Where to Start?
Some top tips on Letting your Property
1. In an extremely varied area such as London, it is imperative to use an agent that has experience and knowledge of the local market. With over 25 years combined experience, this is something that our team can certainly offer. Feel free to question us on our knowledge!
2. Having chosen your agent you will be required to prepare you property to be let out, and below we list a few guidelines to assist you.
The rental market can be very competitive, so in order to obtain the best possible tenants and achieve the best price for the property it is crucial to make yours stand out from the rest.
- Interior walls should be neutral colours and carpets plain
- Fabrics and Furnishings (if applicable) should be of suitable quality to be able to withstand reasonable wear and tear.
- If you have pets, it is advisable to keep them outside for the viewings, and to eliminate their odour as much as possible.
- First impressions are vital, so the front door and hall area should be clean, tidy and clear of any obstructions.
- The property should be clean and well-aired throughout and the garden (where applicable) kept tidy.
- If the weather is cold, heating should be turned on and, in warmer conditions, windows opened.
- For advice on whether you need to do any work on your property, please contact us to arrange a valuation.
3. Other important considerations for landlords before letting a property:
- Written consent must be obtained from your mortgage provider/freeholder (if property is leasehold).
- Your insurance company must be notified that the property is to be rented out and appropriate insurance obtained for a tenanted property. There are specialist insurance companies who can provide this and we are happy to assist you if required.
- The Inland Revenue must also be informed within six months of letting your property, flat or apartment in the UK. Failure to do so may mean you could incur penalties, interest and other consequences. The Inland Revenue have been known to deal harshly with landlords who do not declare rental income and it is always best to seek advice on tax planning and capital gains tax from a fully qualified accountant.
- Mail should be redirected with the Post Office to avoid anything important going astray.
- Further copies of keys will need to be provided, including any communal door keys. At least two sets will be required if you have management agents acting for you.
- Utilities such as gas/electricity/water/telephone & council tax will have to be transferred into the name of the new tenant(s).
- It is essential to appoint a professional to prepare an inventory and undertake a check in. An inventory is an important legal document which forms an integral part of the tenancy agreement and as such it is a false economy to prepare your own in most cases.
- The inventory is required whether the property to let is furnished or unfurnished. Accurate descriptions of the overall condition of wall/floor coverings, kitchen and bathroom fittings to name but a few are essential, as money cannot be withheld from the tenant's deposit unless the loss or damage is proved to have been caused by the tenant.
- In the event that any dispute concerning loss or damage to your property is not amicably resolved then the matter will be referred to the courts and arbitration. It should be noted that any judgement will be on the basis of written documentation – the Inventory.
4. Tenancy – The Housing Act 1988 (amended 1996) has given rise to two types of tenancy: Assured and Assured Short hold Tenancy as well as the existing Company Tenancy and Contractual Tenancy.
- Assured Tenancy
Certain criteria have to be satisfied for a tenancy to qualify for assured status. Assured Tenancy gives the Tenant security of tenure but at a market rent negotiated between the parties. The Landlord may request back possession of the property let on an Assured Tenancy but must obtain a COURT ORDER. This has its advantages but is not as flexible.
- Assured Shorthold Tenancy (AST)
This Tenancy is attractive to Landlords as it offers market rents without security of tenure beyond the contractual term and the majority of Tenancies are based on this format. However, certain criteria must first be met:
The Tenant must be an individual
The property must be the Tenant’s main residence/home
The rent cannot exceed £25,000 per annum
The Landlord must not occupy the same property
If the property is let under an Assured Short hold Tenancy, the Landlord can issue a Section 21 Notice to guarantee possession provided the term of the Short hold is expired and not less than two months notice has been given by the Landlord stating he requires possession.
If court action is needed, this can be obtained on a number of different grounds against the Tenant.
However, it should be noted that is a criminal offence under the Protection from Evictions Act 1977, for a Landlord to threaten or forcibly evict a Tenant from their property.
- Company Tenancy
This is governed by contract law and is not regulated by the Housing Acts of 1988 or 1996. It is used when a Private or Public Limited Company (excluding partnership or sole trader) want to enter into a Tenancy.
There is no security of tenure and rental payments are often made on a quarterly basis by prior agreement.
- Contractual Tenancy
Contractual Tenancy also falls outside the provisions of the Housing Acts of 1988 and 1996 and is not regulated by statute. It is most commonly used where the rent exceeds £25,000 per annum and both parties have the freedom to contract as they choose, but must then rely solely on the provisions of that Agreement.
5. Furnished or Unfurnished - The majority of professional tenants prefer the property to be unfurnished and it has been suggested that a tenant is likely to respect the property more if they have their own possessions. Moreover, the difference between rent for furnished or unfurnished is negligible and the landlord remains responsible for the repair of replacement of any furnishings which become broken or worn (unless this was caused by a deliberate act of the Tenant - (see DAMAGE DEPOSITS)
6. Marketing/Finding a Tenant - When taking the decision to let your property, you will need to decide whether you require your agent to simply market your property and find a tenant or whether you would also like to engage the services of their management department to manage the property on your behalf.
Whether you opt for let only, rent collection, or our full management service, Knight Bishop as your Letting Agent will firstly a provide you with a written rental valuation. This is be based on the property type, size and decorative order - combined with popularity of the area, proximity to transport, and achieved rental price of comparable property. It is important to price your rent fairly but realistically in order to attract the most suitable Tenant.
Your rental property will be regularly advertised in the local press and publications dedicated to the letting industry as well as being featured on our website knightbishop.co.uk, and on leading property portals such as rightmove.co.uk, primelocation.com, findaproperty.com, zoopla.co.uk, globrix.com amongst many others. We also contact any listed prospective Tenants, local companies and relocation agents.
Should you decide to employ us as your Managing Agent, we will also field calls, arrange viewings, vet prospective Tenants and obtain references, draw up contracts and advise you on your Safety and Repairs obligations (see LEGAL DUTY OF CARE).
7. Full Credit Checking - thorough credit checks are carried out on all prospective Tenants as we can reserve the right to decline an application where necessary in the interests of protecting the Landlord’s investment.
8. References – these can be obtained through us as your Managing Agent and include references from the Tenant’s employer and previous Landlord. We can also provide you with/assist you in obtaining a linked insurance policy to safeguard your rental income and provide legal protection (RENT GUARANTEE).
9. Drafting of Tenancy Agreement/Leases – the Letting team at Knight Bishop can prepare and supply you with all legal documentation and give practical general legal advice.
10. Damage Deposits – This is usually equivalent to one month’s rent and is taken from the Tenant to be held in our Client Account until the end of the Tenancy. Upon vacation of your property, there will be a re-inspection and any refunds will be made within a maximum of 28 days, provided that there are no disputes and all utility accounts have been settled.
11. The Inventory - This is an important legal document forming an integral part of the Tenancy Agreement.
Unfortunately many Landlords fail to realise its importance (both in legal and financial terms) and try to “save money” by preparing their own inventory.
More often than not this proves a false economy, as amounts cannot be withheld from a tenant’s deposit in compensation for loss or damage unless it can be proved that the loss or damage was actually caused by the Tenant.
Technically the document should be called an “Inventory and Condition Report”, as an inventory simply list the contents of a property not and their condition. This is useful if the items are missing but not if they are damaged. If the condition of the particular item is not accurately described and the inventory was signed by the tenant prior to taking occupation, how can it be proved that the tenant caused the damage?
Unfurnished properties also require an inventory and a ‘check in’ and ‘check out’ report as there will always be wall and floor coverings, kitchen and bathroom fittings etc, the condition of which needs to be documented.
Where a dispute cannot be resolved amicably by referring to the contents of the inventory, check-in and check-out reports then details of the disputed amount will be sent to the ADR (Alternative Dispute Resolution) who will base their decision on the contents of the inventory, and the contents of the check-in and check-out reports. Their decision is final and cannot be appealed. We strongly recommend that you allow us to arrange for an Inventory (prices upon request).
The costs of everyday repairs and maintenance are the responsibility of the Landlord, but if we are instructed to manage your property on your behalf, we will deal with any day to day concerns. We can also organise quotes for approval on any major repair as this becomes apparent. Under the Landlord and Tenant Act 1985, Landlords are responsible for repair of the structure and exterior of the property, together with installations for the supply of gas, electricity, water and sanitation.
If the property is not in a good state of repair at the commencement of the Tenancy, the Tenant has the right to insist that repairs are carried out and, in the event that the damage is serious, the Tenant will be entitled to consider the letting as terminated as the Landlord will be in breach of his obligations.
12. Collection of Rent – this is usually done on a calendar monthly basis and is forwarded to the Landlord via any previously approved method after any agreed deductions have been made for contractors etc.
13. Legal Duty of Care – Under common law, the Landlord must ensure that properties to let are safe and failure to comply with Safety Legislation is considered a criminal offence resulting in legal action and prosecution.
As your Managing Agent, we can carry out safety checks upon your request, deducting the cost from your rent.
- Gas – (The Gas Safety (Installation & Use) Regulations 1994 (amended 1998) – the Landlord must maintain gas installations and all gas appliances through annual inspections and safety checks carried out by a GAS SAFE registered engineer and a copy of the Current Inspection Certificate must be left at the property.
- Electricity - (The Electrical Equipment (Safety) Regulations 1994 & Electricity at Works Regulations 1989- the Landlord must ensure that all mains voltage household electrical appliances and equipment is tested and safe to use. Any non-repairable items must be replaced and removed.
An NICEIC or similarly qualified electrical engineer must carry out these tests on an annual basis and we would also recommend this is done upon change of Tenancy.
All operating instructions must be left in the property for the Tenant’s benefit.
- Furniture and Furnishings – The Furniture and Furnishings (Fire) (Safety)Regulations 1988 (amended 1989 & 1993) - Soft furnishings (such as mattresses, settees, bed bases, cushions and padded headboards) must meet fire resistance standards and bear a permanent label confirming this. If compliance cannot be proved, the item must be removed and replaced.
- Smoke Detectors – whilst only properties built after 1992 legally require the fitting of smoke detectors (Building Regulation 1991), we would strongly recommend that smoke detectors are fitted to each floor of the property being let.
NB: The penalty for failure to comply with statutory safety legislation is currently a maximum of £5,000 and/or 6 months imprisonment for each offence. This can be harsher in the case of injury or fatality.
14. Overseas Landlords – you are considered an overseas Landlord if you live abroad or go to work abroad for lengthy periods of time.
It is important to firstly note that Inland Revenue regulations apply even if you are a non-UK resident. Moreover, non-resident Landlords must apply to the Inland Revenue Financial Intermediaries Claims Office (FICO) for authorisation (by way of an exemption certificate) to receive payment of property rental “gross”, that is without deduction of Income Tax by the letting agent or Tenant as required by law.
NB: The above is merely a guideline and for fully qualified advice, you should contact an appropriate Accountant or Tax Expert.
Brief Guide to Services:
- We will ensure your property is marketed in local publications, as well as leading property portals such as rightmove.co.uk , primelocation.com, zoopla.co.uk etc.
- We insist on accompanied viewings.
- We also insist on status enquiries/reference and credit check of prospective Tenants.
- We always obtain security deposit/rent guarantee.
- And get competitive quotes for insurance.
- We are experts at preparing Tenancy Agreements and Legal Notices.
- We can assist with arranging transfer of Utilities to the new Tenant’s name, and with establishing Council Tax and Water Rates in Tenant’s name.
- We can advise on compliance with Safety Regulations for Gas/Electricity supplies etc.
- We can collect monthly rental payments and provide monthly accounting to you.
- We can arrange annual gas safety checks (chargeable).
- We can also request competitive quotations and, upon approval, arrange for necessary repairs/maintenance to be carried out.
- We deal with all renewals and/or check-out as necessary.