| We are
members of ARLA the Association of
Residential Letting Agents. |
| This page
is to
aid landlords who are looking to let their property through a residential
letting agency and consists of questions that every landlord should ask and the
answers they should receive. |
| The following questions are
answered below: |
Are you a member of
ARLA?
Why is it so important?
What is ARLA's Fidelity Bond?
What are the fee structures for letting agents? Do you charge me or the
tenant?
What do you do for your money?
What kind of tenancy agreement should you use?
Is letting safe? Can I get my property back?
What if the tenant wants to extend the term of the let?
What about inventories?
Obvious legislation aside, what other regulations could affect me?
What insurance covers can protect a landlord?
What does your agent do if it all goes wrong?
As a landlord or a tenant, I want to know, What is Management? |
| What are the
ARLA membership requirements? |
Are you a
member of ARLA? Why is it so important?
ARLA is the only professional and regulatory body solely concerned with
residential lettings. It keeps members up-to-date with changes in legislation
and the many other requirements for a successful lettings practice. |
| In order to comply with ARLA’s
membership requirements, an ARLA member has to have been in business for at
least two years; hold separate client accounts and demonstrate these are
professionally managed and audited; hold professional indemnity insurance cover
to comply with the requirements of ARLA’s Fidelity Bond; and offer a full
management service to landlords in addition to letting and rent collection. |
What is
ARLA’s Fidelity Bond?
The ARLA Fidelity Bond is designed as a protection of first resort for monies
entrusted to ARLA members by landlords and tenants during the ordinary course of
their business as letting agents. |
| In the event of proven theft or
fraud if a member agent or its staff, if you cannot recover monies deposited
with the agent during its period of membership of ARLA from the agent and the
agent’s own insurance does not cover the loss, you may make a claim to ARLA
for reimbursement of the money you have lost. |
| Click
here for full details of the bond.
|
What are
the fee structures for letting agents? Do you charge me or the tenant?
Obviously fees vary and each letting agent will have their own scale of charges
and terms and conditions of business. They cover letting the property; or
letting and rent collection; or letting and full management. The landlord is the
ARLA member’s client and fees are paid by you as a percentage of rental income
according to the scale of charges. You should ask for a copy. |
What do you
do for your money?
Introduce and vet prospective tenants; prepare the tenancy agreements; advise on
Inventories, changes to utility accounts and Council Tax; collect the rent and
pay the balances to the landlord’s account. When retained on management: pay
bills for the landlord, regularly inspect the property, recommending, overseeing
and accounting for necessary maintenance. |
What kind
of tenancy agreement should you use?
An ARLA member will use tenancy agreements that comply with the Housing Act
1988, or under contract law for bona fide companies and/or rental values over £25,000
a year. Most members will have their own ‘in-house’ tenancy agreement
drafted by solicitors, incorporating clauses covering the potential problem
areas experienced agents recognise. These agreements should be far more
comprehensive than the standard printed agreements bought for self-completion
and are regularly up-dated to take account of changes in legislation. |
Is letting
safe? Can I get my property back?
Yes. It’s safe provided the tenancy agreements are properly drawn up and the
correct Notices served. Then, in those cases where legal action is needed for
repossession the court should make an order in the landlord’s favour. New
Accelerated Court Procedures speed up the process, without the necessity for a
court hearing and take the hassle out of the very occasional problem. |
What if the
tenant wants to extend the term of the let?
This is very common, presenting no problem provided both parties agree and a
professional agent conducts the negotiations and prepares the necessary
paperwork and renewal documentation. |
What about
inventories?
These are essential and it is recommended that an inventory is made by a
professional to avoid omissions or errors. They should always be made at the
start and finish of the tenancy to identify missing items, breakage’s and
damages liable to be covered out of the tenant’s deposit. |
Obvious
legislation aside, what other regulations could affect me?
Regulations are constantly changing, particularly with regard to safety.
Currently these cover furnishings, gas and electrical installations. An ARLA
member agent will be able to advise you about compliance with these new and
difficult regulations. New regulations came into force in 1996 on responsibility
for tax liabilities on rental income for non-U.K. resident landlords. Again,
your ARLA agent will advise you of your liabilities and the procedures to be
followed to satisfy the Inland Revenue. |
What
insurance covers can protect a landlord?
There are two types of cover for use when letting property: Legal expenses
cover, available to most landlords, and rental insurance cover, available
through some agents, calculated as a percentage of the rent achieved. You must
be certain to insure your property for letting and the possible empty periods
between lets. |
What does
your agent do if it all goes wrong?
Solicitors have to be instructed on your behalf to take the tenant to court to
regain possession, or correct whatever breach of contract the tenant has
committed. An experienced agent will know when this is unavoidable, will advise
of likely costs and timescales, instruct solicitors on your behalf, make all
appropriate files available to them, appear as a witness and do everything to
facilitate a speedy solution. |
As a
landlord or a tenant, I want to know, What is Management?
Management is a service provided by the agent to protect and maintain a property
to the standard it was in at the beginning of the tenancy, fair wear and tear
excepted. It includes all maintenance and running repairs, except for those
items that are clearly the tenant’s responsibility. These were expressed by
Lord Denning when he said "The tenant must take proper care of the
premises...he must do the little jobs around the house which a reasonable tenant
would do". Both Landlord and tenant should clearly understand whether or
not management services have been agreed at the outset. |
| In the event of
unresolved disputes, ARLA can offer an arbitration service for landlords and
tenants who use ARLA member firms. |
What are the
ARLA Membership Requirements
There are stringent requirements for membership of the Association of
Residential Letting Agents. |
| |
| A firm must have been in
the letting and management business for at least two years before it can
be invited to join the Association |
| All member firms must
carry Professional Indemnity Insurance to a required standard |
| Separate client accounts
must be held |
| Commissions for letting
property may only be obtained from landlords |
| Business must be carried
out from a properly designated business premises |
| All ARLA members most
lodge a copy of their professional Indemnity Insurance policy with the
Association to comply with the requirements of the Associations Fidelity
Bond |
