What checks do you carry out?
For a successful property let, finding the right Tenant for a property is fundamental. From the outset, we will establish with yourself the sort of people you wish to occupy your property and will endeavor to source tenants matching the agreed criteria with our prospective tenant's log.
Once an application is forwarded, references are usually taken from the following: Current Employer, Previous Landlord and Personal Character Referee. We also credit check tenants for reliability and track record. We aim to process and complete all references within 7 working days. Only after checking these references and credit checks and confirming them with you will we proceed with a tenancy.
'We let properties as if they were our own and we will not offer Landlords any Tenants that I would not be happy to rent my own rental property to' - Michael Grimsted, Director.
Do the Tenants Pay a Deposit?
In most circumstance, we request a 6 week deposit on all tenancies. For private tenants, the deposit may vary from property to property depending on its condition and/or whether the property is furnished or not.
Deposits are held to help ensure the tenant looks after the property and as a safeguard against unpaid rent. It is refundable at the end of a tenancy only after the tenant has vacated the property, providing the house and their account are in order and subject to the conditions within the Tenancy Agreement.
For our managed properties, we will register the tenants deposit with the Custodial Scheme supplied by the Deposit Protection Service under the new Tenancy Deposit Act which came into affect on the 6th April 2007, this scheme is free to use. If you would like to learn more about this, please visit the Deposit Protection Service website www.depositprotection.com
Other insurance based schemes are available but involve registration fees and other criteria that landlords are required to comply with. If you wish to use the insurance based schemes, you will need to register for these yourself independently from Greenwoods Property Centre.
Do you Inspect the property?
Yes, once a tenant's application has been placed and accepted, providing you take advantage of our Inventory & Inspection package, we will prepare an Inventory. This is not just a list of included furniture and belongings, but a schedule for the condition of your property. This can then be compared to a schedule of dilapidation's prepared at the end of a tenancy. Photographic evidence is also taken as part of the inventory process. A copy of the inventory will be sent to yourself and the Tenant. This provides both parties with an opportunity to confirm the accuracy of the document.
With our managed option whilst compiling the inventory we will take the meter readings. These readings are then passed on to the appropriate companies. At the same time we also inform the council of the change in tenancy. We cannot inform British Telecom of the change in tenancy. This must be done by the user of the service. We will conduct regular inspections of all tenanted properties which take place approximately every three months. These inspections serve numerous purposes and they allow us to visit the Tenant in the property and ensure they are looking after it. We also check for signs that something may be wrong with the property. If something needs attention we can then inform you as soon as is practical, helping to reduce the risk of the problem becoming worse and the cost escalating. These visits also help us get to know the Tenants better, so that when the lease is due for renewal we can be confident in the advice we give to you. You will receive a written report once an inspection has been carried out on your property.
What happens with repairs and what am I responsible for?
For managed clients we provide a repairs service, as every property at some point will require some remedial works. If things go wrong and the Tenant contacts us, we will then contact you immediately. In the majority of cases the problem can be resolved quickly. However, if a serious fault does occur and we are unable to contact you, we can authorise a repair agreed by you prior to the commencement of the tenancy. Authorisation for this is contained within the agency agreement you sign.
Once the tenant has occupied the property you do have an obligation to ensure it is well maintained. Carrying out repairs efficiently is as important for you as it is for the Tenant. Repairs caught early often can save money in the long run and tenants do have statutory rights. Tenants can contact the Environmental Health because repairs are not being attended to within acceptable time periods and the possible 'enforcement order' could include additional repairs and subsequent higher final repair bill.
What about preparation and presentation?
Our experience has shown that those properties which have been properly prepared for letting benefit from successful, long terms lets, generating the right market rent and attracting reliable tenants. In the majority of cases where tenants have been problematical, badly maintained property or opportunist landlords have been the root causes. We recommend your property is properly prepared and that any decorating jobs are undertaken prior to marketing. Furniture should be of good quality or removed all together. Windows should be clean, and domestic appliances serviced. If you have any unreliable appliances in the property you should consider replacement or removal prior to letting. Our representative will offer impartial advice aimed to assist you. In summary, quality homes attract quality tenants. Unfortunately the reverse is also true.
What sort of tenancy agreement is it?
All tenancies are now Assured Shorthold unless stated otherwise and are initially prepared for no less than six months. To gain possession the landlord should serve the tenant two months written notice. The tenant is required to serve the landlord one months notice, after the initial six months. Thereafter, it is perfectly acceptable for the tenancy to run on a month to month basis, with termination as above.
How to I receive my rental payments?
For managed clients, we will collect the monthly rent on your behalf. We then make deductions for management charges and other maintenance items, paying the net amount into your bank account.
We also have a dedicated credit control department which carries out regular audits on all our clients accounts. If there are any outstanding payments these are monitored and appropriate action taken to bring the accounts up to date.
What about taxation?
The following information is intended only as a guide. If you would like to know more about taxation when letting your property, you should consult your accountant or financial advisor.
Tax Consequences - The tax implications of property letting can be confusing. A Landlord has two types of taxes to be aware of, Capital Gains Tax and Income Tax.
Capital Gains Tax - As a Landlord there is a risk that you might be exposed to Capital Gains Tax, we would recommend that you take professional advice. If you are a non-resident landlord or you have let out a former home for no more than three years or you have let out a former home when forced to work abroad, then you may well be exempt.
Income Tax - Income tax is payable on the net income from property letting regardless of where you live. It is the responsibility of the landlord to inform the Inland Revenue of letting income whether they are resident or non resident. The income that the landlord is liable to pay tax on is the gross income minus expenses incurred whilst letting the property.
Allowable expenses are as follows:
- Loan interest
- Costs of providing services included in the rent (cleaning etc)
- Agents fees
- Costs of repair, redecoration and renovation
- Accounting and legal costs
- Ground rent and Insurance
Where a property is let furnished the Inland Revenue will allow a deduction for wear and tear of furniture, fixtures and fittings.
Non Residents - From the 6th April 1996, letting agents for non UK resident landlords have been required to deduct tax from the rent collected and pay it directly to the Inland Revenue. Tax is assessed at the basic rate on net income received after allowable expenses.
We are bound by FICO (Financial Intermediaries and Claims Office) to collect the tax and sufficient funds will be retained to meet this liability. However, a non UK resident landlord may apply to receive income without the tax having been deducted and we can provide you with further advice and information regarding this. In order for a landlord to avoid deduction of tax at source we must receive a certificate of exemption from the Inland Revenue.
Stamp Duty - The Stamp Act 1891 states that a document is not admissible as evidence in the civil court unless it has been stamped by the Inland Revenue stamp office. The duty payable varies depending upon whether the property is furnished or unfurnished and the length of the tenancy.
Furnished Tenancy for One Year or more - On the agreement signed by the Landlord the duty payable is 1% of the value of the gross rental for the fixed term rounded up to the next £5.
Unfurnished Tenancy - If the Tenancy is unfurnished which includes properties which contain carpets, curtains and white goods, but no other furniture the percentage rate of duty payable is the same regardless of the length of tenancy being 1% of the gross rental for the fixed term rounded up to the next £5.
Furnished Tenancy for Less than One Year - On the agreement i.e. the copy signed by the Landlord the duty payable as from the 1st October 1999 is £5. This charge is borne by the Landlord. On the counterpart i.e. signed by the Tenant the duty payable is £5 as from 1st October. This charge is borne by the Tenant.
Do I need insurance?
Yes, all landlords need buildings insurance and we recommend contents insurance to be taken out as well. There are a number of insurance policies available to landlords including buildings, limited contents, legal expenses, rent guarantee and emergency repair. We can provide full details of any policies you may wish to undertake.
Are there any other compliance matters?
Yes, There are three compliance matters, which need to be considered when planning to let your property: Gas, Electricity and Foam Furniture. It is now a criminal offence to let your property without first having a Landlord's Gas Safety Certificate (CP12). Similarly, any furniture included in your property must comply with the foam furniture regulations. We have listed all three compliance matters below:
Gas Compliance - More often than not this is a simple inspection carried out by a Gas Safe registered inspector. Upon satisfaction, a certificate is issued for 12 months. This certificate must be placed on file at our offices.
Landlords must maintain gas appliances annually. Gas appliances must have detectors, which cut off the gas supply before dangerous levels of Carbon Monoxide build up. Gas appliances such as open flue boilers are banned from bedrooms due to incidents when lives have been lost because of faulty appliances. A Gas Safe or registered installer must carry out maintenance of appliances.
If an appliance is faulty, both Landlord and Tenant must be notified, only Gas Safe registered installers will be allowed to carry out re-connection, repairs or fit new appliances. If a faulty appliance is not disconnected, an installer who will use their Statutory Rights to disconnect the appliance should inform British Gas. The tenant has the right to complain to the Health & Safety Executive if they believe an appliance to be substandard. The Gas Safety (Installation & Use) Regulations are in addition to the Gas Cooking Appliances (Safety) Regulations 1989.
Our advice, in summary, is to have a service contract on any gas appliance with either BritishGas or a reputable Gas Safe engineer. Further information can be sought from our lettings manager.
Electrical Compliance - The Electrical Equipment (Safety) Regulations 1994, mandatory since 1 January 1997, state that all electrical appliances supplied with let accommodation must be safe. This applies to both new & second hand appliances and covers all electrical items supplied for the intended use of the tenant. The regulations also cover fixed appliances such as cookers, showers & immersion heaters, which must also be safe. The only sure method of ensuring that these appliances are safe is to have them tested by a trained competent person using the appropriate calibrated portable appliance testing equipment (PAT).
Failure to comply with the electrical regulations may constitute a criminal offence under the Consumer Protection Act 1987 that carries a maximum penalty on summary conviction of a £5,000 fine and/or 6 months imprisonment.
Landlords and/or letting agents could also, in addition, be sued in Civil Law under THE DUTY OF CARE for the failure to ensure the tenants safety and face punitive damages.
Furniture Compliance - The Fire & Furnishings Safety Regulations place a responsibility on the landlord of a furnished or part furnished property to ensure the furniture which is supplied in the property complies with current legislation. The following notes have been prepared as a guide to enable you to comply with the law
In general, upholstered furniture must have a fire resistant filling material cover fabrics must have passed a match resistant test (covers in certain fabrics such as cotton or silk maybe used in non-match resistant form, provided the furniture has a fire resistant material between the cover and the filling material.) The combination of the cover and filling material must have passed a cigarette resistance test.
Furniture Included in the Above:
- Bed Bases
- Sofa/Sofa Beds
- Convertible Beds
- Nursery Furniture
- Garden Furniture
- Scatter Cushions
- Seat Pads
- Loose & Stretch Covers for Furniture
Items Not Included:
- Sleeping Bags
- Bed Clothes (Including Duvets)
- Loose Covers for Mattresses
- Pillow Cases
- Any items manufactured before 1950
In order to identify the compliant furniture, the majority of the above items, with the exception of mattresses and bed bases that comply with existing legislation will carry a label that states "Carelessness Causes Fire". The label will also state whether either the covers or the interliner will pass the match test. Items that should, but do not carry the appropriate level can not be included in the tenancy. If there is any doubt, we would recommend that it be left out.
The penalty for non-compliance carries a maximum punishment of up to 6 months imprisonment or a level 5 fine currently £5,000 or both.
What are your fees?
Our fees are payable from the rent we receive on your behalf. We do not make charges in advance of successful letting. Management fees are deducted monthly and are subject to VAT. Letting fees and ancillary charges are deducted from the first month's rent and are subject to VAT.
Inventory & Inspections - Once a tenant's application has been placed and accepted we will prepare an inventory. This is not just a list of included furniture and chattels, but a schedule of the condition of your property. This can then be compared to a schedule of dilapidation's prepared at the end of a tenancy. As well as preparing a written document we also take multiple photographs, this is essential if a dispute arises at the end of the tenancy.
We are also prepared to negotiate on our fees to offer bespoke services for our clients.