Our Terms Overview

 
KEYHOLD TERMS

The following commissions are payable by the Landlord to us following the introduction of a tenant who enters into a Tenancy either directly or indirectly or by way of an introduction from an existing tenant found by us for as long as the tenant remains in possession.

Value Added Tax will be chargeable on all commission at the prevailing rate (currently 20%). This rate may change from time to time and the total cost will change accordingly.

LETTING ONLY SERVICE

Our commission is calculated at 9.6% (including VAT) of the gross rent payable for the first year of the Tenancy, subject to a minimum fee of £600 (including VAT). Should the tenant stay on, we do not charge renewal fees. Payment is due in full at the start of the Tenancy. The balance must be paid in full to us at the commencement of the Tenancy; if this is not received then we will deduct our fees from the initial rent received and we will withhold the Tenancy Agreement until the outstanding balance is cleared.

LETTING AND MANAGEMENT SERVICE

Our commission is calculated at 15% (including VAT) of the gross rent payable under the Tenancy Agreement subject to a minimum management fee of £600.00 (including VAT).

PRIOR TO LETTING

Prior to Letting

The property should be professionally cleaned immediately prior to the tenancy commencement, including carpets, windows and all appliances. Gardens, if applicable, should be in good seasonal condition.

Regulations Covering Rental Properties

If you are planning to let a residential property you will need to comply with the regulations below:

All machines, gas appliances and electrical goods should be in full working order, should have been recently serviced, checked for safety and have clear instructions for use.

The Furniture & Furnishings (Fire) (Safety) Regulations 1988 & The Furniture & Furnishings (Fire) (Safety) (Amendment) Regulations 1993

Most new furniture is marked with a display label (a triangle with a smoking cigarette) to show that it complies with this regulation. There should also be a permanent and non-detachable label stating compliance. Bed bases and mattresses are not required to bear a permanent label but compliance will be indicated if the item has a label stating that it meets BS7177. The aim of the regulation is to improve safety by requiring all furniture and furnishings in rented properties to meet the “match test” or “cigarette test”.
The regulations apply to all upholstery and upholstered furniture and loose fittings, permanent or loose covers including: beds, mattresses, pillows, armchairs and scatter cushions.
You therefore need to replace non-conforming items or let your property on an unfurnished /part furnished basis. Carpets and curtains are not covered by the regulations.

Electrical Equipment (Safety) Regulations 1994

You are responsible for providing instruction books for all items of electrical equipment for your tenant. Appliances are not safe if written instructions are not provided. You are responsible for ensuring that all electrical installations and appliances within the Premises comply with the above Regulations. Electrical equipment including wiring must be safe and an NICEIC registered electrician should carry out a visual inspection prior to the commencement of the Tenancy.

Gas Safety (Installation and Use) Regulations 1998It is a criminal offence to let Premises with gas appliances, installations and pipe work that have not been checked by a GAS SAFE registered engineer. You will need to provide us with a copy of a Gas Safety Certificate (GSC) carried out no more than 12 months previously. If this GSC is not sent to us when you return this Agreement you authorise us to arrange for a Gas Safety check. The GSC will need to be renewed at 12monthly intervals and we will arrange this for you with one of our approved GAS SAFE registered engineers. We need to give your Tenant documentary proof of your compliance with these Regulations at the commencement of the Tenancy and within 28 days of the safety record being renewed. No tenancy can commence until we are in receipt of a valid GSC.

Energy Performance Certificates in Let Property

From October 2008 agents will need to get EPCs for properties that they are marketing to new tenants. The EPC will then need to be renewed every ten years. The provisions are part of The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 SI 2007/991. This can be found in full at https://www.opsi.gov.uk/si/si2007/uksi_20070991_en_1.

The requirement is set out in regulation 5, which demands that a prospective tenant be provided with an EPC at the earliest opportunity and certainly prior to entering into any contract to rent out the property. The regulation goes on to state that the certificate must be provided at the earlier of the prospective tenant being provided with written details about the building or the prospective tenant viewing the building. No other part of the HIPS regulations applies to rental property.

Other important considerations for Landlords before Letting

Written consent must be obtained from your Mortgage Provider/Freeholder (if property is leasehold). Your Insurance Company must be notified that the property is to be rented out and appropriate insurance obtained for a tenanted property. There are specialist insurance companies who can provide this and we would be happy to assist you.

The Inland Revenue must also be informed within 6 months of letting your property, flat or apartment in the UK and failure to do so will incur penalties, interest and other consequences. The Inland Revenue are apt to deal harshly with Landlords who do not declare rental income and it is always best to seek advice on tax planning and Capital Gains Tax from a fully qualified Accountant.

Mail should be redirected with the Post Office.

Further copies of keys will need to be provided, at least two if we are acting for you. 

PRESENTING YOUR PROPERTY

Decoration

  • The quality of decoration both to the interior and exterior may substantially affect the level of rent achievable and the calibre of tenant
  • Keep carpets, curtains and walls neutral
  • Kitchens should be well equipped. Ideally with dishwasher, large fridge/freezer, washing machine, separate drier
  • Bathrooms should be well fitted with a good shower
  • Gardens should be well maintained
  • Exterior decorations should be in good order and door furniture in proper working order

Furnished or Unfurnished?

Landlords enjoy the same legal protection whether the property is furnished or unfurnished. Generally rents achieved are of a similar level except in executive lets where exacting standards in both decoration and furnishings are expected as normal and therefore generate higher rentals.

INVENTORIES

An Inventory and Schedule of Condition is essential for the proper management of your Premises, whether they are let furnished or unfurnished, to reduce the risk of a dispute arising in respect of the security Deposit (“Deposit”). Inventories should, where applicable, show that furnishings and electrical equipment comply with current legislation. If you do not have an inventory and schedule of condition you will not be able to prove the condition of the Premises at the start of the tenancy and may not be able to obtain compensation from the tenant. We do not accept liability for any loss suffered if you do not have a fully comprehensive inventory.

We will arrange for the compilation of the Inventory by an independent inventory clerk. You will be responsible for the fee. Charges made by the inventory clerk will be based upon the time taken to prepare the Inventory and Schedule of Condition. We cannot accept any liability for errors or omissions on their part unless it is as a result of a our negligence or breach of contract..
In the event that any dispute concerning loss or damage to your property is not amicably resolved then the matter will be referred to the Courts and arbitration but should be noted that any judgment will be on the basis of written documentation – the Inventory.

A check-out of the Inventory and Schedule of Condition will be carried out at the end of the Tenancy. Our Agreements make it clear that the tenant will pay for the cost of the check-in and the Landlord pays the cost of the check-out.

TENANCY AGREEMENT

You will need a comprehensive Tenancy Agreement setting out the rights and obligations of both parties. Where the tenant is an individual you will also need to have regard to the Unfair Terms in Consumer Contract Regulations 1999 and guidelines prepared by the Office of Fair Trading which states that any clause in a contract which is unfair to the tenant could be void and therefore unenforceable.


Assured Shorthold

If the applicant is an individual and the net rent is £100,000 or less per year we will use an Assured Shorthold Tenancy Agreement. There is no longer a minimum period for such lettings. However, if the tenant fails to surrender possession at the expiry of the term (and in accordance with your section 21 Notice) you will need a possession order. No such order can expire within the first 6 months of Tenancy commencing unless the tenant is in breach of the Tenancy. The charge of an Assured Shorthold Agreement is £108.00 (including VAT).

Common Law

If the net rent payable is £100,000 or more per year or at a proportionate level for a shorter tenancy, the Tenancy Agreement cannot be an Assured Shorthold. You will need to use a Common Law Agreement. Although this is not governed by the Housing Act 1988 it is nevertheless subject to other statutory regulation (e.g. Protection from Eviction Act 1977). A Common Law Agreement is individual to each let.

Company Lets

This is a Tenancy which is subject to common law as it is outside the protection of the Housing Act 1988. Generally speaking these involve more pre-contractual negotiation. There are no rent restrictions.

Tenancy agreements can be for a fixed duration, run from month to month (i.e. a periodic tenancy”), or be a combination of the two. A fixed term contract will give you more certainty, whilst the periodic tenancy will give you more flexibility.

All tenancies must be terminated by serving the tenant with a valid notice whether the initial term is fixed or otherwise. This is because at the expiry of the initial term the Tenancy will automatically roll on from month to month generally upon the same terms and conditions (including rent) unless and until you serve the tenant with a valid notice to quit or the tenant voluntarily surrenders possession. At least two months notice must be given requiring possession of any premises let as an Assured Shorthold Tenancy before it takes effect. (Housing Act 1988 S.21).

REFERENCES

At least three references will be taken:

  • Bank
  • Employer
  • Previous landlord, if applicable.

If you are letting to a company, a company search is imperative if the company is not a household name, and in addition, the following references will be requested:

  • Accountant
  • Bank
  • Solicitor

CONSENT FOR LETTING

You must provide us with sufficient documentary evidence to satisfy us that you are legally entitled to grant a Tenancy of the Premises.

MORTGAGES

Where the Premises are subject to a mortgage, we will need your mortgagor’s written consent to the proposed letting as soon as possible and in any event prior to any Tenancy commencing. The mortgagor will normally wish to see a copy of the draft Tenancy Agreement. The mortgagor may charge you a fee for giving their permission.

INSURANCE

It is essential that the Premises and contents included in the Inventory are adequately insured and that your insurers are aware that the Premises are let. Failure to do so may invalidate your insurance. You must inform your insurers whenever the Premises remain vacant for a period greater than specified in your insurance policy and you must check that third party liability is included under your insurance policies We will not be responsible for the renewal of your insurance cover. We will require a copy of your insurance policies to be attached to the Tenancy Agreement.

As Landlord you will be liable for tax on rental income and you must inform the Inland Revenue that you are letting the Premises. There are a number of allowances that you can claim against this rental income. You should seek advice on these allowances from your accountant or from the Inland Revenue website which can be accessed on www.hmrc.gov.uk. We should make you aware that a form is sent by us to the Inland Revenue every year providing details relating to those landlords whose property we have let regardless of the country of residence of that landlord. You must keep all your invoices for six years for tax purposes.

TAXATION

The Inland Revenue has special rules regarding the collection of tax on rental income if you are a Landlord who is resident overseas, or you subsequently move abroad. If you fall into this category it is your responsibility to obtain a tax approval number from the Inland Revenue. The relevant form and guidance notes can be down loaded from the above website. Until that approval number is given to us by the Inland Revenue we are legally obliged to deduct tax from your rental income at the prevailing rate which is currently 20%. This money is forwarded to the Inland Revenue on a quarterly basis. No person is exempt from this scheme.

 

DURING LETTING

UTILITIES AND COUNCIL TAX

When we are managing the property, we will notify the electricity, gas, water companies and the local authority when the tenant occupies your Premises and provide them with meter readings at the commencement of the Tenancy. This can only be done if you provide us with the names and account numbers of all utility suppliers.

COLLECTION OF RENT

This is usually done on a calendar monthly basis and is forwarded to the Landlord via any previously approved method after any agreed deductions have been made for contractors etc.
We will pay the said rent less our agreed fees and expenses into your nominated bank/building society account within 30 days of receipt of cleared funds from the tenant. Monthly statements of account will be sent to you not less than once in every three months.

DEPOSITS

We will collect the deposit together with the rental payment from the tenant at the commencement of the Tenancy. The deposit or any balance payable will be paid to the tenant or Landlord as appropriate at the end of the Tenancy. We will hold the deposit in an interest bearing deposit account in a stakeholder capacity which will mean we will be unable to release the deposit or any part of it to you or to the tenant without both parties’ written consent.

At the end of the Tenancy you are entitled with the consent of the tenant to ask us to deduct from the deposit in compensation for any of the damages or other things listed below. The inventory clerk will determine whether or not there are any damages or cleaning needed taking into account the check in report of the Inventory and Schedule of Condition.

In accordance with the Tenancy Deposit Scheme for Regulated Agents, Landlords will not be able to hold a deposit for an Assured Shorthold Tenancy Agreement unless he or his agents are a member of an approved scheme. This took effect in April 2007. In order to protect clients we as agent will be holding all deposits as stakeholder as we are a member of a government approved scheme. We charge a fee of £48.00 including VAT for this service.

At the end of the tenancy both the Landlord and the tenant must agree deductions from the deposit. If there is a dispute between the parties then the matter must be resolved by either the county court or the Alternative Dispute Service (“ADR”) of which we are a member. We will retain the deposit if the matter is referred to the county court until we receive an order from the court when we will return the sums to the relevant parties as specified in the order. If you and the tenant choose ADR we will pass the deposit or the sum in dispute to the service for adjudication.

MAINTENANCE OF THE PREMISES

Sections 11 to 16 of the Landlord and Tenant Act 1985 state that you must:

keep the structure (including the drains, gutters and down pipes) and the exterior of the Premises in good order and repair); 
keep the appliances for supply of gas, electricity and water in good repair; 
keep the appliances for supply of space heating and water heating in repair; and 
keep the sanitary appliances in repair. 

We do not arrange repairs if you use our Letting Only Service.

 

RENTING FACTSHEET

Thinking of renting out your property? If so, here is some information to assist you with the letting and to encourage you to make use of our services.

Residential tenants in the UK have a very high level of protection from unreasonable interference and harassment. This protection is afforded to them by law and custom. Where a landlord lets a property to a tenant they will give up much of their control of the property for the tenancy term. Access to the property can only be sought upon seeking the tenant’s permission, unless it is an emergency, and tenants can only be removed from a property with a court order, unless they leave of their own accord.

Information Regarding Aspects of Letting

  1. Tenancy Type

There are several different types of tenancies in England and Wales with several different types of statutory regimes.

  • Rent Act

Historically tenancies were covered by the Rent Act 1977. These tenancies can no longer be created and are generally dying out. However, these tenancies provided a very high level of protection to tenants for life and benefitted from below market rents.

  • Housing Act

The vast majority of tenancies created today now fall under the Housing Act 1988. The Act applies where tenancies are created on or after 15 January 1989 and creates one of two types of tenancies. The tenancy was either an Assured Tenancy or an Assured Shorthold Tenancy if the landlord served a section 20 notice advising the tenant that his tenancy was NOT an Assured Tenancy. An Assured Tenancy is a tenancy for life, which means it is very difficult to evict a tenant, and a tenancy at a market rent. Assured Shorthold Tenancies are created, as stated above, on the service of the Section 20 Notice or those created after 28 February 1997. The vast majority of tenancies today are Assured Shorthold Tenancies which are tenancies at a market rent and permit the landlord to obtain possession much more easily.

  • Common Law

Contractual Tenancies where the rent exceeds £100,000 per annum. These tenancies are not governed by any specific statute but are a contractual arrangement between the landlord and tenant.

  1. Deposits and Inventory

There are no restrictions on deposits levels in England and Wales however, landlords are required to register the deposit with an approved tenancy deposit protection scheme. In addition to the registration the landlord is also required to provide the tenant with information which differs depending on the scheme that is used. Failure to adhere to the deposit scheme rules can result in landlords facing claims by the tenant for up to 3 times the deposit amount in addition to a return of the deposit. Furthermore, landlords are not permitted to issue possession proceedings on the expiry of a Section 21 notice if the deposit rules have not been complied with because the notice is in fact invalid upon service.

The deposit schemes all offer a free adjudication service in the event of a dispute in respect of any deductions from the deposit. In order to consider such disputes, the schemes will expect to see a comprehensive inventory. It is often the case that landlords do not arrange for an inventory or arrange for a poor quality inventory and this makes it impossible to show that the condition of the property has deteriorated over the course of the tenancy term. In the absence of any proof of deterioration, the landlord is unlikely to be successful in his claim to make deductions from the tenant’s deposit. 

  1. Consents

If you are thinking of letting your flat or a property where you have a superior landlord, then you will need to seek their permission to let. Insurance companies, Mortgage companies and even co-owners will also need to be contacted for permission to let. Without the necessary consents you risk having your head lease forfeited, your insurance cancelled and your mortgage company demanding an immediate return of the full loan amount.

  1. Advertising the Property

Property adverts must be accurate. False advertising is a criminal offence and carries an unlimited fine. Examples of such false advertising includes saying that the local schools are ‘good’ when they are in fact average and that permission has been sought for an extension when it has in fact already been refused. Where tenants have fallen victim to false advertising they are entitled to vacate the property within the first month of their occupancy and demand a full refund of any rent they have paid. 

  1. EPC

All properties on the rental market must have an Energy Performance Certificate (EPC). The EPC provides potential tenants with an estimate of the cost to heat and light the property and recommend works which could reduce these costs if carried out. The EPC uses a rating system based on the letters A to G and from 2018 properties with a rating of E or below will no longer be rentable unless improvements are made or it is not possible to make improvements.

  1. Discrimination

Landlords may be selective in respect of their tenants but they cannot discriminate unlawfully. Such discrimination is a breach of the Equality Act 2010 and can include a refusal to let to people of a particular religion or sexual preference. Disabled tenants can ask for non-structural reasonable adjustments, such as handles along the stairs and it would amount to discrimination if the landlord refused the tenant because they asked for the adjustments.

  1. Gas Safety

It is compulsory throughout the UK for landlords to have gas appliances checked annually. These checks must be carried out by Gas Safe approved engineers and a copy of the certificate must be given to the tenant. It is the Health and Safety Executive that enforces this requirement and landlords can face a prison term and/or a fine for failing to comply in the most serious cases. As with deposits, landlords are not able to issue a valid Section 21 notice if the Gas Safety certificate has not been given to the tenant.

  1. Electrical Safety

In the UK there is no specific legal requirement to obtain certification for the electrical appliances in a rental property. For Houses in Multiple occupation checks must be made of the electrical wiring every 5 years but not the appliances. Failure to have the wiring checked is punishable by an unlimited fine. However, landlords are required to ensure that electrical installations and appliances are safe and the practical way of achieving this is by means of testing. Should a tenant be injured due to a faulty appliance the landlord can face prosecution and even a damages claim by the injured tenant.

However, the government has passed the Housing and Planning Act 2016 in England which allows for regulations to be made in respect of electrical safety. At present the government is consulting over how this will be implemented and how often tests should be undertaken. The legislation is expected to be implemented in 2018. 

  1. Fire Safety

Properties should be fire safe and should include an adequate means of escape in case of fire. Landlords should carry our fire risks assessments and should provide tenants with written instructions on how to operate any fire safety equipment and the procedure to be adopted in the event of a fire.

It is a legal requirement for all properties to have at least one battery powered smoke alarm on each storey of the property. A local authority can serve an enforcement notice requiring alarms to be fitted on 28 days’ notice and if this is not complied with then they can issue a penalty notice for up to £5,000.

  1. Furniture

All soft furniture and furnishings must meet appropriate fire regulations. Most modern furniture will meet the required standard and include appropriate labelling but older or imported furniture may not. The standard of safety and furniture labelling is required prior to supplying the tenant with the furniture and any breach of the requirement is a criminal offence punishable by a prison term and/or fine.

  1. Property Standards

The Deregulation Act 2015 has also placed more pressure on property standards. If a landlord is served with a notice under the Housing Health and Safety Rating System (HHSRS) which requires the property to be improved or allows the local authority to do work itself then they will not be able to serve a notice under section 21 for the next six months. In addition, if a tenant complains to a landlord in writing about the condition of the property and then complains to the local authority who take enforcement action under the HHSRS then any section 21 notice served on the tenant between their initial written complaint to the landlord and the enforcement activity will be invalid. 

  1. Immigration and the Right to Rent

Landlords in England are obliged to check the immigration status of their tenants. In order to comply with the requirement landlords should carry out checks on all adult tenants prior to granting a tenancy. There is a civil penalty for failing to adhere to the requirement is up to £3,000 per individual who is in a property unlawfully. From December 2016 these penalties will be increased to include prison sentences and unlimited fines.

New provisions in the Immigration Act 2016 came into force on 1 December 2016. These provisions require landlords to evict their tenants if they receive notice from the Secretary of State that the tenant/s do not have the right to rent. These new provisions have resulted in changes to the Section 8 notice served by landlords or their agents under the Housing Act 1988.

  1. How to Rent Guide

In England all tenants must be given a copy of the government published guide “How to Rent: A Checklist for Renting in England”. Where landlords fail to provide the guide they will not be able to serve a valid Section 21 notice. In order to serve a valid notice, the tenant must also have been given a valid Gas Safety certificate and EPC.

  1. HMOs

A HMO is a property occupied by a group of people who do not form one household. The Housing Act 2004 does not require that all HMOs are licensed but where a license is required and not obtained anyone collecting the rent is committing an offence. Local councils can elect to change the licensing requirements in any area and bring it into force retrospectively. Landlords will therefore need to know what the HMOs rules are if any and what needs to be carried out in order to comply with them.

  1. Rent to Rent

Landlords that rent properties to a tenant who elect to sublet the property to other tenants on a room by room basis may not have sought your consent. Rent to Rent tenancies are on the increase with the introduction of companies such as Air B&B. Unfortunately, these tenancies could be a breach of local licensing, headlease, insurance and/or mortgage conditions.

  1. Penalty Notices and Rent Repayment

The Housing and Planning Act 2016 (H&PA) creates new penalty notices of up to £30,000 in respect of all matters which are offences under the Housing Act 2004. This includes all forms of offence relating to HMOs and the HHSRS. In addition, the H&PA widens rent repayment orders allowing the local authority and tenants to recover rent paid without there having been a conviction and also applying them more widely to all Housing Act 2004 offences as well as to unlawful eviction. 

  1. Banning Orders and the Database

In addition to the Electrical Safety legislation the H&PA will also implement Banning Orders and a Database for rogue landlords. Banning Orders are not expected to be in force until October 2017 and it is not clear what offences could lead to landlords being banned. But a Banning Order will prevent a person from being a landlord, acting as a letting or managing agent, or both. The banning order will last for at least 12 months and a breach could lead to a prison term of up to 51 weeks and/or an unlimited fine. Any person who is banned must also be placed on the rogue landlord database for the length of their ban.

Furthermore, if a person has been served with two fixed penalty notices or prosecuted they can be added to the database of rogue landlords. This will allow other local authorities to find out about them and use that information to make decisions about licensing. Addition to the database is for a minimum period of two years. 

The private rental sector is subject to a huge increase in legislation and will continue into the foreseeable future. It is possible that other regulations will be introduced at relatively short notice. Landlords can help guard against being caught out by these changes by using a high quality professional agent who will stay on top of the legislation.

Call us

 

Meet us

 
k

Contact us

 

9

OUR ADDRESS

 

Keyhold Lettings

67 Turney Road

Dulwich

London

SE21 7JB

CONTACTS

 

Tel: +44 (0) 20 7733 4518

Fax: +44 (0) 20 7737 0890

Sue Lightbody – Proprietor

Katy Bowyer – Office Manager

COPYRIGHT 2018 KEYHOLD LIMITED / DESIGNED BY CITYSPACE CREATIVE