Property Investment - UK Landlords Letting Guide

Restrictions On Tenants

As a landlord, you are able to decide on restrictions to the tenancy, such as no pets or non-smoking tenants only. However it is important to remember, that in doing so you are going to limit the number of potential tenants to rent your property.

Keeping pets is a big issue and as more and more families decide to keep pets, you will find the range of potential tenants limited.

One solution is to ask for a larger deposit from tenants looking to keep pets and place a clause in the tenancy agreement, stating that all carpets, curtains and other furnishings must be professionally cleaned at the end of the tenancy.

Keeping An Inventory

Many disputes between landlord and tenant occur at the end of the tenancy, regarding the condition of the property. One way to try and prevent this happening is to consult an independent inventory agent, who will prepare a detailed report of the property condition before and after the tenancy.

The inventory should show a list of all the contents of the property including curtains, carpets, kitchen appliances and will state the general condition of walls, windows, light fittings and switches.

The inventory will be 'checked in' with the tenant at the start of the tenancy and 'checked out' at the end of the tenancy.

During the 'check out' stage the inventory agent will assess the state and condition and prepare a schedule of dilapidation's (damages and breakage's) if any, whilst taking into account general wear and tear, the length of the tenancy and the property's condition when it was originally let.

Inventory fees will vary according to the size of the property and whether it is furnished or unfurnished. Furnished properties with a large amount of furnishings and household items will bear higher fees.

Most letting agents will not arbitrate disputes between landlord and tenant and the final decision will often remain with the inventory agent.

Transfer Of Utilities And Services

Normally the tenant will be responsible for payment of utility bills and services, such as council tax, water, electricity, gas, television licence, oil and telephone.

Between lets, the landlord will be responsible for these. When a tenant moves in, either the agent or landlord will need to contact the relevant local authority and service providers to inform them of the change.

Tenant Referencing

Most agents will be able to provide you with a tenant referencing service to ensure potential tenants are able to pay their rent. Provided that references are satisfactory, you can also opt to subscribe to a legal protection insurance plan.

In some cases the tenancy will require a guarantor, in which case the credit search company will advise and referencing will have to be taken up on the person or company acting as guarantor.

Insurance And Legal Expenses Cover

It is important that you advise your insurance company that the property is being let, otherwise you will not be covered by your policy. It is also a good idea to check the level of public liability cover that you will have.

Your tenants will be responsible for insuring their contents, but this will not cover your belongings, so you will need to think about getting contents insurance, particularly if you are letting the property as furnished.

Even if you decide to let the property unfurnished, you may want to cover carpets and curtains from accidental damage.

It is also possible to take out insurance to cover the legal costs if your tenant decides to breach the terms and conditions of the contract.

More information can be found at www.DPJinsurance.co.uk

Property Manual

It is often useful to provide tenants with a folder containing information about the property and the local area. This not only helps you to provide a good service to your tenant, but could also help to prevent accidents or damage to the property.

Some examples of information you could include:

Most letting agents will prepare an appropriate tenancy agreement, written in modern, user friendly language. If you are letting the property yourself, then you may want to use a solicitor to prepare the documents to ensure they are all correct.

It is common practice for a tenant to provide a deposit to the landlord for the duration of the let. This is used as a security to cover any damages to the property and is normally equivalent to six weeks worth of rent.

Often the agent you have employed for collecting rent or managing your property will look after the deposit. If you decide to use an agent, you should ensure they are reputable, are a member of a professional body, such as ARLA or NALS and maintain separate client bank accounts.

In some cases, tenants will suggest that the landlord uses the deposit for payment of the final month's rental. Please remember that if you decide to do this, then there will not be any money to cover cleaning costs or breakage's that could have occurred.

If you are letting to a military or corporate client, then you may find that their organisation will guarantee the deposit and you will not actually take physical payment unless it is required.

Please remember that the tenants deposit is not your money and you should keep it in a separate bank account, if you are looking after it yourself.

Sufficient sets of keys should be left at the property for the tenants. Managing agents also generally require a set of keys.

It is worthwhile labelling keys for different parts of the property, such as window keys, garage door key, front and back door keys.

If the property is fitted with an alarm system, then it is important to provide the tenant (and managing agent if applicable) with the codes and instructions for use.

It should also be clearly defined in the tenancy agreement over who pays for the alarm service, landlord or tenant.

The property should be fully cleaned before the tenant moves in. It may be necessary to have the carpets professionally cleaned and the cleaning contractor can put a protective coating put onto them.

Ensure that chimneys and flues are cleaned and that your tenancy agreement states whether the tenant or landlord is responsible for cleaning these during the let.

The tenancy agreement should also specify that the garden is kept in a reasonable condition. You will need to ensure that hedges, trees and shrubs are kept under control and it may be an idea to employ a gardening contractor to attend to these once or twice a year.

At some point you may not be able to find a tenant for your property and it will be empty. Most letting agents do not take responsibility for empty property and you will need to make new arrangements if you want them to check it.

It is also worth checking your insurance terms, to ensure you are still covered whilst there are no tenants.

If the property is left empty over the winter, you will need to get the water system professionally drained or leave the central heating running to prevent pipes freezing up and blowing.