Landlord Zone

The thought of letting your property to a perfect stranger may seem daunting with potential nightmares looming. Most of us have heard the stories and may be concerned about the pitfalls, however with the correct advice, preparation and execution the letting could bring a welcome and valuable income stream, with minimal risk.

For peace of mind, there are many insurance products available in today's market, which subject to the correct letting process can guarantee rental payments, legal expenses, emergency repairs. Other Insurance products include Buildings, Landlords contents and Tenants contents insurance.

All our tenants are professionally referenced by an external referencing agency, which is backed by the insurance company offering Landlord's protection policies. The Tenant is asked to complete a detailed application form listing addresses and employers details for the last three years. References are sought, checks are carried out including a credit check and a report follows accepting or declining the prospective tenant or seeking further information or a rent guarantor.

As a Landlord there are statutory obligations (compulsory by Law) and contractual obligations, an example of which requires you to provide certain standards of safety and repair at your property. You must be aware and comply with your legal responsibilities for obvious reasons.

The Housing Acts and the widespread introduction of the BUY TO LET mortgage has significantly increased the number of new Landlords entering the market, providing a welcome supply of otherwise unavailable rented housing.

Free No Obligation Consultation

There are many possible reasons for letting your home or a second property and many points of consideration. One of our consultants will gladly arrange a mutually convenient appointment to visit your home, where we can discuss your objectives and offer solutions, in order that you are able to make an informed decision. We offer this free appraisal as a no obligation introduction to our services.

Either click here or call our lettings department to arrange your free no obligation consultation 01244 402940

Once you have made a decision to let

Now is the time for you to plan your letting and make ready for occupation. During our visit to your home, your key objectives will be discussed and a suitable agreed marketing plan put in place. Points to discuss include:

• The Potential Rental Value and how much should I charge?
• Who will manage your property…. Agent or you?
• Smokers/ Non Smokers/ Pets
• Whether to let furnished or unfurnished
• Are you up to speed with your Safety, Statutory and Contractual Obligations
• How long do you wish to let for
• Have you a detailed Inventory schedule of condition report
• Are there any repair work and or decorations required prior to letting
• Is there anything you need to do prior to being able to let my property?
• All properties now advertised must have a valid EPC certificate
• Buildings, Contents, Rent Guarantee insurance

EPC – Energy Performance Certificates

With effect from 1st October there will be a legal requirement for all landlords to produce an Energy Performance Certificate (EPC) to a new tenant before being allowed to let the property out. Please note this only relates to properties being let on 1st October and thereafter. Once the EPC has been finalised this is then valid for 10 years.

We can arrange for the completion of an EPC at a cost of £86.25 inc VAT

Safety Inspections

• Gas Safety (Installation and Use) Regulations 1998
• Electrical Equipment (Safety) Regulations 1994
• Furniture and Furnishings (Fire)(Safety) Regulations 1988

The Gas Safety (Installations and Use) Regulations 1998

These regulations require that any person letting a property must ensure that all gas appliances and flues in the property are maintained in a safe condition so as to prevent risk of injury to any person by ensuring that all such appliances, and flues are checked annually by an approved (CORGI) contractor. The legislation also requires that a record of the annual check is given to the tenant before occupation takes place, or in the case where a tenant is already in residence within twenty eight days of that check being carried out. A copy of that record must also be held by the Landlord (or his agent) for at least two years and made available for checking upon request.

Electrical Equipment (Safety) Regulations 1994

There is no statutory obligation on landlords or agents to have professional checks carried out on the electrical system or appliances. However, under the Electrical Equipment (Safety) Regulations 1994, the Plugs and Sockets etc. (Safety) Regulations 1994, both of which come under the Consumer Protection Act 1987, there is an obligation to ensure that all electrical equipment is safe.

We would strongly recommend that any Landlord, regardless of whether they see themselves as running a business or not, should make absolutely sure they are complying with these regulations to ensure that all electrical equipment supplied is safe.

In order to do this we recommend:

• Inspections on tenant change-overs, recording electrical equipment, its condition and fuses fitted
• Periodic inspections of electrical equipment by a qualified electrician.
• 5 yearly inspections by a qualified electrician to ensure safety and that the electrical system complies with current electrical regulations.
• Keep all records of these inspections

COST - We can arrange an inspection of all gas or electrical appliances at your property by a fully insured Corgi or NicEic registered plumbing or electrical engineer – Cost per check: £86.25 inc VAT

There are two avenues available to you for the letting of your property either Self Managed or Managed. The ‘correct’ option is subjective and depends on your experience, skills and time available. Each option has advantages and disadvantages but you should carefully consider which option is best for your particular circumstances.

Letting Options – Self Managed

These options are available for landlords who are confident that they know their responsibilities and best practice in managing properties. This option saves you management costs, but can require a considerable investment in time. If problems arise, you may require advice from a professional such as a lawyer or accountant, which may come at a cost. Landlords who are based far away from their rental property, or even live abroad, should not consider this option of managing the property themselves.

• Free rental valuation
• Database of professional tenants
• Comprehensive Tenancy Agreements
• Weekly advertising

BRONZE – Find a tenant only

A charge of the equivalent of one months rent is made for the introduction of a tenant. Any Property visits, Inventories reports, Check in/out visits and Professional Safety Check Engineers are available at extra cost. All charges are subject to VAT at the current rate.

SILVER – Rent Collection Service

Where the landlord requires collection of rents in addition to the Find a tenant only service, then the cost will be £275 plus 10% of the gross rental income, this figure will be deducted from rents collected.

Letting Options – Managed

If you decide to delegate the task of managing your property, In addition to the services provided in the Bronze service, the 'Managed' Service offers:

• A specific in house Property Co-ordinator allocated to your property to maintain uncomplicated communication with yourself and the Tenant
• Trusted fully insured contractors for maintenance and repairs
• Organising of annual Gas and Electrical Safety Inspections
• Peace of mind
• Emergency repair service
• Problem solving Lettings Manager
• Maintenance of the standard of the property to attract good tenants at optimum rent
• A better prospect of continued and regular rent payments

GOLD – Standard Management

A charge of £175.00 is made for each letting, along with a percentage of your monthly rent income (currently 14%)

PREMIER – The complete package

A charge of £175.00 is made for each letting, along with a percentage of your monthly rent income (currently 16%) Including Landlords Rent Guarantee protection cover via Endsleighwho are a market leader in providing specialist insurance products for the lettings market, thousands of landlords and tenants already choose Endsleigh for their insurance needs.

The objective is to find a suitable, financially secure tenant offering the best price who is able to meet your requirements, previously agreed, as soon as possible. During our free consultation, we will assess letting potential and agree a marketing plan to best achieve your most suitable Tenant.

Open 6 Days a Week

Our offices are open six days a week for your convenience and are located in a prominent city centre position. We are open until 5.30pm Monday to Friday and until 4pm on Saturday.

Tenant Data Base

Tenants contact us a result of extensive advertising, internet and High Street presence etc and are held on a constantly updated database allowing us immediate communication by telephone, email, fax and or post.

Regular advertising in local media and on-line ensures a constant stream of new prospective Tenants for your home.

www.humphreysofchester.co.uk

www.righmove.co.uk

www.thinkproperty.co.uk

Letting Board

Where appropriate, we recommend the erection of a 'To Let' sign at your home, to ensure all avenues of introducing a suitable Tenant are explored. Some homeowners may be concerned at the prospect of their neighbours knowing they are trying to move, however many good tenants are found by word of mouth.

Accompanied Viewings

Access arrangements to your property with prospective Tenants are always agreed at the outset. Unless otherwise instructed, we will always accompany each viewing, which will allow us to exercise internal security procedures and give us the opportunity of obtaining immediate feedback from the viewers.

Feedback

We maintain a history of each viewing of your property and are able to ensure you are fully aware of the progress of your let.

Offers

All offers will be communicated to you verbally as soon as possible. It is our job to ensure that we provide you with as much information about the status of the prospective Tenants as possible, in order that a decision can be made.

Insurances Available

• Rental Guarantee insurance - in the event of non payment of rent, the insurance company will pay the rent you are expecting from your property until vacant possession is obtained. Related legal expenses are included. (Further policy terms available on request)
• Buildings and Contents Insurance - specifically designed for the lettings market is available. (Quotations and policy terms available on request)

The reality is most tenants are genuine but sadly there are in excess of 150,000 possession requests every year. The most dishonest tenants are often the most plausible so it becomes very hard to take things at face value.

We outsource our tenant referencing to a specialist ‘Complete Letting Agent Service Provider’ who carry out comprehensive tenant vetting. Example below:

• No outstanding works required
• Property is free from rubbish
• Gardens have been tidied
• Two full sets of keys for the new tenant and one set for the Agent to retain
• Energy Performance Certificate
• Landlords Gas safety Certificate
• Electrical Certificate (PAT test / Periodic)
• Inventory & Schedule of condition
• Confirmation that you are happy for deposit to be lodged with the DPS
• You have appropriate landlords insurance

Your property is now successfully being let, however problems may still arise, an agent will act quickly, efficiently and in accordance with prescribed legislation.

Inspections

It is a good idea to visit the property every 2/3 months to make sure that the tenant is looking after it, and that they are not breaking any terms of the tenancy agreement. Notice to carry out such inspections is required giving 24 or 48 hours notice in writing. Attention would be drawn to the tenant to anything that they have broken or are not looking after.

Renewals

As you are nearing the end of the fixed term of the tenancy, you need to make a decision as to whether or not you are happy with the tenant(s) and want them to stay. Assuming the tenant is happy to renew you have 3 options: renew the tenant/ by issuing a new agreement/continue as a periodic or take steps towards ending it.

Ending the tenancy

If you do not wish to renew your tenancy agreement then a Section 21 Notice informs the tenant you are giving them no less than two months notice of your intention to bring the tenancy to an end. The expiry date of the notice cannot be before the last date of the fixed term and must typically, but not always, be the last day of the rental period.

Deposits

As part of the Housing Act 2004 the Government is introducing tenancy deposit protection for all assured shorthold tenancies (ASTs) in England and Wales where a deposit is taken. From April 6th 2007, all deposits paid under an AST have had to be protected within 14 days of receipt by the landlord’s Agent. The legislation aims to ensure that tenants who have paid a deposit to a landlord or letting agent and are entitled to receive all or part of it back at the end of that tenancy, actually get it.

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General Principles

Special rules apply to the UK rental income of non-resident landlords (NRL) or landlords who live abroad (usually for more than six months). The NRL scheme is run alongside Self Assessment and operates for rental income paid on or after 6 April 1996 and replaces the old rules under the Taxes Management Act 1970.

Non–resident landlords (NRL) scheme

From 6 April 1996 letting agents of a non-resident landlord must operate the NRL scheme and deduct tax from the rental income, unless written notification to the contrary is received by the agent, directly from the Inland Revenue, for each landlord. In short the agent will either:

• If authorised by the Inland Revenue, pay the GROSS rental income to their non-resident client, or
• Deduct tax at the basic rate on the net income, subject to certain deductible expenses

Exemptions

If a tenant pays the rent directly into the landlord’s bank account, the tenant must operate the NRL Scheme and deduct tax, unless the rent is below £100 per week or the tenant receives written notification from the Inland Revenue to the contrary

If an exemption certificate is not received from the Inland Revenue, then tax at the basic rate (currently 22%) must be deducted from the rental income after deductible expenses.

Payments of tax must be made within 30 days of the end of each quarter (30/06, 30/09, 31/12, 31/04) and at the same time a form is required to be submitted showing the total tax due for the quarter for all non-residents. An annual return (summary) is also required by the beginning of July following the end of a tax year to 31st March.

Exemption Application

An existing overseas landlord or a landlord thinking of moving overseas, should apply at the earliest opportunity, to the Inland Revenue for approval to receive rental income with no tax deducted as long as:

• their UK tax affairs are up to date; or
• they have never had any UK tax obligations; or
• they do not expect to be liable to UK tax

Further information, guides and applications forms can be found at www.hmrc.gov.uk