Tenancy Agreement Contract
The contract between the landlord and the tenant is known as a tenancy agreement. We strongly recommend using our tenancy agreement as a poor quality or badly written agreement may directly impact your ability to make a claim on the tenant’s deposit, hold them liable for rent, utilities and will also ensure that any notices are correctly served or received.
Every time a tenancy is granted, renewed or extended, we have a legal requirement to register the deposit with an approved deposit protection scheme for an Assured Shorthold Tenancy. If we fail to do this, the tenant is entitled to make a claim against the landlord. Non-compliance carries a penalty of up to three times the deposit value.
Assured Shorthold Tenancies deposits are registered with www.depositprotection.com/
Upon receiving a deposit from a tenant, all landlords and lettings agents in England and Wales have a duty to protect it within 30 days of receipt. Proof of the deposit protection, known as ‘Prescribed Information’, must be given to the tenant within those 30 days along with the latest version of the Government publication ‘How to rent: the checklist for renting in England’. Bracewells can arrange all of this on your behalf.
The standard deposit for a long let usually equivalent to either one month or 5 weeks rent and for short lets the deposit is £700 or equivalent to one weeks rent, whichever is greater.
Rental payments and arrears
Rent arrears can be a huge concern for a landlord. To reduce this stress, we use a comprehensive property management service which enables us to successfully collect the rents due, giving you peace of mind. Our system allows the transfer of rent to your nominated bank account and this usually happens within 24 hours of receipt.
IMPORTANT SAFETY STANDARDS
The Electrical Equipment (Safety) Regulations 1994 state that anything electrical within the property, or anything that you supply as part of the fixtures and fittings, should be up to current electrical safety standards and safe for use. It is the landlords duty to ensure that safety.
If the property is let as an HMO (Five or more tenants who form two or more households) you must also carry out safety checks on electrical installations every five years. These checks have to be done by a NICEIC accredited electrician. Bracewells can arrange for a qualified and vetted contractor to carry out a Portable Appliance Test (PAT) to ensure all appliances with plugs attached are safe.
The Gas Safety Regulations 1998 state that any gas central heating system or appliance has to be certified as safe to use. It is essential that inspections are done prior to a tenant moving in and annually thereafter. Additionally it is also a legal requirement that a copy of the certificate is given to the tenant within 30 days. Bracewells can arrange for the inspection to be carried out by a Gas Safe registered engineer who will issue a Gas Safety Certificate.
Carbon monoxide alarms
If a property has a solid fuel installation e.g. a wood burning stove in one or more rooms, a carbon monoxide alarm has to be fitted in each room that contains the installation. However, we recommend that a carbon monoxide alarm is installed in all properties as a matter of course. Remember that your check-in report should record that the alarm has been tested prior to a new tenancy.
It is a legal requirement to install a working and tested smoke alarm on every floor of a rental property. In addition, properties built after 1992 should be fitted with mains operated smoke detectors and alarms on each floor as required under building regulations.
Landlords of residential accommodation are legally required under The Control of Substances Hazardous to Health Regulations 1989, to assess and where necessary, control the risks of Legionella. Under the act it is a requirement that all water systems are assessed. This can be done by landlords or alternatively it may be worth employing someone to carry out the work. In most residential settings an assessment will show that the risks are low and no further action is required.
For more information visit www.hse.gov.uk/legionnaires/faqs.htm#Landlord.
Furniture & furnishings
Wherever possible it is good practice to ensure that only furniture manufactured after 1988 is used within a property. This is to guarantee that it is covered by the Furniture and Furnishings (Fire) (Safety) Regulations 1988. Check that furniture such as sofas, beds, headboards, cushions, pillows etc. still have the fire safety tag attached. We would advise against using vintage or antique furniture.
THE BEGINNING OF A TENANCY
Cleaning, inventory & check-in
All properties are professionally cleaned prior to tenancy and the same level of cleanliness is expected from the tenant once the agreement ends.
To ensure the smooth running of this system, an inventory check-in report serves as a record of the condition of the property at the start of the tenancy and will then be used to re-assess the condition at the end. Usual wear and tear is a natural part of renting properties and is only to be expected during the course of a tenancy. Initial cleaning and inventory check-in are usually paid by the landlord at the start and at the end of the agreement they are normally paid for by the tenant. Where accessible, meter readings should also be recorded on the check-in report.
Keys and access
We recommend providing us with a set of keys to make it as easy as possible for us to show your property to potential tenants. It may seem obvious, but do ensure that on moving-in day there are enough sets of keys for all of the tenants.
Clients of our comprehensive property management service have the benefit of Bracewells retaining keys which will only be made available to our carefully vetted contractors when access is required. Our key holding service also ensures that regular inspections can be carried out. If you choose to self-manage you must retain keys to the property for repairs and inspections.
Payment of utilities
Within the tenancy agreement, it should clearly state which utility bills the tenant is responsible for paying. In the case of short lets, all the bills are included in the rent and therefore remain in the landlord’s name. The only exception is telecommunications. Regarding long lets it is normally the tenant’s responsibility to pay utilities including council tax, TV licence, water rates, electricity and gas.
A managing agent, should you choose to use one, can assist with the transfer of utilities however it is the tenants responsibility to provide the utility provider with both opening and closing meter readings directly to the utility provider.
Tenants can, if they wish, change utility supplier and indeed it is encouraged to switch suppliers regularly for the best deal. Find more information with us.
It’s worth noting that utilities are separate to ground rent, service charges, buildings and contents insurance. It remains the landlords responsibility to pay for these charges as well as paying for utilities during vacant periods.
ENDING A TENANCY
Once tenants have moved out, the check-out inspection will take place. This is a dated report which provides evidence of the condition and cleanliness of the property once a tenancy has ended. If a landlord subsequently wants to make a claim against the tenant’s deposit, this document is a crucial piece of evidence.
Deductions from deposits
It is the tenants responsibility to request the return of their deposit one their tenancy has ended. The landlord then has 10 days from the date of the request to return the deposit minus any deductions. If there are any proposed deductions, it is the landlord’s duty to inform the tenant of these deductions.
A dispute resolution service is provided by the Deposit Protection Service should there be a disagreement regarding deductions. This is an evidence-based process decided by an impartial qualified adjudicator.
A landlord is entitled to charge deductions for dilapidations and damages, but cannot claim for improvements. General wear and tear does occur especially if a tenant has been in occupation for a number of years and it is important to remember that the tenant’s deposit cannot be used as redecorating budget but only to restore it to the condition it was in as the start of the tenancy.
Making decisions about deposit deductions can be a difficult part of being a landlord. Should you choose to use our management service, Bracewells will conduct all deposit negotiations and evidence submissions on your behalf.
YOUR LEGAL REQUIREMENTS AS A LANDLORD
Consents to let
Ensure that all property owners are named as ‘the Landlord’ on the lettings paperwork. Remember to obtain permission to rent the property from any co-owner(s) and permission from the mortgage provider or freeholder, where applicable.
Energy Performance Certificate (EPC)
From 1st April 2018 all rented properties must have a minimum energy performance rating of E or above and it is a legal requirement to have a valid EPC when marketing your property. In addition a copy must be made available to prospective tenants free of charge. Bracewells can arrange this for you and they are valid for up to 10 years.
Local authority licensing & House of Multiple Occupation (HMOs)
It is important to check with the local council whether you need to apply for a licence when letting your property. Be aware that costs and scheme rules can vary significantly between local authorities.
It is also important to check the website of the council your rental property falls within on a regular basis, to ensure your ongoing compliance with local licensing rules.
HMOs where there are five or more occupants in a property and the tenants comprise two or more ‘households’ are subject to mandatory licensing within England and Wales. Some councils have extended licensing to entire wards, or to all private residential lettings within a borough. For landlords and property managers to understand what is required, The Department for Communities and Local Government (DCLG) issue guidance.
All information, standards in safety and management can be found here: www.gov.uk/government/uploads/system/uploads/attachment_data/file/15652/HMO_Lic_landlords_guide.pdf
Right to rent checks
Within the Immigration Act 2014, right to rent checks have been introduced throughout the private rental sector across England. These place restrictions on illegal immigrants accessing rented accommodation. From 1st February 2016 the immigration status or ‘right to rent’ of all prospective occupants aged 18 and over must be proven by a tenant and confirmed by a landlord before a tenancy can be granted.
Be aware that The Immigration Act 2016 imposes criminal sanctions on landlords for non-compliance. Please consult www.gov.uk/rightotrentchecks for more information.
Tax on rental income
UK residents can usually complete a HMRC Self Assessment tax return to declare rental income received from property in the UK. Landlords outside of the UK have to be taxed at source, unless their agent has permission from HMRC to pay rent to them gross of tax. We recommend taking professional tax advice to ensure that you are maximizing your allowances which can help minimise tax on rental income.
For more information on this subject, visit www.gov.uk/personal-tax/non-resident-landlord-scheme .
It is your responsibility as a landlord to have buildings and contents insurance in place at all times and across all rental properties. If your property is not furnished, you should still considered taking out contents insurance and look for the inclusion of public liability cover, replacement locks and to cover the cost of rehousing tenants in the event of fire/flood.
All estate agents are subject to Money Laundering Regulations 2007 and the Proceeds of Crime Act 2002. Because of this we will require proof of identity and address. Please provide us with original documents or in the absence of those, certified copies are acceptable.
Below is a list of acceptable identity documents for landlords acting as an individual. Bracewells requires two different documents—one from List A and one from List B which must be dated within the past three months.
List A – Identity Document
Valid UK driving licence
EEA member state identity card
List B – Proof of Address
Recent utility bill
Recent mortgage statement
Recent bank/building society statement
Valid UK driving licence (only where this has not been used as a List A identity document)
State pension benefits book
Home or motor insurance certificate
Current local authority tax bill/tenancy agreement
Solicitors letter confirming house purchased/land registration
Electoral register entry
NHS medical card