Maintaining your Property through the winter months
Winter is coming! In fact, it is already here! The sharp drop in temperature has affected everyone these past weeks. Hot Property has provided a basic guide to what Landlords and Tenants should be aware of and advisory actions to ensure their properties are well maintained during the winter months.
Be mindful of damp and mould
Condensation can be a big problem for many properties as warm air created in the property from increased heating and everyday activities, such as cooking and showering, meets cooler surfaces such as a window or wall. It is therefore extremely common during cool winter months.
Unless properly ventilated, this build-up of moisture in your property can lead to mould growth. Damp, and especially mould, can be detrimental to an occupants health and can cause long-term problems for the property.
Bleed your radiators
Although often overlooked, bleeding your radiators can be very useful for maintaining your property in the cold weather. Bleeding radiators involves removing trapped air that can build up over time and prevent them from working efficiently. This can result in the property feeling cold.
As a Tenant bleeding radiators may not be something that you have previously carried out. However, it is straight forward task that would be expected in the general upkeep of the property. It may also make a significant difference to your heating and bills!
Avoid a broken boiler and frozen pipes
Without doubt the worst time to have a boiler breakdown is in winter when temperatures drop and we are reliant on heating. A broken boiler can cause landlords and tenants huge problems, even leading to a dispute! It is, therefore, best practice to ensure that the boiler is in top working condition.
An Introduction to the new Private Residential Tenancy Legislation
Change is coming to the private rental market in Scotland. That change is going to be in the form of The Private Housing (Tenancies) (Scotland) Act 2016 will introduce a new (and very different) tenancy system to Scotland called the Private Residential Tenancy (PRT). As with any major legislative change there is still uncertainty about how the Act will work in practice, but with it expected to be rolled out in December 2017 Landlords and Tenants need to get to grips with the basics now.
The new PRTs will create an open ended tenancy and will last until a Tenant wishes to leave the property or a Landlord uses one or more of the 18 ‘modernised’ grounds for eviction. That means the end of the Section 33 notice which is the most used notice in Scotland to end a tenancy at the moment and requires the Landlord to give no reason for ending the tenancy.
Other features of the Act include a Standardised Tenancy Agreement (at the moment this is still only a recommendation to Landlords), rent controls where a Tenant disagrees with an increase, new notice periods which favour the Tenant and further powers for the First-Tier Tribunal over breaches of Tenancy and the eviction process.
It is fair to say that the Act has been received with mixed reactions with many Landlords concerned about what could be seen as a further tilting of legislation in the Tenants favour. However, until the Act is in place and we know how the governing body, First-Tier Tribunal, are going to interpret and enforce the new rules it is hard to know what the positive and negatives will be for either party. For example at the moment the process for evicting a Tenant in clear breach of their tenancy (often including months and months of rent arrears) through the Sheriff Court can be extremely costly and take months. If this process is taken over by the Tribunal it may negate the need for Landlords to instruct legal representation and it may be in their power to vastly speed up the process.
The new modernised mandatory grounds for eviction include: Landlord intends to sell the property, Landlord intends to refurbish the property, Landlord intends to live in the property and Tenant has a relevant criminal conviction.
There is one definite reasons Landlords can breathe a big sigh of relief; the government guidance recently produced clearly states that existing tenancies and tenancies commencing before the Act comes into force will not be subject to the new legislation.
There is a lot of information to understand and changes to implement, however, Letting Agents should have a handle on it through the mandatory training that the Scottish Government now requires them to complete. It is also a step towards routing out negligent or irresponsible agent currently operating and improving industry standards for both Landlords and Tenants – something which has been long overdue.
Hot Property is committed to providing our customers a professionally informed service regarding the new legislation and its implementation. If you have any questions regarding your responsibilities please do not hesitate to contact us.
The full government guidance on the Act can be viewed here: https://beta.gov.scot/publications/private-residential-tenancies-tenants-guide/
What condition should your property be at the end of a tenancy; a 5-point guide to understanding fair wear and tear.
The end of tenancy period is without doubt the most contentious time in the majority of tenancies. Disputes can arise over notice periods, the final rent balance, access for new tenant viewings and, most commonly, the condition of the property.
Landlords and Tenants often have polar opposite views of how the property should be returned at the end of the tenancy. Legislation clearly states that the property should be returned in the same condition as it was let with the exception of ‘fair wear and tear’. The House of Lords defines fair wear and tear as: ‘Reasonable use of the premises by the tenant and the ordinary operation of natural forces’. However, what the term actually means in practice is still often misunderstood. Breaking this down is the key to managing the expectations of both parties and avoiding lengthy, and sometimes unpleasant, disputes between the two parties.
1. Who are your tenants? It is essential that you choose the right Tenants for your property and that you understand the way that they will be living in the property. If you choose to let your property to a family with 3 children and a dog you have to expect that they will create more wear and tear than a single tenant in their 40s for example. This does not mean that it is acceptable for the property let to the family to be returned with crayon on the walls or a broken door handle; that is clearly damage. However, it does mean that the more people living in the property the more wear and tear you should expect and if there are children and/or animals there will be some further specific differences such as scuffs to lower walls and possibly heavy traffic on carpets. The same rule goes for Tenants with differing cultural or religious backgrounds which may mean that they live in the property in a different way than you would.
2. How long have they been living in the property? If you have a 6-month tenancy you should expect minimal wear and tear at your property; the tenants should return it in very near the same condition it was let to them. If you have a 6-year tenancy you should expect to receive the property back with extensive wear and tear and be ready to invest in the property to bring it to standard for the next tenancy. Think of your own home, after a 6-year period would you have redecorated or made an upgrades/change? The exception to this is if you have completed works mid-tenancy such as replaced carpets, then you should consider the lifespan of the carpets from the day of installation. Often you will find that in longer tenancies the Tenants have carried out works to maintain the property condition themselves. As long as they have had permission and these have been carried out to a professional standard this should be taken as a point in the Tenants favour when considering the condition of the property as a whole.
3. The Quality and Age of the condition at the start of the tenancy. Landlords must take into account the age and quality of the furnishings within the property when the Tenant moved in. If you spent £100 on a pair of lined curtains you can expect them to last considerably longer than a set at £19.99 curtains. The same goes for the age of the curtains; if they are brand new when the tenant moves in then you would expect them to be in excellent condition at the end of a 6 month tenancy. If they were 5 years old at the start of the tenancy then it would be reasonable to assume that they were coming to the end of their life regardless of how the Tenants have treated them. Considering this it wouldn’t be fair for the Landlord to hold Tenants responsible for the cost of replacement. For this reason, it is essential that you keep dates and receipts for purchases at your rental property.
4. Understanding Apportionment & Betterment. Let’s consider that at the end of a 2-year tenancy the property is returned with a large iron burn in the living room carpet. This is clearly beyond the scope of fair wear and tear and the Tenant will be responsible for the cost of the damage. However, this does not automatically entitle the Landlord to claim the full cost of replacing the damaged carpet even if it was brand new and laid before the Tenants moved in. This would mean that the Landlord receives ‘betterment’; they will now have the property in a better condition (i.e. a new carpet in place of a 2-year-old one) than expected at the cost of the Tenant. In this example the 2-year-old carpet could reasonably be expected to have another three years life left in it. If the tenant has damaged the carpet to the extent that it needs replacing a landlord would only be entitled to approximately 60% of the cost of replacement.
5. Cleaning is not included in Fair Wear and Tear. This one is a reminder to Tenants as the most common issue at the end of the tenancy is cleanliness. Cleaning is completely exempt from any fair wear and tear considerations. If the property was professionally cleaned at the start of the tenancy then it must returned in the exact same standard of cleanliness, regardless of who has been living there and for how long.
Ultimately if Landlord and Tenant cannot agree on whether the property has been returned in a good condition or not the Tenancy Deposit Scheme Regulations 2012 stipulate that a decision must be made by an independent adjudicator via one of the three Government approved schemes. This can be a drawn out and time consuming process and the adjudicator will base their decision on the above criteria. Therefore it is important for these points to be taken into consideration at the very start of the process.
If you are a Landlord having trouble with an end of tenancy dispute or unsure of the process please contact Hot Property today and we will be happy to provide you professional and straightforward help and guidance.
Buy to Let : Is being a Landlord a good investment?
In this ongoing period of ultra low interest rates more and more people are turning to alternative investment solutions for their savings. One of the most common of these is Buy to Let (BtL) property investments which is making a whole new segment of the population into Landlords, many somewhat reluctantly. But is BtL a good deal and what return on investment should buyers be aiming to achieve?
Respected financial guru Martin Lewis describes a world of ‘rock bottom interest rates’ on his website moneysavingexpert.com (check it out, it’s a fountain of knowledge). For example, he advises, ‘The Santander 123 account used to be the main beacon of hope for savers in an era of ultra-low rates but its headline is now just 1.5%’.
A better return can be achieved on ‘locked away’ accounts where you can’t access the money in the account for 1 – 5 years but even the industry ‘best’ accounts are only yielding rates of up to 2.4%.
Compare that 2.4% to the 5% average rental yield in the UK for 2016 and it is easy to see why BtL is so attractive; and that’s before you even consider the average returns in Scotland and Glasgow!
Yields in Scotland compare favourably with all regions of England and Wales: The Your Move Scotland Buy-to-Let Index for July 2016 reveals that the average gross rental yield for properties in Scotland increased to 5.8%. Glasgow is one of the top performing cities in Scotland, in 2015 LendInvest reported average rental yields for postcode area G1 of 6.71% and average yields in the East End (G40, G31, G32) of over 7% - in G32 it was actually scraping the 8% mark at 7.95%.
For the savvy buyer there are properties available in the east of the city that will comfortably achieve 8% yield and above, especially for those using Letting Agents as access to their advice on the market and tools such as property portals and marketing general achieves a higher rent than Landlords who go it alone and advertise properties on gumtree etc.
This leads us nicely onto the very briefly mentioned at the start of the article issue that concerns many would be BtL investors; being a Landlord. For Landlords today there are subject to a variety of legislations and requirements that have to be followed which can be intimidating or off putting. A good Letting Agent should cover all of these; not only cutting out the requirement for any day to day involvement but also protecting the Landlord and the investment. Letting Agent fees can be varied, www.moneysupermarket.com reports that you should expect to pay between 10% and 15% of the monthly rental income for a fully managed service. This cost will eat into the end return on investment but with rental yields at the level that they are at in Glasgow it is a cost that can be factored in and have the Landlord still achieve a healthy return.
For advice on choosing a Letting Agent please see our previous blog post ‘Picking a Letting Agent to Manage your Property’. If you are considering a buy to let property please contact Hot Property today and we will be happy to provide you professional and straightforward help and guidance.
Picking a Letting Agent to manage your property
For most Landlords, outside of their own home, their rental property is the most valuable asset that they will have. It is essential that the management of the property and tenancy is done correctly for two main reasons: to protect the asset and the investment that it represents and to ensure that the Landlord does not fall fowl out of the extensive legislation that surrounds letting in Scotland. See our previous blog post Are you a compliant Landlord? Things every Landlord should know!
Most Landlords chose to use a Letting Agent to manage their property; this should ensure that they comply with all legislation, that suitable tenants are found, the tenancy is managed (rent, repairs, renewals etc) and the condition of the property is monitored. . Dorian Gonsalves, chief operating officer of Lettings company Belvoir, says “By renting though a qualified Letting Agent, Landlords can rest assured their property is being let legally and safely and should anything go wrong, both they and their tenants have access to an Ombudsman free of charge.”
Unfortunately, not all Letting Agents provide this level of service and Landlord forums are littered with stories of Landlords burnt by mis-management or people in the industry to make a ‘quick buck’. That is why it is essential that Landlords choose a reputable agent to manage their property. This doesn’t always mean paying more; letting Agent fees can be varied, www.moneysupermarket.com reports that you should expect to pay between 10% and 15% of the monthly rental income for a fully managed service but reports no link between that and the service level. A well managed Letting Agent generally achieves higher rentals than Landlords doing it on their own and posting adverts on forums such as gumtree and therefore a lot of the management fee can be offset.
So, how do Landlords ensure that they are using a reputable agent?
In April 2017 The Telegraph advised that there are 5 things that Landlord’s should ensure that their Letting Agents do:
Hot Property meets all of these points and as members of the Property Ombudsmen follows a code of practice ensuring a high level of service and accountability for Landlords and Tenants. If you are a Landlord looking for an Letting Agent or unsure if your current agency meets these standards please contact us and we will be happy to provide you professional and straightforward help and guidance.
Are you a ‘compliant’ Landlord? Things every Landlord should know!
Being a Landlord in Scotland is more legislatively intensive than ever before and with the Scottish Government planning further legislation and standardised Tenancies that isn’t likely to change. While the legislation is in place to keep the Tenants safe and protect their right to live in someone else’s house as their home it can be a minefield to understand and negotiate.
Many Landlords employ a Letting Agent to manage compliance with the various pieces of legislation however they should be aware that even if they have a Letting Agent acting on their behalf the legislation still holds them personally responsible to ensure full compliance.
With this in mind Hot Property has put together a brief overview of the main points of mandatory compliance that anyone letting a property should be aware of.
Anyone who lets a property in Scotland must register with the local authority area where the property being let is located. The local authority will assess the registration and if approved will provide the Landlord with a registration number which must be displayed on any adverts for let.
Renewal: 3 years.
Gas Safety Inspections / CP12 certificates
Before letting a property a gas safe registered engineer is required to attend and inspect all gas appliances to ensure that they meet the required standard and provide a certificate to that effect (including provision of CO detectors).
Energy Performance Certificate (EPC)
If you're letting out a property to tenants, you must be able to produce a valid EPC to anyone interested in renting the property.
Renewal: 10 years.
Smoke and Heat Detectors
The property must have a satisfactory way of detecting fires and for giving warning in the event of a fire. This is generally accepted as a minimum requirement of smoke detectors in every ventilation space and rooms used for general day time living and a heat detector in the kitchen. All detectors should be hard wired and interlinked.
Renewal: Average lifespan of a detector is 7 years.
Electrical Installation Condition Report (EICR)
Before letting a property a qualified and registered electrician is required to attend and inspect the electrical installations, fixtures and fittings.
Renewal: Usually 5 years however an electrician can specify a shorter period at their discretion.
Portable Appliance Testing (PAT)
The appliances (any item that has a plug) at the property must also be deemed safe, this is usually carried out at the same time as the EICR however it does not require an electrician to perform the test.
Renewal: 1 year.
Repairing Standard Act
The Repairing Standard, contained in the Housing (Scotland) Act 2006, covers the legal and contractual obligations of a Landlord to ensure that a property meets a minimum physical standard. The specifications are at the level you would expect for anyone living in a property; ie wind and water tight / access to heating and hot water, so it isn’t likely that you would allow the property to fall below this level. That being said Landlords should be aware that it is a legal obligation and that there are formal recourses Tenants can take if it is not adhered to.
Since 2011 Landlords have been required to use a tenancy deposit scheme, provided by an independent third party, to protect deposits until they are due to be repaid.
Houses in Multiple Occupation (HMO)
Any property let to 3 or more unrelated individuals must have a HMO license. The licensing helps ensure that accommodation is safe, well managed and of good quality. Before granting a licence the local authority must be satisfied that the owner and any manager of the property is fit and proper to hold a licence; that the property meets required physical standards and that it is suitable for use as an HMO.
While there are other requirements to consider the points laid out above are the specific directives from the Scottish Government and there is very little allowance for Landlords, or the agent that represents them, for non-compliance. It is therefore essential for Landlords that they use reputable Letting Agents who abide by a code of conduct and protect their clients.
If you are a Landlord unsure of your obligations or concerned that you may not have a compliant Tenancy please contact Hot Property and we will be happy to provide you professional and straightforward help and guidance.
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