|
Advice
for landlords letting their property
See
also
How
to present your rental property for letting
How
not to present your rental property for letting
Buy
to Let Uk
Buy
to Let Europe
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Problems Click
Here
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Deposit Protection Scheme Click
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Arbitration
- April 2008 - by David Smith - Pain Smith Legal update
Click Here
General
Information & Points to note before letting your property
This
information is given for general guidance only and should
therefore not be relied on. It has been prepared by an experienced
letting agent operating in the UK market.
It is essential that your property be presented well for letting.
It should be well decorated, clean and tidy to attract a tenant
who will pay a good rental.
Under the 1985 Landlord and Tenant Act, Landlords have a legal
responsibility to ensure that Tenants are “safe from harm”.
This means ensuring that Landlords provide housing that is
fit for habitation.
A property available for rent, must be supplied and maintained
to a good standard. Landlords must ensure the structure, hot
water and water supply, lighting heating and ventilation is
maintained throughout the tenancy.
HOW DO I LET MY PROPERTY
There are several ways to let a property:
-
Advertise
it yourself in the local paper
-
Advertise
on the Internet
-
Advertise
in local shops
-
Instruct
a professional Letting Agent
If
you are instructing an agent consider using one that is a
member of one of the following professional organisations:
-
ARLA
(Association of Residential Letting Agents)
-
NALS
(National Approved Letting scheme)
-
NAEA
(National Association of Estate Agents)
-
RICS
(Royal Intuition of Chartered Surveyors)
If
the letting goes wrong or there are problems receiving your
rent, in many cases if you use an agent that belongs to one
of these organisations you can take the issue up with the
relevant governing body. Tenants often feel more confident
renting a property through an agent that belongs to a professional
association.
PRESENTING THE PROPERTY – decoration , furnishing, equipment
to leave
DECORATION - The quality of the interior decoration
may substantially affect the level of rental achieved.
Although it is not possible to redecorate your own personal
home prior to letting it if you are leaving for work overseas
for example, it is essential that you follow these guidelines
if you are planning on letting an investment property. It
is advisable to follow them as far as possible if you are
a returning owner occupier.
Carpets and walls should be neutral. Whites, creams and light
pastel shades and these make a cleaner, fresher impression.
Paint finishes are much easier to maintain than wallpaper.
Good quality curtains and carpets should be provided as they
will have much longer life normally which is most important
if you are planning on letting for several years. Magnolia
has now become very dated and should be avoided if possible.
Kitchens should be well equipped (see follow on section
WHAT TO LEAVE) and bathrooms should have high quality
modern fittings, including a power shower whenever possible
(overseas visitors will usually expect one), good lighting
and tiled flooring. If you are refitting your bathrooms, white
fittings never really go out of date.
Wood flooring is now very popular and gives the illusion of
more space. Kitchens should be tiled or have vinyl covering
and not carpets unless they form part of a kitchen /diner
and the carpet is then suitable for the dining area.
If you are installing wood flooring in an apartment, please
check with the freeholder if it is a new development, as they
are not permitted in some developments because of the noise
factor.
Lighting is very important for any let. Downlight spotlights
in Kitchens, bathrooms and other areas help. In furnished
properties, consider providing some table lamps. Don’t forget
adequate lighting outdoors (often with the use of sensors)
to have as a safety feature for the property.
If you have bought a property to let, make sure there are
toilet roll holders, towel rails, mirror, bathroom cabinets
or shelves in the bathroom.
PRESENTATION TO A TENANT
If you are showing a prospective Tenant around, the following
guidelines should be noted:
-
The
property is clean, there are no dirty washing up items
about and if there are any unpleasant odours, open some
windows and let some fresh air circulate.
-
Bathroom areas should be clean and leave the toilet seat
down. Beds should be covered.·
-
Although
you might be concerned about people walking on your carpet,
some tenants are not too happy about being asked to take
off their shoes.
-
Lighting
– even in summer we can have some very dull days, so turn
the lights on first. Lights make a property welcoming.
If the viewing takes place after dark, make sure your
front door outside light is switched on. ·
-
Curtains
– If the curtains are pulled over during the day, pull
them back. Just like ensuring sufficient artificial lighting,
natural lighting is equally as important and can give
the impression of more space particularly in smaller properties
and rooms.
-
Garden
areas - Make sure the garden is tidy and inviting
DEFINITIONS
of “FURNISHED, PART FURNISHED or UNFURNISHED LETS”
-
UNFURNISHED
Let with curtains, carpets and kitchen equipment – Electrical
goods. (N.B. some electrical goods e.g. washing machines
can be rented)
-
PART
FURNISHED Let with the above plus occasional furniture
– some beds, settee or dining table and chairs etc.
-
FULLY
FURNISHED Let with the above, but including all furniture,
china, crockery. & Cutlery etc. Do not leave the property
with too much furniture as the appearance could be cluttered
and rooms appear smaller than they are.
WHAT
TO LEAVE – Basic Requirements for a Furnished Letting
Unless
a let is in central London, Bedding, towels, TV’s, Videos
are not included. However, you might be requested to allow
the tenant to erect a satellite dish.
It
is recommended that all items of sentimental or real value
be removed as even the most careful of tenants have accidents.
If you are a returning owner occupier It is important if personal
possessions are stored in a secure area or with friends or
family.
If you are storing the items at the property, the storage
area should be secured and keys left at the managing agents
offices or with a relative or friend who can be easily contacted.
Emergency
access should not be denied to a tenant in respect of gas/electricity/water
mains and storage cisterns. N.B. be careful how you store
your belongings. Attic areas can become very hot in the summer
and garages can become very damp in the winter.
Furnishings –Each room must have adequate furniture
for the Tenants’ need and we list below the minimum for an
average 4 bedroom property. Some wall pictures can be included.
-
Lounge
– Three piece suite, or two sofas, or four lounge chairs,
coffee table. Occasional light.
-
Dining
Room – Dining table, chairs sideboard/dresser/storage.
-
Kitchen
– Modern cooker, fridge/freezer or separate units, washing
machine, tumble dryer, (in an apartment consider a washer/dryer)
Microwave – not essential, but becoming more popular.
-
Kitchen
equipment – Crockery, cutlery, glasses, cooking knives,
chopping board, saucepans, frying pan, wok, electric kettle,
toaster, coffee/tea mugs/cups/saucers, colander, baking
tins, bottle and can opener etc.
-
Bedrooms
– Beds (complying to Fire and Furnishing regulations),
with mattress protectors, wardrobe, bedside table, bedside
lights, chair, chest of drawers/dressing table, adequate
storage for the number of occupants.
-
Bathroom/shower
room – shaver point, wall cabinet, toilet roll holder
and towel rail.
General Household equipment-Vacuum cleaner and tools,
brushes, dustpan, ironing board & iron.
 -
Garden
equipment- Unless you are providing a gardening service,
you should supply a lawn mower (that is capable of cutting
long grass if the tenant misses some cuts), spade, fork,
rake, shear, hoe, wheelbarrow, ladder etc. You might also
like to consider supplying garden furniture.
-
General:
Make sure there are sufficient TV& telephone sockets
around the property Most tenants usually have a computer
these days and require Internet access.
WHAT
TYPE OF PROPERTY IS SUITABLE FOR LETTING ?
Almost all types of property are letable, provided they are
in good condition and well presented.
particularly those:
-
close
to good rail and road communications
-
If
there is a large garden, it is maintained
-
The
rental price is suitable to market requirements
-
There
is parking with the property or very close by
-
There
are not too many landlord restrictions
HOW
MUCH RENT CAN I ASK ?
Many factors determine the rental value of a property. These
include the size of the rooms (a two bedroom apartment with
two good size bedrooms will command a higher rent than one
with an average size bedroom and a box room size bedroom –
this type of property will attract two individuals sharing
who want similar size accommodation).
The standard of the décor and furnishing, the location of
the property and current market conditions. Usually there
is no difference in rental levels these days if the property
is let furnished or unfurnished, but there may be a bigger
demand for a furnished one/two bedroom apartment opposed to
an unfurnished comparable.
On the other hand executive corporate family lets usually
look for very good six four/five bedroom, three reception,
two/three bathroom houses with a double garage that are unfurnished.
HOW LONG DOES IT TAKE TO FIND A TENANT ?
This will depend very much on the market conditions at the
time the property is being marketed and if the property is
on the market at a realistic price. It can also depend on
the type of property and the time of year.
HOW LONG IS THE TENANCY FOR ?
This will vary according to a Tenant’s requirements. In general
most agreements are drawn up for a minimum of six months or
one year with a break clause for the tenant to give two months
notice at any time after four months. (Please note that you
will not normally have a break clause in an agreement and
will have to add it yourself or your agent will have to do
this before the start of the letting.)
Most corporate type lets will require a property to be available
for a minimum of three years, but the tenant will want the
right to break the agreement. For this type of letting it
is usual to have a rent agreed for the first year with an
option to extend for years two and three at a slightly higher
rent usually linked to inflation. You should also ensure that
a modern easy to understand English language tenancy agreement
is used.
HOW IS RENT PAID?
If you use an Agent for a management or rent collection service,
the rent will be paid to the agent and then passed over to
the Landlord less the agent’s commission each month (or agreed
period).
If you are using an Agent’s Tenant introduction service the
rent should be directly paid into your bank account. You should
check your bank statement a few days after the rent has been
paid to make sure that it is in your account.
If there are problems receiving it then, you can rectify the
situation quickly by contacting the Tenant or agent.
RESTRICTIONS ON TENANTS
You can put restrictions on the tenancy, e.g. no pets, non
smokers etc, but the more restrictions you impose the harder
it can be to let a property.
More and more executive families working in this country want
to have a pet – cat or dog and with the opening up of pet
travel from the Passport for Pets programme, a landlord should
consider this issue very seriously.
Larger deposits can be taken, clauses put into the tenancy
agreement stating all the carpets and curtains (and furniture
if provided) has to be professionally cleaned at the end of
a tenancy.
INVENTORY (SEE
ALSO IVENTORIES IN THE UK CLICK
HERE)
Many
disputes with tenants often involve the condition of the property
at the end of the tenancy. It is well worth considering using
an Independent Inventory Agent to carry out this work, as
they are specialists in this field.
Your letting agent may have an “in-house” inventory service
or use an Independent company. If you are letting the property
privately, you can still find Inventory companies listed in
the local telephone directories.
The inventory should show a list of all the contents of the
property including curtains, carpets, kitchen appliances and
will also state the state and condition of the walls, windows,
light switches etc.
It will be checked in with the Tenant at the beginning of
the tenancy and at the end of the tenancy checked out. At
the check out the Inventory Agent will assess the state and
condition and prepare a schedule of dilapidations (damage,
breakages) if any taking into account fair wear and tear,
the length of the tenancy and the state and condition of the
property when it was let.
If you are letting unfurnished, it is still advisable to have
a professional inventory prepared and checked in and checked
out. Inventory fees vary according to the size of a property,
whether it is unfurnished or fully furnished.
If you leave numerous items that have to be included in the
inventory e.g. books in a bookcase, the contents of a garage
and workshop, then obviously the costs of preparation will
be much higher.
Most letting Agents will not arbitrate in any dispute between
Landlord and Tenant and the final decision remains with the
professional inventory agent or a professional letting association.
from
HomeLet
TRANSFER OF SERVICES Including Council Tax
Normally
your tenant will be responsible for the payment of Council
Tax, Water, Electricity, Gas, TV Licence, oil and Telephone.
Between lets you will be responsible for these (except TV
Licence if unoccupied).
The agent or owner should write to the local authority and
service providers advising of the change of occupier. British
Telecom quite often will not transfer a service without the
current subscriber agreeing to this.
Please note the telephone number at a property is for a current
subscriber and if you want to retain your existing number,
you must make arrangements with BT or Telephone service provider
to hold your number in “suspense”.
Water
- Water Industry Act 1991 – Information about water
meters for home movers.
Since
1989, most new homes built in England and Wales have had a
water meter installed. In addition to this, many water company
customers previously on a non-metered supply have opted for
water meter.
Since
1st April 2002 companies like Three Valleys Water
Plc in England have been installing water meters when a property
is sold. From the 1st January 2005 this company
will also be installing meters when a property is rented out.
The
government act covering this is under S1444B of the Water
Industry Act 1991.
TENANT REFERENCING
Most Agents will take up Credit Search references using Letsure
or Homelet Referencing. or similar types of company. Provided
the references are satisfactory you can for an annual premium
subscribe to their Legal Protection insurance plan.
If the tenancy requires a Guarantor, the credit search company
will advise and referencing will have to be taken up on that
person. Company lets will also follow the same procedure.
Letting
to Non EU Nationals in the UK
Landlords
/ property owners or their agents should make sure that they
obtain a photocopy of the prospective tenants passport and
work permit/visa. If the applicant only has three months remaining
on the visa and they are looking for a six month let, then
there could be problems with them being able to remain at
the property.
Several
of the credit search companies when they take up references
on an EU resident or non EU resident also ask for a copy of
an utility bill (mobile phone bill etc) from the applicants
last known address as “proof of residency”.
PROPERTY MANUAL
From experience the Landlord will normally know how equipment
operates, where the stopcock is, when the dustmen call and
where the nearest school and pub are located.
You should prepare a ring binder that gives notes about the
working of the property, the location of meters and the property’s
postcode etc. You should also include photocopies of instruction
manuals for the washing machine, cooker, vacuum cleaner, water
softener etc.
INSURANCE & LEGAL EXPENSES INSURANCE
You must advise your insurance company that the property is
being let. This should cover the buildings policy and contents.
You should also check to ensure you have sufficient public
liability cover.
Many people who let unfurnished do not insure their contents.
Contents
insurance for let property is really not expensive. If for
example you had a burst pipe in the attic and water damage
penetrated through to the kitchen. The buildings policy would
normally cover replacing the ceilings, decoration, but not
your carpets or curtains that were damaged as a result of
this accident. A tenant is normally responsible for insuring
his/her contents and this will not cover your belongings.
It is possible to take out insurance to cover the legal costs
of pursuing claims against the tenant arising from a breech
of the terms of the tenancy, including the costs of obtaining
repossession. When you take out a Buildings Policy the main
insured perils should include Fire - Lightening - Aircraft
- Explosion - Smoke - Impact - Burst pipes or leakage of oil
- Storm or flood - Subsidence damage - Theft- Malicious damage.
(Some policies will give the option of malicious damage caused
by the tenants - a valuable option for let properties).
Most policies will compensate you for loss of rent following
damage from one of the above perils if the property is uninhabitable.
Check this out with your block management agent if you have
an apartment and don't arrange the buildings insurance yourself.
It should be noted however, that damage to property caused
by tenants who are classed as DSS asylum seekers, refugees
or students will no longer be covered under some buildings
insurance for blocks of apartments and you should seek professional
advice.
If
your flat is let and you have not taken out additional insurance,
you will be held personally liable in the event of damage
to property, including neighbouring properties, howsoever
caused, including all costs incurred by the Management Company,
solicitors, neighbours etc.
For further information on insurance services for Landlords
go to
jml-property-insurance.co.uk Because of the
Regulations on the sales of Landlords & Tenants insurance
policies no advice can be given and you must contact Letsure,
Homelet or any other provider for advice on policies.
INCOME TAX
The income derived from letting your property is subject to
UK tax. The position can vary depending if you are a UK resident
or a UK non-resident. It is money very well spent to use an
accountant.
Income earned in the UK is subject to taxation under self-assessment.
This means that the landlords will receive their income from
an agent less any bills the agent has settled on their behalf.
Any tax implications will be between the landlord and Inland
Revenue. If you are a UK resident you will receive the usual
personal allowances applicable to your circumstances, which
may be offset against all your taxable income.
Income from letting a property is subject to income tax at
the basic rate on profit. Profit is assessed after deducting
expenses from the rent received; examples are:
a) Any water, electricity, gas charges paid by the Landlord.
b) Insurance Premiums related to the cover of the buildings,
contents and loss of rent.
c) Repairs – but not improvements.
d) Letting Agents, accountants and legal fees- including VAT.
e) Mortgage interest payments.
f) Maintenance contractors e.g. gardening contractors
If you are going abroad, it is essential that you apply for
your FICO (Financial Intermediaries and Claims Office) number
through the Inland Revenue as quickly as possible. The Inland
Revenue has further information and you can download information
including a FICO application form at
http://www.inlandrevenue.gov.uk/cnr/nr_landlords.htm.
Please
note until an Agent is informed by the Inland Revenue of a
FICO Approval number that they are not able to pay over the
rent without holding back an amount for tax. If the certificate
is not received or approved, they will have to retain money
for tax and pay this over to the Inland Revenue on a quarterly
basis.
They would also make an administration charge to cover their
time in carrying out this work. If you are collecting the
rent direct, your tenant should withhold a percentage to cover
any tax liability, so it is essential that a) You obtain a
FICO approval and b) you employ the services of an
accountant.
If an Agent is acting on a Tenant introduction basis and you
are going overseas you must still obtain a FICO approval number
as otherwise the tenant living at the property would be responsible
for the paying of tax and most tenants would not want this
inconvenience. The Letting Agent would also be duty bound
to advise them of the situation.
Overseas
Properties - UK TAX
If
you invest in overseas property you must declare the profits
in the UK. Unless you are classified as non-UK domiciled,
you are taxed in the UK on all your income and gains wherever
these profits arise. If you let your overseas property you
should inform the tax authorities where the property is located,
which will sometime mean completing a tax return in that country.
The
income and expenses from your foreign property must be listed
on the foreign income pages of UK tax return.Any foreign tax
you pay on that income can normally be off-set against the
UK Tax duew where a double taxation agreement exists between
the UK and the country where the property is situated. Remember
other countries have different rules for tax deductible expenses.
Take professional help.
Resident
Landlords
If
you rent out part of your own home this can also count as
residential lettings, but you can take advantage of the 'Rent
a Room' scheme instead. This lets you get tax-free income
of up to £4,250 from letting rooms in your home. More
information
LEASEHOLD PROPERTY/ CONSENTS TO LET
If you have a mortgage, you should gain consent from the lender
prior to lending. If you do not you will be breaking the mortgage
covenant. Most lenders will give consent provided they have
seen and approved a tenancy agreement and that satisfactory
references are taken up on a given tenant.
In the case of a Leasehold Property, a consent to underlet
may be required from the Freeholder under the terms of the
head lease. You may also have to pay for a consent to underlet
a leasehold property. You might be required to provide a copy
of the Lease to be incorporated into any tenancy agreement
that is prepared.
LEGAL WORK
Most Agents will prepare the appropriate Tenancy agreement
is written in modern day user friendly legally approved language.
If you are letting the property yourself you may consider
using the services of a Solicitor.
TENANT’S DEPOSITS
When an Agent is rent collecting or managing a property they
will normally hold the deposit in separate clients account.
You should find out if your agent is a member of a professional
body like ARLA, NALS etc and maintains separate clients accounts.
On average a rental equivalent to six weeks rent should be
held.
Sometimes a tenant will stop the final payment of rent and
suggest that you have the deposit instead. In the event of
this happening when there is only a months deposit held, there
will be no money for end of stay dilapidations or cleaning
etc.
There will be occasions, e.g. some Military and Corporate
lets where the company or country will guarantee the deposit
and will not therefore physically pay a deposit. Remember
if you hold the deposit, it is not your money and should be
kept in separate bank account. See
Tenancy Deposit Scheme
REDIRECTED POST
You should consider paying The post Office to redirect your
post for you. The Post Office charges for this service, but
you should receive your post quickly. Although a tenant might
initially send on the post to the agents or Landlord, this
can delay matters.
Apart from arranging the redirection via the post office,
you should also leave your forwarding address in the Property
Manual with a note requesting them to cross through your address
and forward it on. (It does not cost anything in the UK, but
it will if the item has to be sent overseas). You should also
write to your bank, Credit Card Company, insurance, mortgage
company, friends and give them your new address
KEYS 
You should leave sufficient number of keys for the number
of people renting the property. Some Agents will retain a
set at their offices. You should label up all the keys at
the property. e.g. garage door, French windows, front door,
windows etc.
ALARM SYSTEMS
If you have an alarm system make the Tenants (and Agents if
applicable) have the appropriate access codes. It should be
clearly defined who actually pays for alarm maintenance –
Landlord or Tenant.
SAFETY GAS, ELECTRIC, FIRE & FURNISHINGS, SMOKE DETECTORS
Gas: The regulations were introduced to ensure that
appliances are properly installed and maintained to avoid
the risks of carbon monoxide poisoning. At the commencement
of a letting, a Landlord is required by law to hold a current
Gas Safety Record.
The tenant must be provided with a copy of the record prior
to occupation. The gas safety record must be renewed annually
and must cover all gas appliances in the property. An authorised
CORGI registered engineer can carry out the Inspection. N.B.
A standard annual service would not be sufficient to comply
with the requirements of the regulations
- Electricity:
At present there is no specific statutory requirement to
prove that the appliances supplied are regularly checked
or tested; the Landlord does have a duty of care. Dangerous
wiring, flexes, exposed cable and damaged sockets must all
be replaced. Appliances must be fitted with a sleeved insulated
plug.
-
Furniture
& Furnishings: From the 1st January 1997 any furniture
supplied as part of a new letting that commenced after
1st March 1993 must comply with the regulations. They
do not apply to Antique furniture made before 1950, carpets,
curtains, pillowcases, duvets, bed linen or loose cover
for mattresses. Generally they apply to all other furniture
that has a cover fabric and filling including cushions,
padded headboards, loose covers, beds and pillows etc.
If your items do not comply and have appropriate safety
labels, they should be removed from the property. The
independent inventory agent will normally note down the
compliance on the inventory.
-
Smoke
Detectors: These are compulsory in all new homes built
since June 1992 and these have to be fitted via a mains
feed on each floor. There are no specific statutory regulations
stating these have to be put in older buildings (unless
it is a registered House in multiple Occupation), but
it is advisable to fit a battery detector in stairways
and halls/landings. You might also like to consider providing
a fire extinguisher and blanket for the kitchen.
CLEANING
& GARDENING
Before a Tenant moves into your property that it is professionally
cleaned throughout. If you have not had your carpets cleaned
for a while, they must be professionally cleaned and you might
like to consider having a protective coating put on them by
the cleaning contractor. Windows should be clean inside and
out.
You should make sure that your chimneys and flues have been
swept. In many tenancy agreements, a clause states that tenants
should do this during the tenancy, but they must also be done
prior to the tenancy starting.
It is often normal practice to have a clause in the tenancy
agreement stating the gardens have to be maintained in a satisfactory
condition. Over the last twenty years, the lifestyle of a
tenant has changed. You do get some enthusiastic gardeners,
but the majority of tenants are working long hours and when
it comes to a weekend want to pursue other activities rather
than gardening. We would suggest whenever possible:
-
a)
You have a gardener to attend to hedges, shrubs and trees
at least twice a year or
-
b) Include this together with regular maintenance of lawns
and flowerbeds. A tenant who knows that they will not
have to look after a garden will be happier to rent your
property.
EMPTY
PROPERTY
You will find that most Letting Agents will not be responsible
for a property between lets and that you have to agree a fee
for checking the property. You should also check the terms
of your property insurance regarding this issue.
During the winter months if the property is empty that either
you have the water system drained down professionally or leave
the heating running.
INVESTMENT PROPERTY – BUY TO LET
Buying residential property can be an attractive investment.
Many people are now purchasing property as part of their pension
arrangements. Investors should be aware that it is best managed
as a medium or long term proposition.
There are a host of factors that may influence the type of
property that is acquired as well as the geographical area
that is chosen. It is always best to seek professional advice
in each instance before deciding on a property and we would
be happy to assist you and you take into consideration the
following:
-
Length
of lease, if leasehold
-
Service
charge and consents to let from freeholder
-
Location
-
Floor
level if you are purchasing an apartment
-
Property
type – 4 bedroom property should have at least two bathrooms
etc
-
Amount
to be spent on the property – New bathroom & Kitchen,
decoration levels
WHICH
LETTING SERVICE DO YOU WANT FROM YOUR AGENT?
Many UK agents offer three types of service:
-
TENANT
INTRODUCTION
-
RENT
COLLECTION
-
FULL
MANAGEMENT SERVICE
TENANT
INTRODUCTION: The Agents find a tenant, take up credit
search references, prepare the tenancy agreement *, arrange
the check in of the tenant * and advise the gas, electricity
& water companies & local council of change of occupier.
After that the rental is paid directly to the Landlord and
all management is carried out by the Landlord The letting
fee is payable once the tenant has been installed.
RENT COLLECTION: The Agents find a tenant, take up
credit search references, prepare the tenancy agreement *,
arrange the check in of the tenant * and advise the gas, electricity
& water companies & local council of change of occupier.
The Agent collects the rental and pays this over to the Landlord
each month less their fees. The Landlord carries out all management.
FULL MANAGEMENT: The Agents find a tenant, take up
credit search references, prepare the tenancy agreement *,
arrange the check in of the tenant * and advise the gas, electricity
& water companies & local council of change of occupier.
They collect the rental and pay this over to the Landlord
each month less their fees & manage the property. This
involves dealing with enquiries from the tenant, arranging
routine maintenance e.g. washing machine repairs, plumbing
repairs etc and visiting the property approximately three
times a year for a property inspection. If major works are
requested by the Landlord, e.g. decoration, new carpets, insurance
claim work etc, they would usually make an additional charge.
*Please note additional charges are normally payable for Tenancy
Agreement preparation & independent Inventory Agents charges.
Stamp Duty on Tenancy Agreements: From the 1st December
2003, Stamp Duty has been abolished and replaced with Stamp
Duty Land Tax. The starting point for this is £125,000.(Budget
March 2006)This means that the vast majority of Tenancy Agreements
will not attract SDLT.
LETTING
A ROOM IN YOUR OWN PROPERTY - Where you live More
information
Many
people have decided to let out a room in their own property
as a way of helping with morgage costs . HM Revenue and Customs
allows the owner occupier a tax-free income of up to £4,250
from letting rooms in your home.
A
lodger can occupy a single room or an entire floor of your
home. However, the scheme does not apply if your home is converted
into separate flats that you rent out. In this case you will
need to declare your rental income to HM Revenue & Customs
(HMRC) and pay tax in the normal way. Nor does the scheme
apply if you let unfurnished accommodation in your home.
You
do not have to be a home owner and can choose to take advantage
of the Rent a Room scheme, regardless of whether you are a
home owner or are renting your home. However, if you are renting,
you should check whether your lease allows you to take in
a lodger.
If
you're a mortgage payer it's best to check whether taking
in a lodger is within your mortgage lender's and insurer's
terms and conditions.
Tenancy
Agreements for being a Resident Landlord
Once
you have found a tenant it is best to make out a tenancy agreement
with them. You do not need to fill in any special forms, but
it is best that you make an agreement in writing. This will
help you if there are any problems later. There are some basics
which should be included in your agreement
- How
much notice you must give the tenant
- How
much notice the tenant should give to you
-
How long is the tenancy is for
- Which
rooms are being let
- Which
facilities are being shared
-
How much the rent will be paid
- Does
the rent include bills? e.g electricity, gas, telephone,
internet, water, Council tax and even food.
-
When the rent is due
-
How should rent be paid (cash, cheque, standing order, direct
debit etc.)
-
Is the deposit payable when the tenant moves in and when
it will be returned and how it will be held
Both
you and the tenant should sign the agreement.
TAX:
If you rent out part of your own home this can also count
as residential lettings, but you can take advantage of the
'Rent a Room' scheme instead. This lets you get tax-free income
of up to £4,250 from letting rooms in your home. More
information
CHECKLIST
Listed
below is a summary of points that need to be addressed prior
to the tenancy starting:
-
MORTGAGE
Get permission to let from your Mortgage Lender
-
LEASEHOLD
PROPERTY Obtain consent from the Freeholder if you
are a leaseholder
-
INSURANCE
Review Buildings and Contents insurance You can do this
via Letsure or Homelet by going to
www.jml-property-insurance.co.uk
-
MAIL
Arrange for the redirection of mail with the Post Office
-
PROPERTY
INSTRUCTIONS Prepare a Property Manual with instructions
for appliances, location of stop cocks and an information
guide for Tenants – local schools, neighbours, shops etc
-
GAS
SAFETY CHECK Organise a gas safety check & appropriate
certificate
-
ELECTRICAL
CHECK Make sure that all appliances are compliant
and that wiring and sockets are safe.
-
CHIMNEY
/ FLUES Make sure that these have been swept prior
to letting
-
SMOKE
DETECTORS Smoke & CO detectors are in working
order
-
FIRE
& FURNISHING Only furniture & soft furnishings
that meet the current regulation should remain
-
STOP
COCKS Label up internal stop cocks
-
LPG
GAS BOTTLES Make sure these are full at the tenancy
commencement
-
OIL
TANKS Make sure that these are full at the tenancy
start
-
SEPTIC
TANKS Ensure that these are emptied at the start of
the tenancy
-
KEYS
Label up any keys you leave at the property or bring to
our offices indicating the doors/windows they are for.
-
PERSONAL
ITEMS Ensure that all personal and valuable items
are suitably securely stored or removed
-
TELEPHONE
Ensure that there is a line installed and that you have
requested a closing account
-
CONTRACTORS
Provide the agent or Tenant with a full list of contractors
(if we are rent collecting or offering an introduction
and you want the tenant to arrange for his/her own repairs)
-
DECORATION
Make sure the property is in good decorative condition
-
GARDEN
Ensure the garden is suitably maintained and if a gardener
is being provided with the let make arrangements for this
-
PROPERTY
CLEANING The property should be professionally cleaned
prior to the let Provided the instruction is in writing
the agents can arrange this.
-
UTILITIES
& COUNCIL TAX You should
advise the service companies of the new tenants names
and take the gas & electric meter readings(and water
if on meter) and write to the companies and local authority.
©jmlpropertyservices
February 2004
Download
our PDF guide How to Present Your Home for letting -
Click Here
New
Tenant moving into your property? Download our PDF "Welcome
to your new home" letter - Click
Here
Read
our section on CONDENSATION Click
Here
Tenancy
Deposit Protection Scheme Click
Here
Click
Here for Premier Homelet Specialist Landlord Insurance
- Instant Online Quote
Click
Here for Letsure Landlords Household Insurance - Instant Online
Quote
Looking
for a Buy to let Mortgage?
Click
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Specialist
Buy to Let, Residential Investment & Commercial Mortgage
Brokers
Thinking
about selling your property? Click
Here
Additional
Pages to View Letting
your holiday home - How
to Market your holiday home and Website
Promotion - Condensation
Problems
Problems
with Accepting Housing Benefit in England and Wales - Article
by Philip Suter Click
Here
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