East London

Could Hit Unprepared Landlords and Agents Hard

A raft of changes to Energy Performance Certificate (EPC) regulations finally come into force last week after being delayed for several months last year. Although EPC requirements for properties being sold and rented have changed numerous times since their introduction four years ago, the latest round of amendments – made to incorporate further European legislation and clarify current grey areas – have a number of ramifications for landlords and estate agents with fines for non-compliance.

The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2011 (SI 2011/2452) became law on 6^th April 2012. It amends the Energy Performance of Buildings (Certificates and Inspections) (England andWales) Regulations 2007.

What is the current legislation and why is it changing?

The Energy Performance of Buildings Regulations 2007 requires an Energy Performance Certificate to be made available to the prospective buyer or tenant of a property by the owner, landlord (or his / her agent). Regulation 5 of the current EPC legislation requires that an EPC be provided ‘at the earliest opportunity’ in order to inform the buyer or tenant about the energy efficiency of the building.

In its impact assessment presented to Parliament prior to the legislation changes being passed, the Department for Communities and Local Government (DCLG) suggested that compliance was low, leading to poorly informed consumers – a fact attributed to the caveat ‘at the earliest opportunity’. The impact assessment also citied a high number of poor quality and fraudulent EPCs as reasons for change.

In its outline of policy objectives, the DCLG stated a desire to improve compliance and provide interested buyers and potential tenants with reliable, useful information. This information is intended to help relevant parties make an informed decision about rental or purchasing.

According to the DCLG, “The [revised] EPB Regulations will be more consistent and coherent, which will result in improved compliance and make non compliance easier to detect. Improved compliance will provide better information to develop proposals to improve the energy performance of buildings and to monitor EPBD implementation.” (Source: Energy Performance of Buildings Directive – Compliance and Enforcement, Impact Assessment).

What are the main changes and areas of interest for private landlords and letting agents?

Regulation 5A of the new legislation requires an EPC to be obtained before marketing of a property for sale or rental commences. Although this has been the case previously, this requirement is being tightened up to reduce non-compliance with landlords, vendors or agent acting on their behalf now allowed just 7 days to secure an EPC in place of the previous 28 days. A 21 day extension to the 7 day period can be requested but it must be proven that ‘reasonable steps’ are being taken to obtain the EPC.

Production of documentation requirements are also changing, with the owner, landlord or their estate agent now required to attach the EPC to ‘written particulars’ of the property or state the asset rating on the written particulars. Where previously this was required just for buildings being sold, the new legislation also makes it a requirement for rented property.

The legal responsibility to procure an EPC currently resides with the seller or landlord. But amendments to the EPB Regulations mean that both landlords and agents can be fined if an EPC is not completed within the requisite time period. Trading Standards Officials have been given powers to check whether this has been done and issue fines of up to £200.00 per property to letting agents or the landlord when this is not the case. The front page of the EPC must also be included on any marketing particulars for the property, be that online or otherwise.

For first time landlords or those acting independently of an agent, a greater legislative burden must be carefully managed. The requirement for an EPC to be made available at the start of marketing a property demands a higher level of preparation and investment before tenants can be sought. Care must also be taken when drafting the particulars of a property to ensure that the EPC information is suitably referenced whether advertising in a local shop window or advertising a property online.

Rebecca Peach is the MD of online lettings and estate agency, I Am The Agent. Find out more at http://www.iamtheagent.com or call 0844 504 5991.

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The term ‘accidental landlord’ has become extremely common throughout theUnited Kingdomin recent years. Accidental landlords are defined as those who have attempted to sell their property for some time without having much success. In these circumstances, some will choose to rent the property privately and benefit from a rental income rather than sit and wait for the right buyer to appear.

A report recently published by property analysts, Hometrack found that despite low rates being offered on mortgages, buyers are dragging their feet when it comes to signing on the dotted line. In fact, its findings concluded that there was a 23% decrease in buyers registering with Estate Agents in the period August 2011 – January 2012. Couple this with Land Registry figures which show a 1.3% decline in house prices since December 2010 and it’s easy to see why the term ‘accidental landlord’ was coined.

While experts like property portal RightMove are suggesting that the market is fragmented and citing the emergence of ‘micro-markets’ around the country, the reality for many homeowners over the last few years is that a stagnant market has eroded confidence, often resulting in the For Sale sign remaining glued to the exterior. Faced with a choice of lowering prices, waiting out the slump and continuing to pay a mortgage on a home they no longer want to live in or taking advantage of the property rental boom, homeowners in their thousands have opted to cash in.

Although a new career as a landlord may not even have seemed like a remote possibility 12 or 18 months ago, it’s not all doom and gloom for those now finding themselves accidental landlords.

The benefits of being an accidental landlord

While selling homes has proved difficult for some, buying has become even more so. As a result of record levels of unemployment, poor consumer confidence and more stringent than ever mortgage requirements, millions of would be homeowners have found themselves renting instead.  A report commission last summer dubbed ‘Generation Rent’ found that two thirds of non-homeowners despaired of ever buying and had resigned themselves to renting.

The net result is record-breaking rental yields – the average private rented property in England and Wales now amounts to a staggering £717 per month. For landlords (accidental or not) rental yields of this magnitude are often enough to cover the mortgage repayments on the unsold property.

Particularly in such turbulent times for the property market, renting a house privately with the ability to command such high rental income gives breathing room to wait for the market to improve and house prices to go up before attempting to sell for a second time

Renting out a private property that hasn’t sold also frees up the accidental landlord to move out, without the worry of leaving the house or flat unoccupied.

Rebecca Peach is the MD of online lettings and estate agency, I Am The Agent. Find out more at http://www.iamtheagent.com or call 0844 504 5991.

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When renting out a private property, there are a million and one things to consider – where to advertise your property online, how to set the rent, whether to provide the property fully furnished, part furnished or unfurnished, how to reference and credit check prospective tenants and whether to employ the services of a property management team or go it alone. In with all of these demands and the legal responsibilities associated with being a landlord, lays the need to protect the property (and your wallet) from potential damages caused by tenants.

Social commentators predict that this summer will see a renaissance in garden and street parties as the nation comes together to celebrate the Queen’s Golden Jubilee, The London 2012 Olympics and the Euro2012 football competition. While you can’t prevent your tenants from inviting friends round to enjoy the festivities, you can protect your property and instill safeguards to ensure you’re not out of pocket should the parties, BBQs and celebrations result in damage to your investment property.

Whether you have rented a private property on a long term agreement or are dipping a toe into the landlord experience with your first short term let, getting the right insurance policies in place can make dealing with damages in the aftermath much less stressful and less expensive. Important policies to consider include comprehensive contents insurance, an emergency assistance service and accidental damage.

While things such as broken windows, stained carpets, broken kitchen cupboards and ruined gardens are not uncommon, you can take steps to make your property more party-proof, reducing the likelihood that you’ll need to make a claim on your new insurance policies. Tips such as using washable paint which can simply be wiped over with a damp cloth to remove dirt and spills can be carried out on a very small budget but can make a big difference to the property maintenance even if tenants regularly have people over.

Other hints such as using dark, hardwearing carpets on areas like the stairs and hallways or even installing laminate or durable vinyl floors that can be swept and mopped can keep maintenance costs low in the long term by avoiding the problem of stained carpets that will need to be replaced at the end of the tenancy.

If despite your best efforts, tenants parties continue to get out of hand and result in unreasonable damage or mess, a formal written letter should always be your first course of action followed by subsequent regular inspections to check the state of the house or flat. If you don’t have the time to dedicate to keeping on top of inspections and following up with problem tenants, it’s worth considering a property management agency to do the job for you – the fees you’ll pay are small in comparison with the convenience and peace of mind of knowing your house or flat is being properly cared for and well maintained.

Bio: Rebecca Peach is the MD of online lettings and estate agency, I Am The Agent. Find out more at http://www.iamtheagent.com or call 0844 504 5991.

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In these difficult economic times, many people are looking for ways in which to supplement their income, and one of the most popular methods is deciding to rent out a private property and turn a hand to the business of being a landlord. Although many assume that finding tenants for a property is the toughest part, there is actually much more to successfully renting a house than ensuring the windows are clean and that the new tenants know what day the bins are supposed to go out.

Before putting a property on the market to rent, it is important to get an understanding of rent prices in the area, adding furnishings and fittings afterwards. Rent which is too expensive might see the property become hard to lease, and listing a property too cheaply will see the landlord losing out on profit. Taking advantage of free valuation offers from a specialist letting agent is great way to get peace of mind that you’re property is priced within range – not too cheaply and not too expensively.

It’s easy to go it online these days and rent a property privately but organization is key. One of the most important steps before listing a property is to obtain the necessary certificates to stay compliant; these being Energy Performance Certificates and Gas Safety Certificates. Once the required documentation has been acquired, the house or flat is ready to list.

Writing a description of a property can also be challenging; the best advice is to focus on the benefits and provide accurate descriptions of room sizes, furnishings and the location of the property including factual information such as the proximity to local amenities, schools and transport links is always a good idea.

Once a tenant is found, a holding deposit is required, as well as tenant reference forms, which include contact details, employment history, salary information and the contact details of their guarantor, if this is necessary. When checks have been carried out, a move-in date can then be established.

From here a tenancy agreement, also known as an Assured Shorthold Tenancy (AST) should be signed by both the landlord and the tenant, stating the terms of the tenancy. When this is signed and completed, a full inventory of the property should be taken, including the general condition of the property, the furnishings and the decoration. This can be done in writing or in photograph form and can be used to settle any disputes which may arise further down the line.

The property is now ready to be inhabited by the tenant or tenants, with all documentation obtained and all the necessary checks carried out. The last hurdle is protecting the deposit received from the tenant with one of the government approved deposit schemes. As a landlord, within 14 days of receiving the deposit you must provide the tenant with a signed Deposit Protection Certificate.

Rebecca Peach is the MD of online lettings and estate agency, I Am The Agent. Find out more at http://www.iamtheagent.com or call 0844 504 5991.

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