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Frequently Asked Questions:
We have put together some Frequently Asked Questions & Concerns – the answers we hope will assist you in the letting of your property.
1.Is there a demand for rented property and how long will it take to find a suitable tenant(s)?
This varies from time to time and area to area but our experience suggests that there is always a high demand for quality residential property at rentals that are competitive within the marketplace.
2. How much rent will I achieve for my property?
This will depend on a number of factors to include location, condition, accommodation, facilities and level of equipment/furnishings. At Frost's Estate Agents we offer a free, no obligation Rent Assessment and will advise you of the exact amount of rent we feel is realistic in the current marketplace. We will also suggest any improvements or alterations, which would help to encourage a swift let.
3. Will we have any income tax liability from income derived from letting our property?
Income received from rented property is subject to Income Tax. There are some expenses, which are treated as tax deductible. Some of these are listed below:
- (a) 10% of total rent received against fair wear and tear
- (b) The costs of all structural repairs and renewals
- (c) All agency fees
- (d) Insurance premiums
- (e) The interest element on your mortgage repayments
- (f) Accountancy and other professional fees
- (g) Water Rates, if applicable
- (h) Charges incurred for postage and telephone class etc made to your agent.
The above list is not comprehensive and we strongly recommend that you consult a tax specialist or your local Inland Revenue Office for further advice.
If you are not normally resident in the UK you, your managing agent, or any person receiving the rents on your behalf, will be responsible to the Inland Revenue for your Income Tax payments. They, therefore, need to withhold money each month at the ruling tax rate to meet your tax liability. You are still allowed to claim the allowances as outlined in (a) to (h) above. Please discuss this with a tax specialist if you have any further queries.
4. Do we let our property furnished or unfurnished?
The choice is yours as there is little difference in achievable rent. The current Housing Act (the successor of the old Rents Act) does not differentiate between furnished and unfurnished tenancies in cases of repossession. Currently the demand is higher for unfurnished properties.
5. What about inventories?
We thoroughly recommend that you do not let your home without an inventory being undertaken. We outsource our inventories to specialist, accredited companies. The inventory at the commencement of the tenancy will be at your expense, however, at the end of the tenancy, we will ensure that the Check Out is paid for by your Tenants.
A signed copy of the inventory will be kept on file (for managed properties) to be used upon checking the property on the termination of the tenancy and interim visits. For Introduction only properties, Landlords will be sent a copy of the inventory.
6. Should we inform our Building Society/Bank of intention to let?
Failure to do so may invalidate the terms of your mortgage. Our Tenancy Agreements comply fully with the legal requirements laid down by all major Building Societies/Banks.
7. Are there any rules and regulations to which I am bound as a Landlord?
There are many rules and regulations to consider before letting your home and below we outline the principles of the four most fundamental rules as follows:
- (a) Fire & Furnishings (Fire)(Safety)(Amendment) Regulations 1993
These regulations came into force in March 1993. Broadly speaking the regulations require that all soft furnishing, upholstery or upholstered furnishings (including beds, mattresses, pillows, settees, armchairs, scatter cushions and bean bags) should conform and comply with earlier fire safety regulations which have been in force for some time controlling the sale of such goods. The furnishings must comply with the following three tests, each of which measures the flame retardant properties of the furnishings: The Cigarette Test, The Match Test and the Ignitability Test.
- (b) Gas Safety (Installation and Use) Regulations 1998 All landlords who let property with gas appliances are subject to this act. This not only includes gas fires and boilers but other appliances such as cookers, hobs and portable heaters.
(i) What must I do to comply?
If your property contains gas appliances, they must be serviced on an annual basis and any remedial work undertaken to bring the appliances up to standard. In addition, the engineer must provide a record of the inspection, part of which must be supplied to the tenant(s). Anyone contracted by a landlord to install, repair or service gas appliances must be GAS SAFE registered.
(ii) Who should organise the inspection/service?
For managed properties, Frost's Estate Agents, we as your agent, are happy to arrange for the initial service and the annual renewals. Furthermore, we will obtain the certificate and ensure that the tenant(s) has their copy. If you wish to use a particular contractor or arrange your own check, take care to select a GAS SAFE registered engineer and ask for the certificate. For Tenant Find only properties, then you will need to provide us with the necessary inspection documentation prior to the property being tenanted.
(c) Electrical Equipment (Safety) Regulations 1994
These regulations state that all electrical equipment over 50 volts must be safe and also satisfy requirements relating to sleeving of pins on plugs, colour coding of main leads, labelling of cables and fusing information. Although the law does not say that the electrical equipment has to be tested, the best way to protect yourself from prosecution is to have relevant appliances tested annually by a suitably qualified electrician.
(d) Energy Performance Certificates
All rental properties must hold a certificate. These are valid for 10 years
8. Are there any risks?
When letting residential accommodation, it must be accepted that a speculative venture is being undertaken and tenants do not always adopt the same standards of care and attention that an owner-occupier would. In addition, there is always a risk that they may default in payment of rent.
The service that we offer has been created to minimise such risks, although it must be realised that they still exist. However, set against these risks is the fact that you will be retaining your capital investment and, if it is your home, you will be preserving it until such time as you may wish to return. We do recommend taking out legal and rent protection insurance and will be pleased to discuss this with you.
FINDING THE IDEAL TENANT
9. Will it be necessary to advertise the property?
We advertise ‘Property to Let’ in our own unique property supplement delivered with Homes24 in the Herts Advertiser to over 50,000 homes on a weekly basis and find that this level of promotion enables us to attract an excellent level of good quality potential tenants. We advertise all our properties on Rightmove,Zoopla,Primelocation, frosts.co.uk and a host of other property portals.
We also circularise major companies, colleagues, H.M. Forces etc with our current availability list, which is updated on a regular basis. This gives the widest possible coverage and, hopefully, continuity of lettings.
10. How do you select tenants?
This is probably one of the most important factors in letting a property and we can assure you that all reasonable steps are taken to research the prospective tenants’ background to include the taking of references from banks, employers and previous landlords.11. Do you allow pets?
The keeping of any pets is not allowed under the terms of our tenancy agreement, although this clause may be waived with your express permission.
12. Do you allow prospective tenants to view properties unaccompanied?
No. Prospective tenants wishing to view your property are normally accompanied following a preliminary interview in our office. Only a brief description of available properties is given over the telephone for security purposes.
13. Do tenants have to pay a deposit?
Yes. All tenants have to pay a deposit equivalent to one and a half calendar month’s rent. For Managed Properties, we will register the deposit with My Deposits. The deposit will be returned to the tenant(s) upon the termination of the tenancy providing all the terms and conditions of the tenancy agreement have been met. Should there be any contravention of the Tenancy Agreement, the costs incurred are deducted from the deposit and only the balance is refunded to the tenant(s).
For Tenant Find only properties, it is the Landlord’s responsibility to either hold the deposit in a ring-fenced’ account or to register the deposit with one of the appropriate schemes. We are happy to advise you on this.
14. What sort of Tenancy Agreement do you use?
We use Assured Shorthold Tenancy Agreements, individually drawn up to suit your needs and requirements. These are for a minimum fixed period of six months and are accepted in the courts of law and by all major building societies.
DURING THE TENANCY
15. When do the tenants pay their rent and when do we receive our cheque?
All rents are due monthly in advance and rent received by us will be transferred into your account, or one nominated by you, within 10 working days of receipt of cleared funds. A statement of account will be forwarded to you at the time detailing the rents collected and expenditure incurred by us while acting on your behalf as your managing agent.
16. How do we know whether our property is being looked after properly?
For our managed properties, we make regular visits to all the properties on our register and you will be advised of any problems that are apparent during these visits. We also visit the property for other reasons such as late or non-payment of rent, following up problems as reported by the tenant(s) or if we believe that there may be a breach of the Tenancy Agreement.
17. Who is responsible for paying for Electricity, Council Tax, Water, and Gas etc?
Your tenant(s) are responsible for all these accounts during the period of their tenancy. Providing that an inventory has been undertaken, we will inform all authorities of tenancy changes providing details of dates, forwarding address and meter readings (if applicable) taken at the time of our inspection. You will be responsible for all standing charges etc for any period of time that the property remains empty and we will arrange, if required, to settle these accounts on your behalf and debit your account accordingly, detailing all such amounts on your monthly statement. In the event that an inventory has not been undertaken, it is the Landlord’s responsibility to provide us with meter readings prior to commencement of the tenancy.
18. Who is responsible for the Building and Contents Insurance?
The provision of adequate cover remains your responsibility and you should advise your insurers, in writing, of your intention to let your property. They may impose a small premium to cover the increased risk but failure to advise them may invalidate the terms of your policy in the event of any claims being made. If you experience any difficulties in this regard then we shall be pleased to assist. Whilst you are responsible for your own contents cover, your tenant(s)s are similarly responsible for all items of personal goods and chattels introduced into the property and will not be covered under the terms of your policy should they suffer loss or damage for whatever reason.
19. Should we maintain any Service/Maintenance Contracts?
Yes. It is your responsibility to ensure that all service contracts remain in force, particularly in respect of central heating systems, automatic washing machines, fridge/freezers, gas fires etc, all of which are prone to breakdown and expensive to repair when they do. We will record all details of all maintenance and arrange to pay the premiums as and when they fall due should you so wish, the costs of which is being deducted from rents received. Please advise us of any such agreements in the space provided on the landlords Acceptance Form you have been given.
20. Who is responsible for repairs and general maintenance?
Generally, you are responsible for all costs so incurred. We have a comprehensive list of accredited contractors we use or, alternatively, we shall be pleased to follow your instructions in this regard and use your nominated contractors should you so wish.
21. Who is responsible for garden maintenance?
Under the terms of the Tenancy Agreement, your tenant(s) are responsible for your garden and its maintenance and it is, therefore, essential sufficient tools in good working order are included in the inventory for this to be carried out.
N.B. It is unlikely that your tenant(s) will do more than keep the grass cut and borders weeded and should you wish to maintain the garden to a higher standard, please feel free to discuss this with us.
22. Can we visit our property during the period of tenancy?
Yes. However, we request that prior arrangements are made through our office in sufficient time for use to advise your tenant(s) of your intentions.
ENDING THE TENANCY
23. How can I regain possession of my property?
Generally, the possession is gained at the end of the fixed term of the tenancy but there are other ground for terminating the tenancy within the period of the fixed term i.e. arrears of rent, breach of the terms and conditions of the tenancy etc. Possession is effected by the serving of the correct notices and we will deal with the service of these notices on your behalf. In the rare event of a tenant(s) failing to vacate the property on the due date, it is likely that court proceedings will have to be brought, which is both time consuming and expensive. Rental & Legal Expenses Insurance is available to protect you and we shall be glad to advise you regarding this.