The Handover of a Rental Property

Exchanging forms and the tenancy agreement

‘Handover’ is the penultimate stage of the  letting process for landlords and comes after successfully finding a good tenant.  It is when a tenancy is created and the landlord finally has to handover their rental property to their  tenants.

Landlords need to make sure that they have two copies of the tenancy agreement, one for them and one for their tenant.

All the details need to be filled:

• Date
• Name of landlord
• Name of tenant
• Property address
• The term of the tenancy (if applicable)
• The rent payable and when it is due
• The amount of  rental deposit
• Landlords address – which needs to be one in England or Wales

Then the landlord and the tenant are ready to sign the tenancy agreements.  Landlords need to remember, this is a legally binding contract and that there is no going back after this.  If landlords are letting the rental property to more than one tenant, because the landlord is actually creating a joint tenancy,  all the tenants will need to sign.  This means that each tenant is deemed to be jointly and severally liable for all obligations including the rental payments. Once signed, the tenant retains one copy whilst the landlord keeps the other.

Landlords who are a registered user of www.propertyhawk.co.uk can create unlimited free assured shorthold tenancy agreements.  There documents are saved and can be updated using our free property management software – Property Manager.

Alongside the tenancy agreement, the landlord should also when preparing the property inventory for the rental property ensure that they detail the contents and their condition. This inventory will also need to be signed and copies shared.

The arrival of the Tenancy Deposit Scheme has bought further paper work for landlords.  The Tenancy Deposit Scheme (TDS) requires landlords to provide the tenant with certain prescribed information concerning how and where their deposit is held.  This information; sometimes known as a Section 213 notice in reference to the part of the Housing Act 2004 in which it is referred.  The exact details of this information is contained in The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 contained in Appendix. We provide free copies of the Section 213 notice.

Taking the first rent payment

Now comes the fun part – ‘the money’. Landlords should always take at least a months rent in advance. Cash preferably, that way the landlord can hand over the keys straight away.  If the tenant has indicated previously that this was going to be a problem because of not wanting to carry that amount of cash; understandable where the total sum amounts to thousands of pounds.  In this case the landlord should have come to an arrangement with the tenant to ensure that funds have cleared into the landlords account either through a cheque or direct transfer.  This precautionary approach is necessary because there are numerous examples of tenants failing to honour even the first payment by presenting the landlord with a cheque that immediately bounces.  Landlords should remember that this initial payment should also include the money taken for a bond / rental deposit.  In return, the landlord gives the tenant an itemised receipt for the monies.  This is appreciated by the tenant because it gives them with some reassurance that the landlord are not just going to run off with their ‘hard earned cash’.  It also provides the landlord with a record of the money received should a landlord need to trace payments in the future and should any queries be raised by the tax authorities.

Handing over the keys to a rental property

The other aspect of ‘handover’ is the presentation by the landlord to the tenant of a set of keys. Each tenant should have a complete set. Landlords should make sure that it is a full set; it’s easy for landlords to forget the keys to the garage or window locks.  These should be labelled with their exact function – front door, side door.  Landlords should remember not to include the full address.  Whilst this might be helpful for reference purposes for the landlord it would also be a ‘God Send’ to an opportunist thief should they ever get lost by the tenant.  It is also necessary for the landlord to record which keys they have given the tenant.  Again the property inventory should have an area to note down these details. Finally, if there is a burglar alarm, it might also be a good idea for the landlord to tell your new tenant the code!

Take the meter readings at the rental property

Other information that needs to be recorded by the landlord are the meter readings.  Landlords should ensure that they have done all of them. The property inventory generated using our free property inventory software  has a space to have these readings recorded by the landlord.  By landlords recording these details on the inventory, they ensure that all the information is kept together on one document which helps with the management of the tenancy.

Instructions for the tenant

During ‘handover’ of the rental property it’s useful for a landlord to demonstrate to the tenants how to use the appliances or ‘pin point’ any aspects of the property that may require some final instruction.  For example, where the gardening equipment is stored, or how the boiler works.  If a landlord has prepared a tenant documentation pack they need to remember to tell the new tenant where they have hidden it.

The inclusions of instruction manuals are always useful to a landlord in that they can be used as a defence to a tenant who tries to argue that an appliance became broken because they didn’t know how to operate them. Landlords should always remember,  to show the tenants where the stop cock is so that they can turn off water in the event of a flood.  It’s also helpful for landlords to point out the location of the RCD or fuse box controlling the electricity supply.  This means should a landlords property be thrown into darkness the tenants should be able to at least locate the RCD unit.  Hopefully it will be just a case of ‘flippin’ the switch to get the power back on.  All this avoids a landlord or an electrician being called out on a needless and expensive trip.

Landlords should try and point out any other useful information such as: the days bins are collected, the central heating controls, the door entry and burglar alarm operation.  Finally, landlords shouldn’t forget to let the tenants have up to date contact details for the landlord or the lettingagent.

Prepare a Tenant’s Pack

It’s always useful to prepare an information pack for each rental property. They help save tenants from making endless phone calls, asking where’s that, how to do this and how do I work that? It saves everyone time and hassle. It can contain instruction manuals and documentation such as:

• Copies of the appliance instruction manuals
• Gas safety certificate
• Bin collection/recycling details
• List of contact details such as:  the landlord, letting agent, approved contractors

Try and keep it ‘short & sweet’

Ideally the whole process shouldn’t really take a landlord more than an hour.  My advice to landlords is to be friendly but efficient and try not to get drawn into a long conversation.  After all landlords don’t want to spend a whole day there!

Another time saving tip for landlords is to where possible make  meetings with the incoming and outgoing tenant coincide.  This way landlords save on travelling time and it also allows the landlord to introduce them to each other.  This is useful to landlords, in that it allows information such as; forwarding addresses and outstanding matters to be passed from the outgoing tenant to the new resident.  In addition, landlords should be able to time it so that the final utility reading for the outgoing tenant becomes the starting readings for the new occupants.  Thereby avoiding a bill being sent to the landlord and the ‘utility nightmare’

Dealing with utility companies

If there is one thing that is guaranteed to prematurely age a landlord it’s dealing with the utility companies.  Most utility companies seem to struggle with the concept that as a landlord you can be responsible for the bills for a very short time and that whilst as a landlord you own the building you don’t live there.  Despite these utility companies having multiple channels of communication; websites, telephone lines, e-mail.

My experience is that it is a little arbitrary whether they will get the information regarding final readings and changes of responsibility and then in turn whether they will process this correctly.  I did have a friend who worked for one of the major utility companies and she confirmed that their system for final billing was in complete turmoil.  Off course landlords should be able to in theory phone them up to clear up the problem.  However,  the reality is that landlords will often be subjected to an eternity of easy listening music while a recorded voice constantly apologies for the delay!  My response, don’t apologise – just get more staff, but of course there is nobody listening!

Landlords should try getting a good book to read or surf the net for a holiday whilst they wait for an operative to appear.  I do know one landlord who uses the tried and tested system of writing to them and this seems to work for her.  Either way landlords should be prepared for a deeply unsatisfying customer experience.  Landlords have been warned!

Getting the paperwork organised

The final stage of the landlord ‘handover’ is often overlooked.  The landlord is  excited and relieved that they have a tenant in place and with the money assured for at least 6 months the landlords thoughts are likely to turn elsewhere.  However, this is dangerous for landlords.  This is because the final stage of the tenancy has not been completed.  The landlord needs to carry out the following to ensure the tenancy is fully on track:

1. Landlords should ensure that the tenancy agreement and inventory is filed in a safe and accessible place.  This is because together these documents constitute the contract between the landlord and the tenant.  Should anything go wrong and legal action be required by the landlord, then they will be vital in proving that a legally enforceable arrangement existed between the landlord and the tenant and importantly what the terms of this are.

2. Notify the utilities.  This is as I have already mentioned  a potentially frustrating experience for landlords.  Nevertheless, it is important for landlords.  This is because otherwise the landlord is reliant on the tenants who may forget.   I tend to phone them up to give them the final reading.  I know other landlords that write to them so that at least they have some record of them being notified.  Either way, landlords should not be too surprised if it takes several attempts for them to get the message.

3. Landlords should ensure that thee the tenants contact details are stored away.  Remember landlords can store their personal details such as e-mail address and phone numbers using our Property Manager free property management software.  This is essential should a landlord need to contact tenants to conduct an inspection, or carry out any maintenance work that requires access to the property.

4. After all the viewings landlords should make sure that they have a complete set of keys  and that they are labelled and stored away ideally in a lockable key cabinet.  This means that should a landlord need to rush out to the property because of an emergency or to meet a tight deadline the landlord can find the right keys quickly and without a panic!