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BOOTH&CO

Landlord’s Guide
CHOOSING THE RIGHT AGENT
At Booth & Co we prefer to look on the relationship with our landlords as a business partner-
ship. As well as gaining an experienced business parter our clients also benefit from:

Advertising on the web, in print, in office.

Up to date tenancy agreements which comply to the 1988 & 1996 Housing
Acts.

No hidden costs or fees for renewing leases, inventories or changes of ten-


ancy.

Access to a bank of specialist property solicitors.

High quality inventories taken by professional independent inventory


clerks.

Independent reference checks on all tenants and guarantors using interna-


tional databases.

Flexible independent service, qualified experienced staff

We adhere to strict codes of conduct as set out by the The Ombudsman


Scheme for Estate Agents, and The Guild of Professional Estate Agents.
A wide number of trusted contractors.

PROFESSIONAL BODIES

The Ombudsman for Estate Agents


(OEA) Scheme. OEA Scheme Members
agree to abide by the OEA Code of
Practice. This sets out a framework within
which Members must operate and sets
the standards of service they should
provide.

The Guild of Professional Estate Agents


is a network of approaching 600 success-
ful independent estate agents whose
combined strength and experience helps
with marketing property including an
exclusive Park Lane office.
CHOOSING THE RIGHT SERVICE
CHOOSING THE RIGHT SERVICE
All services include: Property Appraisal, Marketing, Issuing and Renewing Leases, Issuing
Notices, Inventories, Tenant Referencing and Holding Deposits under the terms of a
Deposit Scheme. There are no additional fees for anything, such us managing insurance
claims, renewing / updating leases etc.

One-Off Set up Fees (plus VAT)

1-2 Beds 3 Beds 4 Beds 5 Beds+

UNFURNISHED £150 £160 £170 £180


FURNISHED £160 £170 £180 £190

TENANT FIND ONLY 7% (plus VAT)


7 % of the gross rent for the period of the agreed term (usually 6 months) payable at the
commencement of the tenancy and any subsequent renewal / re-let to the same tenant.

LETTING & RENT COLLECT 10% (plus VAT)


10% of the gross rent for the period of occupancy payable from the monthly rental col-
lected. In addition to the above, agent to collect rent monthly and transfer directly into
Landlord’s nominated account.

FULL MANAGEMENT 12% (plus VAT)


12% of the gross rent for the period of occupancy payable from the monthly rental
collected. Agent to collect rent monthly and transfer directly into Landlord’s nominated
account. In addition to the above, agent to act as main point of contact for tenant for
all property related issues, arrange repairs in correspondence with landlord, carry out
periodic inspections of the property.

All prices are subject to change (correct at the time of printing), Extra fees may be added for heavily furnished properties, outbuildings or abortive
trips. Fees usually deducted from the first months rent collected by agent, other charges may be due, see terms and conditions for full details.
GETTING YOUR PROPERTY READY
Once you have instructed Booth and Co we can organise the preparation of your property to
ensure it meets all legal requirements and achieves the best possible price.

PRICE CONDITION
As well as experience Booth and Co use Tenants have become increasingly
the following to determine price: discerning. Moving costs can be high
meaning that properties must be clean,
• Condition is important, but a ten- functional and in good condition to be
ant’s choice of property is more considered.
about funcionality. That bespoke
kitchen won’t necessarilly get you a The key thing to remember is that you
higher price! are not going to live there, your tenants
are! When refurbishing avoid overspend-
• Similar properties on the market.
ing. Buy hard wearing, long lasting and
• What comparable properties have easily cleaned items.
recently let.
The property should have wide appeal,
Other considerations are:
be neutrally decorated, clean and unclut-
tered. Don’t forget gardens and outside
• Outgoings for the business, the
areas.
rent needs to cover the expendi-
ture against the property. Check
Furnished or Unfurnished ? There is
the figures before marketing.
little demand for furnished lets. Landlords
• Review your tenants’ total run-
must also consider increased insurance
ning costs. Are they reasonable?
costs, furnishing and electrical regulations
eg: High council tax can deter
and liabilities.
some tenants unless compensated
by reduced costs elsewhere.

THE INVENTORY
To ensure the highest possible standards
are maintained and that all regulations are
adhered to all inventories are undertaken
by independent, professionally qualified
inventory clerks.

Costs for arranging and undertaking inven-


tories are included in our ONE OFF SET UP
FEE. Updates for subsequent tenancies are
paid for by the incoming tenant.
ENERGY PERFORMANCE CERTIFICATES (EPC)
The point of an EPC is so that prospec-
tive tenants can decide whether to rent a
property based on the information con-
tained within the EPC. High energy prices,
environmental concern and sheer visibility
will also raise awareness.

The law states that the EPC must be avail-


able to any prospective tenants. An EPC
for a rental property lasts for 10 years, but Many of the recommended improve-
should you decide to sell, the EPC must not ments attract grant funding. Some of
be older than 1 year by the time it goes these schemes include: Warm Front (www.
into the Home Information Pack. warmfront.co.uk), Landlord Energy Saving
Allowance (www.hmrc.gov.uk/budget) and
The cost of an EPC is £95 plus VAT The Energy Saving Trust (www.energysav-
ingtrust.org.uk).
Once you have an EPC you will not need a
new one at each change of tenancy.

THE DEPOSIT PROTECTION SERVICE (DPS)


The point of the DPS is to ensure that -ment and the DPS distributes funds ac-
deposits are protected and that disputes cordingly.
are resolved swiftly, inexpensively and
impartially. Should tenant and landlord not be able to
agree on depsoit deuctions An independ-
The DPS hold the deposit under the terms ent Alternative Dispute Resolution (ADR)
of the TDS. Usually tenant, landlord and service will aim to resolve any disputes
agent will decide how the deposit should quickly and without the need for court
be allocated. action.

Once settled both parties clarify the agree The law states that any landlord or agent
who takes a deposit from a tenant for an
Assured Shorthold Tenancy must safe-
guard it in an approved tenancy deposit
scheme.

Landlords in breach of the provisions will


not be able to issue Section 21 notices,
and may have to pay the tenant compen-
sation of three times the deposit.
FINDING A TENANT
It will be the tenant(s) who are looking after your investment, so finding the right one is
arguably the most important stage of the rental process. At Booth and Co we use a
number of different marketing strategies in order to secure good quality tenants quickly.

MARKETING
Full High Quality particulars including floorplans, photographs & measur-
ments.

Widespread Advertising including major property websites, boothprop-


erty.co.uk, associate London office, regional magazine and local newspapers

State of the art applicant management sytem where tenants are auto-
matically notified of new properties and can update requirements 24 / 7.

Accompanied Viewings

W
e believe that the best
way to protect our cli-
ent’s investment is by
developing and maintaining good
relationships with both tenants
and landlords.

Depending on your timescale it


is not always a good decision to
go with the first ‘suitable’ tenant.
Waiting for the right person can
sometimes mean you find a tenant
who will actually add value to your
investment.

Once a tenancy application is made


it will be reviewed in conjuction
with the landlord. If approved in
principle applicants will go on to be
referenced.

Note: Once an agreement in princi-


ple has been given, should a land-
lord pull out for any reason other
than unsatisfactory reference checks
they will be liable to refund tenant
referencing fee (£55 per applicant).
TENANT REFERENCING

T
enant verification is more than a are designed to complement all aspects of
credit check, it is an expert and their Landlord’s insurance and are qualify-
impartial third party verification of ing criteria to enable the provision of insur-
suitability of a tenant to rent property. On ance for damage caused by a tenant, Rent
application the tenant pays for sophisti- Guarantee and Legal Expenses.
cated searches designed for landlords to
confirm identity and give the best possible If you buy a Landlords Insurance package
indication of propensity to default. from Property Risks and confirm you have,
or will take one of their Comprehensive
All required information is completed Tenant Verification checks their insurers
online giving an ‘Instant Report’ showing will discount the premium.
immediate suitability, followed by a ‘Final
Report’ once referees such as previous
landlords and employers have responded.

Through this system our landlords have


access to the widest data searches avail-
able which authenticate Identity of the
tenant, check previous address(es), CCJ’s, DO THEY NEED A GUARANTOR?
looks for detrimental information at un-
disclosed and linked addresses, analyses Sometimes otherwise acceptable ten-
Fraud and Credit risk scores, including ants don’t quite earn enough to cover
checking for potential impersonation the rent. In these cases a guarantor
fraud, and hidden information within Ex- might be required.
perian’s consumer information databases
containing over 550 million records. A Guarantor is referenced in exactly the
same way in order to ensure suitability
and are asked to sign a Deed of Guaran-
tee (legal agreement) covering the rent
for the total period of occupation for
that tenant.

The formula for affordability is:


Annual Rent x 2.5 < Tenant(s) Salary

RENT PCM SALARY


£500 £15,000
£550 £16,500
Some tenants might need a guarantor in £650 £19,500
order to be considered suitable. In these £700 £21,000
cases guarantors are referenced also. £750 £22,500
£850 £25,500
PropertyRisks tenant verification reports £950 £28,500
£1000 £30,000
REGULATIONS

G as Safety (Installation
and Use) Regulations
1998 require that all gas appliances (and
any flues and pipework serving such appli-
ances) are maintained in good order. Gas
appliances and flues must be checked
for safety every twelve months by a
registered engineer.

A copy of the safety check record or certifi-
cate must be given to the tenant within 28
days of the annual check.

The cost of an anual gas safety inspec-


tion is typically £65 although this can
vary depending on recommeded works.

F urniture and Furnishings


(Fire)(Safety) Regula-
tions 1988 stipulate that any furniture
“CARELESSNESS CAUSES FIRE” which
identifies whether it meets the relevant
standards. Items which must show such la-
bels include: beds, headboards, mattresses,
and furnishings supplied by the landlord sofa-beds, futons, nursery furniture, garden
within the rented property must meet the furniture, cushions, seat pads, pillows, loose
fire resistance requirements. and stretch covers.

Any items not displaying the required fire


tags, without an appropriate guarantee or
proof of purchase must be removed. Items
made before 1950 are exempt.

Landlords can not bypass this legistalation


by adding exemption clauses into leases,
Most modern furniture will have a manu- giving or selling non compliant furniture to
facturer’s label attached to it saying the tenant.

We recommend checks be carried out as soon as possible as any necessary works may result
in delay. The penalty for non-compliance can range from a fine of £5,000 to an unlimited fine
or custodial sentence. Regulations governing gas and electricity are continually changing.
The above is only a brief guide and is not an authoritative interpretation. For more details
you should refer to the regulations themselves.
E lectrical Equipment
(Safety) Regulations
1994, the Plugs and Sockets
potential shock / fire risks, and identify any
defective work, lack of earthing or bond-
ing. Tests are also carried out on wiring
and associated fixed electrical equipment
to check that it is safe and a schedule of
etc. (Safety) Regulations circuits is developed during the inspection.
1994
Both portable and fixed electrical items
supplied as part of the tenancy includ-
ing wiring should be tested by an NICEIC
registered contractor.

Any electrical item with a plug as well as


fixed appliances such as cookers, showers
and immersion heaters, should be tested
annually with what is known as a PAT test.
The average cost of a PAT test is around
Every 5 years a Periodic inspection £5 per item and periodic inspections can
should also take place. This will reveal vary from between £125 - £200 depend-
any overloaded circuits or equipment, find ing on the size and installation.

REPAIR OBLIGATIONS
Under The Landlord and Tenant Act 1985 (LTA) Landlords must keep in repair:

(a) the structure and exterior of the dwelling; (b) the installations in the dwelling for the
supply of water, gas, electricity and for sanitation; and (c) in proper working order the
installation in the dwelling for space heating and heating water. Landlords can not be
held responsible for any works or repairs required as result of a breach of tenant duties.

Items supplied as part of the tenancy fall under The Supply of Goods and Services Act
1982 and should be good quality, durable, free from defect and fit for their purpose.
Landlords must repair or replace with a reasonable equivalent, items which have bro-
ken down. Such items can not be sold / given to tenants or removed from the inventory.
Clauses within the lease can not absolve landlords of this responsibility.

Tenants are obliged to give landords notice of any disrepair and must allow landlords
a “reasonable period” (judged by the type of repair) to carry out works. Tenants have no
right to hold rent in lieu of repairs.

A landlord or authorised representative may give 24 hours notice in writing to enter the
premises at reasonable times of the day to view condition and repair. However, action to
gain access does not involve making arrangements for forced entry into property.
DO YOUR SUMS
Before you start it is important that you are clear about what you are looking to get out of
your lettings business. Whatever your needs you must work out the finances. Here are few
tips:

• Rent achievable and void periods. Empty periods can be costly. A good strategy can
be to set rent just below the market average to minimise voids and give choice of ten-
ant.

• Running costs. These include interest on borrowed money, purchasing / remortgaging


costs (ie solicitor / survey fees, stamp duty), ground rent and service charges (leasehold),
insurance, maintenance, (expect these to be 20% higher than in a private home), safety
checks, replacing fixtures and fittings, furnishing, redecoration and personal costs. Be
realistic, consider other factors like changes in interest rates or market value.

TAX DEDUCTABLE EXPENSES

• Financing costs
• Repairs & Maintenance (but not improvements)
• Heating & Lighting (when included in rent)
• Insurance
• Letting agency and accountant fees
• Professional & legal fees in connection with tenancies
• Cleaning and gardening costs
• Bad debts
• Administrative expenses

Letting your former home?


You must contact your mortgage company to convert your residential mortgage to a buy to
let one.

Want to Sell?
There are a number of reliefs available reducing the amount of tax you may have to pay on
a capital gain you’ve made on the property. Ask your accountant about Letting Relief and
Capital Gains Tax Allowance.

Living Abroad?
Non UK residents using a letting agent to collect rents should get an exemption from HM
Revenue & Customs so rent can be paid over to them without deduction by the agent (al-
though they may still be required to complete a UK tax return).

Otherwise the Non Resident Landlord’s Scheme requires letting agents to deduct basic rate
tax from any rent they collect for non-resident landlords. For more advice contact your ac-
countant or visit http://www.hmrc.gov.uk/cnr/nr_landlords.htm.
APPRAISAL
DO YOUR SUMS
GET PROPERTY READY TO LET
RETURN T&C’s TO AGENT
E.P.C.
MARKETING & VIEWINGS
SAFETY CHECKS & RECOMMENDED WORKS
TENANT APPROVED & REFERENCED
LEASES ISSUED

INVENTORY
RENT / DEPOSIT

TENANT IN
UTILITIES TRANSFERRED
INVENTORY SIGNED + RETURNED

NOTICE TO QUIT* ISSUED


*Notice to Quit - Notice has to be given Process repeated for life of occupation INSPECTION
before possession can be regained and must
be served in a prescribed form at least 2
LEASE RENEWED
months before the end of a fixed term.
{
Months 1 3 6
7a West Street, Wareham, Dorset, BH20 4JS 01929 551 661 boothproperty.co.uk