Frequently Asked Questions on Rental Property in Hull
Whether you are an experienced property investor or considering investing in the ‘buy to let’ market for the first time there are many points to consider. With the ever changing rules and regulations governing the private rented sector we aim to address the most commonly asked questions in a clear and precise manor which we hope will give you the client a clear understanding of what is involved in owning property.
- Will the tenants forward my mail?
- What do I do if the tenants will not leave?
- What if the tenants do not pay their rent?
- What does the tenant pay for?
- Can I decide who moves in?
- What type of tenants do you look for?
- Do I need to licence or should I register my property?
- What is an Energy Performance Certificate
- Fire Safety of Furniture and Furnishings
- Does the same apply to electricity?
- What is a landlords gas safety record?
- Who is responsible for domestic appliances?
- If I let my property furnished, how much furniture should I leave in the house?
- Do I have to provide furniture and furnishings?
- Who looks after the garden?
- What about tax implications?
- Do I need to tell my insurance company?
- Will renting affect my mortgage?
- What are my outgoings?
- What happens when my property is empty?
- What do I do if the property is damaged?
- What is an inventory and do I need one?
- What is the Tenancy Deposit Protection Scheme?
- Do you hold a deposit or bond?
- What sort of tenacy agreement is used?
- How is the rent paid?
- How much rent will I get for my property?
- Why do I need an agent?
- What are the advantages and disadvantages of letting property?
What are the advantages and disadvantages of letting property?
- Income towards mortgage and maintenance costs
- Investment return/ monthly income
- Security whilst occupied
- No council/utility bills to pay whilst the property is tenanted
- Opportunity for capital growth.
- Wear and tear of fixtures and fittings
- Small risk of tenant damage to the property
- Void periods and non payment of rent
- Possibility of capital depreciation in a depressed property market.
Why do I need an agent?
Of course there is nothing to stop a Landlord managing his own portfolio however there are many legal requirements that a Landlord has to fulfil. Failure to comply may result in a criminal prosecution and a substantial fine or imprisonment. Our trained staff understand these requirements and can advise you on compliance and other matters relating to property management.
Our comprehensive tenant vetting procedures ensures that every aspect of tenant referencing is covered. Our credit reference agency checks the financial history of each applicant and cross references this information with employers details and previous landlords if applicable. Whilst guarantees are never given the information provided allows you the client to make an informed choice.
Our tenancy agreements have been drawn up with the benefit of years of experience and can be tailored to suit individual requirements.
How much rent will I get for my property?
Economic factors such as supply and demand, location and condition of property must be taken into account when assessing potential rental values. A letting agent will inspect your property and provide a free no obligation market appraisal of your property and give advise on how to maximise the letting potential and rental income.
How is the rent paid?
It is usually dependent on the type and location of the property. Where tenants are employed the rent is paid monthly in advance via standing order direct into Maltings designated client account. Our offices are also geared to accept cheque, cash and credit card payments. If a tenant is reliant upon benefit assistance then Maltings will complete the benefit applications forms on behalf of the tenant and liaise with the council in order to ensure their claim is processed without delay. In this instance payments are made direct from the council to Maltings 28 days in arrears.
Our fully computerised accounts department produces a detailed monthly statement for each property and automatically transfers all cleared funds direct to you in a form of a cheque or by BACS transfer direct to your designated bank account.
What sort of tenacy agreement is used?
There are many forms of agreement which can be used depending on the type of property ie residential or commercial, type of tenant ie private or company and the wishes of the Landlord. In the majority of cases the type of agreement used is an Assured Shorthold Tenancy (AST) which lasts for a fixed term of 6 months up to a maximum period of 2 years.
Do you hold a deposit or bond?
Yes- The minimum deposit we recommend is equivalent to one month’s rent. Maltings will retain the deposit, as agents for the landlord in a separate deposit account which is registered with and protected by Tenancy Deposit Solutions Ltd. Please note that any interest earned on the deposit will be retained by Maltings.
What is the Tenancy Deposit Protection Scheme ?
Landlords entering into new tenancy agreements are now required to place any deposit with a government authorised scheme, which will safeguard the money and offer independent adjudication in the event of any dispute. Such disputes, relating to the repayment of all or part of the deposit are a regular cause of conflict between tenants and landlords.
What is an inventory and do I need one?
An Inventory and Schedule of Conditions is an accurate record of the condition of the property and its contents at the commencement of a tenancy. It should be prepared with full attention to detail and be yardstick by which the state of the property and its contents are judged at the end of a term. The preparation of these can be arranged with Maltings for an agreed fee.
What do I do if the property is damaged?
During the final inspection of your property (full letting and management option only ) the contents and condition of your property is checked with the original Inventory and Schedule of Condition held on file. A detailed report is then prepared and sent to you highlighting any missing items or damage to the property along with costings, estimates and any recommendation. The decision on replacement is then up to you.
Upon receipt of your instruction Maltings will then liaise with the tenant and deduct the agreed costs from the deposit held. If agreement cannot be reached the matter may be settled by arbitration or by the courts.
What happens when my property is empty?
Please check your insurance policy for the relevant details. We do recommend however that you inform your insurance company once the property is empty. In the event of making a claim may affect your cover if you do not disclose this at the time.
Maltings do not undertake regular inspections of vacant properties.
What are my outgoings?
These will usually include:
- Lettings Fees and Associated costs ie advertising
- Deposit Protection Certificates
- Energy Performance Certificates
- Mortgage repayments
- Insurance – Buildings and Landlords Contents (as a minimum) plus Legal expenses and Rent Guarantee if applicable.
- Repairs to property and contents
- If leasehold property – ground rent and service charges
- Managing Agents Fees
- When the property is empty – standing charges for utilities and services.
- Tax especially if UK resident overseas.
Will renting affect my mortgage?
Where the property is subject to a mortgage it will normally be a condition of the mortgage, that the property owner cannot let the property without prior permission of the lender. Most lenders are prepared to do this but may ask for a copy of the tenancy agreement and associated documentation before giving their consent.
Do I need to tell my insurance company?
The landlord will continue to be responsible for the insurance of the property and many companies offer specific policies for landlords, which not only cover the insurance of the building itself, but also offer the landlord public liability insurance protection as well. Where there are items of value, contents insurance should be considered. Please note, if you do not inform your insurer that the property is let, they may not pay out in the event of a claim.
What about tax implications?
Most Landlords retain personal ownership of their properties unless they accumulate larger portfolios. This means that as persons" receiving" or "entitled to the income" they will have to pay income tax on any profits made. If a landlord is resident overseas, tax must be deducted by the agent, however we can advise you on how to register for non resident exemption if applicable in order to avoid paying tax. Landlords can claim personal allowances against income from property, along with any expenditure incurred in connection with letting the property.
The Landlord and Tenant Act, 1985 section 11 (as amended by section 116 of the Housing Act 1988), states landlords must keep in repair both the structure and exterior of the property, including baths, sinks, basins and other sanitary installations. Installations for space and water heating must also be kept in proper working order.
Who looks after the garden?
The maintenance and upkeep of the garden is usually the responsibility of the tenant. However should you have a particularly large garden or any precious plants then it may be advisable to arrange for a gardener. The cost of which should be incorporated in the rental value. It is advisable to provide the basic tools for maintaining your garden even if the property is unfurnished.
Do I have to provide furniture and furnishings?
No interestingly enough, in most cases we have found that there is very little difference in rental values between furnished and unfurnished lettings. Perhaps the best formula for letting is carpets, curtains, light fittings and appliances.
If you specifically want to let furnished, you have to bear in mind whether your furniture complies with the Furniture and Furnishings (Fire)(Safety) Regulations Act 1988 ( as amended). New furnishing which are manufactured to these requirements carry labels showing this. Older furnishings are unlikely to meet the required standard and should be replaced or removed from the property. A copy of the Fire Regulations can be provided on request.
If I let my property furnished, how much furniture should I leave in the house?
Opinions of what is a ‘normal’ amount of furniture do vary- what may seem to be a usual amount to one person may seem too much or too little to another. A minimum amount would normally be considered to be a bed in each bedroom, a suite or sofa and chairs in the lounge, a suitable sized dining table with chairs and an adequate amount of storage in the form of wardrobes, cupboards and drawers. Of course, adequate kitchen and bathroom facilities and appliances are essential along with an adequate amount of crockery and cutlery.
All items should be clean, undamaged and in good working order. PAT testing of all electrical items is now mandatory and should be carried our by a qualified engineer.
Who is responsible for domestic appliances?
If the landlord provides appliances, he will be responsible for their maintenance. You should remember that appliances are likely to require repair at some time, however carefully they are used. Arranging Maintenance or Service Contracts may be the most cost effective way of ensuring repairs are carried out with the minimum of inconvenience. Any damage caused to appliances by improper use for example, should be paid for by the tenant.- but it may be difficult to prove that the tenant has caused the damage and the Landlord may still have to pay the repair bill
What is a landlords gas safety record?
It is a legal requirement under the Gas Safety ( Installation and Use ) Regulations Act 1994 (as amended ) to have the gas supply and all gas appliances (whether portable or fixed) checked by a CORGI registered operative to ensure their safety. This must be done at the landlords expense prior to letting a property for the first time and thereafter on an annual basis with a copy of the inspection record given to the tenant with 28 days. Maltings can arrange for these checks to be carried out on your behalf. Failure to comply with these regulations and complete any recommended works could result in a criminal prosecution.
Does the same apply to electricity?
Not to the same degree. However, there is a requirement under the Electrical Equipment (Safety) Regulations 1994 to ensure that all appliances are ‘safe’. We would therefore recommend that all appliances are checked by a qualified electrician on an annual basis. We can arrange this on your behalf.
Fire Safety of Furniture and Furnishings
Fire Safety - In the case of houses in multiple occupation the property must be provided with an adequate means of escape from fire and other precautions, including detection and warning system. Houses which are not houses in multiple occupation must have an adequate means of escape adequate fire alarm system. Houses should be fitted with smoke alarms with tamper proof batteries on each level in the stairway. It is advised that all smoke alarms are mains operated and interlinked to BS5839 part 6 grade D. Fire blankets should be provided in shared kitchens and fire extinguishers provided in category D (Hostels) HMO's.
What is an Energy Performance Certificate
From the 1st October 2008 Landlords are required to provide an Energy Performance Certificate when they rent out a home. An Energy Performance Certificate (EPC) gives information on the energy efficiency of a property you want to let. You need to provide an EPC whenever a home in the social or private rented sector is let to a new tenant.
EPC’s are valid for 10 years and can be reused as many times as required within that period. It is not necessary to commission a new EPC each time there is a change of tenant.
An EPC is not required for any prospective property that was occupied before 1st October 2008 and which continues to be occupied after that date by the same tenant.
Do I need to licence or should I register my property?
If your property qualifies as a house in multiple occupation under the Housing Act 2004 it will need licensing. You can discuss the implications of this and whether or not your property falls into this category with Maltings.
What type of tenants do you look for?
It depends on the type of property but where possible all applicants are properly vetted by an independent credit referencing agency to ensure that they have the financially means and good credit history to honour their rental commitments. Tenants obtaining assistance from the Housing Benefit office present a slightly higher risk and for this reason we may insist on a guarantor who will be vetted in the same way.
Can I decide who moves in?
We never forget whose property it is! When we have found a potential tenant who appears suitable, we will discuss this matter with you and act upon your instructions. However, whilst we are happy to accept your instructions with regards to restrictions on smokers, children, pets or any other specific requirements you have, we will not permit discrimination on grounds of race, colour or creed.
Please also bear in mind the greater the restrictions, the fewer opportunities exist to achieve a let-we will use our experience to guide you on this
What does the tenant pay for?
In addition to the rent the Tenant is expected to take on the responsibility of the Council Tax, gas electricity, telephone charges and water. Please note that water may be paid by you where it is include in the maintenance or due to other exceptional circumstances. As part of the Full Management Service, Maltings will arrange and notify the service providers of your tenants details and meter readings (except for the telephone, which is the responsibility of both you and the tenant).
What if the tenants do not pay their rent?
Whilst every endeavour is made to ensure that the Tenants are financially secure, there may be occasions when a Tenant falls into arrears. Maltings Client Accounting Centre monitors the payments of rents, so that if there is a problem it can be addressed quickly. Often a letter or telephone call will quickly resolve the problem- however, if the rent is persistently late or in severe arrears there is an effective course of redress through the courts. Please note that should it be necessary to take legal action, the cost of doing so is borne by the Landlord.
What do I do if the tenants will not leave?
If the tenants refuse to leave at the end of the tenancy then the matter will need to be settled through the courts. With the introduction of the Accelerated Possession Procedures (APP) for certain circumstances the process need only take a matter of weeks. Please note that Maltings fees and charges do not cover issuing of legal proceedings and should this be necessary you will need to instruct your own solicitors.
If you wish to end the tenancy we will serve the relevant Notices on your behalf specifying that they leave at the end of the term. In order to comply with the provisions of the Housing Act it is a requirement to serve the tenant with 2 months notice.
Will the tenants forward my mail?
We would strongly recommend that you arrange for the Post Office to redirect your mail. However out tenancy agreements do require the Tenant to forward any mail to you.