A Guide for tenants
To provide you with some useful information. It is not intended to be a substitute for other professional or legal advice you may wish to seek. Should you wish to discuss any of the information contained here, or have any further queries, please do not hesitate to contact this office.
Selecting a property
It is important to note that a property is let “as seen”. Any special requests regarding the decorations, furniture, fixtures and fittings must be made and agreed between the landlord and tenant before the tenancy agreement is signed.
When you view a property which is still occupied by the owner or present tenant you will be advised regarding any items which will not be included in your tenancy, but we recommend you also ask for clarification to avoid any misunderstanding or disappointment.
Legislation require Landlords of all properties marketed for letting to provide prospective tenants with a valid Energy Performance Certificate (EPC). The EPC, which is valid for 10 years, has been introduced to help reduce carbon emissions and is designed to allow prospective occupiers to identify the current rating of the property and the projected fuel costs for electricity and gas per annum. A full explanation of the ratings is provided in the EPC which will be provided to you before you are required to sign the Tenancy Agreement.
Reservation of Property
When you have chosen a property, your offer is accepted subject to contract and satisfactory references. You will be asked to pay a reservation fee of £300 per person. At this stage we will cease marketing the property whilst references are taken and the arrangements for the tenancy are made.
This reservation fee will form part of the moving in monies. Should you change your mind about moving into the property, or the tenancy cannot proceed because your references are not forthcoming or prove unsatisfactory, this sum will be retained by us to cover our abortive administration costs. In the event that the Landlord decides not to proceed for any reason other than unsatisfactory references, the reservation fee will be returned to you.
Equally important to the amount of rent a landlord achieves on their property, is the behaviour of the tenant whom the landlord allows to occupy it.
Tenant’s are required to:
Give an honest and truthful account of themselves during the application process.
Pay a reasonable rent as agreed when it becomes due.
Observe all the terms of the tenancy agreement.
Before a tenancy can be granted, references must be taken on each tenant and this is normally undertaken via a credit search agency. All reference or credit search fees (£75 inclusive of VAT per person) are payable by the tenant.
In some instances, eg in the case of students or where there is insufficient employment or UK financial history, it may be necessary to request the provision of a guarantor (see below). It is therefore essential that in such cases you ensure that you are in a position to supply a guarantor before you make an offer for a property.
In addition to References as described above, I in line with the current Right To Rent legislation we also require confirmation of your identity in the form ideally of your current Passport where this is not possible we can accept a current UK/EU Photo Card Driving License if supported by a birth certificate. We require the original documents to photocopy ourselves for our files.
A guarantor is someone who is prepared to undertake responsibility for the full amount of the rent should the tenant be unable to do so at any time during the tenancy and also for any breach of the tenancy terms. The guarantor will be required to co-sign the tenancy agreement and allow references to be taken on them, they must be a UK home owner and have an annual income in excess of 30 x the monthly rent.
It is important to note that where the tenants are “sharers” who have joint and several responsibility under the terms of the tenancy agreement (see below), the guarantor cannot restrict his responsibility to a share of the rent, he/she is effectively required to undertake to stand for all of the tenants and the full rental figure. Therefore in the case of sharers one guarantor will suffice. Should you have any queries regarding this please do not hesitate to ask us.
Individuals renting a property together (“sharers”) are all required to be named on the tenancy agreement as tenants. Under the terms of the tenancy agreement sharers have “joint and several” liability which gives them all equal responsibility for adhering to the terms and conditions of the tenancy agreement and makes each and every one of them responsible for the full amount of the rent. This means that should one tenant default in their rental payment, the other tenants are liable and responsible for the outstanding balance.
Equally, in the case of damage to the property, if damage is caused by one tenant, the other tenants are deemed equally responsible when deductions are made from the security deposit (see later). Any disputes between sharing tenants relating to the security deposit are the sole responsibility of the tenants to resolve and the landlord or his agent cannot act as mediators in such disputes.
The joint and several liability also applies to the termination of a tenancy, one sharer wishing to end a tenancy (provided there is provision to do so within the terms of the tenancy agreement) is deemed to be doing so on behalf of all the tenants.
Generally properties are rented for periods of one year, but the tenancy can be for any term agreed. Most tenancies will contain a release clause effective after the completion of six months. Once the tenancy has commenced you have security of tenure for the fixed period, provided you are not in breach of the terms of the tenancy agreement.
At the expiry of a fixed term tenancy the landlord can take possession of his property (in the case of an Assured Shorthold Tenancy two months notice must first be served) unless it is agreed to renew or extend the tenancy.
The tenancy agreement
It is extremely important that you read your tenancy agreement, and should you have any questions relating to it, that you ask for clarification or seek independent advice prior to signing it. The tenancy agreement must be signed by all parties, prior to occupation. It must also be signed by any guarantor (see above).
In many cases the tenancy created will be an Assured Shorthold Tenancy in accordance with the Housing Act 1988. This applies to all tenancies where the rent is under £125,000 per annum, and the tenant is an individual or individuals for whom the property will be their main or principal home, and where the landlord is not resident in the property during the tenancy as defined by the Housing Act.
Where the tenancy does not fall within the scope of the 1988 Housing Act, a Company or Contractual Tenancy will be arranged.
We charge an administration fee to both the landlord and the tenant for the preparation of the tenancy agreement (and any subsequent renewal or extension documentation).
The amount payable by the tenant is £75 per person inclusive of VAT for the initial tenancy agreement and thereafter £200 inclusive of VAT for any subsequent renewal or extension document or a change of tenant subject to the landlords agreement and satisfactory references.
With effect from 2006, Stamp Duty Land Tax, which was introduced under the Finance Act 2003, may be applied to some qualifying residential tenancy agreements. Each tenancy is individually assessed for liability by the Inland Revenue based on the rent payable and the overall length of the tenancy.
The liability for assessing liability, completing forms and making payment, where applicable, is the sole responsibility of the Tenant and we therefore advise that you seek clarification in regard to any liability for your tenancy. Further information can be obtained from the Inland Revenue Helpline on 0845 6030135 or the Inland Revenue website www.inlandrevenue.gov.uk/so
Unless otherwise stated, the rent will be exclusive of telephone, water, gas, electricity and council tax, which are payable by the tenant direct to the utility companies. Any ground rents or service charges applicable to the property are payable by the landlord.
The first payment is due before the start date of the tenancy in the form of cleared funds. A personal cheque or cash is not acceptable.
Thereafter the normal method of rental payment is by calendar monthly instalments payable in advance by standing order. Rents are due on the date shown in the tenancy agreement therefore standing orders must be dated 3 days in advance of this date to ensure the rent is received on time.
Unless otherwise agreed in writing prior to the start of the tenancy, rent will only be accepted from those persons named on the tenancy agreement.
In the case of sharer tenants, we require one payment by standing order for the full amount of the monthly rent due, we cannot accept individual payments. We recommend that sharer tenants open a joint account from which the rent can be paid by standing order.
Please note that rent demands and reminders are not sent and interest will be charged on late payment of rent. If rent is overdue and we have to send reminders, you will be charged an administration fee of £25 per letter.
The security deposit
At the start of the tenancy, the tenant is required to lodge an amount, usually equivalent to six weeks rent, as security against damage and disrepair. This is payable at the same time as the first rental payment before the start date of the tenancy in the form of cleared funds.
Please note that at no time can these monies be used in payment for rent.
Deposit on an assured shorthold tenancy
All tenancy deposits paid by a tenant in respect of an Assured Shorthold Tenancy must be safeguarded under a government authorised Scheme to comply with the Compulsory Tenancy Deposit Protection regulations under the Housing Act 2004. There are three such Schemes, all of which provide a dispute resolution service to deal quickly and fairly with any disagreements which may arise between the landlord and the tenant about how much of the deposit should be returned.
Property In.com are members of the Custodial Scheme, administered by The Deposit Protection Service (The DPS) and unless otherwise instructed by the landlord, the tenant’s security deposit will be forwarded by us to the administrator of the DPS, where it will be held until the end of the tenancy.
At the end of the tenancy, agreement must be reached between the landlord and tenant within 10 days of the termination of the tenancy regarding any deductions to be made from the deposit for missing items, or for any damage or disrepair not considered to be fair wear and tear. Upon receipt of confirmation from both parties we will arrange for the funds to be dispersed by the Custodial Scheme administrator. In the event of a dispute, this will be dealt with by the Scheme Alternative Dispute Resolution Service.
In the case of a tenancy which is not an Assured Shorthold Tenancy, where it is not possible to safeguard the deposit with the Custodial Scheme administrator, the deposit will be held by us as stakeholder (unless otherwise agreed with the landlord) and at the end of the tenancy the deposit will be returned to you, less any agreed deductions.
If the landlord instructs us to pass the deposit to him at the commencement of the Tenancy, he will be solely responsible and liable for safeguarding the deposit in compliance with the regulations. He must notify you in writing within 14 days of your paying the deposit, of the details of the Scheme under which the deposit is held.
Prior to taking possession of the property an inventory of the condition of the property and its contents will be made ( by a professional independent inventory clerk) this cost is covered by the landlord.
At the start of your tenancy, immediately prior to your taking occupation, the inventory clerk will go through the inventory room by room. A copy of the report and the inventory will be sent to you for information within 7 days, in the unlikely event of any omissions or errors, you have 7 days to query the report.
At the end of the tenancy the same process is repeated, you will be responsible for the checkout report (£125 plus vat £150). Any damage or disrepair will be noted and you will be sent a copy of the report. You will be advised of the cost of any missing items, or damage or disrepair not considered to be fair wear and tear, and upon agreement these costs will be deducted from your security deposit and any balance returned to you by the DPS.
Please note that whilst a degree of ‘wear and tear’ (deterioration through normal usage) is to be expected, any damage to the property or the landlord’s belongings will be your liability. For the avoidance of doubt ‘wear and tear’ does not embrace dirt or dust that was not in a property prior to the tenancy.