Monthly Archives: March 2011

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29Mar 2011

Landlord Property Visits: Good Management or Just Being Nosey?

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By Craig Smith

One way of monitoring the condition of a let property is to visit on a regular basis for a property visit.  This can be an ideal time to discuss any issues that may have arisen or any future plans, but are the visits to keep the property in good condition or just to have a look at what the Tenant is doing?

Always Arrange an Appointment

Any visits by the Landlord or Landlord’s agent should be agreed with the Tenant. Best practice states that agreement should be in writing although in some circumstances, a telephone conversation may be more personal. Whether it is the Landlord or a contractor to carry out repairs, permission should always be sought from the Tenant in order to gain access to the property, even if it is exterior work!

Shouldn’t This Have a Battery?!

The visits should ONLY be to monitor the condition of the property and, if needed, give advice to the Tenant as to how to best look after the property to avoid any damage. For example, maybe mould is developing around a window, you may advise the Tenant to clean it off and keep the room ventilated.

Also, the Landlord should make reasonable steps to ensure that fixtures and appliances are still in working order, such as smoke alarms. The Tenant should always ensure that any battery is working and should test the alarm regularly but if the Landlord tests it themselves on a visit, best advice can be given to the Tenant.

How Often Should I Visit?

There is no real right or wrong answer as to how often a Landlord should visit their rental property, although trying to visit too often could make a Tenant feel harassed. Castle Estates visit fully managed properties on a Landlords behalf around every 3 months or so. This is to keep an eye on any parts of the property that may deteriorate such as bath & sink seals or window frames becoming rotten.  By reporting back to our Landlords, we can carry out preventative maintenance or advise the Tenants on how best to avoid any costs.

But the Dishes Haven’t Been Washed!

Remember, property visits are only to assess the condition of the property and not how a Tenant chooses to live. Everybody lives differently so some people may be tidier than others but whether belongings are left tidy or not is only a matter of opinion. The best way of looking at the difference is that there may be unwashed saucepans left on the kitchen worktop which is fine, but when a hot saucepan has burnt into the worktop, there should be correspondence between the Landlord/Agent and Tenant as this could help to avoid any disputes at the end of a tenancy.

29Mar 2011

Current Property News: Letting Agent Kitemark – Yes Please!

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By Steve Roulstone

The National Approved Lettings Scheme (NALS) are to champion a new Kite mark for Letting Agents with compliant CMP (Client Money Protection) and as the owner of the Castle Estates brand, I would like to throw my weight totally behind the scheme and the principals that the scheme promotes. I have long stated through these pages that I firmly believe in and openly support any move towards confirming professionalism in our industry and can only congratulate those behind this move.

Public will benefit.

Every Agent should embrace this scheme, which is free for those who already have CMP. It is now down to every qualifying Agent to sell the system and advise our Landlords that we both embrace it and what the scheme means. In simple terms, every Agent who carries this Kite mark will by definition, protect and insure the Landlords money. It is time for us not to just sell the advantages but also make sure that both our existing and potential Landlords are aware of the implications of NOT being able to display the Kite Mark. It is time we stood loud and proud and waved the flag of Professionalism as often as possible!

Government take note.

But to me this is also an opportunity to say to the Government that as an Industry we believe they made the wrong decision in not following through with registration of Agents as recommended by the Rugg review of 2009. This is another reason why I champion the decision, if the Government will not support us as an Industry through legislation, then as an Industry we must legislate ourselves. I am not suggesting we do not need the Government, because as the report (link above) states, this is not law, but hopefully, sufficient Agents will adopt this opportunity that the Government has to take note and will in time back us with the type of legislation that will once and for all confirm our Industry as Professional.

Why do we need legislation?

As an Industry, like so many others in difficult times, we are offering our services at reduced rates through Competition. I firmly believe that no matter what price we offer our service, they should always be accompanied by the Guarantees offered by CMP and professional membership to bodies such as NALS and ARLA. Such membership does have its costs, which can be significant and along with having qualified staff to carry out the full range of services that a Professional Letting Agency should offer we can quite often find ourselves competing at a disadvantage to Companies that risk the implications of operating without Guarantees for their clients and at a reduced level of service.

Legislation equals Professionalism.

Unfortunately the papers are still full of Offices that have collapsed because of discrepancies in Client accounts (monies held). Confirming the continued need for legislation, especially at a time when so many have been attracted to what is unusually at present, a growing market. Further proof of this is the Financial Increase we are currently paying for continued CMP cover. An increase which comes about purely because of claims made against the scheme. In summary, this Industry is doing something positive to combat the difference to services available, but the Government can make it happen through Law. The Kite Mark is therefore very welcome, but legislation is still needed and as soon as possible please, in the meantime we can show our commitment by joining and letting the public know, why and what difference professional Agents make to this growing industry.

25Mar 2011

Current Property News: Landlord specialist Insurance must be given strong consideration.

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By Steve Roulstone

It is time once again to stress the importance of Landlords Insurance in the rental market, as we approach another year of difficulties in the workplace. This at a time when record numbers of properties are coming to our market sector and in many cases the demand for rental property is outstripping the supply, the risks MUST be understood by Landlords and the added security of such Insurance Policies as far as I am concerned are the minimum requirement for Landlords, especially those who are renting property for the first time.

Nobody can be secure.

I am not alone in promoting the values of such Insurance and the common sense reasoning is there for all to see. With a policy that protects both the rent and covers the costs of evicting a Tenant, at a time when redundancies are growing (This BBC News link will confirm) Letting Agents should be suggesting that all Landlords take such a policy as a matter of course as no Letting Agent can confirm that the Tenant that they source for the property will not be one of those who may suffer this fate themselves.

Solutions do exist.

 

Of course, any professional Agency will have their tried and tested systems to show how arrears are dealt with and dependent upon the situation surrounding the Tenant (who will always be professionally referenced) could negotiate the surrender of the property on the Landlords behalf and of course with the Landlords approval. But with the best will in the world, and with the best of intentions, no Agent can either stop problems occurring or be able to foresee the manner in which Tenants may react to bad news.

Cost is not prohibitive.

 

With six month’s rent and legal expenses covered for as little as £100.00 in some cases, and as a Landlord myself, I can see no reason why this peace of mind policy should not be taken, but it is not just new Landlords that should take advantage of the policy, I believe all Landlords should consider doing so no matter how long they have rented their property. This cost when considered against the risk, whilst proving that the risk being covered is not a common problem (No insurance that covers a cost risk of several thousand pounds if claimed upon on a regular basis could still be available at such a low premium) is at such a low cost that it really should be taken against every property let, because when a Tenant neither pays or moves on it is not only the fact that it is such a costly process to the individual Landlord against the property concerned, I have also witnessed just how upsetting and time consuming it can be to the owner.   

Peace of mind.

 

It is the comfort factor alone, that income and legal expenses are covered that gives Landlords this feeling that at least they do not need to worry as professionals deal with the situation on their behalf. Instead of having to find a solicitor who not only understands property law (Not as common as you would think in the High Street) but have to be involved at every stage of the process themselves in the decision making, the policy ensures that professionals take all of these decisions on your behalf, as they ensure the matter is dealt with as swiftly as possible, simply because they are the ones paying if the matter is not dealt with in this manner, so yes I advice taking out this peace of mind insurance, perhaps the question should not be why, but rather why not?

23Mar 2011

Avoiding Deposit Disputes: A Good Inventory is Key!

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By Craig Smith

When a tenancy comes to an end, there will often be some work needed to return the property to its original condition. Although it is not always needed, the most common costs from a deposit include cleaning, gardening and rent arrears.

Start the Tenancy Properly

It is not always necessary, best practice is to have a written tenancy agreement in place for any tenancy. Along with the tenancy agreement, to avoid any disputes at the end of the tenancy, should be an inventory. A written inventory should always state any fixtures and fittings but a good inventory will also state its condition.

You may think that an unfurnished property may not need an inventory, a term we hear quite often is ‘… but there’s nothing in there.’ Fair enough, there may be no furniture such as sofas, beds and tables but don’t forget that walls are still wallpapered/painted, carpets should be left clean and kitchens/bathrooms left in good condition.

Keep the Inventory up to Date

A number of changes can be made at a property, particularly during longer tenancies, so the inventory should be amended to reflect this. This is particularly important if a tenant has asked permission to redecorate or replace items in the property along with any documentation to support any permissions granted. For example, if the tenant wanted to repaint a room and the Landlord agreed subject to the property being returned to its original colour upon the tenant vacating.

A Good Move Out Report

Not only should an inventory be taken at the start of the tenancy and agreed by all parties, a good move out report should be taken in order for any comparisons to be made from start to end of tenancy. If an agreement cannot be reached regarding any costs, the dispute would either go to dispute resolution (if registered with a deposit scheme) or even go to court. This is where a good inventory and move out report will be crucial to any decision made by the adjudicating team.

Protect Yourselves

An inventory will not just protect the Landlord for any damages but also the tenant to prevent any unfair charges at the end of a tenancy. Don’t forget that the inventory should always state the condition of items at the property and should contain as much description as possible to be relied upon. 

21Mar 2011

Property Landlord advice: Utility Warehouse charges unfair on Landlords.

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By Steve Roulstone

I had a very upsetting and disturbing situation develop last week on a house of mine that is occupied by Tenants and has been since I moved out last December. The disturbing matter, was that I received what can best be described as a mixture between a debt letter and a threatening letter advising that my account with Utility Warehouse was overdue by some £430.00 and that if I did not take IMMIEDIATE ACTION or worse still IGNORED THIS LETTER charges could rise to over £800.00

First reaction.

Now I do not know about you, but if somebody sends me a debt letter, for no reason what so ever, it does not make me very happy – what transpired when I phoned Utility Warehouse, for it appears to have been their debt collecting agency as I was internally transferred without any delay, made me even angrier!

The facts in this case.

What had actually happened was that we had advised UW that we were moving gave them our forwarding address and subsequently paid the final invoice and closed our account, something that was easy to confirm, as the account number on the stated debt letter was different than the one on our old invoices for this same address. The new Tenants had also been in touch, but they (UW) did not approve of the paperwork sent to confirm the Tenancy and instead of trying anything else they moved straight to debt recovery letter.

 Debt has to be recovered – does it not?

The problem with this debt letter was that they immediately opened another account in my name (as Landlord) and sent the debt letter to us! Now, I know that this could never stand up in court, but I just wonder how many people are not aware? It is a fact that no debt for services amassed by one person can be the responsibility of others, owners or not. No, what UW did here was take the easy way out and send a letter to somebody to get a reaction. Well I have news for you UW it worked!

My advice.

 What I am guessing they did not expect, was that the Landlord in this case would then put this absurd situation in writing and advise all Landlords NOT to have UW as their provider. It is a fact that the Tenant (A Company) as somebody that I have dealt with professionally for several years had no intention of staying with UW and had advised them of this fact, not that UW then made contact back with the Tenant to try and address the issue direct with the person responsible for the bills! Oh no, instead they opened an account in my name without even speaking with me. Now, let’s just look at that again.

Contradiction the name of the game.

 So because they were unhappy with paperwork sent by the people who were generating the invoices, UW would not accept them for a new account. Not that they did not open one in their name, rather that they changed the name when they decided the information was not complete. Now it is what they did next that is, in my opinion, a contradiction of what appear to be their own rules!  So rather than contact the Tenant and sort it out, they opened the account in my name, even though I had not asked for one and they had received no paperwork which they could approve or otherwise!! So it seems that what was not acceptable for the correct person did not matter for the wrong person!

Soft target!

And this is the rub for me, just because we made it known where we live and what we were doing with the property, UW decided to send us the invoice for no other reason than because we were there and available. This is treating Landlords with disrespect in my book and I get fed up of being treated as second class citizens where the rental market is concerned. (I did ask them to investigate and call me back, but their offices only receive incoming calls! Says it all really) We all know what our responsibilities are and we all know this would not happen if the property had been sold! UW would not have sent the invoice to the original owner and yet we are just as liable (as in not liable at all) as Landlords or as past owners. Think again UW treat us all with equal respect and put more effort in too sorting out problems rather than shooting at soft targets!

 

 

 

 

16Mar 2011

Property Landlord advice: Block Management and Letting Agents (Part 2)

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By Steve Roulstone

There are several areas where having somebody who is qualified to understand the implications of renting leasehold property managing the site is to the advantage of the other Leaseholders and the running of the site (Block Management Company) in general. One of these is the need to ensure that any secondary agreement offered to a Tenant by a Leaseholder carries the requirements of the original lease within it, to ensure many basic stipulations of the site can be upheld.

Upholding the rules          

 

Without such inclusions, (which can be dealt with reasonably easily by anybody who understands the implications) such basic site rules as ‘No Caravans’ or ‘No Commercial Vehicles’ cannot be enforced as the agreement of the lease is with the leaseholder, not their Tenant The Tenant is only answerable to his legal agreement and if the clauses are not included, then the original Leaseholder in allowing the Tenant to break the lease and is the person therefore answerable to the Management Committee.

Ignorance is no excuse.

 

There is no way around this as I have found in my own experience, indeed it was only because one Tenant who parked a caravan on a site we Manage was very understanding, that we managed to have the rule enforced. The Leaseholder and therefore Landlord’s only excuse was lack of knowledge, because his Agent had not taken the time to check, which of course must be the situation up and down the country. But there are many clauses which can fall fowl of this problem, such as pets and of course the biggest problem of all, the permission to sub let in the first place.

Permission to rent.

 

Permission cannot be unreasonably withheld of course for any matter, but if the Leaseholders who live on the site as well as the Freeholder (if not self managed) who’s lease we are discussing here, did not intend the property to be available for rent, then by having a Letting Agent acting as block Managing Agent, whether acting for the Freeholder or the Block management Company (Residents) it is probably in the best interest of all concerned that the rule can be upheld.

Check before signing.

 

So the golden rule is to check before any sub-let is agreed and yet in all of my time as a Letting Agent who operates as a Block Managing Agent as well, I have never once received a phone call to request confirmation of the contents of the Lease or indeed ask if Permission is given on site, from either other agents or Landlords running their own Management. It begs the question just how many ticking time bombs exist out their?

15Mar 2011

Current Property News: Rental mortgage barrier not excusable.

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By Steve Roulstone

It was my misfortune to come across this very situation myself at the end of last year, when I rented my home out, not because I could not sell, but because I had an opportunity which made very good sense to me as a house owner. It seems to be the house owner piece of that statement that the mortgage companies are ignoring, for one aspect of my situation did not make sense any way that I look at the circumstances.

Confirmation I am not alone.

A recent report in Property drum (An excellent monthly magazine which I wholeheartedly endorse) confirms that this practise is still happening and for the same reasons! It seems that some mortgage companies are just taking the opportunity to make more money and others are just downright rejecting the possibility without giving the circumstances any consideration at all. It is the situation where the amount of risk to the mortgagor is low that gives me the most concern. In my case, I only owed at a most conservative valuation no more than 20% of the property value. In the reported case this figure was 30%.

Where’s the risk?

I am unable to confirm in the reported case, but in mine the return was twice the mortgage that I was due to pay at that time and yet the answer I received confirmed that it was not a matter of any circumstances fitting the bill, rather that they were unprepared to consider any rental situation at all. In the reported case it was that the owner (Look up the meaning of the word!) was charged 1% for the privilege, or take out a new buy to let Mortgage, which would of course result in more fees being paid. I can at least understand that, but why just say no, especially when we still had to go through the application system?

No understanding of the market?

It could just be that they do not understand what is happening out in the real world, or just that decisions have been made with no consideration to the market that they operate in, but isn’t that no better than giving mortgages and therefore money with such ease that was the cause of the problems we are living through in the first place? It does not sound right does it? But I would love some other explanation that did make sense because at present, the rental market is growing year on year, we have a shortage of housing for the number of Tenants approaching the market and for the first time in history, the private rental sector should overtake the public, this year.

No excuses that make sense.

The reasons listed above are not alone, indeed other reasons are given and can be found through a little research, but none of the reasons make sense to what is actually happening on the high street and in housing estates up and down the Country. This includes the statement that mortgage companies are ensuring the mortgagee can afford the re-payments. Excuse me for stating the obvious, but how can generating more income from the property put the mortgage at risk? Surely all such matters can be assessed using the standard application methods?

Stand alone.

In my humble little way, I just ask that Companies make decisions because they make sense are considered and have the best interest of us all at the heart of the process. So please stop making mass decisions when it seems that they are not needed that do exactly the opposite and cause upset to people’s lives which are hard enough at the moment, especially using excuses that just do not hold water!

11Mar 2011

Property Insurance: Is it Necessary?

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By Craig Smith

These days, there seems to be an insurance package for just about anything. Is it possible to have too little, or even too much insurance?

Advice for Tenants: Accidental Damage

Insurance isn’t just something for Landlords to consider, Tenants can also take out protection against damage to the Landlords goods. Whilst this might not seem very relevant renting an unfurnished property, don’t forget that the carpets, curtains and any other fixings still belong to the Landlord and are classed as their goods. It only takes the click of a finger to spill something over the carpet and the cost of replacement could be very costly. Insurance can be taken for accidental damage where Tenants would only need to pay the excess.

Landlord Advice

The obvious insurance that springs to mind for Landlords is buildings & contents. In the event of a major fire of flood, for instance, a homeowner could be left with nothing but an unsafe, uninhabitable pile of bricks. It is also important to make sure the goods are valued correctly, there isn’t much point in having insurance to cover £10,000 of items if they are actually worth £15,000!

Rent Guarantee Insurance

Landlords can also take out insurance to protect themselves against loss of rent. This might not seem necessary with a good, steady tenant but what happens if the tenant suddenly finds themselves out of work? With no money coming in, they would have no way of paying the rent. And, although there may be a deposit held, this may not be enough to cover a number of months rent owing.

What can Castle Estates do?

Castle Estates work in association with an independent insurance brokers who can provide quote for the above services. More information is available on our website or by contacting us directly. 

11Mar 2011

Property Landlords advice: Resident Landlord agreements (Part 2)

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By Mike Edwards

The starting point and the fundamental factors in determining whether you are dealing with a Resident Landlord (ResLan) or not is whether the building is largely as originally constructed or has been converted. Or a purpose build block of flats no matter how small. If the latter and the builder/Landlord reserves one of the units to themselves not a problem it can never be a ResLan case. Similarly if the Landlord does not use the property as their main residence then equally it will not be a Reslan case.

What is a RESLAN Tenancy?

For it to be a ResLan tenancy therefore one of two things must happen, but in either case the accommodation must be self-contained even if it is a shared communal access – such as the hallway of a converted house. The 1988 Act says quite specifically that if both Landlord and Tenant live in the same original building and it is not a block of purpose built flats, then the tenant cannot have a 1988 Act tenancy. Therefore if you have a self contained flat upstairs and one downstairs and the landlord lives upstairs and the tenant lives downstairs, the tenant can have a Common Law contractual tenancy, but not an AST because it is Resident Landlord, and that puts it in the excluded category.

Licensor and Licensee.

Next assume a simple house and the tenant has their own bedroom but shares the kitchen (even if meals are not provided). If the Landlord was not living there this would be a Hybrid AST situation like any other sharer. But if the sharer or one of them is the Landlord then this is a typical lodger agreement and only a license will be granted and the wording throughout will be Licensor and Licensee – though in construction it could look very much like a normal tenancy agreement. However that may look like overkill for what is a fairly informal arrangement compared to a full blown tenancy. If the occupier where the Landlord lives in the same building (as originally constructed though possibly converted) shares any of the essential living accommodation (bathroom, kitchen even a lounge) then that occupier does not have exclusivity over all the accommodation and is a licensee and can only be granted a licence and not a tenancy at all. For licences it is generally recommend to use weekly periodic agreements to make it easier to get rid of co-habitees who the Landlord ends up not rubbing along with. Basically if you grant the licence on an initial fixed term and payment period of a week then you are contractually bound and can have complications and longer notice periods.

Notice procedure.

If a weekly licence is granted then a simple letter stating all the necessary detail and dates and giving a week’s notice is all that is required and no Court Order is needed to evict either. If it is a Common Law tenancy (Landlord living in same property and tenant having exclusive accommodation again like the flat example above) then a normal Notice to Quit is used giving a month’s notice. As far as tenant or occupier protection and rights are concerned all occupiers who are licensees or tenants are covered by the Protection From Eviction Act 1977 (PFE) except those living with a resident landlord, where a Court Order is not needed. Hence the weekly licence.

Check PFE status.

If they do because they are a tenant then you will have acted illegally if you evicted them only with a letter giving them a week and then entered their room and put their belongings out on the street. You can do this if they are a licensee and don’t leave at the end of the week’s notice – but you cannot if their status gives them PFE protection meaning you should have given them longer notice (minimum one month) and obtained a Court Order

Link to Res LL Part 1

07Mar 2011

Rental issues: Avoiding Rental Voids can be a problem.

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By Steve Roulstone

The Tenant deposit scheme has on the whole been well received and there is no doubt that it has done exactly what it was meant to do when introduced. Namely, to ensure Tenants and Landlords communicate and negotiate with each other over dilapidations. It has however had other effects which were not foreseen and when Tenants do not act in a reasonable manner, causing a dispute and creating a situation which can add further problems when the next Tenant is due to move in for example, the next day.

New Tenants expect the best.

When any Tenant moves in, they do not expect to be faced with a situation where damage to the carpets, decoration or appliance for example, has to be left until such time as proper negotiations have been undertaken with the leaving Tenant over where responsibility for carrying out repairs should lie! It is not a new problem, but prior to the scheme, we could make an experienced judgement over who created and therefore who should pay for the issue to hand. Now we can no longer do this and according to the TDS procedure, must even take time to gather estimates before getting agreement and starting the work.

Why not avoid the situation.

Avoidance would be the easiest solution, always ensure a week between Tenants, but the reason so many Tenants follow hot on the heels of the last occupier is at the new Tenants request. Most Landlords can see the potential issue and rather than risk upsetting the new Tenant, will agree that a void period has to be accepted between Tenants. Of course as Agents, especially those carrying out the viewings, the ability to change Tenants without any void is difficult to avoid, after all, we are doing the best we can by our Landlords and when the new Tenant states they have to be in sooner rather than later it is difficult to risk them going elsewhere by saying no!

Best advice and best practise.

So our advice to avoid the complaint from the new Tenant, which is bound to happen no matter that it was they who HAD to be in the property without delay, when they move in to find the cooker door glass broken, has to be to always build that extra week to the availability date and even though void periods are created by this practise and it goes against our intentions as Letting Agents, it is better to avoid problems for new occupants and give their Tenancy the start we would all wish for.