Paperwork- Paperwork- Paperwork

by | Mar 14, 2016 | Property Investors

I was talking to a landlord at a networking event last week. He was explaining that, when it comes to letting his property, he has no idea what all the fuss is about. He gets his files and move-ins done in just 10 minutes, so why on Earth would he consider outsourcing this function?

This perplexed me, because I know the high level of administration required to stay compliant. I could not resist digging a bit further to see what it was he was doing in his 10 minute let file prep. He explained how he has used the same tenancy agreement for the last 10 years, and he has never had a problem with it. He doesn’t take deposits (he just takes rent in advance instead and uses that as a deposit) and the referencing consists of a letter from their employer that they bring in for him.

In my position, it’s quite difficult to turn a blind eye to such errors in paperwork handling. I’m afraid i could stop myself from getting into a rather lengthy conversation about how he “should” be doing the pre-move in paperwork…

… the problem is, that this is a conversation I am having every single week, to varying degrees with landlords across the country.

From a landlord’s perspective, the increasing burden of paperwork is becoming quite a chore, and I can see why many have decided to take no or little notice of the new rules. The fines, prosecutions and potential criminal offences however are getting heavier and more severe, so landlords really do need to take note.

With the frequent changes in legislation, tenancy agreements need to be changed at least once a year. With fraudulent applicants on the rise trying to get around the latest Immigration Act rules, references need to be sought direct from a verified employer. If a payment is to be treated like a deposit, then in law it is a deposit and should be protected like one, but that is just the beginning…

“If the file is right, the management is right”

We have a motto in our office, that is “If the file is right the management is right” and it is so true. If you put satisfactory care and attention into referencing the tenant, checking the property, getting all the safety elements in place and ensuring the legals are up to date and in order, the rest of property management certainly becomes a lot easier.

So what is involved in setting up a tenancy file? Our checklist for our staff consists of 56 items, but to list the main ones:

  • Tenancy agreement – up to date and with the correct full names of landlord and tenant
  • Referencing – financial and work references
  • Identification – Full ID required for the tenants and occupiers
  • Safety Certificates – Gas Certificate BEFORE they move in and recommended to have electrical certification too
  • Smoke alarm test confirmation (to be tested on the day of move in)
  • Property Check – to make sure ready to let, clean and in order as per any negotiations agreed
  • Inventory completed, metres read, items checked and signed off
  • Confirmations checklist – to confirm issuing of How to Rent Guide, Gas cert, ID checked, Right to Rent ascertained, etc.

In addition, you need to make sure the keys are issued and that the tenant has instruction books for all appliances in the property, and only then you will be good to go. To do all of that in 10 minutes would be quite a challenge!

A good, consistent process is required for all landlords and agents to make sure that all is in order from the outset, so that when it comes to issues later on, it is much easier to resolve with the proper paperwork in place.

Taking the Deregulation Bill alone, just failing to log the issuing of the How to Rent Guide can stop a landlord being able to issue a section 21, and the potential financial issue this causes could run into literally thousands.

So in brief, in order to stay safe, it’s all about the paperwork, now more than it ever has been before. In the past, landlords may have been able to “wing it” but not any more. Agents will have to be better and landlords will have to be better, or else they will for sure be suffering rather severe consequences.