Oaklets

               Residential Property Management

Our Commitment to Service...

Oaklets is part of the largest independent family owned and run firm of estate agents in South East London and Kent. The directors, Simon, David and Alan Pope endeavour to provide the very highest standards of service and efficiency. At least one of the directors is always on hand  to personally deal with any queries that you may have. With six local offices open seven days a week there is no better choice for selling or letting your property. Oaklets is a member of the National Association of Estate Agents.

Please browse through our guide or click on a topic below to learn more

  An Introduction to Renting your Property
Types of Tenancy
How Do I Extend or End a Tenancy?
Our Services
Rules & Regulations
Letting Your Home - Real Peace of Mind
Buildings & Contents Insurance
Taxation of Rented Property
Important Information for Landlords
Our Fees & Services

AN INTRODUCTION TO RENTING YOUR PROPERTY
Whether you are someone looking to rent your property for a short term whilst working away from home or wishing to set up a permanent rental agreement this guide is sure to give you some help, The prospect of letting a property is a new experience to many and it is our aim to try and make the complexities a little easier to understand This guide contains advice on furnishing your property, tips on taxation, a brief insight into the responsibilities of the Landlords and Tenants under the 1988 Housing Act together with a note of our fees and services. We pride ourselves on our personal service and so we would naturally be pleased to meet with you to discuss your plans -just give us a ring or visit one of our offices.

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TYPES OF TENANCY

The decision as to which type of tenancy to use is determined by a number of different factors - we will be pleased to advise on individual circumstances on request. The principal choices are between a CONTRACTUAL TENANCY (used mainly for lettings to Companies) an ASSURED TENANCY and an ASSURED SHORTHOLD TENANCY.

The ASSURED SHORTHOLD TENANCY offers the tenant little security of tenure but gives the tenant the right to refer the rent to a rent assessment committee if he feels that it is too high. It should be pointed out that a rent assessment committee has to show that a tenant is paying substantially above the rent paid for similar properties in the area before ordering a reduction in rent. In practice we feel that with an increasing number of properties on the market it is unlikely that a Landlord would secure tenants if his rent was too high and therefore few tenants will wish to refer rents to the committee. . The original 1988 legislation laid down important procedural steps which had to be followed to ensure that a legally binding tenancy was created but the process has been greatly simplified by amendments introduced in the 1996 Housing act. There is now no minimum time period for an assured shorthold tenancy, although a Landlord cannot obtain a court order for possession of the property within the first six months of the tenancy. For this reason we usually recommend that the tenancy agreement is for a minimum fixed term of six months; this binds both the Landlord and tenant to this period of time. Please note that an assured shorthold tenancy cannot be granted where the Landlord is resident on the premises.

THE ASSURED TENANCY gives the tenant considerable security of tenure (i.e. it is difficult for the Landlord to regain possession) but gives little power to contest the rent once it has been set,  this type of tenancy is principally used by housing associations or other long term landlords and we would not usually recommend this type of tenancy to a private landlord.

The CONTRACTUAL TENANCY is used when the letting is to a Company or where the annual rental exceeds £25,000. In both these cases the letting falls outside the scope of the Housing Act and particular procedures apply to regaining possession and enforcing contractual terms. Our staff would be pleased to advise further if necessary.

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HOW DO I EXTEND OR END A TENANCY?

Under the terms of the assured shorthold tenancy the Landlord has the right to regain possession of the property at the end of the fixed term PROVIDING that a notice requiring possession has been served at least two months before the end of the term. If we act as managing agents we will serve the notice on instructions from the Landlord, if we are not managing the property we will gladly provide the Landlord with a blank copy of the relevant notice.

At the end of the fixed term if possession is not required the Landlord has two choices. With the agreement of the tenant the tenancy can be extended for a further fixed period. There is no limit to the number of times that a tenancy can be renewed and the advantages to the Landlord of renewing in six month blocks are that he is certain of having a tenant for the next period and that if necessary he has the facility to increase the rent twice a year. In normal circumstances we would, however, recommend that rent increases are restricted to one a year.

As an alternative to extending for a further fixed period the tenancy can be allowed to lapse into a STATUTORY PERIODIC ASSURED SHORTHOLD TENANCY. In this case the tenancy would continue under the same terms and conditions as outlined in the original Agreement except that now the tenancy will continue until one party gives notice. Should the Landlord require possession he must give two months notice (on a prescribed form) whilst the tenant can give one months notice of his intention to leave. In either case the notice must expire at the end of a completed period of the tenancy. Whether or not you instruct us to manage your property Oaklets will be pleased to advise on any aspect of your tenancy and can organise tenancy agreement renewals or provide possession notices on request.

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OUR SERVICES

At Oaklets we aim to be as flexible as you need us to be. In order to provide you with the service that best suits your requirements we offer a number of methods by which we can assist you to rent your property - our LETTING ONLY, LETTING & MANAGEMENT and OAKLETS GOLD services.

LETTING ONLY SERVICE
Your property will be inspected by one of our experienced negotiators and its rental value assessed. Any queries that you have can be discussed at that time and we will advise you on all aspects of letting your property.

Oaklets advertise widely in local and Central London publications at no cost to you. All branches are computer linked to ensure that your property has maximum exposure.

We interview all prospective tenants before sending them to your property or accompanying them on a viewing. Full details are taken of individual's circumstances to assess their suitability as tenants.

Upon finding a suitable tenant, we will negotiate an acceptable rent. Satisfactory references will be sought and obtained PRIOR to the commencement of the tenancy and your approval will be gained before drawing up the Tenancy Agreement.

We collect the first month's rent and security deposit and will forward the balance to you after deducting our fee.

We can prepare the appropriate tenancy agreement tailor made to your individual requirements and circumstances and the Tenant can be checked into the property by our inventory clerk using our professional inventory or one supplied to us by the Landlord. (Please note that tenancy agreements, inventories and check-ins are subject to an additional charge.)

LETTING AND MANAGEMENT SERVICE.

In addition to the services detailed above our Letting and Management Service includes the following:-

We will hold the security deposit on your behalf. 

We will collect the rent monthly and account to you on that basis. Funds can either be paid to you by cheque or into your bank account, (please note that due to delays in the banking system it can take up to seven working days from the day the rent is due to the day it is received in your bank).

We will arrange for the Tenant to transfer the gas, electricity and telephone supplies into their name at the commencement of the tenancy. In case it is not possible to arrange for the relevant Boards to read the meters, our Inventory Clerk always takes meter readings at the check-in which are then forwarded to the Boards. Your Termination Account can either come to us for payment or be forwarded to your home address. If you have not already done so, we can arrange Direct Debiting Mandates on the Water Rates on your behalf. At the termination of the tenancy, the utilities will usually be disconnected unless the Landlord has made special arrangements with the relevant Boards. Again, final accounts will be forwarded to the tenant's new address.

Repairs during tenancy - we will organise any minor repairs and obtain estimates for more serious work. In this instance, we will always report to the Landlord before executing work. We will buy any new machinery that is necessary with the Landlord's consent. Any repair or work that is required because of negligence or misuse by the tenant, is payable by the tenant. In all other cases, the Landlord is responsible. It is our normal practice to organise minor repairs (less than £100) without prior consultation with the Landlord. For repairs above £100 we will arrange for two written estimates from reputable tradesmen and forward these to the Landlord for approval before authorising work. Should you require prior notification and estimates of minor repairs please let us know at the start of the tenancy.

We will forward any mail received at the property that is addressed to you or your immediate family, although to ensure that mail does not go astray, we do recommend that you take advantage of the Post Office redirection scheme which, for a small charge, will direct mail for you from the sorting office. 

We carry out a regular three monthly inspection of your property upon which you receive a written report. We would not normally carry out a full inventory check at this stage but rather are looking for any obvious damage or signs that tenants are not observing the terms of their agreement.

If you are resident abroad then we will operate the Inland Revenue  scheme for taxing the Uk rental income of non-resident Landlord, We only deal with tax and allowances on monies which pass through our account although we are pleased to advise you on additional allowances you may claim.  

Should the property become vacant we will, of course, on your instructions, organise the reletting of the property. We will always try to ensure the property is unoccupied for the shortest possible time.

OAKLETS GOLD   SERVICE

The Oaklets Gold Service has been introduced in response to requests from Landlords for a "bespoke Management Service". In addition to the services described under the Letting and Management Service, the Gold Service provides the Landlord with the following additional benefits:

Rent Guarantee We undertake to pay the monthly rent to the Landlord whether or not we are able to collect payment from the tenant. This guarantee will cover up to three months' rent arrears to a maximum of £1,000 per calendar month. Whilst payments are being made under a rent guarantee scheme we will be taking appropriate action at no additional cost to the Landlord to recover possession of the property. In accepting payment of rent under this scheme, the Landlord agreed to assign any debt owed by the tenant to Oaklets in order that we may attempt to recover unpaid rent through the courts.

Free LETsure Insurance. The Oaklets Gold Service provides free LETsure Insurance - see below for full details.

Inspections whilst Empty. We will inspect your property on a fortnightly basis at any time that it is empty between tenancies.

The Choice is Yours. The services detailed above will provide an idea as to the breadth of our expertise - but please contact us if you require any further explanation. We realise that each of our landlords has individual requirements to which we aim to tailor our service.

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RULES & REGULATIONS

There are a number of legal requirements concerning, primarily, the health and safety of the tenant which directly affect landlords who are considering letting their property. These are summarised below and we strongly recommend that you familiarise yourself with the regulations and ensure that your property complies with them as the penalties for noncompliance are severe. The rules are very largely a matter of common sense and it is likely that you will find that your property already meets the required standards. Our representative will be pleased to answer any queries that you may have. We can provide you with the full text of any of the regulations if you require. Should you favour us with your instructions to let or manage your property we will ask you to sign a declaration that you both understand the regulations and will ensure that your property meets them.

Furniture & Furnishing (Fire) (Safety) Regulations 1988.
This legislation defined certain standards and tests which were applied to (mainly) foam filled furniture and applied to manufacturers and importers of furniture from 1st November 1988. From 1st March 1990 the legislation extended to retailers of new furniture and from 1st March 1993 to retailers of second hand furniture. An amendment to the regulations in 1993 made it an offence to hire out non compliant furniture in the course of business and this includes landlords letting furnished accommodation. Any furniture that you supply must therefore meet the fire resistance requirements. If your furniture was manufactured or imported new since 1st November 1988 it will almost certainly comply and should bear a green edged label with a picture of a cigarette and a match to confirm its fire resistance. Furniture manufactured prior to this date may or may not comply and will probably not bear a label. If you are unable to obtain confirmation of its fire resistance from the manufacturer you should remove it from the property prior to the commencement of the tenancy. Furniture and furnishings to which the regulations apply include beds, mattresses, headboards, suites. seat pads. cushions, pillows and loose or stretch covers. Failure to comply with the regulations may lead to a prosecution with penalties of imprisonment or fines up to £5,000.

Gas Safety (Installation & Use) Regulations 1994.
Regulation 35 of the approved code of practice imposes a duty on landlords to ensure that any gas appliances in a rented property are maintained in a safe condition to prevent risk of injury to any person. More particularly each gas appliance must be checked for safety at intervals of not more than twelve months by either the Gas Board or a CORGI Registered gas fitter. Landlords should maintain a record of when each gas appliance was checked, the defects found (if any) and the remedial action taken. This record is in the form of a "Landlords Gas Safety Certificate" should be made available to the tenants on moving in to the property and within 28 days of the annual inspection being carried out. PLEASE NOTE that under our terms of business we consider that it is the Landlords responsibility to ensure that these safety checks are carried out and we accept no liability should you fail to do so. However, we have been able to negotiate favourable rates with a local CORGI registered firm and, on receipt of your WRITTEN instructions will be pleased to arrange safety checks on your behalf. Should you have a Gas Board 3 star service contract (or similar) this will cover one annual inspection of the boiler. These contracts do not, however, cover gas cookers or fires and you will still need to arrange for these appliances to be safety checked. The basic 3 Star Contract does not include provision of a Landlords Gas Safety Certificate, although the Gas Board can provide this at an additional cost. Failure to comply with these regulations may lead to a prosecution with penalties of imprisonment or fines up to £25,000.

The gas safety regulations are administered by the Health & Safety Executive, click here to visit their website.

Electrical Equipment (Safety) Regulations1989.
These regulations cover all mains voltage household electrical goods including cookers, kettles, vacuum cleaners, washing machines, immersion heaters etc. and impose an obligation on the Landlord to ensure that the goods are safe so there is no risk of injury or death to humans or pets or risk of damage to the property. In practice, unless you are aware of any particular fault with an appliance, It is difficult to ensure that it is safe. In general, though, you should remove any item with damaged or frayed wiring, badly fitted plugs etc. and ensure that instruction booklets necessary for the safe operation of any appliance are available for the tenant's use. You should avoid purchasing second hand appliances for the property or, if you do, should have them checked by a qualified engineer. Any non-working appliance should be removed from the property prior to the commencement of the tenancy. There is currently no obligation upon the Landlord to provide a smoke alarm. However, where one is provided the Landlord is required to ensure that it is maintained in working order at all times. Failure to comply with the regulations may lead to a prosecution with penalties of imprisonment or fines up to £5,000.

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LETTING YOUR HOME - REAL PEACE OF MIND

Letting your property is the simple answer to many problems. High interest rates make it uneconomical to leave your property vacant for any length of time and the added security problem of an empty property is always a worry.

Unfortunately there is always a certain element of risk involved in arranging a Tenancy however thoroughly the Tenants are vetted by the Managing Agent. Job loss, a lengthy illness or serious matrimonial upset can soon become a problem for a perfectly respectable and financially sound Tenant with good references.

Oaklets have the solution to this problem - the LETsure Legal Protection Insurance Policy which is underwritten by Sun Alliance.

LETsure Will cover:-

Legal costs in disputes with tenants or other unauthorised occupants over unpaid rent or damage to the building or contents.

The cost of removal of squatters.

The cost of Hotel accommodation up to a limit of £50 per day for up to 30 days for you and your family whilst legal action to remove the Tenant or squatter is started.

All legal fees up to £50,000 per claim to protect your legal rights.

Action for the protection of your legal rights in relation to the ownership or peaceful occupation of the home (neighbour disputes).

Action arising out of a contract to sell or purchase the property.

A debt recovery service through a national panel of solicitors. If your outstanding rent or damages are not recovered by this method the matter will be continue through solicitors for formal legal action. (The minimum amount in dispute must be at least £250)

All of this for the annual LETsure premium of £85. Oaklets can provide further details and will be pleased to arrange this insurance on your behalf.

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BUILDINGS & CONTENTS INSURANCE

Under the terms of the tenancy agreement it is usually the case that the Landlord is responsible for insuring the buildings and personal contents whilst the tenants would be expected to arrange cover for their own belongings.

If the property that you are considering letting is a flat then it is most likely that the Freeholder will arrange the buildings insurance and charge the cost proportionately to each Leaseholder, although there is rarely a problem it would be advisable to check the policy wording to ensure that there are no restrictions whilst the property is let.

Should you require quotations for buildings or contents insurance OAKlets would be delighted to arrange this on your behalf via LETsure. The following cover is available:-

BUILDINGS - Cover is available for houses, excepting those let directly to local authorities, and excluding the first £100 of each claim for all the usual risks of damage caused by:- FIRE LIGHTNING AIRCRAFT EXPLOSION SMOKE RIOT BURST PIPES IMPACT FLOOD OR STORM THEFT MALICIOUS PERSONS

SUBSIDENCE (£1,000 excess applies to subsidence claims) In addition LETsure Buildings Insurance provides the following extensions:- ° Property Owners Liability Insurance ° Accidental damage to underground water, gas, sewer and drain pipes, underground electricity and telephone cables extending from the property to the public supply. ° Accidental breakage of all fixed glass including double glazing and fixed sanitary fittings. ° Loss of rent receivable if the property is rendered uninhabitable by one of the insured events listed above. ° Damage caused by the Tenants not recoverable from the security deposit or court action initiated under a LETsure Legal Protection Insurance Policy up to £2,500. (A LETsure Legal Protection Policy must be in force for this extension to apply.)

CONTENTS Cover is available for houses or flats, excluding properties let directly to local authorities and the first £50 of each claim, for all of the risks listed above. Additionally LETsure Contents Insurance provides the following extensions:- ° Public Liability Insurance ° Loss of rent receivable up to £6,000 where one of the above causes of loss renders the property uninhabitable ° Accidental breakage of mirrors, glass in furniture or ceramic hobs up to £500. ° Loss of metered water up to £1,000 ° Damage caused by tenants not recoverable from the security deposit or court action initiated under a LETsure Legal Protection Insurance Policy up to £2,500. (A LETsure Legal Protection Policy must be in force for this extension to apply.) For further information or a free quotation for buildings or contents insurance please contact our office.

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TAXATION OF RENTED PROPERTY

The following is intended as a rough guide to the taxation liabilities which may arise from the letting of furnished accommodation by a private Landlord. It must be stressed that the rules surrounding this subject are extremely complex and that an individual's personal circumstances can greatly affect their liability to tax. This is only a basic guide and should not be relied upon to provide definitive information; OAklets can accept no responsibility for any losses arising from so doing.

We strongly recommend that a qualified accountant should be consulted who will examine each individual case in detail and ensure that the amount of tax paid (if any) is reduced to a minimum. (We will be pleased to recommend a reputable firm if required.) Alternatively, your local tax office can provide you with booklet IRiSO which supplies detailed information.

Income Tax.  Rent received from rented accommodation is taxable. The taxable income is arrived at by calculating the rent received during the tax year and deducting allowable expenses.

Expenses which are allowable include such items as:

Ongoing maintenance, repair and redecoration (but not improvements) of the property and garden.

Any rent payable by the Landlord (e.g. Ground rent on a leasehold property).

Property insurance premiums.

Agents managing fees.

Accountancy fees and certain legal fees.

Renewal of furniture and equipment (not initial purchase) OR you may elect for a 'wear and tear' allowance calculated at 10% of the annual rent received (less water rates).

In certain circumstances interest payable on loans or mortgages to finance the purchase of the property.

Non-Resident Landlords.  A Landlord is non-resident for tax purposes if he is living outside the UK for a period of more than six months.

On 6th April 1996, a new scheme for the taxation of the rental income of non-resident landlords came into force. From that date OAklets, if appointed as managing agent, are obliged by law to deduct tax at the basic rate (23%) unless we have received a certificate from the Inland Revenue giving us approval to pay rents gross. There are no exceptions to this. To obtain this approval it is necessary to submit a form NRL1 to FICO (Financial Intermediaries & Claims Office) declaring that:-

Your UK tax affairs, including payment of tax, are up to date; or 

You have had no prior UK tax obligations; or  

You do not expect to be liable to UK tax

You also have to undertake to:

Notify the Inland Revenue if you return to live in the UK.

Comply fully with your UK tax obligations i.e. submit tax returns & pay tax on time.

Notify the Inland Revenue without delay if you expect to have to pay UK income tax.

If a property is jointly owned, each joint owner who is non-resident should complete a separate form.

For those landlords who wish to apply for this approval themselves OAKlets can supply the necessary form or they can be obtained from FICO (address and phone number below). We can also supply details of reputable accountants experienced with dealing with the affairs of non resident landlords.

Certificates can be applied for before a tenancy commences and we strongly recommend that any Landlord going overseas applies as early as possible. These certificates are not transferable so if a certificate has been obtained previously naming another letting agent a new application will have to be made.

For those landlords who do not obtain an approval certificate the new regulations impose a considerable administrative burden on the letting agent as each quarter the tax has to be calculated on the rent received less any allowable expenses and the tax paid over to the Inland Revenue. A certificate of tax deducted also has to be provided to the Landlord for each year ended 31st March. There are stringent regulations for record keeping and these records must be available for Inland Revenue inspection at any time. There are also strict time limits for payment of tax which can lead to large interest payments if they are not met.

Because of this additional administrative burden we will charge any non resident Landlord who has not got an approval to receive rents gross £50 + VAT for each quarter that no approval is held to cover our additional costs.

If OAKlets do not manage the property and each individual tenant pays more than £100 per week in rent then the tenant must operate this scheme. The Inland Revenue produces several leaflets which explain the above scheme and other aspects of taxation in more detail, these are:-

IR20 - Residents and non residents, liability to tax in the UK

IR58 - Going to work abroad

IR138 - Living or retiring abroad 

IR140 - non-resident landlords, their agents and tenants

These can be obtained from any tax office or from:

FICO (Non-Residents)
St John's House
Merton Road
Bootle
Merseyside
L69 9BB

        Phone: 0151 472 6208/6209 Fax : 0151 472 6067
        or click here to visit the FICO website
      

Capital Gains Tax In general, property which is used for letting will become liable to Capital Gains Tax when sold. However, in the case of an individual letting a property which has at some time been used as his/her only or main residence, extensive reliefs and allowances are available and in most cases it is unlikely that a liability to capital gains tax will arise.

Tax is payable on the "gain" i.e. the difference between the price for which the property is sold and the price for which it is purchased - (amended by certain allowable expenses and an indexation allowance).

Again the legislation surrounding this subject is very complex and we recommend that you consult an accountant or professional advisor to establish any potential liabilities.

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IMPORTANT INFORMATION FOR LANDLORDS

Landlords have you thought......

Mortgaged Property  If your property is mortgaged, you will need the approval of your mortgagee, a copy of which should be sent to OAklets.

Leasehold Property. Leases should be checked for stipulation against letting the property out.

Insurance It is the responsibility of the owner to insure the structure of the building and the contents therein. Details of insurers should be given to OAKlets. All Insurers must be notified that the property is to be let. Tenants will be advised to arrange adequate insurance cover for their own personal possessions.

Legal Fees If any breach of covenant or arrears arise, any resultant legal action will be taken only after first discussing the situation with you and your Solicitor. Any legal fees that should arise will be your responsibility

Rental Any rental quoted to the tenant by OAKlets on your behalf is inclusive of all outgoings for which you are responsible with the exception of gas, electricity and telephone services.

Furnishing & Decor Furniture should be of a good standard and decor should be as plain and light as possible. High standard properties attract good quality tenants. Please see our attached Inventory list for mini mum furnishing requirements.

Pictures & Plants Properties always look more 'homely' if a few pictures are left hanging and possibly a few plants remain. It is advisable to remove all personal ornaments, books etc.

Television It is not necessary to leave a television although some Company Lets would expect one. The tenant is responsible for the licence in all cases.

Telephone It is usual practice for a working telephone to be connected for the use of the tenant at the commencement of the tenancy.

Cleaning The property should be thoroughly cleaned prior to the com mencement of the tenancy. If OAklets feel that a 'Spring Clean" is necessary at the termination of a tenancy, in between lets, we will arrange a cleaner at the previous tenants expense.

Inventory An Inventory of the contents and condition of the property must be drawn up for the incoming tenants. Please see our Manage ment Details regarding this Service.

Water Rates In most cases, unless you have a metered water supply, the water rates remain payable by the Landlord throughout the tenancy.

Council Tax The Council Tax, as with the Community Charge, will remain the responsibility of the tenant throughout the tenancy. Some prop erties such as those occupied entirely by students will be exempt.

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OUR FEES & SERVICES

Select one of our main services and as many of the additional services as you require (please note that a minimum term of six months applies with both the Full Management and Oaklets Gold Services.

LETTING ONLY SERVICE
For a Landlord taking our letting only service our fee will 85% of the first month's rent + VAT. 

TAX ADMINISTRATION FEE
For those non-resident landlords without tax approval certificates - for each quarter £50 + VAT