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Residential and Commercial Letting
Can I be sure of regaining possession at the end of the lease?
Will my home be in safe hands while I am away?
How much furniture must I leave in the house?
What about an inventory?
Who will insure the house and contents while the house is let?
Will my Building Society object to my letting the house?
Should I arrange for the disconnection of my telephone, electricity and gas?
Who looks after the house when it is not let?
How often do you report on financial matters?
Will I be liable for Income Tax on the rental?
Under the terms and conditions of the Housing (Scotland) Act 1988, the court must grant the landlord an order allowing him to evict the tenant if he applies for one at the end of the tenancy period, assuming the said tenancy complies with the Act.
There is always an element of risk in leaving a house. This is much reduced, but not entirely eliminated, by letting the property. We always obtain references in respect of prospective tenants, which must be satisfactory. But these references are not guarantees and we cannot guarantee tenants. During our management we endeavour to visit the property to monitor the tenant's stewardship.
There is no legal requirement about this. However, unless letting unfurnished, the house should be equipped with quality furnishings in order to attract the best type of tenant. It is best not to leave any item of real monetary or sentimental value. All upholstered furnishings must comply with the fire and furnishings (fire safety) regulations 1998, and all electrical equipment/appliances must be checked for safety. This is to comply with Electricity at work act 1989. Many tenants bring their own things with them and do not require an excess of landlord's equipment.
Prior to the start of each tenancy we prepare a full Inventory and Schedule of Condition covering all areas of the property, except for lofts/attics or rooms/other areas to which access is denied. These documents are designed as a record and are checked when the tenant leaves. But if damage is slight, or is concealed by some means, we cannot accept responsibility as checking can only be at a level which is practical and recognises fair wear and tear during the period of the tenancy. In the event of damage every effort is made to recover compensation from the tenant.
The Landlord. We suggest that clients inform their insurers that they will not be resident in the property. Landlords can arrange all necessary insurance through Grant & Wilson Property Management Limited. For the avoidance of doubt landlords will only be responsible for their contents. Tenants are responsible for the insurance of their own or any third party property.
If the property is subject to mortgage, you should advise your lender of your plans. Our experience confirms that most building societies and banks will consent to the letting of your property although this may involve completing some formalities. Our documentation and code of practice has to date met with all their requirements. There will be some formalities to attend to but, provided you are intending to return within three years, we can comply with the requirements of most societies.
We recommend that you have your telephone disconnected, even though there is a risk that you will come home to a new telephone number. The tenant will reconnect in his own name and will thus be responsible for his own telephone bills. Gas and electricity meters are read by us at the beginning and end of each lease. We arrange for tenants to be billed accordingly. No disconnections are involved.
We will regularly check the property when the house is not tenanted, before or after a lease period, reporting any problems directly to the owner or their representative or to the local police if required. We will always respond to calls to step in should a problem arise, regardless of the terms of our initial appointment.
Monthly. Each month you will receive a statement of receipts and payments in summary form, so you always know where you stand. It normally takes about seven working days, from receipt of rental, for your funds to be transferred by giro credit to your nominated bank account.
On the net profit, yes. This is the gross rental less any expenses incurred in leasing the property (i.e. repairs) and any mortgage interest paid by the client. Profits on net letting income are liable to tax like any other source of income, However, if you are resident overseas, it will be ourselves, as your managing agents, from whom the tax will be demanded. We will apply to the Inland Revenue on the client's behalf, as non-resident landlords are often permitted by the Inland Revenue to receive rental income with no tax deducted. If the tenant were to pay his rent to you direct, he would be obliged by law to deduct tax from his payments. If the Inland Revenue does not grant the right for clients to receive payment without tax being deducted, we hold back funds, at the standard rate of tax, to meet the contingent liability. This money is held in trust in a Building Society, pending a demand from the Inland Revenue. Interest accrues to the client.