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Adding a property
Creating a tenancy
Create AST's and forms
Deleting a tenancy
Calculating income tax
Calculating cashflow
Letting Agents/Supervised
Which forms, when?
More Help and FAQ's
Click on the
Management
tab,
Summary
option.
Click
Add an Address
to add a new property, or
Add an Address and Tenancy
to load a tenancy at the same time.
- view help video
For a new property -
Click on the
Management
tab,
Summary
option.
Click
Add an Address and Tenancy
.
For a property loaded on the system -
Click on the
Management
tab,
Tenancy
option.
Select the property in the drop down box.
Click
Add New Tenancy
.
- view help video
To create a form users need to first have created the details of the property address and tenancy. (see Below for help with this.)
Once created, users can create tenancy agreements and other forms for this tenancy through the
Management
tab,
Forms
option.
Select the property address and the form you which to create. eg, Tenancy agreement.
Follow the
Create Form
link then 'select the tenancy'.
Follow the
Create Form
link and then
Download.
(To create an address and tenancy go to the
Summary
page and follow the link
Add address and tenancy
.)
You can download a tenancy agreement, section 21 period and fixed term notice, section 213 prescribed information, section 13 rent change notice by selecting from the
Forms
drop down list.
- view help video
or for help with adding a property and creating a tenancy agreement
- view extended help video
Click on the
Management
tab,
Tenancy
option.
Click on the tenant name(s). This shows the
Overview of one tenancy
screen, including a link to
delete
the tenancy.
To calculate your Income tax for the year you need to make sure -
All your
Rent
has been added and updated.
All your
Expenses
have been added ( under the correct tax year)
All your
Loan Interest
on mortgages and loans has been added.
The software will pre-populate the
Income tax
liabilty for your letting business automatically.
The details of which can be added into the land and property section of your self assessment tax return.
Cashflow
is one of the most essential metrics for any letting business.
To calculate cashflow firstly add details of any loan or mortgage to the property by going to the
Financial
tab,
Loans
option.
Then add any projected expenses such as insurance for that property under the
Financial
tab,
Cashflow
option.
Cashflow on that property will now be calculated.
Cashflow is viewable as a Portfolio total by selecting Portfolio view by selecting from the property address dropdown menu.
Can I Create an Account with Multiple Property Portfolios?
Yes.
- view help video
Letting agents and landlords with more complex portfolios can register as many Property Hawk accounts as required and then transfer them to a single account login.
You need to first register as many Property Hawk accounts as required. NB: Use a unique password for each account.
Then choose one of your accounts to act as your 'Supervisory Account'.
Within each of your other 'sub-accounts' elect it to be supervised by entering the email address of your 'Supervisory Account', on the Letting Agent tab, Supervised option.
Login to your 'Supervisory Account' and you will be able to click between your portfolio of 'sub-accounts', through the Letting Agent tab, Supervised option.
Register more accounts as required, and add to your 'Supervisory Account'.
TIP FOR LETTING AGENTS - Letting agents can choose to share the login details for these sub accounts with individual landlords to enable a 'shared' management of the portfolio, a word of warning, however, shared management of a portfolio is based on trust, as shared users will be able to alter the data relating to this specific sub-account.
They will obviously not be able to access data in the other managed sub accounts or in the supervisory account.
TIP FOR LANDLORDS - Landlords with existing portfolios can elect to pass data to a 'Supervisory account' typically your Letting Agent.
1. Tenancy Agreements
Do I need a tenancy agreement?
Does I need a formal tenancy agreement? Well the short answer is actually no. Landlords may be surprised to discover that they can grant a tenancy verbally; providing the tenancy meets the following conditions:
* it takes effect on the day it is granted * it is for a term not exceeding 3 years, and * it is at the best rent which can reasonably be obtained without a premium being taken (one off capital payment for the beneficial interest of the lease) However, I would never recommend this, even if the tenancy is to a friend or relative. This is because the enforcement of possession or alteration of the terms of the tenancy is more expensive for a landlord without the documentary evidence of a tenancy agreement, because accelerated proceedings are not available. Please note accelerated possession proceedings, does not mean fast!
Why Property Hawks tenancy agreement?
Its written by an expert with over 20 years dealing with residential tenancies http://www.rotheradowson.co.uk/Our_People/Richard_Baker/ It's suitable for single let or multi lets.
It's FREE forever.
Up to date.
Simple to complete and download in seconds.
Suitable to use with the Tenancy Deposit Scheme.
Allows the landlord to make reasonable charges for late payments of rent and other administrative costs.
Where our tenancy agreement shouldn't be used.
Our tenancy agreement should only be used for tenancies created in England & Wales. It is not suitable for Scottish or Northern Ireland tenancies.
It is suitable for tenancies producing less than £25,000 a year. Any tenancy producing more than this rent per annum is not covered by the Assured Shorthold Tenancy legislation and will need a specially drafted commercial tenancy agreement.
Where a landlord is looking at renting a room out in their own house under the governments rent a room scheme will need a licence agreement as they are not creating a full tenancy.
Watch out for sham tenancy agreements
The rights laid down by law always override those which are stated in a written or oral agreement. A tenancy agreement which suggests that your tenant has less rights than those given by common law or statute is a sham tenancy agreement and will not be upheld by the courts.
Sham agreements are often drafted by unqualified people and frequently come about as a result of an attempt to 'modify' a tenancy agreement to make it less onorous on the landlord and give the tenant less rights than the original tenancy agreement. For instance by claiming that a tenancy agreement is only a 'licence to occupy' although in law it is clearly a tenancy agreement.
What type of tenancy agreement?
Most landlords require a Fixed Term Assured Shorthold Tenancy agreement such as the one Property Hawk provides. This enables landlords to grant an Assured Shorthold Tenancy for a fixed period of time, say 6 months. It is suitable for single and multi lets. Where the property being let out is a multi-let such as a House in Multiple Occupation (HMO) then a landlord just needs to specify when creating a tenancy what part of the property that the tenant has an exclusive right to occupy eg Room 1, Flat A.
Landlords letting in Scotland or Northern Ireland will need a tenancy agreement suitable for letting in these countries.
Length of a tenancy agreement
Our tenancy agreement is a fixed term tenancy so that landlords can create a tenancy for a specific length of time.
It’s possible for landlords to grant a assured shorthold tenancy agreement (AST) for a fixed period, say 6 months. These tenancies are referred to as Fixed Term Tenancy’s. At the end of the term if the tenancy agreement is not renewed by the landlord, it then becomes a Statutory Periodic Assured Shorthold Tenancy (AST. ). The terms of the original tenancy agreement still apply, but the tenancy continues on a period by period basis. For instance, if the tenancy agreement required rent to be paid monthly, then a monthly Statutory Periodic Tenancy would result.
The other type is called a Contractual Periodic Tenancy where no term for the end of the let is set and the tenancy agreement simply continues until either the landlord or tenant decide to bring the tenancy to an end.
How long should a landlord grant a tenancy for?
Assuming a landlord goes for a fixed term tenancy. In my experience most landlords do; the vast majority of Assured Shorthold Tenancy (AST’s ) being for periods of between 6-12 months. I would recommend 6 months, particularly if the tenants are new to the landlord. This way it is easier to for landlords to ‘get them out’ if problems arise. There may be some advantages for landlords to a longer let, say 12 months where the property is being managed. This is because the agent could charge a landlord a fee for renewing the tenancy agreement. It is also possible for a landlord to draw up a tenancy for longer or shorter periods; however there are implications for landlords in both cases.
If the tenancy was for substantially more than a year and the tenant remains for a long period. Unless specific steps are taken by the landlord to increase the rent, it will fall below the market level which generally increases as a result of inflation and rental growth. If landlords wish to let for a shorter period, such as three months,landlords need to remember that; under an Assured Shorthold Tenancy Agreement (AST) the courts cannot order possession LINK SECTION 21 POSSESSION to take effect until after 6 months from the start of the tenancy.
Altering a tenancy agreement
It is possible to alter the terms of a tenancy such as the amount of rent charged where both the landlord and tenant agree. It is always advisable for any changes to be set out in writing and then signed by both the landlord and tenant. The main reason for altering the terms of the tenancy is to increase the rent. A landlord can do this by issuing a Section 13 Notice.
Ending a tenancy
A tenancy can be bought to an end at any time providing both the landlord and tenant agree. The legal process by which this occurs is called surrender. It is always advisable that this agreement is in writing and signed by both landlord and tenant. When a tenant has legally surrendered the tenancy, then the landlord has the right of possession of the property under Section 5 of the Housing Act 1988.
More typically a tenancy is ended after the expiry of the fixed term tenancy after a landlord has issued a Section 21 Notice.
If the tenancy is a Periodic tenancy then the way that a landlord needs to end the tenancy is slightly more complicated.
Where the tenant is at fault and does not comply with a tenancy eg fails to pay the rent a landlord can obtain Possession using a Section 8 Notice.
How to get our FREE tenancy agreement?
To get a FREE tenancy agreement it couldn't be simpler. Just sign in, add a property and a tenancy. Go to the FORMS section and select the tenancy form and property you've already created. Then click on the tenancy and create form. The tenancy agreement will appear as a pdf ready to be printed off.
2. Getting my property back - section 21 notice - possession
What is a section 21 notice?
Under the Housing Act 1988, a landlord who has granted an assured shorthold tenancy has a legal right to get his property back at the end of the tenancy. In order to invoke this right, he is required to follow the correct legal procedure which includes service of a notice (under section 21 of the Housing Act 1988) on his tenant. Section 21 is divided into subsections with different rules applying to notice served during the fixed term of a tenancy and notice for possession that is served during a statutory periodic tenancy.
When can I serve a section 21 notice?
Section 21 of the Housing Act 1988 requires that the landlord provides tenants of an Assured Shorthold Tenancy (AST) with a minimum of two months' notice in writing that he/she wants possession of the property. Extra days should be added if the notice is to be sent by post as the two months starts when the tenant receives the notice.
The notice must be served before possession action can be started. In the case of joint landlords the notice can be given by any one of them. Possession under this section cannot take place during the initial six months of the original tenancy. The provisions in section 21(1)(b) apply to fixed term tenancies.
They state:
Without prejudice to any right of the landlord under an assured shorthold tenancy to recover possession of the dwelling-house let on the tenancy in accordance with Chapter I above, on or after the coming to an end of an assured shorthold tenancy which was a fixed-term tenancy, a court shall make an order for possession of the dwelling-house if it is satisfied-
a) that the assured shorthold tenancy has come to an end and no further assured tenancy (whether shorthold or not) is for the time being in existence, other than a statutory periodic tenancy: and
b) the landlord, or in the case of joint landlords, at least one of them has given to the tenant not less than two months' notice stating that he requires possession of the dwelling-house.
Notice under this subsection can be served on a tenant at any time during the fixed term of the tenancy (but not before the fixed term begins) provided that the tenant receives a minimum of two months' notice. This is the case even if the two months notice ends after the tenancy agreement has expired. For example, if notice requiring possession is served on the last day of the tenancy agreement, the tenant does not have to give up possession of the dwelling-house until at least two months after the date that the notice was served.
Which section 21 notice do I need?
Section 21 dates
The notice should be dated in accordance with the provisions above. Also, a notice should not be dated to expire on or before the last day of the tenancy as this would be invalid. For example, where the tenancy was due to expire on December 31st, then the section 21 notice could be served on or before October 31st, and the notice dated to expire ‘after December 31st'.
Landlords from time to time will need to serve notice on their tenant that they wish to obtain possession of their residential investment property at the end of the tenancy. This involves serving a section 21 notice (non fault based possession). The most common reason for a section 21 notice to fail is because a landlord gets their dates wrong.
Month means Calendar Month in tenancy agreements (Law of Property Act 1925 s61 (a). Agreements run from a day in one month to the day (date) before in another month. For example, a six month tenancy signed on the 5th March (5th day of March) will end on the 4th day of September, AFTER which day a landlord will seek possession.
Serving the section 21 notice.
If the tenancy was for a fixed term, the date specified cannot be any earlier that the expiry date of that fixed term (for a copy of a section 21 fixed term notice section 21 notice go to FORMS in the Property Manager 2.0 )
If the tenancy was periodic or the fixed term has expired before the notice is given, the date specified must be the last day of a rental period. Therefore if the tenancy is a monthly tenancy and the rental day is the 15th of the month, the date specified must be the 14th of a subsequent month at least 2 months after the date of service.(for a copy of a section 21 periodic notice go to FORMS in the PROPERTY MANAGER 2.0 )
Will I get my rent back and any money owed if successful?
The Section 21 Process is a claim for possession only; if rent arrears or damage you are still entitled to sue the tenants see landlord debt recovery.
Am I eligible to use a Section 21 notice and is it valid?
There should be a signed AST (if no Signed AST). If you renewed or issued an AST after 6th April 2007. The Deposit MUST have been protected and the tenant notified where the deposit held prior to the section 21 being served. If an HMO you must have a licence. If you are unable to use a Section 21 see the Section 8 process.
The Chairman of the London Association of District Judges says 7 out of 10 of Section 21 Notices are being thrown out of court because they are wrong.
An invalid Section 21 Notice means a claim for possession may be delayed by 3 - 4 months.
The reasons why Section 21 Notices are deemed invalid see rules about Section 21 Notices.
How should I serve a section 21 notice?
A section 21 notice may be served by post or in person. The courts will recognise the day of postal service as the day on which the letter would normally have arrived. We suggest that the sending of the notice is witnessed by a colleague. When using postal service, it is recommended that the notice be sent by either registered or recorded delivery and that a minimum of three working days is allowed for the notice to arrive.
Burden of proof that the Notice was served falls upon the landlord (see notes in members' area below ). To avoid this situation we recommend serving by hand. Ideally have a witness and complete our witness form.
3. Getting my property back -Possession - section 8 notice
Whats the difference between a section 8 and section 21 notice?
The critical difference is that a section 21 notice is non fault based. This means that the tenant doesn't need to be in breach of the tenancy to serve one. All that is required is that the fixed term tenancy has come to an end.
In the case of an assured shorthold tenancy the landlord simply needs to show that the tenancy has ended and that the Section 21 notice has been served and has expired. He does not need a ground for possession, being entitled to a possession order as of right.
The landlord does not have to show it is reasonable to grant possession. Once the correct Section 21 notice has been served and the court is satisfied that the tenancy is an assured shorthold, it must grant an order for possession.
What is a Section 8 Notice to Quit?
Full title: Section 8 Housing Act 1988 Notice Seeking Possession of a Property Let on a an Assured Tenancy (commonly referred to as a S8 Notice). It is a notice to terminate an Assured Shorthold Tenancy (AST) by relying on a breach of one or more of the 17 grounds contained within Schedule 2 to the Housing Act 1988. It is commonly known as fault based possession because they are used when the tenant has breached the terms of the tenancy, most commonly for failure to pay the rent.
Why would I issue a Section 8 Notice?
It is the first stage in regaining possession of the premises that you are letting to your tenant. It is generally issued when there has been a breach of the tenancy. After issuing the notice, the tenant will be required to move out on the date you specify within that notice or remedy the breach. It is most commonly used for when the tenant is in rent arrears.
Can I not just wait until the fixed term expires and then throw the tenant out?
No – although the fixed term may have ended it does not mean that the tenancy (and the tenant’s right of occupation) has. Even if a fixed term ends the tenancy is still deemed to continue on a periodic basis automatically by virtue of statute. To try to remove a tenant without a Court Order would be illegal!
What expiry date do I specify on the Section 8 Notice?
Is it just 2 calendar months from the date of service? Is it the same as the rules for a Section 21 Notice?
No – it is not that simple! Depending on which ground(s) you rely on will determine the expiry: a particular ground may either be 2 months, 2 weeks or 1 day in length, depending on which one(s) you are using. Also the date you intend on serving the notice and your method of service will affect expiry.
Is there just one single Section 8 Notice which I can use?
Yes. However, since claiming for rent arrears is so common, we developed an automated system to help you to avoid making a costly mistake!
What happens if the tenant moves out and surrenders the tenancy on the date specified on the Section 8 Notice?
The job is done and the notice has served its purpose. You now have now regained possession of your premises. If there are arrears or other monies outstanding you may have to make a separate small claim for that amount.
What happens if the tenant does not move out by the date specified?
You must now make an application for a Possession Order to the County Court local to premises being let. This is referred to as the “Fault-Based Procedure”.
4. Section 13 notice - increasing the rent.
What is a section 13 notice?
A section 13 notice refers to the primary legislation the Housing Act 1988 http://www.opsi.gov.uk/Acts/acts1988/ukpga_19880050_en_2 under which most legislation concerning the letting of residential property is contained. the Notice allows landlords to increase the rent in certain circumstances.
Do I need a section 13 notice to increase the rent?
No, in many cases it's perfectly acceptable for the landlord and tenant to agree an increase in the rent prior to the increase. It's advisable to record any agreement in writing and have it signed.
The tenant doesn't agree with the rent increase.
In this case a landlords option will depend on what type of tenancy exists.
Fixed term tenancy
The landlord cannot put up the rent during the fixed term period, unless the tenancy agreement makes specific provisions allowing this or the tenant agrees. These specific provisions could be by way of an escalator clause for instance stating that the rent will go up by inflation after so many months.
The vast majority of tenancy agreements including the Property Hawk one avoid such clauses. This is because they are seen as overly prescriptive and inflexible. Most landlords opt to review the rent when they decide whether to re-let at the end of the fixed term. This way a landlord can judge the prevailing market conditions and work out what the rental market will bare at that particular time. If a landlord decides to opt to re-let to the existing tenant then raising the rent is relatively easy as all they do is create a new assured shorthold tenancy with the new rent included.
Periodic tenancy
The other type of tenancy that a landlord might employ is a periodic tenancy. These are tenancies where there is no specific end date. The two types of periodic tenancy are the contractual periodic tenancy in which from the outset there is no end date, or the much more common statutory periodic tenancy. The statutory periodic tenancy comes about when a fixed term tenancy comes to an end. In the case of periodic tenancies, increasing the rent is slightly more complicated because the landlord will need to go through the formal procedure as set out in section 13 of the Housing Act 1988. If the landlord wants to increase the rent and intends to keep the tenancy on a statutory periodic tenancy, they can use the special form titled Landlord’s notice proposing a new rent under an Assured Periodic Tenancy or Agricultural Occupancy sometimes known as a section 13 notice. These section 13 notices can be created in Property Hawk’s Property Manager and are free to download. This form allows a landlord to propose a rent increase as soon as the statutory tenancy begins. For a contractual period tenancy a landlord can use the same form to propose an increase which will take effect one year after a tenancy begins. In both cases a months notice of the increase is required for rents paid on a weekly or monthly basis (more if the rent period is longer). With both periodic tenancies a landlord can propose further rent increases at yearly intervals, after the first increase.
5. Tenancy deposit scheme (TDS) S 213 prescribed information
What is the section 213 Prescribed Information?
One of the less well known aspects of the Tenancy Deposit Scheme (TDS) legislation is that not only does it require the landlord to protect the tenant’s deposit under an approved scheme.
Landlords also need to provide certain prescribed information to the tenant explaining how the tenant's deposit has been protected.
This information has also to be given to any third party / interested party (i.e. someone who has paid the deposit on behalf of the tenant whether in whole or part). For example, a parent who pays the deposit on behalf of a student tenant.
What information do I need to provide?
The Government sets out within Statutory Instrument 797 of 2007 the information that the landlord is required to provide.
In summary of 213 prescribed information it is as follows:
The details of the scheme administrator e.g. The Deposit Protection Service.
Any information contained in a leaflet supplied by the scheme which explains how it operates.
The procedures in relation to holding and repaying the deposit and the resolution of any dispute.
Amount of deposit paid.
The address of the property to which the tenancy relates.
The landlords details.
The tenants details.
Third party details if appropriate.
The circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy.
What happens if I don’t provide the prescribed information?
The answer is simple. If you fail to provide this information within 14 days of taking the deposit then the same legal penalties apply to you as if you had not protected the deposit itself. Failure to provide the prescribed information means that you are potentially liable as Landlord to a penalty of 3 times of the amount of deposit and in the meantime no valid section 21 notice to obtain possession can be served. I have already witnessed ‘chatrooms’ where unscrupulous tenants are planning to use this bit of legislation to exploit uninformed landlords by either making a quick buck or using the threat to bargain their way out of a difficult corner.
6. Inventory
How do I produce an inventory using the FREE drag & drop inventory generator?
To produce an inventory you just need to go to the management tab and select inventory. Then select the property you want to create an inventory for and click on create an inventory. Start by dragging the appropriate rooms into the bottom box. Once you have done this go to fixtures. This is where you add in the fixtures and fittings for each of the rooms. Just drag and drop each of the fixtures for each room into the bottom box as you did when selecting the rooms. If the fixture is not shown you can just type it in within the text box and then click add. To save time you can select add all in the right hand top box. This will select the typical fixtures for that room. For any unwanted fixtures simply drag them into the bottom right rubbish box. Once you have a completed set of fixtures you need to go to details. Then type in the details and description of the fixtures. Its important that you accurately describe them and their condition. To check what the inventory will look like once completed click on print preview. Once you are satisfied that the inventory is complete click on save. The property manager does constantly save the inventory during its preparation. Once this is done click to download the inventory which will generate as a PDF which can then be printed off.
What is an inventory?
The inventory is a catalogue of the property and its’ contents. A schedule of condition is a record of condition. Most commonly the two are combined into one report and are called either the inventory or schedule of condition. The inventory/schedule of condition has several functions:
- it is a catalogue of the property being let.
- it records the condition of the property and any items that are included in the tenancy.
- it forms part of the legally binding contract that is set out in the tenancy agreement between the tenant and the landlord.
Do I need an inventory?
Yes, particularly since the introduction of the Tenancy Deposit Scheme which requires a landlord who takes a tenancy deposit to hold it with one of the government approved schemes.
Tenancy deposit protection does not make inventories compulsory. However, in practice, they are essential. Not only will you need an inventory in the sense of a list of items included in the tenancy (e.g. beds, curtains etc) but the inventory will have to record any damage/the condition of each item and any existing defects at the beginning of the tenancy will need to be set out.
If your deposit is intended to cover damage to the property itself you will also need a condition schedule. Again, this will need to record any damage which exists when the tenancy starts. If an item of furniture is new or if the property has been recently internally decorated this will need to be recorded in your conditions schedule.
When do I prepare an inventory?
You will need to take an inventory/condition schedule both at the start of the tenancy and when the tenancy ends. A landlord will need to make sure that at the beginning of the tenancy the tenant(s) signs off the inventory/condition schedule.
You must make sure that you check it carefully before they sign. Any photographs should be dated.
It may not always be possible to get the tenant to check out the inventory/condition schedule at the end of the tenancy but try to do so wherever possible.
How do I prepare an inventory?
The most essential thing about preparing an inventory is to adopt a system that is simple so that it is easily remembered and replicated. This will ensure that you achieve consistent results. In developing your system ensure that the inventory it produces is:
- Ordered - this way when preparing it a landlord is less likely to miss things and also that anyone reading it can easily follow the contents.
- Comprehensive - remember this will be the inventory is a document of reference should a dispute a rise and could potentially end up in front of the judge.
- Verifiable - its accuracy can be agreed by anyone with few or nil additions or alterations.
- Written in Plain English - so it is easy to read and understand. This will help the landlord should the case go to court when a clearly written unambiguous report will have more credibility than one where a tenant could claim that they were unsure what they were signing. This shouldn’t be a defence but judges are only human.
Whats the best technique for producing an inventory?
The best way of producing inventories that achieve the key points given above is to divide any property into a series of rooms. This is largely straight forward; for instance most properties will have a kitchen, lounge, bedrooms, etc. However a landlord will also have to categorise some parts of the property as a room such as hallways, a conservatory, gardens, garages, etc. Once you have established a list of these rooms; it is then a case of subdividing them into a series of component parts. These component parts once categorised will build up an overall framework.
The standard component parts used in the Property Hawk inventory are as follows:
Doors, Floor, Walls, Ceiling, Light fittings, Wood work, Appliances, Windows, Heating, Electricals, Furnishings.
As well as the standard component parts each room may have individual parts specific to that room; these must also be noted down. Once all these parts have been recorded, the next stage is to record items that are not fixtures or fittings. This is particularly important and time consuming where a property is furnished. In this case it will be necessary to note down every item supplied. Once this is done; you will have a complete inventory.
The next stage is to complete what is known as the schedule of condition. This can be carried out concurrently with the inventory. The object of the process is to note down the condition of each component part.
For example, in the case of the lounge under the component part of doors you would record the fact that there are two doors, newly white painted with chrome handles. This part of the process is particularly important because as I go on to discuss later it is disputes over the condition of items and what is ‘fair wear and tear’ that are the most common. This aspect is far more difficult to prove than the removal of an item and it is fair to say that judges will often side with the tenant unless the landlord can prove conclusively that it was new or in good condition. This highlights the importance of retaining receipts not only for tax purposes but also in case of a disagreement with your tenant resulting in arbitration or court action where you will then have to prove the condition of your property at ‘handover’.
How can I speed up the process?
Many inventory clerks use a series of abbreviations to speed up the process. This is fine providing that a full list of terms accompanying the inventory. Whilst abbreviations are useful they can also be confusing for the tenant who will need to verify the report once it is completed.
The important things for a landlord to ensure are:
-That there is an adequate description of each item so that they can be verified.
- That an accurate statement of condition accompanies each component item.
A landlord should avoid at all costs ambiguous language such as ‘spotlessly clean’ or emotive language so as ‘lovely fireplace’. Keep descriptions brief and factual.
If a landlord follows these guidelines then they should end up with a comprehensive written inventory and schedule of condition that will then cover you for all eventualities.
Can I use photos or video?
Surely now it’s a case of the landlord just snapping a few pictures of the condition of your investment property; after all ‘pictures speak louder than a thousand words’. Unfortunately when it comes to it things aren’t that simple.
For a start to form part of the inventory for evidential purposes photographs will need to be conclusively proved and agreed by all parties at the outset. This has to be done by landlord/agent and tenants signing two copies of all items (each keeps one set) or each party signing separate full sets, which are then exchanged on completion (grant of letting)- just like conveyance/duplicate or lease/counterpart. Alternatively it is possible to incorporate sets into the tenancy agreement. In this case, the landlord should include an extra clause reading something like, "The Landlord and the Tenant agree that the attached [photographs][Schedules] show the state and condition of the [property][premises] as at the commencement of the tenancy."
What are the problems with photographic or video evidence?
All of this sounds straightforward. This is until you consider one of the practical difficulties involved with photographic evidence. Consider for a moment how many individual photographs would be required to comprehensively cover a whole property. Even for a relatively small two bed flat the number could easily stretch into the hundreds. The tenant is then faced with the incredibly laborious process of checking the veracity of each pair of photos and countersigning them all on move-in day. On top of this there are the practical difficulties of photos & video being sufficiently clear to show things like scuff marks or dirt. Natural lighting will generally have to be very good for these to show. The trouble is, unless the natural light is good, the flash usually bleaches out images, along with any 'nuances' of grime. If you the landlord then has to review each photo and then adjust the balance, exposure etc, they'll be there for hours - I speak from experience. Also the landlord will need to make sure that there is a hard copy date on each of the photos which are important in verifying when the photos were taken. Otherwise the tenant could use a defence that the photos were taken at a time prior to their occupation.
Legally both photographic and video evidence is admissible in court. One of the difficulties of using them is establishing their authenticity i.e. when they were taken and that they have not been doctored. Therefore, where video or an electronic copy of a collection of photographs is taken on a CD or DVD then you are advised to write this on to a CD ROM. These discs cannot be rewritten or doctored with once written which is important when verifying the evidence. A landlord needs to ensure that where a hard copy is made that they give the tenant one and get them to sign to confirm that they have received it and agree with the contents.
The upshot is that photographic and video evidence may not be the panacea that it initially may suggest. This probably explains why its’ adoption by landlords and agents has only been limited to date. The reality is that landlords should concentrate on ensuring an accurate written is prepared and signed by all parties. Photographic evidence where it is used is probably best used selectively and in conjunction with a detailed written inventory to support and highlight its’ contents.
How can I avoid preparing the inventory?
There are two ways of avoiding the inventory preparation process.
Firstly, if the property is fully managed by an agent then inventory taking and the subsequent ‘check out’ should be carried out by them as one of their management duties. This obviously will save a landlord time. It will also mean that if there are problems with the condition or cleanliness of the property; the agent should rectify these and use the deposit monies to cover this expense before handing the balance back to the tenant.
One thing to be aware of when employing an agent is that legally they act as the landlords’ representative. This means that whilst they may hold the deposit monies, legally it is still the responsibility of the landlord and if the agent goes bust or runs off with the money, the landlord still has to repay the tenant their deposit back. Tenants who take legal action to recover their monies have been directed to take it against the landlord because judges have ruled that there is no privity of contract between the agent and tenant.
This is why it is so important that landlords should always ensure that any letting agent holds their deposits in a trust account or is a member of a suitable bonded scheme such as the one run by the Association of Residential Letting Agents (ARLA). In this way should the agent go bust the deposit monies will always be available to the landlord to repay the tenant with.
The second way to get around having to prepare an inventory is to employ a specialist Inventory Clerk. For a list of inventory clerks visit the Association of Independant Inventory Clerks (AIIC). or vist our Inventory Links page. These individuals carry out the whole process for you; they can also do the mid tenancy inspection as well as the final ‘check out’. The downside to this service is that it is not cheap. The costs of a check in and check out run to about £100-140 each for a standard 2 bed flat. These fees do vary, depending on the size of the property and area of the country (London will be the most expensive).
For this a landlord will have the piece of mind that the inventory has been done professionally and comprehensively. It is possible to pass on the cost of this service to the tenants. This is quite common practice where an agent is used. However there are no hard and fast rules and the agent could equally pass on the cost of this service to the landlord. It is therefore important for a landlord to be clear from the outset about what their letting and management fees include before signing up for their service.
How do I produce an inventory using the FREE drag & drop inventory generator?
To produce an inventory you just need to go to the management tab and select inventory. Then select the property you want to create an inventory for and click on create an inventory. Start by dragging the appropriate rooms into the bottom box. Once you have done this go to fixtures. This is where you add in the fixtures and fittings for each of the rooms. Just drag and drop each of the fixtures for each room into the bottom box as you did when selecting the rooms. If the fixture is not shown you can just type it in within the text box and then click add. To save time you can select add all in the right hand top box. This will select the typical fixtures for that room. For any unwanted fixtures simply drag them into the bottom right rubbish box. Once you have a completed set of fixtures you need to go to details. Then type in the details and description of the fixtures. Its important that you accurately describe them and their condition. To check what the inventory will look like once completed click on print preview. Once you are satisfied that the inventory is complete click on save. The property manager does constantly save the inventory during its preparation. Once this is done click to download the inventory which will generate as a PDF which can then be printed off.
How do I edit my details?
To edit your name,(including the name that is populated on to tenancy agreements), edit email login, password login, postal address, go to
Operations
tab,
Profile
option.
I can't find an expense I've added
.
Check that it has been added under the correct tax year by switching to Portfolio view and checking by each tax year.
Can I add lots of rental requests at once instead of one at a time?
Yes, instead of adding the details of each individual rental payment, you can go to the
Tenancy Overview
screen.(Click on specific tenancy link.eg,John Smith,Flat 1)
Click the
Rent Payments
link at the bottom of the screen.
Tick each
Rent Request
and
Save
.
How do I edit a tenancy?
The
Edit tenancy
link is found at the base of the
Tenancy Overview
screen.
If Rent requests are missing from the Rent List page :
Click on the
Management
tab,
Tenancy
option.
Click on the tenant name to show the
Overview of One Tenancy
page.
Click on
Rent Payments
.
Accessing the Rent List page this way will bring up all the rents expected for the tenancy.
How do I control my reminders?
Go to the
Operations
tab and select
Reminders
. It's then possible to set the regularity of your reminders. To change the email where you receive them go to your
Profile
Adding loan interest
Loan interest
is important when you calculate your tax return for the year.
You can only offset the interest paid on any loan but not the capital sum.
To do this go to the
Financial
tab and select the
Loan interest
option.
Select the property you want and then add a loan. Enter in the interest paid for each month. There are 13 months shown running from April to April. Remember the tax year runs from 6th April to the 5th April the following year so you will need to work out interest for the part of each month.
Your lender will usually send a statement of your loan interest for each tax year.
How do I back up my information??
Go to the
Operations
tab
Back up
option. You have the choice of downloading your information as a CSV or XML file.
How do I cancel my email newsletter?
Untick the email newsletter box in
Operations
tab,
Profile
option.
How do I create an inventory form?
Click the
Management
tab, then the
Inventory
option.
Select the property using the
Select property
dropdown and then click on the
Create inventory
link.
Follow the links from left to right,start off by dragging in rooms to the empty property box.
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July 2010
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