Virgin Landlord

[lena]

Hi All

I'm about to become a landlord on Friday (flat completion date), and so relieved to find this site and forum.

I've read through many topics, and was hoping that you experts could advise me on a few more. Many thanks in advance.

1. How do I ensure Council Tax doesn't land on my head? I'm going to hopefully rent it out within a month . The property is currently unfurnished. Should I inform the council from day one? Can I inform them of the tenant(s)? What if the tenant doesn't get round to 'signing up' with counicl tax?

2. Similar with Utilities. I'm not going to use any from day 1....ok, maybe a tiny bit of water to wipe down and quick 15 mins hoover. Do I sign up with a supplier, then 'sign out' when I get tenant(s)? I'm anticipating this to be a little hassle with opening and closing accounts in what could possibly be a temporary few weeks.

3. Credit / Reference checks. Would prospective tenants be willing to pay for those credit checks? Do I call and check up all the references they provide? What references do you ask for?

4. Returning Deposit. Sorry about the tenant with naughty landlord. What should be considered fair? Broken wardrobe doors. broken window etc?

Thank you all in advance. Take care.

Lena

[Webb]

1. As soon as you have a tenancy commencement date phone or write to Council to tell them what you're doing. You'll probably eventually get a zero bill for tax. Make it the tenant's responsibility on your agreement to pay their tax.

2. Similarly read all the meters again at commencement date and phone or write to utilities telling them what you're doing and giving the readings, however small. It's up to them whether they bill you, but don't expect to get something for nothing, however little. Make the tenant responsible for their utility contracts on your agreement.

3. Do as much as you can yourself on credit and references. Don't expect the tenant to do it! If you use an agent, he may split his charge between you and tenant. Get a family or parent guarantor if you possibly can. If things go wrong, it will be you who has to do the chasing.

4. Wait and see! Return of the deposit depends on the state when and how the tenant eventually departs. At commencement, mark up an inventory of condition when you show the tenant round. It will give you something to refer back to on departure.

I'm a little surprised no-one's answered this earlier. But you learn by your own experience, some of which can be very tough! Remember that Landlording is not as easy at it seems and be prepared to loose once in a while.

Good luck!

[Trenners]

Hi Lena,

1. As long as the property is "empty and unfurnished" then you can gain upto 6 months exemption for Council Tax (whilst you are looking for your tenant). As soon as you take possession of the property ring the Council Tax Department at your local Council and tell them that the property belongs to you but it is "empty and unfurnished".

The council will send you a Council Tax exemption form to fill in - really easy to do - and they might send a man around as well (to peer through the window) to make sure the property is empty and unfurnished.

If you do _not_ inform the council and gain exemption then you may well be liable for the council tax whilst you search for your tenant.

Once you have found the tenant - ring the council and move the council tax account into the tenants name and make sure your tenancy agreement makes the tenant responsible for paying the council tax.

2. Inform all utility providers (gas, water, electric) that you have taken possession of the property and give them initial meter readings and your own address for billing purposes.

When you find the tenant - read the meters with the tenant and move the utility bills into the tenants name by calling the utility companies. Also ensure that your tenancy agreement makes the tenants responsible for paying all utility bills.

3. I do not charge my tenants for credit referencing. I pay for the references myself once the tenant has given me a "reservation deposit" of £250. If the tenant fails the references I always give them ALL of their reservation deposit money back (because I don't want a bad tenant in my properties).

4) When deciding whether to return all of the tenants deposit back (or not) I would simply recommend being fair and not GREEDY. Remember that the security deposit money belongs to the tenant and not the Landlord.

If you decide to deduct money from the security deposit to make good damage caused by the tenant then you should provide an itemised statement of deduction and also produce all receipts etc .

Hope that helps .....

Mark

[lena]

Thank you Mark and Webb for your replies. xx

I was beginning to think that nobody cares.

I have got on to the council for exemption. Hope they'll get back to me soon with the ok.

Will get on to the utilities this evening.

Flat's been available since Friday 28th July. Still no calls from adverts. Am I worrying for nothing?

Corgi man's given the gas etc all clear. Phew! But Electrics man needs to modernise fuse box (otherwise the existing electric shower will be illegal). How did the previous landlord (who was letting this flat) get away with that? Hummphh!

I'm hoping that I can claim that back in April.

[Melboy]

Time to be concerned about no response will be the 28th August

A lot of Newbie Landlords always forget to factor in the 'no Tenant' periods that are bound to occur from time to time.

If you can find a decent Agent you might have to bring them in to find you a Tenant.

[Trenners]

Hi Lena,

August is a bad month for finding tenants (as they are all away on holiday). Has no-one responded to your advertisement ? If so - why might this be ?

Is the property in a bad location, is the rent to high ?

Tenants look for property based on location. An advert such as the example below might have more impact.

LOCATION, Property description, Furnished or Unfurnished, Rent, Call the landlord DIRECT on xxxxxxx

eg: SOUTH CERNEY, BEVERSTONE ROAD, 2 Bed Semi, Immaculate, Laminate flooring, u/f, £495pcm, Call the landlord direct on xxxxxxxxxxxx

When you get a response ask why the prospect wants to live in South Cerney, ask whether they know where Beverstone Road is, tell them to go an check out the location before you waste your time showing them around the property, give them the property number so that they can look at it from outside .....

Assuming the property is well presented (fresh paint, nice flooring etc) then as soon as you actually show someone around the property you have got a good chance of "closing them".

Hope that helps ...

Mark

[Melboy]

I like South Cerney

[lena]

Thanks again guys for the advice.

I've had one showing so far. And one more tonight. But that's it. Sigh!

Ok, I'll start panicking end of month....maybe auction to highest bidder

I've got another problem which I didn't mention before. Maybe I should start another thread on this.

You see, the landlord (the freeholder) of this block of flats has left the common stairs quite scruffy. The carpet, walls, one broken pane of glass and woodwork. I've questioned them just before 'completion' via my solicitor..but still no reply. The common areas were supposed to have been decorated a year ago (seller's documents prove that).

Also, in the last week, one of the residents have dumped a shopping trolley and old furniture on common path. AAArrgghh!!!

Right now, I'm just tempted to decorate and clear it all up myself. For the sake of my business. It doesn't cost much to put right. Should I just write to them and say that I'll do it. I'm tempted to just do it, and bet they won't even realise. I just don't want to delay the decoration because of toing and froing with the landlord. And I definitely want the landlord to write to all residents about rubbish dumping.

Does anyone know how I should phrase my letter strongly?

Thank you guys. xx

[Melboy]

If it means getting a Tenant in I would clear all the rubbish away and paint where necessary.

If it looks rough on an initial viewing any potential Tenant will walk away quicker than that.......plenty more Flats for them to choose.

Mel.

[lena]

Thank you for speedy reply Melboy.

You're right. Think about getting the tenants. I'm probably worrying too much about nothing.

I totally agree. I would do it right away. Just a little worried that the main landlord might tell me to put back the skanky carpet or moan about my choice of carpet.

I've just spent the last 4 hours drafting the letter.

Please put me out of my misery....Cyanide anyone??

Lena xx

[Trenners]

Hi Lena,

I disagree - on this very rare occasion !! - with Melboy.

I think you need to tread very careful with regard to the re-decoration of the communal hallway as the communal hallway almost certainly does not belong to you but is owned / shared by all of the leaseholders.

If you change the decoration in the communal hallway without the permission of the other leaseholders then you could be deemed in breach of the lease.

Also have you asked the freeholder for "permission to let". Have you reviewed your lease to check whether you need to do this or not?

Finally, I am also concerned about you removing the rubbish as "one mans rubbish is another mans treasure". If you do remove it then do not throw it away as someone may later claim that "the rubbish" is "their possessions".

Hope that helps ....

Mark

[Melboy]

That's OK Trenners......Your Right!

You can have the Shopping Trolley and Old Furniture! I know when to quit when the bidding gets too high!

I think lena was only going to slap a coat of Magnolia around the entrance hall to her rental flat........not to re-decorate the whole stairway over 4 floors.

[lena]

Thank you Trenners and Melboy.

The first viewers (I did like them. But do 1st impressions count?) have 'made an offer' this morning - 50 squid less per month. I've accepted but await references and deposit. They've to give month's notice (which sounds like proper tenants to me).

No, I've not received reply from the main landlord about letting. I'd asked my conveyance solicitor to write them (but am now wondering whether he did!!!) before completion.

I THINK it'll be alright. I am basing this only as the lease agreement says '....not to use the flat nor permit the same to be used for any purpose whatsoever other than as a private dwellinghouse in the occupation of one family only nor for any purpose from which a nuisance can arise to other owners lessees....'

However, I think I will send a letter to the them anyhow. The gist of it :

1. ...any objections to letting (too late now really isn't it?)

2. ...decoration (for the landlord to verify the state of it and compensation for me to do it right away)

3. ...rubbish (that I will clear it as gesture of goodwill but for landlord to write warning letter to all residents and attach quotation of how much removal would cost to all)

Another thing. Should I bother with insurance? The main lanlord has buildings insurance (which I will pay towards my share yearly). I have no furniture in it, unless you count curtain poles, laminate floor etc. The only thing I really worry about is if the plumbing fails or water leaks to downstairs neighbour and they claim for redecoration costs. What I'm trying to say is....I don't need building insurance. But contents insurance doesn't cover anything like that or do they? It seems to be all about accidental damage to carpet, droping your tele, or losing frozen food!

What do you think? I know...it seems to me - too much too late. What can I say, I'm so inexperienced. I'm only doing this to sell the flat at retirement so that I can pay off the mortgage on my home.

Thank you all. I really appreciate you guys - fountain of knowledge - and sharing your views with me.

[Melboy]

Noted your comments.

Try and see the Tenant's Landlord on a face to face meeting to obtain a reference as to how good they are or are going to be.

Failing that an address to post to for a reference.

A landline phone number of the Landlord if possible.

Lastly a mobile number which, hopefully, will be the Landlords and not one of their Mates!

[lena]

Thank you Melboy.

Will work hard on checking the references thoroughly.

Any comments about the other things?

Ta. Lena

[Trenners]

Hi Lena,

I think that 1st impressions do count. It is important to get the tenants to make a, small, financial commitment now before you spend loads of time chasing references only for the tenants to change their mind "at the last minute".

I ask my tenants to pay a £200 "holding deposit" which is fully refundable if we change our minds (because we don't like their references etc) but we reserve the right to deduct our costs if the tenant does not proceed and take a tenancy from us by an agreed date.

I agree with Melboy - follow up all references personally - also try and get a character reference (someone who has known them for years but is not related to them).

I do think you need to clarify whether you are allowed to sublet or not. You could get yourself into "hot water" with the leaseholder if you sublet without permission. You need to get this sorted before you sign any tenancy agreements.

Regarding insurance, I would have thought that the common building insurance would cover damage caused to other flats (eg: by water leaking from your flat) as this is a very common situation in blocks of flats. Ask the leaseholder for a copy of the buildings insurance policy and check what the excess payment is.

I would tell the tenants that they are responsible for their own contents insurance.

If you need any sample forms for the "holding deposit" or for "tenancy application" - let me know and I will send them to you via email

Mark

[lena]

Thank you Mark.

I AM the leaseholder. There is a freeholder, the head landlord that owns the building. Does that technically mean I'm sub-letting?

I knew it! Should have bought a house instead....only because I can't afford anything more than a one bedroom flat.

Thank you again.

Lena

[Trenners]

Hi Lena,

To clarify, if you are going to let your flat out to tenants then you are sub-letting and, depending on the wording in the lease, you will almost certainly need to gain some form of permission from the freeholder.

The freeholder may not grant permission, may restrict the types of tenants (eg: no DSS, students), may restrict the types of tenancy (eg: no holiday lets, no sharers) and may also CHARGE you for their permission every time the tenants change.

In addition, the lease might insist that you use a nominated letting agent <yuk>.

For information - this situation doesn't really change even if you own a _share_ of the freehold as the management company (that manages the freehold) will also have the right to restrict the types of tenant / tenancy that can be established.

At the end of the day the freeholder is trying to ensure that all leaseholders have "quiet enjoyment" of their properties. Perhaps not the advice you were looking for .... but you should check with your freeholder ASAP.

Mark

[lena]

Thank you again Mark.

Sigh! One thing after another.

Will send that letter I'd drafted about permission and decoration after I've attached photos tonight.

Sigh, sigh, sigh...

Thank you again.