Why Tenancy Agreements are Important to Tamworth Landlords

Yes, It is possible to create a tenancy without actually signing a tenancy agreement but who is crazy enough to do that?

Well you would be surprised –  Recently I  have been contacted twice by landlords who allowed tenants to move into their properties without having a tenancy agreement in place.

One of the landlords I am afraid to say does not want me to mention his case in my blog, apparently he is the butt of his friends jokes over his little issue. I have given him my advice and the rest is now up to him!Spit Handshake

The other landlord contacted me when his tenants failed to pay the deposit and rent. He allowed this “lovely” couple to take the keys and move in with the promise of paying the monies owed when they got paid, two days later.

When monies were not forthcoming and the landlord chased, he was told, this “lovely” couple were going to pay their rent in arrears and they knew nothing about any agreement to pay a deposit.

So we now have a frustrated landlord asking  “Can they pay their rent in arrears and what about the deposit?

Yes, they can, unfortunatley.

Under common law, rent is payable in arrears unless there is a tenancy agreement in place and the agreement states rent is payable in advance.

With regards to the deposit, the landlord has no recourse, where is the proof.

By using a properly drafted tenancy agreement Landlords go a long way to protecting their position. It is unwise to add and remove clauses without legal advice  as they can be classed as unfair terms .

For example a clause will normally be unfair if it takes away a right which a tenant would normally have in law.

If you want to prohibit something a tenant would normally be able to do, such as re-decorate the property, your clause must contain wording providing for the tenant to request permission to do whatever they are wanting to do and must state that “the permission will not be unreasonably refused”.

Countless landlords have invalidated their pets clauses by removing this wording on the basis that “no pets allowed in this property under any circumstances”.

A tenant can request permission for something but it does not mean that you have got to agree to it. It may be reasonable to refuse your permissionm, that is your right as a Landlord. But if you deny tenants the chance to request permission – this will invalidate the clause, meaning that there is nothing to stop them keeping whatever pets they like.

Tenancy agreements need to be fair and written in plain English, they can include clauses to protect the landlord’s position. i.e. –

Notifying tenants that you will provide their details to utilities if they default on payment. You should also note down that you may also use tracing agents if they leave owing you money.

Everyone living in the property, including all children are named in the tenancy agreement and there should be a clause saying that no one else is allowed to live in the property.

Remember doing business on spit and a hand shake is no longer good practice 🙁

until next week.

Landlords, would you like a second opinion on a potential Buy-to-Let property or do you have nagging concerns – please feel free to contact us on 01827 425195 or 07531484956.We are here to help you on your property journey.

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Tamworth Landlords Legislation for 2018 – Day 3

The news is currently full of government legislation for renting out residential properties and raising standards.

Day 3  – Energy Performance Certificates 

From 1st April 2018 there are minimum energy level regulations (MEES), any building which is to be rented on a new tenancy or a renewal, must have a minimum energy rating of “E”.

Energy performance certificate
EPC

Furthermore from 1 April 2020, the minimum level “E” applies to all tenancies, including existing.

There are a number of exemptions available and if one of those exemptions apply, the property must be registered on the National PRS Exemptions Register.

All residential properties require an EPC certificate if they are being sold or let, if you need one completed, please get in touch.

Hall and Thompson are still conducting viewings and letting properties. Please phone 01827 425195 if you are looking for a property. Almost fully booked for today but still have availability for tomorrow.

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Ask Lorraine – Can I sell my Tamworth Buy-to-let with a sitting tenant?

Ask Lorraine  – Due to changes in my circumstances, I have decided to sell one of my Tamworth properties. Is there any way of selling with the tenants in situ. They are lovely tenants  who have been renting from me for a number of years,  I would like to ensure they are looked after.

Will other landlords buy tenanted properties or must I sell the house with vacant possession?

Many Thanks  Rodney

Tamworth
Tamworth

Lorraine’s Answer – Hello Rodney

I understand you are trying to do the decent thing by your tenants but you do not owe them anything.

There are many landlords who would welcome buying a property with a good solid tenant  in situ. Generally good, long term tenants are an asset to a sale, rather than a problem.

How about offering a financial incentive for the tenants to help you sell for the best price possible?

Whatever route you decide to go down, the new landlord is duty bound by your Tenancy Agreement until the end of its term, so please ensure that your tenants are made aware of this fact.

If your tenants become jittery with the idea of you selling and  a new unknown Landlord, why not let them leave without giving their full notice. At least this way you will have vacant possession.

Until next week

If you want to learn about the Tamworth Property Market , one source for information is the Tamworth Property Blog authored by yours truly at https://www.tamworthpropertyblog.co.uk

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Ask Lorraine – I’m renting to my cousin surely I don’t need to complete The Right to Rent Checks?

ASK Lorraine:
“Hello Lorraine,
I’m a Tamworth Landlord, manage my own property portfolio and have done so for a number of years.  My question is, these recent guidelines that I read about called  ‘Right to Rent check’ –  must I now do this for any new tenant, is this compulsory? Why I’m asking is that I’m considering renting out a property to my cousin. Surely the Right to Rent check does not include family and friends.
Thanks
Alan”
Lorraine’s Answer:
Hi Alan,
The Right to Rent checks were introduced to Tamworth as of 1st February 2016. It’s part of the Immigration Act 2014 which is to ensure that no Landlord or agent permits any adult to occupy a dwelling unless they have a ‘Right to Rent’ in the UK.
The responsibility for these checks has been passed down from the Home Office to the Landlord or agent acting on behalf of a Landlord. Checks MUST be carried out prior to the start of the tenancy. All adults must be checked regardless of nationality,ethnicity or blood group, so even though you are looking to rent to your Cousin you should keep on file a copy of his/her passport. Under age children do not need checking, you should verify their age and keep a note on file. All pertaining  paperwork should be retained on file for as long as required. 
It is a criminal offence if you are seen to be making exceptions to the checking process i.e people who appear to be English.  So if you make it statutory as part of your business process to check every man and his dog,  you will not fall foul of the law.
Passport
So who has the right to rent?

 

 

1/A British citizen.
2/A European Economic Area (EEA) or Swiss national.
3/Has a right to rent in the UK e.g has a valid visa which expires after the proposed tenancy end date.
There are a number of documents which can be used to check the Right to Rent, the usual ones being passports, identity cards and visas, for more information and a full list , check out the governments website.

Should you not feel confident to carry out  the checks yourself, there are many referencing companies who will complete these checks on your behalf.

If you have any further questions, feel free to drop me an email or give me a call. Email me on lorraine@hallandthompson.co.uk or  call on 07531484956.
Don’t forget to visit the links below to view back dated deals and Tamworth Property News.
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Tamworth Buy-To-Let Predictions up to 2037

On several occasions over the last few months, in my Tamworth Property Blog, I predicted that the rate of rental inflation (i.e. how much rents are rising by) had eased over the last year. At the same time I felt that in some parts of the UK rents had actually dropped for the first time in over eight years. Recent research backs up this prediction.

Rents in Tamworth for new tenancies only grew by 0.4% in the last 12 months (i.e. not existing tenants experiencing rental increases from their existing landlord). When we compare that current rate with the historical rental inflation in Tamworth, an interesting pattern emerges ..

  • 2016 – Rental Inflation in Tamworth was 2.2%
  • 2015 – Rental Inflation in Tamworth was 6.9%
  • 2014 – Rental Inflation in Tamworth was 0.7%

The reason behind this change depends on which side of the demand/supply equation you are looking from. On the demand side (from the tenants point of view) there is the uncertainty of Brexit and the fact that salaries are not keeping up with inflation for the first time in three years. Critically this means tenants have less disposable income to pay their rent. As an aside, it is interesting to note that nationally, rent accounts for 29% of a tenant’s take home pay (Denton House).

On the supply side of the equation (landlords point of view) Brexit also creates uncertainty. However, the biggest issue was a massive upsurge of new rental properties coming on to the market in late 2016, caused by George Osborne’s new 3% stamp duty tax for landlords in the first part of 2016. This meant a lot of new rental properties were ‘dropped’ on to the rental market all at the same time. The greater choice of rental properties for tenants curtailed rental growth/inflation. A slight softening of Tamworth property prices has compounded this.  Figures from The Bank of England suggested that first time buyers rose over the last 12 months as some were more inclined to buy instead of rent. Together, these factors played a part in the ongoing moderation of rental growth.

The lead up to the General Election in May didn’t help: after all people don’t like doubt and uncertainty. So now that we have a mandate for going forward over the next 5 years hopefully that has removed any stumbling blocks stopping tenants making the decision to move home.

Whether it be ‘hard’ or ‘soft’ Brexit negotiations (and with the Election result the Tory’s might have to be ‘softer’ on those negotiations) the simple fact is, we aren’t building enough properties for us to live in. Both in Tamworth, the West Midlands and the wider UK, long-term population trends imply that rents will soon be growing faster than inflation again. Look at the projections by the Office of National Statistics.

Population Estimates for Tamworth Borough Council over the next 20 years
2016 (actual) 2021 2026 2031 2036
77,313 77,993 78,616 79,030 79,428
Population estimates for the Tamworth council area over the next 20 years
Population estimates for the Tamworth council area over the next 20 years.

Tenants will still require a vibrant and growing rental sector to deliver them housing options in a timely manner. As the population grows in Tamworth, and wider afield, any restriction to the supply of rental properties (brought about by poor returns for landlords) cannot be in the long-term best interest of tenants. Simply put rents must go up!

The fact is that I see this as a short-term blip and rents will continue to grow in the coming years. With rents only accounting for 29% of a tenants’ disposable income, the ability for most tenants to absorb a rent increase does exist.

Don’t Forget you can keep up to date with all our articles on the Tamworth property Market here.   https://www.tamworthpropertyblog.co.uk

Whatever property type you are thinking of adding to your portfolio next year I am sure it will let readily as the market remains strong with a lack of supply continuing to feed strong rental prices. If you are in town and would like to discuss any plans you may have, give me a call to meet for coffee on 07531484956 or email me lorraine@hallandthompson.co.uk

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Ask Lorraine – My Tamworth tenant wants to be released from her tenancy

🙋  Landlord’s Question: 

Over the weekend, my least favourite tenant asked to be released from the tenancy. To say I’m over the moon is an understatement.

Surrender of tenancy
Surrender of tenancy

A little bit of history – It was to be a joint tenancy so both parties were to be referenced, needless to say the fella failed however the wife passed and feeling under pressure from the couple and not wanting a void,  I gave in and made a decision that was to be a costly mistake.

Shortly after the 12 month tenancy commenced the husband ran off with his best friend, we won’t go there! so he left and Mrs continued to live in the property. The rent was never paid on time and never the correct amount of rent. She would text in the early hours of the morning with excuse after excuse and was always looking for a shoulder to cry on. I was never able to issue notice as rent arrears never quite got to 2 months, she always managed to pay just the right amount to fend me off.

So into the fifth month I had come to the end of my tether. I thought about serving a no fault notice but couldn’t handle the thought of possibly having to apply to the Court for a possession order if she didn’t leave.

My breakthrough came over the weekend, she decided that she wanted to go back home to her parents as she no longer wanted to be responsible for the property and she’s asked if I would agree that she could leave.

So now  I  would be grateful for any advice to get this over with quickly, so that I can sleep easy again.

Lorraine’s Answer:

You could ask for a surrender of tenancy to be completed by Mrs.

So what is a Surrender of Tenancy letter?

 It’s a mutual agreement between landlord and tenant to end a tenancy. This is called ‘surrender’. To be valid, both sides must agree, and it’s always best to put what’s been agreed in writing so everyone knows where they stand. If the tenancy is joint, all joint tenants and the landlord must agree to the surrender.

 

Whatever you do, it must be completed correctly and swiftly to cover all avenues. Ensuring illegal eviction can not be claimed at a later date or Mr deciding that he wants to move back into the property should he find out that Mrs has moved out.

You don’t mention if a deposit was taken and if there are still rent arrears, so try to reach an amicable agreement if at all possible. Let the tenant be released early from the tenancy and agree to keep any deposit if need be which can be used to offset any rent arrears. If the rent arrears are small,  you may wish to write off anyway in order that you can get your property back and with the least amount of fuss.

Hopefully the lady has kept the property in a clean and tidy state so your spend will not be too much before finding your next tenants.

You may also wish to think about a “break clause” for  any future 12 month tenancy agreements that you propose.

Until next week!

 

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Ask Lorraine – Can I run a business from my Tamworth rental property?

🙋  Tenants Question: 

My tenancy states no pets but the agent has allowed me to keep two rabbits as long as they stay outdoors.

I’m now considering starting a business to look after rabbits when people go away on holiday. I don’t want to let my agent know what I’m thinking of doing and they will never find out as they never visit the property. If anybody complains to the agent and they do happen to find out, will I lose my tenancy?

Lorraine’s Answer:

Many landlords do have a no pets policy, however there is an unknown legal loophole which allows tenants to keep rabbits and chickens.

Natasha Brooks, a tenant with New Charter Housing Trust in Greater Manchester, came across this loophole. After an inspection by a housing officer, the trust had threatened  her with action, they were claiming she had breached her tenancy agreement.

Natasha fought her case and the housing trust backed down after she found Section 12 of The Allotments Act 1950. She stated that her tenancy agreement with a“no pets” clause did not specifically mention rabbits and chickens, the law gives  the right to the ‘occupier of any land’ which would include assured shorthold tenancy agreements.

There are legal obligations:-

Keeping rabbits and chickens as pets is allowed, but they cannot be kept so as to  used in a business or for any trade purposes i.e selling eggs to neighbours and friends would break the conditions.

The keeping of rabbits and chickens must not cause a nuisance to neighbours or a health issue.  If the chickens were constantly noisy or rats became a problem, this would most likely mean the right to keep them would be withdrawn.

Penny  and Henny continued to live in the back garden of Ms Brooks house.

So yes you can keep your rabbits as pets,  however  you should check  your tenancy agreement for a clause that prohibits running a business from your rental home. If you do, you will most likely be in breach of your tenancy and will fall foul with your agent and Landlord.

No Pets allowed!

No Pets!!

Until Next week.

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Ask Lorraine – What if my Tamworth tenant has a criminal conviction.

🙋  Landlord’s Question: 

My landlord insurance policy does not allow tenants with criminal convictions. To cover myself as it’s not possible to get a CRB or DBS check carried out on a potential tenant  should I add  a clause to the tenancy agreement stating that I do not take tenants with criminal convictions?

What if my tenant has a criminal conviction
What if my tenant has a criminal conviction

Lorraine’s Answer:

It’s a bit like shutting the gate after the horse has bolted!  So perhaps your application for accommodation should have this question added.The potential tenants then complete the application and sign the declaration, they have answered all questions in a truthful manner, right? You have done your best.

Surely if the potential tenants had lied on the application form about criminal convictions,  your insurance company would have to pay out, what more could you have done.

What if you found out a week later that they had lied on the application form and you want them out of your property,  then ground 17 should be used to seek possession.

Ground 17

The tenant is the person, or one of the persons, to whom the tenancy was granted and the landlord was induced to grant the tenancy by a false statement made knowingly or recklessly by—

* the tenant, or

* a person acting at the tenant’s instigation.

Without the application declaration, you have no proof that they had lied and would be stuck with your tenant for a while longer.

Until next week.

Ask Lorraine – I’ve become an accidental landlord and the Tamworth property I’ve inherited has a woodburner

🙋  Landlord’s Question: 

”Dear Lorraine,

I’ve become an accidental landlord and the Tamworth property I’ve inherited has a wood burner . Should I get rid of this before I consider renting out this property. In a nutshell what  are responsibilities if I leave the wood burner?

Wood Burner advice
Wood Burner advice

 

Lorraine’s Answer

You must install a  carbon monoxide alarm in the room where the wood burner is situated. Apart from that, currently there is no legislation requiring any specific periodic inspection.
A check should be made at the start of each new tenancy by a competent person, that the appliance is safe to use and has not been tampered with or the flue is not blocked. It’s surprising how many people try to burn plastic bags and other combustible materials.  I’ve been reliably informed  that  burning ‘wet’ wood produces acidic moisture that will condense and corrode the flue.
So the wood used should be from a reputable source rather than collecting cheap old doors and windows that may have been treated with varnish or other sealants.
It also worth noting that the backplate, seals and ropes will need to be checked  on a regular basis, so if you think having a wood burner in a tenanted property is not going to work, then I would recommend having a contractor uninstall the appliance.

Until next week.

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch! lorraine@hallandthompson.co.uk or 07531484956

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Ask Lorraine – My Landlord Won’t Issue Another Tenancy!!

🙋  Tenant’s Question: 

”Dear Lorraine,

I have a twelve month tenancy agreement and my landlord had said she won’t issue a new one, it runs out in three weeks.  Is she right that my old tenancy will continue as is? Please advise, I don’t want to leave.

Renewing a tenancy
My Landlord Won’t Issue Another Tenancy!!

Lorraine’s Answer:

All assured shorthold tenancies will go periodic at the end of the fixed term period , as long as the tenant/s continue to live in the property.

Should the landlord create another fixed term tenancy, this may give you, the tenant more peace of mind. A renewal ties the tenant in for another twelve months, however if the tenant really wants to leave early into the tenancy, nothing will stop them.

The landlord on the other hand  cannot issue a section 21 to get their property back until after the four month of tenancy and then the landlord  would have to give two months notice.

So I really see no major advantage of renewing a tenancy, I’d let it run into periodic.

I hope I have put your fears to bed?

Some agents will  do a renewal of tenancy but that’s only because they charge a renewal fee.

Until next week

If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Tamworth Property Market, together with regular postings on what I consider the best buy to let deals in Tamworth (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch!

Email me on Lorraine@hallandthompson.co.uk or call on 07531484956.

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