To take a deposit or not as a landlord? The choice is yours. Some landlords and agents choose to use deposit free schemes, while others prefer to take a cash deposit as they feel that if a tenant can pay the first months rent and a security deposit upfront then they must be fairly okay as they have the funds available. However, this is not always true and I have seen it backfire spectacularly, after just a few months.

The deposit free schemes work instead of the cash deposit and the tenants needs to meet the criteria of having a clear credit history, although I have seen rare incidences where people with a poor credit history have been accepted as members. The tenant's pay a membership fee to the scheme and the landlord is covered for a set period of time if the tenant defaults on the rent or fails to leave the property in a satisfactory condition. There are pros and cons to this and often tenants fail to read the small print and don't realise they are liable for any costs paid out by the insurance scheme to the landlord.

However, if you decide to proceed and take a deposit, the maximum that can be taken for a holding deposit in most cases is the equivalent of one weeks rent. There are laws around when the holding deposit can be withheld. Most agents and landlords suggest that if you have failed to declare your adverse credit history and if you change your mind at any point during the referencing process. A lot of prospective tenants pay their money but forget that you don't actually work for free and will argue about wanting it back if they pull out. I have seen a run on this over the last few months, with tenants assuring you they have a creditworthy guarantor but when you actually reference the guarantor they aren't creditworthy. The next conversation from the prospective tenant is that they want to change who their guarantor is. It is not until you take the time to explain in great detail that they only have 15 days from paying their holding deposit and to complete their application and that on day 15 this really is too late and no the landlord isn't prepared to give them extra time to complete their application. And guess what you actually completed your application form signing to say you agreed to the terms and conditions which state you have 15 days from paying your holding deposit to complete your application. 

At this point they then ask for their deposit to be returned and the standard phrase recently is 'you haven't done that much work!' 

When you ask for the remaining funds you ask for traditionally you ask for the first months rent upfront and the deposit. In total, legally the maximum amount of deposit you can take is 5 weeks.  So you need to take of the holding deposit and work out the remaining amount. Also a note on calculating holding deposits is monthly rent x 12 divided by 52. When it comes to rents some landlord like to collect all their rents on the 1st of each month, as it helps with the tenant's finances, so  it is not uncommon to need to pro-rata the rent. A rule of thumb is if they move in after the middle of the month to collect the remaining rent for that month and the full rent for the next month.  

There are a number of different tenant deposit schemes authorised by the government and they offer both insured and custodial schemes. The former the landlord or agent hold the deposit, in their bank account and the later the scheme itself. As with everything relating to tenancies there are laws relating to the registering of deposits. From the payment of the deposit you have 30 days to register the deposit in one of the schemes and during this time you need to send out the prescribed information to tenants for signing.

A note on prescribed information some deposit schemes provide you with the prescribed information and you fill in the information, relating to the tenancy. While others provide you a template document which you need to customise. Unfortunately I have seen some less experienced clients not realise it is a draft document and that they need to edit it before sending it out to their tenants for signing.

​We are all human and make mistakes but this can be quite a tricky one to unpick, as it doesn't look professional and reflects badly not only on them but the people supporting them. Of course if you don't know or unsure there are some great organisations around who can help you comply with all your legal obligations.  

  

Congratulations you are a landlord and have found your tenants, but are new to the industry and unsure of how to get started and what you need to do.

Of course there are different options. You might have decided to use a letting agent and go fully managed or you might decide to opt for a tenant find  or decide to self manage. Whichever option you have decided to go for my suggested starting point is to the join the NRLA. Their advice is invaluable and the templates mean you don't need to reinvent the wheel. The hard work has been done for you.

But knowledge is power and keeping up to date requires time and effort. Some tenants are very savvy and some organisations love to portray landlords as the baddie!  Only a very small minority of landlords are bad and the same applies to tenants but these create news headlines.

From drawing up your tenancy agreement and sending out the right documentation, to managing your tenants throughout their tenancy and just as importantly after they leave returning deposits in a timely manner.

Communication is key between landlords and tenants to a successful tenancy, but nobody wants to be disturbed at 10pm on a Saturday night reporting that a lightbulb has blown. By setting boundaries and putting processes in place for out of hours emergencies, as well as what constitutes an emergency this can help. We all appreciate how frustrating it is when the washing machine breaks, but it is not in most cases an emergency, unless there is water flooding out of it.

There is a tendency now to believe everything needs an immediate response and that we are surgically attached to our phones! I was recently talking to another business owner who told me that she regularly receives messages at all times of the day and night, seven days a week. 

Instant messaging is great but there is a limit. I suggest that my clients set up an out of hours telephone answering service, where a message is taken and then you receive a text alerting you to an issue. This adds a boundary and means that you are not always available for less urgent issues.

The kind of calls my clients get include lockouts and heating and hot water issues and also means that tenants are aware that we do not work 24 hours a day 7 days a week and won't reply to instant messaging platforms outside normal working hours but still provide an emergency service. This has worked well with the clients who have implemented it and does mean that time is protected outside normal office hours.  

With the additional layer of the out of hours number you can decide if it is a genuine emergency and which member of the team is going to respond and sort out the issue. Providing an on call service is physically and emotionally draining and means that you never have any time to yourself. I personally keep a separate number for each of my clients and also make sure to turn the phone off at the end of my work hours.  

I never fail to be amazed by the number of people who think that it is fine to contact you at any time day or night and on a Monday morning regularly find messages about all sorts of different things, from the kitchen is dirty to have you had my rent payments.    

 

Your new prospective tenants has viewed your property and fallen in love with it!

What next?
There are lots of different options when referencing your tenants from done for you, to undertaking the task yourself. Depending on your time you might decide to outsource it, where you see the completed report and the tenant deals directly with the referencing company or if you have more time you might opt to collate all the information yourself and get the tenant to complete their application on the referencing portal and upload their documents.

There are pros and cons to both, but personally I prefer to see all the information and then upload it our end. Recently I have seen a number of prospective tenants actually lying to get through the door to view properties (2 in one week, for the same property)! I understand there is a shortage of rental properties and a surge in demand, but I am not sure how they think they will secure the property once you start the referencing process. They tell you they earn a certain amount and it is for 2 people, yet from the information they give you verbally, then it is doubtful they really do earn this. By asking them to complete a tenant application it is possible to find out before you start their tenancy application whether they are likely to pass the affordability or have any credit issues. At which point the salary drops significantly and it becomes just for one person. 

 I recently learned of one company where the prospective tenants can choose the information they choose to share in relation to their bank statements. Having referenced lots of tenants over the last few years some things are not always clear cut. Yes their credit score might be okay, but when you actually look at their bank statements, certain things might stand out, like a gambling habit or always being overdrawn. Obviously they might get lucky one day and win a large amount from their gambling habit, but as a Landlord you don't want to take the risk that your rent might not be paid.

At this point you might decide no or you might decide to ask for a guarantor. The choice is yours. I have recently seen some discussion around the role of guarantors and that perhaps one day everyone taking out a tenancy will be required to have one. Again the criteria varies slightly for some people. Some insist on a home owner while others look at affordability and providing they meet the criteria are happy with this. However, for student accommodation this will depend. Some landlords and agents are happy with the parent signing the guarantor documents and nothing else, while others are more rigorous.

The general criteria that the clients I work with opt for ensures that they can get rent guarantee insurance are:-

• have lived and worked in the UK for at least the last 3 years
  
• have the right to live here for the term of the tenancy
  
• have a clear credit history
  
• earn at least three times the monthly rent
  
• are prepared to be fully referenced including a credit check, employment reference and provide their ID and proof of income 
• be prepared to sign all the documents

Not everyone has a guarantor available to them and for some people this limits their access to the private rental sector. There are guarantor companies available and while some agents and landlords don't  accept them, others are willing to. They work by the tenant paying them a set amount at the start of the tenancy and at the time of each renewal. This covers the landlord for rent arrears and other things like damage. However, you do need to look at the terms and conditions carefully before deciding to go ahead. Some policies insist that if you are taking tenants who claim benefits their rent must be paid directly to the landlord.  In the current situation a lot of tenants who are in work receive a top up of benefits and are very capable of managing their budgets and this does feel like they are being penalised for needing a top up.  As anyone who has ever tried to get rent payments directly to the landlord they are often refused, so this is not quite as straightforward as it might seem. Also as soon as the tenant is a few days late (typically less than a week) you need to notify the rent guarantee company.  I think the advice here is do your homework and work out what is best for you.

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When was the last time you audited all your information for the properties you own? Or do you prefer to rely on your managing agents to keep you on track?

There are plenty of different systems available out there, depending on what you want, your budget and how much you like technology or not. You may have everything in your head, but what happens if you are not available to pass that information on? 

The old adage I use is what happens if you get hit by a bus? Can someone else pick up and run your business? This might seem like an extreme case, but information is power and if you aren't available the more that you have documented the better. I have always taken this view and more so after being hit by a car which walking on a pavement a couple of years ago!

However, you choose to store your information auditing what you have, perhaps more importantly what you don't have, where it is stored and who has access to it are the key points to consider.

My tips for your audit are:-
1. create a simple spreadsheet to record all the information you want to track. 
2. check all your compliance certificates are in the correct property folder.
3. create a naming system for your filing system e.g. property name - certificate - expiry date.
4. move all your compliance certificates out of your email inbox into the relevant property folder.
5. make a list of what is missing and find it (not being able to find it won't stand up in a court of law).
6. break it down into properties - it is much easier to do it property by property than to jump around between properties.
7. make a list of the expiry dates and set up calendar reminders for 30 days before expiry, 7 days before expiry. You can also choose to use your planning tool, like Asana or Trello, or your online property CRM. The choice is yours. 

​This is something that will take a little bit of time (depending on the size of your portfolio) but gives you a fundamental structure for keeping on top of your compliance.

When I work with new clients I always recommend this as a first step, because it means your Virtual Assistant gets to learn about your properties, while helping you to remain compliant.

  
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It's that time of year when the university population starts to look for their next student accommodation! Fraught with panic and worry students have this urge to sign up for their second year house after barely knowing the people they currently live with.

We have faced significant difficulties in some areas already this year with a larger intake than before at some universities and students already living over an hour away from their universities, such as students in Durham, Bristol and Manchester. While I accept they are run like businesses and there is nothing wrong with that I do wonder how our vulnerable students are surviving, with the additional pressure of not living in and around their  campuses. There is enough pressure on young people to go to university without adding more when faced with trying to find somewhere to live, as early as this.

Some agents don't release their accommodation until the new year while others are already advertising what they have.

Having only moved to university in September and just getting used to shared living takes time. Effectively our students are still living with a group of strangers and a lot can change between now and next summer and often does.

There is also the worry for those students and their parents where they are left out of the groups and start to feel isolated and wonder what is wrong with them.  The answer is nothing, basically some people are just horrible. As a parent and a bystander it can be horrible trying to support your young person especially when they are not in easy distance to provide the cuddle and support they need!

There are various options for students including on campus accommodation, private halls and the private rented sector. Yet many feel they must go for a house or flat when actually something else might suit their needs.

Top tips for viewing your private rental

• Research the letting agent or landlord before you view (the internet is your friend here).
• Never pay to arrange a viewing this is illegal.
• Check whether they are licenced correctly. Are they on the local council HMO list? 
• Arrange to go in daylight (you can see a lot more during daylight than just the area). You are looking for things like discoloured walls and ceilings, which are showing evidence of leaks or mould. You also need to use your nose! Are there any strange smells? The smell of damp is never a good sign.
• Try to take as many of your group who will be living with you as possible. Some agents and Landlords will only let 2 people attend which isn't great if you are a group of 6. Personally I wouldn't want to be responsible for making a decision on behalf of 6 people! Take a video of the whole property if only a few of you can attend
• Try to speak to the current tenants if at all possible.

Don't be pressurised into signing up there and then. Go away and discuss it with your fellow potential housemates and also speak to your parents. 

Moving forward
So you love the property and want to go ahead. You will be asked to pay a holding deposit and this should be no more than the equivalent of one week's rent. Any more than this and it is actually illegal. The holding deposit is calculated on monthly rent x 12 divided by 52.

Read the tenancy agreement thoroughly and check about guarantors. Are you all liable or your guarantors if one person defaults or is it just your portion of the rent you are liable for? If you are not sure ask questions and seek legal advice. Yes you might feel pressurised but nobody want to sign up to live in the house of horrors!

Along with your tenancy agreement (for England) you should also receive the How to Rent guide and the current EPC (Energy performance certificate), current Gas Safety Certificate, current EICR (Electrical Installation Certificate).

Once you have signed your tenancy agreement and paid your funds your deposit should be registered within 30 days in an approved government deposit scheme and you should be sent a copy of the certificate and your prescribed information.

Good luck finding your new home and hopefully you will find these tips helpful.