The fee for introducing a Tenant on a multiple agency basis is 12% (10% plus VAT) of the annual gross rental, ignoring any options for either party to terminate, with a minimum charge of £300, plus VAT. This refers to all rentals exceeding three months’ duration. In the event that the original term is extended beyond one year to either the same Tenant or any person or company connected with this Tenant, a further renewal commission at the rate of 8% plus VAT will be due. This fee is due for any subsequent renewals of the tenancy, for any term, whether or not the renewal is arranged by Property Sisters. We will, of course, be in communication with you and the Tenant(s) to help with negotiating of the renewal terms and to draw up necessary legal documents. For short term tenancies of 3 months or under our charges are 15% of the total rent payable, plus VAT.
If we are appointed as sole agents we will reduce our introductory fee to 10.8% (9% plus VAT) of the annual gross rental with a reduction of 0.5% plus VAT per annum for any renewal term or any extension thereof.
We are able to offer a management service at an additional fee of 7.2% (6% plus VAT) of the total rent due for the entire term and any extensions. Management is only available in conjunction with our letting service.
PURCHASE OF PROPERTY
In the event that the Tenant, or anyone connected with the Tenant, eventually purchases the Property at anytime after the commencement of the tenancy, we shall be entitled to a fee calculated at 2.4% (2% plus VAT) of the purchase price. Sale fees will become payable upon legal completion of the purchase.
COLLECTION OF RENT
If required, we will collect rent on the Landlord’s behalf according to the terms of the Tenancy Agreement. There will be a further charge of 2.4% (2% plus VAT) for this service. However, this service is automatically included in our management fee.
Letting fees become payable in full for the term of the Tenancy as soon as the Tenancy Agreement is signed and the first installment of rent is paid. For example, if the Tenancy is for one year, then our fee is paid annually, in advance. Renewal fees are payable, in full, as soon as the Renewal document has been signed and the first installment of rent for the renewal period has been paid. Management fees are payable on a pro-rata basis in conjunction with rental payments ie. where monthly rent is paid, management fees are payable monthly. If quarterly rent is paid, then management fees will become payable quarterly, etc.
EARLY TERMINATION OF TENANCY
In the event of the Tenant breaking the Tenancy Agreement and leaving the property early, we will refund any commission already paid by the Landlord on a ‘pro-rata’ basis for the unexpired period.
SALE OF PROPERTY
If the Landlord sells the property subject to the tenancy he will continue to be liable for commission for all extensions. The Landlord may assign his obligations to the purchaser, but must obtain the prospective owner’s agreement in writing before he completes the sale. If the purchaser agrees to take over the Landlord’s obligation to us, we must receive his name, address and signed agreement undertaking to be responsible for our fees, otherwise the Landlord will remain liable for the commission up until such time as the Tenant (or any person or company connected with this Tenant) vacates the property.
MOVING THE TENANT TO AN ALTERNATIVE PROPERTY
If the Landlord agrees that the Tenant may move to another property owned by him or an associated person or company, then he will remain liable for our commission fee, whether or not the tenant enters into a new agreement with him – on the same basis as if the Tenant had remained in the original property. NB:- We reserve the right to charge interest at the rate of 4% above Barclays’ base rate for payment of invoices paid later than thirty days.
PREPARATION OF A PROPERTY PRIOR TO A TENANCY
A thorough inspection of the property is recommended to ensure that the structure,roof, plumbing, wiring, etc., is in good order. Where necessary, all works of repair should be completed prior to the commencement of the Tenancy. It is the Landlord’s obligation to maintain the property throughout the term of the Tenancy, subject to any term to the contrary in the Tenancy Agreement mutually agreed by the parties.
The Landlord should attend to any internal or external decoration that is necessary prior to the commencement of the Tenancy.
The Landlord should ensure that all appliances, including the central heating system, have been checked and serviced before the Tenant occupies the property. Where possible, maintenance contracts should be taken out for the period of the Tenancy. It is essential that operating manuals for all the appliances are provided for the use of the Tenant. Furthermore, details of any maintenance contracts should be provided to the Tenant (and/or ourselves if we are to manage the property) so that the appropriate manufacturers can be called out, as and when necessary. If the appliances are under guarantee, then the appropriate guarantee card should be provided to the Tenant, or to ourselves if we are to manage the Property. This is the responsibility of the Landlord. The new Gas Safety (Installations and Use) Regulations 1994 came into effect on 31st October 1994. Briefly, all gas appliances must be checked for safety at intervals of not more than 12 months and records should be kept in respect of the appliances, the dates of inspections, the defects identified and any remedial action taken. Checks must be carried out by a Gas Safe Registered Engineer, which will include checking the gas installation, associated pipe work and ventilation and supplying a safety certificate. The regulations on electrical appliances for Landlords The Electrical Equipment (Safety) Regulations 1994, mandatory since 1 January 1997 state that all electrical appliances supplied with rental accommodation must be safe. This applies to both new and second-hand appliances and covers all electrical items supplied for the intended use of the Tenant. The only sure method of ensuring that these appliances are safe is to have them tested by a competent person using the appropriate calibrated PAT testing equipment. Failure to comply with the Electrical Regulations may constitute a criminal offence under the Consumers Protection Act 1987, which carries a maximum penalty on summary conviction of a £5000 fine and/or 6 months’ imprisonment. In addition, the Landlord may be sued in Civil Law under the duty of care for failure to ensure the tenant’s safety and face punitive damages. Electrical equipment must be safe and not cause danger. The 1994 Regulations apply to any person who supplies electrical equipment in the course of a business. Safety of any electrical equipment that is supplied as part of furnished accommodation is controlled by the 1994 regulations. We advise that electrical equipment is tested at regular intervals. All new homes must be fitted with mains operated smoke detectors. We would strongly recommend that smoke detectors be fitted in all properties and that they are regularly checked, especially battery operated devices. We would also recommend that carbon monoxide detectors are installed in properties.
With regard to any garden attached to the property, the Landlord should ensure that the garden is handed over in good condition, the lawns cut, the flower beds tidy and free from weeds and any fruit trees pruned. If the Tenancy Agreement requires the Tenant to maintain the garden during the term of the Tenancy, then adequate tools should be provided for this purpose. If the Landlord is to have the garden maintained during the Tenancy then appropriate arrangements should be made with a suitable gardener. Either way, the arrangement will be recorded in the Tenancy Agreement. We strongly advise that gardens are kept maintained during any void period.
It is the Landlord’s responsibility to hand the Property over in a clean and tidy condition, including all windows which should be professionally cleaned both inside and out.
FURNITURE, FITMENTS, MISCELLANEOUS ITEMS, ETC.
If the Landlord has agreed to provide the Tenant with any additional items, these should be located in the property by the commencement of the Tenancy and, if this is not possible, the Tenant should be informed in advance of the date that these items will arrive.
FURNITURE AND FURNISHINGS (FIRE) (SAFETY) REGULATIONS 1988. AND THE FURNISHINGS (FIRE) (SAFETY) (AMENDMENTS) REGULATIONS 1993
All upholstered furniture manufactured after 1950 (including loose fittings and permanent and loose covers) is included within the Regulations. There are severe penalties for non-compliance. The offense carries a punishment of up to six months’ imprisonment and/or a £5000 fine.
- Furniture in all properties which have bee let prior to 1st March 1993 MUST comply fully with the Regulations with effect from 1st January 1997. However, w understand from the Department of Trade and Industry that if a tenancy commenced prior to 1st January 1997 on a property which was let prior to 1s March 1993 then the Landlord can continue to supply the original furniture until the tenancy expires and then on a new tenancy the furniture would have t comply fully with the Regulations. W strongly recommend that Landlords should make sure that all furnishing supplied comply fully with the Regulations.
- Furniture in all letting commenced after 1st March 1993 MUST comply with the Regulations except as se out below in 3.
- A Landlord letting his own home for a temporary’ period and not in the course of business (not defined) has a MORA but no legal responsibility to ensure the furniture complies.
- Landlords letting a ‘second’ property or Landlords letting investment property for the first time after 1st March 1993 clearly must comply.
We confirm that we accept a property on our books on the understanding that the Landlord has made sure that furnishings supplied comply with these regulations.
GENERAL INFORMATION AND PROCEDURES
AUTHORITY TO ENTER INTO A TENANCY AGREEMENT
It is imperative that a party entering into the Tenancy Agreement or the person signing on behalf of that party has a legal right to do so. Proof of such authority may be required by the proposed Tenant or his Solicitor before he agrees to enter a Tenancy Agreement.
CONSENT TO LETTING
The Landlord must obtain the necessary consents where applicable from any Mortgagee, Head Lease, etc. Where possible, consents should be applied for prior to finding a Tenant to avoid any delays in granting the Tenancy Agreement.
It is the Landlord’s responsibility to ensure that he has adequate insurance cover for the property contents (including public liability) for the full period of the Tenancy or any extension thereof or for the period during which the Property may be vacant. The Landlord should also notify his insurers that the Property is to be let.
It is the responsibility of the Tenant or the permitted occupiers of the Property to pay the Council Tax throughout the term of the Tenancy, subject to any term to the contrary in the Tenancy Agreement mutually agreed by both parties. The Landlord should be able to supply the Band that the Property has been allocated so that the Tenant can be made aware of the annual cost.
Before the Tenancy commences all utility account,s namely telephone, gas, electricity and water must be paid up to date. Please provide the Agent/Tenant with the suppliers names, contact numbers and the meter numbers, where relevant, in order to set up the new accounts.
CONTENTS UNDER HIRE PURCHASE OR RENTAL HIRE
The Landlord must cover all rental hire payments and hire purchase installments for the period of the Tenancy.
AUTHORIZATION AND APPROVAL OF TENANT
In the event of the Landlord being abroad prior to the finalization of a Tenancy, then it will be necessary to give someone authority to approve the references and power of attorney to sign the Tenancy Agreement.
We would recommend that the Inventory and schedule of condition be prepared by an independent specialist Inventory firm: We can arrange for this to be done on the Landlord’s behalf, although no liability in respect of this service will be attached to us. The charge by the independent Inventory company for its preparation and its checking-in (if relevant) with the Tenant, if you cannot attend to this yourself, will be charged to you. The check-out costs will usually be borne by the Tenant. If it is the Landlord’s intention to prepare the Inventory then it should also include a Schedule of Condition. In this case it will also be necessary for the Landlord to check-out the Inventory with the Tenant at the end of the Tenancy.
SECURITY DEPOSITS & DEPOSIT HOLDING SERVICE
Amendments of the Housing Act 2004 took place on 6th April 2007, when Tenancy Deposit Protection (TDP) came into force on all new Assured Short hold Tenancies and stated that a Landlord may no longer hold a security deposit on behalf of their Tenant. Landlords are now required to join a statutory deposit scheme, if they take a deposit from a tenant and the deposit must be lodged with their chosen scheme (within 14 days of receipt). Should you require Property Sisters to hold the tenant’s security deposit, then the charge for this will be £18 (£15 plus VAT) for the term of the Tenancy Agreement, This is payable at the outset of the Tenancy, If you do not wish Property Sisters to hold the Tenant’s security deposit on your behalf, then you must give full details of the scheme you have chosen to pay the deposit to, at least 14 days prior to the commencement of the Tenancy or sooner in order for the correct Tenancy Agreement to be drawn up. Property Sisters will hold the security deposit for the period of the Tenancy. As members of The Dispute Service (DPS) scheme no G01524 we are legally allowed to hold the Tenant’s deposit on your behalf. At the end of the Tenancy, the Landlord and Tenant agree how the deposit should be divided, in conjunction with the inventory check out. If there is a dispute, the disputed amount of deposit must be sent to the Scheme for safekeeping until the dispute is resolved by the Alternative Dispute Service (ADR) or any subsequent court decisions. The deposit must then be returned within 10 days to the relevant party, following notification of the ADR/court decision. Please note that Property Services will be liable for notifying the Tenant of the scheme you have adopted to use, within 14 days of commencement of the fixed term agreement. You must understand, therefore, that this is a LEGAL OBLIGATION and it is necessary to choose one of the available schemes. If you fail to do so you may incur a large fine or you may be prosecuted in a court of law. In order to utilize Property Sisters’ DPS scheme, you must inform us in writing upon instruction of marketing your property.
We will, if required, prepare the Tenancy Agreement according to the type of Tenancy. The Agreements which are used comply with the Housing Acts 1988 and 1996 or under contract law for bonafide companies and/or rental values over £25,000.000 a year. The Agreement used has been approved by our own Solicitors and the Association of Residential Letting Agents (ARLA) and covers most eventualities. However, we suggest that the Landlord’s own Solicitors be given the opportunity to peruse the Agreement, as neither we nor our Solicitors can take any responsibility whatsoever in relation to the use of the Agreement in any particular case. The charge for us to draw up a Tenancy Agreement is £240 (£200.00 inc VAT) and this cost is shared equally between the Landlord and the Tenant – and includes the first year’s fee for registering the deposit into the Tenancy Deposit Scheme.
RENEWING/EXTENDING THE TENANCY
In the event of a renewal, Property Sisters will prepare and draft a Memorandum of renewal which will be charged at £120 (£100 inc VAT) to be shared between Landlord and Tenant. Should there be any changes to the agreed terms, save for the alteration to the value of the lettings, either by negotiation or through change in legislation, Property Sisters will prepare a renewal Tenancy Agreement charged at £240 (£200.00 inc VAT); this cost to be shared equally between both Landlord and Tenant.
REDIRECTION OF MAIL
This can either be arranged officially through the local Post Office for a small fee or directly with the occupant, whereby the mail can be forwarded on. We are unable to provide a forwarding service.
If required we will collect rent on the Landlord’s behalf according to the terms of the Tenancy Agreement. There will be a further charge of 2% plus VAT for this service. However, this service is automatically included in our management fee. Present banking arrangements are such that it is necessary for us to allow approximately six working days for cheques to be cleared before transferring monies to clients. The collection of rent does not include taking any legal action against the Tenant regarding late or non-payment of rent. In the event of late or non-payment of rent, the Landlord will be notified at the earliest possible opportunity. Under the Taxation of Income from Land (non-residents) Regulations 1995, the rent receiving Agent, acting for an expatriate Landlord (or where there is no Agent, the Tenant) is required to deduct tax at 22% from rent after allowable expenses and to pay the tax to the Inland Revenue within 30 days of each quarter’s end. Landlords can apply to have their rents paid without deduction by completing form NRL1 or NRL2 or 3 if a trust or company and returning it to the Inland Revenue’s FICO office at Bootle, Merseyside.
INSTRUCTION OF SOLICITORS
You will be informed of any breaches or covenants brought to our attention. However, if it is necessary for a solicitor to be instructed during the Tenancy then their costs would have to be paid by the Landlord and would not be included in our fees.
WHAT SERVICE DO WE PROVIDE?
- The Inspection of the property and advice on the rental value we feel the Landlord is likely to achieve
- The undertaking of a comprehensive marketing campaign
- The arranging for prospective Tenants to view the property and thereafter to negotiate and agree the terms of the Tenancy
- The application for references – financial and/or personal
- The preparation of the Tenancy Agreement unless otherwise instructed, and thereafter we supervise and co-ordinate the documentation at such time as the Agreement has been signed and an exchange has been effected. We arrange for the agreements to be officially stamped, if required.
- The arranging of the first installment of rent to be paid in advance and to account to the Landlord as soon as funds have been cleared by our Bankers.
- Make arrangements for a specialist firm to prepare an Inventory prior to the Tenant taking occupation and arranging for the Inventory to be checked at the end of the Tenancy.
- Hold the security deposit against possible dilapidation and unpaid rental, in accordance with current legislation
- Collection of the rent according to the terms of the Tenancy and account to the Landlord.
- Negotiation of any renewals to the tenancy and prepare the necessary documentation.
NB:- All the above services are optional and no reduction in our fees will be made if any one or all of the services are not required.
- This service is only available if we have affected the original Letting and we are responsible for the collection of the rental.
- On behalf of the Landlord we will instruct the utility companies, i.e. Gas, Electricity, Telephone, Water and the Local Authority for Council Tax of the change of occupancy. If required, final accounts will be settled on behalf of the Landlord and paid from the rent collected.
- If the Landlord requires certain recurring outgoings to be paid, namely, service charges, insurance premiums, etc., and provided that we are duly notified in advance and that the demands are subsequently forwarded to us, we will then arrange for payment to be made on behalf of the Landlord and settled from the rent collected.
- If during the Tenancy, running repairs become necessary, then entirely at our discretion we will arrange for these to be carried out, unless instructed to the contrary. We will arrange to carry out any repairs up to a maximum of £200.00. In the event of the repair or replacement exceeding £200.00 we will endeavor to get permission from the Landlord, and if we are unable to contact the Landlord we will use our discretion especially in the case of emergencies.
- If any major problems occur, we will arrange at the Landlord’s expense, for a Surveyor to inspect and submit a report and thereafter, if authorized, to supervise any work considered necessary and approved by the Landlord.
- We will collect the rent and account to the Landlord accordingly. Where the Landlord requires the rent to be remitted directly to his Bank or Building Society in the UK, then we will require the name, address, branch and account number of such Bank or Building Society. If the rent is to be remitted outside the UK, we will provide this service subject to payment by the Landlord of any bank charges incurred. It must be stressed that this service will only be provided whilst there are no exchange control restrictions.
- Where the Landlord is not a resident of the UK, the rent receiving Agent is required to deduct tax at 22% from rent and pay this amount to the Inland Revenue on a quarterly basis. Landlords can apply to have their rents paid without deduction by completing form NRL1, 2 or 3 as
applicable. We recommend that a Tax Adviser or Accountant is appointed by the Landlord to calculate and agree the tax due.
- If we are required to agree an assessment with H M Inspector of Taxes in respect of the rental income, then we will make a separate charge for this service.
- When we have undertaken our Management Service and if between Lettings the property is vacant for a period not exceeding four weeks, we will at the Landlord’s request, arrange period inspections upon the payment of an additional fee of £18.00 per week (£15 plus VAT).
IMPORTANT – PLEASE READ CAREFULLY
Re: Energy Performance Certificates (EPC) for rental properties
An Energy Performance Certificate (EPC) gives information on the buildings energy efficiency; It shows, 1. the Energy Efficiency rating (relating to running costs) and 2. the Environmental Impact rating (relating to the carbon dioxide emissions rating) of the property. The ratings are standard and list A to G, A for very efficient, and G for very inefficient, as seen on domestic appliances such as refrigerators and washing machines. We would like to advise you of the new legislation that the Government is implementing from the 1st October 2008. All buildings, whether residential, commercial or industrial, will be required to have an Energy Performance Certificate (EPC) that is no more than 10 years old, for every occasion when they are rented, bought or sold. The requirement for such certificates will come into force for all premises when they are let after 1st October 2008. Currently these certificates are a mandatory part of Home Information Packs (HIPs). The local Trading Standards office is the enforcing body who will fine Landlords who fail to comply with the legislation. Property Sisters will be able to provide you with the contact details for an Accredited Domestic Energy Assessor who can carry out the inspection of the property and provide the required Certificate. The EPC is valid for ten years and can be reused as many times as required during that period. It will not be necessary to commission a new EPC each time there is a change of Tenant. The EPC is not required for any property that was occupied prior to 1st October 2008 and which continues to be occupied after that date by the same Tenant. However Landlords may commission an EPC for the property at any time to prepare for a change of Tenant. A copy of the Certificate will be required by Property Sisters at the commencement of the marketing of the property as it must be available free of charge to prospective Tenants. This should be when they are first given written information about the property, or are arranging to view it, and before any rental contract is entered into. A copy of the EPC must be given to the person who takes up the Tenancy.
SMOKE & CARBON MONOXIDE DETECTORS
From the 1st October 2015 legislation will make it a statutory requirement for all rental properties where the Tenancy commences on or after 1st October 2015, to have sufficient smoke alarms (one on each floor) and a carbon monoxide alarm fitted in any room which is used wholly or partly as living accommodation and contains a solid fuel burning combustion appliance. Both alarms must be tested and operational at the commencement of each tenancy. Further information can be found at https://www.gov.uk/government/news/tenants-safer-under new-government-measures.
The Association of Residential Lettings Agents (ARLA) was formed in 1981 as the professional and regulatory body for letting agents in the UK. Today ARLA is recognized by government, local authorities, consumer interest groups and the media as the leading professional body in the private rented sector. ARLA is a sister organization to the National Association of Estate Agents (NAEA). In May 2009 ARLA became the first body in the letting and property management industry to introduce a licensing scheme for all members to promote the highest standards of practice in this important and growing sector of the property market. Both ARLA and NAEA members are governed by Codes of Practice providing a framework of ethical and professional standards at a level far higher than the law demands, and both Associations have their own complaints and disciplinary procedures so that any dispute is dealt with efficiently and fairly. If you require more information, please contact us on 020 3745 7456 LETTING SERVICE. The fee for introducing a Tenant on a multiple agency basis is 12% (10% plus VAT) of the annual gross rental , ignoring any options for either party to terminate, with a minimum charge of £300, plus VAT. This refers to all rentals exceeding three months’ duration. In the event that the original term is extended beyond one year to either the same Tenant or any person or company connected with this Tenant, a further renewal commission at the rate of 8% plus VAT will be due. This fee is due for any subsequent renewals of the tenancy, for any term, whether or not the renewal is arranged by Property Sisters. We will, of course, be in communication with you and the Tenant(s) to help with negotiating of the renewal terms and to draw up necessary legal documents. For short term tenancies of 3 months or under our charges are 15% of the total rent payable, plus VAT.