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HOLDING FUNDS IN MORE DETAIL

Once a landlord has been notified that a tenant wishes to apply for a property, and the landlord is in principle happy to proceed subject to referencing, we will ask the tenant to pay ‘Holding Funds’. The amount will be equivalent to one week’s rent.

 

The property is not removed from the market until these funds are received.

 

Once we have your holding funds, current legislation stipulates that the necessary paperwork should be completed within 15 days or such longer period as might be agreed.  It is usual for us to agree a longer period with you, as quite often the referencing process and obtaining the relevant safety certificates takes longer than 15 days.

 

Do not pay any funds if you are still looking at other properties, or are unsure if this property is ‘right’ for you! If you pay the funds and then ‘simply change your mind’ then the holding funds are not refunded and will be retained by our firm. You will lose your money. By the same token, if you pay the funds and then you unreasonably delay in responding to any reasonable request made by our firm, or if it turns out that you have provided us with false or misleading information as part of your tenancy application, or if you fail any of the checks which the Landlord is required to undertake under the Immigration Act 2014, then again your holding funds will not be returned.  They will be retained by this firm. If your employer or existing landlord do not respond, and you are unable to verify your work status and income by another means asked for by the referencing agency, then the funds will be retained by this firm.

 

However, if the Landlord decides not to offer you a tenancy for reasons unconnected with the above then your funds will be refunded within 7 days. Should you be offered, and you accept a tenancy with our Landlord, then your holding funds will be credited to the first months’ rent due under that tenancy.

           

Where, for whatever reason, your holding fund is neither refunded nor credited against any rental liability, you will be provided with written reasons for this money not being repaid within 7 days.

 

You will not be asked to pay any fees or charges in connection with your application for a tenancy.  However, if your application is successful under our standard Assured Shorthold Tenancy agreement, you will be required to pay certain fees for any breach of that tenancy agreement in line with the Tenant Fees Act 2019. In consideration of us processing your tenant application, you agree to pay those fees to us on request. 

 

It is important that you know your legal rights and accordingly you should feel free to seek independent legal advice before paying any money or signing any paperwork. More information on the fees that can lawfully be charged can be found here:  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/922900/Tenant_Fees_Act_-_Tenant_Guidance.pdf

 

ASSURED SHORTHOLD TENANCY VERSUS STATUTORY PERIODIC TENANCY

When your tenancy starts it will almost certainly be an Assured Shorthold Tenancy Agreement (AST). An AST is a fixed term agreement. It has a start and an end date. It contains all the clauses that you need to fulfil as a tenant, as well as detailing your landlords’ obligations.

On renewal the landlord and tenant need to decide if they would like to commit to another fixed term contract, so have a new Assured Shorthold Tenancy Agreement, or if they would like to revert to a statutory periodic tenancy, more commonly referred to as a month to month or rolling contract.

Both parties must be in agreement as to the type of tenancy they wish to renew on.

With both types of tenancy, all the clauses in the most recent AST remain legally valid ….. so, if you have renewed with a new AST, all of these clauses are the ones you are bound by. If you have opted to have a statutory periodic tenancy, the preceding AST is the one that has the clauses that you are bound by. An exception could be the level of rent, which may have been increased by mutual agreement or by way of a separate Section 13 notice. The biggest difference is when the tenancies will end and how they will end. 

ENDING A TENANCY

Some tenant’s will stay in their rental property for 30 Plus years, others will leave after 6 months. Depending on if the landlord or the tenant want to end the tenancy will depend on the process to follow.

Landlords- if you want to end a tenancy you ALWAYS have to serve a notice. It will either be a Section 8, or a Section 21 notice (depending on the circumstances) It doesn’t matter that your tenant has a fixed term Assured Shorthold Tenancy Agreement, that details an ‘end’ date. You will not be granted possession of your property at court if you have not also served the relevant notice. Please see the chapter on Section 8 and Section 21 notices for more information on these.

Tenants – If you are in an Assured Shorthold Tenancy Agreement we will contact you if your landlord has our fully manged or rent collection services and ask you if you are looking to renew or to leave. You should also read your tenancy agreement to see what is stipulated about ending your tenancy. Commonly it is requested that you serve your landlord two months’ notice. It may also say in your agreement how you need to serve this notice (by post, email etc)

Tenants – if you are on a Statutory periodic Tenancy then the law is different. You must serve your landlord a minimum of one months’ notice (If you pay your rent monthly), this notice must be served on or before a rent payment date, and must end to coincide with a rent payment period.

Tenants – if you want to leave before your contract naturally ends there is a process for this. Remember in law, you are not permitted to simply ‘end’ an Assured Shorthold Tenancy Agreement. But if you need to do this then it can only be done by mutual agreement and there are financial implications. Note these financial implications are permitted under the Tenant Fee Ban Act. Full details of this are available on our web site or by contacting the office.

 

Debbie Jones Cert CIH, FARLA 12th January 2024

RENT REVIEWS

Typically, a rent review will take place once per year. For our fully managed properties, we quite often discuss rent reviews during the property inspection. For our rent collection landlords, we would normally contact you on an annual basis by email or phone to discuss a rent review.

When considering rent reviews, we will always look at the rental market at the time. We compare the rent of a property to the rents currently being achieved for similar properties. We then discuss this with the landlord and tenant.

Rents can be increased by granting a new Assured Shorthold Tenancy to the tenants, with the new rental amount listed, or, if the tenant is on a Statutory Periodic Tenancy, then the rent is increased by the service of a Section 13 Notice.

Rent reviews are always discussed before they are implemented.

If a tenant disagrees with a rent review, then the landlord will consider the reasons, the landlords then have two options:

The landlord may decide to renegotiate, they may decide they have not considered the local market correctly and may be looking to increase the rent too much in comparison to neighbouring properties, so the landlord may review the amount he wishes to increase the tenancy by.

Or

The landlord may decide that the rent review is fair, and if the tenant will not pay the market rent for the property that the tenancy will need to end. In this instance the landlord will need to serve the tenant with the appropriate notice to bring the tenancy to an end.

If a tenant feels that the rent being asked is too high, they can formally challenge this by taking their plea to the First-Tier Tribunal (property chamber). There is a set process and time scale to start this process, it must be before the new rent amount is due to start, or if this is a new tenancy, within 6 months of the tenancy start date.

In reality, it is incredibly rare for tenants to take their grievance to the First-Tier tribunal. The tribunal will look at the same evidence that the landlord has access to, i.e. local comparable rents. If the rent increase is deemed to be in line with the local property market, they will not rule in favour of the tenant.

 

 

Debbie Jones Cert CIH, FARLA 12th January 2024

 

Its important to start this section by stating that different agencies and landlords may run a change in rent payment date differently to the way gps lettings handle this situation, so if you are not one of our tenant or landlords, you should seek advice from your own agency regarding this.

The date your rent becomes due each month will be the anniversary of the day you move into your rental property.

So, if you move into your new home on the 5th day of the month, your monthly rent will then be the 5th day of each month.

Paying your rent on the contractual day it is due is extremely important. Persistent late payment and non-payment of rent is a breach of tenancy, a landlord can seek possession for this under Section 8 of the Housing Act using Grounds 10 and 11, which specifically mention persistent rent arrears via late payments of rent. 

Persistent late payments of rent also affect any references that may need to be provided for you in the future, most referencing companies automatically fail tenants for new properties if they receive a reference stating that the rent was always paid late.

Plus, constantly paying rent late will cause you to have a poor relationship with your landlord, who may be reliant on the rent entering their account on set days to cover important bills and mortgages.

If you are struggling to pay your rent on the day it is due, then the bets option is to apply to have your rent payment date changed to one that fits in better with your income stream. Maybe ask to change you rent payment date to a date that is closer to when you receive your wages?

To change a rent payment date, the process is to speak to us and advise us of the issue and let us know which date you wish to change your rent payment date to. We will advise your landlord of the situation, so they in turn can change any dates of their standing orders etc. We will then send you an invoice to cover the days in between your old and new rent payment dates

Example:

Your rent payment date is the 5th day of each month, but you would like this changed to the 15th day of each month. Your monthly rent is £1000.00pcm

We will send you an invoice that covers the period of 5th to the 14th – this is 10 days rent (calculated £1000 x 12 divided by 365 x 10) = £328.77

You would then pay £328.77, on the 15th day of the month your will pay your full rent of £1000.00. From then on, your new rent payment date is the 15th day of each month, and your rent will no longer show as being in arrears each month, as you will be able to pay your rent on time.

If you are in an Assured Shorthold Tenancy and do not renew at the end of the term, your last rental payment will be less than the others, to consider the change of rental payment dates. You would pay £1000.00 - £328.77

If you extend your tenancy, then for each new extension your tenancy will run from the 15th day of each month, instead of the 5th day of each month, to run in line with how you pay your rent.

It’s important to be open and honest and deal with any issues you may have in paying your rent in full and on time. Ignoring late payment notices and just paying our rent ‘late’ is not a solution, and can be harmful to your credit score, future renewals and landlord and agency relationships moving forward. Ultimately it is better to work together to address the situation and find a solution.

TENANTS AND LANDLORDS

A tenant cannot move into any home without being given copies of certain documents and safety certificates. The law has introduced new documents to be included in recent years, as well as new penalties for landlords not producing these documents and providing copies to your tenants

GAS SAFETY CERTIFICATE

All properties that have a gas supply must have an annual gas safety test carried out. The test can only be carried out by an engineer registered with and on the gas safe register. The gas safe register replaced corgi registration in Great Britain in 2009.

It is a legal requirement for an annual gas safety test to be carried out. Under The Gas Safety (Installation and Use) Regulations 1998. A landlord must:

Arrange for a Gas Safe registered engineer to carry out a gas safety check every 12 months.


Provide the tenant with a copy of the landlord gas safety record before a tenant moves in to a property and then again within 28 days of the annual check taking place.

Maintain the gas appliances, pipework and flues they provide in accordance with the manufacturer’s instructions.

In order to help landlords comply with the legislation, a landlord is able to have a new gas safety test carried out up to 60 days before the expiry of the existing one without losing any time on the validity of the certificate.

Failure to adhere to this legislation could result in a substantial fine or imprisonment.

The Deregulation Act 2015 made it a legal requirement to provide tenants with copies of a valid gas safety record, Energy Performance Certificate and a copy of the most up to date How to Rent Guide before the tenancy begins. Penalty for not providing these documents under the Act means that landlords cannot gain possession of their property by way of a Section 21 notice. It is therefore imperative to not only provide these documents, but also best practice to have dated proof that the documents have been given to your tenant.

ELECTRICAL SAFETY CERTIFICATE

On 01st July 2020 The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 came into effect. No tenant could start a new tenancy from this date without the property having a full electrical safety test. From 01 April 2021 the Regulations were extended to include to all existing rental properties.

The Electrical test must be carried out by a qualified person, and once completed a report is issued which will be an Electrical Installation Condition Report (EICR). The electrician will categorise any issues that he identifies on the report. The categories are as follows:

  • Code 1 (C1): Danger present. Risk of injury. A new tenant cannot move into a property if any code 1’s are identified until these are rectified. If the property is currently occupied then the electrician cannot leave the property until he has made the Code 1 hazard safe.
  • Code 2 (C2): Potentially dangerous. Urgent remedial action required. A new tenant cannot move into a property until any Code 2’s have been rectified. If the property is currently occupied then the electrician must ensure there is no danger to the tenants and rectify the fault as soon as possible.
  • Code 3 (C3): Improvement recommended. Code 3’s are advisory for landlords. Tenants can move into properties that have code 3’s. A landlord may choose to have the recommended works attended to, but isn’t legally required to. An example of a code 3 could be a fuse board not to 17th edition BS7671. This fuse board hasn’t been identified as being unsafe, it just isn’t the type that is now installed in newer properties. 


Further Investigation (FI): Further investigation required without delay. A new tenant cannot move into a property with an F1, the F1 fault needs to be

  • investigated and rectified. If the property is currently occupied then the electrician must ensure there is no danger to the tenants and rectify the fault as soon as possible.

 

Failure to comply to these regulations can result in the Local Authority imposing large financial penalties for landlords. Tenants could also separately take a landlord to court and be awarded compensation if it is deemed that the property is unfit under the Homes (Fitness for Human Habitation) Act 2018 which could include unsafe electrics.

 

ENERGY PERFORMANCE CERTIFICATE

An Energy Performance Certificate (EPC) shows how energy efficient a home is. Homes are rated on a score of A – G (with A being the most energy efficient). The certificate includes recommendations detailing what can be done to make a home more energy efficient. Some recommendations would not be too costly to implement, such as changing light bulbs to energy efficient ones, other recommendations could be much more costly, such as changing the heating system.

The current requirements are set out in the Energy Performance of Buildings (England and Wales) Regulations 2012, which came into effect on 9 January 2013, although they have been amended since, and also the Building Regulations 2010.

In 2008 it became a legal requirement to have a valid Energy Performance Certificate for all properties that were being placed on the rental market. The Government introduced the legislation to spread awareness of how much energy a home was using.

On 1st April 2020 the Government went either further with the legislation in an effort to make properties more energy efficient by making it illegal to rent out a property that had an EPC rating of F or G (certain exemptions apply).

There is a private members bill being debated at the moment The Domestic Premises (Energy Performance) Bill’ asking for all properties to have a rating of a C or lower by 2030. If this becomes legislation it will be very unwelcome news for many landlords. With this in mind, be aware of any improvements that you make to your properties and always look for ways to make them more energy efficient where you can.

Criteria that is considered when assessing a properties’ energy rating will include:

  • the type of building (i.e. flat, house or bungalow) and whether it is detached or not · the age of the building · the number of habitable rooms (excluding kitchens, bathroom hallways, stairs and landings) · extensions and their construction and rooms in the roof · the dimensions of the building and the number of floors · the amount and type of glazing (i.e. single or double glazing) · the material used to build the property (e.g. brick, stone, timber frame, etc.) · wall insulation · roof construction (e.g. flat, pitched) and insulation · the number of chimneys and open flues · the heating systems and the type of fuel used (source

An Energy Performance Certificate is valid for 10 years. Under The Deregulation Act 2015 it became a requirement to ensure that tenants had been given a copy of their EPC prior to starting a tenancy, and if this did not happen then the landlord would be unable to regain their property by way of a Section 21 notice.

LEGIONELLA RISK ASSESSMENT

Landlords have a duty to ensure that they have carried out a risk assessment at their rental property to ensure that there is very low risk of a tenant becoming unwell due to the presence of legionella bacteria. Several pieces of legislation cover this duty. Section 3(2) of the Health and Safety at Work Act 1974 (HSWA) makes provision for relevant health and safety legislation to apply to landlords to ensure a duty of care is shown to their tenants with regard to their health and safety. The Control of Substances Hazardous to Health Regulations 2002 (COSHH) provides a framework of actions to control the risk from a range of hazardous substances, including biological agents (eg Legionella) - to identify and assess the risk, and implement any necessary measures to control any risk Landlords must ensure that the risk from exposure to Legionella in their premises is properly controlled. Since the L8 Approved Code of Practice (3rd edition) (ACOP) was published in 2001, there has been a requirement for landlords of both domestic and business premises to assess the risks from exposure to Legionella to their tenants.

Legionella are bacteria that are common in natural water (rivers and lakes etc) and artificial water systems, e.g. hot and cold water systems (storage tanks, pipework, spa baths, taps and showers). Legionella bacteria can multiply in hot or cold-water systems and storage tanks in residential properties, and then spread, e.g. in spray from showers and taps. Although there is generally higher water temperature throughout, and a relatively low volume of water held in smaller water systems, which in turn reduces the likelihood of the bacteria reaching dangerous concentrations, you must still carry out a risk assessment to identify and assess potential sources of exposure. Legionella bacteria thrive between 20 C and 45 C. Temperatures above 50 C will kill the bacteria. The infection is caused by the inhalation of water droplets or spray mists which have been contaminated by the bacteria.

Specific areas of concern in small domestic systems are mainly to do with stagnation. Your property is likely to have adequate water flow throughout when occupied, but there may be times when outlets are unused for extended periods, or there could be old, redundant pipework which is allowing water to stagnate.

 

Risk assessments should be compliant with current legislation. Risks to be considered are: poorly designed and maintained Cold water tanks, or tanks with a missing or poorly fitting lid. Hot water taps and pipes that are not achieving temperatures of at least 60 C. Shower heads fouled with limescale and / or microbiological growth. Poor disinfection procedures after refurbishments or new installations. Non WRG compliant materials (i.e. natural rubber liners in flexible fittings). Landlords also need to consider if their tenant could be more vulnerable and therefore susceptible to legionella bacteria, eg elderly, ill, or anyone with a compromised immune system.


Your risk assessment has to identify any potential source of exposure and steps must be taken to actively prevent or control any risks that are identified. Records should be taken and kept for a period of at least 5 years.

Steps that can be taken to reduce risks include: raising the temperature of warm water (this has to be balanced out against the risk of any possible risk of burns / scalding). Disinfecting the system, make sure that no water can stagnate anywhere, insulate pipework, and keeping cisterns covered and free of any debris

 What we are doing:

 We are informing our Landlords about the legislation and that the law states that Landlords are responsible for carrying out these risk assessments.

  • We will be making all new Tenants moving into properties aware of precautions that they should take (by handing out some written information to them).
  • For our Fully Manged and Rent Collection Landlords we will organise a legionella risk assessment 2 yearly (charges apply)
  • For properties that we manage: If we receive a report from a Tenant or contractor of a property defect that may result in there being a risk of Legionella bacteria arising, we will arrange remedial works as deemed necessary by a competent contractor (charges to Landlord will apply)

HOW TO RENT GUIDE

The ‘How to Rent Guide’ is an informative booklet, designed and produced by the Government, it advises tenants on their rights regarding renting a property. The guide covers topics such as: how much deposit a landlord can legally ask for, if a landlord or agent can charge any fees to a tenant plus lots of practical information that is useful for a tenant to know.


To ensure that all tenants looking to rent a property have been given a copy of the guide, under The Deregulation Act 2015 it became a condition that the most up to date guide is given to a tenant by the agent / landlord, prior to a tenancy commencing. If this does not happen then the landlord is prevented from gaining possession of his property by way of a Section 21 notice.

The most up to date version of the guide van be found here: https://www.gov.uk/government/publications/how-to-rent/how-to-rent-the-checklist-for-renting-in-england

PROVIDING TENANTS WITH COPIES OF THE CERTIFICATES

Please be advised it isn’t enough just to ‘have’ all the correct certificates in place. Part of The Deregulation Act 2015 legislation is that you have to have given your tenants copes of all of these …… and be able to prove that you have done this.

Tenants are entitled to up-to-date copies of the following as a minimum:

Electrical safety cert, gas safety cert, how to rent guide, deposit prescribed information and scheme rules, EPC, property licence certificate.


Other documents that must be provided if available (and if not available will affect deposit deductions and rent guarantee claims): inventory, legionella risk assessment.

 

 Debbie Jones Cert CIH, FARLA 12 September 2023

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