Choosing a Letting Agent
Letting residential property in England and Wales is covered by various Housing Acts, and Landlord and Tenant Acts, as well as various Safety Regulations. Using a letting agent is by far the best way of ensuring that your property, and you as the landlord, are protected from issues raised by these Acts and Regulations.
YOUR LETTING AGENT WILL OWE BOTH YOU AND YOUR TENANT A "DUTY OF CARE". IT IS IMPORTANT THAT THIS DUTY OF CARE IS BACKED UP WITH BOTH "PUBLIC LIABILITY INSURANCE" AND "PROFESSIONAL INDEMNITY INSURANCE". ANY FUNDS BELONGING TO EITHER THE LANDLORD OR THE TENANT SHOULD BE KEPT IN A SEPARATE CLIENT ACCOUNT AND NOT USED BY THE AGENT IN THE COURSE OF THEIR BUSINESS.
Section 42a Income and Corporation Tax Act 1988 and Taxation of Income from Land (Non-residents) Regulations 1995, SI 1995 No 2902.
For Landlords who live abroad the Lamborn & Hill Full Management Service is available, the Let Only service cannot be used. Overseas landlords are regarded as non-UK residents for tax purposes, and need to apply to the Inland Revenue for Non-Resident Landlord status. A landlord that has already been approved to receive rents without deduction of tax from the Inland Revenue must contact the Inland Revenue and request that an NRL8 (approval notice) be issued to Lamborn & Hill. A landlord who does not hold approval will need to apply to the Inland Revenue to be approved for the non-resident landlord scheme. If the application is successful the Inland Revenue will issue an NRL8 to Lamborn & Hill.
The Non-resident Landlords Scheme is a scheme for taxing the UK rental income of non-resident landlords. The scheme requires UK letting agents to deduct Basic Rate tax from any rent they collect for non-resident landlords. When working out the amount to tax, the letting agent can take off deductible expenses. Letting agents don't have to deduct tax if the Inland Revenue tells them not to. The Inland Revenue will tell an agent not to deduct tax if non-resident landlords have successfully applied for approval to receive rents with no tax deducted. But even though the rent may be paid with no tax deducted, it remains liable to UK tax. So non-resident landlords must include it in any tax return the Inland Revenue sends them.
Most applications are dealt with within two weeks (the Inland Revenue Centre for Non- Residents aims to approve 95% of all applications within this time).
• One certificate is required per person; therefore if Mr and Mrs, or several landlords, all parties must apply for an individual certificate.
• If changes in circumstances occur during the tenancy, the agent must receive written confirmation of the change AND the date the change occurred.
• C/O addresses will always be handled as overseas landlords and tax will be deducted until a completed and signed declaration of residential status is received by the agent, the Inland Revenue are very strict with regard to this matter.
• Should a friend or relative be looking after affairs whilst the landlord is abroad, an Enduring Power of Attorney document will need to be made available to the agent.
• Should a professional person (accountant, tax advisor or solicitor) be looking after the affairs for the landlord, the agent will require written authority from the landlord to allow information to be released to that person.
• Landlords who spend part time abroad and part time in the UK over the course of the year will need to apply to join the non-resident landlord scheme using NRL1.
• The scheme does apply to the Armed Forces and other crown servants. If a member of the Armed Forces or other crown servant had approval pre-1996 they will need to re-apply to join the non-resident landlord scheme using NRL1.
• Some confusion often reigns with the following localities, Isle of Wight and Northern Ireland. These landlords are NOT classed as overseas. Southern Ireland (Eire), the Channel Islands and the Isle of Man are classed as overseas.
• Should a landlord choose not to use an agent for the letting of property whilst abroad, the liability for collection of tax, in the event that non-resident status has not been sought, passes to the tenant.
Helpful Hints for Owners and Landlords in brief
Upon deciding to rent your property
• Apply for mortgage lenders consent.
• Notify your insurance companies.
• Obtain gas and electrical appliance safety certificates. (Oil & Solid Fuel C.H. Systems must also be checked & serviced annually - record to be kept)
• Decide what furniture and /or fittings you intend to leave in the property. It is not advisable to leave bedding, televisions, videos and personal items.
• Ensure furnishings to be left in the property comply with fire regulations.
• Carry out any necessary repairs and remove anything potentially dangerous.
• Make sure the property is in a clean and tidy condition, particularly the kitchen, bathroom, carpets and curtains - as YOU would hope to find it if moving in yourself! A Tenant can tell if the property is well cared for and is more likely to look after it during the tenancy if it is clean at the start.
• Overseas landlords apply for tax exemption certificates - please ask your Lamborn & Hill for more information.
Immediately you are notified that an application for tenancy has been received by Lamborn & Hill, please:
• Remove all personal items from the property.
• Remove all unwanted and non compliant furniture.
• Ensure that the property is clean and the garden is tidy.
• Arrange re-direction of your mail via the Post Office.
• Landlord to inform all utility companies of the change of occupancy along with British Telecom or other supplier that you will not be requiring further use of the telephone line from the commencement of the tenancy. Whilst Lamborn & Hill try to ensure that utility companies are furnished with the correct readings, Lamborn & Hill can not be held responsible for the utility companies failure to recognise the information provided.
• Let Lamborn & Hill have 2 separate sets of access keys.
• Ensure that the central heating boiler pilot light is lit.
N.B. INSTRUCTION MANUALS or LEAFLETS, in ENGLISH, must be left at your property for all APPLIANCES, THE CENTRAL HEATING BOILER AND SYSTEMS before the Schedule of Condition & Inventory can be undertaken. By LAW, copies of these must be given to each Tenant at the commencement of the Tenancy. ALTERNATIVELY, CLEAR HAND WRITTEN OR TYPED INSTRUCTIONS WILL BE REQUIRED. (Failure to provide these will result in unnecessary delays)
Tenants can fall into arrears for many reasons, even those with favourable references. Can you afford to lose monthly income? In an uncertain world, it's good business practice to obtain effective protection.
Tenant's circumstances change for any number of reasons, so it's prudent to minimise the risk to your income.
Rent and legal expenses cover to obtain possession of the property.
Protection to pay the monthly rent for up to 12 months on breach of tenancy agreement.