An agreement between Coutts de Lisle and Landlords for residential lettings
1-Introduction of Tenant: Where no management or rent collection is to be undertaken, our fee is 10% plus VAT of the total rent reserved during the tenancy where the tenancy (including any subsequent renewals or extensions) is less than one year but more than six months. This fee is due for all lettings where the tenant is introduced by us, whether the offer is finalised by us or not. For tenancies less than six months, our fee is 15% plus VAT of the total rent reserved during the tenancy. .
2- Introduction of Tenant and Rent Collection: The fee of 11% plus VAT of the total rent reserved during the tenancy (including any subsequent renewals or extensions) is payable by the Landlord. The fee is charged on the rent collected from the Tenant. Either party can terminate the rent collection agreement by giving the other party a one month notice whereupon our fee will be reduced to 10% plus VAT of the total rent reserved during the tenancy (including any subsequent renewals or extensions) on a pro-rata basis. The minimum period of rent collection is three months.
3-Management (Property Management): The fee of 6% plus VAT of the total rent reserved during the tenancy (including any subsequent renewals or extensions) is payable by the Landlord for our Property management service where we have not let the property but the Landlord has asked us to manage the tenancy. This fee is charged on the rent collected from the tenant. Either party can terminate the management agreement by giving the other party a one month notice. The minimum period of management is three months.
4-Minimum Fee: Our minimum fee is £450.00 (Four hundred and fifty pounds) plus VAT.
5-Renewals and Extensions: Where the tenancy is more than a year, our fee is 8% plus VAT of the total rental duration for any subsequent renewals or extensions. In the event that the landlord and tenant agree to a renewal or extension of the tenancy, a charge of £60 plus VAT will be made by us to each party for the preparation of the documents should the Landlord ask us to prepare the renewal documents. Renewal fee will be payable in respect of renewals, extensions and holdovers where the original tenant stay in occupation. Where there is more than one tenant involved, renewal fee will be payable in full where any or all of them remain in occupation.
5.1- Renewal procedures:
5.1.1- About ten weeks prior to the end of the tenancy, Coutts de Lisle will write to both the Tenant and the Landlord enquiring if they wish to renew/extend the existing tenancy.
5.1.2- Should both parties express a wish to renew/extend the tenancy; Coutts de Lisle will negotiate such a tenancy.
5.1.3- Once agreement has been reached between the two parties about the terms of the renewal/extension, Coutts de Lisle will prepare the renewal/extension documents and send them for signature by both parties, unless the Landlord has opted to prepare the renewal documents himself.
5.2- Should Coutts de Lisle not be collecting rent, the first two months rent for the renewal/extension period will be paid to Coutts de Lisle. We will deduct our renewal fee from these two months rent and pay the outstanding amount of rent to the Landlord.
5.3- Should the Landlord not reply to Coutts de Lisle’s letter in clause 5.1.1 above and our subsequent attempt to contact the Landlord and negotiate a renewal/extension, or should the landlord choose to negotiate the renewal personally despite our attempt to do so, then the Landlord is liable for the renewal fee in clause 5 above.
6-Holding deposit: When an offer is accepted by the landlord, we ask the applicant to leave a non-returnable holding deposit of one week’s rent before we start to apply for references. In return we stop showing the Landlord’s property. If the applicant withdraws the offer, then the holding deposit less references charges and administrative costs is paid to the Landlord.
7. References: All referencing will be carried out via an external Credit Management and Risk Assessment, FCC Paragon offers one of the most reliable and accurate forms of Tenant referencing currently on the market.
To date over 250,000 Managing Agents/Landlords have benefited from their services, making them one of the largest independent referencing agencies in the UK.
The emphasis of referencing operation is on the quality and reliability. By using the above form for credit referencing the following details can be gathered:
- CREDIT HISTORY CHECK
Verification of the voters’ role. If they are not presently listed, this does not necessarily mean that they will be unacceptable. Proof of residency will be requested.
- County Court judgments/ bankruptcies. This can be used to discover hidden addresses.
- On each application a written reference is obtained from the previous managing agent/landlord. Should the prospective tenant have only rented from them for a short period of time we will also apply to the managing agent/landlord prior to that. This means you will always have a full 6 month’s history of your tenant’s previous accommodation. From this information we are able to assess whether they paid their rent on time, have a history of arrears and whether they treated the property in a correct and proper manner.
EMPLOYMENT REFERENCE (or any other financial income)
Reference requests are sent to all current employers to ascertain whether the applicant is employed, in what capacity, whether this is a permanent or temporary position and their salary details.
If they are self employed, we will request an accountant’s reference, P60, or bank statements etc., whichever your tenant can provide most easily. If they receive their income from a Pension, either personal or company, again we will request various documents direct from the tenant. Should they receive any other type of income, then your handler will speak with the tenant direct with regard to the type of documentation required. From the information provided by this section and also the information found within the credit history, we are able to ascertain whether the prospective tenant can afford the rental payments, and whether he will be employed for the full length of the tenancy.
Should the applicant have been employed for 6 months or less we will also apply to their previous employers for a reference. This is essential to confirm continuity of employment
TENANT'S DATABASE
A Tenants’ Database contains hundreds of thousands of Tenant records, collated from details provided by Letting Agent's, Landlords and our own claims records. Each new application is automatically searched against our database. Should we record a defaulting Tenant we will update our database accordingly.
CHARACTER REFERENCE
Although not always essential, it can provide a valuable insight into the applicant’s personality and a better profile of their character. We would ask that no family member or employer is given as the referee.
8-Tenancy agreements: Unless instructed otherwise, we use a standard form of tenancy agreement in respect of all furnished lettings, covering most eventualities. A charge of £120.00 plus VAT is payable by the Landlord for this service.
9-Inventory: It will be necessary for a full inventory of furniture’s, fittings and the condition of the premises to be taken by an inventory clerk for attachment to the agreement to be signed by both parties. This helps to avoid any argument at the end of the tenancy. Unless a detailed inventory is prepared by the Landlord, we shall instruct on the Landlord’s behalf an independent professional firm to prepare an inventory. The cost of the preparation of the inventory, “The Inventory Make”, is paid by the Landlord. The inventory make could be used up to 5 years. The Landlord also pays for the check-in report at the beginning of the tenancy; the tenant pays for the check-out report at the end of the tenancy. In some cases both the Landlord and the Tenant Company will request to instruct inventory clerks at their own expense for both the check in and check out inventories. We can not accept any liability for any deficiencies in the inventory reports.
10- Cleaning and Repairs: It is necessary for the Landlord to ensure that all outstanding repairs (whether to the property or to the appliances), redecoration and alterations to the property are completed prior to the commencement of the tenancy, that the property is ready for occupation in a clean and tidy state.
11-Withdrawals: Should a Landlord verbally accept an offer and instruct us to receive a holding deposit, apply for references and prepare contract, but decide to withdraw his property prior to signing a tenancy agreement, he will be liable to pay to us our minimum fee.
12-Deposit: As agents we will collect and hold a deposit from the tenant at the beginning of the tenancy against any costs or losses incurred as a result of any breach of the terms of the tenancy agreement.
We are a member of the Tenancy Deposit Scheme, which is administered by:
Tenancy Deposit Solutions Limited
3rd Floor, Kingmaker House
Station Road, Barnet
Herts EN5 1NZ
Telephone 0871 703 0552
E-mail info@mydepsoits.co.uk
Fax 08456 34 34 03
If we are instructed by the Landlord to hold the Deposit, we shall do so under the terms of the Tenancy Deposit Scheme and only in cases where an inventory report is provided by an inventory clerk and we draw up the tenancy agreement.
We hold tenancy deposits as Stakeholder.
At the end of the tenancy covered by the Tenancy Deposit Scheme
If there is no dispute we/the Agent will keep any amounts agreed as deductions where expenditure has been incurred on behalf of the Landlord, or repay the whole or the balance of the Deposit according to the conditions of the Tenancy Agreement with the Landlord and the Tenant. Payment of the Deposit will be made within 10 working days of written consent from both parties.
If, after 15 working days* following notification of a dispute to the Agent and reasonable attempts have been made in that time to resolve any differences of opinion, there remains an unresolved dispute between the Landlord and the Tenant over the allocation of the Deposit it will (subject to B 4.3 below) be submitted to the ICE for adjudication. All parties agree to co-operate with any adjudication.
The statutory rights of either you/the Landlord or the Tenant(s) to take legal action against the other party remain unaffected.
It is not compulsory for the parties to refer the dispute to the ICE for adjudication. The parties may, if either party chooses to do so seek the decision of the Court. However, this process may take longer and may incur further costs. Judges may, because it is a condition of the Tenancy Agreement signed by both parties, refer the dispute back to the ICE for adjudication. If the parties do agree that the dispute should be resolved by the ICE, they must accept the decision of the ICE as final and binding.
If there is a dispute I/we must remit to Tenancy Deposit Solutions Limited the full deposit, less any amounts already agreed by the parties and paid over to them. This must be done within 10 working days of being told that a dispute has been registered whether or not you or I/we want to contest it. Failure to do so will not delay the adjudication but Tenancy Deposit Solutions Limited will take appropriate action to recover the deposit and discipline me/us.
The Agent/we must co-operate with the ICE in the adjudication of the dispute and follow any recommendations concerning the method of the resolution of the dispute.
Incorrect Information
If the Landlord warrants that all the information he has provided to the Agent is correct to the best of his knowledge and belief. In the event that the Landlord provides incorrect information to the Agent which causes the Agent to suffer loss or causes legal proceedings to be taken the landlord agrees to reimburse and compensate the Agent for all losses suffered.
If a Landlord wishes to hold the Tenant’s deposit for an assured shorthold tenancy in England and Wales, he will have to be a member of a “Tenant Deposit Scheme”. He will be able to choose between two types of scheme: a single custodial scheme and two insurance-based schemes.
Custodial scheme
The tenant pays the deposit to the landlord;
The landlord then pays the deposit into the scheme;
Within 14 days of receiving a deposit, the landlord must give the tenant the prescribed information (to be set out in secondary legislation) about the scheme being used and the tenancy;
At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, they will tell the scheme which returns the deposit, divided in the way agreed by both parties;
If there is a dispute, the scheme will hold the amount until the dispute resolution service or courts decide what is fair;
The interest accrued by deposits in the scheme will be used to pay for the running of the scheme and any surplus will used to offer interest to the tenant or landlord if the tenant isn’t entitled to it.
Insurance-based schemes
The tenant pays the deposit to the landlord;
The landlord retains the deposit and pays a premium to the insurer - the key difference to the custodial scheme;
Within 14 days of receiving a deposit, the landlord must give the tenant prescribed information (to be set out in secondary legislation) about the scheme being used and the tenancy;
At the end of the tenancy, if the landlord and tenant agree how the deposit should be divided, the landlord returns all or some of the deposit;
If there is a dispute, the landlord must hand over the disputed amount to the scheme for safekeeping until the dispute is resolved.
If for any reason the landlord fails to comply, the insurance arrangements will ensure the return of the deposit to the tenant if they are entitled to it.
For more details please refer to: www.communities.gov.uk/index.asp?id=1152035
If you/the Landlord decide(s) to hold the Deposit yourself, we will transfer it to you within 5 days of receiving it. You/the Landlord must then register it with another Tenancy Deposit Protection Scheme within a further 9 days if the Tenancy is an Assured Shorthold Tenancy. If you fail to do so the Tenant can take legal action against you/the Landlord in the County Court. The Court will make an order stating that you/the Landlord must pay the Deposit back to the Tenant or lodge it with the custodial scheme which is known as the Deposit Protection Scheme. In addition a further order will be made requiring you/the Landlord to pay compensation to the Tenant of an amount equal to three times the Deposit. You/the Landlord will be unable to serve a Section 21 Notice on your Tenant until compliance with the above conditions and the Court will not grant you/the Landlord a possession order. We have/the Agent has no liability for any loss suffered if you/ the Landlord fail to comply.
At the termination of the tenancy, an inventory check-out will take place. The corresponding report clarifies if any items are missing, damaged or if the property/or parts of it is/are left in an untidy and dirty condition. It is the Landlords responsibility to provide a list of deductions if any from the deposit and the cost the value of the items missing or damaged. We are happy to provide estimates for the cleaning of the property. We would then require a written instruction from the Landlord, specifying the amount that will have to be deducted from the Tenant’s deposit. Enclosed to this instruction should be the list of items, together with their costs, that are missing or damaged. We are bound by the tenancy contract to return the Tenant’s deposit as soon as reasonably possible, and we could be legally held liable for late payments of deposits to the Tenant. Therefore if we do not receive the Landlords instruction on the amount to be deducted from the deposit within fifteen working days of the Tenant vacating the property, we are hereby deemed to have the Landlord’s instruction to release the deposit back to the Tenant without any deductions.
13-Important Notes to Landlord:
13.1: Where there is a change of tenant in respect of your property, this shall constitute a new tenancy and not an extension or renewal of an existing tenancy.
13.2: In the event of a third party associated with or found by a tenant or occupant of your property entering into a tenancy agreement for your property, a commission of 8% plus VAT of the total rent reserved during the tenancy (including any subsequent renewals or extensions, whether or not negotiated by us) will be payable by the Landlord.
13.3: The total amount of all the above commission, fees and charges shall become due at the commencement of each tenancy or, where there is a renewal or extension, the date on which the tenancy is extended or renewed. Where we collect the rent on your behalf, such total amount shall be deducted from the initial rent payments we receive from the tenant on or after the due date. If we are not collecting rent and the rent is paid on a monthly basis, the first two months rental payment will be paid to us by the tenant and the total amount of fees will be deducted from the first two rental payments.
13.4 In the event that the tenant(s) were to terminate the tenancy all commissions are charged on a pro rata basis, any refunds due will be paid 10 days after the tenant(s) have vacated the property, in the event of the Landlord terminating the tenancy no refunds on commissions will be due.
13.5 Sale of property by landlord: Where a property is sold transferred or otherwise dealt with the benefit of the tenancy, our fee remains the responsibility of the original landlord for the duration of the tenancy and for any extension, renewals or period of holding over irrespective of whether negotiations were carried out by us. The landlord should instruct his solicitor to assign responsibility for our fees to the purchaser.
13.7: Transfer of utilities: where the tenancy agreement states that the tenant is responsible for the transfer of the utility accounts, the landlord accounts should be closed before the start of the tenancy. Where we manage the property, we will do this. Otherwise the landlord is responsible for:
i) Notifying the relevant utility companies that his account for water, gas and electricity should be closed and providing them for meter readings on the first day of the tenancy
ii) Notifying the local authority that his liability for council tax is at an end.
iii) Closing down the telephone account at the property
At the end of the tenancy, the tenant is responsible for notifying the relevant service providers and local authority that they are vacating. However the landlord should also contact the relevant service providers and local authority to ensure that the services are returned into his name and do not lapse during any vacant period.
13.8: Standing Order: When a tenancy begins and the rent is paid by standing order, we will send the signed forms off to the relevant banks as part of our service, however we accept no responsibility for the standing order being set up by the Bank and in the case where we do not manage the property we assume no responsibility for chasing the rent.
13.9: Permission and consents: the landlord warrants that
13.9.1: consent to let from his mortgagees has been obtained
13.9.2: where he is lessee the lease extends beyond the term that he proposes to let and that any necessary consents have been obtained he has notified his insurance company of his intention to let and has obtained their agreement to extend the insurance cover on the property and its contents to cover the changed circumstances.
13.9.2: where he is a joint owner he has ensured that all the owners and named in the Tenancy Agreement and that he is authorised to give instructions on their behalf.
13.10: Commission & Interest: any commission, interest or other income earned by Coutts de Lisle while carrying out its duties as agent for the letting and/or management on the property for example by referrals to contractors or inventory clerks will be retained by Coutts de Lisle,
13.11: Outstanding Fees: the landlord agrees that, where any of Coutts de Lisle’s fees commission charges and/or renewal commission charges remain outstanding for more than seven days, Coutts de Lisle may use any sums obtained or held on landlord’s behalf to pay the outstanding sums, including rental payments on this or any other property on which Coutts de Lisle is instructed
13.12: Keys: Coutts de Lisle secure key tag system ensures that third parties can not identify which property a set of keys belongs to therefore in the event that keys are lost or unaccounted for Coutts de Lisle liability is strictly limited to the cost of cutting a new set of keys.
13.13: Disclaimer: Coutts de Lisle will carry out all services with reasonable care and skill. However it is unable to guarantee the suitability of tenants’ timely rental payments or vacant possession at the end of tenancy and cannot be held liable by the landlord for such events.
13.14: Legal Proceedings: Coutts de Lisle is not responsible for any legal steps for the recovery of rent or repossession of the property. Appearances before any Court or Tribunal will be by special arrangement and the fee for any such attendance will be £350 per day or part thereof. Coutts de Lisle will not accept service of legal proceedings on the landlord’s behalf.
13.15: Indemnity: the landlord agrees to indemnify Coutts de Lisle as agent against any cost expenses or liabilities incurred or imposed on it, provided they were incurred on the landlord’s behalf in pursuit of Coutts de Lisle normal duties.
13.16: Amendments/Variations: this contract constitutes the entire agreement between Coutts de Lisle and the landlord and supersedes all prior agreements, understandings representations or communications between the parties. No amendment or variation to this contract will have any contractual effect unless approved in writing by a Director of Coutts de Lisle.
13.17 Interest: Coutts de Lisle’s fees are payable when they fall due. Coutts de Lisle reserves the right to charge interest on any amounts outstanding twenty eight days after the fees are due. Interest will be charged from the date the fees become due at the annual rate of 2% above HSBC base rate
13.18: VAT: all Coutts de Lisle commission fees and any other charges are subject to VAT at the prevailing rate.
13.19: The High Court and the County Court of England and Wales shall have jurisdiction to hear and determine e any action or proceeding in the respect to of this agreement
13.20: Coutts de Lisle reserves the right to change its schedule of fees and terms of business.
13.21: Duplicate Documents: in the event of Coutts de Lisle having to send duplicate documents or statements we will be happy to do this free of charge by e-mail. Should the Landlord require hard copies in post, a charge of £2.50 per document or statement will be made subject to a minimum charge of £10.
14-Important Notices to Landlord
Section 48 Landlord and Tenant Act 1987: Provided the Landlord informs us of an address in England and Wales, other than the property we are letting, at which the Tenant may serve any notice on you, we shall inform the Tenant by notice of this address in compliance Section 48 Landlord and Tenant Act 1987.
Furniture and Furnishing (Fire) (Safety) Regulations 1988 as amended by the Furniture and Furnishing (Fire) (Safety) (Amendment) Regulation 1993: The new legislation for Fire regulations will be coming into effect from December 1996. You must ensure that all furnishing in the property meet the new fire regulations. Any furnishings bought after approx. 1992 will already comply, however any furnishing bought before this date may not. Items that can not be proven to comply must be removed and presumably replaced.
Gas Safety (Installation and Use) Regulations 1998: It is the Landlord’s responsibility to ensure that all gas appliances and any installation pipe work in the property complies with the above act. We have negotiated a competitive rate with our plumbing firm for this service and are happy to provide it to the Landlord. If we are not provided a valid certificate three days prior to the commencement of the tenancy and annually thereafter, we reserve the right to appoint a corgi registered engineer to carry out an inspection on all gas appliances and any remedial repairs where necessary. The cost incurred together with our administration charge of £45 will be debited from your account.
We have been advised that if our Landlords do not wish to comply with these new legislation and we are aware of these actions, then our agency will share liability for our client’s breach/s of the law.
Electrical Equipment (safety) regulations 1994.
The landlord is fully responsible that all electrical installation and appliances are maintained in good order and checked for safety at least every twelve months by an appropriate registered engineer and must provide us with a copy of the certificate awarded. If we are not provided a valid certificate prior to the commencement of the tenancy and annually thereafter, we reserve the right to appoint a registered engineer to carry out an inspection on all electrical appliances and any remedial repairs where necessary. The cost incurred together with our administration charge of £45 will be debited from your account.
Money Laundering Regulation 2003
We will need proof of a Photo I.D either a photocopy of a Passport or Driving License. We also need a photocopy of a recent utility bill as proof of residence at your current address.
Tax – applicable to Landlords living abroad: The managing agent collecting the rent on behalf of the Landlord and in the absence of the managing agent the Tenant is liable to withhold tax from the rental and account to Inland Revenue every quarter. This means that either the managing agent or Tenant is liable for the tax on your property. The only way to avoid this is for you to contact the Inland Revenue and obtain a written approval from them allowing you to deal with your taxes personally and discharging the liability from us or the Tenant. We can not be held liable for any penalties, interest and other such costs imposed by the Inland Revenue as a result of inadequate or incomplete information given to us by the landlord.
Indemnity: The Landlord therefore covenant with us that he, his personal representative and his assignees will at all time keep us indemnified against all actions, proceedings, liabilities, claims, damages, costs and expenses in relation to or arising out of your failure to comply with all the regulations above including any subsequent amendments thereto or any replacement regulations.
15-MANAGEMENT SERVICES
15.2 Rent Collection:
The collection of rent is credited directly to the Landlord’s bank after funds have been cleared in our account, minus any outgoings that may have occurred during that period.
15.3 Statement of accounts:
These are made to the Landlord as the rent is collected showing a list of expenditure, i.e. Water Rates, Taxes etc, any rent arrears and the monies credited to the Landlord’s account. The statement is sent to the Landlord by e-mail unless requested otherwise in writing.
15.4 Outgoing:
We pay current outgoing such as, Insurance Premiums and any other service charges and/or maintenance charge demands or estimates where applicable. While we do pay demands and bills on the Landlord’s behalf in respect of his property and while we shall do our best to query any obvious errors, we shall not be responsible for the adequacy and verification of these bills, such as service charges demands.
15.5 Repairs:
We shall deal with the day to day management matters including any emergency and routine maintenance up to £250.00 for any one item. Only repairs in excess of this amount will be referred to the Landlord for approval. We will retain a £250 float from landlords which will be held on account to pay for any emergency works to the sum of £250.00.
15.6 Utilities:
We will inform the Gas and the Electricity Boards, Thames Water, British Telecom and the relevant council for Council Tax of the particulars of the Tenant only if we are managing the tenancy. Otherwise we will instruct the Tenant to sign his/her agreements with the suppliers. The Landlord should provide us with his account number at the various utilities above so we can pass it on to the Tenant. In some cases, an authority might require both the Tenant and the Landlord to confirm the change over of the account, quoting the account number.
15.7 Management while property is vacant:
During void periods, we will charge a fee of £50 per month. We will continue to manage the property during this period, however can not be held liable for any loss and/or damage arising from fire, flood or theft. If the landlord requires the services to be turned off during this period, then we will need to receive instructions in writing and will arrange for the required contractor to attend at the landlord’s expense. All inclusive maintenance stated with in this agreement becomes void unless otherwise agreed by the Agents in writing.
15.8 Purchase of items of property:
We can be instructed to purchase specific items for the property. Time spent for this service will be charged at £50 per hour.