Introduction

Legal Agreements and Leasing

• The majority of residential lettings by private landlords are "Assured" tenancies introduced under the Housing Act 1988. This legislation provides stronger rights than existed previously, enabling Landlords to let a property without the fear of not being able to recover possession. We should be pleased to advise you on the type of tenancy Agreement to suit your circumstances. The Housing Act 1996 has introduced some amendments effective from 28th February 1997 intended to introduce even greater flexibility.

• This will of course depend on the date on which you require the property for your own use, and additionally what form of tenancy can be offered. The majority of residential tenancies are entered into under "Assured Shorthold" provisions and under this case with effect from 28th February 1997 any length of tenancy can be offered. There is no minimum specified but it will not often be in a Landlords economic interest to offer a very short tenancy. We do not recommend however that agreements should be made for longer than one year initially. If it is mutually agreed, a renewal can be granted to continue the letting; this enables us to review the desirability of continuing with the same tenant, and also to review the tenancy conditions if required.

• Many people believe that it is more difficult to obtain re-possesion of a property if it has been left in an unfurnished state. Current legislation however provides the same rights of re-possession, although this has not always been the case. Rentals obtained are little different from those achieved in a part-furnished or furnished state, and if you are reluctant to leave your furniture it may be worth considering storage and/or taking it with you. In respect of furnishing left in a property it is essential that soft furnishings etc are fire retardant and comply with fire regulations. The Furniture and Furnishing (Fire) (Safety) ( Amendent) Regulations came into force in 1993. Any agent taking instructions on a new property must ensure that all furniture complies. Ideally unfurnished properties should contain carpets and curtains.

• On average, assuming the property is in good order and that a realistic rent is being asked, a suitable tenant should be found within a month or so. For a very substantial house, it will normally take longer to find suitable tenants. It is always helpful if a property is offered at the earliest date, as sometimes a tenancy can be arranged one or two months in advance. Clearly a clean and attractively decorated property will be more in demand and therefore command a higher rent.
  
  
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Repairs and Maintenance

• Emergency or essential repairs will be carried out by us without reference to yourself up to a limit normally of One Hundred Pounds. If a greater sum of money is required then we attempt to contact you first.
  
  
• For non essential repairs, we refer to you before any action is taken and where the anticipated cost of maintenance or repair justifies, we shall obtain competitive quotations or estimates from at least two sources.
  
  
• Maintenance of electrical equipment, central heating systems etc are the responsibility of the Landlord, except where other agreements are made with tenant. Or in those cased where the tenant is responsible for any malfunction. The provision of essential services however it the legal responsibility of the Landlord.
  
  
• Central heating /hot water boilers should be services regularly and hwere a maintenance agreement is not in force we shall arrange for an annual service by a competent tradesman. The cost of this should be borne by the Landlord.
  
  It is a legal requirement (for a let property that all gas appliances MUST be serviced annually by a Corgi registered engineer, a record must be kept of all servicing and repairs and a Safety Certificate issued.
  
  
• We shall be pleased to use your own tradesmen if preferred, provided that they are easy to contact and efficient. Otherwise we have a list of tradesmen who over the years have proved reliable and competent.
  
  
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Outgoings and Services

• Once a tenancy is introduced it becomes the responsibility of the tenant, as occupier, to pay Council Tax. It is not the Landlords responsibility. Empty properties however may be subject to a charge which you are liable to pay for the period concerned.

• Mortgage payments we suggest should always be made directly by you. We can deal with payment of ground rents, maintenance charges and if applicable water rates and sewerage charges, although the latter we normally make the responsibility of the tenant.

• On anything other than a very short let the service agreement is transferred to the tenant, and all the accounts rendered are directed to them. Prior to your vacation of the property, we should ask that you contact the various services and arrange for final accounts to be taken or alternatively we can handle all these arrangements for you. We shall be pleased to settle these accounts for you out of the rental received should you wish the final account to be directed to our office.
  
  NB: Owners are responsible for standing charges, whilst a property is vacant.

• Building Societies, Banks etc like to be consulted prior to letting and it will probably be a condition of your mortgage advance that you seek their consent before doing so. They will sometimes wish to vet the Tenancy Agreement and copy references prior to a tenancy being introduced. Normally they will have not objections to a fixed term agreement. In giving consent, in some instances they may request payment of a fee.
  
  
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Rent Accounts

• Rents quoted normally exclude all outgoings (eg water, sewerage, utility accounts etc), except where a building is part of a development sharing communal facilities and a service charge and ground rent may be payable. In such cases the Landlord would normally remain liable for such payments.
  
  There are two principal services we offer; full management of a tenancy and property, or a "Tenant Find" Service for situations where the Landlord wishes to manage the tenancy him/herself once it has been set up and introduced. For a few Landlords we operate a rent collection service only. The financial aspect of these services operate as follows:
  • Management / Rent collection Services
    • Statements are sent at the end of each period, ie end of month or quarter, showing all income and expenditure incurred in the period. The balance is remitted in most cases to a nominated bank or building society account, or if preferred a cheque can be sent to you with the statement. Invoices and demands that we are aware of will be paid on your behalf and shown on your statement. Any such invoices are held on file.
      
      
  • Tenant Find Service
    • An account will be sent to you after commencement of the tenancy indicating any balance due. One months rental will have been paid to us by the tenant and this will be offset against your invoice.
      
      
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Income Tax

• Income tax is charged on the BALANCE of the renal obtained after deduction of a range of expenses, (ie. Profit) and although we are not accountants, we can provide you with a list of allowable expenses which an be offset against the gross income. Landlords resident in the UK or who have a UK employer are paid in this country, are responsible for their own tax affairs regarding rental income.
  
  
• Landlords who are going overseas are recommended to appoint an accountant who will be responsible for the preparation of accounts making the necessary returns to the Inland Revenue. If you do not have an accountant we can recommend one to you or alternatively we can act on your behalf and make the necessary returns in relation to any property/land. The "Self Assessment" taxation system requires that Landlords complete the rest of the return.
  
  
• For Landlords not ordinarily resident in the UK, Agents and Accountants are obliged legally to account for tax on rental income and to make a return to the Revenue Authorities. The Finance Act 1995 set out a scheme for taxing the property income of non-resident Landlords with effect from 6th April 19996. Letting Agents or, where there is no letting agent, the tenant, of a non-resident Landlord must deduct tax at the basic rate from the Landlord’s UK rental income, and pay the tax quarterly to the Inland Revenue. It is possible to apply to the tax authorities for a dispensation so that the rent may be received without deduction and we can advise the Landlords fully regarding this if they are likely to be living abroad.
  
  
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Insurance

• Buildings cover must be maintained and payment of premiums continued. Your insurance company should be advised that you are intending to let your property.
  
  
• Your contents insurance may be affected by a letting and it is a normal condition of your policy that you notify the company of any change.
  
  
• Any expense, which might arise as a result of an accident to the property and involving a possible insurance claim, will be notified to you and your authority obtained before any action is taken, except for emergencies, when any necessary steps will be taken to protect the property. Where a claim would be appropriated we can handle this on your behalf. Any significant extra work by us in this respect would be charged to your account.
  
  
• Whether the property will be let in an unfurnished state or may only be let with carpets , curtains and some appliances, we strongly advise that contents insurance is maintained. Such cover will normally protect agains third party claims when an accident has arisen.
  
  
• If you require advice, or have nay difficulty in arranging insurance cover please discuss the matter with us. SEE PAGE 7
  
  
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Property Sales

• In circumstances where the sale of a property is arranged to a tenant, or to a person who has been introduced to the property through our agency as a prospective tenant, then a commission will become payable to us. This commission is as a specially discounted rate of 1.25% of the sale price ( + VAT) in recognition of a position of an existing client having used or using our services in letting.

• We are possibly the largest specialist agency in this area dealing with Letting and Managing of property. To offer a fuller range of Estate Agency services, particularly SALES we work closely with CONNELL Estate Agents who are in the forefront of the successful marketing and selling of RESIDENTAIL PROPERTY. If you are trying to weigh up whether to sell or to let your property or perhaps to do both it should certainly be helpful to speak with staff from both companies.
  
  
• At this stage there are just a few other general points that we feel you should know:
  
  
  • An complete inventory of the premises is essential, so that at the very end of the tenancy there can be no doubt as to what was the condition of the property and fixtures and fittings at the outset.
    
    
  • This is of course dependent on the type of property being offered, and what you as an owner specify when selecting a tenant profile. Yes you can stipulate no pets, no children, no smokers, but bear in mind please that you may restrict the market making letting more difficult. Emphasis should be placed on the quality of the tenant and not only upon the rental being obtained.
    
    
  • A potential tenants standing is checked not only on the basis of adequate financial means, but on their suitability for the individual property offered and as many references are sought as thought necessary.
    
    
• NOTE: "BETTER AN EMPTY HOUSE THAN A BAD TENANT"
  
  
• It is in your interest that care is taken in selecting a tenant, and this results in many applicants being rejected without even being shown over a property. Unlike the sale of a house where it only mattes that the purchaser has the money, a tenant will be living in your property and it is important to be selective.
  
  
• For this reason we will not normally accept an instruction to seek a tenant and subsequently manage a property where another agent is appointed. To be "first past the post" in a race cannot be in the best interest of a Landlord.
• Additionally, if it is not known that another agent is involved, it can result in a tentative offer being made to a tenant in good faith that subsequently has to be withdrawn. At that point the potential tenant could have entered into or released him/herself from other housing commitments.
• Remember an agent has powers to act on your behalf and housing is too important aan issue not to have clear instructions and parameters to work to
  
  
• IF YOU INSTRUCT US IT WILL BE ON THE BASIS THAT WE ARE SOLE AGENTS – UNLESS WE HAVE SPECIFICALLY AGREED TO SOME OTHER ARRANGEMENT.
  
  
• You may of course have other questions to ask and we should be pleased to meet and discuss these with you. In particular, many people require guidance as to the level of rent that may be expected and it is difficult to advise a figure that may be achieved without visiting the property.
  
  
• If we can help you by advising on any aspect of letting please telephone the number that is local to you. Office hours are 9.00 – 5.30pm Monday to Friday and 9.00 –1.00pm on Saturday. At other times all numbers are connected to an ansaphone and if you leave a message we should be pleased to call you back.
  
  
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Legal Obligations

• The landlord has a number of legal obligations imposed by legislation or in the tenancy agreement. These commonly include carrying out repairs within a reasonable time of being notified, complying with safety regulations in respect of furniture, gas and electricity, giving required notice to tenants and observing the tenants rights to quiet enjoyment.
  
  Failure to observe safety regulations, could lead to prosecution, a fine, a substantial claim for damages by a third party and possibly a prison sentence.
  
  Where ever there is any area of doubt we recommend you contact us for further guidance.

• The furniture and furnishings (fire and safety) regulations first appeared in1988 and were amended in 1993 allowing a transitional period that expired in December 1996. From January 1st 1997 any furniture supplied as part of a new letting, which commenced after March 1st 1993, must comply with the regulations. The regulations require the cover fabric and filling material of upholstered furniture to be made of fire resistant material and be able to pass the "smouldering cigarette" and "match flame" resistance tests and to carry a label confirming this. Generally items manufactured in the UK after 1990 are likely to meet the required standards and display the appropriate permanent label confirming compliance. The regulations apply to three-piece suites, sofas, armchairs, scatter cushions, seat pads, bean bags, beds, padded headboards, mattresses, pillows, sofa-beds, futons, loose and stretch covers for upholstered and garden furniture. Exempt items include antique furniture or any furniture manufactured prior to 1950, as well as carpets, curtains and bed linens, duvets and mattress covers. Items that do not comply should be removed from the property prior to it being let.
  
  
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Gas Safety

• The gas safety regulations came into force during 1994 and have subsequently been added to and amended. They apply equally to appliances and equipment using the mains gas supply or liquid gas (Calor or Propane). The Central provisions of these regulations require that:
  • The Landlord of the rented property must have a gas safety check carried out prior to a let and annually thereafter. A copy of the appropriate record must be given to the tenants. Gas fittings and flues must be maintained in a safe condition.
    
    
  • If any appliance or pipe work is dangerous or defective it must not be used and must be repaired or replaced as soon as possible
    
    
  • 1.The gas safety check can only be performed by an authorised Corgi Registered Engineer, qualified to work on the particular type of appliance or system.
    
    
• The check relates to the following areas: adequate ventilation and flues; operating pressures; heat output; flame combustion; escape of gas or dangerous fumes; obvious defects; and the provision of adequate instructions for the safe use of equipment and appliances. Please note that a standard annual "Service" of equipment is not sufficient to comply with the requirements of the regulations.
  
  
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Electricity

• There are a number of legislative requirements that relate to the supply and maintenance of electrical equipment, household appliances and / or the cables, plugs and sockets that connect them. Such items include electric cookers, microwaves, toasters, kettles, TV’s, video and DVD recorders, washing machines, dishwashers, immersion heaters, electric blankets, fuses and circuit boards, electric garden equipment.
  
  Put simply, the landlord has a duty to ensure that any of these items supplied as part of a property letting are "safe". This could be extended to include the mains supply. This is to minimise the risk of injury, death or damage to the property. Equipment or appliances identified as being potentially unsafe or showing obvious defects should be immediately repaired or removed and replaced with brand new equipment that complies with current BS and EC standards.
  
  New electrical safety requirements came into force on January 1st 2005, under Part "P" of the building regulations, which should help provide some protection against poor quality electrical works being the source of a fire or a cause for injury to consumers. The key aim is the control and authorisation of people carrying out electrical work to avoid dangerous consequences of untrained DIYers or cowboy builders. Broadly, these new regulations redefine the term "building works" to bring installation, repair and maintenance of electrical wiring (other than certain specified minor works) under the heading of "controlled services". Such works should now only be carried out by a "competent person" who belongs to and is authorised by an "approved" body, such as NICEIC or similar. These people can self-certify the works themselves after they have completed the job. As a result, letting agents (and landlords) have an obligation to use only those electricians who are suitably qualified. Alternatively for someone who is not suitably qualified, buildings regulations consent must be obtained prior to work commencing, then the work must be subsequently inspected and approved afterwards. Most local authority building control departments will make a charge for this facility.
  
  
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Smoke Detectors

• All new homes built since June 1992 must be fitted with mains-operated smoke detectors on each floor of the building. There are currently no specific statutory regulations relating to provision of smoke detectors in older buildings. However Sherwoods support the recommendation of the Fire and Safety Officers Association for current BS standard battery-operated devices to be fitted to stairways and halls on each floor.
  
  
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Carbon Monoxide

• Fatal carbon monoxide fumes can be produced by the combustion of any fossil fuel. It is essential that Landlords remember that they have a duty to ensure the regular maintenance and repair of oil-fired or solid fuel heating systems and that they have adequate flues and ventilation.
  
  
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