LANDLORDS GUIDE TO MANAGEMENT/LETTING SERVICES
For individuals or companies with property or properties to let, Ideal can offer a highly experienced and professional property letting and management service. The following guide details the services undertaken on behalf of owners/landlords of residential properties subject to a Management Agreement. This guide forms an integral part of that Agreement.
BEFORE LETTING You must ensure that
If the property is to be let subject to a mortgage:
Permission is obtained from the mortgagee to let the property. Note this must be obtained at the earliest convenient time before a tenant is found. It should be noted that certain Building Societies/Banks charge an extra percentage on top of your base rate when your property is let.
Properties in joint ownership:
Authority to let the property must be obtained in writing from any joint owner who should also be named in the tenancy agreement.
3. If the property is leasehold:
Confirmed letting is permitted by the terms of the Head Lease.
Any tenancy is for a period expiring prior to the termination of your lease.
Written permission is obtained from the Leaseholder where necessary.
Income from property is treated as unearned income and is therefore subject to the appropriate tax rate. You will need to appoint an accountant in order to determine you tax liability. If you are a civilian working outside the UK then the tax authorities will assess Ideal for tax due (under the Income Tax Management Act 1970). In these cases we reserve the right to retain a portion of the rental to meet this tax assessment. The deduction may be avoided if we have written confirmation from your Bank or accountant that they are empowered to deal with your tax affairs and that they will accept liability for and make payment for any authorised tax demand to the Inland Revenue on your behalf. NOTE: There are allowances, which can be set against rental income in respect of tax. These particulars being:
10% of rental as depreciation.
All Agents fees and charges
All maintenance and servicing expenditure carried out whilst the property is let.
This is not meant to be a comprehensive list, your accountant will advise you accordingly.
You should ensure that you maintain paying insurance premiums with regard to the building. Ideal does not accept responsibility for the adequacy or otherwise of any insurance cover.
Any service/maintenance charges should be paid. Ideal cannot verify service/maintenance charges, demands or estimates.
Mortgage payments should be continued.
D An Energy Performance Certificate (EPC) must be supplied prior to the letting commencing. This must be carried out by a qualified assessor and is a legal requirement. Ideal can arrange for this to be carried out on your behalf if required (cost of £75.00)
Annual inspections of all gas appliances by a Corgi registered plumber are a legal requirement. Ideal can arrange for these to be carried out on your behalf if required. (Cost £65.00)
F. Provide and fit two ten-year tamper proof battery smoke detectors to the ground floor (in a suitable location) and first floor landing (if applicable).Provide and fit a carbon monoxide detector. (it may be possible for the landlord to get these fitted free of charge through the local fire service safety advice team).
G. All outstanding bills relating to the property must be paid in full before each tenancy agreement can be arranged.
LETTING & MANAGEMENT SERVICES
If requested by you the services included in our commission are:-
Inspecting the property, preparing appropriate particulars in local office and advertising in local press when considered necessary by ourselves, the undertaking of interviewing potential tenants and assessing their suitability.
The following is undertaken once a suitable tenant is found:
A. We will obtain references. Ideal gives no warranty as to the legitimacy of references obtained.
B. Ideal can offer credit searches against individual’s former addresses and companies if required at an additional cost.
Subject to satisfactory replies to our enquiries, a tenancy will be agreed. A minimum deposit of one months rental will be obtained. Once a formal tenancy has been signed, we will:-
Collect rent normally on a monthly basis, one month in advance.
We will inspect the property periodically.
Arrange for normal maintenance for which the landlord is responsible subject to agreed limits and monies being available.
FINDERS FEES ONLY
We offer a Tenant Finding Service, whereby we will find a suitable tenant for the property but not undertake the management. We will obtain appropriate references on your behalf and take all prospective tenants to view the property. (For further information regarding Finder Fees please contact the office)
GENERAL TERMS OF ENGAGEMENT
RENT We will agree with you the rent to be quoted to potential tenants. In addition, the tenants would normally be responsible for payment of any Local Authority charges such as water rates, electricity, gas, telephone or any other statutory charges that may from time to time be levied against the occupier of the property.
DEPOSIT The deposit paid by the tenant at the commencement of the lease may vary depending upon the circumstances of the letting but will be subject to the minimum charge of one months rental, this deposit to be held by The Deposit Protection Service against damage or dilapidations that may be caused by the tenant. No interest will be paid by The Deposit protection Service on the amount of deposit/bond held.
DILAPIDATIONS At the time the tenant leaves the property a schedule of dilapidations if necessary will be prepared and costed. It must be remembered that the property is subject to a fair wear and tear clause and will be subject to the stresses and strains of every day living. A property cannot be expected to be in the same condition at the end of a letting as it was at the commencement. It must be expected that the interior decorations may need attention, even after a short period of occupation by tenants. The full replacement cost of many items will have undergone various lengths of usages. It is the landlords responsibility to ensure that all items left in a tenancy are maintained in working order, thus even repairs and replacement to old equipment must be paid for by the landlord. Where possible, we strongly recommend service and maintenance agreements such as for central heating systems. The client must ensure that we have full details of any such agreements in order that they may be kept in force and utilized if need be.
INVENTORY We undertake to prepare an inventory of the contents and a brief schedule of your home at the start of the letting and to check the inventory and the schedule of condition at each change of tenant. On vacating, the inventory is checked. Where necessary revised inventories are prepared for subsequent tenants.
TENANCY AGREEMENT The property will be let for a six month period on an Assured Shorthold Tenancy agreement.
INSURANCE You must inform your property insurers of your intention to let the property as failure to do so may result in rejection of any subsequent claim. You should ensure that all premiums continue to be paid when due and that the insurance cover does not lapse.
PLEASE PROVIDE DETAILS TO IDEAL ESTATE AGENTS & PROPERTY MANAGEMENT LTD OF ALL INSURANCE POLICIES RELATING TO THE PROPERTY.
TENANTS We will use our own professional discretion as to the choice of tenant although prior to the commencement of the tenancy full details regarding references etc, will be submitted to yourself.
SERVICES Upon vacating and re-entering a property, Ideal will notify all relevant suppliers in order that there is no liability for any charges that the previous tenants may have incurred. Except in emergency and wherever practical, estimates will be obtained and submitted for your approval in respect of works of re-decoration, renewal and repair likely to cost more than the agreed amount.
INSPECTIONS We will carry out an inspection of the property at the commencement and termination of each tenancy. Inspections during the course of the tenancy will be carried out if a serious defect requiring our attention has been reported to us. It should be appreciated that our inspection and assessment of defects which are brought to our notice will be of a cursory nature and will embrace only apparent obvious defects. In no way should these inspections be construed as being a structural or other type survey. Any further inspections, structural or additional services which may be required will be by special arrangement and subject to an additional fee. Ideal reserve the rights to appoint their own builder/repairer unless you inform us of any particular contractor you prefer to use.
RENT ARREARS/LEGAL ACTION It can sometimes occur that tenants for a variety of reasons find themselves in difficulties and this can result in problems of rent arrears. If legal action is required in order to obtain payment of rent arrears/and/or re-possession of your property then this would involve the services of a solicitor. In any event you will be responsible direct for your costs in connection with any legal action taken against the tenant. We cannot take legal action for you as the tenancy contract is between the tenant and you, not ourselves.
LEASE TERMS Properties are normally let for a minimum fixed period of at least six months in order to comply with current legislation. Once the initial term is complete, the landlord may obtain possession with a minimum of 2 months notice.
TERMINATION Ideal appointment is subject to three months notice to terminate on either side. From accepting instructions and during the full term of management, sufficient funds must be available to meet any expenditure prior to the next rent collection. We cannot service any outgoings exceeding whatever is held by us in your account.
V.A.T. No charges of VAT apply. If circumstances change then 4 weeks prior notice will be given.
COMMUNICATION Ideal will communicate with yourself via normal monthly/quarterly statements. When a property becomes vacant you will be notified accordingly. We do not, however, undertake to notify you independently as and when repairs are undertaken or any problems which may occur with regard to the tenancy unless you so require.
WHAT SHOULD BE LEFT? The condition of the property is a great point to take into consideration when we advise on a possible rent for the property. Although every letting falls into certain guidelines, obviously if it is modern and pleasantly decorated then the rent assessment will be higher and a tenant should be found easier. However, remember that tenants do not always look after the property as you would yourself. Generally unfurnished accommodation should have carpets and curtains to every room, cooking facilities.
Remember your property will be subjected to the stresses and strains of everyday living.
We will approve, without prior reference to you, maintenance and repair expenditure up to the amount previously agreed with you. Any excess of this amount will be referred to you prior to expenditure unless expenditure results from an emergency in your home.
C. We have to allow 10 days from the banking of a clients cheque until we can account to you. Banks need this time for cheque clearance.
We cannot pay outgoings on your behalf in excess of rents payable to us in your account.
We will question obvious errors on suppliers but will pay bills on your behalf which appear correct.
You must advise your insurers both of buildings and contents insurance of your intention to let, they may advise an additional cover, or exceptions or expenditure which may be necessary.
Please ensure that all water pipes and storage tanks are sufficiently lagged.
Ideal are not a member of a client money protection scheme
SUMMARY OF MANAGEMENT CHARGES
*Ideal are not a member of a client money protection scheme*
Full Management fees
INITIAL SETTING UP/LETTING FEE£200.00
£200. will be charged at the change of each tenant.
To let board at the property
Office and window display
A database of potential tenants
Vetting of tenants. Creditchecks, previous landlord checks and employers references
Expert local knowledge
10% of the monthly rental income NO VAT.
Supply a tenancy agreement
Place bond into The DPS scheme
Inform all utility companies of new tenant details
Collection of rent
Payment of rent
6 monthly inspections
Arranging annual Gas safety certificates and electrical tests
Getting quotes for maintenance
Organizing maintenance of properties
This package helps to provide peace of mind and security
SAME AS THE BRONZE PACKAGE BUT TO INCLUDE LEGAL EXPENSES
Servicing notices and gaining vacant possession
Upto £100,000.00 cover in legal costs
Free legal helpline & Free claims helpline
ANNUAL FEE PAID IN ADVANCE IS £55.00 OR MONTHLY PAYMENT OF ONLY £5.00 (which can be deducted from your monthly rental income)
Only need one policy per property and protection is subject to all tenants and/or guarantors on the Assured Shorthold Tenancy agreement have successfully passed a reference with rent4sure
The gold package includes all the bronze and silver benefits but also give you peace of mind that if your tenant doesn’t pay then this is covered under the rent protection policy
ANNUAL FEE PAID IN ADVANCE IS £150.00 OR MONTHLY PAYMENY OF £13.50
(which can be deducted from your monthly rental income)
FINDERS FEES ONLY £300.00
A fee of £300.00 payable upon our finding a suitable tenant for the property.
To let board at the property
Office and window display
A database of potential tenants
Key accompanied viewings
Vetting of tenants. Credit checks via rent4sure, previous landlord checks and employers references
Expert local knowledge
Inventory is undertaken for a £50 charge at the commencement of a management agreement and an initial tenancy. Where a property is vacated the inventory is checked, this is free of charge.
Where we undertake to supervise this work a negotiable fee will be charged.
Statements are provided monthly/quarterly/Annually. Copy statements or additional statements to accountants can be provided at an additional cost.
ALL FEES ARE DEDUCTED FROM RENTAL ACCOUNTS.
THE PROPERTY OMBUDSMAN SCHEME
Ideal are also members of The Property Ombudsman scheme and subscribe to This Code of Practice for Letting Agents. Copies of the code of Practice and the TPO consumer Guide is available at our office or at your request. Ideal maintain and operate an in-house complaints procedure which explain how to complain to us and to the ombudsman. These are readily available at our office for consumers.
PROPERTY MANAGEMENT AGREEMENT
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