Landlords Guide

Landlords guide

Laurence Leigh Residential have been specialising in the London property market for over 20 years.

1) Standard Letting Service

Laurence Leigh Residential will:-

a. Market your property and advertise the Property on our website and additional property web portals.

b. Introduce and accompany prospective tenants for the Property

c. Negotiate offers between yourself and the Tenant and ensure that an appropriate Tenancy Agreement is prepared and signed by the Tenant(s) and either by you or on your behalf where permission is granted.

d. Apply for appropriate references and forward them to you for your approval. Confirmation that the references are acceptable should be made in writing.

e. Prepare and submit a draft Tenancy Agreement to you and the prospective Tenant at the expense of the incoming Tenant.

f. Arrange for the preparation of an independent inventory prior to the commencement of the Tenancy at the expense of the Landlord.

g. Collect the initial payments of rent and deposit monies paid by the Tenant prior to the commencement of the Tenancy and forward net rents to your bank account after deduction of our Commission.

h. All deposit monies will be held with The Deposit Protection Service.

i. Endeavour to set up a standing order mandate for rental payments where appropriate.

j. Serve notice or negotiate the renewal terms between both parties on your behalf

k. Take up further references, if necessary.

l. Prepare and submit a renewal Tenancy Agreement between both parties at the Tenants expense.

 

2) Management Service

Laurence Leigh Residential will (as laid down by the Royal Institute of Chartered Surveyors):

a. Provide all services detailed in 2.1 above.

b. Pay current outgoings such as ground rent and service charge and supplier invoices when demands are sent to Laurence Leigh Residential providing we are holding sufficient funds to cover them. We are entitled to accept and pay without question demands and accounts which appear to be in order, though we will use our reasonable endeavours to query any obvious discrepancies. Please note you are expected to instruct your insurance company, Managing Agent etc in writing to arrange for them to send their accounts to us. We cannot accept responsibility for the adequacy of any insurance cover or for the verification of service/maintenance charge demands, or estimates where applicable.

c. Deal with day-to-day management matters including minor works up to a maximum of £250.00 (excluding VAT) for any one item without further instruction from you. In order to provide this service a float would be set up (a maximum of £300.00 if rental payments are received monthly; or £600.00 if rental payments are received quarterly) from the initial payment of rent and maintained at the agreed level from subsequent net rents passing from the Tenant to yourself. Please note that we are unable to arrange works prior to a letting unless we are holding sufficient funds from you to cover those anticipated costs

d. Instruct, at your expense, an annual Gas Safety Report and provide a copy to you and the Tenant. In addition, we will arrange for the renewal of the Gas Safety Report should it expire during a Tenancy period.

e. Where instructed by you, arrange at your expense for Electrical Safety Tests (PAT and NICEIC) of all appliances, plugs, sockets and wiring, and in the event that works are required to be undertaken prior to the letting, to liaise with you about instructing an electrician to carry these out.

f. Arrange for an Energy Performance Certificate (EPC) to be obtained at your expense prior to marketing the property, if you do not already have a valid one.

g. Arrange at your expense for the Property to be professionally cleaned prior to the commencement of the Tenancy even if the Tenancy does not go ahead.

h. Carry out a routine visit to the Property twice a year (if no serious defect requiring investigation has been reported to us in the meantime) and report to you on each occasion. We cannot be held responsible for any defects within the Property whether latent or otherwise

i. Arrange and pay from rent received the costs of any cleaning and minor repairs, on a change of tenancy during the management appointment.

j. When managing a property let privately or by another Estate Agent, Laurence Leigh Residential will require copies of the Tenancy Agreement, inventory, applicant guarantees or warranties, tenancy references and any other relevant notices or documents relating to the property. We will require a set of keys for the property for emergency purposes.

k. Unless otherwise agreed in writing in advance our appointment to manage is for the duration of the tenancy as defined in this Agreement, subject to three months written notice to terminate on either side.

We emphasise that our standard management service, as set out above does not apply when the Property is not let.

3) Commissions and charges

Letting Service

Letting Service only commission is 12% including VAT of the total rent payable for the entire length of the tenancy stated in the Tenancy Agreement, payable in advance at the commencement of the Tenancy. For any extension or renewal to the tenancy period, a reduced commission of 11% including VAT will be charged at the commencement of the subsequent term.

Management Service

Management Service commission is an additional 5% plus VAT of the total rent payable for the entire length of the Tenancy, payable from and at the same frequency as the Rent received (The person to whom the Letter is addressed (i.e. you the Client) is personally responsible for payment of our fees, costs and charges. If more than one party is to be responsible, the Letter should be signed by all relevant parties and their liability will be joint and several.

Where the Property is owned by a company, the client is the company and in addition to accepting liability on behalf of the company, each person signing the Letter personally guarantees payment by the company of our fees, costs and charges.

4) Useful Information

Keys

There will be a charge if we are required to arrange for a set of keys to be cut.

Inventory

The inventory is prepared by an independent Inventory clerk, who will make a charge for compiling the Inventory which is payable by the Landlord. The Clerk will check through the Inventory at the start of the Tenancy and again at the end of the Tenancy which is usually charged to the Tenant. Since the Inventory clerks are independent, Laurence Leigh Residential cannot be responsible for any inaccuracies or omissions relating to the inventory. Please note this is a requirement if we are providing our combined letting and management service.

Cleaning

Unless we manage the property, it is the landlord’s responsibility to ensure that the property and the contents are professionally cleaned before the letting commences. The tenancy agreement requires that the tenant returns the property and contents at the termination of the tenancy in the same condition as recorded at the commencement of the Tenancy.

Utilities

Ensure that all available utilities are connected to the property including one telephone line, electricity, gas and water. Check that all LPG bottle gas and oil tanks are full at the start of the tenancy and septic tanks empty.

Post

Where the owner is resident elsewhere in the UK it is advisable to ask the Post Office to redirect mail to the new address to avoid delay in receiving mail. Where the agents are paying service charges or water rates out of rent, the relevant authorities should be informed before you leave and our address given to them.

Voids

Between tenancies, prior to tenancies and after the end of a tenancy, the security, maintenance and all charges relating to the property are the landlord’s responsibility.

Sale of property

If a Tenant, any associated party of the Tenant, or any person introduced at any time by Laurence Leigh Residential, purchases the Property or any interest in it (either after entering into a tenancy agreement, or otherwise, and whether by transfer of the Landlords interest in the Property or grant of a lease) the commission on the sale of the Property is payable at 2% (plus VAT) of the sale price and becomes payable upon completion of the sale.

In the event that a third party purchases the Property or any interest in it and the Tenancy is to continue, then your liability to pay Lettings and Management commissions continues unless the purchaser enters into an Agreement with Laurence Leigh Residential on the same terms as your own, and Laurence Leigh Residential agrees to enter into such agreement. We reserve the right to refuse to enter into such Agreement for any reason.

Attendance at Formal Proceedings

If Laurence Leigh Residential are required to attend court to give evidence in connection with proceedings or an arbitration we will make a charge of £100 plus VAT per hour in respect of each member of the firm required to attend.

Fees for the Accounting Service

If Laurence Leigh Residential are required to make quarterly returns to the Inland Revenue, Laurence Leigh Residential make a charge for this of £235 per year inclusive of VAT payable in full at the end of the first quarter.

5) Legal Information

The Gas Safety (Installations and Use) Regulations 1998

Your attention is drawn to these regulations which impose obligations: a) On any person who owns a gas appliance in property let by them to ensure that such appliance is maintained in a safe condition so as to prevent risk of injury to any person. b) To ensure that such appliance is checked and that an appropriate certificate is issued for safety at intervals of not more than 12 months by an approved registered contractor. c) To give the original certificate to the tenant prior to the commencement of the tenancy. If the landlord elects to be provided with only the lettings service and not the management service, he is responsible for compliance with these regulations, which are mandatory and carry a criminal sanction for non-compliance. The tenancy cannot be permitted to commence without the appropriate certificate

Electrical Equipment (Safety) Regulations 1994

The Electrical Equipment (Safety) Regulations 1994 require that electrical equipment, including wiring, is safe. A Portable Appliance Test (or more detailed full electrical inspection, if necessary) should be carried out regularly and all electrical testing must be conducted by a qualified and registered engineer.

The Building Regulations 1991

These regulations require that all properties built since June 1992 must be fitted with mains-operated interlinked smoke detectors/alarms on each floor. Properties built before that date do not have a statutory requirement, but we recommend that you should consider the installation of smoke alarms in your property.

The Furniture and Furnishings (Fire) (Safety) (Amendment) Regulations 1993

Under these regulations it is an offence to supply certain furniture for rented properties unless it complies with what is called the “cigarette test”, the “match test” and the “ignitability test”. The regulations cover, in general terms, all upholstery and upholstered furniture, loose fittings, permanent or loose covers. The regulations do not apply to any furniture which has been manufactured before 1st January 1950. The regulations apply to all rented property. The recommended way to check whether furniture complies is to look for labels attached to the furniture. If there are no labels, you must establish when and where the furniture was bought. Contact the shop/manufacturer and check whether it complies. If you are unable to establish where the furniture came from or whether it complies, it must be replaced. It is illegal to let a property with furniture which does not comply with these regulations.

Energy Performance Certificate (EPC)

From 1st October 2008, if you’re letting a property the law requires you to provide an Energy Performance Certificate (EPC) to prospective tenants. An EPC is a legal requirement for any new tenancies that begin on or after 1st October 2008 and details the energy performance of a property. It is carried out by an accredited Domestic Energy Assessor to ensure it meets all legal requirements and is valid for 10 years. We can arrange for this to be provided at your expense if required.

Stamp Duty Land Tax

With effect from 1st December 2003 under the Finance Act 2003, Stamp Duty Land Tax is only payable by the Tenant.

Tax

In accordance with the Finance Act 1995, the Inland Revenue introduced a system of self-assessment and all overseas landlords may apply to the Inland Revenue for a Certificate of Self-Assessment in order for rents to be paid over gross. We would strongly recommend that all overseas landlords apply for self-assessment. For those who have not, we are required by law to deduct the tax for all overseas landlords at the basic rate from the net rental income and pay this on a quarterly basis to the Inland Revenue and charge a fee. As we are not qualified tax accountants, we would therefore recommend that you take professional advice regarding these regulations.

Disability Discrimination Act 1995

Amendments to the above Act came into effect in December 2006 giving a disabled person the right to ask a landlord for reasonable adjustments to a property to enable the person to enjoy the property and its features as an able-bodied person could. However, it should be noted that such adjustments are temporary and can be reinstated at the end of the tenancy, ie. changes to wall colour, provision of a portable wheelchair ramp, changes to door handles, doorbells and taps. Such reasonable adjustments are at the landlord’s expense.

6) The Housing Act 2004 – Houses in Multiple Occupation (HMO’s)

A property that is let to at least three unrelated sharers who share a kitchen or a bathroom is an HMO. If there are less than five sharers, the property is not subject to mandatory licensing, but the landlord must check with the relevant Local Authority as they may require the property to be licensed.

In addition, where a building is fully converted into self-contained flats and if the conversion work does not comply with the building standards of the 1991 Building Regulations and less than two thirds of the flats are owner-occupied, this type of building is an HMO and may need to be licensed. Again, the landlord must check with the relevant Local Authority. Landlords must not ignore this as failure to obtain a licence from the relevant Local Authority will attract a fine of up to £20,000. A tenancy cannot be allowed to commence until a licence has been obtained.

Housing Health & Safety Rating System

Landlords should be aware that where an HMO is licensed, the property will be subject to inspection under the Housing Health & Safety Rating System within five years of the application for a licence. Landlords should also be aware that any property that is either let, or available to rent, can be subject to inspection under the Housing Health & Safety Rating System. In brief, the inspector visits the property to assess potential hazards (ie. excess cold, steep staircases) and, if applicable, will issue a Notice upon which the landlord must act as appropriate

The Regulatory Reform (Fire Safety) Order 2005

The above Order came into force on 1st October 2006, giving obligations with regard to HMOs. Where a property is an HMO, it must at least have mains linked smoke detectors in the common parts (ie. hallways) and fire blankets and fire extinguishers in the kitchen. Depending on the age and character of the property, further alterations may be required. Although currently the above order applies to HMOs only, we would recommend that all our clients’ properties are fitted with mains linked smoke detectors with fire blankets and fire extinguishers in the kitchen.

7) The Right to Let

Mortgages:

In most cases when a property is subject to a bank loan or mortgage, permission is required from the Lender before the property can be let. It is up to the Landlord to obtain the necessary permission and Laurence Leigh Residential strongly advise this is applied before the commencement of the Tenancy, in case the Lender wished any special conditions to form part of the Tenancy Agreement. Alterations cannot be made once the Tenancy Agreement has been signed by both parties. When the Landlord signs the contract with Laurence Leigh Residential, he is confirming that he has the right to instruct Laurence Leigh Residential to let the property. Tenants normally require sight of confirmation from a Lender consenting to the Letting.

Leasehold:

If the Landlord holds the property on a Leasehold basis, he must also ensure that Letting is allowed under the terms of the Head Lease or Superior Lease and whether written permission is required for the Property to be sublet. Again, it is strongly advised that this is done before the commencement of the Tenancy, as the Tenant can request sight of formal consent. If there are any agreements or restrictions contained within the Head Lease or Superior Lease, which will affect the Tenant, the Landlord must provide Laurence Leigh Residential with a copy of the relevant documents so they can be attached to the Tenancy Agreement at the start of the Tenancy. The Landlord will be unable to force any obligations of the Head Lease or Superior Lease on the Tenant if they are not part of the Tenancy Agreement, which could put the Landlord in breach of the Head Lease or Superior Lease. Any fees payable for obtaining consent or copy or the Head Lease or Superior Lease will be the Landlord’s responsibility.

Insurance:

The Landlord will need to advise his contents insurers that the Property is let and must have obtained their Agreement to extend the insurance cover on the Property and it’s consents to changed circumstances or the Policy may be void. Any conditions imposed by the Landlord’s insurer must be given to Laurence Leigh Residential prior to the Tenancy commencing for inclusion in the Tenancy Agreement. Conditions cannot be imposed on the Tenant, especially in relation to vacant property at a later date, which could be a breach of the Insurance contract making any claim void.

8) Money Laundering

Laurence Leigh Residential are obliged to comply with all legislation to Money Laundering, accordingly Laurence Leigh Residential reserve the right to refuse payment of any sums in cash whether by way of Rent, Deposit, or subsequent payments. Cheques written by the Landlord from foreign bank accounts may also be subject to investigation. Laurence Leigh Residential do not accept any responsibility for any Tenancy, which does not proceed as consequence of these requirements.

 We are required by law to ensure we have proof of our client’s identity and accordingly we require any one of the following:

• Copy of full passport

• Copy of a valid HM forces ID card

• Colour copy of photo card driving

And one of the following, in each case showing your current address:

• Recent receipted utility bill

• Copy of original council tax bill

• Copy of original mortgage statement

• Copy of fire arms certificate

If the property is owned by a UK company we require a certified copy of the certificate of incorporation of the company as well as the names of its directors and copies of their passports. The names of the principle shareholders and certified copies of their passports.

If the property is owned by a non-UK/off-shore company, we also require the names of the shareholders and confirmation that they are known to the directors of the company. The trustees, or company’s accountants or solicitors must confirm that the company is properly constituted.

9) Assignment

Laurence Leigh Residential reserve the right to resign our rights and obligations under this Agreement upon giving the Landlord three months written notice.

10) Compensation and Reimbursement

The Landlord will keep Laurence Leigh Residential reimbursed and compensated for any claim, damage or liability (criminal or civil) suffered from and during the time that Laurence Leigh Residential is or was acting on the Landlord’s behalf, unless it is due to the negligence or breach of contract or the actions of Laurence Leigh Residential or their employees. To avoid any doubt, Laurence Leigh Residential reserve the right to have work carried out on the Landlord’s behalf and to charge for that work if it is necessary to ensure that the Landlords fulfils the contractual and statutory obligations as a Landlord.

11) Acts of Third Parties

Laurence Leigh Residential will not be responsible or any loss or damage suffered through the act, default or negligence of any third party, which may arise otherwise that through the negligence, omission or failure on the part of Laurence Leigh Residential or their employees.

12) Deposits

The Deposit Protection Service

The name, address and contact details of the Scheme Administrator of the Tenancy Deposit Scheme that is safeguarding your tenancy deposit is:

The Deposit Protection Service (The DPS)

The Pavilions

Bridgwater Road

Bristol

BS99 6AA

Telephone No. 0844 4727 000

Online: Enquiry Forms are available through the Virtual Customer Service Agent or the

Frequently Asked Questions at www.depositprotection.com

Services

Laurence Leigh Residential offers a range of property services in London (including St Johns Wood, Primrose Hill and Maida Vale) as well as Radlett, Hertfordshire.

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