Category Archives: Lettings


Demanding Tenants

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I received a call from a tenant the other day; he had moved into a property with his partner and had sent the landlord a long list of issues on day one. The landlord kept his response simple, “Sorry, sold as seen” and as far as he was concerned that was it. The tenants subsequently sent me the list and asked for my advice on their position. Here’s the list:

  1. Lounge walls have lots of scuff marks and needs an immediate re-paint
  2. Chest of drawers in second bedroom not opening smoothly and needs repairing
  3. Mould in sealant around the bath needs replacing
  4. Cushions on the sofa are very flat and uncomfortable
  5. Only 3 dining room chairs at the table which should have 4
  6. Lock on the master bedroom door doesn’t work

I can see the landlords point;the tenant saw the house online, viewed the property with the estate agents and wanted it as it was. Yes there are a couple of understandable points within the tenants list, but I imagine on reading it the landlord had the sudden realisation he had some rather pedantic tenants on his hands for the next year! Then I thought are these tenants pedantic or are they just house proud? They have gone through the flat and are not happy about scuff marked walls and mould around the edge of their bath.

I once had two male tenants,professional sharers just out of uniin one of my flats. At the first maintenance inspection three months in they had not even unpacked their moving boxes and it was pretty evident they didn’t clean the bathroom or kitchen either. At the end of the tenancy the mould on the shower and bath seals was almost coming alive!

What I am saying is, is it so bad that you have picky tenants? Are they just trying to make a home for themselves? Surely landlords can be safer in the knowledge that they are taking pride in looking after your investment property as if it was their own rather than using and abusing it leaving you a royal mess to deal with before you can find tenants when they vacate.

As a landlord it’s worth being reasonable when it comes to these kind of demands, maybe give in a little at the start, a couple of hundred pounds on a handy man putting a few things right to get off on the right foot could well be a good investment. Let’s be honest it’s your property and furniture you are improving and tenants who complain about things like scuff marks will probably look after their newly painted walls leaving them in a good state of repair for the next tenants. But be firm and set out exactly what needs doing and what they can expect from you with regards to maintenance in the future, taking this approach should avoid to do lists every month or so!

At the end of the day if your tenants are happy in their rental home they will treat your property with care and respect, they are also far more likely to want to extend their contract if they are happy and along with rental payments being made on time that’s all you want as a landlord isn’t it?

What is Clean?

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By Nick Lyons, Managing Director, No Letting Go

Whilst it may be of no surprise to many long time property managers, the introduction of the deposit schemes (TDS) has highlighted an area that causes a great deal of time-related cost in the industry. It seems that the most common cause of complaint is, and has been, cleanliness and from my various discussions with property managers and adjudicators over the previous few years, the most difficult element to determine is “What is Clean?”

cleaning products

You’ve got the cleaning products – but what constitutes ‘clean’?

It is fair to say that what one person calls clean, is not what another person calls clean and therefore as an inventory management company, property manager, landlord or in house inventory clerk, how do you benchmark standards and determine levels of cleanliness so that we all know what we are talking about?

In the early days of the deposits schemes, the first statistics to come from all three adjudications as published by Mortgage Trust in 2009 showed that 43% of disputes were related directly to cleanliness.

The TDS scheme at the time was reporting figures in the region of 50% and recent figures released by a landlord survey carried out by mydeposits.co.uk showed that 88.5% of disputes were related to cleanliness, 53.8% were related to wear and tear and 23% related to gardening.

No Letting Go carried out an analysis of all check outs at its various UK offices in 2010/11 to ascertain which areas of the check out were causing most disputes. Cleanliness was (not surprisingly) the biggest area – registering around 78% of the negative comments, closely followed by rubbish, damage and to a lesser extent general maintenance.

To back up the No Letting Go survey on check-outs we went further and carried out an analysis of 100 inventories from various sources including inventory companies, agents and landlords.

Surprisingly we found that only a few companies stated what they determine as clean, most in fact had such a vague explanation that I was amazed that any property manager could make a decision on the level of cleanliness required for the property without having to make a visit themselves! However more companies did make a determined effort to define levels of condition.

As part of a review of No Letting Go inventories following our research we introduced a list of definitions or parameters to state what we meant by clean. We found at the time that we spend an enormous amount of time explaining how dirty or clean a property was.

Inventory companies are in the business of independently registering facts in a subjective area of the property business, thus we needed a way to say to our clients what we meant by the various states of cleanliness. And by that, we mean:

What is a professional clean?

What does cleaned to a professional standard mean?

What is the difference between a good domestic clean and average domestic clean?

What does not clean actually mean and so on.

For example, No Letting Go define Professionally Clean as:

Everything immaculate, sparkling and dust free. Appliances and sanitary ware spotless. Carpets steamed cleaned, vacuumed. Floors swept. All furniture in order and clean. Linen freshly laundered. Cleaned to a high professional standard by a professional cleaner, receipt seen. Name of the company and date carried out.

The key here is not about our own opinions and differences on what we all call clean. It is about clearly telling a property manager or landlord (or adjudicator) what the benchmark is and therefore provide detailed and clear information to be able to make decision on the levels of cleanliness required to get a property ready for the next tenancy or to make it easy to calculate a deposit deduction.

Furthermore, with the increasing importance of the check-in procedure by gaining tenants’ agreement to the inventory and the schedule of condition at the start of the tenancy, clearly defining a level of cleanliness (whether in the inventory and schedule of condition and/or in a separate check in report) is critical.

Knowing that such a high proportion of issues relate to cleanliness, explaining to your tenant what is expected of them before and at the end of the process will mean less ambiguity which in turn saves time and money.

The best inventory management condition reports are not only the most detailed, but the clearest.

For further details on the No Letting Go cleanliness parameters call us on 0800 8815 366 or simply visit our website at http://www.nolettinggo.co.uk/property-inventory-articles.html and look at any of our inventory, check in or check out reports. We define both cleanliness and condition parameters to make it easy to make a decision.

How is the shortage of new properties affecting the buy to let market?

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From all the media stories, no-one is quite sure whether the property market is booming or not!

How is the shortage of new properties affecting the buy to let market?

A shortage of new properties is affecting the UK rental market

The simple answer is that the buy-to-let sector is doing very well but it would be doing even better if there were more new properties to buy. There’s an increasing market in the number of people looking to rent which means that demand is pushing up rents.

Indeed, the Council of Mortgage Lenders recently said that investing in houses and flats to rent is growing in popularity once more.

They say that the number of buy-to-let properties soared by 84,000 last year – with buy-to-let mortgages now accounting for nearly 13 per cent of the total outstanding value of home loans in the UK.

That means that investing in property to rent is a worthwhile proposition once again.

But let’s not kid ourselves about the current situation for prospective investors. While the buy-to-let market is picking up, it’s nowhere near the heady heights of the 2007 property boom. And most of the investors picking up properties for their letting portfolios are cash-rich investors.

It makes sense really: property prices are relatively low and rent prices are still fairly high which means that there’s a good return on your investment.

And the market for renting a home in the UK is continuing to grow.

Estate agents Countrywide say that last year, more than 275,000 new tenants registered for private rental accommodation – a 24 per cent increase on the previous year.

Across most of the UK there is a shortage of property to rent which means rental prices are remaining high and increasing in some areas.

Potential landlords can still buy property to enjoy the rental market using buy-to-let mortgages from many lenders. In fact, there’s so much competition for a potential landlord’s business that the average borrowing rate on a buy-to-let mortgage has fallen in recent months.

The headline of this article is: How is the shortage of new properties affecting the buy to let market? However, it would be wiser to read this as: How is the shortage of new good quality properties affecting the buy to let market?

That’s because the population of the UK is growing and it’s a relatively transient one – people are moving to where the work is and they are willing to pay for a good quality home.

Though there is no doubt that underpinning the buy-to-let market is the fact that not enough new homes are being built and people are living longer as well as the fact that there are more single person occupied homes.

For more information and advice on the current state of the buy-to-let market, contact the UK’s premium provider of landlord services NoLettingGo.co.uk or call 0800 8815 366.

No Letting Go are the UK’s leading provider of inventory management services, providing check in and check out services, property inventory and condition reports and specialist on site services to landlords, lettings agents and property professionals.

How should we deal with one tenant leaving during a tenancy?

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It’s always a situation you hope, as a landlord, you don’t have to deal with – when a tenant leaves early.

What to do when a tenant leaves a tenancy early

Handing back the keys: What to do when a tenant leaves a tenancy early

Not only do you have the issues of finding another tenant you also have the potential legal issues to deal with surrounding the tenant’s leaving.

First things first: you should have in your tenancy agreement a clause that covers such an occurrence.  This is vital – especially if the tenant’s leaving turns into a legal dispute.

When a tenant puts in a request to terminate and leave early from a fixed term tenancy it is essentially a negotiation between them and the landlord. (The issue is clouded if there is one tenant leaving, leaving others behind and this would be covered by ‘Surrender in Part’ and is a slightly different issue).

A landlord is not obliged to let a tenant break the terms of the tenancy but it’s often common sense to negotiate. You need to calculate any loss of fees you may incur – which in itself may be disputed -  or whether your clause for early termination has an actual penalty value to cover the costs you will have to carry and is one agreed by the tenant when s/he signs the contract.

A leaving tenant may also find the landlord a replacement tenant. Do not at any point say yes to the new tenant without carrying out your usual vetting procedures. They may be a perfectly good tenant but they aren’t taking over the tenancy as theirs will be a fresh contract.

This situation is going to occur so it’s more of a situation of how you handle the transition. By working with the leaving tenant you will part on good terms and avoid any missed rent payments.

It’s always wise to talk since any costs you incur funding a replacement will have to be borne by the leaving tenant (or, if you have a penalty clause, the costs will be covered by that).

When a tenant decides to leave a property is something of a legal grey area.

There is no legislation covering this eventuality and landlords need to set the terms for early termination, notice of termination and how the notice is served. This is purely a contractual matter between landlord and tenant.

This termination date needs to be agreed. You should get a proper ‘Surrender of Tenancy Letter’ which will act as a written document and which will then be proof that the tenant has given up possession of the property to the landlord.

If the tenancy agreement between landlord and tenant does not have a break clause and the landlord refuses to accept the termination notice then the tenant is contractually liable to pay the remaining rent balance for the fixed term tenancy.

This is where the art of negotiation is necessary. If there are seven months remaining on the tenancy then you could both settle on four months rent as a settlement to quit.

For more information and advice about how to deal with one tenant leaving during a tenancy, contact the UK’s premium provider of landlord services NoLettingGo.co.uk or call 0800 8815 366.

No Letting Go are the UK’s leading provider of inventory management services, providing check in and check out services, property inventory and condition reports and specialist on site services to landlords, lettings agents and property professionals.

Buying is cheaper than renting in most U.S. cities

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I am always interested in great property stories around the world and read an interesting article on CNN World about how it is now cheaper to buy than rent in most US cities ( http://money.cnn.com/2011/08/16/real_estate/buy_rent/ ) – if only that were the case in the UK.

Nick

New Landlord Emergency Cover Launched

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Leading providers of let property cover, Total Landlord Insurance, have just added Total Landlord Emergency Cover to their portfolio of insurance products
designed specifically for landlords.
Total Landlord Emergency Cover is a cost-effective insurance product that provides immediate assistance in the event of a domestic emergency at a rental
property.
The policy provides cover 24 hours a day 365 days a year for call out charges, labour and repairs for emergencies such as the breakdown of the heating system, plumbing and drainage problems.
Broking Manager, Steve Barnes, said: “Domestic emergencies at landlord’s rental properties can be inconvenient and sometimes difficult to resolve. It is not just boilers that go wrong, plumbing, drains and lost keys can cause inconvenience for landlords. At just £70 per property we feel that this policy represents excellent value for money and provides reassurance for both landlords and tenants that emergency assistance is only a phone call away. Introductory discounts are also available for limited period”.
Total Landlord Insurance will also be extending their range of landlord focussed products to include Rent Guarantee insurance and Tenant Referencing soon.

Steve continued: “Our customers are at the heart of our business and we will be adding more products and services to our website to provide landlords with a one stop solution for their insurance needs”.

For more information on Total Landlord Emergency Cover go to www.totallandlordinsurance.co.uk or call on 0800 63 43 880.

Unpaid rent and filthy tenants – Latest Student Landlord Survey 2011

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With student market nearly upon us, New Student Publications carried out an interesting straw survey on Student Landlord Problems

Different categories were addressed covering areas from unpaid rent to cleanliness issues.

Unpaid rent, filthy tenants and panicking about filling your properties for next year?

The results were astounding, with over 14% of landlords saying that their current biggest problem is just finding tenants to take their properties and fill in any gaps should someone drop out during a contract, with more than 2% feeling like they are struggling just to get viewings. One agent simply said “we have unlet properties remaining for July 2011, the situation is worse than in previous years” In a similar 2009 survey finding tenants was also the biggest problem raised by landlords.

Dirty Tenants

Landlords cited dirty tenants as their second biggest problem, with 16% left to pick up massive cleaning bills, or called out at 4am to change a lightbulb. The general consensus was “students don’t take care of the property or make any effort to keep the house clean.” 3.5% of agents thought that students demanded a much higher standard of accommodation than ever before, although it seems that tenants are unwilling to take out contracts for a full twelve months, with one landlord struggling to get even shorter terms “the majority of people contact me to rent for one or two months.”

Pressure From Pupose Built Halls

Many of the landlords surveyed said that they felt increased pressure from new purpose built student villages found in many city centres; more than 8% of those surveyed would eradicate those villages if we gave them one wish! 2% of landlords are afraid that their properties were not close enough to ‘hotspots’ and so would soon be abandoned in favour of more central locations.

Unpaid Rent

11% of businesses struggle with unpaid rent, while 2% note that this messes with their cash flow and although some are sympathetic to the issues caused by the Student Loans Company, most are fixed on the bigger picture; “a lot of time is spent chasing payment. Students seem to think that it is not always necessary for them to pay their rent.” This coupled with tenants excessively using all inclusive utilities means that businesses are less profitable. One landlord’s wish was simply that we could ‘undo the recession’ as 8 different landlords complained of increases to the cost of maintaining their properties to a decent standard.

Relax Regulations

Bogged down with HMO paperwork and expense? Over 18% of those surveyed would love to change or relax the regulations and the council powers to control them. One landlord stated; “there should be a national guide for HMO legislation.” Some landlords feel so strongly about HMO licensing that they named specific city councils or even actual councillors as their biggest fear for the future. 3 landlords said they had qualms about council schemes to shift populations from one area of a city to another, and how it would affect their business.

Worries Over Tuition Fee Increase

Landlords are worried about the tuition fee increase, with more than 14% saying that if they had one wish, they would fight the fees and leave the system as it stands, a worry which probably contributes to 13% of them saying that they feel the future of the market is uncertain, as some students may choose to stay at home to study. Competition from the university owned housing is a headache too, with 4% saying an increase in that sort of accommodation would be detrimental to their ability to let.

Problems With Advertising

Landlords raised the issue of advertising, when to do it and how the culture of marketing lets so early can damage the business, with nearly 5% of landlords thinking there should be a guideline that means property is marketed in January and not before. 4% thought university accommodation offices charged them too much for advertising, and 5% would like to see cheaper, and more effective advertising available to them.

Deposit Protection Unfair

Some landlords were concerned that the existing Deposit Protection Scheme did not offer them enough scope to reclaim money for damage to their properties. Eight separate landlords would like to see the entire system revised, with 1% of those surveyed listing it as their biggest problem. A case from the survey highlights the DPS’s flaws; “£1500 worth of damage but ex tenants refuse to give consent to DPS to pay the landlord.” And some feel that from a legal standpoint the law does not protect them, 3% of landlords would like to see more legislation to protect the financial interests of the landlord.

Worries Over The Potential Drop In Student Numbers

And what of the future of the student property market? More than half of those surveyed were very worried about the potential drop in student numbers next year, with one landlord summing up the problems this will create; “if student numbers drop because of the £9,000 a year course fees then we might see empty houses, lower rents or both.” A worry shared by 3% of those surveyed, who fear the contraction in the market will mean a forced reduction of rents, while other suggested offering shorter term contracts or starting to appeal to the housing benefit market was the only way to keep the business afloat.

No Problems At All

But this isn’t the full picture. Almost 9% of those surveyed have no major problems with the lettings market, their tenants or filling their properties. One landlord is more than happy with his tenants; “we enjoy our students. We pride ourselves in helping them learn how to care for and run the house. We regard them as ‘professionals-in-training’ and teach them what they should reasonably expect from a landlord and what they should reasonably do as a tenant.” One respondent would use a magic wand to change the public’s attitude towards students; “they tend to live in larger houses that are too big for modern families and therefore almost act as guardians for some of our most impressive architecture. They should be seen as a positive part of any community.”

 

Top 5 biggest fears for the future Number of responses Percentage
Fewer students in the future 101 54%
Student villages 15 8%
Legislation increasing workload 15 8%
Unpaid rent due to fees 10 5%
Universities moving into market 8 4%
 

Top 5 current biggest problems

 Number of responses Percentage
Bad tenants 51 13.6%
Uncertainty for the future 49 13.1%
Finding tenants 48 12%
Unpaid rent 41 11%
HMOs 17 4.5%

No Letting Go are working with a number of student letting agents and bodies around the UK to help protect both landlords and tenants from many of the issues arising from cleanliness and deposit protection. Better use of Inventory services, checking tenants in, property visits and managing the check out is critical to ensuring that potential problems are dealt with in advance and issues arising from check outs are dealt with quickly and efficiently. Contact No Letting Go on 0800 881 5366 or find your nearest office at www.nolettinggo.co.uk

Compiled by Emma Parker New Student – Student Housing Magazines – www.newstudent.co.uk

Landlords flock to purchase rental insurances

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The uptake of HomeLet’s new tenant reference, Optimum, which guarantees to remove the tenant if they fail to pay the rent, is up 150 per cent on projected sales figures. With inflation and unemployment rising the popularity of this product has been attributed to growing concern of rental arrears.

Commenting on the news HomeLet MD, John Boyle explained, “Naturally we’re pleased with the uptake of our new ‘Optimum’ reference, we developed this product specifically to counter the concerns of both our letting agent customers and their landlords. With rents remaining high conditions are particularly hard for tenants at the moment. The latest statistics make for grim reading; inflation is way up on the Bank of England’s targets and unemployment is continuing to creep upwards. These and other factors sadly mean that 2011 will be a tough year for many tenants’ which is obviously a major concern for landlords, who are also facing these difficult conditions.”

According to the latest Residential Lettings Survey from the Royal Institution of Chartered Surveyors strong tenant demand resulted in rents rising rapidly in the three months to the end of January. Figures released by the Council of Mortgage Lenders show that number of new mortgages lent to house buyers slumped by 29 per cent in January when compared to December. With lending likely to remain low throughout the year, demand for rented property is likely to push rents up further in 2011.

Matt Billingham, Owner, Billingham Cooke Estate Agents said, “Demand for high quality rented property is only going to increase in 2011. In many areas across the country tenants are already bracing themselves for an expected increase in rents. For many a rise in rents whilst inflation is so high will only increase the pressure on their budgets and many landlords are starting to realise that a service, which provides an element of cover should a tenant fail to pay the rent, is essential.”

Commenting on Optimum, Sara Bailey, Manager, Aquarius Homes said, “More landlords are asking for a service that also offers to protect their investment income. We’ve seen a number of traditionally safe tenants who’ve passed their references with flying colours fall on hard times, especially with the cuts in the public sector. This is a real concern for landlords, especially reluctant landlords or those with highly geared investments.”

John Boyle concluded, “Following the credit crunch, housing agency Threshold reported an increase in threatened or actual cases of illegal eviction. Evicting a tenant can be a difficult, costly and emotional process, and landlords shouldn’t take matters in to their own hands.

“When they’re covered by Optimum, through their local letting agent, our in-house Legal and Claims department take care of everything whilst ensuring that tenants are treated fairly and that every letter of the law is followed when obtaining vacant possession of a property. We also offer a range of products that provide missed rental payments as well as legal cover.”

Source: Property Drum Newsletter

Lettings firms expelled by Property Ombudsman

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Two lettings firms, one in London and the other in Torbay, have been expelled by The Property Ombudsman scheme.

Madisons of 7, Odeon Parade, 468, London Road, Isleworth, was expelled for failing to pass on rent it had collected and for mishandling tenants’ deposits.

However TPO is required under the terms of the Consumers, Estate Agents and Redress Act 2007, to maintain Madisons’ registration for sales activities.

The Disciplinary Standards Committee (DSC) of the TPO Council considered a number of complaints where Madisons collected rent and did not pass it on.

When the matter was referred to the Ombudsman he determined that the rent should be paid over to the landlords, and that compensation be paid for breaches of the TPO Code of Practice for Letting Agents in the firm’s general failing to provide a service consistent with fairness, integrity and best practice. In one case, although the rents have now been paid, the compensatory award made by the Ombudsman has not been met.

“This has been a sorry and frustrating business for both Madisons’ clients and TPO,” said Gerry Fitzjohn (right), vice chairman of the company operating TPO.

“It concerns us that while we can expel their lettings business from the scheme we have no option but to continue registration for their sales business until the Office of Fair Trading bans the agent.

“In the meantime, it is our duty to make the public aware of the situation regarding Madisons.”

The second firm to be expelled is Torbay Residential Lettings (TRL), of 49 Market Street, Torquay.

The firm had breached several aspects of the TPO Code of Practice for letting agents by not co-operating with the Ombudsman’s investigation, not paying the award made by the Ombudsman after he had found the firm had not registered the tenants’ deposit, failing to complete a proper check-out process, and failing to provide an appropriate form of tenancy agreement.

The Disciplinary Standards Committee (DSC) of the TPO Council, in deciding to expel TRL also noted that one of the directors of the firm had been jailed for three years in January, 2010, for child cruelty and perverting the course of justice.

The remaining director considered that the dispute being decided upon by the Ombudsman was not the firm’s responsibility because the complaint arose from the actions of the jailed director. The DSC took the view that this was not relevant and the firm was liable to meet its obligations as a TPO member.

“Such behaviour is unacceptable,” said Gerry Fitzjohn. “Our scheme’s primary purpose is to resolve disputes between agents and consumers but we also aim to raise professionalism and insist on certain levels of service. Where these are not met, we make it clear that an agent is no longer fit for membership and recommend the public take notice of this.”

Published in Jungledrum, Property Drum. March 2011

Who wins the deposit disputes – tenant v landlord

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TDS state that the following percentage awards (in terms of deposits held) were made during 2010

Percentage of awards made to tenant – 56%

Percentage of awards made to landlord – 42%

Percentage of awards made to agents – 2%

The lack of landlord generated accurate paperwork seems to still be a problem.