Statons Letting Agents. The lettings market has seen a resurgence in the last few years, mainly due to the increased protection and possession rights for landlords following the introduction of the Housing Act 1988.
Generation Rent has had a significant impact, causing demand for private rental properties to rise. This has in turn provided investment opportunities for people from all walks of life, encouraging them to enter the rental market. From investors to accidental landlords, we continue to see a strong belief in the buy-to-let market.
Changing legislation and regulations can sometimes cause confusion, and landlords expect the letting agent they choose to have extensive knowledge and expertise. All our lettings team are ahead of the game, able to calm any concerns and guide you on the right course for your investment.
As letting agents, our fees outlined below represent our charges for the ‘Let Only’ service that our company offers. If you require a Rent Collection or Management Service we work in conjunction with Rushbrook & Rathbone who provide these services. Please contact a member of our team on +44 208 441 9796 for further information about this.
Sole Agency – 9.6% inclusive of VAT (8% + VAT)
Multi Agency – 12% inclusive of VAT (10% + VAT)
The above fees represent the percentage of the total rent due for the initial term of the contract under the terms of the Tenancy Agreement entered into between the Owner and the Tenant.
If the tenancy is renewed or extended, or if an option to renew is exercised by the Tenants, the tenancy renewal will be a percentage of the annual rent after the first term, and every subsequent year thereafter. The percentage will depend on whether you entered into a Sole Agency or a Multi Agency agreement for the original fee (see below).
Sole Agency – 8.4% inclusive of VAT (7% + VAT)
Multi Agency – 10.8% inclusive of VAT (9% + VAT)
The above fees represent the percentage of the total rent due for the term of the renewed contract under the terms of the renewed contract entered into between the Owner and the Tenant.
To protect both you and the tenant there are certain administration procedures that must be followed as part of the rental process. We have outsourced independent specialists who carry out these procedures for us. This means that, in addition to the commission outlined above, you will be required to pay their charges once we have found you a tenant. These charges are outlined below:
We are members of The Property Ombudsman Redress Scheme. All monies held on behalf of Statons Premier Lettings Limited are handled by Rushbrook and Rathbone Ltd, Portmill House, Portmill Lane, Hitchin SG5 1DJ who are part of the Propertymark Client Money Protection scheme.
Before letting your property, you must receive written consent from your mortgage provider or the freeholder, should your property be leasehold. You must also obtain the appropriate insurance for a rental. We can point you in the direction of specialist insurance companies who would be happy to assist.
To ensure you don’t incur any interest, penalties, or any other consequence from the Inland Revenue, you must inform them that your property is to be let out within 6 months. The Inland Revenue are also known for treating landlords who fail to declare rental income harshly. We suggest that you seek the advice of a fully qualified accountant on tax planning and capital gains tax.
Make sure you organise for your mail to be redirected; you can do this easily at the Post Office for 3, 6, or 12 months.
When you have additional keys cut, check that they all work and are without issues. Also, remember to get additional keys should you have management agents acting for you.
You are responsible for all utilities, including gas, water, electricity, council tax and telephone until a tenancy has been secured, at which time they will be transferred to your tenant.
It is imperative that you have an Inventory and Check-in. In our experience, it can be false economy to prepare this document yourself.
It doesn’t matter if your property is furnished or unfurnished, it is a requirement that an inventory be drawn up for any property being let. The inventory gives accurate descriptions of the condition of the property, its décor, fittings, and finishes, from the carpet to the lampshade. If damage has been caused, you cannot withhold any monies from the tenants’ deposit unless you can prove that it was caused by the tenant during their tenancy; this is why the inventory is vital.
In some cases, you may be able to resolve any disputes amicably. If you fail to come to an understanding then the case will be presided over by the Deposit Protection Service (DPS) and their in house resolution service (ADR). This is a free service with an Assured Shorthold Tenancy agreement. The judgment is based on written documentation plus the inventory and checkout, and both parties are bound by their decision.
In addition to the Company Tenancy and Common Law Agreement there are two further types of tenancy that have arisen from the Housing Act 1988 (amended 1996): Assured Tenancy, these are rare as most tenancies are now Assured Shorthold Tenancies (AST).
This tenancy is seen by landlords as the more attractive option and is the format most tenancies are based on. An Assured Shorthold Tenancy doesn’t offer security of tenure after the contractual period, but it does allow for market rent as long as certain criteria are met:
1). The Tenant must be an individual.
2). The property must be the Tenant’s main residence/home.
3). The rent cannot exceed £100,000 per annum.
4). The Landlord must not occupy the same property.
To guarantee possession of a property to let under an Assured Shorthold Tenancy, once the shorthold has expired the landlord can issue a Section 6 Notice. However, this notice cannot be served if the landlord has not given at least two months’ notice to the tenant stating that they wish to regain possession.
We must stress that under the Protection From Evictions Act 1977 it is a criminal offence to try and evict a tenant from your property by force or threat. However, you can obtain a court action against your tenant on a number of grounds.
A Company Tenancy is when a Private or Public Limited Company enters a tenancy agreement. It is worth noting that this type of tenancy is governed by contract law and, unlike Assured and Assured Shorthold Tenancies, is not regulated by the House Acts of 1988 or 1996. With a Company Tenancy, the tenure isn’t secure and, with prior agreement, rental payments tend to be made quarterly.
Common law agreement also falls outside the provisions of the Housing Acts of 1988 and 1996 and is not regulated by statute. It is most commonly used where the rent exceeds £100,000 per annum, and both parties have the freedom to contract as they choose but must then rely solely on the provisions of that Agreement.
The tenants we attract at Statons tend to prefer an unfurnished property, as most will already have furniture of their own, whilst others prefer to put their own stamp on what is to be their home. The rental difference between a furnished and an unfurnished property is negligible when you take unto account the cost of repair and upkeep of the furnishings you supply.
There are a couple of options available to you in this regard; we can simply market your property with the sole purpose of finding you a tenant, or we can fully manage the property on your behalf. Regardless of your decision, we will market your property extensively with quality photographs, and an online presence including the major property portals such as Rightmove, Zoopla, On the Market and our own website. Another powerful resource is our exclusive database of prospective tenants, local contacts and relocation agents. Your property will also be advertised in the local press and within regional publications, as well as being displayed in our offices.
Prior to marketing, we will provide you with a rental valuation that takes into account various factors such as the style and condition of your property, location and access to transport.
An independent referencing service carries out comprehensive reference checks on all prospective tenants. Once a completed process is successful, it is important to safeguard your rental income with legal and protection products; the referencing company can assist you in finding the right insurances.
Before we prepare any tenancy agreement we take a detailed brief from each landlord. Once drafted, we will seek the landlord’s approval prior to sending the agreement to the tenants for them to check and also approve.
The rental deposit (which for tenancies commencing after 31st May 2019 is capped at no more than 5 weeks where the annual rent is less than £50,000 or 6 weeks rent where the total annual rent is £50,000 or above) is placed into the Deposit Protection Service (DPS) for the duration of the tenancy. At the end of the tenancy, when a tenant has vacated and an inspection satisfactorily was undertaken, the deposit can be refunded within a maximum of 28 days. This is on the basis that all utilities have been paid and there are no disputes.
It is worth remembering that, as landlords bound by the Landlord and Tenant Act 1985, you are responsible for the everyday repairs and maintenance of the property, including the structure and exterior.
A tenant can insist on repairs being undertaken should the property not be in a good state of repair at the start of the tenancy. If the damage is serious, as a landlord you will be in breach of your obligations and the tenant is entitled to terminate the tenancy.
We usually forward all rental income to our landlords on a calendar month basis via a mutually approved method. There may be deductions to the rental income due to agreed contractors undertaking work on your property.
It is considered a legal offence under common law to let a property that is not safe or fails to comply with safety legislation; this could result in legal action and prosecution. Failure to comply with current legal safety requirements could result in a £5,000 penalty and/ or imprisonment for 6 months for each offence. Should any non-compliance result in a fatality, the penalty can be harsher.
The Gas Safety (Installation and Use) Regulations 1998 (GSIUR)
Outline your duties as a landlord to make sure all gas appliances, fittings, chimneys and flues are safe and working efficiently. If you’re letting a property with gas appliances installed, you’ve got three main legal responsibilities:
1. Gas Safety Checks annually through a qualified contractor
2. Gas Safety Record (GSR) – Certificate
The reports will need to be provided to your Tenants on move in or you could face a fine of up to £30,000 for each breach of the regulations and you will not be able to serve notice on your Tenant.
The Landlord Electrical Saftey Certificate is a legal requirement for all Landlords from 2022 – referred to as the EICR
Ensure national standards for electrical safety are met. These are set out in the 18th edition of the ‘Wiring Regulations’, which are published as British Standard 7671.
EICR (Electrical Installation Condition Report)
The regulations require that the electrics are inspected at least once every 5 years (and in some circumstances more frequently) and a “satisfactory” Electrical Installation Condition Report (EICR) is in place for any tenancy starting, renewing, or becoming periodic on or after 1st July 2020, and for all existing tenancies from 1st April 2021. The reports will need to be provided to your Tenants on move in or within 28 days of completion for existing tenancies, and a copy must also be given to the local authority within 7 days if requested.
What is an EICR?
An EICR is the report produced following a periodic inspection of the electrics. The electrician will test and inspect the consumer unit (or fuse board), wiring and electrical accessories for faults or deviations from the Wiring Standards.
The following will be tested as part of this:
• The adequacy of the earthing and bonding.
• Devices for protection against fire and electric shock.
• Any damage or wear and tear that might affect the safety of the property’s inhabitants.
• Identification of any damaged electrical fittings and accessories.
• Identification of any exposed live wires that could cause a fire or injury.
EICRs can only be carried out by registered electricians with the relevant skills and competencies.
EICRs will highlight any problems using the below error faults.
• C1 indicates immediate danger requiring immediate action
• C2 indicates potential danger requiring urgent action
• C3 recommends improvements
For the EICR to comply with the legislation it cannot have any C1 or C2 faults. Any remedial work to rectify these faults will need to be completed within 28 days (or sooner if C1) and written confirmation confirming that the work has been carried out needs to be obtained and retained until the next EICR. You could face a fine of up to £30,000 for each breach of the regulations and you will not be able to serve notice on your Tenant.
Furniture And Furnishings
The Furniture and Furnishings (Fire) (Safety) Regulations 1998 (amended 1989 & 1993)
All items with which you furnish your property must meet fire resistance standards and bear the label to confirm this. This includes soft furnishings such as sofas, cushions, padded headboards, and mattresses. If an item does not display the label or you cannot confirm its resistance to fire, then it must be removed or replaced.
Smoke and Carbon Monoxide Alarms (Amendment) Regulation 2022 – October 1st 2022
1. Ensure at least one smoke alarm is equipped on each storey of their homes where there is a room used as living accommodation. This has been a legal requirement in the private rented sector since 2015.
2. Ensure a carbon monoxide alarm is equipped in any room used as living accommodation which contains a fixed combustion appliance (excluding gas cookers).
3. Ensure smoke alarms and carbon monoxide alarms are repaired or replaced once informed and found that they are faulty.
The requirements are enforced by local authorities who can impose a fine of up to £5,000 where a landlord fails to comply with a remedial notice.
Our lettings team are on hand to offer advice to landlords on legal safety requirements; alternatively, we would recommend you contact a qualified solicitor.
An overseas landlord is defined as a landlord who lives abroad or spends long periods of time overseas (for more than 6 months of the year).
As an overseas landlord, and even though you may be a non-UK resident, the same Inland Revenue regulations apply as though you were in the UK.
An accountant or tax expert will be able to provide the detailed advice you need, but as a guide, you need to obtain an exemption certificate to authorise you to receive ‘gross’ property rental payments, in other words, excluding the income tax deduction required by law to be taken by your letting agent or tenant. You must contact the Inland Revenue Financial Intermediaries Claims Office (FICO) to apply for the exemption certificate.
Our services along side Rushbrook and Rathbone include the following:
We would welcome the opportunity to provide you a free, no-obligation letting market appraisal on your property.
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