Conditions of Management and Fees

 

Assured Shorthold Tenancies

Conditions of Management - Residential Properties


Note all fees quoted on this page are inclusive of VAT


Our charges for Collection and Management are as follows:

Monthly Rents: 9% on gross rental

The above charges cover the following services:
  • Collection of rent and/or any other items to be collected.
  • General supervision of tenancies.
  • Payment of outgoings i.e. water rates, insurance, repairs etc.
  • Employ builders to carry out repairs for which the Client is responsible up to a cost of £100 We can only give instructions without referring to owner for such items as we consider to be essential and/or required under the Health Act Regulations.
  • Keeping of accounts and submission of a statement quarterly.

Payment of all outgoings is subject to the owner's account being in credit.

EXTRA FEES PAYABLE

 

In managing residential property, other services are likely to arise for which fees are charged as follows:

 

SERVICE

FEES including VAT

1. MAINTENANCE

 

Repairs, carpet cleaning, general cleaning and other such items costing over £100. This will include obtaining competitive estimates where necessary and supervising the works.

15% of net cost of works

 

2. RENT REVIEW

Assured Shorthold Tenancies

 

Considering open market rental value and serving Notice of Increase on tenant in respect of Assured tenancies and granting new fixed term agreement in respect of Assured Shorthold tenancies.

3.6% of rent proposed

 

Dealing with appeals by tenant to Assessment Committee against open market rent. Preparing representations and submitting them to Committee. Rent Quantum meruit basis - minimum fee £720 plus fee for attendance at hearing if required
Attendance at hearing to give evidence. £210 per hour including travelling time

3. LETTINGS

 

12% of 1 year's rent irrespective of letting period. In cases where we are also instructed to manage the property for a minimum of one year 6% of 1 year's rent.

4. TENANCY AGREEMENT

 
Preparation of Tenancy Agreement on Landlord's behalf. 120
5. PROCEEDINGS  
Instructing Solicitors to issue proceedings for arrears of rent, possession etc. including attendance at Courts and other tribunals.

Quantum meruit - minimum fee 720

6. TAX  
Preparation of statements for assessment of income tax.

Quantum meruit basis. Minimum fee 450 per year of assessment
7. TERMINATION OF MANAGEMENT 405 per tenancy where three month's notice not given.

8. INVENTORIES

Prior to every new letting commencing or terminating, we will employ third party inventory clerks to prepare an inventory and schedule of condition and check the tenants in and out. We use a number of different companies depending on their availability and also the size of the unit being let. You will be charged with the inventory clerks actual fees.

 


DEPOSITS

Definitions
  • Agent - An individual or company who lets or manages property on behalf of its owner.
  • Deposit - A sum of money which a landlord requires a Tenant to pay at the start of the tenancy, and which will normally be returned to the Tenant at the end of the tenancy. The money is security in case the Tenant does not meet their obligations in connection with their tenancy.
  • ICE - Independent Case Examiner
  • Landlord - A person or persons who at any relevant time own, or have a formal interest in, the premises that gives them the right to possession of the premises.
  • Member - Is the person, firm or company who holds the deposit under, and is a member of, The TDS
  • Stakeholder - Any person or body who holds the Deposit at any time from the moment it has been paid by the Tenant until its allocation has been agreed by the parties to the AST, determined by the ADR process, or ordered by the court.

Under legislation brought in by the Government, deposits paid by tenants on commencement of tenancies can only be held either by an agent who is a member of the Tenancy Deposit Scheme or alternatively paid into an authorised company.

The Tenancy Deposit Scheme

We are members of the Tenancy Deposit Scheme, which is administered by:

Tenancy Deposit Scheme
PO Box 1255
Hemel Hempstead
Herts
HP1 9GN
Web www.tds.gb.com

If we are instructed by you to hold the deposit, we shall do so under the terms of the Tenancy Deposit Scheme.

The Agent holds tenancy deposits as Stakeholder.

At the end of the tenancy covered by the Tenancy Deposit Scheme

If there is no dispute we 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 20 working days following notification of a dispute to the Agent/Member 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 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. Because it is a condition of the Tenancy Agreement signed by both parties, judges may 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 we must remit to The Dispute Service Ltd the full deposit, less any amounts already agreed by the parties and paid over to them. This must be done with in 10 working days of being told that a dispute has been registered whether or not you or we want to contest it. Failure to do so will not delay the adjudication but The Dispute Service Ltd will take appropriate action to recover the deposit and discipline us.

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

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.

The following clauses can be inserted if the agent allows the landlord to hold the deposit outside TDS

If you decide to hold the Deposit yourself in relation to an Assured Shorthold Tenancy, we will transfer it to you within 5
days of receiving it. You must then register it with another Tenancy Deposit Protection Scheme within a further 25 days if the Tenancy is an Assured Shorthold Tenancy. If you fail to do so the Tenant can take legal action against you in the County Court. The Court can make an order stating that you must pay the Deposit back to the Tenant or lodge it with the custodial scheme which is known as the Deposit Protection Service. In addition a further order will be made requiring you to pay compensation to the Tenant of between one and three times the amount of the Deposit.

If a landlord fails to meet the initial requirement to protect the deposit, no Section 21 Notice can be served until either the landlord returns the deposit to the tenants in full or with such deductions as the tenant agrees; or if the tenant has taken proceedings against the landlord for non-protection and those proceedings have been concluded, withdrawn or settled (for example, by the court awarding damages being the return of the
deposit or a fine not more than three times the value of the deposit).

If a landlord fails to serve Prescribed Information, (s)he cannot serve Section 21 Notice until the Prescribed Information has been served - but this can be more than 30 days after receiving the deposit. This will not prevent a tenant from issuing proceedings for late provision of the prescribed information and seeking a penalty award.

Tenant's can make an application to a county court for a penalty award even where the tenancy has ended, and can do so for up to six years.

We have no liability for any loss suffered if you fail to comply.

Fees for dealing with a dispute will be charged on a quantum meruit basis subject to a minimum fee of £720


REPAIRS

We need to be able to carry out day-to-day repairs to your property without reference to you. Unless you advise us to the contrary we will carry out repairs costing up to £500 without reference. Where we consider it appropriate, competitive estimates will be obtained.


REFURBISHMENTS

Where we undertake refurbishment of properties on behalf of Clients prior to re-letting or sale we will charge fees on the net cost of the works of 15%

In addition, in order to comply with legislation produced by the Health & Safety Executive, documentation needs to be produced in order to comply with the Construction (Design & Management) Regulations 2015. We will arrange for an appropriate contractor to undertake the CDM. Their charges will be passed on to you. Our fees for the administration will be charged at £96

In order to comply with Health & Safety Legislation an Asbestos Survey of the property to be refurbished has to be undertaken by suitably qualified inspector who surveys the property, taking samples, if necessary, for analysis and reporting back on his findings and method of disposal of asbestos items found.
We will instruct an appropriate person to undertake this survey on your behalf. Our fees for organising this will be £90 The asbestos survey will cost between £420 - £540 plus the cost of any laboratory analysis tests.

ABORTIVE FEES

Once estimates for the refurbishment have been submitted to you, if you then decide not to proceed in accordance with the estimates, we will charge abortive fees of 90% of the fees chargeable based on the estimates

GAS APPLIANCES

Where a residential tenanted property has gas installed there is a legal requirement on landlords to have a gas safety check undertaken at least once in every twelve month period and any gas appliances belonging to the landlord must be included in the gas safety check and serviced.

We will arrange for our nominated CORGI registered contractors to undertake gas safety check and issue certification and where appropriate for landlords appliances such as boilers, water heaters, gas fires to be placed on a maintenance contract with them.

We have negotiated charges for this with our nominated CORGI registered contractors substantially less than charges raised by British Gas and the contractors charges for these services will be debited automatically from the rent account.

Our charges for the administration, organisation and recording the Gas Safety Certificates is £96 per tenancy.

On granting of a new tenancy of a property an up to date Gas Safety Certificate must be produced to the tenant and therefore in these circumstances more than one gas safety check may be undertaken in any twelve month period resulting in additional costs being raised.

ELECTRICAL APPLIANCES

Landlords must ensure that all electrical appliances and the electrical supply is safe. From 1st January 1997 all new appliances must carry a "CE" mark and all newly installed plugs and sockets must comply with regulations.

Tenants can ask for confirmation that inspections have taken place. Although there is no specific time scale for inspections, we would recommend that regular inspections are undertaken, especially in shared accommodation, every 5 years. We can arrange for our nominated electricians to undertake these tests on your behalf. Our administration fees for organising and recording the tests will be £96

ENERGY PERFORMANCE CERTIFICATES

Under Government legislation, all lettings or re-lettings after the 1st October 2008 must be supported by an Energy Performance Certificate a copy of which we must give to the tenant prior to completion of the letting. If you do not already have an Energy Performance Certificate for the property that we are to manage we will employ a company to produce the Certificate. At present, we are using a company called Surrey Energy and their charges are £55 (no VAT). The Energy Performance Certificate is valid for ten years from the date of issue.

Our charges for the administration, organisation and recording of Energy Performance Certificates is £96 per tenancy.

OVERSEAS CLIENTS

Under the provisions of the Finance Acts, with effect from the 6th April 1996, unless and until specific action is taken by landlords and agreed by the Financial Intermediaries and Claims Office of the Inland Revenue, we will be obliged to submit a return and pay tax at currently at 20% on the net assessable rental income to the Inland Revenue within 30 days of the end of each three month quarter. The quarter dates are the last day of June, September, December and March, which coincide approximately with our quarterly dates. This will happen


unless we receive notification from the Inland Revenue that we do not have to make a tax deduction from your income. In order to obtain this clearance, you have to take the following action.

In order to obtain the Inland Revenue's agreement that you can receive income from property without deduction of tax, you must complete form NRL1 and send it to the Inland Revenue Financial Intermediaries and Claims Office at Bootle, whose address is shown on the back page of the form. If you wish we can supply you with a photocopy of Inland Revenue leaflet number 1R140 relating to the obligation of non-resident landlords, their agents and tenants, which may help you to understand the situation.

If you intend to apply to receive rental income with no tax deducted, it would be appreciated if you could let us have a copy of your application form for our records and we can also then chase up the appropriate department, if they have not responded by the time we deal with the first quarter's rents.

TERMINATION OF MANAGEMENT

One quarter's notice of termination on either side is required except in the case where we sell the property on behalf of the owner. Where the property is sold to the tenant originally introduced by this firm, the vendor will be liable for our commission of 1.8% of the sale price

INSURANCE

Unless otherwise agreed, it will be a condition of our management that the insurance of the property and the contents, if appropriate, is through St. Giles Finance & Insurance Services Ltd., St Giles are our nominated insurance brokers, including full property owner's liability to include Public Occupiers Liability. These brokers pay us a fee for reviewing the terms of the insurance on an annual basis, checking the renewal papers, organising and collecting the premiums on their behalf and accounting to them and overseeing any claims with the loss adjusters. The fee that we are paid for the work we do on insurance is retained by us in order to keep our costs down. However, under FSA rules and the RICS Designated Professional Body Scheme we are required to advise you on an annual basis of any money earned by general insurance mediation activity in relation to your property which we will of course do.

INTEREST

In order to keep our charges down to a minimum we keep a substantial amount of Clients money on deposit without obligation to pay any interest earned to clients. Under the RICS regulations, if Clients money is placed on deposit, strictly speaking, any interest earned belongs to the clients unless an individual agrees to waive the right to interest. The money is on immediate call if required.

In the past all our clients have agreed to waive the right to interest on any clients money on deposit with a view to keeping their costs down and we trust that you will continue to agree to this. If you do not, this will involve us in additional administration work and as a result we will have to increase our commission on collection by 6% over and above the figures mentioned above.

We shall be obliged if you will kindly confirm your instructions by deleting one of the following alternatives.

* I HEREBY agree to waive any right to interest on moneys held by John G Dean & Co. on my behalf.

* I HEREBY confirm that I am not prepared to waive my rights to interest and understand that the commission on collection will in these circumstances be at the rate of 6% above normal

* (Please delete one of the above alternatives.)

BANKING

All rents and other moneys collected are banked at Nat West Bank PLC, 128 Balham High Road, London, SW12 9AE in the name of John G Dean & Co. Clients Account.

MONEY LAUNDERING REGULATIONS 2003 AS UPDATED

Under the above Legislation, we are required to obtain proof of identity without which we are regrettably not permitted to commence any work for you.

In the case of an individual or individuals who own the property, please provide us with either the original or a certified photocopy of each person's passport and utility bill or bank statement addressed to each person's home address. If you do not have a passport, please supply a copy of driving licence or similar document which bears your name and signature. Copies must be certified by either a solicitor, Banks officer or another professional person.

In the case of a company, please supply a certified copy of the company's Certificate of Incorporation.

COMPLAINTS HANDLING PROCEDURE

As required by the RICS we have a formal complaints handling procedure, details of which will be provided upon request.

PROVISION OF SERVICE REGULATIONS 2009

We comply with the above regulation by displaying the required details of our Professional Indemnity Insurance in each of our offices.