|
SUMMARY OF OUR SERVICES & CHARGES
THE MANAGEMENT OF PRIVATE RESIDENTIAL PROPERTIES
1. Management
Having received your instructions to act on your behalf in the management of your property we will actively market your property in an effort to secure suitable potential tenants. After interviewing and receiving satisfactory references, we will agree a tenancy and an Assured Shorthold Tenancy Agreement will be signed by yourselves, a nominated person with Power of Attorney, or the Lyndon Brett Partnership on behalf of the landlord, as directed. When a tenant has taken occupation we will demand rent, inspect the property periodically, arrange for normal maintenance for which the landlord is responsible, and render an account of income and expenditure to the landlord.
2. Management Services
As Managing Agent Lyndon Brett Partnership will:
a. inspect your property initially establishing its rental value and advising as to whether any work or additional furnishings are required
b. advertise, market and provide a suitable prospective tenant for your property following interview and the obtaining of references
c. collect rent for you and pay the net sum directly to you, or into your designated account
d. deal with all queries relating to the property and carry out minor repairs up to the limit of one third of a month's rent or, £100 whichever is the greater. Emergency and urgent repairs will be carried out at our discretion
e. pay outgoings, payable in respect of the property by arrangement
f. grant or renew tenancy agreements as instructed
g. inspect the property at regular intervals and report back to the owner where appropriate
h. inform the landlords of changes in tenancies
i. check the inventory and the state and condition of the property at the conclusion of a tenancy and agree any deductions from the tenants' damage/security deposit - our decision being final
j. send out regular statements of account showing rents received less expenditure incurred.
3. Tenancy Agreement
The type of tenancy used is an Assured Shorthold Tenancy Agreement in a standard format, copy attached. The term must be for a fixed period of not less than six months and not more than three years less one day. Any tenancy of more than three years must be by Deed of Lease. When requested, we can include any specific points which are not in the standard format, subject, of course, to them being legally acceptable.
4. Inventory
We undertake to prepare an Inventory of the contents and Schedule of condition of your home at the start of the letting and to check the Inventory and Schedule of Conditions at each change of tenant. On vacating, the Inventory is checked and a new inventory prepared for subsequent tenants. It is the Landlord’s responsibility on furnished lettings to ensure that all items comply with the following:
Fire and Furniture (Fire) (Safety) Regulations 1988 and
(Amendment) Regulations 1993
Low Voltage Electrical Equipment (Safety) Regulations 1989
Gas Cooking Appliances (Safety) Regulations 1989
Because of the above regulations there is a tendency for landlords to let properties unfurnished.
5. Scale of Charges
Managed Property
If the property is to be managed our fee we will negotiate on our fees to reflect rents, the number of properties to be offered and a percentage of monthly rental income, plus VAT at the current rate, will apply.
However, there is an initial charge to cover cost of advertising, checking of references, serving Notices, preparation of Agreements, inventories and photographic records for unfurnished properties, meter readings, notification of Utilities, etc., which is taken from the first month’s rent that we receive.
Unfurnished
Rentals up to £350 per calendar month £200.00
Between £351 and £499 per calendar month £225.00
Between £500 and £599 per calendar month £250.00
Over £600 per calendar month assessed according to the property and
time taken in preparation.
Furnished or Part Furnished
Rentals up to £350 per calendar month £225.00
Between £351 and £499 per calendar month £250.00
Between £500 and £599 per calendar month £275.00
Over £600 per calendar month to be assessed according to the property,
contents, and time taken in preparation.
VAT at the standard rate is chargeable in addition.
All instructions are accepted on a Sole Agency basis. Further setting up fees will not be charged on renewal of Agreements to existing tenants. However, where there is a change of tenant a maximum of 50% of the initial fee may be charged.
Un-managed Property
Should we be required to find a tenant but not manage, our fee will be the equivalent of one month’s rent. Our charges cover the cost of checking of references, serving Notices, preparation of Agreements, inventories, meter readings, notifying Utilities etc., but exclude advertising costs.
6. Dilapidations
We obtain from the tenant, prior to commencement of the tenancy, a deposit against damage, which we hold as a stakeholder for the duration of the Tenancy. At the time the tenant leaves the property the inventory will be checked and a schedule of dilapidations, if necessary, will be prepared and costed.
If the property is checked and deemed acceptable to Lyndon Brett Partnership, the deposit will be returned to the tenant unless we have instructions from the landlord prior to the tenant vacating. If for any reason the deposit is not returned to the tenant for reasons such as damage, etc., Lyndon Brett Partnership will be responsible for costing works/repairs etc, and deducting said costs from the tenant’s deposit.
It must be remembered that the property is subject to a ‘fair wear and tear’ clause, and will be subjected to the stresses and strains of everyday living. A property cannot be expected to be in the same condition at the end of the letting as it was at the commencement.
We may find that the internal decorations need attention after occupation by tenants and will notify the Landlord.
The full replacement costs of many articles found defective cannot be charged against the tenant as in many cases these articles will have undergone varying lengths of usage.
It is the landlord’s responsibility to ensure that all items left in a tenancy comply with The Fire & Furniture (Fire) (Safety) Regulations 1988 & (Amendment) Regulation 1993, Low Voltage Electrical Equipment (Safety) Regulation 1989 and Gas Cooking Appliances (Safety) Regulations 1989.
Where possible we strongly recommend service and maintenance agreements. Clients must ensure that we have full details of such agreements in order that they may be kept in force. Each appliance must have proven record that it complies, and gas appliances will be checked annually.
7. Utilities
British Telecom have a system whereby each time a tenant takes possession and for the duration of the tenancy, the tenant is the subscriber and is responsible for all account, including any charges plus VAT, when a charge takes place. When the landlord re-occupies he will also have to pay a charge for the telephone to be re-instated in his own name. It is in the interest of the landlord to take this action in order that he will not be charged for any calls or rent charges that the previous tenants may have incurred. One problem that does occur is that when the new telephone directory is printed, the subscriber for the time being will be listed and the landlord’s name removed from the directory. The landlord is advised to discuss with British Telecom in the event of any changes within BT system.
Gas, Electricity and Water - Landlords shall ensure that gas, electric and water services are available to the tenant at the commencement of a tenancy. If there is a gas card meter at the property, this should be cleared and a normal meter installed. If the property has an electric key meter, the landlord should ensure this is not in debit. The agent will notify all utilities of tenant’s details and meter readings where appropriate.
8. Income Tax
We aim only to give you a brief guide and do not attempt to cover the wider aspects of personal taxation. If you are unsure about any aspect of your tax liability, then you are advised to seek further advice from your accountant, financial adviser or Inland Revenue.
The Inland Revenue's new Self-Assessment Rules changed the treatment of Overseas Landlords' Tax with effect from 6th April 1996. Under the Taxation of Income from Land (Non-Residents) Regulations 1995, the rent receiving agent (or where there is no agent, the tenant) is required to deduct basic rate Tax from the rent (after taking deductible expenses paid out, into account) and to pay the Tax to the Revenue each quarter.
However, the overseas landlord can apply to the revenue for exemption from this requirement. Providing his Tax history is good and his Tax affairs are up-to-date, the overseas landlord will be issued with a certificate, with a copy sent to his rent receiving agent. This will authorise the agent to pay rent to his landlord without deduction of Tax. Application forms for exemption are available from Lyndon Brett Partnership on request.
The Lyndon Brett Partnership strongly advise that applications for exemption are submitted as soon as a landlord is aware that he will be going abroad, so ensuring that rent can be paid gross.
Landlords employed with the Diplomatic Service or the Armed Forces are no longer exempt from the provisions. The Lyndon Brett Partnership do not withhold tax for landlords resident in the UK.
It is not necessarily the case that you will have to pay tax on your letting income, it all depends on your personal financial circumstances. Income tax is payable on rent received from property which is let. Your tax position will determine whether you pay tax or not. All profit you make from letting should be added to your other taxable income for the year, although the financial records for letting must still be kept separate. You have to pay income tax if the total of your taxable income is greater than your tax allowances.
All landlords living abroad are advised to obtain literature from Inland Revenue and tax will be deducted at a rate of 24% from all rent received, unless the agent received notification from Inland Revenue stating otherwise.
Only those expenses incurred ‘wholly and exclusively’ for the purpose of the let can be offset against your letting income. These might include mortgage interest, general repairs and maintenance, insurance and management fees. A record should be kept of all income and expenditure in relation to the letting showing from whom income has been received and to whom payments have been made. All receipts provided to you should be kept.
Allowances that can be set against rental income are:
Several items of expenditure can be offset against rental profit of which the following list covers the main tax deductible areas (Further detailed advice is available on request):
a) Loan or Mortgage interest (when not under the MIRAS scheme)
b) Water Rates
c) Council Tax for which tenants (during their occupation) are responsible.
d) All agents fees and charges, including VAT.
e) All maintenance and servicing expenditure carried out whilst the property
is being let.
f) Wear & Tear; this allowance is given for hard furnishings and fixtures where a property is let furnished. The allowance is calculated by deducting 10% of the gross rent received for that income tax year (less the occupier's water rates where an inclusive rent is payable).
g) Buildings, Contents and Legal insurance premium.
h) The cost of telephone calls and correspondence to agents.
i) The cost of visiting your property on necessary occasions, i.e. evictions can
be claimed for providing they represent sensible costs.
j) Various other expenses directly relating to the letting
You should remember to keep all receipts for all expenses incurred.
Communication with the Inland Revenue is the responsibility of the Landlord or his or her accountant.
Tax returns are the responsibility of the landlord or his/her/their financial advisers.
Should you sell your property, you may become liable for Capital Gains Tax. Your financial adviser can explain this in greater detail.
9. Low Voltage Electrical Equipment Regulations 1989
This regulation came into force on 1st June 1989 and the following is designed as a brief guide and summary of the above legislation.
The regulations relate to the supply of electrical equipment designed with a working voltage of between 50 and 1000 volts, acting as secondary legislation under the Consumer Protection Act 1987 (the ‘Act’). Because the Regulations operate with the same definition as ‘supplier’ as the Consumer Protection Act, then letting agents and landlords letting in the ‘course of business’ are liable as suppliers. The Regulations impose the obligation on the supplier of such goods to ensure that they are ‘safe’ as defined by section 19 of the Act, so that there is no risk of injury or death to humans or pets, or risk of damage to property.
The regulations cover all mains voltage household electric goods including cookers, kettles, toasters, electric blankets, washing machines, immersion heaters, etc.
In the case of letting agents or landlords letting in the course of business, the electrical equipment ‘supplied’ will invariably be second-hand and little further information will be available (e.g. receipts, safety standard, instruction manuals).
The Regulations require:
GENERAL SAFETY. That all electrical equipment supplied is safe. This will include plugs and sockets.
INSTRUCTIONS. Where the safe us of equipment relies upon the user being aware of any particular characteristic, suitable information or instruction booklets must be provided. The necessary information may take the form of markings or recognised graphic symbols on the equipment itself, or where this is not practicable, in a notice accompanying the equipment. The instructions should be given in English.
Letting agents and landlords must consider the following action:
• Check all electrical appliances in all managed properties for defects (e.g. frayed wiring, badly fitted plugs, etc), remove unsafe items.
• Have appliances regularly checked by a qualified electrical engieer.
• Maintain records of the checks carried out for all the above appliances in each property.
• Inform landlords of the regulations and their obligations.
• Ensure that instruction booklets are available at the property for all appliances, and that any necessary safety warnings are given to tenants.
• Avoid purchasing second-hand electrical appliances for rented properties and advise owners likewise; if used appliances are installed, it is necessary to have them checked by a qualified engineer.
It is vital that the above is adhered to and the Agent recommends on-going checks to ensure compliance.
The maximum penalty for non-compliance is a fine of £5,000 or six months imprisonment, or both.
10. Gas Safety Regulations 1994
The following is designed as a brief guide and summary of the above legislation.
Any gas appliance needs to be regularly maintained so they run safely and reliably, and should only be worked on by a qualified Gas Safe approved gas engineer. Heating appliances such as fires, water heaters and boilers need to be serviced once a year.
This was effective as of October 1994 and all gas appliances in rented properties will have to be subject to an annual check by law including gas central heating boilers, water heaters, gas cookers, etc. The check needs to be carried out by a suitably qualified technician and a certificate will generally be issued following the checks.
The maximum penalty for non-compliance with the regulations is a fine of £5,000.
The Regulations require that:
• All work to gas appliances and fittings be carried out be a competent and suitably qualified engineer, i.e. Gas Safe registered.
• No person shall install a gas appliance with open flues (non “room sealed appliances”) in a bedroom (or any room used as sleeping accommodation), bathroom or shower room.
• Where the gas meter is installed in a meter box, the installer should supply the consumer with a suitable labelled key to the box.
• The installer or engineer must perform as defined series of safety checks and tests after carrying out any work on a gas appliance.
• Any person who installs a gas appliance in a property shall leave instructions for the occupier of the premises.
• A person responsible for the premises shall not use or permit to be used any gas appliance that is suspected or known to be faulty or incorrectly installed.
It is the duty of the owner to ensure that all gas appliances and associated pipework is maintained in a safe condition and checked for safety at least every twelve months by a suitably qualified engineer. It is also the duty of the owner to keep a record of the gas appliances in the property.
Ventilation: A gas appliance needs to draw in an adequate supply of air in order to work correctly and safely. Often, vents and air brick are provided for this purpose and you must take care not to block any ventilation. Check that these vents have not been blocked up or otherwise obstructed.
Chimneys & Flues: The products of combustion also need to be safely vented and they usually escape through a chimney or flue. Some early types of flue (e.g. open flues) may need to be modified to bring them up to current standards. If the fire or chimney is blocked, waste gases may build up in your room. This can be fatal.
Flues must be checked before an appliance is fitted and every year when it is serviced.
What checks are required:
The statutory check will include: check flue is clear and unobstructed clean and check burners pressure test on gas pipework
You can also carry out your own simple checks. There are some important points you should watch for which may show your appliance is not working properly:
• Staining, sooting or discolouration on the appliance or on the decorations around the appliance.
• A yellow or orange flame instead of the normal blue.
• A strange smell when the gas appliance is working.
11. Smoke Alarms
Lyndon Brett Partnership advise their landlords to have installed BS 5446 confirming smoke alarms in all their properties to avoid the accusation that the landlord is failing to properly fulfil their duty of care towards tenants. Failure to do so for whatever reason would be indefensible if and when a case came to court and, please remember there is no better defence against domestic fire than fully operational smoke alarms. What defence has a landlord if they do not install them.
12. Furniture & Furnishings (Fire) (Safety) Regulations
This regulation was effective as of March 1st 1993 and landlords are expected to ensure that all upholstered furniture complies with the Fire and Furnishings (Fire) (Safety) Regulations 1988. In general, the fire resistance requirements of the 1988 Regulations, as amended in 1989, are that:
• Upholstered articles (i.e. beds, sofas, armchairs, cushions, pillows etc) must have fire resistant filling material.
• Upholstered articles must have passed a match resistance test or, if of certain kinds (such as cotton or silk) be used with a fire resistant interliner.
• The combination of the cover fabric and the filling material must have passed a cigarette resistance test.
One of the most important provisions of the new regulations is that any extra or new furniture added to the property after 1st March 1993 must comply with the relevant Fire Resistance Requirements, and when buying new or second-hand furniture for a rental property, you should always check to see that there is an appropriate label. Furniture or furnishings manufactured after the introduction of the regulations in 1989 should all have attached labels.
Both new and second-hand furniture and furnishings will carry labels.
| 
