For the benefit of our clients, we have put together a number of questions and answers for the most frequent queries we have stumbled across in our experiences as letting agents:-
Why should I use a letting agent?
We believe there is real added value to be gained from using an experienced quality agent such as Carlin Property Sales & Lettings. Our extensive experience of the lettings business and knowledge of the local rental market enables us to give you the very best advice and support, ensuring you achieve the maximum potential from your investment.
Our accredited team fully understand the implications of all relevant legislation and our expertise in managing the practicalities of the rental business places us in the best possible position to guide you through the process and arrangements.
You should not assume that the tenant has left the property. The courts have been quite liberal in their interpretation of whether people have or have not moved out where property is left at a property. To be safe, if you have any doubt that the tenant has not moved out you should obtain a court order before entering the property and taking possession.
I have not increased the rent which my tenant pays for some time. Can I just tell him that the rent is increased and what if he does not pay?
You cannot increase the rent during the fixed term of a tenancy agreement. If the fixed term has come to an end, you can increase the rent by asking the tenant to enter into a new agreement. If he will not, you have the choice to bring the tenancy to an end in accordance with the law.
I want to rent out a house which I own but I have a mortgage on the property. Do I have to tell the lender?
It is always good practice to tell your lender if you intend to let out the property. Most mortgages have a prohibition on letting without the approval of the lender.
I have moved into a new house but cannot sell my old property. I want to let it out for a year or so because I think the market will improve. What should I do?
You should get your tenant to sign an assured shorthold tenancy agreement for either six or twelve months. It is probably a good idea in these circumstances to serve a notice under Section 21 of the Housing Act 1988 saying that you require possession of the property at the end of that initial fixed period. This should be done at the start of the tenancy and will enable you to recover possession more speedily if you need to get the tenant out to sell the house at the end of that time.
Can I enter the property to inspect the state of repair and how the tenant is looking after it?
This will depend on the terms of any tenancy agreement. Most written tenancy agreements allow the landlord to inspect on giving reasonable notice. Reasonable notice is usually no less than 24 hours and often requires the landlord to give the tenant notice in writing. What would not be acceptable is simply turning up and letting yourself in as this could be a breach of the tenant’s rights of quiet enjoyment.
The tenancy was for 6 months which has expired. Do I need to grant another agreement or can I simply take no action?
Where the initial fixed term of the tenancy has expired, there is no need to enter into a new fixed term agreement unless you wish to bind the tenant to stay for a further fixed period. A tenant who does not sign a new agreement in these circumstances “holds over” as a statutory periodic tenant. To all over intense and purposes, the rights and obligations of both the landlord and the tenant remain the same.
What happens about insurance when I let out property?
It is usually the landlord’s responsibility to insure the property and it is good practice to keep it this way so that you are sure that the property is properly insured for the full value. It is essential to tell the insurance company that the property is to be let out. If this is not done, the insurer may be able to avoid paying up if there is a claim. You should also make sure that the insurer is told when the property is empty. The general rule is that everything material to the risk which the insurer is asked to assume is disclosed to the insurer. If this is not done the insurer can refuse to pay claims.
If I let out a property, do I have to provide the tenant with any furniture? I have an old three piece suite. Can I put this in the property?
There is no obligation to provide the tenant with furniture. You can let a property furnished or unfurnished or partly furnished. If you let a property with furniture it is usually a good idea to make sure that there is an agreed inventory between you and the tenant including notes on the state of furniture. This is so that if the tenant damages any property you will be able to prove it at the end of the tenancy. You must also be careful however that any furniture in the property complies with the latest fire regulations. Old three piece suites may not comply. Only furniture which is properly labelled as complying should be provided to the tenant.
Who has to pay for the TV licence, me or my tenant?
The position is not as simple as it might be. If you provide the TV you must buy the licence but you can make a proviso in the tenancy agreement that the tenant must buy it. But, both you and the tenant could be prosecuted if the tenant fails to do so and the premises are unlicensed.
Will my rent cover my mortgage payments?
We will always provide realistic rental valuations based on current market conditions. We will also ensure rent reviews are undertaken at appropriate intervals to protect your interests. However, it is important to recognise that factors contributing to rental values and mortgage or loan conditions (e.g. interest rates) are quite varied and therefore it is not possible to guarantee that any rent received would cover any loan payments obligations. Whilst using the facilities of an experienced agent such as ours will help in reducing tenancy voids, there may be times when your property is unoccupied with associated income gaps.
Will the tenants take care of my property?
We place great emphasis on finding quality tenants and matching them to your requirements. As result of our extensive credit checking and referencing process, together with our ability to assess potential tenants through our meetings with them, we are able to provide you with the greatest levels of confidence in those tenancies we secure.
Of course our attention to detail does not end when the tenancy begins, our ongoing liaison with tenants and our property inspection regime ensures we are able to address any issues before they become a concern.
Whilst you will have your own specific conditions relating to the type of tenants you would wish for, we also have some basic standards that we will not compromise on to ensure that tenant selection is made with confidence in their ability to meet their financial and other tenancy obligations.
What about the Tax implications?
Whilst tax implications alone should not be considered a barrier to property rental, there are considerations which you, the landlord, should take into account when you rent a property. Income from your property rental is taxable and should be declared on your annual tax return. There may also be implications for you also in relation to Capital Gains liabilities from your property portfolio.
There are, of course, genuine running costs in maintaining a rental property and there are a range of allowances given to assist with these.
Personal tax affairs are a specialised area and will differ for each individual, our advice therefore is to always seek professional advice from your financial adviser or by consulting your local HMRC office.
As a client of Carlin Property Sales & Lettings, we can assist you further by providing annual statements giving the details you need for the completion of annual tax returns in respect of your managed property. If you would like more information on this element of our service please contact us.
What legal obligations apply to Gas?
As a landlord of a residential property you are obliged under the Gas Safety Installation and Use Regulations 1998 to ensure that all gas appliances in a let property are properly maintained and serviced. There is a legal requirement to have an annual safety test carried out of all gas appliances on the property.
You must obtain a new certificate every year and the certificate must be issued by a CORGI registered engineer. We can assist in organising this for our landlords.
What legal obligations apply to electrical safety?
There are a number of electrical safety regulations applying to residential property. All appliances supplied in a letting should be tested for safety.
The landlord has a legal duty to ensure all appliances such as fridges and kettles are safe – this applies to used and brand new appliances. The fixed installations in the house must also be safe and periodically tested.
All electrical equipment manufactured after January 1995 should carry the CE symbol.