LDG TERMS OF BUSINESS FOR LANDLORDS
Our Standard Service includes:
- Advising as to the likely rental income.
- Advertising and marketing the Property.
- Interviewing prospective Tenants and taking up full references, and where necessary, additional security would be requested by means of a guarantor.
- Preparing the Tenancy agreement necessary for the Landlord to gain protection of the relevant Rent and Housing Acts, and renewing the agreement where necessary at the end of the tenancy term.
- Taking a Holding Deposit from the prospective Tenant, dealing with this deposit under the requirements of Tenancy Deposit Scheme until the end of the tenancy when the Property and contents have been checked for unfair wear and tear and handling any termination issues with the tenancy deposit scheme provider.
- Collecting the rent and paying over to the Landlord (normally sent within 10 days of collection) less any fees or expenses due or incurred for the period. Payments will be made by direct bank transfer and a detailed rent statement will be forwarded to the Landlord.
- Arranging with service companies (principally electricity gas & water) for meter readings and advising them of the transfer of service contracts to the tenant at the beginning of each tenancy.
- Regular inspections of the Property are undertaken. Responsibility for and management of empty property is not normally included, and will only be carried out by special arrangement agreed in writing between the Landlord and the Agent.
- Co-ordination of repair or maintenance including arranging for tradespeople to attend the Property and obtaining estimates where necessary, supervising works and settling accounts from rents received.
- Making payments on behalf of the Landlord from rents received for costs in managing the property.
- Carrying out a full property inspection and inventory check at the end of the tenancy and, if necessary, preparing and agreeing schedule of costs relating to any damage or unfair wear and tear prior to releasing the deposit.
- Collecting and forwarding Landlord’s mail.
Additional items and other expenses will be charged according to the scale of fees defined below
The Landlord agrees to provide the property in good and lettable condition and that the Property, beds, sofas and all other soft furnishings conform to the current Fire and Furnishings (fire) (safety) Regulations 1988 (as amended) by the Furniture and Furnishings (fire) (Safety) Regulations 1993. The Landlord agrees to make the Agent aware of any ongoing maintenance problems.
For expenditure in excess of the agreed expenditure limits, the Agent would normally request authorisation in advance, although it is agreed that in an emergency or for reasons of contractual or legal necessity where reasonable endeavours have been made to contact the Landlord, the Agent may reasonably exceed the limits specified. By law, it is necessary to carry out an annual inspection of any gas appliance. The Agent will carry this out on the landlord’s behalf and expense and administer the necessary inspection and maintenance records. The reasonable costs involved will be debited to the landlord’s account.
Where the Agent is required to co-ordinate repair and maintenance work on behalf of the Landlord, the Agent will not be responsible for any negligence, damage, or breach of contract by any contractor employed in this way.
When letting property and collecting rents for non-UK resident landlords (NRL), the Agent is obliged by Income and Corporation Taxes Act 1988 and the Taxation of Income from Land (Non-Residents) Regulations 1995 to deduct tax (at the basic tax rate) to cover any tax liability, unless the landlord has been authorised in writing by HM Revenue and Customs (HMRC) to receive rent gross. In this situation, the Agent also requests that the Landlord appoints an accountant or reserves the Agent the right to employ a suitably qualified accountant in order to manage correspondence with the Inland Revenue. A standard annual charge will be made for this work and the Agent may charge reasonable administration expenses for further work requested by the Landlord, the Landlord’s accountant or the HMRC in connection with such tax liabilities. In many cases, landlord’s tax liability is minimal when all allowable costs are deducted.
Payment of Council tax will normally be the responsibility of the tenants in the Property. However, landlords should be aware that where a property is empty, let as holiday accommodation, or let as a house in multiple occupation (HMO) responsibility for payment of council tax then rests with the owner of the property.
The Agent will take meter readings whenever possible at each change of occupation in the Property and where necessary, inform the service companies (electricity, gas and water) of these readings and change of occupation. In many cases, the service companies (e.g. BT) require that the new occupiers formally request and authorise the service and it is not possible for the Agent to do this on the tenant’s or Landlord’s behalf. Regarding mail, Landlords should take care to inform all parties (e.g. Banks, clubs, societies etc.) of their new address; it is not always possible to rely on tenants to forward mail
The deposit protection schemes established under the terms of Housing Act 2004 require that all Landlords need to be protected by good inventory and condition reports from the outset. The Agent will instruct an inventory clerk to prepare an inventory for the property and a charge will be made for this depending on the size of the Inventory and the property. The standard inventory will include all removable items in the Property (Except those of negligible value) plus carpets, paintwork, wall coverings, curtains, mirrors, sanitary ware and other articles that in the opinion of the Agent, need regular checking. Landlords should not leave any articles of exceptional value in the property without prior arrangement with the Agent. The standard inventory service will include a full schedule of condition (Condition, colour & decoration of ceilings, walls, door fittings etc). Evidence of condition or damage (i.e. photography) will be prepared as required, or at the Landlord’s request, and will be charged accordingly.
The Standard Management Service includes the preparation of a Tenancy Agreement in the Agent’s standard form(s) and provision of a copy of this agreement to a designated advisor or building society. Should the Landlord, advisors or mortgagees require amendment of the contract or require the Agent to enter into further work or correspondence, a fee for this extra work may be requested (or The Landlord may have the tenancy agreement amended by your own adviser at your own expense). It is agreed that the Agent, where authorised, may sign the tenancy agreement(s) on behalf of the Landlord.
The Agent cannot accept responsibility in relation to their standard form of Tenancy Agreement or other agreements in respect of “security of tenure” that may be conferred on or attached to any Tenant or any other person and excludes all liability in respect thereof. The Landlord should seek independent legal advice in this respect.
The Agent will, as necessary, serve the usual legal notices on the tenant(s) in order to terminate the tenancy, increase the rent, or for any other purpose that supports the good management of the property, or the timely return of the deposit at the end of the tenancy.
SECTION 48 LANDLORD AND TENANT ACT 1987
In accordance with Section 48 of the Landlord and Tenant act 1987, the Landlord must provide an address in England or Wales where Notice of Issue of Proceedings may be served upon them by the Tenant. Please note that the rent is not legally due to the Landlord unless this requirement of the Act is satisfied.
A reservation fee is taken from a Tenant applying to rent a Property. The purpose of this fee is to verify the Tenant’s serious intent to proceed, and to protect the Agent against any administrative expenses (taking out bank references, conducting viewings, re-advertising) that may be incurred should the tenant decide to withdraw the application. The reservation fee does not protect the Landlord against loss of rent due to the tenant deciding to withdraw, or references providing unsuitable. Landlords should notify the Agent where they wish a larger security fee to be carried to protect against loss of rent, or insurance undertaken. This fee is not a deposit until it is transferred to the establishment of the tenancy
Deposits: Upon signing the tenancy agreement, The Agent will take a dilapidations deposit from the tenant(s) in addition to any rents due. The purpose of the dilapidations deposit is to protect the Landlord against loss of rent or damage to the Property during the Tenancy itself. This deposit will be kept in a separate and secure client account ready for refunding (less any charges due) at the end of the tenancy, subject to 12.4 to 12.8 below
Statutory Tenancy Deposit Protection: Where the tenancy is an assured Shorthold tenancy, the Landlord or Agent is legally required to ensure that any tenancy deposit taken under the tenancy is protected within one of three statutory tenancy deposit schemes within 14 days of receipt.
Tenancy Deposit Information: Where statutory tenancy deposit protection applies to a tenancy deposit, the Agent will provide to the tenant within 14 days the following information required from the Landlord by the Housing Act 2004:-
- information on the particular scheme under which the tenancy deposit is protected;
- compliance by the Landlord with his obligations under the Act and
- Prescribed information for the tenant.
At the end of the tenancy covered by the Tenancy Deposit Scheme
- If there is no dispute the Agent will keep any amounts agreed as deductions where expenditure has been incurred on behalf of the Landlord, or repay the whole or the balance of the Deposit according to the conditions of the Tenancy Agreement with the Landlord and the Tenant. Payment of the Deposit will be made within 10 working days of written consent from both parties.
- If, after 10 working days* following notification of a dispute to the Agent and reasonable attempts having been made in that time to resolve any differences of opinion, there remains an unresolved dispute between the Landlord and the Tenant over the allocation of the Deposit it will be submitted to the ICE for adjudication (subject to 3 below). All parties agree to co-operate with any adjudication.
- When the amount in dispute is over £5,000 the Landlord and the Tenant will agree by signing the Tenancy Agreement to submit the dispute to formal arbitration through the engagement of an arbitrator appointed by the ICE although, with the written consent of both parties, the ICE may at his discretion accept the dispute for adjudication. The appointment of an arbitrator will incur an administration fee, to be fixed by the Board of The Dispute Service Ltd from time to time, shared equally between the Landlord and the Tenant. The liability for any subsequent costs will be dependent upon the award made by the arbitrator.
- The statutory rights of either the Landlord or the Tenant(s) to take legal action against the other party remain unaffected.
- It is not compulsory for the parties to refer the dispute to the ICE for adjudication. The parties may, if either party chooses to do so, seek the decision of the Court. However, this process may take longer and may incur further costs. Because it is a condition of the Tenancy Agreement signed by both parties, judges may refer the dispute back to the ICE for adjudication. If the parties do agree that the dispute should be resolved by the ICE, they must accept the decision of the ICE as final and binding.
- If there is a dispute The agent must remit to The Dispute Service Ltd the full deposit, less any amounts already agreed by the parties and paid over to them. This must be done within 10 working days of being told that a dispute has been registered whether or not you or we want to contest it. Failure to do so will not delay the adjudication but The Dispute Service Ltd will take appropriate action to recover the deposit and discipline the agent.
- The Agent must co-operate with the ICE in the adjudication of the dispute and follow any recommendations concerning the method of the resolution of the dispute.
* These time scales can be changed by agreement with the tenant in individual cases or by the contract used as standard by the agent.
Where the agent allows the landlord to hold the deposit outside TDS
1. If the Landlord decides to hold the Deposit themselves, we will transfer it to you within 5 days of receiving it. The Landlord must then register it with another Tenancy Deposit Protection Scheme within a further 9 days if the Tenancy is an Assured Shorthold Tenancy. If you fail to do so the Tenant can take legal action against the Landlord in the County Court. The Court will make an order stating that you/the Landlord must pay the Deposit back to the Tenant or lodge it with the custodial scheme which is known as the Deposit Protection Service. In addition a further order will be made requiring the Landlord to pay compensation to the Tenant of an amount equal to three times the Deposit. The Landlord will be unable to serve a Section 21 Notice on your Tenant until compliance with the above conditions and the Court will not grant the Landlord a possession order. The Agent has no liability for any loss suffered if the Landlord fails to comply.
2. If the Landlord decides to hold the Deposit and the Tenancy is an Assured Shorthold Tenancy the Landlord must specify to the Agent prior to the start of the Tenancy under which other Tenancy Deposit Protection Scheme the Deposit will be covered. If the Deposit is covered by Tenancy Deposit Solutions the Landlord must provide proof of membership, together with a copy of the insurance policy before the Deposit can be released. If the Deposit is to be sent to the custodial scheme known as the Deposit Protection Service (DPS) the Agent will forward the Deposit to the DPS and register the details of the Tenancy on the Landlord’s behalf or give the Landlord a cheque for the amount of the Deposit made payable to the DPS for the Landlord to forward within nine days.
More information on the requirements of the deposit protection schemes are available on the following web site(s) and landlords are strongly urged to familiarize themselves with their legal responsibilities.
Under the Standard Management Service, the Agent will normally carry out inspections quarterly starting after the first month. Such inspections do not constitute a formal survey of the Property, and it is not the intention to check every item of the inventory at this stage. The inspection is concerned with verifying the good order of the tenancy (i.e. house being used in “tenant-like” manner) and the general condition of the Property. This would normally include inspecting the main items (carpets, walls, cooker, main living areas and gardens.) Where these were felt to be unsatisfactory, a more detailed inspection would generally be made.
Following the departure of tenants, a final inspection of the Property is carried out by the Agent / Inventory Clerk. Testing of all electrical appliances, heating system and plumbing is not feasible during this inspection; a qualified contractor should be appointed for this purpose should it be required by the Landlord. Any deficiencies or dilapidations would normally be submitted to the Landlord (and, if appropriate, to the relevant tenancy deposit scheme administrator) together with any recommended deductions or replacements values.
TENANCY DEPOSIT DISPUTES
The Agent will attempt, by negotiation, to resolve any deposit disputes between the Landlord and the tenant. Where the deposit is subject to statutory tenancy deposit protection, and a dispute cannot be resolve between the parties, then it will be necessary to submit the claim to the tenancy deposit administrator for adjudication under an alternative dispute resolution (ADR) process. (See clause 12.6 above) An estimate of the likely costs of preparing and submitting the claim to adjudication will be submitted to the Landlord before any case is started.
The Landlord authorises the Agent to make appropriate deductions from the rental income in the last two months of the tenancy to provide a maintenance fund from which any cleaning, repair or other cost can be disbursed at the end of the tenancy
The letting of property is now closely regulated with respect to consumer safety. The law makes particular demands regarding the safety, servicing and inspection of the gas and electric appliances and installations within a property, and with respect to the safety of furniture and soft furnishings provided. The following regulations apply:
– From 1st October 2008, all rental properties with a new tenancy in England and Wales will be required to have an Energy Performance Certificate (EPC).
– Furniture and Furnishings (Fire) (Safety) Regulations 1988
– General Product Safety Regulations 1994
– Gas Safety (Installation and Use) Regulations 1998
– Electrical Equipment (Safety) Regulations 1994
– Plugs and Sockets (Safety) Regulations 1994
The Landlord confirms that they are aware of these obligations and that the Agent has provided sufficient information in the form of explanatory leaflets accompanying this agreement to assist with compliance. It is agreed that the Landlord shall ensure that the property is made available for letting in a safe condition and in compliance with above regulations. The Agent shall ensure that all relevant equipment is checked at the beginning of the tenancy or during the tenancy as required. The Landlord agrees to repay the Agent costs in incurring any reasonable expenses or penalties that may be suffered as a result of non-compliance of the property to fire and appliance safety standards.
The Agent requests as part of the Tenancy Agreement that Tenant’s ensure the property is professionally cleaned, including all curtains, carpets and bed linen (where applicable) prior to handing back the property at the end of the tenancy. Therefore, it is necessary for the Landlord to ensure the property is handed to the Tenant at the commencement of any tenancy having been professionally cleaned including all curtains, carpets and bed linen (where applicable) if required. The Agent reserves the right to instruct professional cleaners (at the Landlord’s expense) if in the Agents opinion the property is not in a suitable state of cleanliness for a Tenant to take occupation. All machines, appliances and heating & water systems should be in good working order and recently serviced, with all instruction manuals being left in the property (to be included on the Inventory).
It is agreed that any instructions to the Agent from the Landlord regarding termination, proceedings, major repairs, payment, or other significant details regarding the letting be confirmed to the Agent in writing
VALUE ADDED TAX:
Our fees are stated do not include VAT which should be added to the fee at the appropriate rate
The Landlord shall be responsible for the property being adequately insured and that the insurance policy covers the situation where the property is let. The Agent would normally be responsible for the administration of any claims arising during the period of management where the property is being managed (i.e. this only applies to properties under the full “Standard Management Service“) and subject to an additional charge for major works (see “Maintenance”).
Any delays of payment or other defaults will be acted on by the Agent in the first instance. Where the Agent has been unsuccessful in these initial actions, or there are significant rent arrears or breaches of the tenancy agreement, the Landlord will be advised accordingly. A solicitor may then be appointed and instructed by the Landlord (except where the Agent in unable, after taking reasonable efforts, to contact the landlord. In the event the Agent is authorised to instruct a solicitor on the Landlord’s behalf). The landlord is responsible for payment of all legal fees and any related costs.
LETTING ONLY SERVICE
Where the Landlord does not wish the Agent to undertake the full management, (the Standard Management Service), the Agent can provide a LETTING ONLY SERVICE. The Letting Only Service includes only items 1 to 5 of the Standard Management Service as listed above. The Landlord would remain responsible for all other aspects of the letting including the maintenance of the property and any gas and electrical appliances. The Landlord would remain responsible for complying with the deposit protection requirements of the Housing Act 2004 and must provide the Agent with written confirmation of this together with a receipt for the deposit monies received by the Agent on his behalf. The fee for the Letting Service is 10% of the gross rental for the term of the tenancy and will be deducted from monies received by the Agent on the Landlord’s behalf. If the tenant leaves prior the end of the term of the tenancy or prior the end of the break clause, through no fault of the Agent, the landlord shall not be entitle to reimbursement of any fees paid.
LETTING ONLY SERVICE PLUS DEPOSIT PROTECTION
Where the Landlord requires the Agent to deal with his legal responsibilities for the protection of tenancy deposits under the Housing Act 2004 (item 6 of the Standard management Service) then this will be charged in addition to the above Letting Only Service.
LETTING AND RENT COLLECTION SERVICE:
Where the landlord requires the collection of rents and deposit service (item 6 & 7 only of the Standard Management Service as listed above) in addition to the Letting Only Service, then total fees of 10% (of the gross rental income for the term of the tenancy) will be charged and will be deducted from rents collected.
Where, with the consent of the landlord, the tenancy is renewed or extended to the same tenant (or any person associated with the tenant) originally introduced by the Agent, a renewal fee equivalent of 8% of the gross rental for the term shall be payable on the renewal date. The Agent shall prepare the tenancy agreement, if required, for the new or extended tenancy and the terms of this Agreement shall continue until the tenant leaves, or this Agreement is required.
ACCEPTANCE & VARIATION
The terms & conditions of this Agreement may be varied, but only with prior notice.