We set out below some of the more frequent questions asked, together with answers for your guidance. It will be appreciated that these are general questions, your own situation may vary depending on your individual circumstances.
1. Q
How can I be sure I will be able to regain possession of my home?
A.
Regaining possession of your home can usually be guaranteed providing the correct Agreement is drawn up at the outset. There are several types of legal agreement available for Landlords depending upon whether you own one or more properties. We will be pleased to discuss your individual needs either with you or your legal advisers.
2. Q.
What can I do if the tenants do not pay the rent?
A.
Under the terms of our Agreements there is provision for the Landlord to re-enter the premises if the rent is not paid. In reality we would first see why the rent is not paid and the likelihood of the situation being resolved. The Agreement provides for us to use the holding deposit as rent payments, this deposit having to be restored by the tenant in this event. If after seven days of the due rent date the Landlord under the terms of our Agreement can charge the tenant interest on late rent. Also, if the property is left vacant for more than 30 days without notification the Landlord has the right to re-enter. It should be pointed out that under English law a court order may be required in certain cases for possession.
3. Q.
What happens if the tenants do not pay their gas, electric and telephone bills?
A.
At the outset of the tenancy where we are on full management we would take meter readings or in the case of telephone accounts ask for the line to be read and request closing accounts for you to be sent to us for payment out of the initial rent monies received. The services would then be placed into the name of the tenant who would be legally responsible for them from then on. At the end of the letting period and prior to you returning, the service meters would be read again and then placed back in your name. If the tenants did not or had not paid for any of the services you would not be liable and it would not affect you retaining the services, although sometimes there might be a delay in reconnecting the telephone.
4. Q.
What are the advantages and disadvantages of "Company lets"?
A.
One of the main attractions to some landlords is the fact "Company lets" fall outside the Rent Act therefore offering no security of tenure to tenants outside the terms of the signed Agreement. Assuming the Company is of some substance a landlord may feel there are better guarantees for payment of rent. One possible point to consider is that on a "Company let" the company has the right to put any employees/directors it chooses into the property.If the Company is unknown to us we would carry out a Company Search and quite often we would expect one of the directors to also stand as a guarantor.
5. Q.
Can you explain if there is any advantage in letting to sharers?
A.
The main advantage, depending on your type of home, is that you may be able to obtain a higher rent, It is after all logical that one should be able to obtain a higher figure from say two or three independent salaried people than one family with only one member working. On a shared let full references would be taken up on each person and they would all be jointly and severally liable under the terms of the Agreement (i.e. any single tenant would be legally liable to pay the rent or dilapidations of the others). We would be looking for professional sharers in good full-time employment.
6. Q.
What happens when a prospective tenant applies to rent my home through you?
A.
At the initial viewing of your property we would not take up references, however you would be told their occupations, reasons for renting and whether they have any animals or not. Only after you have decided you would like them as tenants do we start a full investigation into their background. All tenants are asked a number of detailed questions including : have they been bankrupt or had any court judgements, whether they have any pets, the names of bankers and employers, previous landlords and reason for renting. We will also ask how long they have been in their place of work and how long they have lived at their previous address. Prospective tenants also have to pay us a £100.00 processing fee which is deducted from the initial monies at the outset of the tenancy. The reason for this is to make sure firstly they definitely want to rent your home, and secondly, the information they have given us is correct. If they change their minds or their references are bad they will lose the £100.00. We find this system works well as, although £100.00 is not a large sum, a potential tenant will think twice about losing it by giving us incorrect information or supplying us with references that will not be satisfactory. We also have access to central computers to check on tenants backgrounds if it is felt necessary.
7. Q.
What happens about pets?
A.
The saying that Britons are a nation of animal lovers may be true about one's own pets, but we find that when it comes to other people's animals most landlords have a different view. For this reason our Agreements have standard clauses stating that the tenants may not keep any animals on the premises including dogs, cats or birds. If however you do not object to pets we would leave the subject open to discussion when a tenant is found. It is true to say that in some cases tenants may smuggle a pet in after the tenancy has commenced, however if this was discovered the appropriate action would be taken to rectify the situation which would include discussing the situation with yourself. Where an animal is allowed to occupy a property we might well ask for a larger deposit somewhere in the region of two months rent. As mentioned earlier tenants are asked at the outset whether they have any animals. This is recorded so that we can check back if they proceed with a tenancy.
8. Q.
Do I have to insure the tenant's possessions?
A.
No. The tenants would be expected to insure their own belongings. However, under the terms of our Agreements we do require both Building and Contents insurance (to include Public Liability) to be effected. If you do not have insurance we would be pleased to advise you on the amounts of cover you should have.
9. Q.
Do you ever ask for guarantors on Agreements?
A.
Yes. If we feel the tenants are suitable but their finance reference is weak or they are quite young, we may ask for a guarantor. When we say a weak finance reference we are referring to a Bank reference that states, for example, that they are respectable and trustworthy, however, the figure is higher than the Bank is accustomed to see going through their account, or that they may have recently opened their account. The guarantor would have to be a property owner or be able to produce good bank references, who in the event of problems, would become totally responsible for any liabilities that may arise from the Agreement, the guarantor also having been required to sign the same agreement.
10. Q.
To what will your inventory refer?
A.
Where we have been instructed to prepare an inventory, your property would be visited after you have vacated and prior to the tenants taking possession to make a detailed list of the contents. This list would not only refer to the items but to their colours and whether they are in poor or marked condition. It would also refer to the garden and outbuildings and condition of exterior paintwork. Items that are simply listed without comment would be assumed to be in good condition. We sometimes find landlords are offended by remarks made on the inventory, however it is well known that when you have been living in your own home for some time one does not notice certain marks and defects.
It is therefore essential to have an accurate record at the outset that the tenant would sign signifying their agreement so we could refer back to it at the end of the tenancy to see if any claim should be made against the tenant's deposit.
11. Q.
If I have a mortgage should I tell the lender that I want to let my home?
A.
This would depend upon the terms of your mortgage contract. Most Building Societies/Banks require their consent to be asked and do have the right to refuse permission. However, more often they will charge a processing fee for checking the letting contract or in some cases they may increase your interest rate. Our Agreements are approved by Building Societies/Banks and Solicitors. The main reason the mortgage lenders do not like lettings (unless it is a Buy to Let loan) is that their security is being passed to a third party that in turn could delay them regaining possession of your home in the event that you default on your mortgage repayments.
12. Q.
How will I know what state my property is in?
A.
On properties where we are on full management we would, after about the first 30 days, carry out an initial inspection and then, assuming no problems arise, we would visit your home around every 3 months. We would send you a written report after each 3 monthly inspection. This report would not only tell you the state of the inside (i.e. how clean and tidy the property is) but it would also report on the garden and exterior decorations.
13. Q.
What is my liability for repairs and how can I make sure they are carried out?
A.
Under the terms of most lettings landlords are required to keep all items in reasonable condition with regard to the structure and fittings in the building. Such items as vacuum cleaners, cookers, washing machines, mowers, etc. (when supplied) would also be required to be kept in working order. However if damage should occur owing to misuse by the tenants then the tenants would be liable for their repair. Where we are on full management we would look after the repair of items for you.
14. Q.
How can I make sure the garden is maintained ?
A.
Under the terms of our Agreement the tenant must keep the garden in reasonable order for the season of the year. They must also not lop, top or cut any trees, bushes or plants growing on the premises. On full management, when we carry out our inspections, should we find the garden in need of attention we would first write to the tenants telling them what we require to be done. If this was not done on our re-inspection (within one month) we would call in contractors at the tenants expense to do the work.
15. Q.
What papers/documents will I receive?
A.
At the outset we send you copies of the references (if requested) received together with a copy inventory. We would also (if requested) send you the original letting agreements signed by the tenants although we do prefer to send you a copy, keeping the original on file in case we need to refer to it.
16. Q.
How long will it take to find tenants?
A.
Unlike selling a property, the letting market moves very quickly. Tenants that enquire about accommodation normally require possession in 7-14 days and 30 days at the outside. Therefore although you may like to give us 2 to 3 months notice of your intention to let, we would not normally place your property on our register earlier that 4/6 weeks from the availability date. Tenants also are required to give us 1 Months notice to end a tenancy after the fixed term of the contract has expired and this is nearly always ample time to find alternative tenants so there is no break (other than perhaps a few days) in the tenancy.
17. Q.
What about rental payments to ourselves?
A.
Statements are sent out monthly showing the balance sent to your Bank. The quarterly date of the statement would depend upon when the Agreement started. If, for example, the Agreement commenced on the 15th of each month the rent would be payable on the 15th of each month and our statement date would be around the 25th. We have to allow 10 days for clearance of cheques as do Building Societies as we do not receive the rent you would of course be informed of the situation with our recommendations and what steps were being taken to resolve the situation.
18. Q.
What can you tell me about buying a property as an Investment to let out?
A.
This is a very wide area to cover here. However, we do handle many investment lets and if you would care to contact us about this we will be pleased to discuss the matter in greater detail.
19. Q.
Why do you cover such a wide area from your offices?
A.
As you will see from the enclosed map our organisation goes through South London and into Surrey. Although many tenants may initially enquire in a specific area, we have found over many years in the business that their final decision on where to rent is often many miles away from their first chosen area. A majority of tenants require road and rail lines to London and most properties on our area map offer this.
20. Q.
What happens about signing the Letting Agreements if I am abroad?
A.
On our Management Services Instruction Form you may give us full authority to sign any Agreements on your behalf. However, we do prefer to send Agreements for your own signature and we normally find with Air Mail postage there is no great delay in using this system.
21. Q.
Apart from your commission on rents collected, are there any additional charges I will have to pay?
A.
Yes. At the outset we charge for preparing the Agreement which attracts stamp duty. Where we are on full management there is also an additional charge for the preparation of the Inventory. This would depend upon the size of the property, and we will be pleased to quote you a figure on request. There is also a charge for the Inventory check-out at the end of a tenancy, the checking-in charge being payable by the tenant. We do not charge for overseas telephone calls, e-mails and faxes as some agents do.
22. Q.
Do you ever get a full payment in advance for the Agreement period?
A.
Yes. In some cases prospective tenants prefer to pay all the rent for the rental period in advance although where this is done they would quite often expect a slight monthly discount. Depending upon your situation this may be an attraction and obviously where rent is paid fully in advance it only leaves the matter of the property being looked after to be checked.
23 Q.
How do you see the general rental market in the future?
A.
There will always be a demand for properties to let owing to companies moving their staff around the country, visitors from abroad, and people in between houses. The main section of the rental market that has contracted in recent years has been the newly-weds or purchaser saving to buy their first home. Whereas in the past these have proved to be exceedingly good tenants, the arrival of 100% mortgage finance in recent years has meant a lot of these would-be tenants have disappeared from the rental market as they are obviously buying their own homes. We are, however, confident that there will always be a strong demand for rented accommodation in the South of England although the volume of good quality tenants will continue to require careful finding and vetting.
24. Q.
What is my tax liability?
A.
Under the Taxes Management Act 1970 all agents are liable for your tax on rental income received. Therefore if we are unable to receive confirmation from the Inland Revenue that you have been accepted on the Non-resident Landlords Scheme or an indemnity from your bankers/accountants for your tax and you are to be resident outside the UK, we would be required to withold money for tax. However if you have a National Insurance number it is almost certain you will be accepted on the Non-resident Landlords Scheme so we would not need to withold any funds for tax.
Where funds are retained by us they would not be discharged to you until we receive written confirmation from the Inland Revenue that your tax liability for the year has been paid. The funds we hold may of course be used to pay your tax. There are several items that may be offset against Income Tax liability. These include mortgage interest payable, fair wear and tear on furnishings, decorations and repairs as well as agents fees. We would recommend that you consult your accountant. However if you do not already have one we would be pleased to advise you in this instance.
25. Q.
What happens at the end of a tenancy?
A.
Under most agreements we would be required to serve the tenants with 2 months notice to vacate the premises, however if as landlords you were able to give us earlier notice of your intention to re-occupy, this is always helpful although not essential. There are standard Notice to Quit forms that we would serve and we would of course discuss the matter with the tenants to see if we could help them with alternative accommodation. At the end of the tenancy where we are on Full Management we would call at the property to arrange to read the meters and carry out an inventory inspection. Depending on the time of year and the exact date of your return, we would either arrange for heating to be left on or, if we think fit, we would arrange for the entire water system to be drained down to avoid damage by frost. If we felt the house would need cleaning we would arrange for contractors to carry this out prior to your re occupation, the charge being recoverable from the tenant.
26. Q.
What is an Assured Shorthold Tenancy?
A.
Shorthold tenancies in general terms are a form of contract that guarantees repossession of your property in the event of you having one or more homes. They have to be for a minimum period of 6 months and cannot be broken during that time by the landlord. The landlord has to serve two months notice on a Shorthold Agreement indicating he will require repossession.
27. Q.
Which of your services should I use?
A.
This will depend on how involved you wish to be with the letting. If you are leaving the country we would recommend Full Management. However, for landlords staying within the UK this may not be required. When we are not Full Management the landlord will remain responsible for arranging for repairs to the property, inspections, and payment of any bills such as ground rent/maintenance where appropriate.
28. Q.
How should I prepare my property to let?
A.
One basic rule we find useful is that landlords should be prepared to spend at least one night in their own property. So if you feel you would not like to walk on the carpets, sleep in the beds or sit on the settee then the chances are neither would good tenants. A happy tenant makes for a good tenant so while the property need not be newly furnished or fully modernised it should be clean and tidy in both decoration and furnishings (if supplied). Items such as central heating, cookers, showers, plumbing and electrics should be in good working order and where gas is connected an annual gas safety certificate must be supplied by Law (we can arrange this if required). Attention to detail in the way your property is presented can also be important to maximise the rent and find quality tenants. Washing machines and showers (or shower attachments to baths) are almost an essential item for the let of the new millennium.
29. Q.
What should I do now?
A.
Once you have decided you want to let and have some idea of your leaving date, contact Christopher St James, and we will be pleased to arrange a visit and advise on rental values and answer any further questions you may have about lettings and the Rent Act. On our visit we shall also be pleased to advise you of any repairs we feel should be carried out to the property prior to letting, together with the sort of items that should be left, should you wish to let your property with furniture.
We trust the above has been of help to you and given you some idea of the formalities involved in letting your home.
There are many thousands of properties let each year to very satisfactory tenants and providing one is vigilant and carries out all the necessary precautions at the outset, there is no reason why your own letting should not run smoothly.
We will be pleased to supply you with the names of our Bankers and Accountants should you wish to take up references, and supply a specimen Letting Agreement for your solicitors to inspect.
NOTE: This leaflet is provided as a guide and we reserve the right to amend or alter our terms without notice.