Tag Archives: Property Advice

10Aug 2011

Landlord Property Advice: Always Allow for Wear & Tear

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By Craig Smith

When a tenant leaves a property, some Landlords think that they are automatically entitled to have items such as carpets replaced or walls repainted at the tenants’ expense. But this isn’t always the case as Landlords must take into account fair wear and tear.

What is Classed as Wear & Tear?

As a general rule, wear & tear is usually worn carpets or  a reasonable amount of scuffing to walls in high traffic rooms such as a hallway or stairway. Over time a cooker or hob may start to look a little shabby purely because of the amount of use it has had. Landlords should expect this during a tenancy and need to make reasonable allowances when a tenant vacates.

Certainly staining or deliberate marks are not just wear & tear but can be classed as damage. Yes, everybody has accidents from time to time and the odd drink will be spilt or food dropped at a meal time and replacing a large carpet could be expensive, but don’t forget that tenants can take out insurance for such incidents. (Refer to our previous blog regarding insurance.)

Longer Tenancies Means More Wear

Something that you learn very quickly in this business is that everybody has different standards, one persons ‘filthy dirty’ is another persons luxurious palace. It is very difficult to police how somebody lives in their home which is something that some Landlords forget. Generally speaking, the longer someone lives in a house the more wear is to be expected. For example, a property that has been tenanted for 5 or 6 years should expect more wear than one that has been let for just 6 months. Obviously there are some exceptions where there may be an exceptionally good or bad tenant.

The More Tenants, the Higher the Wear?

Another factor to take into account is the number of tenants who will be occupying a property. Imagine a typical 3 bedroom house, with a tenancy that has run for 3 years. If the tenant was a single person living on their own, you would expect less wear than a family with 2 adults and 3 children.

The same can be said for pets. Most pet owners are responsible people who look after their pets and the property they live in. However, if a Landlord chooses to accept a pet in the home then the Landlord should also expect some additional work at the end. Yes, it is the tenants responsibility to leave the property in the same condition as when they took it on (not forgetting some reasonable wear & tear!) but the Landlord should make some allowances when discussing any costs.

Excuses, Excuses

So we should avoid any tenants with pets? Wrong! If all Landlords avoided these sorts of tenants, there would be an awful lot of homeless people! Don’t forget that obtaining good references before a tenancy commences will help to determine how good the tenant is and, although circumstances can change, will give a Landlord good indications of whether to proceed. The same can be said for gardening, if a tenancy started with a neatly cut and well presented garden but left overgrown and weedy, the tenant cant say that this is because they aren’t gardeners. The property should be left in the same condition and this shouldn’t be used as an excuse! 

01Aug 2011

Current Property news: Property news roundup.

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By Steve Roulstone

There are three items of news this morning that are all worthy of note and comment, but not I feel, in their own right so I have added them all together in this Blog. They are about a Private Landlord who overstepped the mark in attempting to save money, a report on what TPO is trying to achieve and finally evidence that TPO are indeed acting where required against Agents who carry their logo, when they are not members and do not have the right to do so.

Property flattened in Twickenham.

This report in the Daily Mail today reports on a property owner who, on a property refurbishment, flattened the house concerned to enable him to rebuild the property, because allegedly, he wanted to avoid paying VAT which is exempt on a newbuild project. Quiet an extreme to go to I am sure you would agree and far be it for me to suggest he was justified in doing so, as the courts have indeed confirmed, but the case for reviewing the VAT charges for refurbishment contracts is overdue. Of course as a Letting Agent, we advise many an investment Landlord buying property for long term investment and whilst it is difficult to suggest that VAT should not be chargeable on either newbuild or refurbishment building works, there has to be a scenario which would better cater for both and this report confirms what people will allegedly do to make best use of current legislation.

TPO move closer to OFT approval.

Property Wire are carrying confirmation of the TPO Agents code having passed stage one of the review and subsequent request for approval by the OFT. This is alongside the new Kitemark, as introduced by The National Approved Lettings Scheme that the Industry is also adopting. As regular readers of this post will be aware, I support any move for professionalism in our industry as long as it has teeth (which is what the final article confirms!) and is in the best interest of the industry. This is where I have to take issue with this news, because whilst I am absolutely in agreement with what the TPO are doing and would support any move to have professionalism rubber stamped the Industry as a whole must be wary of confusing the public in what such organisations are trying to achieve. It will be to the Industries loss should our customers be confused by more than one code of practise or conduct being trumpeted at the same time.

TPO wield its power!

It is with great relish that I read the final article, namely that an organisation in the Midlands have been fined for wrongly displaying the TPO and OFT logo on its web site and thrown out of the voluntary membership of the scheme. In this instance the Company concerned were Estate Agents, but never the less the very fact that standards are being upheld for the right reasons (even if the judgement does seem a little ponderous) shows that the TPO does intend to operate as an association where membership does stand for professionalism within the industry it covers. Good news from where I stand!

18Jul 2011

Rental Issues: Checking in advice for Tenants.

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By Steve Roulstone

I always find it very interesting to visit other property blogs available and having done so over the weekend, there was one recurring theme that I kept on coming across, and by thinking through the situation one answer that cries out to protect Tenants from what is obviously a recurring problem. The focus of the questions was the state of property and the promised changes that were not made or belongings not removed prior to the agreement being signed.

You have to be there!

And in all seriousness, that is the answer short and simple. If you are promised by a Landlord, or Agent, that repairs will be undertaken or decoration carried out prior to the date you expect to move in, or not wanted furniture and belongings removed for the same timescale, then always without exception, do not sign the agreement until you have confirmed that the work or removals have been carried out or removed. Of course, more simple matters, such as cleaners who have failed to turn up, or a spare bed that is not required can be dealt with on the spot. No the situations I was reading about were matters that needed referring to Environmental Health, or rooms still full of somebody else’s furniture! The best way to achieve this aim? Arrange for the signing at the property on the day the agreement is due to commence.

That means you!

You must look on this as an important date and even if there are several people signing the agreement, they should treat it seriously enough to be present on the day. Then, everybody will be able to see that promises have been carried out and the agreement can be executed (signed) without any issues remaining. Even in the situation I studied the most, where one person was not moving in for a few weeks, either still be present on the day, or have arranged for a signature by proxy and stay in touch (This could be one of the other Tenants or better still your own representative.

Achieving completeness.

This is the name of the game, after all the Landlord or Agent is not going to release keys until all monies have been paid and accounted for (at least no Landlord or Agent I know would consider completing before being paid) so if the outstanding work is that important and I would say state and condition is a good marker for any new Tenancy (how will the Landlord react if and when further problems occur?) do not pay or complete!

Prior arrangements make for better action.

The other important issue here, is that as my own Agency would never consider starting a Tenancy without the Tenant present at the property by advising the people controlling any Tenancy that you as Tenant wish this to be part of the arrangements, it should, if those very same people have any intention of completing the work in the first place, focus their minds to the fact that they are walking in to a problem by not completing what they have promised, so by just confirming this practical and sensible routine, you could be ensuring the work is carried out. And if it has not, then do not sign and think very seriously about if you really want to under these circumstances!

15Jul 2011

Property Landlord advice: Accidental Landlords need to understand the difference!

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By Steve Roulstone

I have just read a report in the Daily Telegraph, about the rise in Accidental Landlords over the current year and the reasons why so many are looking at the Lettings Industry as a viable method of allowing them to ‘move on’ during this period of inactivity in the property sales market. The reason given for the lack of sales is the locked position of seller and buyer not wishing to negotiate on price, but fails to point out the reason why there is an impasse, which is the difficulty potential buyers have in either amassing the deposit or affording a mortgage. This points more to buyers being unable to negotiate any further and therefore the actual need is for sellers to lower their expectations, or indeed, turn to the rental market!

And why not!

Because this is a very viable alternative and one that is continuing to increase year on year (Let’s face it,  Estate Agents up and down the Country should be praising its growth, because without it, many more would have been in grave danger of closing their doors) and a market which offers many professional Letting Agents, who, because of the manner that Accidental Landlords come to the market place, never actually speak to Professional Letting Agents, rather sticking with the Estate Agent who has been unable to find a buyer, without the knowledge that (I would suggest) there is another layer of services available from our industry which when visited, would open the eyes of these new Landlords to what our market is about and how property can be looked after.

Registered by Law?

Now that does not mean that all Estate Agents do a bad job in the rental market, of course not. No more than all Letting Agents are perfect, far from it. But an interesting statement is made in the article about all Estate Agents needing to be registered by Law, because this does not apply when they all started to manage property in the rental market (if you read my pages often you know what is coming now!) because no registration is needed for a Letting Agent and it is something that we have been asking the Government to address for many years now. But I feel it is somewhat short of the mark to suggest in this statement that Estate Agents are better able because of registration, because if Letting Agents were asked to prove that they were professional, many of the Estate Agents who fell on our industry as a lifeline two years ago, would not be able to qualify.

So the difference!

This is really what my point about this article is, it proves something that I have seen all over the Country, that sellers who turn to the Letting Industry and rent their property instead, should make sure they speak to an agent for advice and judge the difference for themselves. The Letting Agent they choose should be a member of a professional body and registered with Safe Agent, the Industries latest attempt at providing re-assurances for its customers. I believe that no matter what the local market charges (because not all of the country is able to charge 15% (London?)) they will not only have price competition, but knowledge, experience, training and service competition as well. vive la différence!!

 

 

 

04Jul 2011

Current Property News: Increased Renting demands pays dividends for Landlords.

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By Steve Roulstone

I have looked at three pieces of news this morning, all surrounding the property market and I believe all good, proving yet again that the rental property market continues to be positive in a period of time even for the current downturn we are experiencing that has seen nothing but negative news on closures, redundancies and negative forecasts. Other items I read this morning even hinted that ‘savvy’ business people might continue to look to the property market as a better investment than the more traditional stock and finance markets.

Squatting made illegal.

The really interesting point about the news released by the Government recently, is the amount of reporting that defends both the action of squatting and the need for squatters making this bad news for the public in general, but I would like to pick on two points that the majority of commentators have missed. Firstly, it is totally inappropriate to say that Squatters in some way make use of empty property and are therefore unlocking living space for those without a home of their own. This is just a way of turning the eye from the reality of the fact that they have no legal standing in occupying any home they choose, empty or not! I am not in disagreement that empty property could be better used, but only with the acceptance, knowledge or permission of the owner. I do not need to point out the damage caused to owners who are unable to utilise their property because of somebody squatting.  Secondly, all this does, is continue to take pressure of local Councils. This is where any move to utilise property that is truly left unused, as the Government and therefore local Council need to be the vehicle given the power to unlock property that is left empty long term, and is genuinely available to ease our housing needs. One further point for the writer, it is at least Mr Cameron and the words Prime Minister are suffixed by a capital letter!

Gazumping on the increase.

There is no doubt that rents are on the increase, but we are not seeing any great evidence of Gazumping outside of major cities, but before anybody starts to jump up and down about Landlords making profit, two points again that need to be confirmed. It is not often that I comment that we are in a similar position to Estate Agents as letting Agents, but it needs to be confirmed, that we are duty bound to advise our Landlords if a better offer for a property is received, just as Estate Agents would do for their customers, even more so because our contract with our Landlords gives us a duty of responsibility to comply with and therefore we have no choice but to both advise and react to our customers wishes. But holdfast! These were the same Landlords who were faceing offers on property below the asking price only two years ago and this current trend is only really redressing the balance from that period of rent reduction.

Renting numbers still increasing.

This is of course good news and confirms that by the end of this year, the percentage of rented property in the Private sector in the UK will have increased to something close to 20% and overtaken the Public sector at the same time. The issue that jumped out of this report at me was the mention of avoiding rogue agents in the links. Sorry to be a bore, but how simple would that job be if the Government were to protect this now significant and continually increasing sector, by introducing licensed Agents! (Now where have I heard that before?) For me, as a Professional who spends most of his time pushing the message that qualified Letting Agents are both the Tenants and Landlords best way of managing and finding property, allow me to add one more reason to the case: One of the main reasons we have an increase at present is because the Sale market is unable to move property for owners who need to move on and the rental market provides the outlet owners need. But by default, the Estate Agents who now have a captive audience are the beneficiaries of this business. My comment to owners is that they should try at least one qualified specialist Letting Agent. By doing so, you should be amazed just how knowledgeable they are and therefore better protected and prepared you will be in the rental market! This is what being trained in our market means and only by speaking with a specialist office will you find out for yourself what that difference means.

10Jun 2011

Property Landlord advice: Gardens and Renting how to get it right!

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By Steve Roulstone

This time of year, as agents visit the properties under their charge, the most common phone call to the Tenant, if they were not present during the property visit, becomes the request to tidy the Garden. So often the Garden, especially when the house concerned is a family home is so well tended and designed that when the property is let expectations about the manner in which it is kept can be misinterpreted resulting in disappointment at the very least and in some cases frustration and anger.

The problem.

We all know a tidy garden helps us rent the property, but Landlords need to understand that when they rent their property, whilst it is the Tenants responsibility to look after the house and garden in a proper manner, this does not necessarily mean it will be kept in the style you would wish. It is the translation of the term ‘proper manner’ which can cause the problem. If such a matter should reach court, as periodically they do, then the Judge is in all probability going to ignore any claim made against the Tenant because all a Tenant is charged to do is keep the Garden in reasonable order and not to the same standard or manner kept by the previous owners, as time would normally be given by the courts for the Tenant to address the issue.

Reasonable Standard.

This is what would be expected of all Tenants the problem being that reasonable can just be mowing the lawn and stopping the borders from being full of weeds. This does not include tending for plants, over wintering in a greenhouse or cutting back at the appropriate time of the year. The point that needs to be appreciated is that by renting the property you are accepting that the Tenants will be allowed to live in a manner which suits themselves and not how you may wish them too. The point being, that tending the garden to the standards you wish for is not required, just the ability to keep the appearance neat and tidy is all that should be expected by the Landlord.

Covering all bases.

This means that provision needs to be made prior to the property being rented to ensure the Landlord achieves what they want for the Garden. I myself, with a wife who just falls short of sleeping in the Garden, having just moved, made arrangements for a Gardener of our choice to visit the house every week. The resulting bill we pay, but were able to rent the property with Gardens tended at a better price. I believe this made the choice easier for our Tenants as they continue to enjoy a mature garden with plants flowering throughout the year. But even with this provision, we both know the Garden will slowly suffer, as nobody cares for a garden better than the Gardener!

Rent to a Gardener.

I have of course on many an occasion, been told by the prospective Tenant, ‘oh how lovely a garden I can look after’! Only to be disappointed by the lack of efforts they then put in. So my advice and I believe the only advice that can ensure the best results, is to ensure if it matters that much to you, the Gardens are looked after by the person you appoint – which means your own Gardener. I certainly would not suggest you do them yourself, as this would not be acceptable to the incoming Tenant.

Family home or Buy to Let?

Of course it matters so much as to why the house came to be rented in the first place and as so many houses that were lived in by Parents are now entering the Rental market, it is quite often that the Garden so lovingly nurtured by your parents is so important to you in how it is looked after by others. My advice in the past has also been to carry out a major re-fit if seeing the vegetable patch turn to weeds and slugs is going to be so upsetting. By having the Garden stripped and relayed to lawn for example, you remove the problem in one go. After all, nobody will ever look after the Garden in the manner your parents did and this can be a very good way of removing the garden as an issue, in the same way as ensuring the Bathroom and Kitchen (the two most important rooms in any house) are in a rentable condition, but that is another story!

03Jun 2011

Property Landlord advice: Student Accommodation and Council Tax for part time Students.

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By Steve Roulstone

I have recently come across a situation that I would both welcome comment on and happily post as a warning to all Student Landlords that possession of a Student card does not always mean that as far as the local Council are concerned, the person you are dealing with is not necessarily considered to be a Student. This has specific impact on the Council Tax status of your property.

Large Student accomnodation.

The situation we have just found ourselves in is somewhat complicated by the building in which the students reside. We manage a converted ex County Council building in the middle of Stafford, which comprises of two sets of accommodation, split by a central corridor. To maximise the Landlords return, one half is for Students and one half used for normal Council Tax paying workers. The Student half, comprises of 12 flats, with anywhere between four and ten rooms per flat. They have centralised kitchens, en-suite facilities and they all share one large common room on the ground floor. So not the usual Student accommodation, more purpose built.

Not enough hours.

The problem we encountered with the Student concerned was that they were only a part time Student, on a course which was for 16 hours per week. The problem arose when the Student concerned approached the Council for financial assistance, even though we had advised they would not be eligible. They were not, but the Council then questioned the Student status and quoted from their own web site that: ‘To qualify as a student, the course must be over 21 hours per week and last for at least one year’

Caught out.

I am sure we are not the first to have fallen foul of this ruling and because it is on the Council web site we cannot complain too loudly. But this does show one very alarming hole in what we normally accept as proof of status. This is that the Student card issued by the College is not sufficient proof for the Council to agree. In future we will be insisting on seeing the appointment letter as well as the Student card, because as usual in these situations the consequences are financial!

Consequences.

In the Councils eyes, any property which has been used as their main residence by a person who is not a registered Student (to their own translation) no longer applies for full Student discount. The end result is that the Council have asked for Council Tax for the whole flat for the period that the person lived in this accommodation. This totalled a period of six months. Now many people would already be aware of this rule, but obviously we were not and this is why I have chosen to post this information in this manner. It just proves the old adage; you are never too old to learn!

01Jun 2011

Current property News: 95% Mortgage starts to turn the key.

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By Steve Roulstone

We have seen several items in the press yesterday about the 95% mortgage starting to appear again and of course it has received mixed reviews. However the BBC report on Radio 2 during the lunchtime Jeremy Vine show hosted by Vanessa Feltz was nothing more than an attempt to get as many negative comments about the Banking world from the general public and lacked any real depth, however they did attract several sensible comments about how if housing sales are to start to improve again, a move to ease the deposit burden was bound to be the sensible solution.

Renting options.

The show focused on the options available to those who could not afford to purchase and it was nice to hear one commentator point out that renting is a perfectly viable and acceptable option now and certainly offers a plentiful and varied option of places to set up home (I say this as a Tenant myself) and indeed this same topic was discussed during the finance slot on BBC Breakfast show yesterday.  It is a fact that the rental market has shown consistent growth in demand over the last two years and I have commented many times through these pages that our market is very healthy at present.

Mortgage options.

Now to me these two facts point clearly to the need for better mortgages for Landlords as a way of easing the market and supplying rental property for current demand at the same time. This is another subject that I have mentioned before and I do not apologise for doing so again! It was clear however from the comments made during the show that Mortgages are an emotive issue  with one (poorly advised) person thinking any easing of Mortgage availability was just a way for banks to ‘line their pockets again’. Of course the facts are that Mortgages need to be made easier to obtain before the market starts to move again, no matter what sector of the market is considered.

Differant options.

One area that I do not agree with however is the split option of shared ownership, which has been trialled before (as the problem for first time buyers is not a new one) The problem for me is that no matter how long you own the property, when you come to leave you are still only left with half of the collateral built up in the property during your time under shared ownership. Now most people who use this scheme as a starter home, need to move on having got married, started a family and as is normal need more space. This means that moving to a bigger house can present just as many problems as finding a house in the first place, because shared ownership is only encouraged for started homes. Therefore, assumptions are being made that everybody will be able to improve their circumstances (income) during the period the initial property is shared. Experience tells me this is not the case and guess what? Most co-owners will not allow renting as a method of financing the next move!

One option stands out.

It is a little ironic that the same scheme is being championed again when in the past the rental market was seen as the solution to the eventual problem most shared owners find themselves in! With the current trends which are not only financial but also lifestyle choices for the majority of Tenants the rental market yet again shows itself as the market that can trigger an increase in house sales, if the proper Landlord tool was made available. Surely this is where the Mortgage Companies should be looking alongside any easing of deposits required; after all, buy to let properties have the additional support of that income behind them!

18May 2011

Current Property News: Buy to Let market grows in strength.

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By Steve Roulstone

Recent reports indicate that the Buy To Let market is, as I have been reporting for some time, growing in strength and therefore returning despite all the gloom and doom reports that the Financial Crisis would see an end to Private Landlords investing in property using this specialist mortgage.

Misrepresentation of Landlords.

This report raises several issues for me, the most glaring being the overall suggestion that Landlords buy property to get rich quick and that they will not do so ‘Under current circumstances’. Well excuse me for pointing out that this is obvious and the error in the unstated indication that ‘Getting rich quickly’ is why Landlords purchased property in the past. Well as one of these Landlords and as somebody who speaks to and knows many others, can I point out that by far the majority of Landlords chose and indeed choose property as an investment, because it has traditionally given a conservative return, but never actually lost money!

Markets will always dictate.

I have pointed out on these pages recently, that it is the market itself which will dictate both the number of properties available and the need for Landlords to supply that demand. We have seen Tenant demand rise steadily over the last three years and the % of rented UK housing stock confirms both the need and the ability for Property owners to supply the demand. What has happened however is that droves of new Landlords are being created by the inability of the Sales market to provide purchasers and the realisation that by renting property instead, they have been able to move on with their lives and plans. I myself now rent and have rented my main home for the next five years for the same reasons.

Rising rents, really?                     

The main push of this article is to concentrate on the amount of income generated from the rent and I find the statement that Landlords are being enticed because of the possibility of rising rents to be a little thin! Firstly, this totally ignores the more down to earth reasoning given above that owners are renting simply because they can, when they are finding it very difficult to sell, allowing them to get on with their lives, but the assumption still ignores the main reason for Landlords to buy or invest in bricks and mortar, which is historical, because property in the long term always gains in value and this is very much linked with the conservative expectation, set against the risk of either Currency or Stocks and Shares.

Tarred with the same brush.

It seems to me that the writer has looked at Property Landlords in a ‘one view take all’ approach, where the reality is so much different and far less simplistic. Is it my view alone that people who invest in property are more conservative than those who invest in more traditional methods? Either way, the market is driving this increase in new Landlords and what is not my belief alone is that it is both sustainable and shows no sign of decline for the foreseeable future!

17May 2011

Rental Issues: Reserving a rented property whilst a Sale completes.

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By Steve Roulstone

Rental Issues: Reserving a rented property whilst a Sale completes.

This is one of those issues that whilst rare does occur now and then and always causes confusion. I think clarity would help so that potential Tenants understand where Letting Agents are positioned and why we have to do what we do. It has happened at our office in Stafford again recently and it is the matter of how long we are prepared to hold a property before Tenants accept responsibility (sign a Tenancy agreement) that is nearly always at question. Under normal circumstances and with so many Tenants in the market at present, this problem does not and need not occur.

Legal position.

Tenants are only legally bound to pay for a property from the day they actually sign the agreement and of course Tenants do not wish to do so if they are subject to a sale which has not completed or could indeed collapse which seems to happen more often in recent years. Nobody would want to accept a minimum of six months liability for a property that should the sale collapse, you could neither afford or equally wish to use as your home. This is why Agents will quite often ask for payment from a date in time without signing the agreement as a payment in good faith but without committing the Tenant to legal documents which have far more lengthy implications.

Holding a property.

What needs to be realised is that Letting Agents have a legal responsibility to provide the best service and advise to the Landlord because of our legal position (as Agent of the Landlord) What also needs to be considered is that the Landlord will need to earn income from the property for as many days possible. Agents will do whatever they can to avoid void periods for Landlords, it is easy to see why anybody who owns a property as an investment, which is of course exactly what rental property is wants to earn rental income for every week possible. This is why once we have found a Tenant we will (in most cases?) confirm that we allow a four week period under normal circumstances for the move to be completed.

No similarity with sales.

This of course is the rub, there is nothing in the two processes which are alike, indeed the only comparison would be to expect Building Societies to allow payments to be suspended during the same period, so you can see how one sided the effect of waiting for a sale to complete now sits! Therefore we have to proceed in the best way possible for our Landlords and during a period where the rental market continues to improve, people who are renting after selling are not necessarily so attractive as prospective Tenants. I have known situations where sales collapsed after a seven week wait and resulted in the Landlord having a three month void period. Position this with our legal responsibility to give best service and advice to our Landlords and perhaps the situation becomes more understandable!

Co-operation required.

It is of course an emotive subject as anybody who has gone through a house sale nowadays would know. So we have to ask for co-operation from prospective Tenants under these circumstances and interim payments to reserve the property without asking for a legal commitment by signing the Tenancy agreement are a half way house which I believe offers both parties the ability to proceed and still deal with whatever the legal process of house selling throws at us, what we ask is that Tenants understand our liabilities and can co-operate in the same way.