Types of Tenancy Agreement
Tenancy Agreements can be roughly divided in to three main categories, all of which have a number of permutations depending on what is contractually agreed, however to keep it simple they are:
Assured Shorthold Tenancy (AST): The most common type of agreement where the tenant is protected under various housing acts, principally the 1988 Housing Act, but still allows the Landlord to regain possession after serving 2 months notice (subject to contract and potentially a court order). In order for an agreement to be an AST it must fulfil certain criteria, the annual rent must be under £100,000, the tenant must be an individual or group of individuals, the Landlord must not live in the same property, and the property must be the Tenant’s main residence.
Non-Housing Act Tenancy: This agreement is used when the rent is over £100,000 per annum and the property is let to an individual or group of individuals. There is no additional protection other than what is outlined within the written agreement.
Company Tenancy: This is a type of non-housing act tenancy in so far as a company is the Tenant rather than an individual. The Tenancy should ideally specify an occupant, known as a licensee.
Consents to Let
Before you can let your property you will need to get consent from your mortgage lender and the freeholder (if your property is leasehold). You will also need to provide your tenants with the relevant sections of any lease on the property if adherence to a head lease is stated within the tenancy agreement.
The providers of any insurance on your property will also need to be informed when the property is going to be let out. Failure to do so could nullify a policy.
There are various safety regulations that you have to adhere as a Landlord, not all of them are statutory obligations, but Stirling Ackroyd recommends that you treat them as such.
If your property has any gas appliances, installation or pipe work within the property they must be declared safe by a Gas Safe registered engineer. This is a statutory obligation and an inspection must be carried out prior to the commencement of a tenancy and then on an annual basis.
The electrics within your property must be safe, including any electrical appliances that you might leave in the property. Stirling Ackroyd recommends you allow an NICEIC electrician to check over your property before it is let out.
All of the furniture you leave within the property must comply with the provisions contained within the Furniture and Furnishings (Fire) (Safety) Regulations 1988 and any subsequent amendments to the Act. These apply to beds, sofas, cushions, pillows amongst other things.
Stirling Ackroyd also recommends that you have working smoke alarms and carbon monoxide detectors installed in your property.
Energy Performance certificate (EPC)
As of October 1st 2008 residential let property will require a valid Energy Performance Certificate provided by an approved Domestic Energy Assessors (DEA) before marketing of the property can commence. Stirling Ackroyd can help you to arrange an EPC on your property, please contact the relevant office for details.
As of April 2007 is has become unlawful for a deposit on an AST to be held by either an agent or a Landlord unless they have joined one of the regulated schemes. Stirling Ackroyd has joined one of the schemes and can guide you through the process. Details of which will be outlined in the tenancy agreement.
Preparing your property for rent
Utility Bills and Council Tax. Although contractually your incoming tenant would normally be responsible for payment of the utility bills and council tax you still need to notify all of the providers about the change, and provide them with meter readings. You will also need to notify the relevant local authority that tenants will be moving in.
Cleaning and Inventories. Before your tenant moves in Stirling Ackroyd recommends that you undertake a full professional clean, and allow us to organise an inventory and check-in. The inventory and check-in will give you and your tenant written evidence of the condition of the flat and may be useful when negotiating any possible deductions from the deposit.
Looking after your tenants and property
During the course of a tenancy it is advisable to look after both your tenants and your property. As a Landlord you have a duty of care towards your tenant and various contractual obligations.
It is also advisable to keep to your obligations as quite often they are maintenance based, inaction may cause serious damage to your property and ultimately any costs could escalate.