Before a property can be let, there are several matters which the owner will need to deal with to ensure that the tenancy runs smoothly, and also that he/she complies with the law.
Energy Performance Certification
Energy Performance Certificates (EPCs) were introduced in to the residential lettings market in 2008 and it is now illegal to advertise a property to rent unless it has an EPC.
An EPC will remain valid for 10 years and the legislation allows for a fine of £200 for every day the property fails to comply.
The EPC looks a bit like the coloured bars that are on many domestic appliances. It shows two things, firstly the current energy efficiency of the property and secondly the potential allowing for reasonable changes.
There are two charts produced, one is the energy efficiency rating and the second is an environmental impact rating. A very large building may get a great energy efficiency rating but still have a fairly large environmental impact. Each EPC has a unique serial number.
The big problem for the rental market is that to reduce energy consumption by making a property more energy efficient will be a cost to the landlord, and the gain will be to save costs for the tenant. There are grants in many areas for some properties to make improvements. Enquiries should be made of your local authority to find out what is available and whether you are eligible.
The idea behind the EPC is that a prospective buyer or tenant will be able to see the rating and make an informed choice about whether or not to rent that property based on its energy efficiency. This is a good idea, particularly as the rating will have some relationship to the cost of running the building, but it will be limited to the degree that people actually care less about that factor than others in the rental decision.
Mortgage
If your property is mortgaged, you must obtain your mortgagee's written consent to the letting. They may require additional clauses in the tenancy agreement of which you must inform us.
Leaseholds
If you are a leaseholder, you should check the terms of your lease, and obtain the necessary written consent before letting.
Insurance
You should ensure that you are suitably covered for letting under both your buildings and contents insurance. Failure to inform your insurers may invalidate your policies. You may also wish to consider Landlords Legal Protection, Rent Guarantee Cover and Landlords Contents and Buildings Insurance.
Bills and regular outgoings
We recommend that you arrange for regular outgoings e.g. service charges, maintenance contracts etc. to be paid by standing order or direct debit. However where we are managing the property, by prior written agreement we may make payment of certain bills on your behalf, provided such bills are received in your name at our office, and that sufficient funds are held to your credit.
Council Tax and utility accounts
We will arrange for the transfer of Council Tax and utility accounts to the tenant. Meter readings will be taken, allowing your closing gas and electricity accounts to be drawn up. All these matters we will handle for you, however British Telecom will require instructions directly from both the landlord and the tenant.
Income tax
When resident in the UK, it is entirely the landlord’s responsibility to inform the Inland Revenue of rental income received, and to pay any tax due. Where the landlord is resident outside the UK during a tenancy, under rules effective from 6 April 1996, unless an exemption certificate is held, we as landlord's agent are obliged to retain and forward to the Inland Revenue on a quarterly basis, an amount equal to the basic rate of income tax from rental received, less certain expenses. An application form for exemption from such deductions is available from this agency, and further information may be obtained from the Inland Revenue.
The Inventory and Schedule of Condition
It is most important that an inventory of contents and schedule of condition be prepared, in order to avoid misunderstanding or dispute at the end of a tenancy. Without such safeguards, it will be impossible for the landlord to prove any loss, damage, or significant deterioration of the property or contents and seriously undermine his/her case should a dispute go to arbitration. In order to provide a complete service, we will if required arrange for a specialist company to prepare an Inventory and Schedule of Condition, at the cost quoted in our agency agreement.