Trouble Free Letting –
Questions Every Landlord Should Ask
This document has been designed to aid landlords who
are looking to let their property through a residential letting agency and consists of
questions that every landlord should ask and the answers they should receive.
Are you a member of ARLA? Why is it so important?
ARLA is the only professional and regulatory body solely concerned
with residential lettings. It keeps members up-to-date with changes in legislation and the
many other requirements for a successful lettings practice.
In order to comply with ARLA’s membership requirements, an
ARLA member has to have been in business for at least two years; hold separate client
accounts and demonstrate these are professionally managed and audited; hold professional
indemnity insurance cover to comply with the requirements of ARLA’s Fidelity
Bond"; and offer a full management service to landlords in addition to letting and
rent collection.
What is ARLA’s Fidelity Bond?
The ARLA Fidelity Bond is designed as a protection of last resort
for monies entrusted to ARLA members by landlords and tenants during the ordinary course
of their business as letting agents.
In the event of proven theft or fraud if a member agent or its
staff, if you cannot recover monies deposited with the agent during its period of
membership of ARLA from the agent and the agent’s own insurance does nor cover the
loss, you may make a claim to ARLA for reimbursement of the money you have lost.
Full details of the scope of this protection and how to make a
claim under it are available on written request to ARLA at the address below.
What are the fee structures for letting agents? Do you charge me or
the tenant?
Obviously fees vary and each letting agent will have their own
scale of charges and terms and conditions of business. They cover letting the property; or
letting and rent collection; or letting and full management. The landlord is the ARLA
member’s client and fees are paid by you as a percentage of rental income according
to the scale of charges. You should ask for a copy.
What do you do for your money?
Introduce and vet prospective tenants; prepare the tenancy
agreements; advise on Inventories, changes to utility accounts and Council Tax; collect
the rent and pay the balances to the landlord’s account. When retained on management:
pay bills for the landlord, regularly inspect the property, recommending, overseeing and
accounting for necessary maintenance.
What kind of tenancy agreement should you use?
An ARLA member will use tenancy agreements that comply with the
Housing Act 1988, or under contract law for bona fide companies and/or rental values over
£25,000 a year. Most members will have their own ‘in-house’ tenancy agreement
drafted by solicitors, incorporating clauses covering the potential problem areas
experienced agents recognise. These agreements should be far more comprehensive than the
standard printed agreements bought for self-completion and are regularly up-dated to take
account of changes in legislation.
Is letting safe? Can I get my property back?
Yes. It’s safe provided the tenancy agreements are properly
drawn up and the correct Notices served. Then, in those cases where legal action is needed
for repossession the court should make an order in the landlord’s favour. New
Accelerated Court Procedures speed up the process, without the necessity for a court
hearing and take the hassle out of the very occasional problem.
What if the tenant wants to extend the term of the let?
This is very common, presenting no problem provided both parties
agree and a professional agent conducts the negotiations and prepares the necessary
paperwork and renewal documentation.
What about inventories?
These are essential and it is recommended that an inventory is made
by a professional to avoid omissions or errors. They should always be made at the start
and finish of the tenancy to identify missing items, breakage’s and damages liable to
be covered out of the tenant’s deposit.
Obvious legislation aside, what other regulations could affect me?
Regulations are constantly changing, particularly with regard to
safety. Currently these cover furnishings, gas and electrical installations. An ARLA
member agent will be able to advise you about compliance with these new and difficult
regulations. New regulations came into force in 1996 on responsibility for tax liabilities
on rental income for non-U.K. resident landlords. Again, your ARLA agent will advise you
of your liabilities and the procedures to be followed to satisfy the Inland Revenue.
What insurance covers can protect a landlord?
There are two types of cover for use when letting property: Legal
expenses cover, available to most landlords, and rental insurance cover, available through
some agents, calculated as a percentage of the rent achieved. You must be certain to
insure your property for letting and the possible empty periods between lets.
What does your agent do if it all goes wrong?
Solicitors have to be instructed on your behalf to take the tenant
to court to regain possession, or correct whatever breach of contract the tenant has
committed. An experienced agent will know when this is unavoidable, will advise of likely
costs and timescales, instruct solicitors on your behalf, make all appropriate files
available to them, appear as a witness and do everything to facilitate a speedy solution.
As a landlord or a tenant, I want to know, What is Management?
Management is a service provided by the agent to protect and
maintain a property to the standard it was in at the beginning of the tenancy, fair wear
and tear excepted. It includes all maintenance and running repairs, except for those items
that are clearly the tenant’s responsibility. These were expressed by Lord Denning
when he said "The tenant must take proper care of the premises...he must do the
little jobs around the house which a reasonable tenant would do". Both Landlord and
tenant should clearly understand whether or not management services have been agreed at
the outset.
In the event of unresolved disputes, ARLA can offer an arbitration
service for landlords and tenants who use ARLA member firms.
What are the ARLA Membership Requirements
There are stringent requirements for membership of the Association
of Residential Letting Agents.
A firm must have been in the letting and management business for
at least two years before it can be invited to join the Association
All member firms must carry Professional Indemnity Insurance to a
required standard.
Separate client accounts must be held.
Commissions for letting property may only be obtained from
landlords.
Business must be carried out from a properly designated business
premises
All ARLA members most lodge a copy of their professional Indemnity
Insurance policy with the Association to comply with the requirements of the Associations
Fidelity Bond.
This ARLA page is intended as a guide only to illustrate the
questions that should be asked by the landlords and tenants when first approaching a
letting agents. It is a guide to good practice but practices may vary from agent to agent.
ARLA does not occur any liability from this web site.
