LANDLORDS GUIDE. Brackley s leading Letting Agent LETTINGS & PROPERTY MANAGEMENT. Hartley House, 29 Market Place, Brackley, NN13 7AB

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1 LETTINGS & PROPERTY MANAGEMENT LANDLORDS GUIDE Brackley s leading Letting Agent Hartley House, 29 Market Place, Brackley, NN13 7AB post@macintyers.co.uk

2 LIST OF CONTENTS Contents 1. Lettings Guide 2. Getting started Presentation Furnished or unfurnished Gardens 3. Permissions Utilities Maintenance/Repairs 4. Buy to Let Finding the right property 5. Service Level Options Let & Rent Collection Let only service 6. Marketing Tenancy Agreement Inventory Wear and Tear 10. Property Maintenance Accounting Interim Visits Extending or Terminating the Tenancy 11. Useful Numbers 12. Safety Regulations 13. Rental Income Taxation UK Resident Landlords Non UK Resident Landlords 14. Contact us Meet the Team Internet Marketing 7. Table of Services 8. Selecting the right tenant Reference and Financial Checks 9. Setting up the Tenancy

3 1 Lettings Guide Welcome to our Residential Lettings Guide. Macintyers is a thriving independent company giving local expertise and knowledge to the residential lettings market. The directors bring over fifty years experience from which our clients benefit and we are committed to training our staff to the highest standards. Professionalism is demanded by today's landlords and Macintyers are members of ARLA, the Association of Residential Letting Agents, a government recognised professional and regulatory body solely concerned with residential lettings. ARLA members are governed by Principles of Professional Conduct, providing a framework of ethical and professional standards at a level far higher than the law demands. Therefore, landlords who use an ARLA agent can be assured that they are receiving the best and latest advise on all lettings matters. Macintyers are also regulated by the Royal Institution of Chartered Surveyors, a professional body which places very high demands on the professional conduct of its members in all areas of its business. Letting your property will demand careful planning and as a major investment should only be entrusted to a professional agent who will look after your interests and optimise your investment. Improvements in transport links and changing lifestyles have made this a very popular area in which to live, a fact reflected in the increasing number of tenants seeking good quality accommodation of all sizes. We thank you for your enquiry and hope that this guide will give you an insight into the professional services offered by Macintyers. Ben MacIntyre & Roger Tyers As a landlord you will have responsibilities and this guide is designed to give you help and advice in this area and explain the services we can offer you. Whether you are an experienced investor or letting your home for the first time we are in the best position to let and manage your property.

4 2 Getting Started GETTING STARTED The first stage towards letting your property is to meet with your chosen letting agent at the property for a Market Appraisal Appointment. We provide this service free and with no obligation. Presentation First impressions count! If your property is presented well, it will not only achieve a higher rent but will also attract better tenants. It is important to ensure that the property is cleaned, that redecoration is carried out and carpets professionally cleaned where necessary, windows cleaned inside and out and the garden well tended. Macintyers can advise you on the level and type of furnishings, fittings, and appliances required and where redecoration or other improvements are required. Furnished or Unfurnished? One of the first decisions to be made is whether to let your property furnished or unfurnished. From experience we find most prospective tenants are looking for unfurnished accommodation so this is how we generally advise you to let your property. tumble driers as they are a liability for the landlord if they break down and tenants normally have their own. Smaller wall mounted items such as mirrors in the bathroom and cloakroom, toilet roll holders and towel rails. If these are not left, tenants tend to fix and remove their own leaving unsightly drill holes in the process. Door stops can also stop damage behind doors and are strongly recommended. If you choose to let your property furnished then: All soft furnishings i.e. beds and upholstered chairs and sofas must comply with the Furniture and Furnished (Fire) (Safety) Regulations Act Any furniture manufactured before 1988 will generally not comply. All bed linen, towels and ornaments should ideally be removed. Only basic kitchen equipment, cutlery and tableware should be left. We do not recommend leaving electrical appliances such as televisions or hi-fi equipment as anything you leave will be your responsibility to repair or replace if it breaks down. Gardens Garden maintenance is normally made the tenants responsibility and most tenants although rarely enthusiastic gardeners, are happy to maintain a small or medium sized garden. However, if your property has a large garden or requires specialist maintenance, we recommend that you employ a gardener to look after it during the tenancy with the cost of this being reflected in the rent. Unfurnished lettings generally include the following:- Carpets or laminate flooring Vinyl or tiled flooring in bathrooms & kitchen Curtains or blinds Light fittings Built in kitchen appliances including a cooker but not other free standing kitchen appliances. We advise against leaving washing machines and

5 3 Getting started Permissions Mortgage lenders If the property is your usual residence and the mortgage is not a buy to let loan, you must advise your lender and seek their permission before making arrangements to let. If you do not do so, they may be entitled to repossess the property and evict your tenants. It is rare for lenders to refuse permission, but you must ask them first. Superior landlord/leaseholder - If the property is leasehold you should seek permission from the free-holders and notify them of your plans to let. Insurance - A landlord is responsible for arranging insurance on the buildings and any possessions left within the property or outbuildings. The insurance should also include personal liability insurance to cover you for example, if a flat that you let has a washing machine which floods and damages the flat downstairs. It is preferable for this insurance to be a specialist letting policy, as standard policies may exclude certain situations such as damage by tenants even where the damage was unintentional. Utilities You should notify all utilities and service providers that you are letting the property and request closure of accounts. Services should not be disconnected as this can cause delays and problems when managing the property. Tenants are usually responsible for Council Tax, Electricity, Water Rates, Telephone and Gas or Oil Supply and we will transfer these as part of our full Management services. Royal Mail You will also need to make arrangements with the Post Office to forward your mail (we cannot forward mail without passing on the Post Offices charges). Maintenance/Repairs Landlords should note that it is a legal condition of any tenancy granted that the landlord should keep in good repair the structure of the premises inside and out including decoration, gutters and drains. Also all installations supplying water, gas, electricity, oil, sanitation, hot water and space heating should be kept in working order.

6 4 Buy to Let Buy to Let Historically, residential property has proved to be an excellent investment with values on average doubling every eight years over the last fifty years. The abolition of rent controls, the landlord s right to regain possession, the availability of tailored buy to let mortgages at competitive rates, increased demand from a more mobile workforce and changing lifestyles have all contributed to a significant increase in the residential lettings market. Property should always be viewed as a medium or long term investment. There are short term rises and falls in property values but over the long term, property has always performed well as an investment. To ensure your property investment is as good as it can be, it is important to buy the right kind of property. Finding the right property Macintyers are able to provide all the expertise you need to ensure that you choose the right type of property to suit your budget and personal circumstances. We will advise you on location, local demand and rental values to enable you to achieve the most from your investment, as well as explaining all the legal, financial and tax issues, wherever possible. In general terms, the smaller the property, the greater the rental return on your investment. One or two bedroom houses and apartments and three bedroom houses are ideal. Modern property is preferable from a maintenance point of view but a carefully renovated older property is fine. Good residential localities attract better tenants and demand is stronger for town rather that country property. Small studio apartments and bedsits are not ideal as there tends to be a higher turnover of tenants and a greater problem finding reliable, financially stable tenants.

7 5 Service Levels Service Level Options At Macintyers Property Management we offer three levels of service to accommodate clients differing needs. Most landlords opt for our Full Management Service, although we also offer a Let and Rent Collection Service, and a Let Only Service for very experienced landlords. 1 - Full Management Service: Our full management service ensures that every aspect of the letting process is dealt with on your behalf and includes everything specified previously plus:- We will organise for the transfer of utilities into the tenant s name and on a day to day basis we will be the point of contact for the tenant should problems occur. We will also effect minor repairs and pay charges relating to the property provided we are in funds. We will carry out regular visits to the property, usually every three to five months, to ensure that proper care is being exercised and check the condition. We will then report to you on maintenance required and arrange for this to be completed unless otherwise instructed. We will also administer the renewal of the gas and electrical safety checks where applicable and at the end of the tenancy check the tenants out and advise on the apportionment of the security deposit in accordance with the TDRSA. 3 - Let Only Service We begin with a Comprehensive on-site meeting with you to discuss your requirements, advise on current demand and rental levels, advise on your property s presentation and relevant safety regulations and decide upon a marketing Strategy. Marketing commences with your property being listed and advertised within our prominent office, on our website and in the local property press. Details are circulated to corporate and private tenants, viewings conducted and preparations for letting the property completed. Once a prospective tenant has been found and tenancy terms have been negotiated on your behalf, references are carried out which include credit checks. If these are satisfactory then the tenancy agreement and the inventory are prepared. Only once the tenant has signed up and paid the first month s rent and security deposit, usually equal to one and a half month s rent (which we hold under the terms of the TDRSA), can keys be handed over. At this stage we hand over legal documents to you as the landlord and the tenancy, rent collection and management of the property, including compliance with safety regulations and the checkout become your responsibility. 2 - Let and Rent collection Service: In addition to the let only service we collect the rent, usually on a monthly basis, pay this into the landlord s designated account and provide a statement of account. If rent is not paid we will make immediate contact with the tenant and follow set procedures to collect arrears. We will serve necessary notices and negotiate a new agreement where appropriate, reflecting rent increases if applicable. At the end of the tenancy you will be responsible for checking the tenant out of the property and we will disperse the security deposit when the landlord and tenant have reached agreement on dilapidations or in accordance of with the terms of the TDRSA.

8 6 Marketing Effective Marketing As soon as Macintyers receive your written instructions to proceed, our lettings team will commence the process of finding a suitable tenant and prospective tenants will be contacted. A description and photograph of the property will be distributed to prospective tenants and added to our property list, our macintyers.co.uk website, and other websites such as rightmove,co.uk and On the Market.com.A selection of properties are displayed in the local press every week and in our office windows. Macintyers will continue this active line of promotion until a suitable tenant has been secured. Macintyers invest heavily in press and internet advertising in order to generate constant enquiries from potential tenants. Internet The internet has become an essential tool in the marketing of rental properties. Over 70% of people moving home use the internet to search for property. Available 24 hours a day, prospective tenants can view homes that are currently available from wherever they are in the world. Because property lists can be updated daily and contact can be made online, the whole letting process is accelerated. Our internet advertising generates daily enquiries from individuals, military personnel, companies and relocation agents. All of our rental properties are featured on the following websites, as well as on our website, : Our high profile, strong reputation and innovative marketing generates considerably more enquiries than most other local letting agents. All this works towards getting your property let as quickly as possible.

9 7 Table of Services Full Management 14.5% inc. vat initial set up fee (inc vat) Let & Rent Collection 12% inc vat initial set up fee (inc vat) Let Only 100% of the first months rent inc. vat Initial visit including Legal & safety advice & marketing strategy Marketing Including web sites, newspapers and mailings Direct advertising to corporate tenants and relocation agents Interviewing tenants and matching to your property Accompanying all viewings of your property Referencing of tenants including credit search and employer Covering tenancy with Guarantor if necessary Preparing tenancy agreement & inventory Obtaining and holding a substantial deposit subject to TDSRA rules Receiving rent and paying it to you by electronic transfer First month only Chasing tenant for overdue rent and serving the appropriate legal notices Monthly statements sent by mail or Checking the tenant into the property and agreeing the inventory Chargeable Transfer utility accounts Regular property visits throughout the tenancy & report to you by mail or Arranging for routine repairs and maintenance to be carried out Chargeable Arranging access for you or contractors with tenants Chargeable Managing tenants queries and difficulties throughout the tenancy Chargeable Responding to all mail regarding the property and tenancy Chargeable Paying bills relating to the property from the rental income Chargeable Yearly rent appraisals Serving the appropriate notices for annual rent reviews Arranging safety checks in line with your statutory obligations Chargeable Serving the appropriate notices for repossession due to arrears Serving the appropriate notices for repossession for any other reason Chargeable Negotiating an agreement for the deposit return with you and your tenant Preparing the case for TDSRA if a deposit dispute goes to adjudication Chargeable Chargeable Remarketing the property during the notice period Chargeable Chargeable Chargeable Returning the tenants deposit as agreed by tenant and yourself Macintyers

10 8 Selection Selecting the right Tenant A significant proportion of applicants are unsuitable as tenants either because of their financial situation, their age, or their inability to look after a property carefully. The success or failure of a letting agent rests on their ability to make the correct judgement of an applicant. There is always an element of risk with letting, but an experienced agent will know when to refuse an applicant. The most appropriate type of tenant will also depend on the type of property and your own specific circumstances and requirements. Macintyers will discuss your particular needs in detail and strive to find the most suitable tenant. Different landlords make different stipulations regarding what they will and will not allow. Typical exclusions include the following, but remember, the stricter you are, the more difficult it becomes to find a tenant:- No pets No smokers No children Reference and Financial Checks When a tenant has been found we employ stringent referencing procedures which gives us an understanding of their personal and financial circumstances. When it comes to tenant selection we cannot guarantee to always get it right, but out of the many lettings with which we deal, we get very few problem cases. Macintyers

11 9 Setting up the Tenancy Setting up the Tenancy Tenancy Agreement Once we are satisfied with the choice of tenant, we will proceed with preparing the tenancy agreement. Macintyers use a comprehensive tenancy agreement which has been carefully designed to protect your rights to possession, to control the tenant s activities, ensure that you have redress if your property is not looked after carefully and comply with standard building society requirements. Tenancy agreements are normally for an initial term of six months and thereafter six/twelve months with your permission. The Housing Act 1988 (as amended by the Housing Act 1996) specifies the types of tenancy and whilst there are several types, it is likely that the tenancy of your property will be an Assured Shorthold Tenancy Inventory We prepare a schedule of condition/inventory for each tenancy. At the end of a tenancy the property is inspected and any damage or deterioration of the condition of the property is noted. The tenant is responsible for the cost of rectifying any damage caused by them at the property and this cost is deducted from the tenant s deposit. Wear and Tear Please bear in mind that people will be living in the property and reasonable wear and tear must be taken into account. Depending on the length of time your property is let, you must be prepared for some redecoration and other work at the end of the tenancy. Macintyers

12 10 Property Maintenance Property Maintenance We have staff on hand to deal with any maintenance issues, oversee any essential repairs and arrange payment of the contractor. Our prime concern is to ensure that the property is maintained on your behalf, in the same condition as that in which it was first let, allowing for fair wear and tear. When appropriate we will advise you of any improvements that may be needed in order to attract quality tenants. Unless you have preferred contractors, Macintyers will use one of a group of contractors who have proved their reliability and good workmanship. Accounting Macintyers accounts team will ensure that rent is paid on the due dates and passed on to you as quickly as possible. They prepare statements of rental income and expenditure every month to ensure that you have full information for yourself and for your tax return. Extending or Terminating the Tenancy Although our tenancy agreements are usually for an initial term of six months or one year, many tenants extend their tenancy and in some cases stay for several years. Towards the end of the term of the tenancy we will contact you and confirm your instructions and then either serve notice on the tenant (minimum two months) or negotiate a new tenancy for a further fixed period. Occasionally no notice is served and the tenancy becomes periodic on a month to month basis. In this case the landlord can end the tenancy by giving a minimum of two months notice which must expire on the same day of the month that the tenancy commenced. The tenant can give one month s notice. The tenant pays rent into the Macintyers client account initially and this is then transferred into your account each month. Our accounting complies fully with both the RICS and ARLA bylaws and our bonded client accounts are independently audited annually. Interim Property Visits We carry out routine visits of the property about every three to five months. We do not carry out a survey of the property but do check that care is being taken and check the condition of the property. We then write to you on maintenance required and arrange for this to be completed unless otherwise instructed.

13 11 Useful Numbers Useful Numbers Oven & General cleaning Sparkles Pete Brookes Gardening Design Grow Jane Jarvis Builders and Repairs Simat Simon Hemmings G.S Building Solutions Andy Price General Maintenance RSJ Roy Jenkins Mobile Caretaking Services Painting & Decorating Martin Hirons Nigel Lumsdale Windows & Doors Brackley Glass Carpets Home Move Carpets Electrical M Mumford Electrical Steve Valentine Plumbing Lovell Plumbing Champion Gas Maxheat Appliance Repairs Chris Brady Locksmith ALS Chimney Sweep John Underwood Tree Services James Handford Pest Management Pestwatch Company Registration Number:

14 12 Safety Regulations Safety & Regulations The following information is intended only as a guide for landlords and should in no way constitute a detailed interpretation of the complete regulations. Whilst the regulations might appear onerous, they are designed to ensure the safety of the property and tenants. Landlords should note that the maximum penalty for non compliance with these regulations is a fine of 5000 or 6 months imprisonment. Gas Safety (Installation and Use) Regulations 199 These cover all gas appliances, flues, meters and associated pipe work and require landlords to get an inspection carried out by a Gas Safety Registered Engineer (formerly CORGI registered) to check any gas installations. Once the engineer is satisfied that the installations are safe, he will supply a Gas Safety Certificate, a copy of which must be held by the managing agent and also given to the tenant before they move in. This certificate must be renewed once a year. It is worth arranging the inspection before a tenant is found, to avoid delaying the start of the tenancy. Breach of this regulation can result in heavy fines or even imprisonment so tenants are not allowed to occupy a property without a current certificate. Landlords are also responsible for ensuring that either the operating instructions are shown on the appliance or that an instruction booklet is supplied. Oil Boilers and Chimneys We require chimneys to be swept and oil boilers to be serviced annually. Furniture and Furnishings (Fire) (Safety) Regulations 1988 (Amended 1989 and 1993) This act covers all upholstery and upholstered furniture supplied by the landlord in a rented property, including; beds, footstools, pillows, headboards, mattresses, sofa beds, futons etc. Furniture manufactured since 1950 cannot be supplied to a tenant unless it has been professionally re-upholstered with conforming materials. Compliant furniture will always carry a label indicating that it complies. The Electrical Equipment (Safety) Regulations 1994 As a landlord you must be able to demonstrate that the fixed wiring electrical installation and any electrical appliances are safe. There is also an obligation in accordance of Section 11 of the Landlord and Tenants Act 1985 to make the property safe. Supplying unsafe electrics in a rented property that result in injury or death could result in a landlord being prosecuted. To ensure that the electrical installation is safe our professional body, The Association of Residential Letting Agents (ARLA) recommend that before the property is let, a competent qualified electrician who is a member of one of the approved professional bodies, carries out an electrical installation inspection report (EICR.) Necessary updating highlighted by the EICR will need to be completed by a qualified electrician prior to tenants moving in and copies of certification provided to our office. Periodic inspections of the fixed wiring installation will need to be repeated every five years. However, you will generally find that once an installation has been brought up to standard most will only require more minor improvements after five years to stay up to standard. An Energy Performance Certificate will be required before marketing can commence. Portable appliances (usually defined as those that are plugged in) should be tested before each tenancy. Some landlords choose not to leave any portable appliances in their let properties, however not having appliances in the kitchen can make a property less attractive to tenants and increase void periods. As a landlord you are also responsible for ensuring that operating instructions are shown on appliances or that instruction booklets are left at the property. Smoke & Carbon Monoxide Detectors All new homes (built after June 1992) must be fitted with mains operated smoke detectors. There are no specific regulations governing older buildings, however, Macintyers insist that at least one smoke alarm is fitted to each floor of your property. We also recommend that a carbon monoxide detector is supplied.

15 13 Rental Income Taxation UK Resident Landlords Non UK Resident landlords If you are a landlord resident in the UK, your net income from your investment property is subject to income tax. The level of tax depends on your other income. If you are already a higher rate tax payer, tax will be payable at the higher rate. The normal method of reporting your taxable income to the Inland Revenue is by a self assessment tax return. We strongly recommend that you instruct an accountant to advise you on the implications and allowable expenses before you start letting your home or buy a property to let. The following deductions can usually be made from your rental income to arrive at the net income which is subject to tax:- Interest on mortgage (subject to conditions) Property repairs Letting and management fees Building insurance Ground rent Service charge The non-resident landlords (NRL) scheme is for taxing the rental income of persons whose usual place of abode is outside the UK. If you are treated as a non resident landlord you still have to pay UK income tax on rental income from UK property. Unless the landlord can provide Macintyers with an exemption certificate from the Inland Revenue, we are obligated by law to deduct basic rate tax from rents received and account to the Inland Revenue on a quarterly basis. Exemption certificates are required by any person named on the tenancy agreement who lives overseas. Landlords are responsible for obtaining their own exemption certificate and the appropriate forms should be submitted as early as possible as they take several weeks to process. The majority of landlords apply for and are granted an exemption certificate. Details on taxation are correct at the time of printing. Further information for non resident landlords and owners tax advisor exemption application forms are available from Macintyers or the Inland Revenue at:- Centre for Non Residents Landlords, Fitz Roy House, P O Box 46, Nottingham. NG2 1BD Our reference is NA

16 14 Contact Us Ben MacIntyre Director Roger Tyers Director Macintyers Residential Lettings Hartley House 29 Market Place Brackley NN13 7AB Tel: Yvonne Jones Lettings Manager The Team Gill Hirons Lettings Manager Sarah Tallon Letting Agent Lyn Norris Lettings Administrator Julie Lovell Lettings Agent