Guide to our property management services

 

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Why Let?

You may be considering letting for a number of reasons. Perhaps you will be working overseas for a number of years and want to retain a stake in the UK housing market. Perhaps you have recently inherited a property or you may be one of a growing group of people who view property as a key element of their investment portfolio.

why letMany homeowners may look for an alternative to selling their property due to a number of reasons, and have found that letting has provided them with flexibility to engineer the house move they require, be it relocating or moving up or down the ladder. Mortgage companies can help to facilitate this by offering ‘buy to let’ mortgage products.

Whatever your reason for letting, the private rental sector in the UK has never been more attractive.

Recent legislative changes have removed many of the uncertainties associated with letting, so that you should always be entitled to seek possession of your property at the end of a letting period.

Preparing For Letting

prepare to letVarious factors need to be taken into account when advising a landlord on how they should best proceed with their letting.

The location, condition and size of the property, standard of contents and fittings provided and prevailing market forces are all factors that must be considered. An experienced Letters of Distinction representative, will undertake a comprehensive assessment of your property by visiting the property to carry out an initial inspection, following which all relevant issues will be discussed in greater detail with you. This enables you to ask any questions that you may have or discuss any particular concerns. This service is provided free and with no obligation.

It is important to review the condition and presentation of the property, as this will affect the speed at which your property is let and the level of return you can expect to achieve.

Letting Your Property

managing your propertyOne of the principal functions of a managing agent is the identification and referencing of a quality tenant.

We will extensively market your property using both advertising through internet coverage with the major property websites such as rightmove.com and a wide range of relocation organisations.

On your behalf we will take references on every tenant over 18 to be named on the tenancy agreement.

To ensure this vital process is carried out as objectively and thoroughly as possible we use an independent professional referencing company, the cost of which is fully covered by the prospective tenant. The report sent to us by the credit referencing company will be actioned on the basis that the conclusion deems the applicant to be a suitable tenant and acceptable to underwriters for legal and rent protection policies.

Our aim is to secure the right tenant, at the right rent, in the shortest possible time.

Managing Your Property

As part of our comprehensive property management service to landlords, we arrange for an independent professional inventory clerk to visit your property to undertake an inventory and schedule of condition.

managing propertyThe legislation regarding the registration of tenancy deposits has driven our decision to outsource this vital procedure to a specialist company.

Our full property management services include a regular property inspection of your property during the tenancy, whereby complete feedback will be given to you and a report held on your property file to ensure peace of mind.

Along with tenant feedback, the regular property inspections will highlight any maintenance or repairs that are required.

Repairs are necessary to each and every property throughout the length of the tenancy and landlords must be prepared for this eventuality. We will make arrangements, on your behalf, with our qualified local contractors or a contractor of your choice to carry out any necessary repairs.

managing propertiesWhen tenants are checked out of your property an assessment is made of any redecoration or minor repairs, which cannot be reasonably accepted as fair wear and tear against the original inventory.

We will agree with the tenant and you, the level of deposit to be withheld, obtain estimates by way of confirmation and the net deposit remaining will usually be released to the tenant.

We will arrange for any necessary work to be carried out prior to the next tenant moving in.

We will collect the rent from your tenant on the 1st monthly and transfer the funds directly to you that month.

A detailed monthly statement can be provided to you, and your accountant, giving details of all transactions relating to your property.

Safety & Environmental Regulations

The Gas Safety (Installation & Use) Regulations 1998

This regulation is extremely important as it places the obligation upon the landlord to ensure that all mains or bottled gas appliances supplied by them in a rented property have a certificate of safety. This includes central heating boilers, water heaters, cookers, fire and gas refrigerators etc.

Each year, all such appliances must be serviced by an engineer who is registered with the Council of Registered Gas Installers (CORGI) and that a safety record is provided in a prescribed format and a copy issued to the tenant.

The appliances must be properly maintained and the safety record must be reviewed annually. Non-compliance with the Gas Safety Regulations could jeopardise the life of your tenant or result in a heavy fine up to £5000 and/or imprisonment.

As these provisions apply equally to the managing agent as well as the landlord, you will understand that we must make a clear stance in this matter to the extent that we are unable to accept and/or retain a property on our books that does not comply with these regulations.

The Electrical Equipment (Safety) Regulations 1994

The above regulations ensure that the landlord is responsible for checking that all the electrical appliances supplied in the let property are safe for use.

Since 1st January 2005, most work carried out on the electrical system must be certified under Part P Building Regulations. We recommend that all electrical appliances within a let property be regularly checked, as failure to comply could lead to imprisonment and/or a fine up to £5000.

We are happy to arrange for the necessary electrical inspections to be carried out on your behalf.

The Furniture and Furnishings (Fire) (Safety) (amended) Regulations 1988

All upholstered furniture and furnishings in rented properties must pass the ‘cigarette test’. If any property is found not to comply the landlord can face a fine up to £5000 and/or a maximum six month imprisonment.

Any landlord placing a property on the rental market must comply with these regulations immediately, and any furniture not complying must be removed before the tenancy commences.

Similarly, if any items in a property subject to an existing rental are replaced, either during a tenancy or a void period, then those replacement items must continue to satisfy the requirement of these important regulations.

Generally, most furniture purchased from a reputable supplier after March 1990 should comply with regulations and will be labelled accordingly. Further advise on this issue is available from your local Trading Standards office.

Energy Performance certificates (EPC’s)

Under Article 7 of the European Directive on Energy Performance of Buildings, any building which is sold, rented out or constructed must have an Energy Performance Certificate (EPC). This must be issued by a qualified and accredited assessor in an independent manner.

Once produced an EPC is valid for ten years. The certificate is accompanied by recommendations on how to improve energy efficiency. These do not however have to be implemented. This part of the Directive has been implemented into law in England and Wales by the Energy Performance of Buildings Regulations (2007/991).

From 1st October 2008, whenever a rental property is let to a new tenant an EPC is required. Letters of Distinction have reached an agreement with a local DEA, to provide the guidance and EPC required for rental properties.

Smoke Detectors

The law requires that all new houses built after June 1992 and all properties declared as Houses of Multiple Occupation must have electronically linked, mains operated smoke detectors installed on each floor.

Although older properties are exempt from this requirement, we strongly recommend that smoke detectors be installed on each floor in all rental properties.

Financial Considerations

Will I have to pay tax on my rental income?

The short answer is ‘yes’, the long answer is ‘it all depends’.

You will be liable to pay income tax on your net income from the property, that is the gross income less allowable expenses which are incurred from letting the property. Due to the potentially complex nature of this issue, we have arranged with local accountants to give our landlord clients an outline assessment of their likely position.

If your property is mortgaged you must advise your bank, building society or other lender that you propose letting your property and obtain their written consent. Sometimes an administration fee is charged for issuing a consent letter if necessary we will liaise with your lender on your behalf.

If your property is leasehold, your head lease will state whether or not you require permission from the freeholder to sublet. You should find that your lease will contain a clause indicating that you must obtain consent from your head leaseholder but that such consent should not be unreasonably withheld from you. If necessary we will be pleased to liaise with your leaseholder on your behalf.

We will be pleased to arrange any insurances you may feel you require to cover your legal costs and rental income.

Policies will be arranged through companies acknowledged as market leaders in providing these specialist policies. Apart from the legal and rent protection policies already referred to, cover is also available for buildings and/or contents.

Will my money be safe?

It is essential for landlords to ensure that they only entrust their properties and any rents, deposits and maintenance funds to agents who operate to the highest professional standards.

Letters of Distinction maintains separate clients’ accounts and operates these accounts to professional standards under ARLA in order to protect the interests of both landlords and tenants.

Letting Practicalities

Gas, electricity and water companies etc, should be advised whenever the property is empty or when there is a change in occupation, so the meters can be read and final accounts prepared, even if this is for a relatively short period of time.

Letters of Distinction will do this for you on the initial letting and also each time there is a change of tenant. During the void periods the utility services will be transferred back into your name but, assuming we are still under your instructions, accounts will be made care of our office address.

The tenant is obviously responsible for the utility bills generated by their usage during the tenancy, including standing charges, but their liabilities in this respect clearly finish on the date their legal liabilities as tenants end.

It is also the tenant’s responsibility to arrange re-connections of the telephone and meet any costs associated with the line rental and call charges.

Council tax is a property based tax, payment is therefore the tenant’s responsibly whilst the entire property is let, however, if the property is let on a room basis, such as to students, no council tax will be payable as long as all the tenants are exempt.

The maintenance and upkeep of the garden is usually the tenant’s responsibility. You should provide sufficient gardening tools and mower for their use; these items would be included on the property inventory.

Alternatively, if the property has a large garden or delicate plants you may wish for us to arrange a gardener to make regular visits during the tenancy and reflect this in the rental charged.

We strongly advise that you make arrangements with the Post Office to have your mail forwarded to you from the day you vacate the property.

Whether you choose to leave your property furnished or unfurnished is always a big decision. There is relatively very little difference in the rental values between the two.

Unfurnished is usually the most popular as it minimises your risk considerably. We are happy to advise you on the level of furniture required for your particular property to provide the best possibility of a let.

Want to know more?

If you have any question with regard to letting and our property management services, then please call us on 01904 529539 or contact us via our contact form.

If you found this guide useful, then you can download a FREE PDF version by clicking the button below.

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