Tag Archives: Landlord Advice

15Feb 2011

Property Landlord advice: Letting Agency visits a must.

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By Steve Roulstone

There is no doubt in my mind what so ever, that the Property visit for Landlords in a fully managed scenario, is one of the most important functions carried out by the agent on behalf of the Landlord. It works so well on so many levels that when I cannot understand why any professional agent should not carry them out.

Landlord benifits.

When you receive a report that the property is or even is not, being looked after by the existing Tenant, means that as a Landlord, you know that the agent is on the job and that you are receiving a return for the monthly fees being charged. A report on the current Tenancy, which should in my opinion (and practise and I am not alone!) be carried out every three months especially with a new Tenant can put your mind at rest about the property, or give an early warning about what may need to be done in the future. Whichever way this plays out, this becomes a strategy and the best way to manage any situation is to plan in advance and that is exactly what happens when holding regular property visits.

Tenant benifits.

Now what is not recognised so readily, but is an issue that I have seen firsthand, is that the same visit also gives the Tenant belief that the owner of the property cares about its condition (this to me is why so many Tenants talk about their agent as their Landlord by mistake, because the face of the Landlord IS the Agent and they know somebody cares!) and it is very important for the person paying the rent to know that they are not alone in being responsible, financially or otherwise, for the home they live in and pay to live in!

No losers!

So everybody wins when visits take place, but make sure it is organised well and legally, badly dealt with this could cause more problems than NOT visiting, but I continue to experience first hand that it can be difficult to get Landlords to carry out direct visits themselves especially under self Management, but what they do not realise is the harm it does to the perception of them as Landlords by the Tenants! I have stated before and firmly believe that if Tenant requests continue to be ignored by Landlords those very same Tenants who want action because they care, will stop doing so and that can only be bad news for the property itself.

Difference between Inspection and Visit?

Technically none, but it is worth pointing out that to the true definition of the word, it is Property Visits we carry out and not Inspections. Many years ago an Agent was successfully sued for failing to report on the failing condition of a property as part of the ‘Inspection’ which resulted in heavy cost for a Landlord which could have been avoided should the problem have been spotted at an earlier date. This then opened a can of worms for Agents and a better defined ‘role’ and ‘description’ was utilised, that I feel is better described as a ‘Visit’ to carry out a ‘Check’ on the manner in which the Tenancy is being carried out. This removes the risk on us not noticing that the chimney stack is cracking and the cost of replacement for not reporting at a time that remedial action could have been carried out!

08Feb 2011

Current Property News: NLA Chairman fights back, but legislation is still needed!

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By Steve Roulstone

I was busy doing those Saturday morning chores this weekend, when I report on BBC Breakfast caught my attention. What I then heard was the BBC once again doing what they do best, trying to put a negative slant on a housing matter, this time the report was about the standard of rental property nationwide. Answering the main point that a large proportion of rental property in the private sector in the UK is in poor condition, was the Chairman of the National Landlords Association, Mr David Salusbury. Very calmly and with clear comments he put the presenter straight about the standard of the majority of rental property in the Country, to the extent, I thought of reducing the length of the report as I felt the presenter had very little left to pick at once David had made his point with such authority and presence!

Missed opportunity.

Of course what David could not do in any depth, was to get the conversation round to what should have been the made drive of the report, which the BBC report failed to do, namely that legislation recommended by the Rugg review and rejected by the current Government, is what is needed to address the issues that do exist with rogue Landlords.

Councils to look after us.

The Housing Minister Grant Shapps, has stuck to the line that Local Councils have the powers already, but two things struck me from what was stated that really have an effect on what is actually happening on the ground. Firstly and most importantly, Councils may have the powers, but there is no way they have the man power to carry out this role! I remember being advised when the HMO regulations came in, that it would take our Council several years to inspect the property they already knew was due for inspection, before they even got around to investigating the property they did NOT know about! (Therefore the property where real action was needed) because we all know that the property the Council are aware of is that owned by responsible Landlords (probable members of such organisations as the NLA or managed by professional agents!)

Let’s not forget the work carried out so far!

Secondly, what is not mentioned is how the market has improved greatly over the last ten years. I can remember being asked to look at some property in the past where I have wiped my feet on the way out not that long ago! Now Landlords listen to what we agents say, because they know they need to compete in this market and prepare in a way to ensure prospective Tenants want to live in their home, not the opposite.

Let’s catch the rest.

So what needs to happen is recognition that bad Landlords do not operate through professional Agents, we need as a profession, to keep making this blindingly obvious statement until bodies such as the BBC and more importantly the Government, listen to us. This is why the registration is so important, because it would catch everybody who does not operate in this way and if our industry could be self policing, which could be operated through a qualification needed to operate for both Landlords and Agents, then what problems do exist, would be dealt with very quickly.

Conclusion.

 This is why I keep stating the same point again and again! Stop emphasising the bad points, speak about the good, let’s get a balanced opinion of our industry, housing and the need for more and then we just might start to get positive ways forward. And for what it is worth, my way would be a simple qualification that all Landlords and Agents would need to qualify for, run within the industry, by the industry, which, when Landlord or Agent fall foul off, would remove the ability to trade in this way. (on a sliding scale which could include penalties dependent upon the severity of the offence, right up to dismissal from the scheme, removing the ability to Manage property themselves)

This would force bad Landlords to be Managed by professional Agents and would stop any bad Agent from trading at all.

Now, let’s consider what effect this would have on the quality of rental housing stock in the UK?

03Feb 2011

Property Landlord advice: Rent Increase time of the year.

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By Steve Roulstone

If being involved in the rental market for over ten years has taught me anything when it comes to increasing rent for a sitting Tenant, then it is that thoughts turn to the subject in the spring, more than at any other time of the year. So much so that it is the time of the year, that as an agency we review all of our rents on behalf of our Landlords so that we can actually advise our Landlords with knowledge of having done the work before we get asked.

Important procedure.

But it is not just a matter of advising the Tenant and awaiting the increased rent to arrive. Far from it! There are several considerations, not least of which, that rent can only be increased once in any one year and perhaps more importantly, rent should be increased by issuing the correct notice, in line with the requirements of the Housing Act 1988.

Once per year.

This sensible rule ensures that Tenants, who are outside of any fixed period as stated in their Tenancy Agreement, know exactly how long they have between rent increases. An increase raised through agreements or renewals, can be the best way to achieve an increase, as the Tenant knows again that the period is fixed and therefore so is the rent for the same period. This also means that after any fixed period and for example after the traditional initial six month period rent can be increased, but only once per year. Now I have had many conversations with Landlords about the impact of increasing rents within the first year of a Tenancy and any such request has be to handled with care to avoid the Tenant immediately giving notice to leave.  

Correct Section notice

Again, by using the prescribed documentation, you can ensure that the procedure is dealt with in accordance with the Housing Act that introduced the legislation, allowing increases to be served whilst Tenants are outside of any fixed period agreement. (Periodic) This ensures that there can be no argument about the legality of the new rent. Also, I cannot write about rent increases without stating that any increase should consider the Tenant, the property and what it would rent for if empty at that time and the market and current financial situation. Then and only then can the increase be justified if the Tenant does question the increase, and yes, it is right and proper that it can be.

Investment requirement.

It is part of the market in the same way that investments can go up or down, that Rent Increases are part of owning a rental property. There have been occasions, most noticeably when property could not sell, that rents have gone in the opposite direction, as Tenants, realising that there were many properties available at the time, made offers to Landlords who needed a Tenant in their property rather than waiting another month for the full asking price. After all, in the lettings market you cannot recover rent for the period property sits empty, but that is not the case now and it has been well documented that rents will increase this year. For Letting Agencies, now is the traditional time to carry out the preparation and be ready to carry out the role on behalf of our Landlords, most importantly, correctly and professionally!

26Jan 2011

Current Property News: HMO Licensing could cost £millions.

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By Steve Roulstone

I am not one to look at matters with a doom and gloom outlook, but I do believe in being factual about the outcome of actions when there is a danger that there could be far reaching implications of a change to legislation, or changes carried out by any legislative body, as is the case with the decision by Oxford City Council in reference to ALL of the Houses of Multiple Occupation within the City.

 The decision.

What they have done, is to decide that every property that falls under the description of an HMO will, on a timetable spread across the next two years, need to be licensed by the owner with the Council, in order to improve the standard of the property and in order to receive approval from the Council to continue to operate as an HMO.

What is an HMO?

The HMO’s which fall under Mandatory Licensing are those under the three storey and five people rule, but any property where more than two unrelated people abide as their main residence, is an HMO as designated by the 2004 Housing Act. Not as so often been mistaken in the past, mandatory licensed property only. Indeed, the legislation confirms that all HMO’s are subject to exactly the same safety regulation inspection as the licensed properties. And this is the potential problem for every Landlord who operates Houses of Multiple Occupation.

The implications                   

This applies on two fronts, firstly the charges for licensing every property, as every license has to be paid for by the Landlord, are set by each local Council respectively, so charges can both vary and are entirely at the whim of the Council’s concerned. Reports for Oxford state that this number could be as many as 4000 properties in the City. Should they decide to charge the average cost as confirmed by a Communities and Local Government survey (Executive Summary) £387 per application (The range goes as high as £1500 per application) then Oxford City Council at a time of great austerity, would raise a total of £1.5 Million. Even allowing for the stated intent of the act that charges should reflect the cost, this kind of income has to be looked at seriously. (Although what should happen with a major increase in licenses to be issued is a reduction of the average cost) It does not take a huge leap of faith to see how much this could interest any Local Council at present as Local Councillors struggle to cope with achieving budget targets imposed by Government. (At a time when suggestions such as heating swimming pools with heat generated by crematoriums are being put forward and seriously looked at, all such methods of income are bound to be considered) Secondly, the result of any inspection by the local Council, may not result in lifts and fire escapes all round, but my experience is that minor recommendations, such as fire doors and walls when deemed necessary, could result in costs up to £1000 per property with ease.  

Who pays?

Well this is where the effects of any such move are always badly judged in my opinion, because whilst the bill will of course become the Landlords, the costs are almost bound to be passed on to the Tenants. Especially where there is knowledge that every rental property is being treated in the same way! So improved accommodation is the stated desire, increased rents is the effect, but unusually for me, I would finish by repeating the warning, Landlords beware, Licensing may be just around the corner for your HMO, even if it is a Bungalow or any other form of ground floor accommodation!

24Jan 2011

Property Landlord advice: Frozen pipes, whose responsibility?

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By Mike Edwards

Property Landlord advice: Frozen pipes, whose responsibility?

Doubtless we will suffer another bout of cold weather before this winter is finished, and indeed even as I write this the temperatures are dropping fast at night and hard frosts are a regular feature again.

So problems with frozen pipes and lack of water supply have in some areas created unprecedented calls for help (witness Northern Ireland’s woes in December) all of this has raised several important questions for Landlords.

Who arranges and pays for the Contractor?

Maintaining the supply of Water is the Landlord’s responsibility under section 11 of the Landlord and Tenant Act 1985, so he should shoulder it all, including arranging contractors. The only possible exception might be tenant negligence but there is a court case where it was held that a tenant is not required to insulate pipes, just live in the property reasonably. If there is a power cut or as was the case during December the conditions are simply exceptional, this will not be the tenant’s problem.

What happens if the tenant says “We have no running water at all” (as opposed to no heating) and tries to go for temporary absence at the Landlord’s expense or possibly early release from the agreement with no penalty. There are no easy answers and it all depends very much on circumstances.

Pipes outside which are badly designed or poorly insulated (including roofs) have to be considered by the landlord. Be careful also with self condensing boilers where the small bore evaporation pipe is external to the property there have been a lot of problems with these freezing this winter. Yes they can be defrosted with a hair dryer in about five minutes but is it reasonable to expect the tenant to go out into a blizzard armed only with a hair dryer more than once in a winter?

Council viewpoint

But what happens if the Landlord has in effect done all they can and are as much a victim of extreme conditions as the tenant – except they are not living in the property of course!! Well courtesy of the current fitness standards as dictated by HHSRS a property with no water supply for whatever reason would be condemned as not fit for human habitation by almost any Council or Court.

If the tenant considers it necessary, they could speak to the local council who will then make a decision and if they consider them homeless, have the obligation to re-house them. Let the Council decide for you – but again beware as If faced with such an obligation and related costs the Council would almost certainly send in the Environmental Health inspectors to conduct an HHSRS examination of the entire property.

Who can claim and for what?

So the system is frozen and a leak expected, if a contractor is called in can any costs be claimed? Well not by the tenant as it would be under the buildings cover but not by the Landlord either as the only insurable peril is any subsequent leak and damage.

If there is subsequent damage, the word reasonable will keep cropping up. Did the landlord act reasonably and did the tenant act reasonably? If the answer to both is “yes” then in response to the original question it will be a landlord problem to solve

The other issue to be wary of especially with tenants trying to thaw out frozen pipes in an inappropriate manner is when pipes are known to be frozen making sure that the damage is strictly minimized. Otherwise in any subsequent damage claim the insurance may be able to wriggle if they say you did not take enough care to control damage during the defrosting of the pipes especially if a professional plumber was not involved.

To minimize the problem

The best advise has got to be take advise, especially from professionals who know the law and what would happen in these circumstances, bur remember, quick action and cooperation should always be looked for before freezing problems get out of hand!

18Jan 2011

Current Property news: Mortgage demand providing a good platform.

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By Steve Roulstone

Even as early as the second week in the New Year, agencies are reporting a big increase in Mortgage demand and the majority seems to be in the rental sector as Landlords continue to react to the need for an increased number of rental properties. Indeed, as a Country that normally follows what happens in the USA by way of financial trends, it could be argued that we are right on the heels of trends in America as they start to ease the availability of mortgages across the pond.

 Follow that lead!

I have stated before and would repeat with this very current news of increasing demand, that we are building up a head of steam which would when the market releases a product that would be acceptable to Landlords, result in an increase in sales for the coming year, which I believe will at the very least aid the recovery (if not start the recovery) of the housing market in the UK. There is no doubt that the Mortgage houses are looking at what demand would bring as they continue to sample the market place with short term offers, and this is producing strong demand, confirming my beliefs that the demand is high amongst Landlords, who are only delaying because they do not wish to be tied in too the wrong style of mortgage for their investment portfolio.

Strong Rental demand

There is no doubt that the demand is continuing to grow and this at what is normally a quiet time, even allowing for the spike of demand caused by the extended Bank Holiday blues! As Agents, at Castle Estates we are gearing ourselves to be ready for a year of high demand by ensuring we have the right technology to supply our Tenants demand for information and ensuring we remain competitive in an industry where Tenant charges can sometimes be difficult to justify. We have always maintained that the relationship with our Tenants is the key to the art of good Management and we wish to ensure we supply the service demanded by an ever increasing technically knowledgeable customer.

Producing higher rents.

For the result of the current shortage of rental property will result in higher rents for the Landlords, that is what market forces will dictate, even with the knowledge that affordability will be a large part of any increases in the current financial climate that we are living through, so giving Landlords even more reason to increase their portfolio of property. The market professionals and providers know this and will be looking for sustained signs before releasing the products that the industry requires. There is no doubt that this continued increase in demand will be playing a large part in providing that very proof!

16Jan 2011

Property Landlord advice: Further problems for reluctant Landlords.

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By Steve Roulstone

It is strange how some matters come up on more than one occasion and this week, we have seen two occasions where absent property owners were at risk without even being aware and it is a situation that I now recommend everybody to be aware of, indeed check with your own Insurance Company to ensure the house insured is covered under your normal homeowners Buildings Insurance policy. The outcome may have a great effect on you becoming a reluctant Landlord.

Empty property.

The two occasions that have arisen this week, both concern owners, who in our case are Landlords both, who have found that their property is not insured under their existing Insurance policy, because the property is currently empty. In the first case, the property was empty whilst the Landlord had work carried out in preparation for renting the property, to ensure that the house was presented in the best possible condition. His policy only gave cover for sixty days and was discovered because of damage being claimed through a burst pipe during the recent cold weather. Needless to say he was not aware of the clause and I wonder just how many insured are?

Policy renewed.

The second case is even worse, in that because of what had happened to the first Landlord we asked the second, who had moved on over a year ago, only to find that he only had thirty days cover and the property had been empty for over a year. In fact, the Landlord had recently renewed and even with the address change, nobody at the Insurance Company asked the question about why, so it appears they gladly took the payment without even taking the opportunity to check if the house was covered! When you consider the questions we have to answer to ensure our position (property) is insurable, it seems strange that the reverse does not happen, i.e. we are not asked if a situation exists, even with evidence to support that it does (the different address) that means any claim would be rejected!

Now the implications

The advice has got to be that any owner looking to move on and leave a property empty, advises the Insurance Company from day one and of course checks how long the house is covered in their absence. But the implication for owners wishing to achieve a sale before deciding to consider their options (our experience suggests this can be anything up to six months) is that they are liable to find that their Insurance policy will not allow them the grace of time and a decision may well be forced.

Renting options

What we normally see is a request for information before owners move on, so that if they do decide to rent they will have already decided who to appoint as Managing Agents and do not have to return to the area to make an appointment. Far be it from me to suggest otherwise and of course we are accustomed to gathering everything we need at that first appointment to enable us to do our job without the then landlords having to return. But under these circumstances, owners are going to have to make that decision at an earlier date and I for one would not argue! but we must always give best advice and as was proven this week, it will be the property owner who will benefit in the long run!

14Jan 2011

Property Landlord advice: Rent arrears kept in control.

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By Steve Roulstone

It is that time of year again when as all Letting Agencies know, rent arrears are at their worst. The Christmas credit card bills start to arrive, if the bank account has not already been left dry because of too much celebrating during the Christmas Holiday, especially with the current financial climate So we must be extra vigilant and ensure that our systems are up to date and no time is lost in dealing with the issue.

Proper methods

The key to dealing with arrears is communication and a system that is tried and tested. At Castle Estates we use a system that has been built over the last twenty years and is based on regular communications that whilst leaving the Tenant in no doubt as to what the problem is, also ensures that they know we are always available to discuss the matter to hand.

Lets talk!                  

It is dealing with matters in this way that leads to resolution in most cases and even if the Tenant is unable to pay the rent, because of the loss of a job for example, it is communication and relationships that are going to give the best solution in the long term. I am not saying that legal action can be avoided just because we are on speaking terms with the Tenant, but the ability to have reasoned conversation does mean in most cases, that you will get a reasoned response!

Not forgetting protection           

Of course policies are available for Landlords to ensure they are covered for any loss and of course as I have stated before, we highly recommend Landlords take such a policy and that they also investigate which policy suits their needs of course to be sure that we are in line with FSA regulations, as a Company we do not recommend any particular Policy or provider, but we must ENSURE Landlords know that Rent and Legal Insurance policies exist.

Range of coverage.

But what I will comment on is the range of policies and differing levels of cover that they give and in some cases not always for the best. Letting Agencies can now link themselves to services which will take over the Management of the debt and serve the appropriate notice for them. Well forgive me, but that is like saying we are a Letting agent – to a point! These are intrinsic parts of a Letting Agents role to me and once again give clear demonstration of the difference between a Letting Agent and Letting Agencies. I for one would not wish to ‘offload’ what is a vital part of the service we offer our Landlords.

Be aware!

Every Landlord should of course not only expect their agent to be able to offer the service themselves but also ensure good communication to keep them fully aware of not only missed payments but what is being done and the responses received to deal with the problem. This will also ensure that progress towards the possible appointment of a solicitor if insurance is not in place will be known and not come as a shock. So be aware, act at the appropriate time and keep all informed. That way we can hopefully reduce the problems rather than increase them during difficult times.

 

12Jan 2011

Franchise News: Letting agents WANT ‘The Hook’

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By Steve Roulstone

It may seem that I am paranoid about the BBC. My wife would probably agree, far from it, I always start with the BBC before any other channel whenever I turn the TV on. But there are times when I do despair about the way in which they report matters and it is not just the Housing market or in particular the Letting Industry that grabs my attention, just listen to the bad news angle taken within the weather forecasts and you will know what I mean!

Popular news reports.

One of the automatic results of being the BBC is whatever they write, especially within the news, they always get ‘Star billing’ within Google. Well done to them, after all we are all looking for better placement, but over the last couple of weeks, a report by the BBC from back in June 2010 has kept appearing within the criteria of my Google search. It is entitled ‘Letting Agents let off the hook by Government’ so this morning, when it appeared again, I read it.

Principals .

One of the important principals about writing anything for publication on the web, if you wish for people to find your scribbling, is to make sure that your article explains the title, so it falls in the ‘what it says on the tin’ principal, or at least that is what I have always been taught.  However, having read the article I would have to describe this as a tenuous link at the very least. The comment within the article that the title refers to is about agents who I assume are not part of any professional body, as either the ARLA spokesman did not confirm this in what he said, or only part of his comment was printed.

Actual intent.

What is confirmed by ARLA and indeed the CAB is that the legislation was both welcome and good in its intent. That some will take advantage of the decision is a matter of conjecture, as professionals, we believe the legislation would have stopped that happening.  So the actual meaning of professional agents (and in my opinion letting agents are qualified individuals, letting agencies are offices!) is not differentiated in the article headline.

Now for the rub!

And the reason I list this as Franchise news, because the result of the visibility such articles get through Google, is that hundreds of people will read the title and without even reading the article, my Industry will be tarred with a brush, that when you read and understand the article, we do not deserve! It is difficult enough to prove that my industry is not suffering in the same way that House selling has suffered over the last few years and indeed that we have benefitted in so many ways. I do not ask that we have good news just to suit my Industry and I would not state or write anything that I cannot support, but it is time that the BBC went back to the agency that reports the news in a factual manner and stopped looking for elements of bad news so often in its reporting.

The reality is different.

Because they are who they are, the BBC have far more influence that such practises deserve, in the meantime how many people have written off a Property Management Franchise on the back of articles and reports like this that give what in my opinion is a negative approach, when in actual fact, as an Industry we would welcome such legislation and the article says just that. Pity the title the BBC chose disagrees!  

 

10Jan 2011

Current Preoperty news: Cannabis factory increases.

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By Mike Edwards

I would not normally copy information from elsewhere for my own writings, but as this is very good and timely advice from the Police on the prevention of Cannabis Factories, I will make an exception and copy in full a circular I received from Thames Valley Police sent to me because of my position advising our franchised offices within Castle Estates:

Dear Landlord/Estate Agency,

 Cannabis Cultivation

Commercial cannabis cultivation is a growing industry in the UK. In the past two years, Thames Valley Police has uncovered more than 300 cannabis factories, with an estimated yield of £4.4 million.

Cannabis factories range from small enterprises in a bedroom, to barns and industrial premises adapted for large-scale production. Because properties are often sub let from existing tenants, it can be difficult to trace those responsible.

The damage to property caused by this kind of activity can be substantial. Landlords face severe penalties for failing to report illegal drug production, and could be sentenced to a maximum of 14 years in prison.

Information for Landlords, giving advice on how to spot if drug production might be taking place at one of your properties and what to watch out for with regard to a new tenant is available on our force website by following the link below.

http://www.thamesvalley.police.uk/crprev/crprev-home/crprev-home-canprod/crprev-home-canprod-adv.htm

Use this number, 08458 505505, to report a non-emergency crime or to give information to Thames Valley Police. You can contact Crimestoppers anonymously by calling 0800 555 111.  Always call 999 in an emergency.

 If I can be of any further assistance please don’t hesitate to contact me.

 Kind Regards,

 Wendy Walker, Community Information Manager, Force Intelligence Bureau, Thames Valley Police. Tel: 701 3967 (External 01865 293967) Mobile 07837 496532. Email:  [email protected]

 The area is of course not significant, but the advice is paramount.

Good advice

Any advice of this nature should of course be well received and what matters most is the ability to put steps in place to stop such a disaster happening to any Landlord and of course, when fully managed by an agent, who would carry out regular property visits, it should not! Only when Landlords leave a Tenant in the property without visiting between Tenancies do such opportunities arise and when you consider the possible actions taken against the Landlord, surely this is reason enough to ensure all properties are visited on a regular basis!