A GUIDE FOR LANDLORDS
Woodsies Property Services was established in 2000 with just a few properties to rent. Since then the company has grown to establish itself as one of the market leaders for rented accommodation in Porthcawl and the surrounding area. Woodsies Property Services provide a wide range of services to suite our clients individual needs, whether you require full management or an introduction service only we are able to meet your needs and secure a suitable tenant for your property. We take pride in the fact we are members of the UKALA ensuring we work to a high professional standard providing the most comprehensive service to our client .Our landlords guide is an introduction to letting your property and the services Woodsies Property Services provide. The guide contains an informative overview of letting a residential property and will naturally raise further questions which our team of property managers will be delighted to answer and guide you through the process step by step.
Assessment of Rent
The level of rent, which can be achieved on a property, will be determined by the current level of demand for rental accommodation in the area. A prospective tenant will also consider the location of the property, the quality of the fixtures and fittings and its general condition. One of our Property Managers will visit your property and evaluate its rental value based on all of these things. It is normal that furnished/unfurnished properties are let at a rental inclusive of buildings insurance and in case of leasehold properties, ground rents/service charges. The tenant is responsible for council tax, water rates, gas, electricity and telephone unless a Landlord stipulates otherwise.
Inventory Schedule and Condition
A detailed inventory and schedule of condition will be drawn up along with a video inventory prior to the first tenant moving in. It is important to maintain a certain standard expected by both landlord and tenant and therefore it may be necessary for us to instruct gardeners and cleaners prior to the commencement of the tenancy. This would be carried out after obtaining the appropriate instructions from the landlord and charged at the cost agreed. The detailed inventory will be updated and methodically checked before each tenancy commences. This document will form part of any claim for dilapidation against future deposits.
Do I Leave the Property Furnished or Unfurnished
There is now more demand for unfurnished than furnished property. However please feel free to speak to one of our property managers about this.
What Not To Leave
It is recommended all items of sentimental or real value are removed as even the most careful tenants have accidents. All televisions, audio/ information technology equipment and personal contact items such as bed linen, towels, tea towels, cutlery and crockery should be removed.
If you intend leaving the property fully furnished the following is a guide on what to leave. We do however stress this is no more than a guide and not all the items listed are essential.
Kitchen
Basic crockery, cooking utensils and cutlery sufficient for the size of the property (usually a specific set ie. 4 of all or 8 of all). General cleaning equipment i.e. broom, mop, vacuum cleaner etc. electrical equipment i.e. cooker, washing machine, fridge, freezer, iron etc.
Lounge/Dining Room
Basic lounge suite and coffee table dining table and chairs (where applicable)
Bedrooms
Beds, wardrobes and chest of drawers sufficient for the size of property. We also suggest that when leaving beds, suitable mattress protectors are provided to ensure the long term use of the mattresses.
Garden
Basic gardening equipment including lawn mower (Tenants are responsible for the upkeep of gardens and by leaving the required equipment it helps ensure the gardening will be carried out).
Property Maintenance
During tenancies, tenants are required to report all defects promptly to us. If it is of an urgent nature e.g. burst pipes it would be repaired by a local maintenance engineer at our discretion to avoid further damage, and or costs to your self. For less urgent defects we would contact you and gain permission before proceeding. This is for any defects caused as a result of normal wear and tear and are your responsibility as the Landlord. Any fault caused by the Tenant will be repaired at their own cost. We would request that details of all service contracts and current guarantees are given to us at the time of instruction. If the property is fitted with a central heating system we would recommend arranging an annual service contract to avoid expensive breakdown.
Property Inspections
Our management team will visit your property and inspect both the inside and outside. This is mainly to gain an understanding of how the tenants are living in the property, also to look for possible defects that should be addressed. (It should be appreciated that any inspection can only extend to apparent or obvious defects and would not amount in any way to a structural survey. We cannot accept responsibility for hidden or latent defects. This service is only available with our full management service. Please refer to our Agency Agreement for the schedule of pricing for requested visits.
Tenancy Agreements and Notices
Your property will be let under an Assured Shorthold Tenancy Agreement as defined in section 19a of the Housing Act 1988. The Agreement will be for a fixed term not less than six months and would not end sooner unless both the Landlord and Tenant were both in agreement. The rent would remain the same during this set period with any increase, if requested, being obtained at renewal of contracts for a further term.
The provisions for recovery of possession in section 21 of the Housing Act would apply. The landlord would be required to serve a minimum of two months notice prior to the end of the agreement when wishing to recover possession.
Transfer of Services and Arrangements of Final Accounts at End of Tenancies
We will read the gas and electric meters and arrange for the transfer of the services at the commencement of each tenancy. However as the telephone providers will not deal with managing agents you will need to arrange disconnection and your final account before leaving the property. Incoming tenants will make their own arrangements for the reconnection of the service. As we have no dealings with telephone providers we cannot be held responsible if the tenant arranges for the telephone number to be altered. Water charges are transferred by us into the tenant’s name, however, specific meter readings are not obtained.
Collection of Rent and Accounting
At the commencement of the tenancy we will collect the first month’s rent in advance in cleared funds. The tenant is thereafter contracted to pay the rent from their bank account and the landlord will be paid into a designated bank account on a specified date in the same month. Our accounts department will provide a detailed monthly statement showing the rent received and any deductions including our service charge and other expenses. The forwarding of statements to accountants or another third party is carried out by us at your request at no extra cost. We will, if instructed, settle the Landlord’s closing accounts for gas, electricity and water.
Deposits
Woodsies Property Services will secure a minimum of one month’s rent as a bond, which will be forwarded to the Deposit Protection Service within 14 days of receipt as security against dilapidations caused to the property or rent arrears by the tenant ( the property Manager dealing with your prospective let will advise you how much deposit has been agreed).
Tenant’s Deposit Dispute Service
As of the 6th April 2007 all landlords letting their properties under Assured Shorthold Tenancy Agreements are required by law to insure their tenant’s deposit. If a deposit is not protected after this date the landlord will be breaking the law and if proven will be unable to regain possession of their property using notice only grounds for possession under section 21 of the Housing Act 1988. The landlord could also be taken to court by the tenant, who could apply for a court order to have a deposit protected and if the court is satisfied that the landlord has broken the law it could also order him to pay up to three times the deposit amount to the tenant.
The Dispute Service is an independent adjudication service in the event there is a dispute over the return of a deposit. It is usual that there is no disagreement about the return of a deposit, but sometimes there is, this can cause hardship and inconvenience to both landlords and tenants. The scheme has been developed to ensure that the deposit held against dilapidation is protected and that any disputes about their return are resolved, swiftly, inexpensively and impartially. If you would like to find out more about the scheme and the systems in place to deal with a dispute please ask one of our Property Managers.
Insurance
It is essential landlords continue to insure their property and contents whilst renting, and we would advise you to check with your insurers as to whether your existing policy is adequate or if you will require an alternative one. Your policy will not cover any of the Tenants belongings and we advise tenants to arrange their own insurance. Woodsies Property Services can provide you with a list of companies for your insurance needs.
Rules and Regulations
Electrical Safety Regulations
There are a number of pieces of legislation including the Electrical Equipment (safety) Regulations of 1994) which relate to the supply and maintenance of electrical equipment, household appliances and/ or the cables plugs and sockets which connect them.
We recommend that before a tenant takes occupation of your property a Fixed Wiring and P.A.T. (Portable Appliance Test) is carried out by a qualified electrician. Common electric items included in rented properties are: electric cookers, microwave ovens, electric kettles, vacuum cleaners and table lamps.
General Safety
Electrical appliances should be checked before every let. If there is any doubt as to the safety of any electrical item, it must be removed. Therefore be vigilant when you see worn or cut flexes, broken casings or other safety defects. The Regulations stipulate that the appliances need to be checked by a qualified electrician.
Replacement
Whereas it was common for landlords to use second-hand appliances in properties to save money, the new regulations make this inadvisable. If clients insist on putting in second- hand electrical goods, then they must be tested by a qualified electrician.
Whilst at present there is no specific statutory requirement placed upon landlords to prove that such items are regularly checked or tested by a qualified electrical engineer(IEE wiring regulations BS 7671 Standard) Woodsies Property Services strongly recommend to landlords that appropriate ongoing checks of equipment should be scheduled and kept up to date.
The Gas Safety (Installation and Use) Regulations 1994
Gas Safety Regulations
On the 31st October 1994 the Gas Safety Regulations came into force. They are designed to provide standards for the installation and maintenance of gas appliances, meters, pipework etc. Landlords should be aware of the general provisions in the regulation for all new gas pipework and appliance installations and conditions for on-going maintenance.
General Safety
Appliances should be safe. Work on gas appliances and fittings must only be carried out by a qualified gas fitter, (Gas Safe registered).
Flues
All flues should be correctly fitted and checked for blockage every twelve months. No open flue appliances are to be installed in bedrooms or bathrooms.
Periodic Inspections
Landlords must ensure that all gas appliances in rented property are checked for safety at least every twelve months. Records must be kept of such checks, dates of inspection and any defects noted and rectified.
Instructions
Instruction booklets should be available for all gas appliances.
Our recommendation: As the above regulation stipulates you, as the owner, are responsible for gas appliances left at your rented property we recommend that you employ the services of British Gas and take advantage of their various service contracts or use a local Gas Safe registered plumber.
The contact telephone numbers of British Gas or a local plumber are available on request and if you have any queries regarding these regulations you should raise these with our property management team who will be delighted to assist you.
Furniture and Furnishings Regulations
Regulations
On the 1st of March 1993, the Furniture and Furnishings (Fire and Safety Amended) 1993 Regulations came into force. As from the 1St January 1997 any furniture supplied as part of a new let must comply with these regulations. These regulations directly affect the way in which you, the Landlord, may furnish a rented property.
All upholstered furniture and furnishings must meet the Fire Safety Regulations. An exclusion to note, however, is furniture manufactured before the 1st January 1950. Apparently the defective flammable materials were not used prior to this date and therefore “period” or antique furniture is exempt. Generally, items manufactured in the UK after 1990 are likely to meet the required standards and display the appropriate permanent label confirming its compliance.
Items the regulations apply to:
Three piece suites, sofas, arm chairs
Scatter cushions, seat pads, bean bags
Beds, mattresses, pillows and padded headboards
Convertible sofa beds, futons
Loose covers for upholstered furniture
Conservatory furniture, garden furniture suitable for indoor use
Exceptions:
Antique furniture or furniture manufactured prior to 1950
Carpets and Curtains
Duvets, Pillow cases and Linen
Mattress protectors
These regulations make it an offence to supply in the course of business any furniture that fails to meet the cigarette test, the match test and ignitability test. Currently the offence carries a punishment of six months imprisonment or a level 5 fine (currently £5000). These penalties are only for non-compliance and should there be a fire at the let property and it can be proven that the non-compliant furnishings aggravated the fire, the landlord could be held liable to greater penalties.
What Happens If I Have A Mortgage?
If your property is mortgaged you will usually need approval from your mortgagee before letting. This is normally readily given if dealt with at the start of letting proceedings. Banks and Building Societies often ask for certain criteria to be met and Woodsies Property Services, if instructed, will provide the details needed and deal with them directly on your behalf. It is worth noting Building Societies often charge a slightly increased mortgage rate due to the extra risk involved in letting, or administration fee.
We will also require proof of ownership of the property.
Will I Have To Pay Income Tax?
Rental income is taxable income and the source should be notified to your tax office. After the end of each year a statement of income and expenditure should be submitted to the tax office. Whether there will be a tax liability on the income will depend on a number of factors and there may be certain tax planning steps that can be taken to reduce any amount payable. Ensure you keep accurate records of expenditure.
Deductions for tax purposes can be made for expenditure incurred in relation to the rental income including such items as our fees, insurance, repairs, wear and tear of furnishings, improvements made to the property in direct response to an Energy performance recommendation, mortgage interest paid etc, etc. Woodsies Property Services recommend that you seek professional advice to ensure that your tax liability is minimised as there could be a substantial saving through the claiming of allowable expenditure and any other allowances that may be available.
Going Overseas (Finance act 1995 and the Taxation of Income from Land (non residents) Regulations 1995
If you are going abroad you are legally required to appoint an agent to act on your behalf and any tax assessments will be issued in their name. April 1996 saw changes in the tax law for Landlords going abroad and it is now possible to deal direct with the Inland Revenue and make the managing agents exempt from having to hold back monies to pay any tax liabilities on your behalf. If you choose not to liaise with the Inland Revenue Woodsies Property Services will automatically deduct the basic rate of tax at source, pay to the Inland Revenue quarterly and it will then be up to the Landlord to claim monies back through their yearly tax return. Please ask for further information and the appropriate forms. There are certain further tax implications in going abroad and we consider that professional advice is a necessity.
If you already have an accountant then he should be able to advise on all taxation aspects. If not then we will be happy to recommend a local firm.
Energy Performance Certificate
As of October 2008, all landlords offering property to rent will be required by law to provide prospective tenant’s free of charge, an Energy Performance certificate 0n their property. The requirement has been introduced to comply with the EU’s Energy performance of Buildings Directive ( EPBD) which applies to all property including rented property.
By 2009, all buildings in the UK that are constructed, sold or rented out will have to have an Energy Performance Certificate. EPCs for dwellings will rate the energy performance of buildings (not the appliances within them) on a scale of A to G, where A is the most efficient and G is the least. This will be displayed graphically in a similar way to present labelling of white goods such as fridges and washing machines. Two ratings will be shown, an overall energy efficiency rating and an environmental impact rating. In terms of carbon dioxide emissions (CO2) emissions, the higher the rating, the less impact on the environment. EPCs will always be accompanied by a recommendation report, including a list of measures (such as low and zero carbon generating systems) that would improve the energy rating of the building and indication.
Landlords wishing to make energy saving improvements to their properties, either before or after obtaining an EPC, are offered some help from the government; the Landlord’s Energy Saving Allowance, originally introduced in April 2004, now covers loft insulation, cavity wall insulation, solid wall insulation, hot-water system insulation, draft proofing and floor insulation. Expenditure on these items would otherwise be treated as capital expenditure, which means it could not be deducted from rental income to arrive at a taxable item. However, the LESA allows up to £1500 per property spend on such items as straight deductions on rental profits.
Further details on tax saving improvements are on the Inland Revenue website:
http://www.hmrc.gov.uk/budget2004/revbn31.htm
Locating a Tenant
We will market your property on www.primelocation.co.uk , www.woodsiespropertyservices.co.uk with colour photographs and a description. We will also advertise in local, regional magazines and newspapers. The property details will also be distributed to all Woodsies franchisee’s. This will ensure your property obtains the widest coverage throughout the market. Due to the length of time Woodsies Property Services has been trading a large amount of tenants move within the companies existing register of property, relocation/corporate clients also provide a continual source of secure tenants. We will also erect a ‘TO LET’ board at the property.
References
As our Property Manager will point out to you every possible precaution is taken to ensure the tenant placed in your property will provide a trouble free tenancy. Woodsies Property Services employ the services of a professional company specialising in the vetting of tenants for residential property (at the landlords discretion). If a tenant wishes to proceed with a property they will pay an administration fee and complete the appropriate application form providing information including employment details, salary and where they have resided for the last three years. We will also obtain proof of identification and proof of residency. Once all checks have been carried out we will make our recommendation for the tenancy to be formally granted or the property placed back on the rental market depending on the findings.
Please also find a sample Landlord’s Agreement