Landlords FAQ
Q. What is a tenancy agreement?
A. This is a legally binding contract between the Landlord/s and the Tenant/s which outlines the legal and contractual obligations of both parties.
Q. What is the difference between an 'Assured Shorthold Tenancy' and a 'Non-housing Act' or 'Contractual Tenancy'?
A. The most common form of tenancy is the Assured Shorthold Tenancy under the 1988 Housing Act (Amended 1996 and 2004). If the tenancy falls into any of the following 4 categories, then the type of contract will be an Assured Shorthold Tenancy, which means that it will be covered by Housing Act legislation:
- The tenant is an individual or individuals (up to 4 people) and not a company
- The annual (pure*) rent is less than £100,000
- There is not a resident landlord in the original building**
- This is the tenant’s main home
* The annual rent less the cost of any services included in the tenancy, such as the gardener or the cleaner.
** If the property has been extended and the Tenant lives in the extension, then this is an Assured Shorthold Tenancy. If the original building is converted into flats and the landlord lives in one of them, then that is a Contractual Tenancy.
Q. How long is the tenancy agreement for?
A. This will vary according to the wishes of both parties and the type of tenancy being used, however, most agreements are for 12 months and often include a break clause after month 6. Sewell & Gardner do not organise agreements for less than 6 months. A tenancy agreement over 3 years MUST be drawn up as a deed by a solicitor, therefore, it is unusual for tenancies to be for longer than this initially. An initial fixed term Assured Shorthold Tenancy agreement does not automatically end after the fixed term has expired. Unless notice is served on the other party the tenancy will become a periodic tenancy unless a further fixed term agreement is put into force.
Q. What does ‘joint and several’ mean?
A. Where there is more than one adult on the tenancy agreement 'joint and severally liable' means that all of the tenants on the contract are responsible for the rent and all liabilities, or any breach of the tenancy. For instance, if one of the tenants cannot pay their portion of the rent, then the other tenants will have to pay it, because they are all liable for the rent, or if one tenant wishes to end the tenancy, they ALL have to vacate, because they are all liable.
Q. What is a break clause?
A. This is a clause inserted in a fixed term tenancy which allows either the landlord or the tenant to give written notice after the minimum term, thus terminating the tenancy earlier than the original fixed term.
Q. Why do I need to provide photo identification?
A. We need to ensure that you are the landlord of the property so we will need to see a title deed or solicitor's confirmation that you own the property and a form of photo identification for each of the owners / landlords and a current (within 3 months) utility bill from your home address.
Q. Are tenants entitled to have my name and address?
A. Yes, we are legally obliged to provide the tenant with the landlord's details within 21 days of a formal written request.
Q. What references will be taken and will I see them?
A. It is important to have the applicant professionally referenced and Sewell & Gardner will use Homelet for this purpose. Homelet are the market-leaders for referencing in the lettings industry and they will provide a report on the applicant which includes a credit check, an employer reference and, where applicable, a previous landlord reference.
For your peace of mind, once the applicant has received an acceptable reference and you are happy to proceed with the tenancy, Sewell & Gardner will provide you with a Rent Guarantee Insurance policy for a minimum of 6 months.
Q. If my tenant references show adverse credit history, should I continue with the tenancy?
A. If your prospective tenant has been honest at the outset and notified this to the referencing company, with a credible explanation, and can offer a guarantor to act on their behalf, there should be no reason why you should not consider them as your tenant. However, the final decision is up to you and Sewell & Gardner can only give you the facts and allow you time to digest them.
Q. How do I serve notice to end my tenancy?
A. Notice can be given at any time, however, it will not come into force until it is legally allowed to do so, and this is dependent upon the tenancy you have; whether it is an assured shorthold or a contractual tenancy; whether fixed term or a periodic tenancy or whether you have a break clause?
Q. How do I serve notice when the property is MANAGED by Sewell & Gardner?
A. Please ensure that you write to Sewell & Gardner stating the date you wish to regain possession of your property and ensure that you give at least 2 weeks' notice, on top of the legal notice you need to give to the tenant, as determined by the type of tenancy you have.
Q. How do I serve notice when the property is NOT MANAGED by Sewell & Gardner?
A. You need to write directly to your tenant and ensure you give enough notice in accordance with your tenancy agreement. Please send a copy of your notice letter to Sewell & Gardner, 103a High Street, Rickmansworth, Hertfordshire, WD3 1AN so that we can liaise with the tenant to organise the check out procedure and confirm your obligations at the end of the tenancy.
Q. What happens if either party wants to end the tenancy early?
A. There are only limited ways in which this can happen. The landlord cannot make the tenants move out, nor can the tenants lawfully walk away from their obligations to fulfil the contract. Either party might request of the other that a formal surrender of the tenancy be allowed (called a Mutual Release Agreement). It would then be up to the parties to agree the terms and conditions of such a surrender and this might include some financial compensation for inconvenience or costs incurred.
Q. What about insurance?
A. It is your responsibility to insure your building and the contents, fixtures and fittings. You must inform the insurance company that you are letting the property or failure to do so may invalidate your policy. Sewell & Gardner are appointed representatives of Homelet and have are able to organise your insurance needs, please speak to a member of the lettings team for a free quotation. Even if your property is unfurnished, you are advised to take Landlord Insurance because you will then be covered for property owner's liability, because if your tenant or any of their visitors injures themselves in your property, you could be found negligent and face a hefty legal bill.
Q. Do I need to advise my mortgage company or freeholder?
A. If the property is subject to a mortgage it is your responsibility to seek consent in writing from the mortgagee. It is wise to obtain permission in principle before marketing the property to avoid unnecessary delays when negotiating a tenancy.
If you are a leaseholder it is important that you obtain approval from your freeholder or the managing agent in order to sublet, so that you do not invalidate your lease.
It is also important to notify the tenant of any specific parts of your lease (ie. cannot hang washing on the balcony, cannot have a Sky dish, no commercial vehicles allowed) so that these clauses can be inserted into the tenancy agreement.
Q. Are there any safety regulations I need to comply with?
A. The landlord must provide an annual gas safety certificate which can only be issued by a registered engineer. In addition you have a duty to ensure that all electrical equipment is safe to use. Sewell & Gardner can organise both the gas and electrical checks on your behalf, please contact info@sewellgardner.com for further information or prices. All buildings since June 1992 must be fitted with mains smoke alarms, although it is advisable to fit these into older properties too, along with carbon monoxide detectors. All furniture must comply with the 1993 amendments to the Furniture Furnishings (Fire) (Safety) regulations legislation, even furniture you are storing in the loft, shed or garage. The basic rule is that if it doesn’t have a safety label attached then it isn’t safe and should be removed from the property.
Q. What is an 'EPC' and do I need one?
A. As from 1st October 2008, all rental properties in England and Wales are required to have an Energy Performance Certificate (EPC) prior to marketing. This is a European directive to help reduce the Carbon Footprint of your rental property, so it is exceptionally important to the environment.
These reports & graphs enable tenants to SEE AT A GLANCE how your property is assessed against other properties, and advises how some simple remedies (such as the use of low energy lighting, loft insulation, cavity wall insulation) can have a huge impact on the environment and also on the tenant/s' energy bills. They are valid for 10 years (unless taken from a Sales Home Information Pack 'HIP', whereby they are only valid for 3 years).
Q. What about an inventory and schedule of condition?
A. ARLA and all the Tenancy Deposit Schemes consider an inventory an essential document which provides a written benchmark that should be remade at the beginning of each tenancy. A properly constructed inventory will detail in full the fixtures, fittings and contents of the property and it should be used to provide a schedule of condition at the outset and at the end of the tenancy.
Q. What is a schedule of condition and why do I need one?
A. The schedule of condition is the part of the Inventory Document which explains whether the property has been recently decorated, professionally or domestically cleaned, carpets vacuumed or shampooed, lime-scale removed, windows cleaned etc. At the end of the tenancy you will not be able to ask the tenant to shampoo the carpets, if they were not shampooed at the beginning of the tenancy. If the oven has not been professionally cleaned at the beginning of the tenancy then there is no obligation for the tenants to clean it at the end of the tenancy.
Q. Why should I get a professional inventory when I can prepare a perfectly good inventory myself?
A. An Independent Inventory is a document that is prepared by a qualified clerk, working for both the Landlord and the Tenant. One of the reasons that the new Tenancy Deposit Protection legislation was introduced was to remove the drawn out process of disputes regarding security deposits. An impartial professionally compiled report is viewed very favourably, should the inventory be required to settle a legal dispute rather than if it is prepared by the Landlord. The provision of AN INVENTORY is now a pre-requisite if the dispute cannot be settled between the Landlord and the Tenant. This dispute will be dealt with by The Alternative Dispute Resolution Service (ADR) and this can only be done if an inventory is submitted.
There are a number of DIY inventories available on the market, however, if the report has been prepared by the Landlord it will be viewed as biased in a court of law, should the tenancy enter a dispute regarding the return of the deposit. Instructing a 3rd Party Inventory Company to fulfil this important part of the letting process is the only way to ensure that an unbiased report is prepared and therefore protecting all of the parties involved.
Q. What is an HMO and how do I know if I have one?
A. An HMO is a House in Multiple Occupation, usually a larger property where a number of different people share a kitchen or bathroom facilities. On 6th April 2006 licensing of Houses in Multiple Occupation came into force and the Act introduced mandatory licensing for larger, HMOs and the Local Housing Authority have the discretion to extend licensing to other categories.
Mandatory licensing: A building, or part of a building, set over 3 floors (which would include any shop below, even if this is not included in the tenancy), in which five or more people (as their only main residence) live, forming two or more 'households', who share one or more basic amenity (eg. kitchen / bathroom facilities) and for which rent is paid by at least one person for that use and occupation.
Discretionary licensing: A building, or part of a building, in which two or more 'households' live, comprising of three or more people (as their only or main residence) who share one or more basic amenity (eg. kitchen / bathroom facilities) and for which rent is paid by at least one person for that use and occupation. Or, a building, or part of a building, which has been converted into, and consists of, self-contained flats but was not converted to the 1991 Building Regulations and still does not comply with them, and, less that 2/3rds of the self contained flats are owner-occupied.
"Household" = a couple (married / common law / same sex) or a family, extended family (relations) and any staff (au pair / nanny etc).
If you think that your property COULD be subject to HMO regulations you MUST ensure that you have made the relevant enquiries and obtained a license, if necessary, from the Local Authority. If, as your agent, we feel that this has not been organised, enquiries WILL be made, on your behalf, with the Local Authority and you WILL be responsible for the cost of any necessary license or remedial works required for the property to comply with legislation. The fine for NON-COMPLIANCE is £20,000
Three Rivers District Council t. 01923 776611
Watford Borough Council t. 01923 226400
Q. Who pays for the utilities, council tax and TV license?
A. It is the responsibility of your tenant to pay for the gas, electric, telephone, council tax and TV license. However, in some leasehold blocks of flats, the water is included in the service charge that you pay, so please make sure that you check whether or not this is the case as we will need to alter the tenancy agreement prior to the commencement date. It is wise to check the water meter and ensure it is accessible for the reading to be taken, otherwise you should ask the water company to read the meter before the tenancy commences.
Q. Who notifies the utility companies and council tax office?
A. If the property is a managed property then all of the relevant companies will be notified by Sewell & Gardner, with the exception of the telephone line supplier as they will not take instructions from a 3rd party. If the property is NOT managed by Sewell & Gardner, then you should notify the relevant companies yourself, giving your forwarding address and outgoing meter readings. DO NOT cut off the supplies.
Q. How much security deposit will the tenant pay?
A. Sewell & Gardner will usually ask for a deposit equivalent to 6 weeks' rent and this will be held in our protected deposit account for the duration of the tenancy and insured by the TDS (Tenancy Deposit Service). If you do not wish to use our Deposit Holding Service, you must provide us with your landlord ID for the scheme you have chosen and with the completion paperwork you will receive the security deposit cheque made payable to the DPS (Deposit Protection Service) members or to yourself for TDSL (Tenancy Deposit Solutions Limited) members. The deposit must be protected within 14 days of receipt and a certificate and prescribed information given to the tenant.
Q. Can the tenant use their deposit to pay the last months rent?
A. Deposit monies are held against the property to cover dilapidations or damage and to settle any outstanding bills or unpaid fines at the end of the tenancy. The deposit is held in a special account and cannot be touched until the end of the tenancy, so it is not possible for the tenant to use this money to pay the last month’s rent, as this would be a breach of the tenancy agreement. However, if the tenant refuses to pay the rent and states to take it from the deposit, this must be received in writing and it would mean that you only have the remainder of the deposit (usually 2 week's worth of rent) to cover anything for which the tenant is responsible for after the check-out.
Q. Who controls my rent payments and who sets them up?
A. It is a Tenant's responsibility to set up a standing order mandate. When they move into the property they will be given a mandate with your bank details on (or our bank details if it is a managed property), and they must complete this and send to their bank in plenty of time for the next rent due date.
If the property is managed we will chase the rent if it does not show in the account and when it arrives it will be forwarded to your bank account via BACS. You should see the rent appear in your account within 10 days of the rent due date stated in the tenancy agreement and you will receive a statement either by post or by email, whichever you have specified as your preference.
Q. If I intend to live overseas, what are my tax obligations?
A. If one or more Landlords reside outside of the UK for a period of 6 months per annum or more, the Inland Revenue will hold your Tenant or your Managing Agent, responsible for the payment of any tax liability which arises on rents paid to you, unless an Approval Certificate, addressed to the Tenant or the Agent, is provided by the Inland Revenue pursuant to The Finance Act 1995.
You can apply for Inland Revenue exemption by filling out a NRL1 form, quoting the Sewell & Gardner / Wildabout Properties Limited reference number: NA 032463 if we act as your managing agent: Contact Details:– Centre for Non-Residents, Fitzroy House, P O Box 46, Nottingham, NG2 1BD Tel: 0151 472 6208/9 or www.hmrc.gov.uk/cnr/
If you are resident abroad and we are collecting the rent on your behalf, it will be necessary for us to deduct monies at the appropriate rate (currently 20% from April 2008) until an Approval Certificate has been received. These monies will be forwarded to the Inland Revenue on a quarterly basis (end March, end June, end September, end December). Similarly, if at present you live within the UK, but subsequently move abroad, the money will be deducted and held until the quarterly returns are made to the Inland Revenue and will not earn interest on your behalf. The eventual liability for tax may be less than the amount forwarded to the HMIT. In this event you will have to liaise with the Inspector of Taxes directly and Sewell & Gardner will not be liable for any refunds. We regret the necessity to make the liability on your behalf and we, therefore, ask you to let us know as soon as possible who will be dealing with your tax affairs in this country. Should you at present reside within the UK but subsequently move abroad, please let us know the name of your accountants or tax advisors at that time.
Q. What happens after the end of the initial fixed term tenancy?
A. Sewell & Gardner will write to you and your tenant approximately two months before the end of your tenancy and will include a form asking if you have been happy with the tenants and whether you wish to offer a further term at the property. If both parties decide to continue with the tenancy a new fixed term tenancy will be organised and sent out for everybody's signature. Please remember that a tenancy does not come into force until all parties have signed and the contracts are dated and any fees are paid.
Q. Who is responsible for repairs?
A. Under existing legislation the Landlord is responsible for all repairs to the property and it's contents, except when a repair is necessary due to a tenants misuse. If we are managing a property we will arrange for the work to be carried out by one of our approved contractors.
Q. Who is responsible for external maintenance?
A. External decorations and maintenance are the responsibility of the Landlord. However, if the property has a garden the Tenant is usually responsible for the upkeep provided that the Landlord has provided the necessary tools.
Q. My property is MANAGED by Sewell & Gardner and I wish to utilise my own contractors when there is a maintenance issue?
A. If you are happy with your contractor and you can provide us with a copy of their qualifications, accreditations and public liability insurance, then we will send them our Maintenance Contract and they will be marked as preferential contractor on our system. However, if we are unable to contact this contractor after several attempts, we will revert to our own contractors.
Q. My property is rented but not managed by Sewell & Gardner and I wish to utilise your contractors when there is a maintenance issue?
A. It is not possible for us to recommend our preferential contractors to you because we need them available for our own managed properties. If you do not live in the area we may be able to provide you with local companies, however, please be advised that we cannot be held responsible, in any way, for substandard workmanship or problems you encounter. You are advised to ask any contractor for their qualifications, accreditations and a copy of their public liability insurance.
Q. What is the difference between condensation & damp?
A. Firstly, condensation is NOT damp! Condensation is caused by lack of air in the property and the difference in the internal and external temperature. It is a tenant's responsibility to ensure condensation and mould does not build up in a rental property and to inform you or us (for managed properties) if any damp issue arises. Please ensure that there are adequate air vents in the property and that the tenants understand how they should not hang washing out to dry in un-ventilated rooms and how they should open the windows in the kitchen or bathroom after use, so that the warm air does not build up inside. If the windows are on the ground floor it is important to have an alternative solution, such as an extractor fan. If you have any doubt about the nature of damp or mould, a specialist damp survey can be organised free of charge, to ascertain the cause of the problem.
Q. What happens if the tenant presents me with a bill for maintenance work I was unaware of, or refuses to pay the full rent because they have paid for work without my permission?
A. It is the tenant’s duty to notify you of any maintenance issues within the time specified in your tenancy agreement. If the tenant fails to do this, they are in breach of the tenancy agreement and you would be well within your rights to call out your preferred contractor to come and assess the work, rectify if necessary and charge the tenant for this. However, each situation should be looked at individually and, if you feel that the work has been carried out to a satisfactory standard, and you have checked comparable prices and find the bill acceptable, you should reimburse the tenant. Please first check that the 'maintenance' issue was, in fact, a landlord repair obligation and the problem was not caused by tenant negligence. Make sure that you reiterate to the tenant that they are not to proceed with future work without your consent or provide the tenant with a list of your preferred for them to use in the future. This way you can be sure to have checked the contractor's credentials and seen sight of their insurances.
Q. What is 'reasonable' time for repairs to be sorted?
A. This will depend upon the type of issue and the time of year and various other factors! For instance, if the heating breaks down in July it will be less urgent than if it breaks down in December, when the weather is cold.
Common sense prevails and it is important to consider how you would react if this was your own property and something went wrong and take into account that sometimes parts need to be ordered or investigations need to be made, and these can take time.
