Guide to Residential Letting
roybarrett.co.uk
Guide to Residential Letting Roy Barrett - Independent Estate Agency...at its best
Our Service Over recent years, changes in both the housing market and social patterns have resulted in an unprecedented and inexorable rise in demand for property within the private rental sector.
Roy Barrett Estate Agents have been established since 1991 when our office opened in Sturminster Newton. We opened the lettings department in 2006 which has proved to be extremly successful and now we have grown to become market leaders for sales, lettings and commercial property in the area. Our highly dedicated and qualified staff are passionate about selling and letting property and will provide only the very best in support and advice throughout the process. Our welcoming office is a Grade II Listed building and is in a prominent position in the town centre. We are proud of our reputation for professionalism, integrity and attention to detail and also friendly service which has made us the natural choice for landlords and tenants in the area. We hope you will find the information in this brochure helpful and informative.
Investing in Buy-To-Let property is proving to be a prudent decision for many people looking for an alternative to stock markets or savings accounts. Key to a successful investment are factors such as location and the type of property, but it is also important to consider achievable rent levels, tenant demand and expectations, maintenance and potential capital growth. We recognise that this is likely to be your second biggest investment, after buying your own home, and whether you are a first-time landlord or an experienced investor you can trust our guidance. Some owners wish to rent out their property rather than sell depending on their circumstances. With so much to consider Roy Barrett Letting Agents will take the time to assist you, from the start, by providing honest and reliable advice. Kevin Harmsworth Lettings Manager
• PREPARING YOUR HOUSE FOR LETTING Mortgages: Where the property to be let is subject to a mortgage, permission to do so is normally required from the mortgagee. You must obtain your mortgagee’s permission to let in writing. We will require a copy of their authority before we can commence marketing. If required, we will be very happy to recommend mortgage brokers to you. Insurance: It is essential that the property and your contents are adequately insured both while the property is empty and while it is let. Your insurers must be told that the property is to be let, failure to do so may invalidate your cover. We can provide details of insurance advisors specialising in cover for rented property who will be happy to provide you with a quote.
Security: Security systems (locks on windows and external doors, lights, and even full alarm systems) are often considered essential by prospective tenants, and are taken into consideration by all the leading insurance companies when calculating the premiums. Decorations and carpets: We recommend these should be fresh and neutral in terms of colour and style. Higher quality properties will always attract better quality tenants and therefore it is vital that a property is well presented to meet the expectations of a potential tenant. Unfurnished or Furnished?: By far the greatest level of demand from tenants is for properties that are let unfurnished, which traditionally includes just carpets, curtains and a cooker. This also suits landlords, who avoid becoming responsible for furniture and the annual testing and maintenance of electrical appliances. Domestic Appliances: These should also be of good quality and condition and subject to regular servicing. It is important that full instructions for use are left on the premises to avoid the need to call in an engineer to demonstrate. Gas and electrical appliances must meet legal safety requirements and oil appliances should be tested annually. Cleaning: It is essential that the property is handed over in a clean condition. We recommend that the property be professionally cleaned throughout, including all carpets. This creates a benchmark that will be recorded in the Inventory and Schedule of Condition, and will allow us to maintain a high standard through subsequent tenancies. We can provide the names of reputable and economical cleaning contractors.
roybarrett.co.uk
Guide to Residential Letting Roy Barrett - Independent Estate Agency...at its best
Telephone and TV: A working telephone line and TV aerial must also be provided. You should instruct whichever company supplies your telephone service to put a temporary stop on the line when you vacate and send you a closing account, either direct or via the Agents office. Empty Properties: It is important that you comply with any insurance requirements during vacant periods, especially during the winter months.
• SAFETY REGULATIONS AND PRECAUTIONS
Failure to comply with the following Safety Regulations may constitute a criminal offence under the Consumer Protection Act 1987 and could lead to a fine or imprisonment. In any case, Landlords have always had a duty of care under Common Law to ensure that rented property is kept in a safe condition and it is therefore essential to examine the property and its contents closely before letting.
Gardens: The gardens should be left in a good seasonal order, as tenants will be responsible for its maintenance and upkeep. However, some Landlords will provide a gardening service, particularly if the garden is large or complicated to look after. We are happy to help find suitable gardeners, either for a full maintenance service or for hedge cutting and pruning or a general tidy. Gas, Electricity and Water: These services should be left connected and we will arrange for their transfer into the tenant’s name. Under the Housing Health and Safety Rating System, tenants must be able to control and regulate heating systems. Council Tax: We will notify the local Council Tax office of each change of occupier and of any void period between tenancies. Keys: Three complete sets of keys should be provided, two for the tenants and one to be retained at the Agents office in case of emergency.
Housing Health and Safety Rating System (HHSRS): The Housing Health and Safety Rating System was introduced under the 2004 Housing Act. It is a risk based evaluation tool, designed to identify potential hazards to health and safety from any deficiencies identified in dwellings. Common breaches of this legislation include a lack of extractor fans in bathrooms and kitchens, trip hazards such as uneven patio slabs and loosely fitted carpets, or staircases without handrails. Fire and Furnishings Regulations: Under the Furniture and Furnishings (Fire) (Safety) Regulations l988 (as amended) a Landlord who is letting a property in the course of business is responsible for seeing that the furniture carries the appropriate fire resistance labels. Bedding, carpets and curtains and furniture manufactured before 1950 falls outside the regulations.
Electricity: The Electrical Equipment (Safety) Regulations 1994 state that all electrical appliances, both fixed and portable, in rented accommodation must be safe. The only sure method of checking this is to have them all tested and labelled periodically by a qualified electrician with the appropriate portable appliance testing equipment.
Regulatory Reform (Fire Safety) Order 2005: This came into effect in October 2006, and it applies to the common parts of blocks of flats and houses in multiple occupation (HMOs). It is a mandatory requirement that a detailed fire risk assessment be carried out to identify any risks or hazards and any such findings should be eliminated or reduced.
We will require a Periodical Electrical Inspection to be undertaken prior to a tenancy commencing.
Energy Performance Certificate: From 1st October 2008, all rental properties with a new tenancy in England and Wales are required to have an Energy Performance Certificate (EPC). The EPC will rate the energy efficiency of a property and its environmental impact. The EPC survey must be completed prior to marketing a property, and a tenant is required to receive a copy of the report before entering into a tenancy agreement. We would therefore encourage landlords to improve the energy efficiency of their property to increase its appeal to potential tenants.
Gas Safety Regulations for Landlords and Agents: (Statutory Instrument No. l886 of l994 Health & Safety - Gas Safety ( Installation & Use) Regulations 1994 (as amended). From 3lst October l994 it became law for gas equipment in rented properties to be serviced and safety checked before a Tenancy and then annually by a registered installer and for Landlords or their Agents to keep accurate records of work carried out on all appliances in their control, confirmed by an official safety certificate. It is a legal requirement that we ensure that a Gas Safety Certificate is provided to the Tenant annually. This, of course, includes all gas appliances like cookers, fires and flues as well as boilers and water heaters. Landlords are reminded that only British Gas or Gas Safe registered plumbers should carry out this work. We would stress the importance of leaving all gas appliances with service contracts in place. Smoke Detectors & Carbon Monoxide Alarms: The Department of the Environment have regulations governing the installation of smoke detectors in newbuild homes and these are incorporated in the Building Regulations l991. These state that all new-build homes must be fitted with interlinked mains operated smoke detectors, one on each floor. There are no such regulations governing older properties but of course, all Fire and Safety Officers would advise the installation of at least battery operated devices, if not mains operated ones. We therefore strongly recommend that all Landlords of pre-1992 properties agree to the installation of smoke alarms in their property. This may also be a requirement under the terms of your building insurance policy. It is also advisable to install audible carbon monoxide detectors which comply with British Standard BS7860 in the property. We recommend one alarm for each room that contains a gas appliance.
roybarrett.co.uk
Guide to Residential Letting Roy Barrett - Independent Estate Agency...at its best
Benefits Include: • A comprehensive marketing strategy including the circulation of your Property Details to all suitable prospective tenants, regular advertising in the local press, listings on all the major internet web portals, details distributed to our list of numerous Corporate Relocation Agents, Institutions, Blue-chip Companies and private tenants. • Organising an Energy Performance Certificate, Landlords Gas Safety certificate and Periodical Electrical Inspection if required.
• OUR SERVICES
We provide two levels of service, full details are provided within our Terms and Conditions.
TENANT INTRODUCTION (LET ONLY)
The tenant find service is perfect for landlords who have the time and experience to manage their own investment, but still require the reassurance and convenience of professional marketing and tenant vetting to be carried out on their behalf.
• Once we have secured a suitable applicant, we will undertake comprehensive referencing to include financial or employment reference, solicitor or landlord, accountant, professional character reference and a credit check which will establish whether the applicant has any County Court Judgements, bankruptcies or adverse credit history. On receipt of satisfactory references, copies will be sent to you for approval, on request. • Preparation of a detailed Assured Shorthold Tenancy, for an initial fixed term of 6 months. • Collection of 1st months rent, to be paid as cleared funds prior to the start of the tenancy. We shall arrange for all subsequent payments to be paid direct to you. • Collection of deposit, and ensuring compliance with statutory deposit protection legislation • Transferring legal responsibility for gas, electric, water and council tax accounts to the tenant’s name.
• At the end of the Tenancy, we will arrange for the Inventory (if applicable) to be checked by the Inventory Clerk and for a Schedule of Dilapidation (if any) to be prepared. A copy of this is normally sent to both Landlord and Tenant for approval before a Tenant’s deposit can be returned. • If instructed by you, we will pay ground rent, service charges, insurance premiums and any other outgoings from the rental income as and when it is received. We do our best to query any obvious discrepancies but it must be understood that we are entitled to pay without question demands and accounts which appear to be in order.
• After each visit a brief written report is sent to the Landlord and any action taken, or situations which require the Landlord’s decision, clearly stated. It must be understood that these visits can only provide a superficial examination and will not involve a structural survey or inventory check, nor can we accept any responsibility for hidden or pre-existing defects. • Oversee with any day-to-day maintenance, repair or servicing of appliances up to a maximum cost of £300 (three hundred) per item or as agreed by the Landlord.
FULL MANAGEMENT SERVICE
Our Full Management Service provides landlords with comprehensive and thorough administration of their property, allowing our clients to distance themselves from the day to day management of the property. In addition to the services provided in the Tenant Find and Letting Services, we will: • Undertake quarterly visits to your property to ensure that the Tenant is taking proper care of it. Our Full Management Service will also include investigation of defects which come to our notice or are clearly and adequately brought to our attention by the Tenant.
roybarrett.co.uk
Guide to Residential Letting Roy Barrett - Independent Estate Agency...at its best
Wherever practicable we will obtain estimates and submit them prior to the commencement of any work. However, in emergencies and when we consider necessary, we will act to protect your interest without consultation. Any professional fees incurred in conjunction with the works must be borne by the Landlord. We offer the services of a full range of maintenance contractors who are competitively priced, reliable and prompt, but we are equally happy to use the Landlord’s preferred qualified contractors who are familiar with the property. The main consideration is that all repairs are dealt with swiftly and competently so that damage to your property is minimised and the Tenant is spared, as far as possible, any distress or inconvenience. No handling charge is placed on contractors invoices.
IMPORTANT CONSIDERATIONS Remittance of Rent: Rent will be paid to the Landlord via internet payment once we are in receipt of cleared funds. We encourage all tenants to pay their rent to us by standing order. However, there are occasional circumstances where a tenant may choose to pay by cheque or cash. Present banking arrangements are such that it is necessary for us to allow approximately 10 working days for rent cheques to be cleared before transferring monies to clients’ accounts. We recommend that you ensure that your account has sufficient funds to meet any obligations as occasionally payments may be delayed due to bank holidays or weekends. Assured Shorthold Tenancies: As defined within the Housing Act of 1988 as amended in 1996 most private dwelling houses let by a Landlord who does not reside within the premises, to an individual or individuals (as opposed to a company), at a rent which does not exceed £100,000 per annum, fall within this type of Tenancy. This means that, at the end of the Tenancy Agreement, the Landlord cannot evict the Tenant without first obtaining a Possession Order from the Court and, in order to be granted the Possession Order, certain provisions in the Tenancy Agreement must have been made. A Landlord may obtain possession when the Tenant is in arrears with his rent payments or not complying with his other obligations under the Tenancy Agreement.
Inventory and Schedule of Condition: Prior to a tenancy, we are able to undertake an Inventory and Schedule of condition, which will record the decorative and physical state of your property and its garden. The document is very detailed and will provide an accurate room by room record of fixtures, decoration, cleanliness. This will be supported by digital photographs. if applicable. Tenants are required to agree and sign the Inventory, allowing us to accurately assess the property and gardens at the end of the tenancy prior to refunding the deposit. Security Deposits: We will obviously obtain a deposit from the tenant. This security deposit is held by ourselves, as Stakeholder, throughout the Tenancy. Once damages, if any, have been agreed and copies of all receipted final invoices have been checked, the balance of the deposit will be returned to the Tenant. Roy Barrett is a member of The Tenancy Deposit Scheme, which is administered by: My Deposits Ground Floor Kingmaker House Station Road Barnet Hert. EN5 1NZ Tel: 0844 9800290
Void Periods: Our management service does not include the supervision of the property when it is vacant although, in the normal course of showing it to prospective Tenants, periodic visits may be made to the property by our lettings staff. Instruction to Solicitors: You will be informed of any rent arrears or breaches of covenant brought to our attention. Should it prove necessary to employ the services of solicitors you will be responsible for instructing them, and for all fees involved. Taxation of UK-Resident Landlords: Landlords who remain resident in the UK are required to declare rental income annually, together with all other income, as it is assessable, after allowable expenses, for Income Tax. Taxation of the Non-Resident Landlord: Where the Landlord of the property is resident abroad for six months or more and has not been approved under the Non-Resident Landlords Scheme (see below), the Commissioners for Inland Revenue will, under UK Income Tax Law, hold the Managing Agent (or the Tenant where there is no Managing Agent appointed) personally liable for the payment of tax on income from rent collected on the Landlord’s behalf. The Taxation of Income from Landlords (Non-Residents) Regulations 1995 requires the rent-receiving Agent to retain the tax element on the net rent and to pay it to the Inland Revenue on a quarterly basis, within thirty days of the end of the quarter.
roybarrett.co.uk
Guide to Residential Letting Roy Barrett - Independent Estate Agency...at its best
If separate “exemption” is not granted for both Landlord and partner, the Agent will be obliged to retain and pay the tax element on half the rental income. The completed forms are then sent to the FICO (Non-Residents) office at St John’s House, Merton Road, Bootle, L69 9BB. It is also important to note that Diplomatic and Armed Forces’ Staff are no longer outside the tax regulations and Crown Employees living abroad need to apply for “exemption” as any other non-resident Landlord. The Inland Revenue notifies both Landlord and Agent when an “exemption certificate” has been granted but, without the certificate, the Agent is obliged to keep strictly to the “collect and pay” rules with fines imposed for failure to comply. It is obviously in all parties interests to follow the correct procedure and overseas Landlords are strongly urged to appoint a Tax Adviser in the UK to oversee their accounts. Circumstances Where a Tenant Wishes to Buy: In the event of a Tenant introduced by us (or any person or body corporate associated with that Tenant) subsequently purchasing the property whether before or after entering into a Tenancy Agreement, commission shall be payable to us on completion of the sale at the rate of 1.5% of the sale price. Value Added Tax: All our fees, and any other charges made by us, will be subject to Value Added Tax at the prevailing rate.
However, overseas Landlords and their partners are able to apply to the Inland Revenue for approval to receive their rental income gross, and thereby gain “exemption” from this requirement. The majority of Landlords qualify for this exemption, provided they have a “good tax history” with no debts outstanding. The “exempt” overseas Landlords then, at the tax-year end, declare their UK property income along with any other UK income and, by direct communication with the Inland Revenue, agree their liability for tax, as required under the rules for SelfAssessment. Application forms are available from this office. The forms must be completed individually by both the Landlord and their partner as neither your Accountant or Tax Adviser nor the Managing Agent can apply for “exemption” on your behalf.
You Can Be Reassured: Roy Barrett Letting Agents are proud to be a member of The Lettings Ombudsman. If you have an empty property and are not sure whether to sell or let we can provide our clients with a unique ‘sell or let’ service. We will offer the property for sale and offer the property to let - whichever occurs first. Please ask for more information (01258) 475151
AND FINALLY‌ e look forward to meeting you soon and W discussing our Letting and Management Service with you in greater depth and answering your specific questions.
Kevin Harmsworth Lettings Manager Roy Barrett Letting Agents
roybarrett.co.uk
Drapers House Market Place Sturminster Newton Dorset DT10 1AS Tel: 01258 415151 Fax: 01258 471014 lettings@roybarrett.co.uk www.roybarrett.co.uk