Tag Archives: Landord Advice

11Jul 2013

Property Landlord advice: Landlords and Legionella; The Facts!

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By Steve Roulstone

Legionella

Last year, the Health and Safety Executive (HSE) changed the regulations on the size of water tank for regular inspection for Legionella disease, which had the implication that all rental property is now included within the Health and Safety at Work Act 1974 legislation. I wrote at the time that what the industry needed (Rental Industry) was a clear and defined method of dealing with the implications of this change, well the results are in and Landlords are once again facing the bill.

We all know that the risk of a Tenant catching Legionella within a residential property is slim, I doubt anybody would sensibly deny that, but what cannot be denied, is that the HSE are quite clear in their advice on the subject, that it is clearly the responsibility of Landlords to ensure that all precautions are taken to avoid any risk at all. This means all houses must be considered for Health and Safety checks and as Agents we have no option, in fulfilling our obligations to our Landlords, but to advise that check be carried out.

There is a difference here in that the decision as stated in the legislation, lies clearly with the Landlord and therefore whilst we have to recommend the inspection, every Landlord has the right to say no and as long as we can confirm the instruction, then our position is clear. The point being, it is not our decision, but we always have to give best advice and can never confirm that a property does not need investigating.

The Code of Practise change states that to comply with the law in this area, it is required that all rental properties must have had a Legionella risk assessment, so only if the disease occurs would failure to comply become an issue. What the decision by the HSE confirms, is that no risk is to small to escape their attention.

What is not considered is where do you stop? Just how many checks and precautions do you carry out before you accept that life carries risks and no matter how you live your life, you run the risk of being caught out at one time or another, by something outside of our control? Just imagine for a moment that it was found that by cleaning every carpet every year, that asthma was cut by half. Does that also become the responsibility of the Landlord as well? Or does the Tenant accept the risk, or, have the carpets cleaned themselves.

This for me is where this legislation falls down, by all means make everybody aware of the risks in private houses, but let’s have a situation where the Tenant decides if the check should be carried out and if they feel it should, let’s have the price shared by both parties if the Tenant wishes to have the risk assessed?

I once again turn to the sales industry, has anybody suggested that private houses should have this investigation before they are sold? The answer of course is no, but I fail to see what the differences are and why once again, the rental industry has been signalled out for action. So this additional burden has been placed upon all Landlords, but I repeat, no matter what I believe, in our position as a professional management agency, we cannot ignore compliance issues, particularly in relation to the health of Tenants and in the interest of safety.

29May 2013

Transparency of Agency Fees Discussed

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By Craig Smith

3 Agents Fees 290513

The big talking point in the lettings industry at the moment is something I wrote about just a short while ago. Due to the increase in the amount of rental properties at the moment, there seems to be a lot of ‘have a go’ agents popping up. As there is no compulsory regulatory body for letting agents, there are more and more stories of rogue agents leaving their clients out of pocket.

Hidden Extras

There are tales of agents disappearing and their clients having no clue about where their money is. But the other big concern is agents who don’t show a transparent fee structure to their clients which results in a lot of hidden costs.

Naturally, you would expect to pay a higher cost if a higher amount of work is needed. For example, you can buy yourself a pizza but if you want extra toppings you would be charged extra. The same principle applies to lettings, a Landlord taking a tenant find only service would pay extra for additional services such as an inventory. Although charging for additional services is fine some agents will hide the charges from clients in order to try and gain extra business.

I would just like to point out at this stage that Castle Estates have never hidden any fees. Tenants are asked to sign a terms & conditions leaflet before applying for any property which contain a set of possible fees, not just for the application but for almost every eventuality throughout the tenancy. Likewise, our agreements with Landlords contain a list of any fees that may be necessary throughout the tenancy.

Lack of Experience

The problem isn’t just with the rogues of the business out to make an early retirement, it is also down to the amount of agents who aren’t properly trained or have the support they need to know exactly what they need to do. Running an agency isn’t about sitting back and waiting for the money to come in, far from it! There is a lot of work that goes on behind the scenes that not everybody knows about to make sure a tenancy is properly managed & above board.

The BBC have likened the letting industry to the wild west which isn’t entirely true. Yes, there are some bad guys out there but for each one I bet there are 10 times more good agents. But without a compulsory regulatory body, there is often little or no comeback for those who have been affected by the bad guys.

Avoid the Sting

There are ways that Landlords and tenants can avoid being left out of pocket. You should always look for the agents who do belong to a professional body. Although it doesn’t guarantee a perfect service, it does mean there are better routes to go down in the event of a complaint.

16May 2013

Rental News: BBC Watchdog Criticises Letting Agents

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By Craig Smith

BBC Watchdog 150513 CS

Yesterday the BBC aired a program which looked into the ways that some clients can find themselves being ripped off by rogue letting agents. Some of what was said does ring true as, believe it or not, the regulations surround lettings agents are very loose.

The Big Issue

If you didn’t see the program yesterday, there is a clip of it on the BBC WEBSITE HERE. It featured TV favourite Nigel Havers who had a bad experience himself (quite ironic considering some of the characters he has played on the screen!). Sometimes it does need someone like him to add a little weight to an argument, in this case the argument that there should be stricter regulations surrounding letting agents. Nigel, if you are reading this, we agree with you!

The problem at the moment is that anyone can setup a letting agency with no prior training or qualifications. I was speaking with someone yesterday who has heard of one business selling letting starter kits over the internet for a small fee. So quite literally anybody could be setting up in your area! Apparently the renewal rate after the initial purchase is very low but it is the initial sales keep the money coming in and that particular business afloat. I’m yet to see one of these packs myself (perhaps you have one and could let us know if it was useful?) but without any proper training or support, what is the likelihood of that prospective agent surviving & doing the right thing?

Qualifications

I know we have waffled on about this before but Castle Estates are proud to be ARLA members. It isn’t just a fancy logo that can go in our window and it certainly cant be purchased by just anyone! Anyone who wants to become a member needs to pass examinations (been there, done that) to prove they have the knowledge and what it takes. Or let me put this in another way, your property could be worth a lot of £££’s, would you really want to trust someone to manage it who has no idea what they are doing?

There are 5 people in our office who have currently gone through the necessary training and 1 more studying at the moment. Although these aren’t compulsory in the eyes of the law, we prefer to show our clients we are prepared to do this so that they have faith in us as their agent.

Further Complaint

The other issue that the program highlighted was that of utility companies being very difficult to deal with. The main company named was Spark Energy and I’m not going to comment any further on this at the moment. If you are really interested, just read their reviews in Money Supermarket to make up your own mind.

We used to work with such companies after them making so many promises of great customer service and easy to use facilities but they all seem to fall down. We have had so many complaints from tenants that we now no longer use any specific company and let the tenants decide who they should use. We do still encounter problems, usually relating to specific suppliers, but thankfully nothing quite as bad as some of these reviews report!

18Oct 2012

Landlords Lose Money to Greedy Utility Companies

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By Craig Smith

A little while ago, Steve from our office blogged about some of the issues he was having with a certain utility company, namelyUtility Warehouse. Well it seems they are still trying to overcharge for energy used in rental properties!

Incorrect MeterReadings

The usual process for our office when a tenant moves in or out of a home is to inform the relevant companies, in writing, of the correct readings and forwarding address. The property in question was no different where after a brief empty period, new tenants moved in and the emails sent off to the utility companies. We would normally expect to get any final bills within a few weeks, arrange for the payment to be made and everything can be forgotten about until next time.

Well, the bill came through with estimated readings! This basically means that the energy supplier hasn’t taken any notice whatsoever of the readings we have taken and made up their own readings. Surprise, surprise! They are usually always over-estimated and this case was no different, which meant that we need to send the correct readings over… again!

Lack of Contact

This all happened in August (2 months ago) and since then we have had no contact fromUtility Warehouseregarding this account. Until today. A letter arrives through our door from a debt collection agency chasing the outstanding amount of just over £20! (Now, you might think that arguing over such a small amount is silly but you should only pay for the energy you have used!)

Needless to say that due to the lack of contact and the usually less than helpful nature of some of the debt chasing staff, we have made contact & told them what we think of the service!

Not the Only One!

It may sound like I am singling out a single supplier here but the truth is that this seems to arise with numerous companies and some are worse than others. Which begs the question, how many people (not people, not just Landlords!) are out there that have been scared by these tactics and ended up paying more than they should have done?

Deemed Rates

Another big money-earner is the type of tariff the account is put onto. When you are living in a property it is easier to research cheaper rates for your energy bills but something that a lot of Landlords forget when a property is empty. This is particularly important if a property is left unoccupied for a longer period of time. We have had instances in the past where no energy has been used at all but standing charges still apply.

The Solution

Unfortunately, there doesn’t seem to be any way of making dealing with some of these companies any easier and sometimes you just have to grit your teeth and get on with it. By always informing any changes in writing, it gives a good backup should accounts not be updated as they should be. For now, we shall carry on…

21Sep 2012

Property Landlord advice: Insulation now available!

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By Steve Roulstone

A few weeks ago I wrote that Residential Insulation which is currently being promoted through the Governments Carbon Emission Reduction Traget CERT and the possibility of Landlords being able to claim for expenditure against annual costs, was very difficult to explain to current Landlords and Tenants when the Industry itself had no way of communicating its message.

VNR Contracting Services

I am pleased to confirm that I have now found a Company who is not only being proactive in speaking and working with other organisations, but that understood what we are trying to do, but is also happy to put leg work in themselves in achieving a result.

Landlord and Tenant Choices

What we need to know is that as Property Managers, we can rely upon a Company who specialise in the Insulation field to explain clearly the benefits of having Insulation fitted and the grants that are currently available for Landlord and Tenant alike, one through direct costs and one through the tax incentive currently being offered.

Action Plan

This means we will be able to write to our Tenants and Landlords alike with information relevant to them and then allow the Company to follow up with visits to answer questions and quote for the work direct ensuring that our Tenants and Landlords are able to take advantage of the schemes before winter this year, if they choose to get involved.

Service Provided

To us, this is part of what we should be doing as Property Managers on behalf of all of our clients, not for any other reason than from a central point we are in a position to receive information as Companies approach us and distribute the same to a wide audience. It is not for us to dictate what decisions are made or even recommend what options are pursued, rather to place the information in front of those who have the right to take advantage of the grants etc that become available.

Reliable Contractor

What is reassuring now is that having struggled to find a Contractor to work with, we have been approached by one who already works with local Councils and as such carries a pedigree that is re-assuring. I am happy to recommend VNR Contracting Services Ltd and in reality that is only the second recommendations we have made in over two years of writing!

01Aug 2012

Property News: Full Council Tax Charges May Apply to Vacant Properties

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By Craig Smith

If you have had a property empty for whatever reason, you may know that a property can be exempt from council tax charges for up to 6 months, provided that it is unoccupied and unfurnished. This is known as a Class C exemption.

Under the Localism Act (which has also changed the way in which tenancy deposits are dealt with recently) the Government is planning to allow local authorities to charge almost whatever they like whilst the property is empty. In theory, the council could still allow an empty property to be exempt from the charges but, on the other hand, they could charge the full amount of council during that period.

Bad News for Landlords

Lets just put one thing into perspective here. Yes, sure, the local authorities could earn a little extra cash with the budgets being tighter than ever, but have they thought how this would actually affect homeowners?

It is not always possible for tenants to move out and in on the same day and it is not usually advisable especially if any work was needed between tenancies. A Landlord could find themselves not only out of pocket but in a financial mess if their property was empty for a month or two. Not only would they have no rent coming in to cover the mortgage, insurance etc but they would also have the expense of paying the council tax for a property they don’t even use!

The Knock-On Effect

If your not a Landlord yourself then you might think I’m being biased here but what about the knock-on effect on regular homeowners? For example, an elderly person moving into a care home might leave their home empty whilst they sell it, another expense to prevent them moving forward with their lives. Or how about someone relocating for work and needs to move away quickly?

And this is a Government that is trying to get the housing market back on an even keel?

Looking at this from the other side, most rental properties would hope to be empty for only a few days between tenancies which would mean that only a small amount of council tax would be due. Now, it is isn’t always easy to contact Landlords, particularly if the Council haven’t got the Landlords home address to address any billing. This would create a whole load of extra work for the Councils to chase outstanding amounts so all that money that could earn from empty properties could all be lost in chasing the debt!

Is This Really a Possibility or Just Scaremongering?

A consultation has already been held and 169 councils voted in favour of the extra charges and only 25 against so it is clearly obvious what the majority want. Unsurprisingly, the majority of Landlords are against the idea and quite rightly too!

I’m sure that this is by no means the last we will hear of this as we trundle towards the inevitability of the ever increasing costs of being a Landlord!

17May 2012

May Update: Current Lettings News

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By Craig Smith

At last, a chance to update you all on the latest goings on in the letting world! This month seems to be going so quickly there is a lot to write about, so lets get on with it!

Increasing Number of Viewers Making Offers

With the slow down in the property market over the last few years a number of people are still struggling to sell their homes. This leads some to consider letting their property instead in order for them to move on with their lives but take care of the ‘unable to sell’ situation at the same time. Whether this is the case or whether an investment Landlord has a property coming empty, everyone is keen to get their property let sooner rather than later!

If you are in the market to purchase a property it is common practice to make an offer on the asking price to get a better deal. Today the situation is much the same in the rental market with many prospective tenants making offers on the asking price. Couple this with the huge supply of rental stock that is available at the moment and many Landlords find themselves without any rent increases.

Too Much Choice for Prospective Tenants!

The huge amount of choice that a prospective tenant has when looking for a property has increased the amount of viewings booked for a property. Instead of being able to find only 2 or 3 potential new homes and making a decision in a few days, tenants now have the possibility of a dozen that may be suitable. This, in turn, does lead to more people offering lower rents and trying to get more for their money (it makes sense!) but also increases the number of viewings that might be needed on a property before it is finally let!

In what seems like a distant memory of times gone by, a Landlord could expect perhaps 4 or 5 viewings on a property before it goes under offer. One property that we have been marketing has had over 20 viewings and has now been taken.

Rent Review Time

Increasing the rent is a tough decision at the moment and should be well thought about by any Landlord. We are currently advising our Landlords of properties that have been let for around 12-18 months if we consider a rent increase to be feasible. Given the choice, I’m sure 99% of Landlords would like an increase but putting the rent up too much could force the existing tenant to look around and see what else is available.

Look back at the first section of this post and if a tenant can make an offer on a property that is in the same price range they could just be tempted to move! By keeping the rent at the same rate a Landlord might lose perhaps £10 a month but this is still a lot better off than having a property sat empty for a month between tenancies!

Change of Deposit Legislation

Regular readers will remember my post from back in March regarding the change in Deposit Protection Rules. We’ve been busy organising the new Prescribed Information forms and have issued them to all of our tenants who need them. (By the way, if you are a tenant of ours who hasn’t got them back to us yet please don’t forget!)

If a Landlord hasn’t ensured that they have their paperwork up to date it could come back to bite them in the future. Any deposit taken for an Assured Shorthold Tenancy Agreement must now be registered with one of the approved deposit schemes. If the deposit has not been protected then the Landlord is unable to serve a Section 21 notice on the tenants to leave the property (and wouldn’t be able to do so until the deposit is registered) and could find themselves ordered by a court to repay up to 3 times the deposit amount to the tenant. This is regardless of any rent arrears or damages that a tenant may already have accrued!

What Next?

There are further changes on the horizon including the way in which Energy Performance Certificates need to be presented on property details. If anyone tells you that employing a managing agent for your property is a waste of money then just tell them to see how busy we are in looking after our Landlords!

15Mar 2012

The Localism Act: Changes on the Horizon for Assured Shorthold Tenancies

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By Craig Smith

Oh no! Not another post about deposits! Around 12 months ago we posted the importance of dealing with deposits correctly. In December of last year we wrote about a court ruling regarding a deposit for an Assured Shorthold Tenancy that had not been protected by the Landlord. Since then a number of changes have been announced that change the way in which deposits should be dealt with and these changes come in to force on 6th April 2012.

Prescribed Information for AST’s

Under the ‘old rules’, Landlords would have 14 days in which to serve the Prescribed Information to the tenant. This is the document that gives the tenant certain information about where the deposit is held and what happens to it. With the changes that are due to come in to force in April, Landlords will now have 30 days to protect the deposit and issue the Prescribed Information.

But this doesn’t mean relaxed rules for Landlords as if the deposit has not been protected within those 30 days, the tenant can take the Landlord to court to claim this back. Neither can the Landlord wriggle out of any penalties by protecting the deposit at that time as this will now not be accepted as sufficient protection for the deposit. The fines for non protection of the deposit used to be a mandatory 3x the amount of the deposit, plus the original deposit to be paid back to the tenant. Now it can be any amount between that of the original deposit and a maximum of 3x the deposit amount.

Existing Tenancies to be Protected

The new rules also require deposits for any existing AST’s to be registered within 30 days from 6th April 2012. This is regardless of whether the tenancy began before or after the date that Tenancy Deposit Protection came into force (6th April 2007) but of course any AST’s that started, or renewed, from that date should already be registered!

The reason for this is that the new legislation states that any new tenancy should be registered and the wording in the Housing Act 1988 means that any tenancy that goes to a periodic status is classed as a new tenancy. 

Tenancies Not Under the Housing Act 1988

The legislation is still yet to reach other types of tenancy agreement, such as Company Let or Assured Tenancies. Of course, this may change in the future but we’ll cross that bridge if we come to it! Non-AST tenancy deposits may still be registered if all parties are in agreement but it is always best to check before registering. 

09Jan 2012

Rental Property Advice: What is the Role of a Guarantor?

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By Craig Smith

The majority of letting agents in England, including ourselves, usually insist that a tenant is referenced before proceeding with a tenancy. This usually includes a credit check and background checks on the prospective tenant in order to confirm their identity and credit history.

Who are the Referencing Company?

Different agents use different referencing companies to carry out the checks and some are more in depth than others. This doesn’t necessarily mean that, by having a tenant referenced, you are guaranteed a good tenant. Everybody’s circumstances are different and can change at almost any time, whether that is 10 years down the line or 10 days into the tenancy!

Poor Credit Equals Bad Tenant?

Similarly, it is not always the case that if someone may have poor credit that they won’t be good tenants and look after the home. With the aid of a guarantor, a tenant can proceed with an application for a tenancy with the Landlord knowing they have an additional ‘safeguard’ should the tenancy go wrong.

What Does a Guarantor do?

Provided the tenant pays the rent on time (and in full!) and looks after the property, the answer is nothing! But perhaps the best way of describing the responsibilities of a guarantor is that they have the same responsibilities as the tenant but without being able to actually live at the home. This does not just include and rent arrears but also and damages or costs should the tenant fail to cover them. For example, if a tenant is not contactable at the end of a tenancy but with damages to the property. The guarantor can also be used during the tenancy if a tenant fails to pay the rent on time.

A common misconception if the length of time that a guarantor is in place for. Most Assured Shorthold Tenancy Agreements are for 6 or 12 months or maybe more and guarantors can often believe that they would only be responsible for the initial term of the tenancy. However, unless agreed otherwise with a Landlord, the guarantor could remain in place for the full length of the tenancy, whether it lasted 6 months or 6 years!

If you are about to stand as guarantor for a tenancy you should be absolutely certain that you are in a position to do so. You should also seek advice if you are unsure of any of your responsibilities before signing any agreements! 

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.