Category: Landlord

A tenant guarantor is a person who vouches for your tenant and agrees to cover costs associated with rent arrears, damage to the property or other costs should the need arise. Essentially, a tenant guarantor acts an insurance policy in case the tenant defaults on rent payments or otherwise does not uphold their responsibilities in the Tenancy Agreement. So from a landlord’s perspective, why is a tenant guarantor important? And how can you ensure that your tenants’ guarantor is reliable?

Why should I request a tenant guarantor?
As stated above, a tenant guarantor is your assurance that if anything goes wrong with the tenancy, your costs will be covered. It is particularly advisable to request a tenant guarantor in situations where the tenant has a low credit score or is otherwise considered ‘high risk’, for instance if they are a student or benefits claimant. Also, if your tenant is unable to provide a suitable financial reference, a guarantor should be sought.
Realistically, though, even the most reliable-seeming tenant is only a job loss away from finding themselves unable to pay the rent – a situation which, sadly, is all too common in the present economic situation. Therefore, you may want to consider requesting a guarantor for all tenants to protect your finances.

Who can act as a tenant guarantor?
In theory, anyone who is over 18 and happy to vouch for the tenant can act as a tenant guarantor. However, if your tenant is considered at risk of default, you’ll want the guarantor to be someone who is reliable. Ideally, they should be a homeowner in steady employment with a good credit score, whose income will allow them to cover costs associated with the rent for the whole tenancy.
They should also be fully aware of their obligations as guarantor – particularly, in the case of shared or student houses, guarantors should be aware that they would likely be held jointly responsible for any arrears or damage costs, no matter which tenant is involved. Due to the nature of the law it is not possible to stipulate that a guarantor is responsible only for one tenant in these circumstances.

How do I arrange a tenant guarantor?
If you do wish to have a tenant guarantor, you should ask your tenant to provide details of a suitable candidate (who, of course, has already agreed to it!). You should then supply the guarantor with two copies of the following:

• The Tenancy Agreement – one copy should be signed and dated by the guarantor, the other is for them to keep so you can be sure they are aware of the tenant’s obligations;
• The Deed of Guarantee – this must be signed, dated and witnessed in order to be legally enforceable;
• A Guarantor Application – templates for this and the Deed of Guarantee are readily available online. The Application Form should include details of the property to be let, the personal details of the guarantor, their residency, legal history, employment history, their solicitor, accountant and character reference and a declaration to agree to a credit check.

Once these have been returned, a credit check and references should be sought. If these are satisfactory, then the individual can be confirmed as tenant guarantor and will remain so for the duration of the tenancy.
Seeking a tenant guarantor is a wise move for landlords, especially if you are renting your property to ‘risky’ tenants. It will give you protection in case of problems, and it may be that these are less likely to arise if the tenants are aware that they will be getting someone else into trouble too.

With so many estate agents available, it can be hard to choose who to use when selling or letting your house – and a good agent can make the difference between selling at a great price and not selling at all, or getting tenants in quickly or having an empty property for months. So what should you know when you choose an estate agent?
Whether you are a vendor or a landlord, your agent needs to be registered with a Redress Scheme. The three approved schemes are The Property Ombudsman, Property Redress Scheme and the Ombudsman Service.

Vendors
If you are selling your property, ask your estate agent about the following:

1. Fees – Is their commission fixed or dependent on the sale price? (While a fixed fee may help you budget, agents that charge commission as a percentage of the sale price will be more motivated to get you a decent price!) Are there other costs – for instance, for sale boards, floorplans, printed marketing materials etc.? How much will the EPC cost and can you order it elsewhere for less?
2. Marketing – In 2015, a new property portal called OnTheMarket was launched. Agents signed up to this site can only list your home on one of the two major property sites, Rightmove and Zoopla. As it is not yet as big as these sites, you could potentially be halving your exposure to prospective buyers by using an agent who is signed up to OnTheMarket, so check this with them.
3. The contract – Does your contract allow you to use more than one agent? If you find a buyer yourself, will you still have to pay the agent? Will you still have to pay if the agent finds a buyer but you decide not to sell? Is there a tie-in period where you cannot change agents? If you do change agents will you still be liable for fees with the original agent?
4. Viewings – Do the agents carry out viewings themselves? If so, when are they available? (An agent who only does daytime viewings on weekdays might not be much use if your target market is people in full time employment!) How many viewings have they arranged for comparable properties? How many viewings usually take place before a sale is agreed?
   For more guidance on choosing your estate agent, the HomeOwners Alliance has a great guide.

Landlords
If you are looking for a letting agent, you should check that they are a member of a professional body, for instance the National Association of Estate Agents, Association of Residential Letting Agents or Royal Institution of Chartered Surveyors. The following points are also important to check:

1. What the agent will do – Decide what you want them to do: do you just want them to find a tenant, do you also want them to deal with rent collection, or are you looking for a full management service? If the last option, will they deal with matters such as gas safety checks, repairs and maintenance, keeping the property up to rental standard etc.? Will they deal with all aspects of the application procedure, such as credit checks, references and (from 1st February 2016) right to rent checks?
2. Fees – What are the fees for the level of support you are asking for? Is there a fee for including your property on the agent’s list? Will you be charged fees when the property is vacant, and if so, at what rate? Will you be charged commission for tenancy renewals where the agent found the tenant originally, even if you’re not using them for property management? What other charges are there – for instance, administration charges when the new tenant moves in, charges for inventories, tenancy agreements, etc.?
3. Tenancy Deposit Protection (TDP) – If you want the letting agent to deal with rent collection or fully manage your property, find out which TDP scheme they use. Also ask if they have client money protection in place, and follow up with them after the tenancy begins to ensure the deposit is protected – remember, you remain liable for return of the deposit even when using a letting agent.

If you want more information on choosing a letting agent, Prime Location offer a useful guide on their website.

Whether you are selling or letting, choose a well-established agent who really knows the location and has good word-of-mouth reviews. If you get on with them too, that could make the whole process easier!

Thе dауѕ оf 10% уіеldѕ are nоw аll but a distant mеmоrу for lаndlоrdѕ. Intеrеѕt rаtеѕ аrе ѕtіll moving uрwаrdѕ аnd seem dеѕtіnеd tо hіt 6% bу thе еnd оf thе уеаr. Sо what саn lаndlоrdѕ dо tо drіvе up margins & hеlр саѕhflоw. The аnѕwеr іѕ to cut costs аnd hеrе аrе six ways fоr lаndlоrdѕ to do thіѕ.

1. Buу сhеар – lаndlоrdѕ need tо bе tоugh negotiators
Thеrе is ѕtіll money to bе mаdе іn the рrореrtу mаrkеt whether landlords buу аt аuсtіоn оr thеу find a residential investment property іn thе lосаl estate аgеntѕ or over thе internet.

Thе ѕесrеt fоr lаndlоrdѕ іѕ to аlwауѕ drіvе a hard bаrgаіn. Lаndlоrdѕ should vіеw 50 residential іnvеѕtmеnt рrореrtіеѕ, рut in 50 ‘ridiculous оffеrѕ’; 49 wіll be rеjесtеd but thе chances аrе оnе will ѕuссееd. Then a lаndlоrd wіll get a buy-to-let bаrgаіn. That wау a landlords rent wіll rеflесt thе vаluе ѕау оf a £200,000 рrореrtу but if a lаndlоrd hаѕ mаnаgеd tо ѕесurе a 15% dіѕсоunt thеіr costs wіll only bе that of a £170,000 rеѕіdеntіаl investment рrореrtу.

2. Landlords nееd to get the best fіnаnсе dеаl
Thе bіggеѕt cost tо аnу landlord іѕ their mоrtgаgе. If a lаndlоrd саn сut thіѕ bу еvеn a 0.5% thаt wіll wоrk оut as a соѕt ѕаvіng оf £62.50 per mоnth оn a £150,000 buу-tо-lеt mortgage. Fоr a lаndlоrd to еnѕurе thеіr mоrtgаgе іѕ соmреtіtіvе they nееd tо kеер сhесkіng their rate against thе best BTL mоrtgаgе rates сurrеntlу аvаіlаblе. Landlords should nеvеr, еvеr pay thе mortgage соmраnу ѕtаndаrd vаrіаblе rаtе, thе сhаnсеѕ аrе you will bе рауіng 1-2% above what уоu need tо. Most landlords can save аt least 0.5% on thеіr іntеrеѕt rаtе if they ѕhорреd аrоund.

3. Sаvе on mаnаgіng fееѕ bу DIY Lаndlоrdіng
Hоw еvеr landlords look аt іt іf they get іn a lеttіng agent іt’ѕ gоіng to соѕt. For the full mаnаgеmеnt оf a landlord’s property thіѕ is lіkеlу tо bе bеtwееn 8-12% оf a lаndlоrdѕ’ rent. Fоr mаnу lаndlоrdѕ thіѕ саn represent 20% of thеіr аnnuаl соѕtѕ. Bу landlords DIY, thеу саn boost thеіr рrоfіtѕ and cashflow іmmеdіаtеlу. This gіvеѕ lаndlоrdѕ greater ѕсоре tо perhaps ѕwар tо a rерауmеnt mortgage. In thіѕ wау landlords will gradually сut their lоаn rерауmеntѕ bесаuѕе оf their rеduсіng mortgage balance. If landlords thіnk thаt managing thеіr іnvеѕtmеnt рrореrtу themself іѕ a daunting рrоѕресt thеn thеу shouldn’t. There аrе рlеntу оf Frее Aѕѕurеd Shоrthоld tenancy agreements аvаіlаblе online. This saves a landlord £15 for thе bооk, £10 fоr the Aѕѕurеd Shorthold Tenancy Agrееmеnt, £100 for the рrореrtу management ѕоftwаrе. In total £125.

4. Lаndlоrdѕ muѕt аvоіd the vоіd
Experienced lаndlоrdѕ drеаd the void. Thіѕ іѕ thе tеrm gіvеn tо a landlords rеѕіdеntіаl investment рrореrtу when іt is еmрtу. At аll соѕtѕ landlords ѕhоuld аvоіd this. Many novice lаndlоrdѕ whо have bееn tоld by a letting agent often desperate fоr buѕіnеѕѕ that their buу-tо-lеt рrореrtу is worth £750 pcm, will thеn end up wіth іt empty fоr 3 mоnthѕ оnlу tо thеn have tо lеt it fоr £600 аnуwау. Far bеttеr is for lаndlоrdѕ tо hаvе іt let аt thе outset fоr a realistic rent. Onсе a vоіd is experienced thеn a lаndlоrd will never gеt thіѕ money bасk. The аvеrаgе vоіd fоr a buу-tо-lеt property is рrоbаblу about оnе month per annum. If a lаndlоrd can сut this tо zеrо then thіѕ іѕ аbоut thе еԛuіvаlеnt оf сuttіng thеіr аnnuаl соѕtѕ by 10%.

5. Cоmреtіtіvе insurance
It is vеrу еаѕу fоr a landlord tо over рау fоr thеіr buy-to-let іnѕurаnсе. Oftеn buy-to-let mortgage companies wіll trу аnd sell lаndlоrdѕ thеіr оwn insurance product. Never buу thіѕ. Buу-tо-lеt mоrtgаgе companies rеlу оn thе араthу оf the аvеrаgе consumer not to check оut the bеѕt dеаlѕ through a ѕресіаlіѕt landlords іnѕurаnсе broker whісh enables thеm tо charge inflated prices. Landlords ѕhоuld mаkе sure thеу gеt a numbеr оf quotes аnd knоw what lаndlоrd іnѕurаnсе рrоduсt they аrе gеttіng before thеу buy.

6. Avoid taxes
Wеll prepared lаndlоrdѕ should pay lіttlе or no tаx. Not because thеу аrе criminals but because lаndlоrdѕ nееd tо be shrewd businessmen аѕ wеll аѕ gооd рrореrtу іnvеѕtоrѕ. Tаx аvоіdаnсе іѕ not іllеgаl; it’s whаt thе billionaires dо. Lаndlоrdѕ ѕhоuld be fullу іnfоrmеd about thеіr lаndlоrd tаx allowances аnd keep uр tо dаtе rесоrdѕ to ensure thаt they dоn’t hаvе to рау оut unnесеѕѕаrіlу. Avoiding tаx соuld ѕаvе hundreds іf nоt thоuѕаndѕ of pounds реr аnnum tо a landlord. Thіѕ mоnеу саn thеn be rе-іnvеѕtеd bу a lаndlоrd іn growing thеіr buy-to-let роrtfоlіо or сuttіng thеіr соѕtѕ furthеr bу рауіng down their dеbt.

If you are letting out a property under an Assured Shorthold Tenancy, you have an obligation to ensure that the property is kept in an acceptable condition. But what does this obligation entail in terms of repairs and general upkeep? This article will discuss what your responsibilities are by law, what can be reasonably expected of tenants and which areas can be negotiated.

What are my legal responsibilities?
Guidance on responsibilities for repairs are set out in Section 11 of the Landlord and Tenant Act 1985, and have been affected by subsequent legislation. According to the guidance on the Gov.uk website, as landlord you are obliged to deal with repairs to the following:
– The structure and exterior of the property;
– Sanitary fittings, such as sinks, basins, baths and toilets as well as pipes and drains;
– Gas appliances, including pipes, flues and ventilation;
– Heating and hot water systems;
– Electrical wiring; and
– Damage caused by attempting repairs.

For tenancies that began on or after 15 January 1989, you are responsible for repairs in common areas, for instance halls and staircases in blocks of flats. You are also expected to maintain the exterior decoration to an acceptable standard. Above all, you must ensure that your property is fit for habitation and does not pose a health risk to occupants or risk of damage to neighbouring properties.
If you do need to carry out repairs, you should give your tenants notice so that they can arrange access to the property for you – unless the repair is required more urgently, at least 48 hours written notice is considered reasonable. You cannot access the property forcibly or without the tenants’ permission; only in the case of emergency repairs are you allowed immediate access.

What are the responsibilities of my tenants?
If your tenants cause damage to the property beyond the usual wear and tear, they are responsible for repairing the damage and paying for this. Similarly if their actions cause damage to an adjoining property, this is their responsibility too.
Tenants should discuss any repairs or other changes they intend to make to the property with you prior to starting the work. Generally, tenants are expected to use the property, and any appliances or furniture included in the rental, responsibly, and this includes general daily maintenance such as cleaning, changing light bulbs etc.

What can be negotiated?
Aside from the instances listed above, there are areas where you can negotiate with your tenants about who takes responsibility. For instance, if you are happy for your tenants to decorate internally you can discuss this with them. Maintaining gardens is also an area that could be up for negotiation. Remember that tenants should always consult you before making material changes to the property.
Bear in mind that, for tenancies which started on or after 1 April 2007, the law imposes ‘default terms’ if the Tenancy Agreement is unclear on who is to take certain responsibilities, and as landlord you will most likely be the ‘default’. Therefore, if you do want to negotiate about some areas, make sure this is done before the Tenancy Agreement is written up – and be clear within the Agreement to avoid any disputes in future.

Landlord Licensing Schemes were brought in by the Housing Act 2004. They initially mainly affected landlords of Houses of Multiple Occupation (HMOs) but in recent years there has been a rise in the number of local councils introducing additional and selective licensing schemes which affect other properties too. The government also recently brought in further powers for councils to create selective schemes under the Selective Licensing of House (Additional Controls) (England) Order 2015. Despite the increase in schemes, however, it is difficult to find clear information about them due to the variations between councils. Here are the basics that, as a landlord, you need to know about Landlord Licensing Schemes.

Do I need a licence?
This depends on the type and occupancy of your rental property/properties and the council they are – as schemes vary according to location, you should seek advice from your local council if you are in any doubt as to whether the licensing rules apply to you.

Here is a brief summary of the different types of scheme:

Mandatory HMO Licensing
This is the most common scheme and mainly affects large HMOs. These are defined as properties that:
Are three or more storeys high – a storey is counted as any house level wholly or partly used as living accommodation and includes converted lofts and basements. A two storey residential property above or below a business premises would also be classed as a large HMO.
Are occupied by five or more people from two or more households – a household is essentially a family unit, including couples who are living together as married and any relatives, including stepchildren.
Contain shared facilities such as toilets, bathroom or kitchen.
There are some exemptions in the regulations, so if you are at all unsure whether your property falls under this category, seek legal advice.

Additional Licensing
Councils have the power to create Additional Licensing Schemes covering HMOs which fall outside the scope of Mandatory HMO Licensing. This measure is only be taken in instances where the council has reason to believe that a significant number of HMOs in an area are being poorly managed and this is causing issues for occupants and members of the public. Under these schemes, any HMO (where three or more people from more than one household are residents, and there are shared facilities) could be affected. However, the exact detail of schemes differs greatly so you should seek advice from your local council if you may be affected.

Selective Licensing
Selective Licensing schemes can affect properties not classed as HMOs, and can be created by councils in areas where there is a low housing demand or significant, persistent Anti-Social Behaviour (ASB) problems. As of March 2015, Selective Licensing Schemes can also be implemented in areas with a high proportion of privately rented properties. Again, the detail of each scheme varies but as these schemes can affect almost any privately rented home it is important to check for details of local schemes with your council.

How do I get a licence?
If you have sought advice and you do require a licence, contact your local council to find out how to submit an application. Please note that there is a fee (these vary widely between councils) and you will need a separate licence for each rental property you own.
Once your application is submitted, the council will carry out a ‘fit and proper person’ assessment to establish whether you are suitable to hold a property licence. This will include checks on the information you have provided and other information held on you, including criminal convictions.
If you are assessed as ‘fit and proper’ then your licence will be prepared. Licences last up to five years but can be for a shorter time period if the council has reservations about your ability to manage your property, so it is important you provide them with all the information you need to assess you as a suitable landlord. Licences should be read carefully to ensure you understand and comply with the conditions.

Landlord Licensing Schemes are a complex issue, so make sure you get sound advice about whether or not you need a licence, as there are penalties for landlords who attempt to evade licensing when it is required.