Legal & Compliance
Information For Landlords When Letting Their Property
A tenancy agreement is a legally binding contract between a Landlord and tenant that sets out both the legal and contractual responsibilities and obligations of the two parties.
The most common form of Tenancy Agreement is an “Assured Shorthold” (an A.S.T.) under the 1988 Housing Act (amended 1996). This type of Tenancy offers the greatest flexibility to the Landlord, has straight-forward notice procedures for bringing the Tenancy to an end and a special Accelerated Possession Court procedure should Tenants fail to vacate. These Agreements tend to be for a minimum of 6 months to 2 years, but can be for any period up to 3 years or longer if drawn up by deed.
A ‘Break Clause’ is sometimes inserted when a fixed term tenancy is for a year or longer, allowing the agreement to be terminated after the initial 6 month fixed term. If either party wishes to end an existing fixed tenancy early, this
can only be done by mutual agreement between both parties.
In certain circumstances a “contractual” non-Housing Act Tenancy must be created. Examples would be a Company Let, Winter Let Agreement for a Holiday Cottage or where the annual equivalent rent exceeds £100,000 per annum. Very rarely would a Tenant be offered an “assured” Tenancy that gives significant long-term security of tenure.
Properties with Land
An Assured Shorthold Tenancy Agreement applies to residential property with land up to 2 acres (excluding gardens). Where additional land and paddocks are
included a separate agreement would be required for the land.
Failure to inform your Bank or Building Society may invalidate the terms of your mortgage. Our TenancyAgreements comply fully with the legal requirements laid down by all major Banks and Building Societies.
Letting your property is likely to affect your insurance policy for the Building and/or Contents.
It is your responsibility to maintain the Building Insurance in all cases and obtain consent from your insurers to let.
It is important to ensure that your current policy is tailored specifically for letting. If you require a quote, we can arrange this in house and shop for the right policy at the best price for you. Tenants will be responsible for their own
personal goods and chattels.
Furnished or Unfurnished
Most Tenants prefer unfurnished accomodation but thechoice is yours. There is little difference in achievable rent. If letting unfurnished this would still normally include carpets, curtains, light fittings and cooker. Current
legislation does not differentiate between furnished or unfurnished accommodation in cases of re-possession.
If the property is jointly owned then permission must be obtained from all owners who should be named and sign all documents and Agreements.
References are taken up on prospective Tenants followingan “In Principal” agreement of the letting. This will be in the form of a report from a Credit Referencing Agency to include credit checks, previous/current landlords reference, employee reference, Accountant/Solicitors references, if
self-employed and character references.
For tenants who do not fully meet our referencing criteria we may ask for a guarantor or full payment of rent for the tenancy term, or simply refuse them a tenancy on the grounds of being unsuitable.
Please note that whilst every effort is made to ensure that prospective Tenants are satisfactory, we cannot accept liability for the shortcomings of any tenant or change in their circumstances during the period of the tenancy.
Tax and The Inland Revenue
Income received from letting your property is liable to Income Tax. Certain allowances will be eligible to be off-set to help reduce the final taxable amount, to include:
• Our agency fees
• Insurance premiums
• Interest element of mortgage repayments
• Repairs and renewals
• 10% of rent for fair wear and tear (furnished property only)
• Accountancy and other professional fees
You should consult your accountant, tax specialist or Inland
Revenue for further advice as all of the above are subject to change.
Non Resident Landlords
Special rules apply to the UK rental income of Non-Resident Landlords (NRL) usually being Landlords who live abroad for a period of more than 6 months per annum.
As agents we are responsible for operating the NRL Scheme and deducting tax from the rental income unless written notification (approval number) to the contrary is received from HMRC for each Landlord.
We will either:-
a) If authorized by the Revenue, pay the rental income to the Non-Resident client GROSS
b) Deduct tax at the basic rate on net income subject to certain allowable expenses and deductions
If the property to be let is leasehold, please ensure:
1. The intended letting is permitted by the terms of Lease.
2. Any agreed Tenancy is for a period expiring prior to the termination of your lease.
3. The Tenant is made fully aware of any restrictions contained within the Headlease
4. Notify head landlord if required.
The initial fixed term tenancy of usually 6 or 12 months, can be brought to an end by the Landlord serving a Section 21 Notice at least two months before the end of the term. If the Agreement is to be extended this can be
done by drawing up a new fixed Agreement or continuing on a Statutory Periodic basis.
All Tenants have to pay a deposit, usually equivalent to
the first month’s rent plus £100. No interest is payable
on the deposit held by the Deposit Protection Service.
Landlords - Preparing Your Property For Letting
Condition of Property
It is important to ensure that the property is presented in the best condition as possible throughout, to include the gardens and outside areas. Tenants have become increasingly discerning and their expectations of the properties they rent, have risen accordingly as have values. You are expecting a Tenant to leave the property in a similar condition (except for fair wear and tear) as when they took occupation. It is therefore essential you present it well in
the first instance. Main considerations are as follows:
1. To clean the property throughout to a professional standard.
2. Gardens are tidied and grass cut
3. Chimneys swept
4. Boilers, Agas, Rayburns are serviced
5. All appliances included are in working order
6. Windows cleaned
These recommendations will help to ensure the property is left in an acceptable condition at the end of the tenancy and aid deposit administration and minimal fuss before the next tenant moves in minimising delays, maximising income.
Whilst it is the tenants responsibility to maintain gardens and outside areas (unless agreed otherwise), it is considered unreasonable to expect tenants to prune large hedges, shrubs and trees. Therefore landlords may need to make arrangements for these matters to be dealt with during the tenancy. It is also advisable to provide a lawn mower within the let if the lawn is to be maintained.
The keeping of pets is not permitted within our standard Tenancy Agreement, however, this clause may be waivedwith agreement. Increasingly many Tenants have pets and therefore giving consideration will help increase Tenant demand especially for village and rural properties.
It is important that Landlords who have previously occupied the property make arrangements for their post to be redirected by the Royal Mail who require at least 7 days notice. Hawksby's will not be responsible for forwarding mail.
Landlords should provide two sets of keys to prospective Tenants for main external doors, and if fully Managed, one set of keys for Hawksbys. All window keys to be left at the property. Keys for any outbuildings stipulated in the tenancy must also be made available, for example detached garages, sheds and workshops etc. Any keys required to be cut by Martin Hawksby will be charged to Landlords.
BT will only disconnect/ reconnect a telephone line with direct instruction from the user. As a third party we are unable to make these arrangements.
Notification of Utilities and Council Tax
As part of our Full Management Service Martin Hawksby will notify service utilities companies and the local authority of the change of occupation with appropriate meter readings. Full details of current utility companies from
yourselves are important.
Rent and Utility Bills
It is normal that the Tenant pays rent monthly in advance by standing order. In addition they would usually be liable for the payment of all utility bills to include Council Tax. Landords are responsible for payment of ground rent,
Service Charges and Building Insurance. We don't accept cash payment from tenants for rent as from 2014 onwards.
EPC – Energy Performance Certificates
Since the 1st October 2008 landlords in England and Wales are required to provide an Energy Performance Certificate (EPC) if they are letting their property. An EPC demonstrates the energy rating and efficiency of
a property and gives landlords and tenants information on how efficient the property is and gives a standard Energy and Carbon emissions rating from “A – G”, with “A” the most efficient and “G” the least. EPC’s are valid for 10
years. The current cost for obtaining an EPC can be confirmed at the time of your instruction for you to proceed.
Safety Regulations for Landlords
There are a number of regulations to consider before letting your property. Failure to observe these could lead to a prosecution, a fine, a claim for damages and in extreme cases, imprisonment.
1) The Furniture & Furnishing (Fire Safety) Regulations.
All Furniture and Furnishings supplied within a let property must comply. Carpets and curtains are not covered by the regulations. Most new furniture/ furnishings are marked with a label to show that they comply with current
regulations. Generally all furniture purchased in the UK after 1990 should comply. If you have any doubts please check your furniture and furnishings.
2) The Gas Safety (Installations and Use) Regualtion 1994 (as amended)
Under the above regulations Landlords are required to maintain gas appliances and flues in a safe condition, and to have them checked for safety annually by a competent and suitably qualified engineer. As agents we require a copy of the gas safety certificate before letting the property. We will organise the above for
you upon request.
The check which can often coincide with the annual service will look for the following:
• Operating pressures
• Heat output
• Adequate ventilation and flues
• Escape of gas or dangerous fumes – flame combustion
• Obvious defects
• Provisions of adequate instructions where appropriate.
3) Carbon Monoxide – Oil fired/ Solid fuel appliances.
Carbon monoxide is also produced by oil and solid fuel boilers, cookers and fires etc. Therefore, all appliances using fuel of any kind should be checked prior to the tenancy commencing and annually serviced thereafter.
A carbon monoxide alarm is also recommended.
4) Smoke Alarms
From October 1st it has become a requirement for all Landlords on newly agreed tenancies to have installed smoke alarms on every floor. It is also a requirement that they be fully tested and in working order at the commencement of any future new lets prior to a tenant occupying. This task is mandatory and to be undertaken by the landlord him/herself or the Managing Agent
5) Electrical Equipment Regulations
The landlord is obliged to ensure that all electrical equipment and fittings are safe. Hawksbys strongly recommend that checks are undertaken prior to and periodically thereafter, during a tenancy by a suitably competent person. Any equipment or appliances showing obvious defects should be immediately removed or repaired.
“Part P”. Since the 1st January 2005 all electrical work, even minor works such as adding sockets has to be certified by a “competent” person ie: registered with an approved self-certification scheme or referred to the local authority “Building Control” department.
The information provided above is intended for guidance only and is not an authoritive statement.
Safety in the home is very important, especially when your home is occupied by Tenants. When signing and returning our Terms and Conditions of business you are confirming to us that you are aware of your obligations and that you
will comply with them. Ultimately we will not market your home if for any reason we feel it is unsafe.