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A Guide for Landlords

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					                                               Renting your Property
                                               A Guide for Landlords

This Guide aims to provide answers to many of the questions you may have regarding
the renting of your property and also sets out our approach to Property Management.

Renting your property is a big step and you will want to feel that you fully understand
what is involved. Should you find yourself with further questions or queries particular
to your own situation please do not hesitate to get in contact with us.

The Terms of Instruction

The Terms of Instruction is a legally binding contract between the Landlord and the
Agent (New View Residential Ltd). Under the terms of this agreement the Landlord
authorises the Agent to act with his/her authority with regard to their Property. Where
a Property is owned by more than one party, all parties will need to sign the Terms of
Instruction.

Provided the Agent acts within this given authority, the actions of the Agent are
legally binding upon the Landlord(s), such as incurring expenses on the Landlord’s
behalf or entering into Tenancy Agreements.

The Landlord should carefully read the Terms of Instruction before signing and
ensure that they fully understand their obligations under this contract and that they are
aware of the charges made and level of service provided by the Agent under this
agreement.

New View Residential offer two levels of service, Full Management and Let Only.
The Landlord should ensure that the level of service offered under the Terms of
Instruction meet their requirements.

The Landlord is protected by the Unfair Terms in Consumer Contracts Regulations
1999.

The Landlord is the client of the Agent, and the Agent is contracted under common
law to act on the Landlords behalf provided the requirements of the Landlord are
within the Agent’s authority and do not require the Agent to break the law.

Distance Selling Regulations 2000 - If the Terms of Instruction are signed at our
offices they will be immediately binding. We will then be able to start representing
you and marketing your property straight away.

If the Terms of Instruction are signed away from our offices, then under the
regulations, the Landlord is entitled to a 7 day cooling off period. Under these
circumstances we will be happy to market your property but will not be able to
undertake viewings until the 7 days have elapsed.




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Consents

The Landlord must be legally entitled to rent The Property. This will include gaining
consent to do so from any mortgage companies, freeholders, head leaseholders and
insurance companies (as appropriate).

The Agent will require proof of ownership from the Landlord. Copies of consents and
a copy of any headlease (if applicable) will also be required. The conditions stipulated
in any headlease will form part of the Tenancy Agreement and the Tenant will also
require a copy.


Identification

In order to comply with Money Laundering and Anti Terrorism Legislation New
View Residential is required to obtain satisfactory proof of identification from the
Landlord(s).


Rental Value & Income

The Rental Value is estimated based upon all available comparable evidence. This
includes variables such as location, size, condition, level of furnishing and prevailing
market conditions (current supply and demand).

When calculating the income or yield for your home or potential investment property
it is important to budget realistically. You will need to include deductions such as
Agents Fees, Vat, repairs & maintenance, service charges/ground rent and Income
Tax liability. Best practice suggests budgeting should include two vacant months per
year (e.g. 10 months rental income out of every 12 month period).


Insurance

The Landlord is responsible for insuring the Building and for their Contents. The
Tenant is responsible for insuring their-own possessions.

In many cases an existing insurer will agree to provide extended Insurance cover for
the property being let out. This may require an additional endorsement or a different
policy being issued. There may be an additional premium.

If the insurance company is not notified that the Property is to be let, it is likely that
the policy will be void and the Landlord will be unable to make a claim. This may
also be in breach of the Tenancy Agreement and affect the rights of the Tenant.

Even if the property contains little in the way of furnishings it is worth bearing in
mind that even carpets and curtains can be expensive to replace. In addition, most
Contents Insurance policies contain an element of Public Liability cover. This would
protect a Landlord against claims made by a Tenant e.g. for injury suffered as a result
of tripping on a loose carpet.


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Specialist insurance products are available for the letting market. These include
Landlords Building & Contents, Legal Cover and Rent Guarantee policies. New View
Residential is able to provide details of the products of Letsure, specialists in letting
related products.


Overseas Landlords

If a Landlord is intending to live or travel abroad for 6 months or more in any 12
month period, they are considered a Non Resident Landlord for tax purposes. The
Agent will be required by law to deduct the standard rate of income tax from the rent
collected and forward it to Her Majesties Revenue and Customs (HMRC). The
Landlord can apply for a certificate of exemption from deduction at source if their tax
affairs are in order.


Income Tax

The Landlord will need to report their Rental Income and expenditure to HMRC for
Income Tax by self-assessment. It is possible to offset certain allowable expenses
against Rental Income including Agents Commission, VAT, mortgage interest (but
not capital repayment) and some repairs and maintenance.

This is a specialist area and New View Residential strongly recommend Landlords to
seek the advice of an Accountant or Tax Professional for help in this area.


Property Viewings & Keys

We will require one set of keys in order to gain access to your Property for viewings.
If The Property is occupied we will arrange suitable notice to be given.

A member of our staff will accompany potential applicants to The Property.
Feedback will be sought from potential applicants and where given, will be reported
to the Landlord as soon as is practical.


Tenant Applications & Referencing

This is a vital part of the letting process and can have an effect on the whole Tenancy.
Once an Applicant wishes to rent your Property we will collect their personal details
and proof of identification.

At this point we will contact you and to ascertain if you wish us to proceed with this
applicant at the offered Rent and Tenancy terms. At this point, the terms of the
tenancy are open to negotiation.

Once the Landlord is happy to proceed we will then submit the Applicant to the
Letsure Reference Procedure and collect a Holding Deposit.



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Once satisfactory references have been received we will notify the Landlord with their
agreement proceed to make arrangements for the start of the Tenancy.

Should the Applicant not proceed to take a Tenancy then Holding Deposit will be
used by New View Residential to offset administration costs associated with the
abortive application.


The Tenancy Agreement

This is a legally binding contract made between the Landlord and the Tenant.

The Tenancy Agreement is prepared and signed by all parties prior to the start of the
Tenancy. Once this Agreement is dated (usually on the first day of the Tenancy) it
becomes legally binding.

Since the Housing Act 1988 (amended 1996) most residential tenancies are Assured
Shorthold Tenancies (AST). These provide the best security for Landlords in terms of
regaining possession of their property.

In order for a tenancy to be an AST the following conditions must be met:

1/ The Landlord must not be resident i.e. they do not live in the Property, or a separate
part of the property if it the Property has been converted into separate units.
2/ The rent must be less than £100,000 per year.
3/ The Tenant must be an individual or individuals and not a company or corporate
body.

Where the above conditions are not met and an AST cannot be used, New View
Residential will prepare a legally binding Tenancy Agreement outside of the Housing
Act 1988.

Most tenancies will be for 6 or 12 months as standard, but any specific length is
possible.


The Tenancy Fixed Period

This is the minimum period of time that Tenant must be given occupancy.
Generally a Landlord cannot regain possession of a property until this period
has expired.

Different rules apply for different types of Tenancy Agreement.

Under certain circumstances it may sometimes be possible to gain possession during
the Fixed Period for Assured and AST Tenancies, e.g. if the terms of the Agreement
have been seriously breached. The particular Grounds under which the Property may
be re-possessed are specified in the Housing Act 1988 (amended 1996). This might
include situations of serious rent arrears or ongoing anti-social behaviour. This would
require a Court Order.


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A Section 21 Notice can be served during the Fixed Period to terminate the Tenancy
at the end of the Fixed Period. A minimum of two months written Notice is required
and a minimum of 6 months must have elapsed.


Periodic Tenancy

Unless an AST is brought to an end at the expiry of the Fixed Period or a new
Tenancy Agreement signed, it will automatically become a Periodic Tenancy.

A Landlord may regain possession of a property in an AST Periodic Tenancy
(provided a minimum 6 months has elapsed) by serving a written Section 21 Notice.
The minimum period would normally be 2 clear calendar months (if rent is paid
monthly) to coincide with the end of the usual rent period.


Inventory & Schedule of Condition

This is a very important document as it forms evidence of the contents and condition
of The Property at the start and end of a Tenancy. As such, it supports any claim the
Landlord may have for any damages caused by a Tenant.

Our Inventories are carried out by third party specialist Inventory Clerks. This is to
ensure accuracy and impartiality. The tenant will check and sign the Inventory at the
start of the Tenancy.


Deposits

Deposits are collected from the Tenant at or before the start of the Tenancy and held
against potential damage caused to The Property, for non-payment of rent and any
loss reasonably incurred by the Landlord under the terms of the Tenancy Agreement.
Deposits are normally equal to one and a half times the monthly rental value.

The Housing Act (2004) stipulates that Deposits must now be insured by (or
deposited with) a Government approved scheme. It states what information the Tenant
must be given concerning the management of their Deposit prior to the start of the
Tenancy. Specific time periods are also set down for the registering and return of the
Deposit.

New View Residential use the Deposit Protection Service (DPS). In the case of Fully
Managed properties, deposits will held by the DPS.

In the case of Let Only properties, unless the landlord has joined and is able to
provide proof of membership of one of the Government approved schemes, the
Deposit will be held by the DPS, allocated to the New View Residential account.

The DPS has it’s own independent arbitration service for disagreements over damages
and the return of a Deposit.




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Where a Landlord has not provided an Inventory & Schedule of Condition and no
other evidence is available, the Law directs the arbitrator to side with the Tenant in
such matters. Hence, the importance of a well prepared Inventory.

New View Residential are bound by the procedures set down by The DPS. These are
available upon request.


Fair Wear and Tear

In assessing the condition of a property at the end of a tenancy it is necessary to allow
for fair wear and tear. This is what would be reasonably expected from occupation of
the property.

A Landlord is not permitted to profit from repairs and maintenance carried out at the
Tenants expense (called betterment). For example, if a 5 year-old chair was damaged
beyond repair by a Tenant and required replacement, it would not be reasonable for
the Tenant to meet the whole cost, as this places the Landlord in an improved position
than at the start of the Tenancy.

Problems with damages can often be overcome by insurance. We require all of our
Tenants to be covered by Contents insurance. In many cases accidental damage to
Landlord’s belongings can be claimed by the Tenant against their insurance.


Mid Term Inspections

These are normally carried out quarterly. This does not include an Inventory check or
a structural survey, but assesses the Property for signs of mistreatment and any
obvious maintenance issues. Attention is paid to carpets, decoration, signs of mould
growth and garden maintenance. A full report will be given to both the Landlord.


Landlords Legal Obligations


1/ Repairs & Maintenance
Q. What are my legal obligations as a landlord?
The Landlord is responsible for repairing the structure and exterior of the property, to
include drains, gutters and external pipework. Internally the Landlord is required to
keep in proper working order the installations for the supply of water, gas, electricity
and sanitation. Also, you are required to keep space heating and installations for
heating water in good repair.

Fitness standards in rented property are now covered by a risk assessment called the
Housing Health & Safety Rating System (HHSRS). If a local authority are concerned
about the standards within a rented property they can carry out this risk assessment
procedure. It includes 29 categories in 4 main areas:




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a/ Physiological Requirements
b/ Psychological Requirements
c/ Protection against infection
d/ Protection against accidents

This covers many common sense areas including trip hazards, hot surfaces, mould
growth, ventilation, crowding, hazardous substances and structural stability.
(The Landlord and Tenant Act 1985 (Section 11)).
(The Housing Act 2004 (Part 1)).


2/ Soft Furnishings

The Landlord must ensure that all furniture and soft furnishing complies with the
regulations. Compliant items will carry the appropriate label or have a receipt giving
proof of the date of purchase/re-upholstery. Any item that does not comply will have
to be removed. Carpets, curtains and mattress covers are exempt from the legislation.
(Fire & Furnishings (Fire) (Safety) Regulations 1988)


3/ Gas Appliances

The Landlord must ensure that any gas appliances and/or gas pipe work in the
property is maintained in a safe condition. All gas installations require checking
annually by a qualified engineer approved by and registered with the Gas Safety
Register.

A written Gas Safety Record must be produced and kept on file. Tenants must be
given a copy of the Record prior to the start of a new tenancy and within 28 days of a
test during an existing tenancy.
(The Gas Safety (Installation & Use) Regulations 1998)


4/ Electrical Safety

The Landlord must ensure that all electrical equipment (both fixed installations such
as wiring and portable items such washing machines) are safe, fit for purpose and are
not a source of danger. Manuals for electrical appliances must be provided to the
Tenants so that they may be aware of their correct and safe operation.

For fixed installations New View Residential require that Landlords provide a current
fixed installation test report carried out by a qualified (NICEIC) electrical engineer.
The length of time before re-test on this report will vary depending upon the age and
type of installation and will be stipulated by the engineer in their report.

Where the Property contains portable appliances (items with plugs) New View
Residential require that a Portable Appliance Test with certification be carried out
annually by a suitably qualified person.




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New View Residential can arrange for both Fixed Installation and Portable Appliance
testing on the Landlord(s) behalf if requested.

Where the Property is Fully Managed, New View Residential will carry out a visual
inspection of plugs and sockets between changes of Tenant where this does not
coincide with an annual inspection.
(Low Voltage Electrical Equipment Regulations 1989)
(The Electrical Equipment (Safety) Regulations 1994)
(Plugs and Sockets etc (Safety) Regulations 1994)


5/ Energy Performance Certificates (EPC)

From October 1988 all let properties require an EPC. New View Residential can
arrange for the preparation of an EPC if required.

An EPC is normally valid for letting purposes for 10 years unless major changes have
been made to the property. The potential applicant must be shown a summary of the
certificate as part of the property particulars prior to entering into any agreement
(ideally before viewing The Property) and be given a copy of the full EPC before
signing a Tenancy Agreement.
(European Directive on the Energy Performance of Buildings – Article 7)


6/ The Right to Free Enjoyment

Tenants are by law entitled to the Right of Free Enjoyment of The Property. This
means that the Landlord and/or Agent may not harass the Tenant and only enter upon
The Property reasonably, such as for a quarterly inspection or to carry out repairs or
maintenance. Even then, the Tenants are entitled to a minimum of 24 hours notice
(emergencies excepted).


Houses in Multiple Occupation (HMO)

An HMO is defined by how a property is used rather than the type of building. The
regulations around HMO’s are complicated.

Broadly speaking where there are three or more occupiers forming two or more
households (see below), a property will be classed as an HMO. This is where:

- the property is not made up of self-contained flats and where the households share
some basic amenities e.g. toilets, bathrooms or cooking facilities.
-it is the occupiers main home
-at least one of the occupiers pays rent

Here a household is defined as people being of the same family. A family includes
married couples, partners in a sexual relationship, blood relatives and step
relationships. Au Pairs, live in nannies etc. can be included in a family unit.



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For example, two couples in a shared house form an HMO, three single student
sharers form an HMO; two unrelated individuals sharing a five bedroom house are not
an HMO.

HMO’s have additional requirements over non-HMO properties. These include higher
safety standards; fire safety equipment must be maintained; electrical installations
must be tested at least every five years; common parts must be safe, well lit,
unobstructed and maintained in good, clean condition. The contact details for the
person responsible for the Property must be clearly displayed in a common area.

Where more than five individuals form an HMO fire escape notices must be clearly
displayed.


Licensed HMO’s

If an HMO has three or more floors (including a two story property with a
commercial premises below) and has five or more occupiers, then the property must
be licensed with the local authority. Larger HMO’s are likely to require full integrated
fire alarm systems, fire doors, emergency lighting and so on.

If you believe your property may fall into the category of an HMO, New View
Residential will be happy to discuss this area with you in more detail.



Questions?

This Guide for Landlords attempts to cover a wide range of topics in a reasonable
level of detail. Naturally, it is not possible to include every aspect of property letting
and management and you are likely to be left with some questions.

Please feel free to contact us to discuss your particular situation.

New View Residential Ltd
9-11 Coldhams Business Park
Norman Way
Cambridge
CB1 3LH

telephone: (01223) 868570
email: mail@newviewresidential.co.uk




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New View Residential Ltd. Company Registration no. 7393234. Registered in England and Wales.
Registered Office: 9-11 Coldhams Business Park, Norman Way, Cambridge CB1 3LH. Telephone (01223) 868570.
Wholly owned by The Windhorse Trust Ltd. (Registered charity no. 1098979).




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