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Property/DIY

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Newly private Landlord

25 replies

Mathmatical · 30/01/2018 20:13

I'm helping my DF rent out his property privately, this was previously done through an agency but they were taking such a large cut of the rent that it just wasn't feasible anymore as it's his only steady income.
He has insurance, there are electric and gas safety certificates, the contract has been drafted ready to be signed, inventory created, references are pending through a third party referencing company. Deposit to be logged with DPS.
Is there anything glaringly obvious that we are missing?
Thanks

OP posts:
wowfudge · 30/01/2018 21:20

Insure against unpaid rent and for legal assistance if you need to evict and repair the house. Take photos of the condition of the property. He needs to check the tenant's ID against passports or other photo ID.

BexleyRae · 30/01/2018 21:31

Smoke alarms
Right to rent check, if you are having references done through a company make sure they are completing a right to rent check

Mathmatical · 30/01/2018 22:18

Great thanks. Photos will be taken when it's empty and I'll add them to the inventory so both parties can agree on condition.
Will make a note to take copies of ID.

Are 6 monthly inspections reasonable?

What does a right to rent check cover?

OP posts:
Mathmatical · 30/01/2018 22:19

Oh and smoke alarms are all installed. Are carbon monoxide alarms a requirement now?

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specialsubject · 30/01/2018 22:25

You urgently need to join a landlord association and do some training. You are really vulnerable to a financial disaster, especially if you are dependent on the rent. Tenants can stop paying for many reasons.

Co alarms only required if a solid fuel appliance, although good practice.
Right to rent check is landlords doing border control. Screw it up and get fined. Procedures on gov.UK.

Insurance for buildings, contents, malicious damage, legal , rent guarantee, home emergency.

Professional inventory much better.

Get evidence that the tenant has received all the docs without which you can't issue a section 21. Ditto that you have served deposit PI.

Needmoresleep · 31/01/2018 07:38

EPC!

These only need to be done every 10 years so one previously done for agents should still be valid. I think these need to have been shown to tenants if not included in original advertising.

For flats Freeholder permission to let, if that is a condition within the head lease. Though having said that, this may depend on the building management. I rent in a block where about 70% rent, and where I suspect no one has sought permission. Firstly because the management are so inefficient that it would take till next Christmas for them to give any permission. And secondly big Central London letting agencies with detailed and legally scrutinised contracts are likely to push back on clauses the management company would want to insert. But this is share of freehold. Some dodgy freeholders could become quite aggressive if the required and expensive permissions are not sought.

Worth checking also that your contract includes any restrictions contained within the head lease. No pets is the obvious one. Running a business from home can also be tricky from a legal/insurance point of view, and can conflict with head leases. And Air BnB.

I would second the professional inventory. Peace of mind for the tenant as well as you. Normally leases have landlords paying for check in and tenants for check out. Put in writing that Tenants have be 10 days to review inventory, note any issues and return a signed copy. Otherwise inventory will be considered to have been accepted.

Ditto a professional clean with receipts can save a lot of hassle, as the tenant is required to do the same at end of tenancy.

The most important thing. Are prospective tenants people you feel you can have a constructive working relationship with. A lot of give and take is required. Landlords need a good address book of workmen who they can lean on to respond promptly. Tenants need to understand that plumbers cannot be magicked out of thin air. One good tip from a letting agent was that ‘reasonable’ is what you would do in your own home. So next day heating engineer if boiler has failed, but the loan of a couple of storage heaters overnight. That sort of thing.

If there is a garden discuss maintenance. Tenants almost never look after them. If you mind about this, agree cost of regular garden maintenance is included in rent.

unfortunateevents · 31/01/2018 08:06

As a matter of interest, what proportion of the rental were the agency taking? Suggesting that the margins when renting through an agency are unfeasible sounds as if the margins on this rental are very tight, leaving your father vulnerable if a tenant stops paying for any length of time or a sudden large repair bill comes in.

Roystonv · 31/01/2018 08:17
  1. what is your agent charging then check if it ties in with others in the area if yes use one as 2) you are guessing what the responsibilities are, the law changes all the time and it is a bugger if you get it wrong. Good agents (and I was one) are worth their weight in gold; people forget they do not just look after the tenancy but the property too. Think about what the property is worth then about managing the tenancy 24/7/365 with little experience and then decide if paying a small amount over the year for peace of mind is worth it.
Needmoresleep · 31/01/2018 08:20

One tip with agencies is that though they may only discount their fee a little in the first year, you can often get them to agree swingeing reductions in second and third years. So we have managed 8%:6%:4%. If the tenant lasts the commission is low and you get the protection of an agent who is (you hope) up to date on legislation.

Another thing to consider for larger properties is HMO legislation. Some authorities (thanks Greenwich! ) are trying to extend this to almost all rental properties. Admin time and costs are large, so brace yourself if it is required. Your LA should have their definition of HMO on their website. Usually applies if property is 5 sharers, or 3 sharers and 3 or more stories.

Mathmatical · 31/01/2018 14:59

Thanks for all the advice.

I'm not sure in percentage terms but the agency charged the tenants 800 for the property and my DF received 600 so it's a fairly large chunk. Previously he was too busy to deal with the letting himself but now that his business is winding down he has more time on his hands. He has owned the property for 15 years and it's been rented that whole time through the same agency so he's not a new landlord per se, just new to renting privately. It doesn't sound a great deal to me considering my DF was still on call from the tenants 24/7 for repairs etc. He's very handy so a does a lot himself, bar plumbing and electrical work, and has a number of contacts to provide this work so that's not an issue.
He has all the required insurances, the only extra I will suggest he gets is the rent guarantee/legal fees, as this was previously provided by the agency (never used though as the property is incredibly sought after and only empty for a matter of days).
The contract states no pets, no home businesses etc so that's all covered.
As his business winds down that extra money will make a big difference each month, though it's not his sole income.
Would you still suggest a professional inventory if the property is unfurnished?

OP posts:
AnakinCyberwalker · 31/01/2018 15:04

I'm not sure in percentage terms but the agency charged the tenants 800 for the property and my DF received 600

25% is not a normal cut even for tenant finding +full management and rent collection. I paid less than that with a posh agent in central london!

Have you thought about asking for other agents to quote? Might be the quickest way to save money without upping the hassle...

specialsubject · 31/01/2018 15:24

the rent guarantee does not pay out when the place is empty!!! It is for when the tenant stops paying. As it can take up to a year to evict it is a good idea.

The legal fees cover is for the eviction, the basic costs are about £500 and the solicitor will double that. Good idea to employ one of the three firms that knows what they are doing.

has he got malicious damage cover? Not all landlord policies include it.

yes, you need a professional inventory as presumably it has a kitchen, a bathroom, walls, doors, carpets, floors, boiler, lights etc etc etc.

25% agency fees is a rip off.

specialsubject · 31/01/2018 15:26

also given the gaps in your knowledge, you really need to do some serious research. If nothing else, lurk on landlordzone.

you cannot leave an agency to it - the buck stops with the landlord if they cock up. You need to check that everything has happened.

FluffyWuffy100 · 31/01/2018 15:44

Legionnaires risk assessment?

Does your local council require you to be signed up as a registered landlord?

FluffyWuffy100 · 31/01/2018 15:44

And what everyone else said. There is a lot to consider.

Shouldileavethedogs · 31/01/2018 16:00

ID. Just so they are who they say they are. Plus you must be registered as a landlord now

specialsubject · 31/01/2018 16:03

no, landlord registration is only in some areas.
No, just ID won't do. Proper right to rent checks according to gov.uk.

Mathmatical · 31/01/2018 18:20

Well yes there may be gaps in my knowledge but that's because I'm not the landlord Smile I'm just trying to get a head start with the paperwork whilst he's on holiday.

Yes he has malicious damage cover.

Apologies yes I realised after I posted that the insurance is for when tenants don't pay, rather than when the property is empty. I confused the two as the agency provided both.

Yes isn't it a complete rip off! I'm sure it was reasonable 15 years ago when the property was only renting for 650 but it's never been renegotiated and rents have risen dramatically around here.

OP posts:
Mathmatical · 31/01/2018 18:40

There's no joined vents at the property so I assume legionnaires assessment wouldn't be necessary.

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specialsubject · 31/01/2018 22:08

Not with you on that one...but you can do your own legionnaires assessment. For example ( not legal advice) a property with no water tanks, mains water supply and a regularly used water system is very low risk.

There's guidance online.

Mathmatical · 31/01/2018 22:27

Legionnaires can be spread through air con. Anyway, it's not an issue for the flat.

OP posts:
specialsubject · 01/02/2018 09:37

True, although a residential building in the UK that needs aircon would be unfit for rental due to terrible design. It would be a windowless shithole like many offices.

FluffyWuffy100 · 01/02/2018 09:48

Legionnaires can be spread through air con. Anyway, it's not an issue for the flat.

You still have to actually do a risk assessment and document it. You can do your own, but you have to do the risk assessment not just say 'I didn't do it because I know its low risk'.

And you don't just get it via air con... can also spread via ho and cold water systems although risk is typically considered low for a normal uk domestic property given regular use/turnover of water.

Mathmatical · 01/02/2018 10:09

Okey doke. I'll do the risk assessment.

OP posts:
Needmoresleep · 01/02/2018 10:22

On legionnaires I did it myself, partly because the person who did the gas safe check, said he could do one, but given it was a two bed flat, with a combi boiler and no tank or aircon, he would not know what to test. I did, presumably after studying the guidance, say something about cleaning the shower head should the flat be empty for three weeks or longer. It was accepted by the agency, but my experience is that Agencies have largely given up on asking for them.

Maybe we should have a landlord thread where people can flame us, and we can carry on trying to house people responsibly.

I have done some digging into the Small HMO thing and individual Council's additional requirements. I heard about the Greenwich one late last year but was too busy with other stuff to do anything but park it.

It is going to be a major task.

The very simple learning is that should you be thinking of letting to sharers, you should check your Councils HMO requirements very carefully. The Greenwich additional requirements are quite hidden away.

The next learning is that if you fall under what are termed Small HMO provisions, simply don't let to sharers. The work and cost of even getting to first base, ie when the Council come in and potentially demand all sorts of works, is huge.

This will surely push potential sharers, and Greenwich with its University and good transport links, has strong demand from young professionals and students, out of the better quality housing into the
hands of those who are likely to ignore regulation. In short the borough loses good quality accommodation whilst doing nothing much about the bad,.

The biggest problem is planning. I have sharers in a very bog-standard Victoria terrace house in a nice residential street. I let either to prof sharers or to families. I dont want to evict my lovely tenants so will have to seek a certificate of lawfulness for change of use from C3 (residential) to C4, the latter being Small HMO. This change falls within permitted development in Greenwich, but only up to September 18. After that I will need full planning but still have to pay £231 and it will take about 6 weeks. If I relet to a family or want to sell I probably need to do get permission to change the use back. Then I need to repeat should I let to sharers again.

The costs continue to add up. I need to have a DBS. I need to produce a floor plan. The cost of licensing will be £1508 though there is a discount if I join a landlord organisation. The licence will be for a period of 1-5 years - the Council get to decide. The standards required go well beyond Gas Safe and electrical and cover a range of issues such as kitchen, bathroom and toilet facilities, fire precautions, heating, lighting, ventilation and room sizes. Again Councils can demand standards beyond Government ones. Again there will be costs of checks, with the potential for more costs should anything be found wanting.

All good on one level, in that tenants should be safe. But everyone should be safe, and given I have alarms, gas checks, fire doors etc already, I can't see that my tenants are any less safe than owner-occupiers in the same street.

The fines are horrendous. £30,000 plus up to a year's rent. Not surprisingly some Councils (yeah mine) are gaining a reputation of being very hot on implementation.

My agent is offering to help with the forms, but at a price. The Councils HMO phone helpline was less than useless, as if they have no obligation at all to help Landlords through this, and seemed completely unaware of the planning issue, and though the planning guy tried to be helpful he only told me about the current situation, and did not alert me to changes that will be implemented in September, even though I was subsequently able to find the information on the Council's own website (not linked to their HMO licensing information as far as I could tell.)

Bizarrely Foxtons, who I rent other properties through, were really helpful. They have just had to set up a dedicated section to help landlords and don't charge extra. Apparently if the Agent manages or rent collects they also fall within these new provisions, and each Authority has a different approach. I assume in time insurers will want to see licensing documents.

There is also this website:

www.londonpropertylicensing.co.uk/

Sorry about the rant. I would welcome recommendations for a good landlord association to join, so I can get my Licensing discount.

I hope this serves as a warning that BTL is not a business to go into without experience. Plus for those who are already there, there is a need to think very carefully about letting to sharers. It may not be worth the effort.

Grenfell was awful. However Councils are exempt from many of the regulations private landlords face, including it seems, fire/smoke alarms, room sizes and over-occupation. Unlike private landlords Councils make very little effort to check who actually lives in the flats they rent out, and whether they have a right to rent. Ditto unlike private building managers, they don't seem to enforce any permission to let provisions.

More bizarrely, you don't need to be licensed to let to, say weekend stag/hen parties, via Air BnB.

Regulations should target risks.

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