Landlords Fees

 

 

LETTING AND MANAGEMENT SERVICE

TERMS AND CONDITIONS

 

 

This Agreement is made between the Landlord of the Property and RESIDENTIAL LETTINGS (MIDLANDS) LTD who agree to act as the Agent for the Landlord. The purpose of this document is to set out clearly and concisely the extent of the letting and management service offered and the scale of fees charged.

 

The term “the Agent” for the purpose of this Agreement is RESIDENTIAL LETTINGS (MIDLANDS) LTD.

 

The term “the Landlord” means the owner(s) or other persons having the authority to instruct the Agent to let the Property.

 

The term “Tenant” is the person contracted with the Landlord to rent and reside in the Property.

 

The term “Property” means the property as named at the end of this Agreement, which is owned by the Landlord and is to be let by the Agent.

 

The term “Tenancy” means the period for which the Property is let to the Tenants.

 

  1. STANDARD MANAGEMENT SERVICE

 

RESIDENTIAL LETTINGS (MIDLANDS) LTD provides a property management service to owners (and superior landlords) wishing to let out their property. The standard fee for the management is taken as a percentage of the gross rents due for the period of the Tenancy (see Scale of fees 3.1) and a set-up fee will be levied at the outset for taking references and arranging the Tenancy.(see scale of fees 3.1.1)

 

    1. The Standard Management Service includes:

 

      1. Advising as to the likely rental income.
      2. Advertising and generally marketing the Property.
      3. Interviewing prospective Tenants and taking up full references including employer or previous landlord character reference. Where necessary, additional security would be requested by means of a guarantor.
      4. Preparing the Tenancy Agreement necessary for the Landlord to gain protection of the relevant Rent Housing Acts, and renewing the Agreement where necessary at the end of the term.
      5. Liasing with a Landlord’s mortgagees where necessary with regard to references and Tenancy Agreement.
      6. Taking a deposit from the Tenant to be held by the Agent in an insurance bases tenancy deposit scheme until the end of the Tenancy when the Property and contents have been checked for unfair wear and tear.
      7. Collecting the rent monthly and paying over to the Landlord monthly (normally sent within 15 days of collection) less any fees or expenses due or incurred for the period. Payments will be made by direct bank transfer.
      8. Notifying the service companies (principally electricity and gas and water) of the meter readings and advising them of the transfer of service contracts to the Tenant at the beginning of each Tenancy.
      9. Regular inspections of the Property are carried out throughout the term of the tenancy. Responsibility for and management of The Property when empty/vacant is not included, and will only be carried out by special arrangement.
      10. Co-ordination of repair or maintenance including arranging for tradesmen to attend the property and obtaining estimates where necessary, supervising works and settling accounts from rents received.(subject to maximum expenditure Point 6)
      11. Carrying out a full property inspection and inventory check at the end of the Tenancy and dealing with matters relating to unfair wear and tear before releasing the Tenant’s deposit.
      12. Carrying out an Inventory and Schedule of Condition of the property prior to the tenancy commencing.

 

    1. Additional items and other expenses will be charged according to the scale of fees defined below.

 

    1. Although the aim is to take care in managing the Property, the Agent cannot accept responsibility for non-payment of rent, damage or other default by tenants, or associated legal costs incurred in there collection where the Agent has acted correctly in terms of this Agreement, or on the Landlord’s instructions. An insurance policy is recommended for this eventuality.

 

  1. SCALE OF FEES (All fees are subject to VAT at the current rate )

 

  1. Standard Management Fee                                                            12% of rent due

3.1.1 Letting Fee and set up (including Inventory)                              75% of first month’s rent

  1. Tenancy Renewals                                                                          £60.00
  2. Redirection of mail overseas                                                           cost of postage
  3. Faxes & overseas telephone calls                                                   telephone costs
  4. Minimum Fee (in case of early termination)                                    £300
  5. Obtaining estimates and supervision of major works                      10% of cost of work over £500
  6. Duplication & testing of extra keys                                                   £7 per key                                              

 

GENERAL AUTHORITY and RENTAL PAYMENTS

 

The Landlord confirms that he/she is the sole or joint owner of the Property and has the right to rent out the Property under the terms of the mortgage or head lease. Where necessary, the Landlord confirms that permission to let has been granted by the mortgage company. The Landlord authorises the Agent to carry out various duties of property management as detailed 2.1.1 - 2.1.12 previously. The Landlord also agrees that the Agent may take and hold deposits. It is declared that the Agent may earn and retain commissions on insurance policies issued and that no interest is payable to the landlord from the deposit held by the agent.

 

4.1    We require the tenants to pay their rent on the due date every month, being the date of commencement of the tenancy. Normally this is done by standing order. Once the rent is received we require the monies to clear our accounts. The system of payments for rent is as follows. Please note this system carefully as the Landlord will need to take into account our rental payment system when considering his payments and outgoings on the property. Please note this system is applicable only once we have received the cleared funds from the tenants. Monies received one week are paid out on the Friday following the week that they were received by Residential Lettings(Midlands)Ltd by Bacs transfer. This transfer will then take three working days to clear the landlord’s account.              

 

    1. REASONABLE COSTS AND EXPENSES:

 

The Landlord agrees to repay the Agent for any reasonable costs, expenses or liabilities incurred or imposed on the Agent provided that they were incurred on behalf of the Landlord in pursuit of the Agent’s normal duties. To assist the Agent in carrying out his duties effectively, the Landlord agrees to respond promptly with instructions where necessary to any correspondence or requests from the Agent.

 

    1. MAINTENANCE:

 

  1. The Landlord agrees to provide the Property in good and lettable condition and that the Property, beds, sofas and all other soft furnishing conform to the current fire safety regulations. 
  2. The Landlord on vacating the Property and/or prior to the commencement of the Tenancy will thoroughly clean throughout the Property (i.e. carpets, skirting boards, inside and outside of cupboards and drawers). Specific attention should be paid to both the kitchen and bathrooms. This includes cutting and tidying the gardens and any other area surrounding or belonging to the Property that will become the responsibility of the Tenant to maintain on commencement of the Tenancy. A subsequent cleaning charge will be levied should the Property be handed to the Tenant in a disorderly and dirty condition.
  3. The Landlord agrees to make the Agent aware of any ongoing maintenance problems. Subject to a retained maximum expenditure limit (UK landlords: £150 overseas landlords: £250) on any single item or repair, and any other requirements or limits specified by the Landlord, the Agent will administer any miscellaneous maintenance work that needs to be carried out on the Property (although the administration of major works or refurbishment will incur an additional charge – see Scale of Fees). The administration of major works will only be undertaken by the agent when agreement has been reached between the landlord and agent. In normal circumstances major works will be undertaken by the landlord. The agent cannot accept any liability for major works carries out on the property.
  4. ‘Retained maximum expenditure limit’ means that the Agent has authority to spend up to this amount (or other amount individually agreed) on reasonable improvements or repairs in any single monthly accounting period without prior reference to the Landlord.
  5. For expenditure in excess of this, the Agent would normally request authorisation in advance, although it is agreed that in an emergency or for reasons of contractual necessity where reasonable endeavours have been made to contact the Landlord, the Agent may reasonably exceed the limits specified.
  6. By law, it is necessary to carry out an annual inspection and service for the central heating and any gas appliances. 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.

 

    1. CHANGE OF RESIDENCE OF LANDLORD

 

In the event that the Landlord takes up residence outside of the United Kingdom then, in accordance with the Finance Act 1995, a deduction in respect of Income Tax will be made unless a valid exemption certificate is obtained from the Inland Revenue and lodged with the Agent.

 

  1. OVERSEAS RESIDENTS:

 

When letting property and collecting rents for landlords overseas, the Agent is obliged by the Taxes Management Act  (TMA) 1970 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 Inland Revenue to receive rent gross. In this situation, the Agent also requests that the Landlord appoints an accountant or reserves to 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 reasonable administration expenses my be charged by the Agent for further work requested by the Landlord, Landlord’s accountant or the Inland Revenue in connection with such tax liabilities. In many cases, landlord’s tax liability is minimal when all allowable costs are deducted.

 

  1. COUNCIL TAX:

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 a 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.

 

 

 

  1. SERVICES:

 

    1. The Agent will take meter readings whenever possible at each change of occupation in the Property and 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.
    2. The Landlord will arrange redirection of his/her own mail from the Property via the Post Office. No liability can be attached to the Agent for failure to receive or loss of post that continues to be sent to the Property once the Tenancy commences. If the Agent is required to forward mail to the Landlord then the Agent will be entitled to charge an administration fee as well as recovering the cost of postage from the Landlord.

 

  1. INVENTORY:

 

    1. Agent will prepare an inventory for the Property via an independent third party at a cost of £65. The standard inventory will include all removable items in the Property (except those of negligible value) plus carpets, paintwork including colour and decoration of ceilings, walls, doors and door fittings, wall coverings, curtains, mirrors, sanitary ware and other articles that, in the opinion of the Agent, need regular checking.
    1. should not leave any articles of exceptional value in the Property without prior arrangement with the Agent.  The standard inventory service does include photography but will not include written descriptions of crockery, cutlery, utensils and bed linen. 

 

  1. TENANCY AGREEMENT:

 

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 you may have the tenancy agreement amended by your own adviser at your own expense). It is agreed that the Agent may sign the tenancy agreement(s) on behalf of the Landlord.

 

13 INSPECTIONS:

 

    1. The Standard Management Service, the Agent will normally carry out inspections quarterly starting after the first month. During tenancies where the Agent deems it unnecessary to continue carrying out inspections every quarter then inspections will be carried out thereafter at the discretion of the agent. 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 a ‘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.
    1. the departure of Tenants, the Agent will carry out a final inspection of the Property. Testing of all the electrical appliances, heating system and plumbing is not feasible during this inspection - a qualified contractor should be appointed for this purpose should the Landlord require it. Any deficiencies or dilapidations would normally be submitted to the Landlord together with any recommended deductions or replacement values.

 

  1. HOLDING FEES AND DEPOSITS:

 

    1. holding fee is generally 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 administration expenses (taking our bank references, conducting viewings, re-advertising) that may be incurred should the Tenant decide to withdraw the application. The holding fee does not protect the Landlord against loss of rent due to the Tenant deciding to withdraw, or references proving unsuitable although early acceptance of rent from the applicant would not be advisable until satisfactory references have been received. Landlords should notify the Agent where they wish a larger security fee or deposit to be carried to protect against loss of rents, or insurance undertaken.
    1. 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. These deposits, will be placed into the new insurance based government scheme, which is held in a separate account and enables any disputes that cannot be resolved amicably between all parties to be

Then passed to the scheme who will liaise on a non bias basis to resolve the matter and

                        Hope to settle claims within 10 working days of the agreed settlement figure.

.

    1. Agent is entitled to charge the Landlord a cancellation fee if the Landlord subsequently instructs the Agent not to start the Tenancy when a suitable tenant has been found and referenced. The fee will be equivalent to the Letting and set up fee point 3.1.1.

 

  1. TERMINATION:

 

    1. Agreement may be terminated by either party by way of two month’s written notice. The Minimum Fee applies if on termination the total fees due are less than the Minimum Fee. Where cancellation of this Agreement is unavoidable due to circumstances beyond the control of either party, the Minimum Fee will not apply and any pre-payments will be returned to the person entitled to them, less any expenses reasonably incurred to the date of the cancellation.
    1. Landlord shall provide the Agent with any requirements for return and repossession of the Property at the earliest opportunity. Landlords should be aware that any Tenancy Agreement entered into on the Landlord’s behalf is a binding legal agreement for the term agreed. Details of any Tenancy being entered into will be communicated to the Landlord as soon as possible.
    •  Landlords should be aware that the legal minimum notice period to Tenants under assured tenancies is generally two months (should the contract allow for early termination) and this needs to be given even in the case of a fixed term Tenancy which is due to expire.

 

  1. NOTICE / INSTRUCTIONS

 

    1. Landlord when wishing to serve any notice upon or give instructions to the Agent must do so in writing. Verbal instruction will not be accepted except where it is followed by written confirmation of the instruction.
    2. Agent will not act on any matter outside this agreement unless instruction is given and accepted in writing by the Landlord and Agent respectively.
    3. Landlord agrees to reply to all correspondence promptly.

 

  1. SOLE LETTING RIGHTS:

 

It is agreed that the Agent may let the Property.

 

  1. SAFETY REGULATIONS:

 

WARNING:  You should read and understand these obligations before signing overleaf.

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 electrical appliances and installations within a property, and with respect to the safety of furniture and soft furnishings provided. The following regulations apply:

    • Furniture and Furnishings (Fire) (Safety) Regulation 1988
    • General Product Safety Regulations 1994
    • Gas Safety |(installation and Use) Regulations 1998
    • Electrical Equipment (Safety) Regulations 1994
    • Plugs and Sockets (Safety) Regulations 1994
    • Energy Performance Certificate (EPC) 1st October 2008

 

The Landlord confirms that they are aware of these obligations. It is agreed that the Landlord shall ensure that the Property is made available for letting in a safe condition and in compliance with the 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 pay the Agent costs 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.

 

  1. INSTRUCTIONS:

 

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.

 

  1. KEYS

 

The Landlord will supply the Agent with a total of three sets of keys. If these are not supplied by the Landlord four days prior to the commencement of the Tenancy, the Agent will have the extra copies cut for the Landlord at the Landlord’s expense and be entitled to an administration charge (see “Scale of Fees”).

 

  1. VALUE ADDED TAX:

 

Our fees are subject to VAT at the current rate

 

  1. INSURANCE:

 

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 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”).

 

  1. HOUSING BENEFIT:

 

The Landlord undertakes to re-imburse the Agent for any claims from overpayment which may be made by the local authority in respect of housing benefit, or other benefit scheme, paid to or on behalf of the Tenant(s) as rent. This undertaking shall remain in force during the currency of the Tenancy and up to six years thereafter, whether or not the Agent continues to be engaged to let or manage the Property under this Agreement.

 

  1. LEGAL PROCEEDINGS:

 

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 is unable, after taking reasonable efforts, to contact the Landlord. In that 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.

 

  1. SALE OF PROPERTY

 

If the Landlord sells the Property within six months of the end of a Tenancy (or within six months of an introduction by the Agent) to a person who was shown or let the Property by the Agent, or is or was a Tenant of the Property (and was introduced by the Agent) the Agent shall be entitled to 1.0% (plus VAT) of the selling price on completion of the sale (unless otherwise stated in writing by the Agent).

 

           RENEWALS

Where, with the consent of the Landlord, the Tenancy is renewed to the same Tenant (or any person associated with the Tenant) originally introduced by the Agent, then the Agent can prepare the necessary Tenancy Agreement. A Renewal fee shall be payable at the renewal date (see Scale of Fees)

 

LETTING AND RENT COLLECTION SERVICES

TERMS AND CONDITIONS

1              LETTING SERVICE:

 

The Letting Service is provided to clients for the introduction of a Tenant(s), who is acceptable to the Landlord and who subsequently enters into a tenancy agreement for the letting of the Landlord’s property. It includes:

 

  1. Advising as to the likely rental income.
  2. Advertising and generally marketing the property.
  3. Interviewing prospective tenants and taking up full references including employer or previous landlord character reference. Where necessary, additional security would be requested by means of a guarantor.
  4. Preparing the Tenancy Agreement (in our standard format) and corresponding notices necessary for a client to gain protection of the relevant Rent and Housing Acts.
  5. Liaising with a client’s mortgagees where necessary with regard to references and Tenancy Agreement.
  6. Collecting first month’s rent and deposit and paying over to our client less our fees for the Letting Service.

 

  1. FEES. (all fees are subject to VAT at the current rate )

 

    •  The fee for the letting service is the equivalent to 100% of the first month’s rent subject to a minimum fee of £250. The fee shall not be refundable where a Tenant leaves prior to the end of the tenancy.

 

 

    1. LETTINGS (MIDLANDS) LTD reserves the right to charge the Landlord for a sum equivalent to one week’s rental as a minimum fee for any abortive work where a suitable prospective tenant has been put forward and is being referenced by RESIDENTIAL LETTINGS (MIDLANDS) LTD and has acceptable references and is not granted a tenancy or where the landlord no longer wishes RESIDENTIAL LETTINGS (MIDLANDS) LTD to continue letting the property whilst an application is being processed.

 

    1. and testing of extra keys                                               £7.00 per key

 

    1. collection                                                                       2.5% of gross

 rent received

 

2.5  Extensions to existing lease                                                       £60.00

 

2.6  Preparation of Inventory                                                             £65.00

 

An inventory of the property can be prepared by the agent prior to the tenancy commencing and copies supplied to the landlord and tenants. This inventory will include photographs and will detail the condition of the property and contents at the start of the tenancy. The fee for the preparation of the inventory is as point 2.6.  Crockery, cutlery, utensils and bed linen will not be included buy may be photographed

 

 

 

3.SAFETY COMPLIANCE.  It is agreed that the Landlord shall be responsible for compliance with the Gas Safety Regulations (requiring annual safety checks) and other related safety obligations prior and during the letting. If the landlord requires the agent to organise for the Gas Certificate prior to the tenancy the request must be put in writing to the agent. Reasonable costs for organising the Gas Certificate will be debited to the landlords account.

           

The following safety regulations are required:-

 

    • Furniture and Furnishings (Fire) (Safety) Regulation 1988
    • General Product Safety Regulations 1994
    • Gas Safety |(installation and Use) Regulations 1998
    • Electrical Equipment (Safety) Regulations 1994
    • Plugs and Sockets (Safety) Regulations 1994
    • Energy Performance Certificate (EPC) 1st October 2008

 

It is the responsibility of the Landlord to ensure that the above regulations have been adhered to.

 

4.GENERAL AUTHORITY. The Landlord confirms that he/she is the sole or joint owner of the Property and has the right to rent out the Property under the terms of the mortgage or head lease. Where necessary, the Landlord confirms that permission to let has been granted by the mortgage company. If the property is subject to a Head Lease and permission to let the property has therefore already been granted we suggest that a copy of the head lease is supplied to the tenants prior to the tenancy commencing.

 

5. MAINTENANCE . The landlord agrees to provide the Property in good and lettable condition and that the property, beds, and sofas and all other soft furnishings conform to the current fire safety regulations. By law, it is necessary to carry out an annual inspection and service of all gas and central heating appliances. The landlord agrees to supply a current Gas Safety Record and a energy proformance certificate for the property. If one is not provided RESIDENTIAL LETTINGS (MIDLANDS) LTD will obtain a current certificate and the reasonable costs will be debited to the landlords account.

 

 

6. TENANCY AGREEMENT The Standard 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 you may have the tenancy agreement amended by your own adviser at your own expense). It is agreed that the Agent may sign the tenancy agreement(s) on behalf of the Landlord.

 

 

7. KEYS. The Landlord will supply the Agent with a total of three sets of keys. If these are not supplied by the Landlord four days prior to the commencement of the Tenancy, the Agent will have the extra copies cut for the Landlord at the Landlord’s expense and be entitled to an administration charge (see Section 2 Fees)

 

 

RENT COLLECTION:

 

If required, RESIDENTIAL LETTINGS MIDLANDS) LTD will collect any rent due from a Tenant(s) and pay this over to the Landlord or his/her appointed representative by direct bank transfer less any fees due. We aim to make all payments to Landlords within 10 working days after receipt of rent monies from the tenant(s).

 

Our fee for collection of rent is calculated at 2.5% of the gross rent for the term. VAT will be added to all fees above at the standard rate.

 

 

DEPOSIT:

 

From 6 April 2007, all deposits taken by landlords for what is called Assured Shorthold Tenancies in England and Wales must be protected by a tenancy deposit scheme.

 

To avoid disputes going to court, each scheme will be supported by an alternative dispute resolution service (ADR), whose aim is to make disputes faster and cheaper to resolve.

 

Landlords will be able to choose between two types of scheme: a single custodial scheme and two insurance based schemes.

 

 

    Custodial Scheme

  

  • The tenant pays the deposit to the landlord;
  • The landlord then pays the deposit into the scheme
  • Within 30 days of receiving a deposit, the landlord must give the tenant the prescribed information (to be set out in secondary legislation about the scheme being used
  • At the end of the tenancy, if the landlord and the tenant agree how the deposit should be divided, they will tell the scheme which returns the deposit, divided in the way agreed by both parties
  • If there is a dispute, the scheme will hold the disputed amounted until the dispute resolution service or the courts decide what is fair
  • The interest accrued by deposits in the scheme will be used to pay for the running of the scheme and any surplus will be used to offer interest to the tenant, or landlord if the tenant isn’t entitled to it

 

Insurance-based schemes:

   

  • The tenant pays the deposit to the landlord
  • The landlord retains the deposit and pays a premium to the insurer – the key difference to the custodial scheme
  • Within 30 days of receiving a deposit, the landlord must give the tenant prescribed information (to be set out in secondary legislation) about the scheme being used
  • At the end of the tenancy, if the landlord and the tenant agree how  the deposit should be divided, the landlord return all or some of the deposit
  • Of there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved
  • If for any reason the landlord fails to comply, the insurance arrangements will ensure he return of the deposit to the tenant if they are entitled to it

 

 

In each scheme, the deposit must be returned within 10 days of the landlord and the tenant agreeing how the deposit should be divided, or within 10 days following notification of an ADR/court decision.