For the tenant, it is much simpler to rent
than to buy, a contributory factor to the steady growth in the Private Rented Sector; and
the agent does most of the work for the landlord too. That is why the letting agent’s
job is so complex. It is not just a matter of finding a property that appeals to the
personal taste of one buyer.
For the tenant, the agent has to find an
instant home, usually at short notice, that will be pleasant to live in and in good
working order.
For the landlord, the agent is the guard
dog, helping to protect an expensive asset by finding suitable tenants who will enjoy and
care for the property, by managing the maintenance and repairs and by producing the income
stream the owner requires.
To attract good covenant tenants the agent
needs to be well-established in the area with a strong local reputation. It is this
reputation - for professionalism, membership of ARLA with its requirements for
qualified staff, client
accounting and indemnity cover leading to fidelity bonding - that brings in the
instructions from the property owners - and that is what attracts the tenants.
After a tenant’s offer has been
accepted, the letting agent is responsible for taking up references and making credit
checks before preparing to change the utility accounts and drawing up the Tenancy
Agreement.
It all begins with references, credit
references from the bank or building society and personal references from the employer
and, if applicable, from a previous landlord. These personal references are very
important. There’s a total stranger about to move into the property. Some clues to
character are needed to match with the agent’s own experienced assessment of the
applicant. For the self-employed, references are expected from an accountant or solicitor.
Then, an inventory and condition report must
be made. In this report, the entire contents of the property will be noted down, along
with the condition of the carpets, curtains, furniture, wallpaper and paintwork. Both the
tenant and the landlord, or their representatives should be present when this inventory
report is compiled, and then they should sign each others’ copies. It will be the
basis for checking that the contents and the condition of the property at the end of the
tenancy are the same as they were at the start.
The legal process is fair and equitable to
both landlord and tenant, everyone will know where they stand. Virtually every let
nowadays is arranged as an Assured Shorthold Tenancy, unless the property has a rental
value of more than £25,000 a year. An Assured Shorthold is for a minimum of six months;
and, more often than not, these tenancy agreements run for a year. They can contain
options to renew but the initial length of the tenancy will have been agreed at the
outset. So will the rent payable, with it being stipulated in advance that when the
agreement is for more than a year, or if there is an option to renew, the rent will be
increased, probably annually and in line with any upward movement in the Retail Prices
Index.
So, in short, the landlord and the tenant
can be confident of the precise rental term and cost; and, with a properly drawn-up
Tenancy Agreement, of the Dos and Don’ts.
These Dos and Don’ts will be included
in a Tenancy Agreement produced by the experienced agent; but the first Don’t is
don’t expect to find them catered for in an off-the shelf agreement form bought from
HMSO or from law stationers. The agent’s own Tenancy Agreement will be the product of
experience, local market conditions and the constantly revised and up-dated advice of
specialist lawyers, selected for being properly versed in residential property law.
As well as including the length and cost of
the tenancy the deposit and the responsibilities of the tenant, an agent’s own
Agreement will certainly detail many other matters important to each individual property.
The Agreement will cover pets (and the agent may well have demanded pet references),
children and specific responsibilities like looking after common parts or the garden, even
down to feeding the goldfish in the pond. It’s all there in black and white and both
parties must read it carefully before signing.
The agent will notify the mortgage lender of
the new let and its terms and change the utility accounts as bills from the electricity,
gas, water and telephone companies and for Council Tax become the responsibility of the
tenant. Then, once the cheque for the deposit (usually the equivalent of a month to six
weeks rent) together with the amount for the first rental period has been cleared - AND NOT BEFORE, the keys are handed over and the
tenant can move in.
During the term of the tenancy the letting
agent will collect the rent, attend to day-to-day maintenance and repair as requested by
the tenant and required under the terms of the Tenancy Agreement, alert the owner of major
problems needing attention, account to him for costs incurred and pay over all balances
due. Periodic but regular inspection visits are made to check that all is well with the
property and that the tenant is happy - for a contented tenant is the best tenant.
Finally, at the end of the tenancy, the
inventory and condition is checked against the signed report, deposit monies returned, or
allocated against missing or damaged items, and the utility accounts returned into the
owners name.
Then the whole process starts again,
hopefully with the property only vacant for a very short time. In a well drawn-up Tenancy
Agreement there is always a clause to allow the agent to start showing the property to
prospective new tenants before the existing tenancy has run its course.
