LANDLORD INFORMATION GUIDE

As members of NALS (National Approved Letting Scheme) & The Property Ombudsman (TPO) & TDS (The Dispute Service) you can be assured that we have a detailed understanding of the lettings and management sector and will ensure that you are given the best possible service. Over the last few years and following the introduction of the 1988 Housing Act which offers greater protection and possession rights to Landlords, there has been recovery in the lettings market.

People from all walks of life are looking to become involved in the rental market whether Investors, Companies, people who need to relocate with their work or homeowners who are having difficulty in selling their own properties. Increasingly, a large number of people are entering the ‘Buy to Let’ sector as an opportunity for investment. As a result, Landlords have come to expect extensive knowledge and expertise from the Agency they choose to act in their interests.

WHERE TO START? Local Lettings Agent – We would suggest you find a local agent who is associated to a Trade Association such as NALS (The National Approved Letting Scheme). In choosing us, you have come to the right place providing peace of mind to both Landlords and Tenants through the knowledge that firms within NALS offer high levels of customer service.

Having chosen your agent, you will be required to prepare your property for rental and below we list a few guidelines to assist you:  

Interior walls should be neutral colours and carpets plain 
Fabrics and Furnishings (if any) should be able to withstand reasonable wear and tear and be of suitable quality
Animals and their odours should be eliminated
The front door should be clean and the entrance hall clear of any obstructions as first impressions are important
The entire property should be clean and well-aired If the weather is cold, heating should be turned on and, in warmer conditions windows opened
For any other advice contact KILOSTATE  

The rental market as with any other is competitive therefore, in order to obtain the best possible tenants; you must present your property in the most effective way.

Other important considerations for Landlords before Letting:  

Your Insurance Company must be notified that the property is to be rented out and appropriate insurance obtained for a tenanted property
Inland Revenue must also be informed within six months of letting your property
Mail should be redirected with the Post Office.
Further copies of keys will need to be provided, at least two if you have Management Agents acting for you.
Utilities such as gas/electricity/water/telephone & Council Tax will have to be transferred to the successful Tenant.
An Inventory and Check In should be drawn up. This is an important legal document which forms an integral part of the Tenancy Agreement

The Inventory is required whether the property to let is furnished or unfurnished and accurate descriptions of the overall condition of wall/floor coverings, kitchen and bathroom fittings to name but a few are essential. Amounts 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 but should be noted that any judgement will be on the basis of written documentation – the Inventory.           

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.

A) 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.

B) 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:  

a) The Tenant must be an individual 
b) The property must be the Tenant’s main residence/home 
c) The rent cannot exceed £25,000 per annum  
d) 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.

C) 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.

D) 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.

FURNISHED OR UNFURNISHED - Most Tenants prefer the property to be unfurnished and it has been found 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).

MARKETING - Your property will be regularly advertised in the local press and as well as displayed in our offices and feature on our website and other sites such as FIND A PROPERTY, RIGHTMOVE, PRIME LOCATION, ZOOPLA to ensure maximum exposure. We also contact any listed prospective Tenants, local companies and relocation agents.
 
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.

REFERENCES – These can be obtained through us as your Managing Agent and include references from the Tenant’s employer and previous Landlord.

DRAFTING OF TENANCY AGREEMENT/LEASES – The Letting team at KILOSTATE can prepare and supply you with all legal documentation and give practical general legal advice.

DAMAGE DEPOSITS – This is usually equivalent to one month’s rent and is taken from the Tenant. Depending on service chosen, upon vacation of your property, there will be a re-inspection and any refunds will be made within a maximum of 10 days, provided that there are no disputes and all utility accounts have been settled. 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 pay the contractor out of the Tenant’s rent. 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.

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.

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.

Energy Performance Certificates - From the 1st October 2008 all rental properties in England and Wales with a new tenancy will be required by law to have an Energy Performance Certificate - EPC. An Energy Performance Certificates tell you how energy efficient a home is on a scale of A-G. The most efficient homes - which should have the lowest fuel bills - are in band A. The Certificate also tells you, on a scale of A-G, about the impact the home has on the environment. Better-rated homes should have less impact through carbon dioxide (CO2) emissions.

The average property in the UK is in bands D-E for both ratings. The Certificate includes recommendations on ways to improve the home's energy efficiency to save you money and help the environment. A landlord (or landlord's agent) will be required to show the EPC to prospective tenants. o9The tenant will be able to see at a glance how energy efficient and environmentally friendly a particular rental property is. 

The EPC needs to be provided when any written information about the property is provided or a viewing undertaken. If neither of these occur it must be supplied before entering into a contract to let. The certificates will be valid for 10 years. If a property has recently been purchased, it is likely to have an Energy Performance Certificate as this has formed part of the HIP (Home Information Pack) in England and Wales.

There will be no need to get EPCs for current tenancies or renewals to the same tenants. A tenant cannot 'legally' move in to the property until an Energy Performance Certificate has been produced. The above is only a guide to the legal safety requirements and should you have any further enquiries, we would recommend that you contact a qualified solicitor who will be able to verify these in full.

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.