General Information for Landlords
The Current Rent System
A new letting by a landlord who is not living in the same house as his tenant will normally be either an assured tenancy or an assured short hold tenancy. An assured tenancy will generally allow the tenant to stay for as long as he wants. An assured short hold tenancy will allow the landlord to take the property back at the end of the agreed term.
Whether they let on the basis of an assured or an assured short hold tenancy, landlords can now charge tenants a market rent. So you need not fear that you will be forced to let at an unrealistically low rent. There are one or two rules to prevent overcharging but, broadly speaking, the rent you agree with your tenant is the rent he must pay.
It used to be difficult to get your property back when you wanted to. Now it is possible to let property for the length of time which you find convenient and be absolutely certain that you can get it back. This type of letting is called an assured short hold.
Fixing a price
If you let on this basis of an assured short hold tenancy, where you have the absolute right to get the property back, your tenant has the right, during the first fixed period of the tenancy, to ask the rent assessment committee to determine a rent for the tenancy. This is an independent statutory body consisting usually of three people: a lawyer, an expert in property valuation and an ordinary lay person. The committee will only set a rate if there is evidence that you are charging significantly more than other landlords of assured short hold tenants in your locality. The rent they determine will be a market rent.
If you let under an assured tenancy which is not an assured short hold, you and your tenant agree the rent he will pay and you can also agree how it is to be increased. No one can interfere with the rent, or the rent review mechanism, once it has been agreed between you and your tenant - although you and your tenant can agree to a change if you both wish.
If you decide not to include in the initial agreement some means of raising the level of rent you can still do so in some circumstances. You cannot, for example seek to increase a rent for which there is no rent review mechanism for a fixed term tenancy. But you will always been able to increase your rent if the contract says that you can.
Getting your Property Back
Getting your property back when you want it is now easier than ever before. You have an absolute right to get it back at the end of an assured short hold tenancy. Although it should be remembered that it is not normally possible for the landlord to get the property back until after the initial 6 months unless there has been a breach of a term of the tenancy agreement, or the tenant agrees to leave at an earlier date. The tenancy can be extended at the end of the initial term either by granting a further fixed term, or allowing it to continue as a periodic tenancy for as long as you wish. If you allow a short hold tenancy to run on in this way you retain the right to seek possession of the property at any time on giving the tenant two months' notice of your intention to do so, and the court must grant you possession when you seek it.
A full assured tenancy (i.e. one which is not a short hold) gives the tenant more security. But you can still get the property back in certain circumstances, and the law will not protect bad tenants. There are seventeen grounds in law on which an assured tenancy may be brought to an end. Some of the grounds are mandatory, so if they are proved the court must order possession, whilst the remaining grounds are discretionary, and the court will grant possession if it considers it reasonable to do so.
Some of the grounds are prior notice grounds, which means that you must tell the tenant in writing before the tenancy is entered into that you may wish to get the property back in some circumstances. These grounds are useful if you are unsure when you may need your property back (though you will not be able to use them during a fixed term tenancy). For example, you may want to move back into what was your main family home because a job in a different part of the country has come to an end.
Some of the answers to the common questions below show how some of the grounds might be used, and others are referred to in the section dealing with problems with your tenant.
How to present your property
The definitive answer to this question is to present an apartment in a style that befits the building. Many properties are shown in a contemporary style, which is often most appropriate, as the majority of modern city centre living spaces are smaller than suburban spaces. This style is sleek, impressive and often in demand with young professional prospective tenants. We advise the following checklist:
* Choose carpet or laminate wood flooring, but always carpet bedrooms.
* Budget for blinds or window coverings that will ensure privacy
* Invest in a good quality sofa that is relaxing and comfortable.
* Choose a good quality double bed in the master bedroom and second bedroom, then opt for a three-quarter bed, sofa bed or single beds as space dictates. It may also be prudent to leave the second bedroom bare to allow tenants greater flexibility.
* Buy double wardrobes and bedside cabinets for bedrooms.
* Provide a mirror above the wash-hand basin in each bathroom.
* Appliances should include a fridge freezer, an oven, hob, washing machine (preferably a washer / dryer), microwave, toaster, kettle and possibly a dishwasher. Some of these items will have been included in the sale of the apartment.
* Put together a kitchen starter pack to include items such as cutlery, crockery, glassware, and chopping boards. You should also provide a mop and bucket, soft sweeping brush, small Hoover, iron and ironing board and a dustbin.
* Consider also spare bulbs, a nice touch which will be greatly appreciated.
* Some landlords will provide basic bed linen and towels, again a nice touch, but do not expect these items to be replaced at the end of the tenancy.
* There is no need to provide expensive or delicate ornaments or televisions, videos and audio equipment. There may be special requests for items but these would be available to incoming tenants at their own expense.
You should ensure that you are in possession of three full sets of keys, entry fobs, mailbox keys, car parking fobs etc. One for the tenant, one set for the letting agent and a set for yourself. In the event that there is more than one tenant the agent will pass their set onto the tenant when they move in.
The tenant shall normally pay a security deposit at the time that the lease agreement is signed . If an agent is managing the property, the agent will normally hold onto this deposit in a client's’ account. This money is held against the tenants’ liabilities for rent, dilapidation and breakages. This money is held until all rent accounts and claims have been settled and until the tenant has discharged his responsibilities under the agreement to the reasonable satisfaction of the landlord. If you are looking after the monies yourself, the money should be held as above, a sum normally equivalent to one to two months of the agreed monthly rental.
Rent in Advance & Method
It is typical that one month in advance be paid. In the past rents were normally collected in person by the landlord at an agreed time. Currently the trend is toward paying by standing order directly from the tenant's bank account to the landlords on a monthly basis. In this case, the tenant will require a current account; setting up a standing order is a relatively straightforward task once both parties' bank details are available.
Rental income is taxable and landlords should consult an accountant and make themselves aware of current legislation in this regard.
Some properties may attract various incentives such as Capital Gains Tax or Capital Allowances Tax. It is always advisable to consult one’s accountant before letting a property to tenants.