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Eden Lettings & Management |
LANDLORDS' INFORMATION- SOME QUESTIONS
1. Are there any necessary preliminaries? 2.What will be my responsibilies? 3. What type of Tenancy Agreement is used? 4. What about a Deposit? 5. Who pays the Outgoings? 6. Will I pay tax? 7. Can a Guarantor underwrite the rent? 1. Are there any necessary preliminaries?Yes! First, Mortgages. If a property is subject to mortgage, the owner should contact the Bank/Building Society and notify it of his/her intention to let. The Bank/ Building Society may stipulate conditions under which the property may be let and will probably charge for its consent. A higher rate of interest may also be charged. Secondly, insurance. Insurance companies also ought be notified of an intention to let. They may ask for an increase in premium payments. Next, Energy Performance Certificates - since October 2008, all property advertised To Let must be provided with an Energy Performance Certificate (EPC). These can only be prepared by qualified Energy Assessors. We can obtain EPCs for clients if required at reasonable costs and no VAT. Return To QuestionsReturn To Top 2. What will be my responsibilies?Landlords are responsible for ensuring that their properties comply with the Gas Safety (Installation and Use) Regulations, 1994 (updated October, 1998)and the Electrical Equipment (Safety) Regulations, 1994 and European Commission Directives 73/23/EEC (the Low Voltage Directive). and 93/68/EEG. All relevant equipment must be checked regularly and records of the checks must be maintained. Copies of the records must be made available to the Tenant. EL&M can arrange for the necessary tests to be carried out on clients' behalf. If a property is let furnished, the Furnishings (Fire) (Safety) Regulations 1988 (as amended) apply. Any relevant furniture in a let property has to comply with the legislation, which applies primarily to soft furnishings but the definition is wide in its scope. There are exceptions. All let property must be fitted with an operational smoke detector/alarm. Properties built since 1991 should have mains powered smoke detectors installed. In general terms, the Landlord is responsible for the maintenance of the property and should also deal with the insurance of the fabric (and the contents if let furnished). Return To QuestionsReturn To Top Page 3. What type of Tenancy Agreement is used?The majority of residential tenancies now granted are Assured Shorthold Tenancies. The Housing Act ensures that any new assured tenancy will automatically be an Assured Shorthold Tenancy unless it falls within one of the exceptions. It is no longer necessary to give notice to create an Assured Shorthold Tenancy prior to its commencement. There are exceptions to this general rule, such as in the instance of tenancies being granted to agricultural workers where specific procedures have to be followed if the new tenancy is to be an Assured Shorthold Tenancy. There is no longer a minimum period to the term of an Assured Shorthold Tenancy. It is usual for the initial term to be for six months, since a Landlord cannot recover possession in under six months except in limited circumstances or unless the Tenant is in breach of the terms of the Agreement. After six months, the tenancy can be allowed to run on as a statutory periodic tenancy (known as a replacement tenancy). To terminate the replacement tenancy, the Tenant has to give one month's notice from a rent-due date or the Landlord has to give two months' notice. Alternatively, Landlord and Tenant can enter into a new written agreement. Return To QuestionsReturn To Top Page 4. What about a Deposit?We recommend that a deposit at least equivalent to one month's rent be taken from the Tenant before the start of a new letting. This should be returned to the Tenant at the end of the tenancy if the property and its contents are surrendered undamaged and if the rent is paid in full. The deposit can be held by either the Landlord or by EL&M as Agent. NOTE:- All Tenants' Deposits are now protected by law. Within 14 days of taking a deposit, Landlords must either surrender the money to a government agency or enter it into one of two insurance backed schemes. EL&M uses the Government-sponsored Dispute Service Limited which actually holds the deposit money. EL & M and can see to the administration of the deposit and the necessary legal paperwork associated with it, if asked to do so. Return To QuestionsReturn To Top 4.Who pays the Outgoings?The Tenant pays for the water, gas, fuel and
electricity consumed within the premises, the sewage and heating
charges and also for the telephone, if connected. Where
properties are not metered separately, some of the charges can be
incorporated within the rent or made the subject of a separate service
charge. Such arrangements ought to be identified in advance of a
letting, so that potential Tenants know the basis on which the
property is being offered. Return To Top 4.Will I pay tax?Rental income from property is taxable. Landlords are able to set off some expenses against their tax liabilty provided that they relate directly to the letting of the property. These include:-
If a Landlord is not resident in the UK, the Agent that manages the property has to deduct tax at source and account for it to H.M. Revenue & Customs. There are instances where this will not be necessary, such as when a Landlord is a diplomat, a member of the Armed Services or an employeee of an Overseas Development Agency. Return To QuestionsReturn To Top 4.Can a Guarantor underwrite the rent?In certain instances, the circumstances of the applicant may require that a Guarantor is required to ensure that the rent is paid and that the Tenant performs his/her obligations under the terms of the agreement. Care needs to be exercised in assessing the Guarantor. We require prospective guarantors to undergo the same referencing procedures as applicants. Return To QuestionsReturn To Top |
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