Tenants Guide
A helpful guide to the process of renting and Chesterton Humberts mandatory charges.
Contents
Choosing to rent a home Tenant home search process
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3 4–7
Tenancy arrangement
8
Deposit
9
Referencing
10
Guarantors
11
Renewals and Vacates
11
Definitions
12
Choosing to rent a home
The popularity of renting as a lifestyle choice is growing and as with any home search, there is much for an individual to consider. Chesterton Humberts can help you focus your search to increase the likelihood of you finding the right place at the right time. Everybody’s situation differs as does priorities and motivations impacting a tenant’s decisions. However, all renters should consider and be armed with the following information prior to their search;
• • • •
Who will you be living with (for example; family, friends, alone) Location Budget Date of move in
We always recommend being flexible on furnishings and outside space, however, these factors may be of utmost importance to you. Once you have come to a decision on the above, you will undoubtedly turn to the major property web portals to search for a home. If it is your first time renting, you may also wish to visit citizens advice bureau to research your rights and obligations as a tenant. You should also register your interest with a regulated lettings agent, which is where Chesterton Humberts can help you!
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Tenant Home Search Process
3. Register with Chesterton Humberts
4. Viewings
2. Decide on area
19% 40%
ER UND R OFFE
21%
12%
7% 18%
13%
1. Decide on budget
6. Agree a Contract
8. Attend the inventory check in 7. Prepare for your move
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5. Offer on a Property
9. Make yourself at home!
Decide on budget When letting via a regulated agent you must be willing to submit to an independent referencing process. An element of this is to ensure that your earnings reflect that you are capable of managing the rental payments. Please see “References” on page 10 for more information to assist you in deciding on how much you wish to spend. You will also need to consider the administration fees that you may be charged for arranging a tenancy.
Chesterton Humberts Mandatory Charges; Upon agreement of a tenancy Chesterton Humberts charge tenants the following fees;
Administration Fee Reference Fee Renewal Administration Fee* *Upon a renewal of a tenancy
£185 + VAT £35 + VAT per tenant £80 + VAT
It is common practice to negotiate that the landlord pays for the inventory check-in at the commencement of the tenancy and the tenant will pay for the check-out. Costs may vary, but you can easily get an idea by contacting independent inventory clerks and ask for a quote based on the size and location of the property you seek. Other charges may apply to specific circumstances which we will highlight where applicable.
Decide on area You may be moving within an area you are already familiar with, or, you may be moving to a new location. Internet research is a good way to get the low down on an area (for example youtube.com, purelocation. com) as well as talking to friends and colleagues. The majority of our negotiators live in the areas they service and will be happy to provide some inside knowledge!
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Register your interest with a regulated Agent / Use the internet to research available properties Having an agent onside could speed up your search, but you should always use a regulated agent. Chesterton Humberts are members of the Association of Residential Lettings Agents (ARLA). This will give you peace of mind that we are held to the highest standards of practices, which we adopt when negotiating a tenancy and drawing up your contract. We will register your requirements and thoroughly discuss your situation to ensure that all recommended properties meet your needs.
Viewings We will make every effort to accommodate your viewing schedules however, it is important to be flexible with your availability. Remember, some of the properties you will be viewing will be occupied by tenants who have a say on when viewings take place. Ask plenty of questions and note any unanswered points the negotiator may have to come back to you on. This way you will know all of your queries have been satisfied before you consider making an offer.
Offer on a Property In a market where demand outstrips supply, there is no getting away from the fact that acting quickly is a huge benefit to getting the property that you want. However, as you are making a huge commitment and about to enter negotiations to arrange a legally binding contract you need to be sure you are making the right decision. Once you have decided to make an offer, Chesterton Humberts will;
1. Ask you to complete a Tenants Terms of Offer Form. 2. Request preliminary monies to the sum of the equivalent of 2 weeks rent. Our Terms of Offer Form will detail the terms of taking preliminary monies, such as what it is retained against and for, as well as the particulars of your offer. If you are not sure of anything or require further explanation on any points, then please ask the negotiator who is dealing with your offer. All going well, the offer will progress to a tenancy and the preliminary monies sum will be deducted from the initial monies.
Enter into negotiations to secure a tenancy agreement contract between yourself and the Landlord Chesterton Humberts’ trained negotiators will present your offer and liaise with you and the landlord until terms are agreed.
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Agree a contract Our trained co-ordinators will liaise with you in the production of all paper work including the tenancy agreement. They can respond to or field any queries you may have at this stage. Other paper work will include; a breakdown of the agreed offer (rent, deposit etc); specially negotiated clauses, a breakdown of the initial monies. All initial monies must be paid in cleared funds prior to the commencement of the tenancy and we recommend that this is paid by bank transfer. All future rental payment must be received via standing order. Legal documents requiring your signature will be sent to you for electronic signature, so pease ensure you have provided us with your personal email address. Where a guarantor is applicable (see “References” for more information) the paper work will also include an additional agreement for them to sign to establish that the guarantor has been made aware of their obligations.
Prepare for your move Get packing!
Liaise with Chesterton Humberts to arrange an inventory check in It is in the tenant’s best interest to attend an inventory check in. They take place prior to any belongings being moved in, so frequently they are either the day before or the day of the move in. Chesterton Humberts uses independent third parties to carry out inventories and therefore we respectfully request that tenants remain flexible of the time they can attend, although we are committed to arranging at a time that is best for all parties involved.
Agent will exchange contracts (normally on the day of move in) Please see “Tenancy Agreement” on page 8 for more information. We will inform you who will be managing the property during the tenancy. Where Chesterton Humberts does not manage the property on the landlords behalf, we will forward you the landlords contact details on the day of move in and they will be your contact throughout the tenancy. Where we are instructed to manage a property, we will give you the details of your property manager, who will be your point of contact.
Move in and make yourself at home! When it is time to move on, see Renewals and Vacates. 7
Tenancy Agreement
A tenancy agreement is a legally binding contract between a landlord and tenant to secure tenure of a property for a tenant. In most cases a contract will be an Assured Shorthold Tenancy (AST) which dictates statutory obligations on the landlord and tenant. Statutory obligations cannot be contracted out of. There is a lot of available information for tenants on the subject of AST, please visit the citizens advice bureau website for information at citizensadvice.org.uk The tenancy agreement will detail the landlord and tenant obligations. These include, but may not be limited to;
• R ental payments on time in the manner agreed—which is from one account by standing order • Details of the deposit; who is paying it, who is collecting it, who is holding it, how it is being held, why is it being held • Do not disturb or cause nuisance to neighbours and prohibit guests from causing a nuisance • Do not cause damage to the property and the contents • Do not make unauthorised alterations to the property • Promptly report maintenance issues to the landlord or the Property Management Agent • Allow access for property inspections (with prior sufficient notice). Generally, property inspections would not exceed 4 per year • Transfer of tenancy is prohibited—no subletting etc. • Not to leave the property unoccupied for longer than 28 days without informing the landlord or managing agent (this may impact the landlord’s insurance) • The Landlord name and address and obligations Anything that does not form part of a standard tenancy agreement can be recorded as specially negotiated clauses. Also known as riders, these are terms that have been agreed specific to the parties (landlord and tenant) concerned. Once a tenancy agreement is signed, Chesterton Humberts will exchange the documents, normally on the commencement date of the tenancy. Once the contract is exchanged, it is legally binding and all parties are bound by the terms.
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Deposit
In the majority of cases the deposit required is equivalent to 6 weeks rent*. This is paid to the agent by the tenant and the agent will hold the deposit as a third party stakeholder. Chesterton Humberts protects the deposit with an approved tenancy deposit scheme by registering and providing the tenant with the certificate and necessary prescribed information which includes a leaflet from our tenancy deposit scheme explaining the scheme. The deposit is held against dilapidations and rent arrears and specific information is found in the tenancy agreement. For further information regarding deposit protection, please see the direct gov website, or please ask us for more information should you require this prior to letting. * Where a Landlord is amenable to accepting pets, it is common practice to arrange a minimum 8 week deposit.
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Referencing
All tenants renting through Chesterton Humberts must submit to an independent reference check. You will have to complete an application form and provide 2 forms of identification (photographic eg: passport, drivers license & confirmation of address eg: utility bill). You will need to provide the following information to complete the tenancy referencing process:
• Current/previous landlord • Bank details • Employment details The company will check that the information you have submitted is truthful and will contact your employer and current/previous landlord. The referencing cost is £35 (plus VAT) and we will process your application once we have received your preliminary monies. Please note that the referencing is carried out by a third party and charges are non refundable. You should not apply for a tenancy if you are aware of any outstanding County Court Judgments or are in arrears with your current landlord. You should resolve these issues prior to attempting to rent a new property. Financially, referencing companies check that the applicant can afford to pay rental commitments prior to recommending that the landlord proceeds with the tenant. The combined household salary should be 30 times the monthly rental. Below is an illustration of common rental amounts and the earnings required to pass referencing. Rent Per Month
£867
£1,517
£1,733
£1,950
£2,137
£2,600
£4,333
Rent Per Week
£200
£350
£400
£450
£500
£600
£1000
Household Annual £26,010 £45,510 £51,990 £58,500 £64,110 £78,000 £129,990 Salary in excess of; Based on a 1-year contract. If a properties marketed by week, the monthly price is; weekly rental x 52 /12
If you believe that you will not satisfy the financial element of the reference check then you will need to find a guarantor who can financially support the tenancy. 10
Guarantors
A guarantor will guarantee the entire tenancy agreement legally and financially, to this end they must be referenced in the same way as a tenant. They will have to read and sign the final tenancy agreement. They will be as liable as the tenant if there is any breach of the contract. Only one UK based guarantor can be included on any one tenancy agreement and you must give this serious consideration where you may be sharing with multiple tenants. It is advised to prepare a guarantor in advance of offering on a property to limit delays to your home search. Make sure they are briefed in the aspects above and in a financial position to be acceptable. Example Scenario Three graduates move to London as they have secured employment. They decide to house share as they have £200/week each to spend on rent and offer £600 per week on a property. As they have not been in employment for more than than 3 months, they will require a guarantor. They must find 1 individual to act as their guarantor, ideally in employment and/or a UK home owner, with no adverse credit history and a salary in excess of £78,000. Common causes of failing references;
• • • •
Employed as contractor (non-permanent) Recently granted entry into the UK Being a student Salary not reflecting your actual monetary status (referencing companies will not take into account bonuses)
Renewals & Vacates
Three months prior to the end of your tenancy term, our dedicated Renewals and Vacates Department will contact you to see if you wish to arrange another fixed term tenancy. There is an administration fee of £80 (plus VAT) for the issuing of a memorandum of agreement, which will formalise your extension. Should you wish to vacate, you can serve the necessary notice to the landlord (in line with the terms of your tenancy) and we will send you a vacate check list to aid you in your move. To prevent delays in deposit return, you should ensure that the property is professionally cleaned, tidy the garden where applicable, remove all of your belongings and rubbish and return all keys to the landlord or agent. The property should be returned to the landlord in the condition it was received in (as per the inventory check in report) save for “fair wear and tear.” 11
Definitions Preliminary Monies
A sum equivalent to 2 weeks rent deductable against the initial monies, taken as a gesture of commitment from the tenant and to indemnify the agent against administration and referencing costs if the tenant choose to withdraw after considerable work has been undertaken. More details of which are detailed in the Tenants Terms of Offer Form. The payment does not guarantee a tenancy or that the property is necessarily removed from active marketing in all cases.
Initial Monies The sum due in full prior to move in. Keys will not be handed over without these monies being received into Chesterton Humberts bank account. This is made up of the tenant administration fee, the referencing fee, the deposit and the 1st month’s rent (or rent in advance as agreed) less the preliminary monies amount.
Tenants Terms of Offer Form A form detailing the tenants obligations when entering into negotiations and the specifics of the Offer. The form is completed at the offer stage, however, should you wish to see a form in advance, please do request one.
Offer The monetary and terms consideration that the tenant is asking Chesterton Humberts to put to their client, the landlord. This denotes the commencement of negotiations which, when all points have been agreed, formulated the Tenancy Agreement contract.
Fair Wear and Tear Is the reasonable expectation of deterioration of the property or its contents over the life of the tenancy and number of tenants.
Dilapidations Means the deterioration or damage at a property beyond fair wear and tear for which the tenant is financially liable.
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