If you are a first time landlord or a seasoned professional finding the right agent to work for you can be overwhelming with so many out there. How do you know who will truly be working with your best interests at heart? Martin Arlington and Harry Rouse set up Arlington Rouse based on 30 years combined experience to work with a small client base to offer a personal service so our clients can rest assured that everything we do is with them in mind.
As a landlord you have the option to self manage or appoint an agent to manage for you. At Arlington Rouse we will ensure that which ever option you chose we will guide you through the process.
How much rent can I achieve?
When you decide to put your property on the market or even before you purchase it we will assess the value. It is vital that you receive the correct valuation as this will help you to plan next steps as well as to realistically assess the health of your portfolio. Rest assured we will work with you to get the best rent from the best tenants as quickly as we can.
What must I do before I let my Property?
Letting out your property can be simple however there are few things you need to consider before you do. To achieve the best rent it is essential that the property is presented in the best possible light. Tenants when viewing a poorly maintained or badly presented property are unlikely to be interested or pay the price you want so it is vital to ensure the following;
Inside
Outside
All rental properties legally require an Energy Performance Certificate (EPC) showing the energy performance of a property. This must be made available for prospective tenants and be included in our marketing. The EPC lasts for 10 years. We can arrange an EPC for you if required.
Who do I need to ask for permission?
Before you rent you will need to ensure that you have the required permission to rent. If you are renting an apartment then it is likely to be leasehold. You will need to ask the permission of the Freeholder or Managing Agent and they will not usually refuse however they may charge a fee and will most likely have conditions that must be met before you can rent (for example, reference checks for the tenants). Please send us these conditions os we can ensure they are included in the Tenancy Agreement the tenants sign.
If you own the property with a mortgage you will need the permission of your lender. Each lender will have specific requirements so please make us aware and we can ensure compliance.
If you have buildings or contents insurance they you will need to inform them otherwise may find that you are no longer covered.
In some areas of London you may be required to register with the Council either as a mandatory licence or if your property is a HMO (House of Multiple Occupancy) then for a HMO license?. The requirements may be interpreted differently in each local authority so it best to check with yourCouncil..
What Legal documents will I need?
Your tenants will be required to sign an agreement with you to create a tenancy. They would usually sign one of the following;
Assured Shorthold Tenancy (AST). This is the most common type of tenancy agreement and provided the following conditions are met your tenancy will be an AST. The rent is less than £100,000 per year (£1923 per week), the tenant is an individual and the landlord does not also live in part of the building. Under an AST the tenant is provided with certain protection under law and the landlord has the right to retain possession by providing a minimum notice of 2 months in the correct manner.
Contractual or Common Law Tenancy. This tenancy is used if the rent is more than £100,000 per year or the tenant is not an individual (a company or partnership). Both parties are bound by the terms of the agreement and it is not subject to the Housing Act 1988. The tenancy is subject to the Protection From Eviction Act 1977 and is also subject to a minimum notice of one month. If you rent to a company then the person living in the property should be named on the agreement as a licensee.
Prescribed Information. You are required to register the deposit with one of the British Government’s approved schemes. Each scheme will require you to serve specific documents on the tenants (Prescribed Information). If you fail to do so then you will be unable to serve notice on your tenants to vacate the property and you could be liable to pay a fine of up to three times the deposit amount.
What safety checks must I carry out?
As a landlord you have a duty to ensure the property is safe for your tenants. Failure to comply could mean your tenant is injured or worse and you could face a fine or imprisonment.
The Gas Safety Regulations 1998
Under the provisions of these regulations the landlord must ensure that all gas appliances and installations are checked annually by a Gas Safe registered engineer and the tenant must be provided with a copy of the Gas Safety Record prior to the commencement of the tenancy and within 28 days of the renewal of the Safety Record. Failure to comply is a criminal offence with a penalty of 6 months in prison and/or a fine upto £5,000. We can arrange a Gas Safe registered engineer to carry out the required initial inspection and where we manage the property we ensure it is always kept up to date.
The Smoke and Carbon Monoxide Alarm Regulations 2015
Under these regulations smoke alarms are now required on each storey of the property where there is a room used wholly or partly as living accommodation and carbon monoxide detectors must be fitted in any room which is used wholly or partly as living accommodation and contains a fuel burning combustion appliance (including gas). We can arrange installation for you if required.
The Electrical Equipment (Safety Regulations) 1994
Under the provisions of these regulations the landlord must ensure that electrical installations and appliances at the property are safe, maintained in good order and checked regularly for safety by a NICEIC qualified engineer. New electrical equipment must carry a CE marking, affixed by the manufacturer. The landlord must ensure that all electrical equipment complies with the 1994 Regulations mentioned above. We recommend that a fixed electrical wiring test is carried out every five years and we can arrange this for you.
Fire and Furniture Regulations
It is a criminal offence to let a property with upholstered furniture, loose covers and loose fittings which cannot be proven to comply with the safety regulations. You will find compliant furniture will have the Kite mark tag attached. We would recommend you keep a record of the purchase of furniture and the tags attached. Please note furniture manufactured prior to 1950 is exempt.
Legionnaire's Disease
The landlord is responsible for carrying out a risk assessment for Legionnaire’s disease before letting the property. It is recommended this is carried out by a qualified contractor and during the tenancy you are responsible for maintaining control measures to minimise the risk of Legionnaire's Disease in water systems. We can arrange a risk assessment for you on request.
Internal blinds and corded window coverings
The British Standards Institution published new standards in February 2014 based upon the European Standards on safety requirements to address certain risks posed to children by internal blinds, corded window coverings and safety devices. The Standards affect any device used for internal blinds or curtain tracks, including but not limited to, vertical blinds, roller blinds, Roman blinds and plantation shutters. The Standards apply to blinds which have cords or chains fitted with a hazardous loop that could create a hazard in premises where there are children aged between 0 and 42 months who are likely to have access or be present. If the blinds or curtains have been fitted by an approved contractor then they are responsible for ensuring compliance with the regulations.
What should I do before the Tenant moves in?
Ensure the paperwork has been completed and you are satisfied with the tenants’ references. Most tenants would expect the property is professionally clean at the start of the tenancy and there are no unwanted items left behind. Make sure the tenants have a minimum of one set of keys per person and they are aware of the procedure to collect them on the move in day. If the tenant has requested items to be changed or works to the property ensure this is completed prior to the start of the tenancy. If Arlington Rouse are managing your property we will require a set of keys to enable access for contractors and we will make sure the move in runs smoothly.
It is not a legal requirement to have an inventory however it is highly recommended to have an inventory produced by an independent inventory clerk. The inventory is not just a list of the contents of the property but a schedule of the condition of the property. If you do not have this document then you will not have evidence that your tenant has damaged your property and you will most likely find it impossible to make deductions from the deposit. Often landlords will try to save money by carrying out the inventory themselves but in our experience this is often a false economy which is only fully realised when there is a dispute and the quality of evidence is not adequate. The standard practise is that the landlord pays for the creation and checking of the inventory at the commencement of the tenancy and the tenant pays for checking when they vacate.
For long term rentals usually the tenant will be responsible for paying the utility bills such as; gas, electricity, council tax, water, telephone, TV and insuring their own belongings. The landlord will be responsible for the service charge, ground rent, building insurance and contents insurance. If you have an inventory the inventory clerk will usually read the meters but do make sure you tell them the location of the meters and provide access. Otherwise you will need read the meters and inform the utility companies of the transfer. If Arlington Rouse manage the property we will take care of this for you if you just let us know who the current providers are.
How does it work with Money?
Arlington Rouse will collect rent on your behalf and will usually pay into your nominated bank account within 5 days or receipt. We will send you a monthly and year end statement. We inform you of any arears and chase the tenants for payment.
We will collect a deposit of typically 6 weeks rent and register this with a government approved deposit scheme and serve the required documents. It is a legal requirement to register the deposit with a government approved scheme. If you fail to register the deposit or fail to provide the tenant with the required paperwork you could face a fine of up to three times the deposit and you will be unable to regain possession of your property for any reason. There are two types of schemes which are described below:
Custodial where the deposit is transferred to the scheme to hold securely and return at the end of the tenancy; or
Insurance where the landlord or agent holds the deposit in their own bank account and you pay a fee to the scheme.
Currently schemes are run by www.depositprotection.com, www.tenancydepositscheme.com or www.mydeposits.co.uk.
Tax is due on all rental income from property in the UK. You are required to declare all rental income to HMRC using a self assessment tax return. If the property is jointly owned each owner of the property must complete an individual tax return. Tax is only due on the profit generated and you can make deductions for the following:
- letting agents’ fees
- legal fees for lets of a year or less or for renewing a lease for less than 50 years
- accountants’ fees
- buildings and contents insurance
- interest on property loans
- maintenance and repairs to the property (but not improvements)
- utility bills, like gas, water and electricity
- rent, ground rent, service charges
- council tax
- services you pay for, like cleaning or gardening
- other direct costs of letting the property, like phone calls, stationery and advertising
From April 2017 landlords will no longer be able to deduct the full cost of interest on property loans if the rent means total earnings are above the basic rate of income tax. This will be phased in over 3 years.
How does tax work for overseas Landlords?
If you are a landlord who is non-resident in the UK you are liable to pay tax on the rent your receive in this country. We are obliged by law to collect tax at the basic rate and pay on your behalf to HMRC. unless we receive authorisation from HMRC to pay without deductions. You will be required to complete a form available from HMRC and submit it. If you already have authorisation for one letting agent you will be required to complete a new application if you change agents.
What should I do during the Tenancy?
You have a legal obligation to your tenant and a duty of care to maintain the property and of course you would like to keep the property in good condition to enhance its value. If you manage the property yourself then your tenant should notify you when maintenance is required. A tenant will usually demand an immediate response and action. If you chose Arlington Rouse to manage the property we have the experience, resources and expertise to ensure that tenants are dealt with quickly and efficiently. Our approved contractors offer competitive rates and we are available 24 / 7 in case of emergencies.
We recommend properties are regularly visited during the course of the tenancy and you should visit the property at least twice and no more than four times a year. If you visit too often then you could breach the tenants rights and may be considered harassment. The visit is an opportunity to check on the condition of the property and to ensure that the tenants are looking after the property, complying with the terms of the agreement, and to check for unreported or unnoticed maintenance issues. Often what starts as a minor problem can create a major issue if not dealt with quickly. For our managed properties Arlington Rouse will provide two complimentary visits per year and report back to you for peace of mind.
