NEW LANDLORDS WELCOME
If you have property you would like to rent on a long term or short term basis, furnished or unfurnished in the surrounding area, do not hesitate to call us. We have handled successfully property rentals for over 20 years. We can forward to you our 'New Landlords' information pack, which will answer many of your queries . . or why not give us a call today on 01425 279035, we would be pleased to discuss any questions you might have, and to arrange a viewing.
Baytree Residential
Landlords Information
We specialise in the letting and management of all types of property, both furnished and unfurnished.
Each property receives the personal attention of the Baytree staff and is checked on a regular basis during the tenancy agreement.
Terms Of Business
What Protection Do You Have?
It is possible for an owner/occupier to let their property without fear of not being able to recover possession. Certain conditions have to be met and Baytree will provide all the necessary details prior to any agreement being made.
Length of Agreement
It is normal practice to let the property in question for a minimum period of 6 months or maximum 12 months. Should you wish to work abroad for a period of 3 years for example, we would arrange a tenancy for 12 months only, to be renewed for a further 12 months at the end of the first agreement, if you so wish. This enables us to review the agreement and increase the rental to cover any increase in your disbursements.
How Quickly Can A Tenant Be Found And What Type?
It is advisable to put your property on the “Letting Market” as soon as possible as in many cases, properties can be let several weeks in advance from the date they become available. The type of tenant very much depends on the type of property, i.e. small starter home would be suitable for a younger couple. The larger properties will be offered to professional clients, either direct or through their company.
What Are The Legal Requirements?
Once again, Baytree will provide a safe and legal tenancy on your behalf by completing a formal agreement, duly signed by yourself and the tenant under the various rent acts, or by us your managing agents.
An inventory, complete in every detail, will be taken and will include the condition of the decoration, furnishings and carpets etc. A dilapidation deposit is also taken from the tenant (equal to one months rent unless otherwise specified. This deposit is held in the required insured scheme) and only returned on completion of the tenancy and after the inventory has been checked out and we are in possession of receipted bills for all utilities used by the tenant during their period of residence.
If the property is found to be in need of cleaning or if any of the items listed on the inventory are missing, the cost of reinstatement recoverable from the tenant via the deposit.
Also, before letting your property for the first time, we reserve the right to make a small charge for cleaning, should we consider this to be necessary.
Services
At the commencement of the tenancy, all services – Gas, Electricity, Telephone & Council Tax, are put in the name of the tenant and proof of this transfer has to be shown when signing the agreement.
Your Outgoing Costs
Payment of your mortgage (if any), water rates, insurances etc. should be made by bankers order. If you have a mortgage, it is necessary for you to contact the mortgage company to inform them that you wish to rent your property.
Repairs To Your Property
Baytree can arrange to deal with all emergency or essential repair, without reference to yourself up to a limit of £150.00, unless further delay would cause greater damage and further costs (burst pipes, personal injury etc.) Written details regarding insurance are available upon request.
All non-essential repairs will be referred to yourself before taking any action, unless prior arrangements were made when your property was registered with us. EG – The Landlord lives abroad.
The Landlord is responsible for the maintenance of electrical equipment, i.e. dishwashers, washing machines, cookers etc, except in those cases where the tenant is accountable for any malfunction
Management Duties
As Managing Agents it is our responsibility to look after your total interests in connection with the property being let and to act on your behalf in the supervision and checking of repairs, inventory changes, negotiating with tenants, insurance claims and rent collection etc.
Please arrange to have your mail redirected by the post office. Should any post be delivered to your property after being let, Baytree will be pleased, for a limited period only, to forward this to your new address.
Please remember to leave this office your forwarding address. A list of local services, i.e. milkman, doctor, dentist, newsagent left in your property would greatly assist the tenant. Instructions on how to work the boiler, washing machine etc would also be most helpful and should be left in the kitchen.
We would ask you for three full sets of keys to your property. Two sets will be given to the tenants and one set will be held by Baytree for various inspection visits and any potential emergencies. We can, at your request have further keys cut subject to the required fee.
What happens if I want to sell the property?
Should you wish to place the property on the market, we would request being notified as soon as possible, so we are able to give the tenants two months written notice (subject to the agreement) and assist them in finding a new home. If a person has contracted to purchase your property as a result of an introduction, either directly or indirectly by Baytree Residential Letting, 375 Lymington Road, Highcliffe, Christchurch, Dorset, BH23 5EG, our sale commission, payable by the Vendor will be One Percent (1%) of the sale price. This will be payable by the vendors solicitor / legal representative on the day of completion. This also applies to a purchaser who is or has been a tenant of the property within Twelve Months (12 months) prior to sale contracts being exchanged.
What does the Landlord pay for our services?
(A) Full management will be carried out for __% (plus VAT) of the monthly rent.
(B) Your total legal costs are £___(plus VAT). This covers the Agreement, Rent Act Form and Inventory
(C) No charge is made to the Landlord for the check-out of the property at the end of the lease.
Renewal Of Lease / New Lease
Prior to the end of a lease, we will check with you to see if the property is to be offered for
re-letting. If so, we will arrange the new lease with the present tenant for a fee of only £___(plus VAT). A new lease is issued only if there is a change in the rent. If not, the original lease just continues, without any cost to the Landlord.
What happens if the tenants won’t leave my property or don’t pay the rent?
All of our agreements are known as asured agreements and run for a minimum period of six months. We monitor all rental payments and, in the event of a default by a tenant, we will serve all relevant notices immediately. (28 days after the due date is the soonest we are legally allowed although we will try and contact the tenant by phone and letter during this period).
If the tenants do not discharge the outstanding rent or fail to vacate the property on the due date, we instruct solicitors to take immediate action to recover possession and obtain a Judgement for the arrears of rent outstanding. Generally, the costs incurred in obtaining a possession order are covered by the deposit which is held by Baytree. However, the Landlord is responsible for any shortfall. We now operate a Landlords rent guarantee scheme – details on request.
Liability To Income
Rental Income Is Taxable Income!
Landlords must declare this income on their tax returns. If a Landlord does not receive an annual tax return, then they have a legal responsibility to notify the Inland Revenue if their rental income gives rise to a liability to tax.
The UK now has a system of “Self Assessment”. This imposes a considerable burden on individual taxpayers and there are financial penalties for those who fail to meet their obligations.
Non-UK resident Landlords are also liable to income tax. Their letting agent or tenant (if no agent) must deduct the basic rate of tax at source and pay this to the Inland Revenue under the ‘Non Resident Landlord Scheme’ and a tax exemption certificate is issued to the agent.
The tests for determining an individual’s residence status are complex. However, for the purposes of the ‘non resident landlord scheme’ an individual is regarded as non-resident if their usual place of abode is outside the UK.
Self Assessment also applies to non-resident Landlords who may be required to file tax returns with the Inland Revenue.
These Tax Facts Is For General Information Only And Does Not Constitute Any Legal Advice Whatsoever. We Would Strongly Advise You To Obtain Up To Date Advice And Information Via Your Own Accountant Or Tax Advisor
Deductible Expenses
Generally, expenses must be of a non-capital nature and incurred wholly and exclusively for the purposes of letting the property. This is a statutory definition and a practical interpretation is sometimes difficult. Common items of allowable expenditure are:-
Letting Agents Fees
Tax advisors fees for preparing an annual letting account and agreeing liabilities with the Inland Revenue.
Usual maintenance of the property including repairs, although not repairs which amount to improvements.
Water rates, Council tax, Ground rates, Insurances, Service charges and Inventory costs. A 10% wear and tear allowance if the property is let furnished. Legal fees for drawing up a lease of less than a year. Certain expenditure incurred before the property is first let.
Mortgage Interest
Interest payable on a loan to purchase, improve or make alterations to a let property is deductible for tax purposes. Tax relief is given on the full amount of the loan and at the highest marginal rate of tax. Individuals who have previously lived in the let property may be able to claim under MIRAS. In some cases this can work to their advantage and they should seek professional advice.
Capital Gains Tax
Capital gains tax is a charge on assets which increase in value between the date of acquisition and the date of disposal. UK real property is a chargeable asset for CGT purposes. Certain costs can be deducted for CT purposes including incidental cost of acquisition and disposal such as the fees for a surveyor, valuer, accountant or solicitor.
There is an indexation allowance to counteract the effect of inflation. In other words only capital growth in excess of inflation will be charged to tax. UK landlords are entitled to an annual exemption, both husband and wife being entitled to this.
If someone has previously lived in the let property, they will be entitled to additional relief and they should seek professional advice. Non-resident Landlords are not generally liable to CGT and this exemption extends to property situated in the UK.
Inheritance Tax (IHT)
Liability to Inheritance Tax is largely governed by a persons domicile status. Domicile is a legal status and is a concept which is distinct from a persons residence status. The question of domicile can often involve complex negotiations with a UK tax authority and professional advice is strongly recommended.
UK domiciled individuals are liable to IHT in respect of their world wide estate. Non-domiciled individuals are usually liable to UK IHT on assets situated in the UK. With careful planning, this liability can be avoided.
Owning Property Through A Company Or Trust
This is a complex area of taxation and professional advice should always be sought.
Termination Of This Agreement
This agreement can only be terminated by the Landlord at the end of a letting period by giving TWO CALENDAR months notice in writing. In the event of termination, commission is still payable to Baytree Residential Letting Agency in respect of all tenants who were originally introduced by the agency until such time as they vacate the premises forming part of this agreement.
Insurance
The Landlord should ensure that the property is adequately insured and the agency can accept no responsibility in this respect. However, should you have any questions, we are an agent for LetsSure who have various polices for Landlords and Tenants, which may be of assistance to you. We do hope that this information will be of use to you, however please do not hesitate to contact us if you have any further questions.
We Look Forward To Receiving Your Instructions.