25Jan 2013

Prescribed Information Still Important When It Comes To Deposits!

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By Craig Smith

In another recent case a Landlord has been found to have not complied with legislation when protecting their tenant’s deposit. It can be a bit of a minefield if you are new to the industry but the rules are becoming clearer and clearer.

Not Just Deposit Protection

Where a deposit is covered by the legislation it isn’t enough to just protect the deposit. The Prescribed Information (PI) must be provided to the tenant at the start of the tenancy, usually within 30 days of the deposit being paid. The PI contains the information the tenant needs to know about where the deposit is going to be held and who has access to it. This recent case also proves that the tenants must be provided with the terms and conditions of the relevant deposit scheme.

What Information to Give?

You may have read my post about the DPS before so you’ll know that it is that scheme that our office uses. We must always give our tenants a set of the DPS terms & conditions which is a lengthy document but is worth its weight in gold should a case arise. The legislation states that it is the responsibility of the Landlord to ensure the information is given to the tenant and it is not up to the tenant to go looking for it. The terms and conditions are an important part of the PI as the case has proven. In this instance, the Landlord had registered the deposit in line with the legislation but hadn’t given the correct PI to the tenants.

There are also a lot more handy documents available through the DPS giving both tenants and Landlords advice on how to use the scheme. Don’t forget that each scheme differs slightly in the way their information is presented and they may not have an official set of terms and conditions, so to speak. 5 minutes checking you have the right stuff is better than 5 years recouping unnecessary costs!

Final Advice

Some of the information that needs to be provided may seem trivial but it is very easy to get hold of. Certainly with the DPS, the documents are free to download and can be found with a few clicks on their website.

The majority of tenants seem to ask what they need to do at the end of the tenancy anyway as the documents seem to get overlooked. You only need to read the details of the case mentioned here to see how really important they are!

21Jan 2013

The Green Deal: How Will It Affect Rental Properties?

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By Craig Smith

From 28th January 2013 the Green Deal will be coming into force as part of the Energy Act 2011. The idea is that households can have a grant from the Government to install more energy efficient improvements which will then be paid back as part of their utility bills.

Homeowners

The basic way that the deal will work is for a homeowner to have their property surveyed to see if they could benefit from the grant. The grant would only be given if the savings that could be made would outweigh the installation costs as there would be no point otherwise! Some of the more well known improvements include loft insulation or installing a more energy efficient boiler.

Once the improvements have been carried out, the homeowner would pay back the grant over a set period of time as part of their energy bills but this would not come to any more than their regular bill payments. This way, in theory, they start to enjoy the savings almost straight away.

Clearly, the longer you live at the house the more savings you should make. Even if you did need to sell up or move quicker than expected, the grant repayments would stay with the property itself rather than the owner so the new occupier would pick up the bill but also enjoy the savings!

Landlords and Tenants

Having this done in your own home looks like a great way to save money, particularly if you don’t plan on moving any time soon. But when it comes to rental properties, it gets a little more complicated.

A tenant could still save money and help the environment which can only be a good thing. However, tenants may not be so keen to take part in the scheme if they aren’t planning on staying put for very long. A lot of tenants, for example, only rent because they need to move around for work and may need to move on again in a few months time. Don’t forget that in the majority of lets it is the tenant who pays for the utilities, thus covering the extra bill and saving very little in the short term.

Good or Bad News for Letting?

Some tenants may see this as them paying for improvements to someone else’s property. And whilst they may enjoy some savings when they are living there, they wont gain anything when they vacate.

However, what sounds like a disadvantage for some Landlords could be beneficial to others, depending on the tenants in the property. Longer term tenants may want to benefit from the savings and could also improve the Landlords property at the same time. Perhaps a longer term tenancy agreement could be agreed for some tenants who would be willing to take up the grant? This would ensure that the tenant benefits from the potential savings and also gives both the Landlord and the tenant security of having the home let for a longer period.

Stricter Rules in the Coming Years

This deal comes in at just the right time as from April 2018, it looks set that no property with an EPC rating of a band E or lower could be legally let. (The aim is to not just save money but to reduce the impact on the environment from energy usage.) This could be bad news for Landlords of the more rural or older properties. We don’t yet know if the sales of such properties will be affected but with energy usage becoming bigger and bigger news, it does look as though it will have some impact. Would you want to buy a property knowing it would cost a fortune to run or not be able to let it out?

07Jan 2013

Coronation Street Raises Gas Safety Awareness

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By Craig Smith

They say there is a first time for everything and here we are commenting on a big issue made aware by a TV soap!

There is a storyline currently running where one of the residents in Coronation Street has suffered from carbon monoxide poisoning thanks to a dodgy boiler repair. This doesn’t just make good viewing but also raises the awareness of having someone competent to do the right job.

Competent Worker

The boiler had been repaired by a friend with some mechanical knowledge as a goodwill gesture. OK, this is soap land but these kinds of things could happen in your street. What starts as a helpful neighbour could turn into something disastrous if not done properly.

By law, anyone working on a gas appliance such as a boiler or gas fire needs to be Gas Safe registered and hold the necessary skills to carry out any works. Carbon monoxide has no odour and in many cases can kill or seriously harm someone without them having any idea there is a leak.

Work in Other Areas

The same principles apply to other times of work such as electrical installations & repairs and day to day maintenance. Electricians must hold the correct certifications in order to install or replace any fittings or appliance and in general day to day repairs, you wouldn’t ask a roofer to put up some shelves, would you?!

The Consequences

The results of a bodged repair can not only affect the people in a property but also the person who was responsible for the work. With regards to gas safety, the person responsible could not only be fined but could also face a jail term as punishment.

Always Check

This is the reason you should always check who is coming to work on your home. This is important not only if you are an owner occupier but more so if you are a Landlord. If you instruct someone who is not suitably qualified to carry out the relevant works, you could be putting the lives of your tenants at risk and could also be held responsible!

22Dec 2012

Letting News: Tenant Information Packs Becoming Compulsory in Scotland

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By Craig Smith

As our office is based in the Midlands (England) it isn’t very often that we have the need to report on a change in Scottish legislation. The 2 countries may be very similar but they don’t share all of the same laws and regulations when it comes to lettings.

New TIP Packs

Under the Private Rented Housing (Scotland) Act 2011 any Landlord inScotlandwill soon have to provide each new tenant with a Tenant Information Pack (TIP). This may be new toScotlandbut may I just point out that Castle Estates have been producing these packs for almost 10 years! It has changed over the years to cover the ever changing legislation and changed layout once or twice but has remained generally the same.

Why So Long?

The Scottish equivalent could be up to 30 pages long with various information about the property and its necessary legal requirements but our fits neatly enough into 5 pages and covers, we feel, all of the general information a tenant might need. It is our general practice to go through this with every tenant at the check in to ensure that they understand their rights & responsibilities before they sign any tenancy agreement.

Don’t get me wrong, I’m all for making sure that everyone knows exactly what is expected of them but being perfectly honest, I don’t know how many people actually take the time to read it during their tenancy or remember most of what it means. Which only begs the question, what is the point in having a compulsory version that is 6 times as long?!

Waste of Effort?

If the government stopped and thought realistically for a moment, they might share the same viewpoint. Maybe this will just be yet another stack of paper wasted and extra money down the drain for no reason?

The same has happened in relation to deposit protection (uh oh, here we go again with deposits!). We now need to ensure that the terms & conditions for the relevant deposit scheme are provided to each tenant at the start of their tenancy. This is just over 10 pages of information which seems to end up in the bottom of a drawer or at the back of a cabinet.

Good Idea or Bad?

In general, I do think it is a good idea to have certain information for tenants although some of it may just be overkill and could be found with 2 minutes searching on the internet. I guess we’ll have to see if this becomes law in England and Wales too and how well it goes in Scotland!

22Dec 2012

Letting News: Tenant Information Packs Becoming Compulsory in Scotland

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By Craig Smith

As our office is based in the Midlands (England) it isn’t very often that we have the need to report on a change in Scottish legislation. The 2 countries may be very similar but they don’t share all of the same laws and regulations when it comes to lettings.

New TIP Packs

Under the Private Rented Housing (Scotland) Act 2011 any Landlord inScotlandwill soon have to provide each new tenant with a Tenant Information Pack (TIP). This may be new toScotlandbut may I just point out that Castle Estates have been producing these packs for almost 10 years! It has changed over the years to cover the ever changing legislation and changed layout once or twice but has remained generally the same.

Why So Long?

The Scottish equivalent could be up to 30 pages long with various information about the property and its necessary legal requirements but our fits neatly enough into 5 pages and covers, we feel, all of the general information a tenant might need. It is our general practice to go through this with every tenant at the check in to ensure that they understand their rights & responsibilities before they sign any tenancy agreement.

Don’t get me wrong, I’m all for making sure that everyone knows exactly what is expected of them but being perfectly honest, I don’t know how many people actually take the time to read it during their tenancy or remember most of what it means. Which only begs the question, what is the point in having a compulsory version that is 6 times as long?!

Waste of Effort?

If the government stopped and thought realistically for a moment, they might share the same viewpoint. Maybe this will just be yet another stack of paper wasted and extra money down the drain for no reason?

The same has happened in relation to deposit protection (uh oh, here we go again with deposits!). We now need to ensure that the terms & conditions for the relevant deposit scheme are provided to each tenant at the start of their tenancy. This is just over 10 pages of information which seems to end up in the bottom of a drawer or at the back of a cabinet.

Good Idea or Bad?

In general, I do think it is a good idea to have certain information for tenants although some of it may just be overkill and could be found with 2 minutes searching on the internet. I guess we’ll have to see if this becomes law in England and Wales too and how well it goes in Scotland!

03Dec 2012

TDS Survey Reveals Landlords Thoughts on Letting

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By Craig Smith

We always find it interesting to hear a Landlords feedback, whether it relates solely to their own property or about lettings in general. This week, The Dispute Service have released the results of a survey asking Landlords how they feel about their tenancies.

Worried by Tenants

One of the questions asked in the survey was what concerned Landlords the most when it came to letting, giving a choice of answers. The most commonly chosen answer was the quality of the tenants who were on the agreement which isn’t too surprising given some of the scare stories going round. Certainly having the tenants referenced prior to them moving in can help to determine their credibility but won’t guarantee whether they will continue to be as good as their references suggest.

One instance we have had in the past is the guarantor of a prospective tenant giving a glowing reference, only to come back and tell the horrible truth when the tenants stopped paying the rent!

Rent Arrears

Following on quite nicely from the above, the second biggest concern in this question was rent arrears. The majority of Landlords have mortgages to cover and if not still have to insure the building and have to provide for the upkeep of their properties. Arrears can be distressing even for the biggest of Landlords as it can be a lengthy process to get any non-payers to leave, not to mention the additional costs!

New Regulations

The third most commonly chosen answer to what concerns Landlords the most was complying with regulations. Over the last 5 or 6 years or so the industry has seen a lot of changes in legislation including the registration of certain deposits (there I go talking about deposits again!) and new energy regulations.

There are certain things that a lot of Landlords forget or don’t know about such as ensuring there is a handrail on the stairs or ensuring that a chimney is swept & safe to use. This can highlight the importance of speaking with a local agent who can advise a Landlord of the necessary rules & regulations in order to prevent any damages or injury to tenants and their belongings.

Happy Landlords

The survey included just over 200 Landlords and just over 80% confirmed they were satisfied with the quality of their tenants. Surely this can only be good news?! There are always going to be some bad experiences with the sheer number of lettings properties out there at the moment but this shows that the majority of experiences are good.

This is again good news for those who are referred to as reluctant Landlords i.e. an inherited property. Hopefully this should keep a little confidence in the industry and keep people renting for the future years!

30Nov 2012

Tenancy Deposit News: DPS Announces New Insured Deposit Scheme

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By Craig Smith

The Deposit Protection Service has recently announced its new plans to setup a new insured deposit scheme alongside its already well established custodial scheme in 2013.

Custodial Vs Insured

The difference between the custodial scheme and the insured is what happens to the actual deposit money. Custodial is exactly what it says on the tin, the deposit money has to be given to the DPS for them to hold securely whereas with the insured scheme, it is simply registered rather than being paid over.

Why Use Custodial?

Prior to 2010 we used to register tenancy deposits with The Dispute Service (TDS) and had to pay a yearly fee in order to confirm our registration. The renewal prices were hiked up so high that many Landlords and Agents were forced to move elsewhere, hence our move to the DPS. (There are too many abbreviations in tenancy deposit protection, or TDP for short!)

By using the DPS, we found that Tenants know that their money is safe and there is no risk of it being used for anything without their say so. Nor can it just happen to be used ‘by accident’ by a forgetful Landlord! One other agent local to us closed down recently which left a number of Landlords and Tenants reportedly losing out on money as the deposits were held in an insured scheme. No such chance if the money is held elsewhere!

Downfalls with Insured Schemes

Now I don’t know exactly how the insured scheme will work with the DPS but it looks as though a Landlord or Agent will not need to pay a registration fee but will need to pay a fee per deposit registered. This seems fair enough but still begs the question, why bother when there is a free alternative?

There seems to me there is no point in holding a deposit in your own account. The amount of money to be earned from interest is barely pennies with interest rates lower than low and the custodial option even offers a free dispute service to boot! Not to mention the extra hassle of having to pay back the money yourself whereas a repayment with the DPS custodial scheme can be done & dusted with the click of a few buttons.

The Future for Deposits

Back in April 2012 the law changed with regards to the registration of tenancy deposits. Any deposit taken for an Assured Shorthold Tenancy needs to be protected and the future surely looks set for further tightening of the protection process.

I can honestly say that I think deciding to use the DPS is perhaps the best decision any Landlord can make. It is free, easy and everybody knows exactly where their money is!

23Nov 2012

Rental Property Advice: Damp or Condensation?

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By Craig Smith

One common issue reported by a lot of tenants is that of damp appearing in a property. But it isn’t necessarily damp that is the issue as a lot of ‘damp’ turn out to be nothing more than condensation which can be cured with a few simple pieces of advice.

Condensation Problems

The majority of these issues are, of course, condensation. This can come about if there is a lack of ventilation in a particular part of a property where the moist air can’t escape. Although we are approaching the winter months and the temperature is gradually getting colder (although hopefully not too cold this year!) it is still important to ensure rooms are kept well ventilated, mainly when showering or cooking.

Both of the above generate warm, moist air which can mostly be seen on window panes. What can’t always be seen is the amount of warmer air that cant escape and will eventually appear as black marks or peeling paint on walls or ceilings. We tend to find that most of these reported problems occur in bathroom or upstairs bedrooms, bathrooms due to the obvious showering & warm water and bedrooms as a lot of people prefer a nice warm bed to go home to and leave windows etc closed.

Putting a Dampener on Things

The symptoms for damp and condensation can be very similar; typically a black or mouldy mark and a musty smell where it has occurred. When someone notices a mouldy or wet patch on a wall or ceiling it is easy to mistake this for damp, particularly in older properties such as Victorian terraces. Damp is usually caused when there is a leak of water into the property such as a leaking roof or gutter or water coming up from the ground through the walls.

The repair job might not be as big as it sounds and can sometimes be fixed with a couple of hours work from a local trusted builder. From experience in our office, items such as a slipped roof tile, blocked/broken guttering or a crack in the outside wall are the most common causes of this.

Putting the Damage Right

For condensation the best cure is to keep the affected areas well ventilated (for example, using extractor fans where there is one and opening windows to keep air flowing through) and to wipe down any areas where the mould appears to help prevent it spreading. It will take time for it to eventually die down but with some good ventilation and some old fashioned elbow grease you should soon notice the difference.

As above, damp may need a little more than just cleaning but a good builder can recognise exactly what needs to be done to cure the problem. Once the job has been finished you will probably need a few coats of good paint or stain block once the moisture has dried up to stop the marks from appearing again.

Big Difference

Condensation usually occurs higher up in rooms whereas damp can lurk around outside walls where moisture can come in rather than it trying to get out. Sometimes it is better to do some investigative work yourself before involving any costly call out charges.

22Nov 2012

Rental Property Advice: Damp or Condensation?

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By Craig Smith

One common issue reported by a lot of tenants is that of damp appearing in a property. But it isn’t necessarily damp that is the issue as a lot of ‘damp’ turn out to be nothing more than condensation which can be cured with a few simple pieces of advice.

Condensation Problems

The majority of these issues are, of course, condensation. This can come about if there is a lack of ventilation in a particular part of a property where the moist air can’t escape. Although we are approaching the winter months and the temperature is gradually getting colder (although hopefully not too cold this year!) it is still important to ensure rooms are kept well ventilated, mainly when showering or cooking.

Both of the above generate warm, moist air which can mostly be seen on window panes. What can’t always be seen is the amount of warmer air that cant escape and will eventually appear as black marks or peeling paint on walls or ceilings. We tend to find that most of these reported problems occur in bathroom or upstairs bedrooms, bathrooms due to the obvious showering & warm water and bedrooms as a lot of people prefer a nice warm bed to go home to and leave windows etc closed.

Putting a Dampener on Things

The symptoms for damp and condensation can be very similar; typically a black or mouldy mark and a musty smell where it has occurred. When someone notices a mouldy or wet patch on a wall or ceiling it is easy to mistake this for damp, particularly in older properties such as Victorian terraces. Damp is usually caused when there is a leak of water into the property such as a leaking roof or gutter or water coming up from the ground through the walls.

The repair job might not be as big as it sounds and can sometimes be fixed with a couple of hours work from a local trusted builder. From experience in our office, items such as a slipped roof tile, blocked/broken guttering or a crack in the outside wall are the most common causes of this.

Putting the Damage Right

For condensation the best cure is to keep the affected areas well ventilated (for example, using extractor fans where there is one and opening windows to keep air flowing through) and to wipe down any areas where the mould appears to help prevent it spreading. It will take time for it to eventually die down but with some good ventilation and some old fashioned elbow grease you should soon notice the difference.

As above, damp may need a little more than just cleaning but a good builder can recognise exactly what needs to be done to cure the problem. Once the job has been finished you will probably need a few coats of good paint or stain block once the moisture has dried up to stop the marks from appearing again.

Big Difference

Condensation usually occurs higher up in rooms whereas damp can lurk around outside walls where moisture can come in rather than it trying to get out. Sometimes it is better to do some investigative work yourself before involving any costly call out charges.

15Nov 2012

Rental Property News: Survey Shows High Number of Properties Left in Poor Condition

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By Craig Smith

At the end of every tenancy comes the day that a lot of Landlords and tenants both dread… the day the tenant hands the property back to the Landlord. The actual arrangements can be simple enough but sometimes the property can be returned in a less that satisfactory condition.

Landlords Not Happy

A recent survey of 300 Landlords by Meet My Agent suggests that 73% were not happy with the condition in which their rental property was returned to them. This doesn’t necessarily mean that the properties needed a complete refurb but can mean items such as cleaning or repairs were not up to scratch. That said, the survey also suggests that 41% of Landlords’ properties have needed a complete refurbishment following a tenant vacating which is staggering!

Our Recent Statistics

I’ve looked back through our most recent 20 check outs and can conclude that, in general, more properties have issues upon the tenants vacating than those that don’t. The split is 60% that have issues, whether it is something small such as a couple of hours cleaning or more in depth works, to 40% that were left with no issues whatsoever and are ready to be occupied again.

Facts Instead of Presumptions

To get a better picture I think it is more important to look at the actual level of works required rather than just looking at the number of issues. Looking back again at the 60% which needed works, I cant find a single one which didn’t need some form of cleaning following the tenant vacating. Again, this doesn’t mean that these tenants have lived in squalor, (far from it!) but does mean that the property wasn’t left in such a clean condition as when the tenancy first began.

3 out of those 12 needed items other than cleaning such as replacement items but none of these were anything too major.

Preventing Extra Works

One way to better the chances of a property being returned in good condition is to not only take an inventory at the start of the tenancy but also to tell the tenants what you would expect. Part of our usual process is to send a short set of guidelines to the tenant which lists some of the most commonly forgotten items. Some of the main concerns mentioned above include dusting down skirting boards or making sure a kitchen extractor hood is left clean.

Best Practice

Through the experiences this office has gained we find that advising tenants before they vacate can help to ensure a property is returned in a good condition. Of course this isn’t always the case but it does all add up to ensure a smoother handover!