I have a question regarding what would be acceptable information for a planning department to give a Certificate of Lawfulness for a property I am potentially looking to purchase.
Background:
Property in question is the heart of one of the areas where 80-90% of all properties are of class 4 use. As many of you are aware since March 8 2012 there has been a change in the rules relating to HMO’S and planning. Continue reading Certificate of Lawfulness for a HMO
I have conducted a fire risk assessment for one of my properties, a non-licenseable HMO with 4 bedrooms.
The report recommendations includes the following 2 items:
1. As I provide fire extinguishers in the property, the tenants should be trained on how to use them ! Has anybody else heard of this requirement, how can I satisfy this ?
2. The property has an interlinked fire alarm system with control pannel, according to BS5839 Part 1 or Part 6A. The assessment states that such a system should be tested weekly according to the current fire protection guideline. As this is a guidance only, I could test the system less frequently but then in a case of fire I would be responsible in front of the law as to why I did not comply with the guidance. Again, has any body heard of this requirement, are the other HMO landlords testing their fire alarms weekly ?
I would appreciate if other HMO landlords would share from their experience.
Thanks
Cristian
Neil Gammie of BirminghamI’ve been a professional landlord building a portfolio of properties in the Edgbaston area of Birmiingham since 1986.
I handle all aspects of my business except finding/vetting tenants which I leave to a couple of trusted local lettings agents. I try to keep abreast of legislation and the increasingly perverse number of recent court cases which we are all trying to get our heads around.
I rent out a variety of properties and my attitude is not that of landlord – a word which I loathe – and tenant but of somebody supplying a service for which I am paid. My customers tend to stay in my properties and I have few voids. I am a member of NLA and RLA and also company secretary for four freehold companies owning blocks of flats, 3 in Birmingham and 1 in Devon.
Two years ago I suffered major fire damage to a property and was left battered and bruised by the whole restitution process which was an absolute nightmare. I was shafted by my insurance company, the loss adjustor, the company appointed to carry out the refurbishment works and the surveyor who had his own agenda. I learnt a lot. If you are about to make a major claim get in touch with me first on my email address below.
40% of landlords visiting Property118 use Firefox as their favourite browser according to our analytics.
I was quite surprised at this as I’m a massive fan of Google Chrome but only 9.9% of our visitors seem to agree.
In second place was Internet Explorer and to be honest I thought that would come up number one as it was the default for most Windows based computers for several years.
3.8% of our readers are now using iPads and a further 5.7% are using the Safari browser via other devices such as iPhone etc. Continue reading Firefox is landlords favourite browser
Part 2 of 2 written by Bill Loryman
The first reactions from Property Investors hearing about Capital Allowances are that they sound too good to be true and that,”surely my Accountant has identified them for me?”
Well, firstly they have been around since 1878 and are not a tax loop-hole or tax avoidance scheme. If you own a commercial business property, including an HMO or Multilet, you are entitled to claim Capital Allowances for them.
Secondly, the process of valuing the likely tax savings has to be completed by Capital Allowance experts who need to send Surveyors into the property to assess the “plant & machinery” – fixtures and fittings – assets etc. that are in the fabric of the building. They then prepare a typically a ten page report, with photographs, plans and a detailed analysis of all the qualifying assets that will satisfy the HMRC guidelines on submitting Capital Allowance claims.
This is a very specialised tax service that many accountants simply outsource in order to help their clients. A specialist will help you submit a claim, or work with your accountants to work out how much tax and money you can save, either as a tax rebate or off-set over future years.
• You need to be a UK tax payer. The investment property can be owned by a Company or a person. Whether the tax band is 20%, 40% or 50%, the higher rate you pay the greater the tax benefit and savings.
• The minimum value of a property really needs to be £150k but total value of portfolio qualifies. If you are buying this year or last you can qualify for AIA (Annual Investment Allowance) of up to £250,000 which can help make the claim successful and give substantial tax savings.
• Your accountant will claim for the furniture and general repairs but Capital Allowance surveyors look into what makes the building work, so the hidden assets unclaimed in the fabric of the building, items such as heating installation, wiring, lighting, fire alarm systems etc. are all valued using Quantity Surveying rules that confirm to the HMRC guidelines on submitting Capital Allowance claims.
Three of our recent examples are shown below:
| Sussex | Hearts | Norfolk | |
| HMO/Multi Let Purchase Price | £280,000 | £155,000 | £205,000 |
| Capital Allowance Identified | £28,000 | £12.500 | £9,200 |
| Net Tax Saved | £14,500 | £3,500(refund) | £7,680(refund) |
Clearly everyone’s tax situation is different and you will need to discuss preliminary details in order to get an illustration of the likely tax savings such as property address, type of business – Multi-let, HMO, student let, holiday let etc, date of purchase and the price paid plus the value of any improvement work you have carried out.
When you (and your accountant) decide to go ahead an engagement letter to be signed which gives the authority to contact the Land Registry to ensure no previous claims have been made. The property will then be surveyed for qualifying assets and a full report prepared for submission to HMRC.
The whole process typically takes about 10 – 12 weeks and should always involve your accountants. Fees for this service are usually generated out of a small percentage of the claim value on a ‘no claim – no fee’ arrangement.
Bill Loryman is the Managing director of HMO Tax Limited and has 20 years experience in the property world involving franchising, licensing, acquisitions and property development.
If you would like an illustration form of your likely tax savings on your investment property please complete your details below.
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I was a tenant at a property that I recently left. A few issues have come up and I would appreciate any advice people care to give.
The Notice: The landlord knew I would be going as I had let him know before X’mas 2012. The rent for the property is paid up and all the bills have been settled. The rent was due on the 14th of each month and in the final few months I gave my notice on the 1st April, cleared out completely and gave the landlord the keys back on the 27th of April.
However I paid the full rent for the final month so was fully paid up for two weeks past the date I gave for moving out of the property although I had made it clear to the landlord that the additional rent money I gave was to cover any damages and I had stated this on my written notice and in a few conversations I had with the landlord prior to moving out.
I admit to a problem with the gas fire that was my fault and paid the landlord extra money to cover the costs for fixing that item in particular although I don’t believe the cost will be that excessive. The extra money I left should easily cover that item and any other issues he may have.
Since leaving the property the landlord has come up with additional items and I feel that he’s making a grab for more money. The landlord is also now trying to tell me that the extra rent money I paid him will not cover any damages as it’s rent that was due and the only time I should be leaving the house was on the 13th of the month.
Issue 1: My cat had scratched wallpaper in the kitchen near the door frame and there are a couple of patches, say a square foot, either side the door frame that are now affected. The landlord has told me that he doesn’t have matching wallpaper and that the whole kitchen now needs re-papering. An additional point to note, there was no extractor fan in the kitchen and the wallpaper is peeling off the walls near the ceiling due to condensation – when I cooked I always left the door’s and windows open however this didn’t stop the wallpaper from peeling.
Issue 2: There was a bed that came with the property. I asked the landlord to remove it and he told me that I should put in the garage which I did. After I left the property he’s told me that he needs to replace the mattress as its gone moldy and he’s also denying that he told me to put the bed in the garage.
Issue 3: Bathtub – There is a cast iron tub in the bathroom. The enamel had started peeling off under the hot water tap and there is a small patch missing at that position. The landlord has told me he needs to replace the bathtub.
Issue 4: Garden – The landlord has told me that parts of the garden need weeding however I feel that I have left the garden in reasonable condition. I know that he’s going to contact some gardeners and arrange for the work to be done however I think that he may get them to do the whole garden and try to push all the costs on to me.
I had hoped to leave the house and maintain a good relationship with my landlord however since all these issues have come about I feel that he’s trying to take as much of my deposit as possible and I don’t think I want to maintain any contact with him from now on.
I don’t know if he will go for competitive quotes or even if he will get any quotes he can just tell me the cost was £X in a bid to take more money from me.
I would appreciate any advice.
Concerned Tenant
We have a 3 storey Georgian terrace that we let as an 8 bed student property. All the ceilings are old lath an plaster, but in order to meet current standards, we should really board over every ceiling with plasterboard, incurring a massive cost, and also ruining much of the character of the rooms by removing the traditional cornicing. Continue reading Fire sprinkler systems for HMO’s – any thoughts?
Just before the 1st annual check on a newly installed combi boiler my tenant reported a smell of gas when she showered.
At first we thought it was incomplete combustion and a leaky flue, which is exposed in the bathroom ceiling. On opening up, the inlet duct was not fully on the gas valve seating. But the leak persisted. Continue reading Problem with a new Combiboiler
Imagine my horror whilst watching the local news on Sunday evening, seeing a row of 4 terraced houses in Norwich on fire and the end one being one of my rental properties!
I would be keen to see if other landlords have experienced a fire and what happened in the following weeks.
Luckily my tenant was away and no-one was injured. The fire started in the next door neighbours house and spread to our roof. For now the property is uninhabitable and our tenant is staying with some friends.
I am waiting for a loss adjustor to visit the house. For now however I am feeling concerned that the house is exposed to the elements and wish to prevent further damage being done. As you look up from the upstairs bedroom, the sky is visible and the weather isn’t great right now.
Although we are covered for fire damage, I am not sure what we can claim for, such as cleaning, redecorating and don’t wish to be out of pocket.
I have not had to deal with fire damage before, has anyone else dealt with fire and can give me any advice on what to expect?
As it stands at the moment, the insurance company are aware and have appointed a loss adjustor who has recommended a structural survey of the property.
Whilst the actual fire was contained within the roof, there is water damage in the 2 upstairs bedrooms. Half the roof is missing over the front and back of the house and the loss adjustor thinks we will need a new roof, ceilings taken down and asbestos tested, new carpets (which I discovered are NOT covered by buildings insurance!).
Our tenant is deciding what to do, whether to find temporary accommodation or start a fresh, I know we can claim for loss of rent, but not sure for how long, is it until we get a new tenant or when the work is completed?
We have also been told that we need to take action to protect the property as the front door was smashed to allow the fire fighters entrance, which for now this is boarded up and padlocked. I have ordered a new door, but don’t know when the insurance company will reimburse us for that.
Also, we need to have a tarpaulin put over the house, but due to structural concerns we need to have scaffolding erected first, again, it is another cost incurred upfront by us.
Due to the fire being spread across 4 terraces, it is not straight forward to just have our roof fixed without the others being done too.
Are we going to end up out of pocket because of the fire? As yet our insurance company have not been that helpful.
The latest figures from letting agents suggest that the UK still has a healthy appetite for rental properties. According to The Association of Residential Lettings Agents (ARLA) over half (54.8 per cent) its members reported that they had more tenants on their books than available properties to rent. With demand so high, those seeking rental properties for the first time may feel rushed into a decision without fully understanding the legal obligations or what to expect from the landlord so ARLA has today issued advice on what you need to do or know beforehand embarking on a tenancy.
Ian Potter, Managing Director, ARLA said: “Many people find the prospect of renting a home daunting, whatever their age or experience. Particularly in today’s competitive market prospective tenants may rush into making a decision about a property for fear of losing out.
“But tenants should remember that rules and procedures vary depending on the type of tenancy. Researching their obligations and fully understanding the legal aspects of being a tenant, even before they start searching for a property to rent, is vital.”
ARLA has the following advice to help those unfamiliar with renting make their experience as smooth and trouble-free as possible:
1. Lettings is an unregulated industry: The rental industry is not subject to any central Government legislation, meaning that anyone can set up as a letting agent or landlord. For peace of mind, do your research and seek advice from a letting agent affiliated to a professional organisation like ARLA. All ARLA agents must adhere to a strict code of conduct, as well as offering client money protection and redress schemes, which help protect consumers if things go wrong.
2. Your deposit should be secure: Typical deposits required can range from anywhere between four to six weeks’ rent. This deposit should be paid by your landlord or agent into one of three government-approved tenancy deposit schemes. It is a legal requirement that the landlord or lettings agent protects the deposit in this way. Tenants can find out more at: www.direct.gov.uk.
3. A professional inventory can help protect you: A detailed inventory compiled at the start of the tenancy assists in assessing any costs that may be deducted from your deposit at the end of your contract. Be present when the inventory is being done; if that’s not possible, insist on seeing a copy to ensure you agree with what has been noted. If there are photographs make sure they are good quality and reflect accurately any items captured. All documents should be signed and agreed by both landlord and tenant.
4. There are different kinds of tenancy agreement: Many shared tenancies contain a joint liability clause and this means you are responsible for the actions of your co-tenants for the duration of the tenancy. This includes covering their share of the rent if they were to unexpectedly move out. Before you enter such an agreement consider how well you know your sharers. And if you are asked for a guarantor when sharing, then make sure that they understand that they are guaranteeing all your responsibilities contained in the tenancy agreement.
5. Meeting safety standards: Landlords have a legal obligation to ensure gas safety is checked annually. Make sure you have seen the gas safety certificate and instructions for all electrical items. Also check to see if all soft furnishings comply with the Furniture and Furnishings (Fire) Safety Regulations 1988 and are fire safety compliant. Look for the fire safety label on all furnishings.
6. Energy performance certificates: Energy Performance Certificates should be given to you by your landlord or agent before you move into a new property. This will show you how energy efficient a property is.
7. Carrying out repairs: Advise your landlord or managing agent when things need fixing to avoid bigger problems in the future. Landlords are responsible for most repairs to the exterior or structure of a property including problems with the roof, chimney, walls, guttering and drains, as well as electrical, heating, hot water and sanitary installations. For minor repairs and maintenance the tenant is usually responsible, but any changes – like re-decorating – should be pre-approved by your landlord.
8. Pay bills: Other than paying the rent on time, tenants need to ensure they are paying bills which are not included in the tenancy agreement. In most cases these include bills for council tax, utilities, TV licence, Internet and telephone charges. Tenants must also remember to check their tenancy agreement as some landlords will forbid any change to utilities supplier.
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