Listed below are some important facts and regulations for all Landlords. For further information or indeed to arrange for a valuation for rental, please call +44 (0) 20 8458 9119 or email enquire@godfreyandbarr.com
Most new private tenancies formed with rents up to £100,000 per annum are classified as Assured Shorthold Tenancies (AST).
Any deposits will need to be protected with one of the three government-approved tenancy deposit schemes. This is a must and if Landlords do not have these deposits protected, they are in breach of Tenancy Deposit Protection (TDP) legislation.
If you have a property which you are thinking of letting, or perhaps you are wondering whether to let or sell, then the single most important thing you need is good advice. To make the decision that's right for you, you need to know the advantages - and pitfalls - of letting your property. Our advice is free – but could save you a great deal of time and money.
We are finding that more and more Landlords are asking us to let and manage their properties. There are sound reasons for doing so, including peace of mind and less hassle! 'Let Only' means just that - we will find you an acceptable Tenant and finalise the Tenancy documents. After that, it's up to you to collect the rent and deal with any issues such as repairs, tenancy renewals etc. With full management, you just leave everything to us - and after letting your property, we will collect the rent (and account to you monthly) and look after any authorised repairs. Our charges for full management are competitive (and include compliance with the Tenancy Deposit Scheme requirements) - you might be pleasantly surprised.
One of our experienced staff will carry out an appraisal of your property, advise you of its likely rental value and how it should be advertised and promoted. Remember, our valuers are experienced in the letting of property and can offer advice on many of the legal pitfalls such as gas and electric safety checks, EPC's etc. There is no charge for the appraisal visit. We're skilful in creating interest that will achieve the maximum market rent for your home. But we won't flatter you with silly-money valuations that Tenants can't fulfil.
A Tenant will pay a security deposit to us before moving in and is entitled to have it back at the end of the tenancy, provided the rent has been fully paid and the property is left clean and in good order. Any rent arrears, together with the cost of rectifying any damage or having cleaning carried out may be deducted from the deposit at the end of the tenancy. All money deposited with Godfrey & Barr is held in a special Clients Account and we ensure full compliance with the legal requirements of the Tenancy Deposit Scheme - another thing you need not worry about.
Properties are usually let as Assured Shorthold Tenancies, typically for a period of 6 or 12 months, at the landlord's option. The Landlord may agree to let to the same Tenant for an extra term if they wish, but otherwise is entitled to regain possession of the property. Provided the relevant notice document has been served the Tenant must move out. The Landlord must also have a valid EPC, electrical and gas certificates and the Tenants must have been provided with these, along with a Tenants guide to lettings, otherwise possession can become complicated.
Overseas residents who receive rental income from UK property may well be liable to pay tax on that income. We are used to helping overseas landlords in simplifying their tax arrangements and of course, with the internet and e-mail, we can communicate with you wherever you are in the world. Overseas Landlords must register with the HMRC to receive their rental gross of tax.
As a Landlord, you are responsible for the safety of your Tenant and the suitability of your property. Gas and electricity are covered by legal safety requirements, while The Furniture & Furnishings Regulations of 1988 cover fire safety issues. Your mortgage lender also must know about your plans to let your property; otherwise, you could face financial penalties. Furthermore, your insurance cover may be affected by letting a Tenant into your property.
Just as some people service their own cars and re-fit their own kitchens, you can certainly let your own property. But in your busy day-to-day life, the reassurance of knowing that your major investment is being let to a reliable Tenant, at a good rent, the deposit is safely held in compliance with the law and all maintenance and repairs are being dealt with by tried and tested local contractors, is worth the small cost involved. After all, while most lettings proceed to a smooth and trouble-free conclusion, there can be difficulties along the way – and that's when you appreciate having an expert on hand to look after things for you.
Godfrey & Barr have an established rental and management division. We have been handling residential lettings in NW London and Hertfordshire for over 30 years and have built up a large portfolio of clients including many large organisations, who are often seeking properties to rent for executives in the London area. We have rented properties ranging from small flats and cottages in Hampstead Garden Suburb, Mill Hill and the peripheries, through to ambassadorial style houses.
As members of Propertymark, we deal with all aspects of residential lettings which would include extensive marketing, evaluating suitable Tenants, taking up rental and management references, processing paperwork, including the preparation of a tenancy agreement and statutory notices, with the intention of ensuring that any transaction proceeds smoothly and quickly. We will provide you with details of current legislation governing the rental of property in the UK.
You should also be made aware of the implications of an Assured Shorthold Tenancy Agreement (AST) and the differences between these and Contractual Tenancies or Company Lets, the required Statutory Notices, the Fire and Furnishing Safety Regulations Act 1998 and the Gas Safety Regulations 1994 and NICEIC Electrical testing.
If the private Tenancy agreement is to be in your name and the rent is less than £100,000 per annum, you and the Tenants are most likely to enter into an Assured Shorthold Agreement. This form of agreement came into effect in 1989, under the Housing Act of 1988. This is a fixed term agreement that runs for a minimum period of six months. Our own comprehensive Tenancy Agreements and Assured Shorthold Agreements have been prepared by us and are designed to be both fair to the Landlord and the Tenant. Both parties will be bound by the terms of the agreement. You should read your Agreement carefully and make sure you understand all the clauses. You should always endeavour to seek independent legal advice from your solicitor prior to you signing it. The cost of preparing our Agreements is currently £300 plus VAT at the prevailing rate, is paid for by the Landlord.
Depending on the type and terms of your agreement, your Tenant may have an option to renew for a further period. If this is the case, they must notify us in writing within the time specified in your Agreement. If there is no option to renew, but both you and the Tenant wish to extend or renew your Agreement, this can be organised. In both cases, once terms are agreed we will prepare the necessary documentation. In addition, the Tenant may want an option to break (cut short) the Agreement. This must be agreed with the Landlord at the outset. Notice to terminate must be adhered to, as specified in your Agreement. The Landlord can also request an option to break, but in the case of an Assured Shorthold, not before six months. They can also request, in certain cases, an option to purchase the property but this must be agreed at the outset. In that case, a separate commission for the purchase will apply and terms need to be agreed with Godfrey & Barr.
Rental payments are payable monthly, quarterly, half yearly or annually in advance by standing order or direct debit, depending on the terms of your Agreement, whether legally demanded or not. The first payment would normally be made payable to Godfrey & Barr and will be paid at the time that the Tenants sign the agreement along with the agreed deposit. Further payments will normally be paid directly to the Landlord’s account as detailed above. Godfrey & Barr will sometimes collect all the rent if a management service is being provided.
From the 6 April 1996 the way in which non-resident Landlords are taxed on rental income changed. These changes present the agent or the Tenant with two alternatives. They can either pay the Inland Revenue 25% of the rent, net of expenses. There is no negotiation on the flat rate of 25% and payments must be made quarterly. If at the end of the tax year there has been excess payments, the Landlord can, on submission of detailed paperwork, apply to the Inland Revenue for a rebate, or the agent or the Tenant can pay to the Landlord rental income without deduction of tax. The latter should only be done if the Landlord (or his agent) apply for and are granted permission by HMRC to avoid deductions. The above is only applicable to Landlords who are non-resident (normally someone who resides out of the UK for a period more than 6 months). If you are paying rent to a managing agent, then it is the managing agents’ responsibility to withhold tax as above, or to receive an exemption certificate. If, however the tenants are paying rent directly to an overseas Landlord and the Landlord cannot provide them with an exemption certificate, then the tenants are strongly advised to withhold 25% of the rent and make a return to the Inland Revenue quarterly for this amount. If they do not, they may well be assessed by the Revenue for payment of the same. Further details of this Scheme are available online from HMRC.
A deposit is generally equivalent to 5 weeks rent for tenancies with an annual rent of up to £50,000 or 6 weeks rent for tenancies with an annual rent of over £50,000 and up to £100,000 per annum and is normally held by Godfrey & Barr as stakeholders between the parties in accordance with the TDS (Tenants Deposit Scheme) unless the rent is greater than £100,000 per annum. Godfrey & Barr will be entitled to interest on this money. In certain circumstances and where the rental falls outside the Housing Act 1988 - and provided the Tenants agree and current legislation permits, the Landlord can hold the deposit, but this should be placed in a separate interest-bearing account. It could be used to offset any costs such as cleaning, gardening, damage, or dilapidations at the end or during the Tenancy but should not be converted into rental payments. The deposit should be refunded in full by either the Agent or the Landlord at the end of the Tenancy if there are no dilapidations or breaches of the agreement. Any disputes on AST tenancies will be arbitrated under one of the approved deposit schemes.
Before the Tenants move in, the Landlord or an inventory service prepares an inventory, listing comprehensive details of the contents and conditions of the property. On the day the Tenants move in or at some other agreed time, they may be met on the premises to check through the inventory. They will then be asked to sign a declaration confirming the details of contents and condition are correct. The costs of preparation of the inventory and the check-in and check-out costs are normally paid by the Landlord. If the Tenants do not sign and return the inventory to the agent within seven days of the start of the tenancy, it will be deemed that they have accepted it as written. Godfrey & Barr use an outside company to provide this service, which is charged for separately.
As stated above, once the Tenants have chosen a property and the terms of the Tenancy have been agreed, Godfrey & Barr draw up the relevant documents for signature. Currently Godfrey & Barr ask them to pay a holding deposit. Some of their deposit may be non-refundable if they withdraw from the letting.
Most Tenancy Agreements require the Tenant to be responsible for gas, electricity, telephone, water rates and TV licence, as well as Council Tax. Gas, electricity and telephone companies will carry out a credit check on the Tenant. If they have not been a customer before, they may ask for a deposit against the first year’s bill. You must inform all the relevant services of your start date, as must the Tenants. It is your responsibility to notify the relevant utilities of your impending termination date, at the termination of the Tenancy.
You must inform the local authority of the start date. The council will then send the Tenants a registration form. It is a criminal offence not to pay Council Tax.
Under our normal agreement, the Landlord takes out insurance for the building and their contents provided. This does not usually cover the possessions of the Tenants. For their own possessions they should take out an "all risks" insurance policy.
Either Godfrey & Barr or the Landlord should arrange for an inventory check-out on the day the Tenants are due to leave. At the checkout time, the property should be clean and tidy, as they found it and ready for hand over. After handing over the keys, a report is prepared as to the condition of the property and any defects or damages are listed. The Tenants should already have contacted the utility companies for termination accounts. Once these are paid, they should be submitted to either Godfrey & Barr or the Landlord as evidence of payment. This is important. If for any reason a supply is disconnected, the Tenants could be charged a reconnection fee. Their termination receipts are also needed so that either the Landlord or Godfrey & Barr can release the original deposit, less any appropriate charges, (which may include the cost of the check-out) and return the balance to them.
March 1993 saw the application of the above Regulations to furnished lettings. They require that upholstered furniture supplied in a furnished let must meet all the resistance requirements of the Regulations. The supply of furnishings "in the course of business" which do not meet the Regulation constitutes an offence under the Consumer Protection Act 1987. Conviction for an offence under the Regulations carries a maximum penalty of a fine of £5,000- or six-months imprisonment, or both. The phrase "in the course of business" includes the business of letting furnished accommodation by Landlords and can also include the business of a Letting Agent. However, Landlords who privately let their principal residence are not caught by this definition, unless the let is long term, or they carry on persistent letting. In brief, the Regulations require that the upholstered furniture, mattresses, pillows and cushions, headboards and head bases which are upholstered and included in a furnished letting must have a fire-resistant filling material, the covering fabric must have passed a match resistance test and the combination of cover fabric and filling must have a passed cigarette resistance test. The Regulations do not apply to soft furnishings such as curtains, carpets, etc. Furniture, manufactured before 1 January 1950 have been deemed not to be made with especially hazardous materials and is exempt. Since 1 March 1990, all new upholstered furniture sold in retail outlets has had to comply with the Regulations. To show compliance, such furniture carries a permanent label stating the tests to which the materials have been subjected. This label is of great assistance to a Letting Agent or Landlord in determining what furniture is acceptable in order not to commit an offence.
Further guidance and a free booklet produced by the Department for Trade and Industry is available from your local Council Trading Standards Department, or from this office. Please ensure that the furniture and furnishings of your property conform to the regulations of the above act. Godfrey & Barr cannot be held responsible if your furnishings and furniture does not comply with current regulations.
The Gas Safety (Installation and Use) Regulations 1994 are made under the Health and Safety at Work act 1974, which is the principal legislation relating to the same. The principal obligations of the Landlord are to be found in Regulations 34, 35 and 36 and the offences in Section 33 and 36 (1) Health and Safety at Work Act 1974. Details of which are available from this office and the Health and Safety executive. The act governs the Landlords obligations, unsafe appliances, and maintenance of appliances, escape of gas and criminal liability. An annual gas certificate must be provided.
As of 1 December 2003, this tax is solely the responsibility of the Tenant to pay. It is payable to the Inland Revenue for any short-term residential tenancies of up to seven years. The core change is the threshold over which the SDLT becomes due and the method of calculating that threshold is based on a computation known as Net Present Value (NPV). If the NPV amount is less than £60,000 then not LDLT is due. If the figure is more than £60,000 then tax is payable by the Tenant(s) based upon 1% of the NPV. The sole responsibility for the calculation and submission of the relevant forms (SDLT1 and SDLT4) to the Revenue is the Tenant(s). If makes no difference if the Tenant is a person(s), Company, Trust or Partnership. All are liable to pay SDLT. The Tenant has 30 days from the 'effective date' in which to submit the forms. There are fines and possible penalties if the forms are submitted later than three months. It does not matter whether the tenancy is assured, shorthold, non-housing act or company let, they are all included. The calculation is on the rent due under each year (or part year) of the initial fixed term - irrespective of any notice period requirements. It is irrelevant if there is a break clause in the tenancy, as the calculation of the NPV is based upon the rent due each year (or part thereof) of the initial fixed term. There is no entitlement to a rebate if a break clause is exercised, or a tenancy terminating early for any reason. Further details are available from the HMRC website or from ARLA.
With effect from 1 June 2020, Landlords in the private rented sector in England have a legal obligation ensure any electrical installation (i.e., fixed wiring, sockets, light fittings, switches, the consumer unit or fuse and protective bonding) in their rental property is inspected and tested by an approved electrician, at intervals of no more than 5 years. These Regulations in England came into force for all new tenancies (including renewals) from 1 July 2020 and all existing tenancies from 1 April 2021.
The report will assess if the electrics are in good working order and meet current standards, specifically British Standard 'BS 7671:2018'. Landlords must then supply a copy of this report (usually an Electrical Installation Condition Report or EICR) to existing Tenants within 28 days of the inspection and test; to a new Tenant before they occupy the premises and to any prospective Tenant within 28 days of receiving a request for the report.
We can recommend a contractor or if we are managing the property, Godfrey & Barr can organise this for you. You may be required to carry out remedial works if your property does not meet the required fixed electrical safety standards. Local authorities will be responsible for enforcing the new Regulations and can impose a financial penalty of up to £30,000 if they find a Landlord is in breach of their duty. This guidance summarises the regulations, we can provide you with a guide explaining these in full. Further information regarding the above-mentioned regulations can also be found at: https://www.gov.uk/government/publications/electrical-safety-standards-in-the-private-rented-sector-guidance-for-landlords-Tenants-and-local-authorities/guide-for-landlords-electrical-safety-standards-in-the-private-rented-sector. Please note the new regulations do not cover electrical appliances, only the fixed electrical installations. We recommend that landlords regularly carry out portable appliance testing (PAT) on any electrical appliance that they provide and then supply Tenants with a record of any electrical inspections carried out as good practice.
Furthermore in accordance with The (Part P) Electrical Regulations Act 2005, it should also be noted that if you are undertaking any major building or repair works, any installation or repair, (excluding minor repairs, such as replacement of switches and sockets), needs to be completed and self-certified by a qualified electrician, who is a member of either ELECSA, BSI, ECA/BRE, NAPIT or NICEIC. Alternatively Building Control at your Local Authority must oversee any installation or repair and sign such off such works upon completion.
Our fees for rentals are 8% for sole agency and 10% as multiple agencies. If you require a management service, we charge an additional 7%. All fees are charged annually for each renewal of a tenancy. Our full terms and conditions are available upon request. All charges are plus VAT at the prevailing rate.
We entered the operation of buying and selling with a jaundiced view of Estate Agents... as far as Godfrey...
Mrs A - Hampstead Garden Suburb, NW11
Jeremy is a great agent and negotiator, best I have known in a long time and went beyond to help me, also...
Mrs S - Hampstead Garden Suburb, NW11
We bought our house in 2010 and sold it in 2021 through Godfrey & Barr (Mill Hill). We’ve always...
Mrs S - Mill Hill, NW7
Excellent service from Godfrey & Barr on our house sale. Barbara worked tirelessly to help secure a...
Mrs F - Mill Hill, NW7
Great experience selling our property with G&B. Worked with them for over 20 years, but this recent...
Mr A - Hampstead Garden Suburb, NW11
Previous
Next
VIEW GOOGLE REVIEWS
