which meet their requirements.

Prospective tenants view the property on accompanied viewings.  The property needs to look as attractive as possible and be available for viewing, often at short notice.  Access arrangements are important.

Interested parties are required to complete an application form giving their details for taking up references.  We will then confirm all details to you as Landlord.  We cannot take any responsibility if we are instructed to accept a tenant without taking references.

Legal Requirements for Rented Properties

Your property will need to be in good structural and decorative condition with all machines and appliances in working order.  Landlords have always had a duty under common law to ensure the safety of rented property and contents so that no injuries or damage is caused to occupants.  The Landlord and Tenant Act Section II states that landlords must maintain and repair all sanitary equipment and any appliances offered for use at the property.  If an accident occurs in, or outside a rented property due to lack of maintenance or as a result of a breach of legislation, landlords may be sued by tenants, visitors or member of the public and prosecuted by the Local Authority.

The Furniture and Furnishings (Fire) (Safety) (Amended) 1993 Regulations came into force on 1 March 1993 and directly affects a landlord who may wish to furnish the property.  The regulations apply to all upholstery and upholstered furniture, permanent or loose covers.  This includes beds, mattresses, pillows, settees, armchairs, scatter cushions and bean bags.  Should a landlord leave such furnishings in a property, each MUST carry a permanently affixed label showing the British Standard kite mark and stating that it is fire resistant.

The Gas Cooking Appliances (Safety) Regulations 1989 came into force on 1 March 1989 and applies to all equipment suitable for cooking purposes.  Landlords must ensure that all gas cooking appliances are clearly marked concerning usage and supplied with an instruction manual in the English language.  The Gas Safety Certificates are legally required and must be renewed annually.

The Gas Safety (Installation and Use)  Regulations 1998 are in addition to the above and states that the landlords should maintain ALL gas appliances such as boilers, central heating systems, fires and cookers annually.  Landlords should be aware that the British Gas Three Star service plan does not automatically cover all gas appliances including gas fires unless specifically requested.

The Electrical Certificate including a P.A.T. Certificate are required on all properties.   These are updated periodically.

Smoke alarms, fire extinguishers, fire blankets to be fitted in the appropriate sites.

New Acts relating to the rented property market are frequently introduced and updated.  We will advise landlords on relevant points and ensure that all possible steps are taken to comply with new legislation.

Valerie Rose Residential Management recommends all landlords install smoke alarms to their properties and all electrical appliances are checked over by a qualified electrician annually.

Preparing to let your property

MORTGAGE             

We find that many potential landlords overlook the fact that if a letting is envisaged and property is either mortgaged or charged against a loan then Consent to Let must be obtained from your mortgagees.  You should find that the majority of mortgage companies will usually give their consent where a Professional Lettings Agency is instructed.  We are happy to provide copy documentation to any lenders.

INSURANCE            

Landlords will need to advise their building insurers that the property is to be let.  Special conditions may apply if the property is likely to be vacant for a period.  We are able to offer advice concerning Landlords contents insurance and also default insurance to guard against such occurrences, in rare cases, of non-payment of rent and legal costs.

ENERGY PERFORMANCE CERTIFICATE (EPC)

Why do I need an Energy Performance Certificate for my rental property?

The Energy of Buildings Directive (EBPD 2002/91/EC.  The EU made this directive law and as such every EU Country must have systems in place, by the end of this year, for EPCs to be carried out on all residential and commercial buildings at point of sale or rent.

The UK Government have already implemented this in the sales process of residential property via Home Information Packs.  The role out to residential rental is already underway; however, it will become mandatory to have an EPC for property being marketed for rent on 01 October 2008.  It will be illegal to advertise a rental property without an EPC, and failure to produce one could result in a £200 fine.

Under these new rules, Landlords will need to provide an EPC to all prospective tenants and provide a hard copy to the selected tenants.  However, you will not need an EPC to tenants that renew their contracts as it is not necessary to provide an EPC to an existing tenant.

EPCs are intended to help prospective tenants compare the energy efficiency of various properties.

What is included in the EPC?

There are two rating on the front page of the EPC: The Energy Efficiency Rating and the Environmental Impact (CO2) Rating.  Both are based on a scale of A to G, where A is the best.  In addition the front page also shows an estimate of the energy required to provide heating, lighting and hot water, which includes an estimated cost to the tenants.

The certificate also includes a recommendation report which will outline any potential improvements that would make a difference to the energy consumption of the building.  This includes details of the approximate cost of improvements and the difference each improvement would make to the performance rating and the impact this would have on the cost of energy provision for the property.

The inspection will include assessment of the construction, heating/hot water, windows and insulation of the property.  All of this information will be fed in to a computer which then calculates the ratings and generates a certificate.

Where do I get an EPC and how much will they cost?

The EPC is carried out by fully qualified and accredited Domestic Energy Assessors (DEAs) and the cost is dependent on the size, type and location of the property.

Fees approximately £60 per property.

What impact will EPCs have on the environment?

The Energy Saving Trust have estimated that the average property owner could save over £300 a year on fuel bills related to their property by carrying out the basic recommendations in the EPC.  Indeed, if only one fifth of home owners made the basic changes set out in the EPC, collectively they could save around £100m a year on energy bills and cut carbon emissions equivalent to taking 100 cars off the road.

INVENTORY            

Prior to the letting of your property, Valerie Rose Residential Management will prepare a detailed inventory of the contents of your property noting all fixtures and their condition.  The inventory will be checked and signed by the tenant at the commencement of the term and will be checked periodically throughout the tenancy.

TAX                           

Income tax is payable on rents generated in the United Kingdom and landlords should inform their tax office of such earnings and submit their own tax return.  Members of HM Forces are responsible for the payment of this tax direct with PD5 at Cardiff (subject to our receiving a waiver of liability from the department).  Where a landlord lives overseas, a tax assessment is made against ourselves as agents and Valerie Rose Residential Management have a duty under the Taxes Management Act to pay over to the Inland Revenue any tax demanded on rental income.  To protect ourselves against such claims, Valerie Rose Residential Management will retain, from the rents we have collected, sufficient reserves to cover any likely tax bill.  In the case of OVERSEAS LANDLORDS, we recommend you appoint an accountant to prepare your tax assessment as the amount that may be due is considerably less than the amount we are obliged to retain and your return needs to be submitted as quickly as possible to enable any balance to be forwarded to you speedily.  We do require a notice of exemption for retention from rental income.

THE TENANCY DEPOSIT

The Agent is a member of the Tenancy Deposit Scheme, which is administered by:

The Dispute Service Ltd
P O Box 1255
Hemel Hempstead
Herts
HP1 9GN

Telephone no.         0845 226 7827
Web.                           www.thedisputeservice.co.uk
Email.                         deposits@tds.gb.com
Fax.                            01442 253193

1.  If we the Agent are instructed by the Landlord to hold the Deposit, the Agent shall do so under the terms of the Tenancy Deposit Scheme.

2. The Agent holds tenancy deposits as Stakeholders.

At the end of the tenancy covered by the Tenancy Deposit Scheme

1.  If there is no dispute we/the Agent will keep any amounts agreed as deductions where expenditure has been incurred on behalf of the Landlord, or repay the whole of the balance of the Deposit according to the conditions of the Tenancy Agreement with the Landlord and the Tenant.   Payment of the Deposit will be made within 10 working days of written consent from both parties.

2.  If, after 10 working days following notification of a dispute to the Agent/Member and reasonable attempts having been made in that time to resolve any differences of opinion, there remains an unresolved dispute between the Landlord and the Tenant over the allocation of the Deposit it will

be submitted to the ICE for adjudication (subject to .3 below).   All parties agree to co-operate with any adjudication.

3.  When the amount in dispute is over £5,000 the Landlord and the Tenant will agree by signing the Tenancy Agreement to submit the dispute to formal

Arbitration through the engagement of an arbitrator appointment by the ICE although, with the written consent of both parties, the ICE may at his discretion accept the dispute for adjudication.   The appointment of an arbitrator will incur an administration fee, to be fixed by the Board of The Dispute Service Ltd from time to time, shared equally between the Landlord and the Tenant.   The liability for any subsequent costs will be dependent upon the award made by the arbitrator.

4.  The statutory rights of either you/the Landlord or the Tenant(s) to take legal action against the other party remain unaffected.

5.  It is not compulsory for the parties to refer the dispute to the ICE for adjudication.   The parties may, if either party chooses to do so, seek the decision of the Court.   However, this process may take longer and may incur further costs.   Because it is a condition of the Tenancy Agreement signed by both parties, judges may refer the dispute back to the ICE for adjudication.   If the parties do agree that the dispute should be resolved by the ICE, they must accept the decision of the ICE as final and binding.

6.  If there is a dispute we must remit to The Dispute Service Ltd the full deposit, less any amounts already agreed by the parties and paid over to them.   This must be done within 10 working days of being told that a dispute has been registered whether or not you or we want to contest it.   Failure to do so will not delay the adjudication but The Dispute Service Ltd will take appropriate action to recover the deposit and discipline us.

7.  The Agent must co-operate with ICE in the adjudication of the dispute and follow any recommendations concerning the method of the resolution of the dispute.

Incorrect Information

The Landlord warrants that all the information he has provided to the Agent is correct to the best of his knowledge and belief.   In the event that the Landlord provides incorrect information to the Agent which causes the Agent to suffer loss or causes legal proceedings to be taken the landlord agrees to reimburse and compensate the Agent for all losses suffered.

Creating the Tenancy

There are many types of tenancies available to landlords and we would be pleased to discuss these in detail with prospective landlords.  Section 51 to 55 of the Housing 1980 introduced a tenancy referred to as a Shorthold Tenancy.  Subsequently, the Housing Act 1988 introduced the Assured and the Assured Shorthold Tenancy, of which the latter is the most commonly used and the one which we would recommend.

The Assured Shorthold Tenancy will be for a certain term, by agreement.  Valerie Rose Residential Management will ensure the tenancy is drawn up correctly prior to the commencement of the term.  It is important to note that TWO CALENDAR MONTHS notice must be given stating a landlord’s intention to seek possession at the end of a tenancy term.

Should a tenant fail to vacate, a landlord is advised not to under-estimate the time involved for Court procedures.   Landlords cannot evict a tenant without a Court Order.  To do so is a criminal offence and significant amounts of compensation may become payable to the tenant.

Our Duties as Managing Agents

We offer various services to prospective landlords and the following applies only to where we are instructed in our full management service.

As agents, Valerie Rose Residential Management will undertake to advertise your property and seek suitable tenants, meeting the criteria for the property.

Once a tenancy is procured, references taken up and approved, we will negotiate all the terms and conditions to be incorporated into an agreement.  Valerie Rose Residential Management prepare a Tenancy Agreement which is constantly updated and checked over by our legal advisors.  A draft copy is initially made available to you, also a copy of any future Tenancy Agreements introduced by this company.

Valerie Rose Residential Management recognises that not all landlords need a full management service and wish to oversee the running of the tenancy at their property themselves.  In such cases we would be happy to provide a LETTING SERVICE, which would include the search for a tenant and preparation of documentation to include a full inventory.  Valerie Rose Residential Management would check the tenant(s) into the property and collect the first month’s rent and deposit.  The rent is then forwarded on to the landlord, less agreed fees.  The deposit is held under the terms and conditions identified.  From this point the landlord will arrange his/her/their own management of the property to include rent collection, supervision of repairs, inspections and serving Notices for possession at the end of the tenancy.  Valerie Rose Residential Management would be happy to undertake any of the above named, but having provided a Letting Service only, would make an appropriate charge.

Introduce a Tenant Service

Where a landlord simply requires the introduction of a potentially suitable tenant, this service can be discussed and the appropriate action taken with the applicable fee being agreed.