Tenure
All new tenancies commence with a minimum six-month Assured Shorthold Contract, a class of tenancy created by The Housing Act (1996). This type of tenancy is preferred, as it provides the Landlord the maximum legal protection in the recovery of possession of the property.
Once this contract has been in force for just over three months, the tenancy is reviewed and we will write to you asking if you wish it to continue. If you do not wish it to be renewed, we should be advised immediately so we can make arrangements to serve the statutory notice.
We will then contact the Tenants; they can opt to leave the property at the end of the lease or request permission to stay on. If the Tenants wish to stay in the property you can decline, in which case the notice to quit must be served. The Tenants have two months to vacate the property. Alternatively, you can allow the tenancy to continue, in which case you can choose to renew for a period of six months or more. A significant number of Tenants do request twelve month contracts. If you do not wish to commit yourself to a definite period, the contract can become a periodic tenancy, whereby the Tenant stays in the property (under the terms of the original contract). Should they wish to leave however, they only need to give one month’s notice; if you require possession of the property, you must give the Tenants two months’ notice. MIDAS PROPERTY LTD, acting as agent, arranges a Tenancy Agreement between the Landlord and the Tenant. The agent is not party to this Agreement, and cannot therefore be held responsible for any breach thereof by either party.
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Independent Advice
If you are in any doubt at all as to what this means, you should take independent legal advice from your own solicitors prior to entering into a Tenancy Agreement. A separate Landlord Contract between the agent and the Landlord will also be prepared.
Whilst we take every care that the relevant Tenancy Agreement is correct, you must satisfy yourself that it is correct prior to it being signed. We advise that your own solicitors should approve the actual Tenancy Agreement, which we can fax to them if requested.
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Tenants
Finding the right Tenant for the property is fundamental. We start by establishing with yourself criteria for the sort of person you wish to occupy your property. We then match this to prospective Tenants who must provide us with a reference.
Private Tenants are fully referenced with an Independent Credit Referencing Company. Their bank details, employment history, previous care of property rented, credit checks and any other financial commitments are all thoroughly researched.
Housing Benefit Claimants are checked to the extent that the information given will allow. It is difficult to reference someone who may have no bank account, no credit rating or has not registered on an electoral roll. To ensure that all possible steps are taken to find a good Tenant, we insist they provide us with a guarantor, who must be in full time employment or a house owner and must pass a standard credit check. Once they have been approved, guarantors are required to sign a legally binding Guarantor Agreement stating that they will be liable for any rent arrears and any dilapidation to the property over and above that considered to be fair wear and tear.
Housing benefit claimants are accompanied to the benefit office by a staff member of MIDAS PROPERTY LTD and a receipt is obtained from Housing Benefit as proof of claim.
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Inventories
Prior to the commencement of the tenancy, we make an inventory of all fixtures and fittings in the property. This also provides a description of the property’s general state of decoration, carpets, walls and the condition of any gardens and sheds.Whilst compiling the inventory we also take the meter readings, which are passed on to the appropriate utility companies. At the same time we inform the Local Council of the change in tenancy. It is the responsibility of the user to notify BT or other telecommunications provider of any change MIDAS PROPERTY LTD will hold the master copy of the inventory which will be attached to the Landlord’s copy of the Tenancy Agreement. The Landlord and Tenant receive a copy each. The inventory forms part of your contract with the Tenant and is an important legal document. You are responsible for the maintenance of items listed on it.
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Inspections
We conduct regular inspections of all tenanted properties; if something needs attention we can inform you as soon as is practical, helping to reduce the risk of the problem becoming worse and the cost escalating. We write to you after each inspection and inform you of the condition of the property.
These visits also help us to get to know the Tenants better, so that when the lease is due for renewal we can be confident in the advice we give to you.
Repairs
Every property at some point will need some remedial work; if things go wrong the Tenant contacts us and we contact you. In the majority of cases the problem can be resolved quickly. However, if a serious fault does occur (water burst/flood) and we cannot contact you, we reserve the right to authorise a repair up to a previously agreed cost limit. Authorisation for this is contained within the Landlord Contract.
Once a property is tenanted, you have an obligation to ensure it is well maintained. Carrying out repairs quickly is often as important for you as it is for the Tenant, as repairs caught early can save money. Remember Tenants do have rights, and they can contact the Environmental Health Department if repairs are not being rectified. Any ensuing enforcement order could include extra repairs and a significantly higher final bill. Work not done by the Landlord will be carried out by the Department and they will add a hefty additional charge on top of the repair bill.
In the Landlord & Tenants Act 1985, Section 11, it is implied as a condition in the tenancy agreement that the Landlord has:
(a) to keep in repair the structure and exterior of the dwelling (including its drains, gutters and external pipes).
(b) to keep in repair and proper working order the installations in the dwelling, for sanitation and for the supply of water, gas and electricity as well as those for space and water heating.
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End of Tenancy
Once a tenancy comes to an end, we make arrangements to meet the Tenant at the property and obtain forwarding details. We inspect the property and take meter readings.
If for any reason there are disputes over the final condition of the property, the first course of action is to give the Tenant an opportunity to rectify the problem. If the Tenant does not rectify the situation, we can make a deduction from the deposit (valid estimates must be obtained, indicating the exact cost of repair, cleaning or gardening needed). Failing agreement between the Landlord and the Tenant, we will act as arbitrators. We will aim to resolve the disagreement as quickly and amicably as possible. Our decision is final, with both parties abiding by our judgement.
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Tenant's Deposits
A deposit against rent arrears, damage, dilapidation or other breach of contract is held by us for each Tenancy Agreement in the amount of £250.00. It is refundable at the end of the tenancy, only after the Tenant has vacated the property and providing the house is in order and their account is up to date. In cases of dispute, we have the right, at our discretion, to deal with the return of the deposit three months after the Tenant vacates the property. Interest is not paid by the Agent to the Landlord or the Tenant on this deposit.
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Furnishings
If any furniture is provided in a property, you as the Landlord have a duty to ensure it is maintained and (for electrical/mechanical equipment) repaired should it become faulty, provided of course this is not as a result of negligence or malicious damage by the Tenant. Any soft furnishings (chairs, settees, beds, etc.) that are provided must comply to fire regulations in accordance with the requirements of The Consumer Protection Act 1987 Section 12 (1) and the 1988 regulations. A label clearly stating so must be attached. If not, then the furnishings must be removed from the property, they cannot be stored at the rented address.
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Alarms
We recommend that all properties should be fitted with a mains smoke alarm. While this is not a legal requirement, failure to take adequate precautions (such as fitting smoke alarms) could lead to a Landlord being prosecuted if something happens. Smoke alarms are inexpensive and are easily fitted; they can and do save lives. Once installed, these devices must be checked on a regular basis.
If your property has gas appliances you may wish to consider the installation of carbon monoxide alarms (these detect the build up of dangerous gases). These units cost a little more than smoke alarms but again do serve a very useful purpose.
More and more Landlords install intruder alarms with a master code as well as a user code. The master code must be kept secret. A master code means that changing the alarm number is only possible with this number. Consequently while your Tenants can have the benefit of the alarm they cannot change its settings.
Alarms (like any piece of electrical equipment) can malfunction. This is not only annoying for you and neighbours but is also leads to increased calls from the police, and they list them as nuisance alarms. The implication being that if an alarm is frequently sounding for no valid reason, the police refuse to respond. We would therefore recommend that the alarm is checked on a regular basis.
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Gas Appliances
It is a legal requirement that every gas appliance and gas central heating system has to be inspected on an annual basis. They have to meet strict conditions and a Safety Certificate must be issued. (This certificate or copy of it must be kept in our files).
You can ask British Gas (who charge per item inspected) or a private Gas Engineer. Remember for an inspection to be complete the piping must also be inspected and the person conducting the inspection must be CORGI registered.
We can arrange for the safety inspection to be carried out for you by our local CORGI registered Gas Engineer. Once the inspection has been completed we keep a record of the date as a Safety Certificate must be issued every twelve months.
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Instruction Information
Please leave any instruction manuals you can for all domestic appliances such as the central heating, washing machines, cookers and grills, fridge/freezers, etc., and any other information you have relevant to the smooth running of the property. Any information on matters such as rubbish collections, milk deliveries, etc., is also appreciated.
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Keys
We would normally require three sets of keys for the property, two will be handed to the Tenant on occupation, the other set will be held in our office for emergencies and inspections. Note: If you wish to use or collect keys at any time you must bring proof of identification as a security measure.
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Vacant Property
In the event that the property is unoccupied during or after expiry of the term, the Agent cannot be held responsible for any loss or damage to the property, fixtures and fittings or personal property belonging to the Landlord or the Tenant howsoever caused. The Landlord is advised to take advice from his insurance company.
To comply with most insurance companies’ policies all vacant property must be inspected every fourteen days. We will automatically put inspection procedures in place and a log of visits will be kept.
We also undertake to advertise the property for the procurement of another Tenant every week until a new Tenancy has been agreed. (NB The property must have a valid Landlord’s contract with Property Growth Management Ltd).
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Contents and Building Insurance
As Landlord you are responsible for the building and accordingly the building insurance. Please note buildings insurance will not cover the costs of replacing or repairing carpets if they become damaged, it does however cover fixtures and fittings. If the property is furnished or part furnished, you may also wish to consider contents insurance. We can arrange buildings and contents insurance for Landlords and/or Tenants if this is required.
You must inform your insurance company that you are now letting your property, otherwise your insurance could become void. If is your responsibility to ensure that this is done.
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Mortgages
If the property you wish to rent if subject to a mortgage then the mortgage lender should be informed that you intend to let the property, unless this is a Buy-to-Let mortgage. This should be done before a Tenant moves into the property. Gaining permission from the building society usually depends upon the mortgage account not being in arrears. Some lenders do ask to see a copy of the lease which the Tenant will be asked to sign. We will happily provide them with this. The lender may make a small charge to cover administration costs.
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Ongoing Liabilities
Please arrange for regular payments such as buildings insurance to be paid by standing order or direct debit. Water rates, where these continue to be the Landlord’s responsibility, are best paid by direct debit. Your Television Licence is personal to you and can be transferred to your new home address if required.
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Utilities
Your Tenant is responsible for gas, electricity and council tax during the Tenancy. Most Tenants are also responsible for water rates. We will pass on the relevant information, on your behalf, to the utilities except BT as they will not take instruction from third parties. We will set up new accounts in the name(s) of your Tenant(s).
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Post
It is advisable to have a mail redirection service provided by the Post Office as neither we nor your Tenant(s) are responsible for redirecting post, although we will do our best to help. We emphasise that a Post Office redirection is the only sure way to avoid problems with delays or loss of post.
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Maintenance Department
We have our own Service and Maintenance Department which can deal with all maintenance and repair work required on your property. We are also equipped to carry out garden maintenance, specialist cleaning and decoration work if needed.
You will always be consulted first about any maintenance required wherever possible. We reserve the right, in your best interests, to carry out emergency repairs on your behalf without prior notice.
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Payment of Rent
Rent is payable monthly in advance by the Tenant and is usually collected by us via standing order. We will pay the rent to your bank account between 14th and 16th of every month provided the Tenant’s funds have cleared. A statement of account will be sent to you at the end of the month and a copy can be sent to your accountant if required. Clients are advised that the MIDAS PROPERTY LTD can take no responsibility for difficulties with the BACS or telephone systems beyond our control and will accept no liability for charges incurred by clients as a result.
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Rent Arrears
Rent arrears although rare, do occur occasionally, despite the stringent processes we undertake on your behalf in taking up references and carefully assessing prospective Tenants. If a Tenant does default on the Tenancy Agreement, we will advise you on your monthly statement that the deposit has been paid out to you in lieu of rent and we will pursue our normal range of credit control procedures.
In addition, we can arrange for our solicitors to issue a notice requiring possession of the property and to bring proceedings for possession and recovery on your behalf. Our fees do not cover this eventuality.
In the rare circumstances where a deposit is transferred and used in lieu of rent, we reserve the right to make a reasonable administration charge to the Tenant, prior to the transfer (usually £25.00). We can deal with solicitors on your behalf in the event of any problems that may occur, and will furnish copy documents that may be needed.
When vacant, a suitable new Tenant can usually be found for your property quickly, minimising the void period. We must emphasise however, that whilst we shall endeavour to prevent such a situation occurring, and will provide every assistance in the event that it does, we do not take any responsibility for legal costs and/or loss of rent that might arise as a result of a Tenant’s default.
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Exceptional Circumstances Charges
We reserve the right, in exceptional circumstances, to make a reasonable charge for any work we carry out that is additional to our normal duties in connection with a tenancy. Any such fees will be notified to the Landlord concerned on our monthly statement.
Such circumstances are very limited and will include cases where proceedings for possession are issued against a Landlord or Tenant, and/or attendance at court is required, or where exceptional measures are required of us to recover rent due to a Landlord or where a Tenant’s conduct necessitates additional work. We also reserve the right to charge a reasonable Inventory fee (in the range of £50.00 to £100.00) for a large fully furnished property in accordance with the terms of the Letting Provisions.
Tax
Income received from renting any property is subject to tax and we strongly recommend that you take advice from your accountant. Expenses incurred (i.e. water rates, property insurance, our fees, any other professional fees, any repairs or other expenses directly related to the property or the letting of it) may be set against this liability as may the interest paid on the mortgage, subject to current regulations.
Landlords are personally responsible to the Inland Revenue for any tax liability and for preparing and submitting the necessary statement of income and expenditure.
We make no routine declaration to the Inland Revenue regarding the affairs of our UK Landlords, but have from time to time, to complete a Revenue form detailing all monies collected by ourselves, giving our Landlords’ names and addresses.
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Overseas Landlords
Up until April 1996 Landlords who moved out of the United Kingdom had to have tax deducted by their Agents.
If a Landlord is absent from the UK for more than six months during the period of letting then we, as Agents will be liable for Income Tax at basic rate on the rent received by us, unless you registered with the Financial Intermediaries and Claims Office of the Inland Revenue (FICO) and they have granted a certificate authorising us to pay the rent to you without the deduction of the tax. Once this certificate has been issued, we will be able to pay the rent gross.
If you do not wish to enter these arrangements, of FICO refuse to grant a certificate, then we are required to deduct 22% of your gross rent to hold against tax, which we must remit to FICO quarterly, together with a statement of your account. You will remain responsible for the completion of your tax return each year.
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Valuations and Selling
Should you decide to sell the property, we are often in the best position to initially obtain a valuation on your behalf and instruct a selling agent. In many cases, it will be possible for us to carefully negotiate with the Tenants of the property for it to be placed on the market prior to them vacating. This latter process ensures that the property is occupied for the longest possible period, so ensuring security and income up to the time of exchange of contracts and completion of a sale.No charge will be made for this service. However, if the property is sold to the Tenant or an associate of the Tenant, during the period of the Tenancy Agreement or within 18 months thereafter, a fee of two percent of the sale price is payable on completion of the sale.
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Our Fees
Our fees are as detailed below. It is important that we give as full and clear an explanation of our fees as possible, as this guide will form part of any agreement between us. Your authority for us to sign a Tenancy Agreement on your behalf will be deemed o have created our Agency Agreement on the terms referred to herein.
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Contract Fees
We prepare agreements for the Tenancy and we currently make a charge for this to the Landlord of £150.00. This fee includes obtaining bank references on prospective Tenants and or Guarantors, together with the preparation of a standard Inventory and the preparation of legal documents. This fee will be deducted from the first month’s rent.
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Re-Let Fees
Where a re-let is agreed to an existing Tenant or a new Tenant is found for the property, a fee of £100.00 will be charged. Re-let fees are charged to your account with us in the month that a renewal is agreed. Landlords should note that this will often be a month prior to the actual date of the renewal. In certain cases, particularly where a re-let is for a period of less than six months, this fee may be less than £100.00.
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Caretaker Fees
We charge a fee of £45.00 per year to be taken in December for the purpose of inspecting all vacant properties every fourteen days to comply with Insurance Companies’ policies. (See section under Vacant Property).
We also undertake to advertise the property whilst vacant until a new tenancy has been agreed. (NB The property must have a valid Landlord’s contract with Property Growth Management Ltd).
Commission
Our commission for managing the Tenant is currently 15% of the total rent received during the whole term of the Tenancy Agreement (irrespective of the existence of, or the operation of, any notice clause in the Tenancy Agreement, or any breach of the contract by either the Landlord or the Tenant).
Our entitlement to this remuneration is established by our introduction of a Tenant with whom a Tenancy Agreement is concluded..
Our Tenancy Agreement fees, Re-Let fees and Caretaker fee charges, covered earlier in this section of the guide, are levied in addition to this charge.
Our fee includes meeting you to discuss your needs, estimating the rental value of your property, taking details of the property, as well as collection of rent and is inclusive of the ongoing general management of your property, in accordance with the duties set down in this guide and in your Landlord Contract with us.
We undertake to provide regular inspections in accordance with the section headed “Inspections” in this guide and will deal with the organisation of repairs and maintenance as it becomes necessary to do so.
Our commission is deducted monthly. However, we reserve the right, at our discretion, to revert to a “letting basis” at any time, without prior notice. This will result in the total commission (the remainder of the commission due to the end of the term of the tenancy) becoming immediately due and payable.
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Our Commitment To You
We trust you have found this brochure informative and whilst the law of Landlord and Tenant may be complex, you will no doubt appreciate that the financial rewards can be highly beneficial.
As your Agents we ensure an efficient service is enjoyed by both you and your Tenant. Should you require any further information please do not hesitate to contact us.
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ENJOY THE PERSONAL SERVICE YOU DESERVE. |
