16Sep 2010

Property Landlord advice: The Importance of Landlord Insurance.

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By Steve Roulstone

 

Firstly, to explain the title, this is not House Insurance, as being advertised as Landlord Insurance by a well known Company at the moment on TV. Proper Landlord Insurance is about Insuring against loss of Rent and Legal expenses (R&L) should a Tenant fail to pay and need evicting.

Is Insurance for Rent and Legal Expenses important?

When you consider that annual policies that cover the period that Courts could take to evict Tenants from a property are available for less than £100 in today’s market, I think every Landlord should think so and I speak as a Landlord myself. When you consider that any Tenant could find themselves redundant, then taking out a policy for less than 2% of a year’s rent should not be a difficult decision.

Our duty of service to advice.

We must always ensure that as Letting Agents we stay inside the FSA regulations surrounding the selling of Insurance policies and unless we are qualified then our role is to advice Landlords that the policy is available and then let the Insurance Company sell the attributes of R&L Policies to our Landlords.

Should be common practise.

I have just found an advice line for Landlords statingthat Landlords should be careful how they select Tenants in case they cannot afford to pay the rent. No problem at face value, but if they employ the services of an agent, which they do not advice, by using professional referencing we can both ensure the Tenant is acceptable at the start of the Tenancy and because through this referencing R&L Insurance will automatically be available, providing of course the Property is fully managed, then Landlords can ensure against such problems during the Tenancy.

Managing the situation.

As I have reported in a recent Blog, Local Council Housing departments do NOT offer help and only act to delay the process of providing the Tenant with accommodation. So by having the correct Policy in place, Rent and Legal expenses which can be expensive on their own, will be covered.

Hidden advantages.

There is a valuable side effect that should not be ignored: By knowing you will not lose any rent, you can at least work with your Tenant and assist him with the Housing department. Such acceptance and assistance can only receive appreciation from the Tenant – after all, they will not want to be in this position either and human nature should ensure that the property is at least looked after during the process.

15Sep 2010

Franchise News: Training Letting Agents.

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By Steve Roulstone,

Business develops so fast today, that no matter what industry you are in, training and ensuring Staff and Company systems are at the front end of both Business and people trends has never been so important. When I first started in business in the mid 70’s nothing really changed for many years and whilst you had to be much smarter to be ahead of the field, today we need to be aware of the possibilities that the electronic age has afforded every business in the world.

How to achieve the best return.

This is where I believe Franchising really delivers results. There are of course many scenarios where Companies get together to train their staff. But the only situation where it matters so much to every outlet or office, that I am aware of is Franchising.

Because it matters!

Franchising delivers because the people who are being trained need and appreciate the importance of delivering whatever they are being trained for, to ensure their business continues to perform and stay ahead of the competition. Of course some multi outlet National Companies are managed by people who also care, but I seriously doubt they care as much as those who have put their own future on the line by starting their own business!

The links that make the difference.

Of course there are as many who do so, on their own, but that is where they differ and would struggle to be so well informed. Franchise organisations have the not insignificant backing of the Franchisor, who can arrange training at reduced and more cost effective rates, and because it is not only in the interest of the Franchisor that the business succeeds, but also that they stay ahead, the Franchisee can rest assured that the training will be offered when needed and by professionals.

Hence the difference.

I do of course recognise that Franchising does not suit everybody, but what it does do is offer more than just a system and knowhow and through the training offered, it can ensure that a business that is Franchised is kept at the top of the pile, and of course run by people who really care about the success it achieves.

10Sep 2010

Rental Issues: Local Councils promote breaking the Law?

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By Steve Roulstone

I believe that Local Councils, in delaying the time frame of having to find a home for Tenants that have failed to pay their rent and face eviction, by advising that they do not leave the property until they receive an eviction notice, are encouraging people to break the law and I do not believe this is the role they should be playing. 

Landlord and Tenant Rights.

Ok, let’s look at the reasons behind the scenario. If a Tenant is either unable or simply fails to pay the rent, the Landlord is of course entitled to take action and as Agent of the Landlord  it is our responsibility to take the best action on his behalf, which must include giving notice to quit the property. We use the notices within the Housing Act 1988 and by issuing such notice we are operating within the law.

Tenant reaction.

 Now if the Tenant has nowhere to move too, they need the support of the local Council to find somewhere to live. I have always believed that the service exists for exactly these circumstances. But this is where the problem lies. More and more there reaction is too advice the Tenant to stay exactly where they are until they receive an eviction notice and this is where ‘Breaking the Law’ enters in to the equation.

The implications of such advice.

So what happens if they stay in the property, don’t forget, failing to pay the rent! We are forced to take the Tenant to court and get the very eviction notice that the Council demand. Then and only then will they assist the Tenant in being re-housed. The Courts of course will not issue the notice unless we can prove that the Tenant has broken the agreement and should indeed leave. In fact, under some circumstances, the Courts do not even have an option and must issue an eviction notice, as it is mandatory within the Housing Act.

On the Record!

So now we have the rub, Councils by this lack of action, or rather delay of fulfilling their duty, cause the Tenant to be taken to court and in most cases have a court action issued against them. I see this as breaking the law and I do not feel it is right to place Tenants in this position in the first place, when the only thing that is achieved is a delay in the Council fulfilling its obligation and everybody else,  suffering the consequences:

Landlord, because they do not receive rent for a property for which they will more than likely have a mortgage to pay.

Tenant, because in my experience, they just want the Council to give them somewhere to live, but are forced to accept the route through lack of choice.

Agent, because they are unable to provide the service they are charged with, take on extra work which they have no control over and are the only sounding board for both parties.

And finally the Council? Well they still have to find property for the Tenant at the end of the day, but perhaps they feel they have done their job, because many Tenants do find an alternative rather than by forced to court. But hold on? Is it not the role of Councils to provide accommodation in these circumstances?

I think it is clear that the Tenant is the neediest and in these circumstances and in my opinion, it is they who suffer as the Council try to cut costs!

08Sep 2010

Current Property News: Reporting of Connaught collapse.

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By Steve Roulstone

The collapse of the Connaught Company is of course bad news for the employees and sub contractors and they must all be worried about their future this bleak morning. It is a position I have never been in and hopefully never will, but they are definately in my thoughts surrounding this somewhat inevitable sad news. Hopefully, with the work still needed to be completed, arrangements through a differing agency will offer some of the workers hope by picking up where Connaught have pulled out.

BBC News reporting.

However, the subject of my blog is the manner in which the BBC took great pleasure in either condemning the building Industry and or the Government as being responsible for the collapse. In my opinion, debts of £220 million cannot be associated with the stringent measures and cut backs being introduced by the Government. They have only been in operation for three months and yet the report on BBC 24 last night clearly stated that the collapse was as a result of Government measures. What kind of Company can manage to lose such massive amounts in three months? I think anybody who puts their mind to such comments will be able to see through them, but if you accept the statement at face value, then the collapse is laid squarely at the door of Number 10. Now whoever is in charge this just does not make sense and we should expect better standards from the BBC than comment which cannot be backed up.

BBC News reporting stage 2.

But they did not stop there! The next statement was that all Council House Tenants should beware (Actually they just stated Tenants with no differential) as what was going to happen about the work outstanding now? The suggestion as that it would not be carried out and they were going to be left high and dry! Well again, I am no genius, but I would have thought somebody else would be appointed to carry out the work? After all, unless Connaught was paid before the work was carried out, then it will still need to be carried out and presumably somebody will be paid by Councils across the Country for completion. Indeed this very point is made in the BBC news report on line! But this is typical of the way in which the BBC seem to deal with news relating to property. It seems to me, that bad news is good news! If it is possible for the story to be presented as the Building Industry, or housing in general in a poor light they will do just that.

Better Standards.

If I am wrong in the assumptions that I have made, then the BBC should have laid the facts out clearly for us all to understand, instead of leaving us with such unclear statetments. If I am right, then the report looks like an effort to make more out of what is a bad enough scenario for those concerned already by presenting the story using scaremongery. Come on BBC we deserve better!

02Sep 2010

Rental Issues: Tenants status with Letting Agents.

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By Steve Roulstone

Welcome to another heading in my Blog, highlighting issues and hopefully clarifying same for the better understanding of all concerned. My first Blog concerns the position of the Tenant when they are dealing with Letting Agents. It is something that I do not think is explained often enough and only with better understanding will problems that occur regularly be removed.

The Agent in Law.

As the link above demonstrates, when Letting Agents sign a contract with Landlords who employ them, they are both confirming the services they will provide and through this document confirming that we stand as ‘Agent of the Landlord’ in this relationship. This means that we are employed by the Landlord and in seeking a Tenant for the property concerned, we are providing the service highlighted in the contract.

The Tenants position.

We do not sign a Contract with the Tenant and therefore our relationship is totally different, especially in the eyes of the Law and that is important, because in being party to a contract with the Landlord, it is through the Law that our actions for the Landlord may be judged. The contract the Tenant signs is either 1) The Tenancy agreement confirming their status in the property concerned, how they will and must perform and equally how the Landlord will and must perform, but only in relation to the property concerned. Or 2) What we at Castle Estates call our terms and Conditions, which is also about being sure the Tenant is aware of how the process of becoming a Tenant works and again what is expected of them during the Tenancy.

In Summary for the Letting Agent.

 When I went through my initial training with Castle Estates I was given a way of summarising where we stand as Letting Agents in this triangle of relationships and it has never been surpassed as the best and easily understood way of describing it. A Letting Agent has a duty of responsibility to the Landlord and a duty of care to the Tenant. This is a statement that I have used on many occasions, not lightly, because I firmly believe in both parts and it is important that Letting agents provide both with integrity. But if this was explained to Tenants more often, then they would be better informed to understand the duty we perform in carrying out our role as Letting Agents.

01Sep 2010

Property Landlord Advice: What should your Letting Agent do for you?

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By Steve Roulstone

I was talking to a Landlord this week, who again confirmed that some Letting Agents do not provide the services they should in full Management. I wrote only last week about the problems caused by Landlords who self manage not visiting the property during the Tenancy and whilst it is standard practise for our Letting Agency it appears this is not always the case.

Standard practise.

So what should Letting Agents provide for their Landlords in Full Management, the term ‘Full Management’ is of course what most Letting Agents would call their complete service and it is the price of this that we compete with up and down every High Street in the Country. Sometimes Agents provide a varying list of Full Management services, but it is not a situation I am comfortable with. If you are supposed to do a job, then you should offer a service that enables you to do just that, not a service that suggests there are various levels a Landlord can buy in too, because in my eyes, Full Management is Full Management.

Letting Agents list of services.

Of course, every agent should be associated with an Industry Professional body, so you know they work to a standard that is acceptable to the market in the first place. So, for that list of services:

Initial ‘Rentability’ Valuation, Safety and legal advice, Web Marketing and advertising included, Accompanied Viewings, Tenant Referencing, Complete set of Self branded approved agreements, Specialist Landlord Insurance, Standard Landlord Insurances, Tenant contents Insurance, Full check-in facilities (Always at the property), including Inventory and back-up state and condition support, Utility services, Regular property visits and reporting, Monthly Landlord statements, Full Maintenance provision (with Landlord authority) Complete arrears service, Renewal and Rent increase provision, Full check out facilities (Always at the property) and that all important service covering all of those little unexpected eventualities!

This cannot and should not be comprehensive, but could be considered to be a minimum for a Full Management service and that is the point of this piece. However it should not include any services that should be provided by other specialists, you would not ask a Letting Agent to fit a radiator in the same way you would not ask a plumber to find you a Tenant!

Check the Contract

All Letting Agents should provide you with a Landlord contract that summarises the services they include. They are designed to protect both parties and form the basis of the relationship between Agent and Landlord. Either way, what this list will do, is provide a method of checking if the Letting Agent you are talking to, is aware of what looking after Landlords is all about!

24Aug 2010

Franchise News: Franchised Property Lettings wrapped in the Web.

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By Steve Roulstone

The future is on line.

One of the most important principles that any Letting Agency has to understand in today’s cyber community, is not only the importance of the Web but how to control and appear in the web to all potential customers. With Google controlling 86% of all search engine activity, to be listed on the front page under any generic term, has to be the goal of every National Property Management Company.

Who does not look on the Web?

Every agent should be aware of where their customer base comes from. I was aware years ago, that the number of Tenants moving in to properties that I managed through my Agency, was growing month on month. Now nationally, the figure is around 90% and makes the cost of advertising in the local paper prohibitive and probably explains why most of the press where the income from property advertising is significant, are creating their own web site! Both Tenants and Landlords are looking for their information and sourcing the solution they require through the web and Google have captured the market!

Franchise Online.

As a National Franchise Agency we are very aware that all Property Lettings Franchise Companies look to market themselves in the same way and therefore we all have training available for our Franchisees so they make the best out of what, if you get it right, is a free service. Get your Company in the right position on the web and visible in searches relating to your business in your area and your target customers will find you!

Delivering the message

But this is not as simple as some may think or suggest it is. It takes dedication and understanding of how to achieve your aim and we are all aware that there is a plethora of Companies telling us they can train us how to appear at the top of the listings and I would recommend all Companies employ professionals to instruct them in the correct methods. If you are going to ensure you are well versed in the art (and it is an art!) of positioning then choose carefully, but there is no doubt, we all need to gain web presence!

24Aug 2010

Property Landlord advice: The art of Property Management for Landlords.

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By Steve Roulstone

Why manage yourself?

As a professional Letting agent, we are often asked to find Tenants for Landlords who are going to manage the property themselves. This is because they feel that once the initial service has been provided, which is requested because of our ability to both provide professional referencing as well as ensure that the process and agreements are correct in format and content, they will be capable of looking after the property after the Tenant has moved in.

What happens next?

What happens after we have completed our job and handed the Tenant contact details for the Landlord is the key to self Management, because if the Tenant is under a Full Management service, they will then continue to receive contact and information whilst they settle in, including more detailed information and utility confirmation and usually continued contact as the final details are completed for their tenure. At this stage the Tenant is getting to know how the Management works and getting to know the people involved. I actually firmly believe that the smaller agency is very good at this, because they offer the same contact no matter what the issue.

More contact = Happy Tenant

We know from experience that by ensuring the Tenants are settled in, knowledgeable about how the Tenancy is going to work and receiving assistance in dealing with utilities, keys, maintenance issues (which always seem to come at the start of most Tenancies) and the legal side of the Tenancy including setting up rental payments, they feel welcome and comfortable with the situation. Rather than the Agent becoming a nuisance to them, we prove that we are going to be able to make living at the property a more pleasurable time in their lives.

Less contact = Abandoned Tenant

But if they do not have anybody who is prepared to assist in sorting these issues out, the opposite happens. They will probably not let you know that the door to one of the kitchen cupboards has become loose, that post has arrived for the Landlord, that they have a new Mobile number etc etc! Instead, what happens is unless as a self Management Landlord you keep regular contact with your Tenant, they feel that you have abandoned them in the property.

The consequences.

And this is important, as many Landlords find to their cost when they either need to visit the property or even worse, at the end of the Tenancy. A Tenant who is left to feel that the Landlord is happy to take the rent, but not to ensure they are comfortable will possibly stop looking after the property and advising of any issues. I would state that it is a dangerous scenario and not wanted by any Landlord. If you are a Landlord who wants to manage the property yourself, always make sure that you keep regular contact and carry out regular visits to the property. If you do not want to do this, use your Letting Agent to manage the property on your behalf!

20Aug 2010

Property Landlord advice:Teenage Tenancies

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By Mike Edwards

 

Changes to the Law

If a tenancy has been granted to a minor then to date it has probably been completed in the tenant’s name with a Guarantor’s Agreement in the background. However all this has now changed and that procedure may not be robust enough to withstand a challenge from the tenant against a section 21 notice issued while they are still under 18. This is courtesy of a recent Appeal Court decision known as The Hammersmith Case

An under age tenant had applied to the council for homelessness assistance when she was 16 and pregnant. The council provided her with temporary accommodation on an AST with standard terms and conditions. When it later received complaints from other residents about her conduct, it served notice to quit, brought a possession claim and obtained a possession order. The Court of Appeal however has allowed the tenant’s appeal and struck out the possession order.

And the result is!

This is because she was not 18 when the tenancy was granted. So the local authority was legally cast in the role of Trustee. However be warned the role would be assumed unwittingly by any Landlord unwittingly accepting the role of being the tenant’s Trustee on the tenancy until the tenant reaches 18 at which time the danger automatically falls away. In effect this decision is saying that ANY Landlord in granting an under 18 tenant an AST is in fact granting it in Trust for them as a Trustee and thus cannot serve notice to evict them as to do so beaches that Trustee status.

Therefore a Landlord cannot terminate such a tenancy or seek possession until the tenant reaches 18. A Landlord wishing to avoid such a result – but wanted to accommodate a minor – must therefore do so by providing them with non-exclusive accommodation because exclusive possession is the necessary hallmark of a tenancy. The way to provide non-exclusive accommodation is of course for the under 18 occupier to be an authorised occupier rather than a tenant.

What we should do

So what has to happen is that the proposed Guarantor actually has to take the tenancy in their name. Clearly this cannot be an AST as the property not only will not be their main or principal residence (which it has to be to be an AST) but they are not even going to be living there. So at Castle Estates we would grant a Common Law Non 88 Act tenancy to the person who was to be guarantor but now becomes the tenant and then let them give permission to nominate the minor as an authorised occupier. Such permission to occupy is not a legal interest in land so not covered by the Law of Property Act 1925..

12Aug 2010

Property Landlord advice: Problem getting your rent?

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By Samantha Knight

It is often the case that when a tenant decides not to pay their rent, the creative side of their personality can go into overdrive and what they believe to be a valid unique excuse, is just a story we as agents and landlords have heard oh so many times before.

 And today’s excuse is!

 1)    Banking Error

2)    A death in the family

3)    An illness or accident resulting in hospital treatment

 My advice is not to be afraid to challenge the reason you are given or suggest ways of helping to resolve the situation, there will be occasions where the reason is genuine, but it is only by speaking with your Tenant and through your  experience, that you will be in a position to understand what the real reason for the non-payment is!

 Remember, your tenant has signed a contract which they must honour and excuses do not give them a reason for not making that payment, much the same way as there is no excuse for you as a landlord not to deliver on your repairing obligations.

 But be careful how you proceed.

 But whilst it is the correct procedure to take a tough line on arrears, you have to be careful that you do not cross that fine line between tough arrears action and harassment.  Be sure not to leave yourself open to any such claim, as the courts take a dim view on harassment claims which could be considered as refusing to leave the property when visiting, changing the locks when the tenant is not home, continually visiting or even watching the property and of course abusive communication and physical violence – this list is not exhaustive.

 So can we help you?

 So if you do think your Tenant is not being truthful in what you are being told, how do you proceed? This is of course where Professional Letting Agents can help.

 At what cost?

 I would venture to say that our methods which have been built over years of experience are probably going to produce a scenario which will save you money against having no rent for several months whilst the problem drags on unresolved. So the advice is proceed with strength or turn to that Professional agent, who will probably not only provide a solution but also be the answer for the longer term as well!