Newbie Landlord looking for helpful tips and general advice and the basics

by Readers Question

7:26 AM, 10th April 2017
About 2 years ago

Newbie Landlord looking for helpful tips and general advice and the basics

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Newbie Landlord looking for helpful tips and general advice and the basics

I am a newbie landlord trying to get some basic understanding and thought I would post for some help. I have a few manuals some incredibly long to read at some point, but I have a tenant moving in soon so just wanted to quickly pick up any tips and advice from those that are experienced in these matters.

My questions are as follows:

1. Assured Short Hold Tenancy Agreement – I am planning on going for a 6 month AST. I am not sure what happens at the end, do I need to write another one out if the same tenant stays on? I want to stay strictly within the law at all times and don’t want anything or mistakes to invalidate my insurance so would like to know what landlords generally do?

2. Notice to quit should it be necessary, I believe its 2 months with a 6 month AST? Is this correct? What notice does the tenant need to give?

3. The actual AST. I am going to use the one I found on .gov.uk website because I like the explanation notes throughout it for both the landlord and tenant. I have had a skim read of this but could not see anywhere to add your own ‘house rules’. Can these be added, or do we need to mention an appendix and add them in there? What tips and advice can everyone give regarding this? I know legally the tenant has the right to ‘quiet enjoyment’ but what exactly does this mean from a legal perspective. I just want to clearly state within the tenancy agreement things like making sure the flat is properly ventilated (I think that is referred to in the one I have downloaded), no smoking policy, no pets, no wild parties (lol) and anything else I think might be a problem. Can we just list our do’s and don’ts or does any of these put us in danger of making the AST not legally binding, I don’t want to do something and then find my AST would not stand up in a court of law because I did this or that, so I am really looking for the idiots guide to getting it right and staying on the right side of the law. Obviously I don’t want to be paying legal fees either before or after, hence I am asking for those experienced landlords for the benefit of their knowledge.

4. I am aware of the Rent to Rent legal obligation so will be drafting something up for the tenant to sign and taking a photo of their passport.

5. I am also aware of the Rent Deposit Scheme and will be doing this within the 30 days as I have already had this, does anyone have any advice on this not sure whether to pay the small fee and retain it or not? Just thinking its best to have it if you had any disputes at the end of the tenancy what do people think?

6. I have already used a third party and had the tenant referenced and credit checked and all looks good, am I missing anything?

Many thanks all.

Tony



Comments

Neil Patterson

7:35 AM, 10th April 2017
About 2 years ago

Hi Tony,

Tenancy law is and can be incredibly complex even for experienced landlord and the most important thing is you don't know what you don't know especially as a Newbie.

I think it would be wrong of me to try and answer your questions and give you the impression that is it. You only have to read the years of articles on this website to see what a minefield being a landlord is.

I would 100% recommend you use a great letting agent. We have our own, but you may know one yourself. Pease see LettingSupermarket >> Full Management from 5% of rent via LettingSupermarket.com

Please also see an article and do an article search on the deregulation act >> https://www.property118.com/what-does-the-deregulation-act-2015-mean-for-landlords/87201/
and >> https://www.property118.com/?s=deregulation+act&submit=

Also Tessa Shepperson's Landlord Law >> https://www.property118.com/?s=tessa+shepperson&submit=

And our Lettings Tab >> https://www.property118.com/letting/

Dave Driver

7:59 AM, 11th April 2017
About 2 years ago

Best advice I can give is to join the NLA or the RLA.

Heather G.

11:34 AM, 11th April 2017
About 2 years ago

Hi Tony,
I'm new too and have just let our first property. I know there is an abundance of information available for free and I would advise you to research as much as you can (checklists available from Upad, Kate Faulkner, easyPropertis to name a few). Off the top of my head I would suggest the following:
- Read your mortgage and insurance T&Cs carefully, including the small print. I found a number of clauses in mine which I had to incorporate into the AST, including what needs to be done if they leave the property empty for more than 28 consecutive days (including having the thermostat on Frost Stat in the winter) and the fact that I can't rent to people on benefits.
- Read up on your council's website - mine states that rubbish must be disposed of in a prescribed way, it's a smoke free zone, subletting/HMO & ASB clauses
- Have a think about getting Legal Expenses and Rent Guarantee Insurance (about £100), peace of mind when you're starting out I think.
- Create a folder with a contents page for the house. Include everything you need, and anything else you can think of. You must include the How to Rent booklet, manuals for ALL appliances you provide, EPC Cert, Gas Cert, electrical certs, deposit scheme prescribed info and contact info. I also included information on condensation & damp management, Legionnaires info, waste & recycling info, contact info for utility suppliers, a Tenant's Contact Details Form, electrical and boiler tutorial, ASB Agreement, pre-printed re-address labels for any post for us and the inventory & AST. I showed the tenants the manual and its contents on check-in and got them to sign that they confirm receipt of everything, so there can be no dispute at the end of the tenancy.
- In the AST I also included: No extra keys to be cut for anyone not on the AST and that we hold a set for emergencies, email can be used for service of notices etc, when the property will be inspected, our right to review the rent at the end of the 12 months, that we don't replace items supplied if broken or damaged by misuse, tenant must give vacant possession and return all keys at the end of the tenancy.
- I would highly recommend you get an inventory done just before the start of the tenancy.
- All clauses must be fair to be legal. If you say "No pets" I suggest it also says "without written permission which will not be unreasonably withheld" and if they want pets, add a Pet Policy as an addendum and take additional deposit (which must also be registered). (Our tenants announced on move-in day they have a dog but didn't want to tell us incase we declined them - be flexible).
- If you're holding personal info about them which is identifiable, you need to register with the Information Commissioner.
Happy to help in any way I can so please feel free to ask.
Good luck!
Heather.

CARIDON LANDLORD SOLUTIONS

12:32 PM, 11th April 2017
About 2 years ago

Dear Tony,

First and foremost WELCOME to the landlord world!!!!!

Feel free to give me a call for free advice on AST, Notices and Deposits.

Old Mrs Landlord

12:58 PM, 11th April 2017
About 2 years ago

Reply to the comment left by "Heather G." at "11/04/2017 - 11:34":

Regarding cutting of additional keys, not only will you find this is not a legally enforcible condition but it may surprise you to learn that tenants have a right to change the locks and don't have to give the landlord a set of keys. (You don't have to tell them this of course.) It's just one more aspect of letting legislation rigged in favour of tenants I'm afraid.

Kate Mellor

14:24 PM, 11th April 2017
About 2 years ago

Hi Tony,
Lots of fabulous advice already given. As mentioned thoroughly read the Deregulation Act conditions to ensure you are up on all the latest requirements. Get PROOF that you've met all the requirements in the form of a signed declaration listing everything provided on sign up.

I include a statement on my Proof of Receipt declaration about the smoke alarms, stating that batteries were changed on sign up and alarms tested in the presence of the tenant, & that the tenant understands that they will be responsible for testing the alarms at least annually and replacing batteries as necessary and notifying us promptly of any faults identified with them. This covers you that it has been agreed who is responsible for what with regard to this important safety feature.

I'd also strongly recommend joining a Landlord org such as RLA or NLA for a small annual fee, you'll get access to lots of forms, docs & info, plus telephone advice & reduced rates on training courses.

Regarding you first question, at the end of the six month term specified in your AST the tenancy will automatically continue on the same terms until ended officially. The tenancy will then either become a Statutory Period Tenancy (usually monthly depending on how often rent is due), or a Contractual Period Tenancy. The difference being the wording of your AST. If your AST stipulates that it will become a monthly periodic tenancy after the 6 months then it is Contractual and if not then it is Statutory. This is not a new tenancy unless a new tenancy agreement is signed.

I don't choose to automatically renew tenancy agreements after each fixed term myself as I would prefer to have the option of using a section 21 notice should I need to repossess the property. If a tenant is in a fixed term and stops paying rent your only options are to wait until you are in the final two months of the fixed term to issue a section 21 notice or to issue a section 8 notice. A section 8 notice requires an appearance in court and is far less certain to be granted than a section 21 notice...

In answer to your second question in short, a landlord must give at least 2 months and a tenant one month, but this is a complex area which has many provisos attached, so you will need to thoroughly research the requirements. I would recommend a visit to Landlordzone.co.uk which gives access to lots of detailed instructions on this and other important areas, including free forms, checklists and documents you would be advised to use for your tenancies (or to use as a starting point for creating your own).

Regarding the deposit scheme, I use the DPS custodial scheme. I prefer to keep the money separate from my own funds and the bonus is it is free to use. You will find that whichever scheme you use, custodial or insured you do not have the ultimate say in whether your claim for repairs etc is allowed and you will have to abide by the decisions of the arbitrators or the courts in the event of a dispute.

You will need to ensure you have dated photographic evidence of the property condition on the date the tenancy commences, along with a detailed and signed inventory in order to claim for any damage caused by the tenant. PROOF is everything. You need to be able to clearly prove that the disrepair was not evident on commencement of the tenancy, photographic evidence of the damage, plus proof of the age and cost for example of the original carpet to be replaced along with quotes for the remedial work. (You can only claim for a portion of the replacement cost of a carpet, depending on its age and expected lifespan).

If the tenant does not agree to your claim for deductions and you cannot reach an agreement it will either go to arbitration, where you must provide all your evidence, or you will need to make a claim in court, which again will rely on the quality of your evidence.

As you can probably gather the bulk of the important work is done before the tenancy commences and involves not only ticking all the required boxes, but being able to PROVE that you've ticked them up front, so that in the event that things go south you are able to rely on a valid section 21 notice (also referred to as an Accelerated Possession Order) to regain your property at the earliest possible time.

Good luck with your new investment!

Graham Bowcock

13:06 PM, 12th April 2017
About 2 years ago

Dear Tony

Firstly, welcome to the world of property and being a landlord. This can be a hugely satisfying (and rewarding) experience. You will need to learn not to cry when things go wrong and accept you are entering a business environment. Most failures I have seen are from those seeking to make easy money from minimal input - boosted by the media of the 1990s!

However, with that in mind I do wonder why you are not using a local agent to give you this advice. You will not doubt be investing some personal money (possibly with a mortgage) and a total investment of at least tens of thousands of pounds, if not well into six figures. Whilst it is a credit to others that have written with advice for you there is always the danger that something is missed due to your particular circumstances, or those of your property. For example you have not said if you are in England, Scotland or Wales; the laws are different in each country. Does your mortgage lender have any particular requirements in the loan agreement? Is your ownership leasehold or freehold? Do you own personally or thought a corporate structure?

In comparison with making mistakes the fees of a good letting agent will outweigh any problems you may have by going it alone. Choose somebody you are comfortable with and can talk to, find out if they really know their stuff. I am tempted to say that in my experience problems are very rare; however, the key point is my experience. I have been involved in the industry as a landlord and as an agent and seem to have the balance right between commerciality and legal compliance. The most reported cases of problems seem to be landlords falling into the traps!

I am sure that you can do it yourself, but maybe not for the first one.

Regards

Graham

Kate Mellor

18:33 PM, 12th April 2017
About 2 years ago

If you do decide to use an agent, look for one with client money protection and check they are a member of a redress scheme. They all should be, but check everything for yourself.

Also, do a Company search on the Companies House Beta site and find out the names of the Directors, then search the Directors names and check they haven't got a string of former letting agencies to their name. If they do, google the company names and see if they've had a bad reputation. You have to do your due diligence if you're going to trust them with yours and your tenants hard earned money. It won't take long, but it'll give you peace of mind. Perhaps others who've got experience using agents, or who are agents could better advise what the main features are to look for in a good agent.

Michael Barnes

19:01 PM, 12th April 2017
About 2 years ago

My points (numbers do not reflect yours).

1. when I started I bought a couple of hours of a letting agent's time to go through what I thought I knew and to get him to tell me what I didn't know. If you do this, be prepared with printed notes to update so that you don't forget anything. He also gave me sample lettings agreement and inventory.

2. Get several lettings agreements and pick out the bits you like from each - no one has a monopoly on good ideas. i do not like the wording on rent increases in the Government agreement. They seem to say that if you do not increase the rent on an anniversary, then you cannot increase it until the next anniversary; there are probably other subtle things in there too.

3 if you have covenants in your lease or freehold, then put them in an appendix and reference it. You will then know that these are. Similarly any other sources of restrictions such as insurance or mortgage - a separate appendix for each.

4. You cannot stop your tenant from doing most things. The clauses you write will indicate the expected behaviour and hopefully induce that behaviour. You will not get a section 8 order for most breaches, but they will allow you to claim from the deposit for any damage caused by breach.

5 I think that tenant clauses are expansions of four requirements:
a) pay the rent
b) look after/don't damage the property
c) don't annoy the neighbours
d) don't be aggressive to landlord or his agents.

6. Spend at least 20 hours reading up on and understanding the law and your responsibilities.
When I started I used the Which Guide to Renting and Letting, but I do not know what is available now: go to a good bookshop (like waterstones) and buy at least one book.

7. Any clause you have on tenant's notice has no effect once the tenancy becomes Statutory Periodic: it becomes "not less than 1 month, ending at the end of a rent-payment period".

8. It is your property but your tenant's home; respect that.

9. Finally, tenants are not the enemy (until proven otherwise on an individual basis); the way you treat them will reflect on how they treat your property.

Chris Daniel

19:53 PM, 12th April 2017
About 2 years ago

Reply to the comment left by "Michael Barnes" at "12/04/2017 - 19:01":

I think being a Landlord,operating a 6 figure business and providing a service to members of the public should be treated like driving a car, - you should be qualified.
there are so many pieces of eve increasing legislation that a newbie landlord is like a lamb walking into a wolf's den.
Do a 1 day Landlord Foundation course - that will give you a basic understanding, and a good starting point to learn more.

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