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Legal and financial aspects to buy to let services



Financial services:
 
- Economics of Buy to let
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- Financial considerations
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Legal

Recent years have seen a big rise in the amount of legislation associated with the buy to let market. The situation regarding new laws is very dynamic. It is very important to remain well informed. Buy2LetExpert utilise their solicitors and are members of a trade association who continually update on such matters as legal issues. A few key issues are highlighted below:

  • Contracts. It is very important to choose the right kind of contract. Legislation changes in October 2010 now mean that all buy to let tenancy contracts for rents under £100,000 per annum should be Assured Shorthold Tenancy agreements. While not complicated documents, it is important that they are completed correctly and everything is done 'by the book'. Buy2LetExpert can advise on the details and how to tailor the contract including specific clauses required by the landlord or property in question.
     
  • Late, Partial or Non Rental Payment. Strict procedures should be followed should there have been a breach of contract. For property repossession, appropriate forms must be completed and delivered in an appropriate manner. Forms must be delivered after minimum periods etc. It is a costly and time consuming process and best avoided if at all possible. Careful adherence to the Buy2LetExpert advice will minimise the likelihood of the requirement for legal repossession.
    In almost 20 years no Buy2LetExpert property has ever been repossessed. Furthermore no tenant has ever vacated with outstanding debt.
     
  • EPC, Gas Safety and PAT Tests. Energy Performance Certificates (EPC’s) are now required by law when marketing a buy to let property and should be available to the potential tenant. They attempt to measure the property in terms of its energy efficiency so that different properties can be compared. It highlights issues such as inefficient boilers and areas where insulation might be substandard. It also recommends improvement that might be made. Currently, EPC’s are valid for 10 years regardless of what improvements are made. So, in theory, it may be beneficial to repeat the EPC if for example old boilers are changed, roof insulation added or windows replaced with double glazed units. An EPC test typically costs around £50. A quick 'google' will reveal many providers of the service. There is no pass or fail on an EPC check but merely a score.

    Gas Safety Checks are also a Legal Requirement but should be carried out on an annual basis by a 'Gas Safe' registered heating engineer on all gas appliances such as boiler, hob etc). The property must pass a test to receive a valid certificate. There are doubtless many excellent engineers but sometimes a very small factor can result in a fail and re visit. Buy2LetExpert attempts and usually can anticipate the problem issues that are often quickly rectified BEFORE the visit saving repeat visit cost. A typical cost for an inspection is £65 with an additional £40 or so for a repeat visit.

    Portable Appliance Checks (PAT checks) are not a legal requirement but are advised. They relate to an electrical test on all portable appliances provided by the landlord. So examples would be toasters, kettles, irons, coffee machines etc etc. Buy2LetExpert would strongly advise NOT to supply portable appliances otherwise there will be a cost associated with testing the appliance. If a tenant demands a kettle or two then simple make a 'gift' of such items and get the acceptance of the gift signed in writing! This minimises the portable appliances but any remaining (e.g. vacuum cleaners) can be checked by Buy2LetExpert at the time of the annual gas safety check at no additional cost.
     
  • Fire Retardant Fabrics. All soft furnishings (including mattresses) much display the appropriate fire test certificate if to be included in a let property. Be careful with older furniture (not antiques) which are unlikely to conform.
     
  • Tenancy Deposit Scheme. It is a legal requirement that all tenant deposits must be registered with a quasi government organisation. The issues of the inventory itself  is discussed within the Tenant Management section. It is very important that the inventory is carried out correctly prior to registering the deposit. However, once the deposit is registered, the tenant (and landlord) can call upon the services of an independent arbitrator to settle any disputes.

 

 

Legal side to property investment

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To contact us call: 020 7482 0300 or email