Q. I have a property I’d like to rent out – why would IME be the best option?

A. Renting out your property and then ensuring the tenancy is managed correctly can be a very complicated and time-consuming business. Additionally, legislation changes on a regular basis and it is important that both landlords and tenants are kept informed of the changes that affect them.

IME will deal with all that for you and furthermore we will ensure that all advertising is in hand; prospective tenants are vetted; tenancy agreements are correctly drawn up and executed, maintenance is dealt with in an effective way and tenancies are ended in the correct manner. Doing this on your own can be very stressful – particularly as most landlords have their own full-time jobs to take care of!

Q. There seem to be a lot of agents operating in and around Edinburgh – what makes IME stand out?

A. IME is an established company and has many specific strengths; including extremely distinctive branding, excellent public profile and great technical support. However the crucial difference between us and other agents is the quality of service that we offer. Our whole purpose is to provide you, the customer with a level of service that is impossible to beat. We make all our clients feel that they are a part of something special and, if there is anything we can do to help our clients, we will do it.

Q. Are IME qualified to look after my property?

A. At present, anyone who wants to can set up and run a letting agency. Few checks and balances are in place to safe-guard and protect standards within the industry and unfortunately this has lead to quite an explosion of agents who feel a side-line in letting is a good spin-off to their core business. This inevitably dilutes the market place and can, in some cases, be detrimental to landlords, reflecting poorly on the industry in general.

IME Residential are first and foremost letting agents – this is our core business. We have many years of experience in the industry and as a company we are members of ARLA (Association of Residential Letting Agents). Additionally, we are registered with TPO (The Property Ombudsman), both organisations have comprehensive membership Byelaws which include compliance with such issues as handling and accounting for Clients’ money; the mandatory ARLA Client Money Protection Bonding Scheme; Professional Indemnity Insurance; Dealing with Complaints and Disciplinary Procedures. Our membership of these organisations demonstrates our commitment to first-class service and company structure.

Q. As a landlord, what are my main responsibilities?

A. Your responsibilities range from those relevant to the property, such as repairs, to ensuring that the tenants are afforded the correct rights of tenure as per their tenancy agreement. Broadly speaking, as a landlord you are responsible for the following:

• Repairs to: the structure and exterior of your property, heating and hot water installations, basins, sinks, baths, toilet installations, pipes and service supplies to the property.
• The safety of gas and electricity installations and appliances.
• The general safety and fire safety of the furnishings and furniture that you provide.
• Arranging and paying for building insurance and the insurance of your contents – not the tenants’ contents.
• Ensuring that the correct type of tenancy is served on the tenant and that they are free to enjoy the property during the period of the lease
• Accounting for and arranging for the return of the tenants’ deposit throughout and at the expiry of the lease

Q. Prior to letting out my property – what exactly do I need to do?

A. Before letting, there are a few boxes to tick – these generally involve advising anyone with an interest in the property such as mortgage lenders or insurers of what you are doing:

• Your mortgage lender, if you have one
• Your house insurance company
• The local planning and building department, if you are changing the use of the property or part of it, or if you are altering the structure.
• The local council. As of April 2006, all landlords must be registered under the Antisocial Behaviour Act of 2004.
• If you are going to let your property on a multiple occupation basis – more than 3 independent tenants sharing one property – then you may need to register your property with the local authority as a House in Multiple Occupation (HMO)
• Obtain an Energy Performance Certificate (EPC)

Q. as a landlord I have quite a few things to do – what responsibilities to tenants have?

A. Like landlords, tenants have a number of rights and responsibilities under the terms of the law, these broadly include:

• Being Honest and truthful in the tenancy application.
• Paying a fair (market) rent.
• Paying the rent as and when agreed.
• In most cases, paying the council tax and water/sewage charges. If the landlord pays these, they can be included in the rent or in the case of students they can claim exemption.
• Paying bills for gas, electricity, telephone and TV license – this must be made clear to a tenant at the outset of their tenancy.
• Taking proper care of the property.
• Arranging insurance for their personal effects

Q. Is it a good idea to have an inventory – can IME prepare one for me?

A. Having an inventory is possibly the most important element of property management and the emphasis on the inventory is only going to increase in years to come. The Scottish Executive is currently looking to introduce mandatory regulations for dealing with tenants’ deposits which is similar to that used in England and Wales and when this comes into force there will be added pressure on landlords and agents to produce accurate and detailed inventory.

IME use state of the art software to prepare our inventory reports and we include a library of digital photographs to supplement this.

Q. What type of lease agreement does IME use and how long does it last?

A. We use a Short Assured Tenancy (SAT) in accordance with the Housing (Scotland) Act 1988. The minimum time period for this type of agreement is six months. There is no maximum amount of time over which this type of agreement can run, however we do not usually recommend tenancies lasting for more than a year at a time as a lot can change in that period for both parties. The main advantages of such a tenancy agreement (if you are a landlord) are:

• You have a mandatory right to get your property back after six months.
• You can charge a market rent.
• You can get your home back before six months have passed, if the tenant does not pay the rent. He or she must owe at least eight weeks rent.
• Tenants can be evicted if they cause a nuisance to neighbours or damage your property.

Q. How will I receive my money from my tenants?

A. IME pay via BACS transfer the net rental straight to your bank account.

When tenants are in our office signing their lease, we make it a condition that they set up a standing order to pay their rent to IME. When we receive the gross rental, we subtract our fees and then forward the net figure to you electronically.

Q. Is the rent always due on the same day every month?

A. Your rent is always due on the 1st of every month, with tenants paying in advance.

Tenants are free to move in at any point initially, and we therefore work out a pro-rata amount for their first rental payment. For example, a tenancy moving in on the 5th of January would pay from the 5th to the 31st of January, and then on the 1st of every month thereafter. When tenants move in after the middle of a month, they pay from that point until the end of the following month. For example, a tenancy beginning on the 20th of January would pay from the 20th of January to the 28th February, then from the 1st of every month thereafter.

Q. During the tenancy agreement – will IME check on my property?

A. Yes, IME carry out inspections every two to three months during tenancies. This serves two purposes: firstly it allows us to ensure that the property is being looked after correctly; and secondly it allows the tenants to discuss any issues that they feel are relevant.

In general the inspections open up an effective channel of communication between us and the tenants and allow us to maintain a supportive presence throughout the tenancy. We use state of the art software to prepare our inspection reports and we can email PDF copies to you instantly.

Q. Should we allow the tenants to have pets?

A. As part of our lease, pets are not allowed unless prior written agreement is given. Our advice in general is that pets such as dogs or cats can, if not looked after properly, create additional wear and tear on a property. Obviously the tenants are held to account for the damages due to their pets. Given these concerns, it may be advisable to seek an additional deposit payment from tenants who keep pets. Overall, it really depends on your gut-feeling as regards pets; anything that lives in a cage or a tank is usually acceptable!

Q. If there is an emergency at my property what happens?

A. As with our maintenance services, we are ideally positioned to deal with emergencies. In the case of an emergency outside office hours, tenants can call our office and will be directed to a specific mobile number. Our operatives are on call 24 hours a day, seven days a week; so dealing with an emergency call is never a problem.  Often we are able to use our experience to talk tenants through various scenarios which can eliminate the need to call out a tradesman – our position is that we don’t want to create excessive costs for our landlords. We always act to limit damage to your property and your liability to neighbouring properties.

Q. What should I do about insuring my property and contents?

A. It is the landlord’s responsibility to insure the building and arrange as much contents insurance as deemed adequate. It is a condition of the lease that tenants arrange insurance for their own possessions and that this cover also protects them against damages to the fabric of the property they rent.

IME has a block policy which our landlords are free to join. We can arrange a quote very quickly and this allows us to ensure that cover is always up to date and mostly significantly, deal with any claims that may arise. This again takes away any potential stress for our clients. Our block policy also includes a level of contents cover that should be more than adequate for rental properties.

Q. What are the main safety checks and requirements that I should be aware of?

A. Key issues you should be aware of include:

• Furniture and Furnishings Regulations. All upholstered furniture supplied in a let property must comply with these. This means that, in simple terms, if your furniture is pre-1988 and post-1950, it probably will not comply and must be removed or replaced.
• Gas Safety Regulations. These state that ALL gas appliances must be checked for safety at least once every 12 months; a record of these checks must be made, this record must contain certain information and it must be handed to the tenant.
• Carbon Monoxide: It is good practice to install carbon monoxide detectors in let properties.
• Electrical Regulations. These are less precise but essentially all electrical goods supplied in a let property must be safe and not cause danger. This means, by definition, that any electrical goods must be checked at some time by a competent person. Other regulations cover plugs and fuses which must be up to date and correct.
• Smoke Detectors: the repairing standard contained in the Housing (Scotland) Act 2006, came into effect in September 2007 and this specifies that at least one functioning smoke alarm should be present in every rented property. This can be battery operated if it was in place prior to the legislation being brought in, however once the batteries need to be replaced – a mains-wired alarm must be fitted. Therefore if you are letting a property for the first time and have no smoke alarm at all, then you will need a mains-wired alarm fitted prior to the property being let out. Mulit-occupancy (HMO) properties have more stringent requirements.
• Energy Performance Certificate: from January 2009, all properties being advertised as available for rent should have an EPC as per European Union guidance. The certificate provides information about the existing and potentional carbon emmissions from the property and also contains estimated costs of heating the property.

IME can arrange all of the certificates required prior to letting on your behalf.

Q. Does it make a difference whether the property is let furnished or un-furnished?

A. Typically in Edinburgh, the historic trend has been to let property fully furnished. This is due to the high proportion of student and transitory professionals in the City.

Recently however, the majority of property coming onto the rental market has been part furnished; i.e. offered with carpets, curtains and white goods in the kitchen and a basic level of furniture in each room. The rentals achieved for part furnished property are equal to those for fully furnished rentals.

The demand for this type of letting is there because tenants, especially those wishing to make a home at the let property, are generally happier to create their own space by bringing in their personal furniture and effects. It is worth noting that tenants will not be in such a hurry to move on if they are able to sleep in their own comfortable beds and sit on their own sofas. The current financial situation has also lead for a higher demand for part or un-furnished accommodation. In terms of rental income; there is negligible difference between furnished and unfurnished – the key difference is that in certain areas having a furnished property may broaden the potential market for prospective tenants.

Q. Is it essential that I advise my mortgage lender that I am going to let my property?

A. The short answer to this is yes. Typically, under the terms of your loan, you will have restrictions with regard to letting your property and letting is most probably prohibited without permission. It is now quite rare for lenders to refuse permission. Generally they will give permission for a limited period of, say, three years initially.

If you let without permission, the lender may have the right to repossess your property and evict the tenants. This would leave you open to an action by a tenant for ‘lack of peaceable enjoyment of the property’. If your Lender has given permission, they will not be in a position to evict any tenants if you do not pay your loan before the permitted time has expired. Even if they do not seek possession, should they discover that the property is being let out they can insist on a new product being taken out to effectively pay off the existing residential mortgage, which could amount to several thousand pounds of fees being due.

IME strongly advise having the correct type of mortgage product in place and should you require a buy-to-let product, we can assist you through our membership of ARLA – please email us for more information.

Q. What are the tax implications of letting my property?

A. Each tax year you will be required to submit a tax return to HM Revenue & Customs.  This will include details of the total rentals you have received, less allowable costs and tax adjustments.  This will give you either a net profit or loss for the year.  A profit is subject to tax, and is added to your other earnings to calculate whether or not you will have additional tax to pay for the year.  A loss should also be reported, as it can be offset against future profits and capital gains, to reduce any potential future tax liability.

If you started letting  on the 1st of April 2010, your first trading period would be to the 31st of March  2011, and this would be included in your tax return for 2010/11.  If submitted electronically, the deadline for submitting the necessary form would be the 31st January 2012.

Q. I have heard a lot about HMOs – what does this mean and does it affect me?

A. HMO stands for House in Multiple Occupancy and the term applies to properties that are let to three or more un-related persons. For example, if a property has three bedrooms and each bedroom is let to an individual or couple, then it would constitute an HMO.

The main purpose of HMO legislation is to ensure that larger properties are correctly managed and maintained in a safe condition. The HMO application process can, at times, be laborious and time consuming as it involves a great deal of paperwork. IME is a specialist at dealing with HMO properties and for a one-off fee of only £150, we will be happy to deal withal aspects of your HMO application procedure.  For subsequent renewals our fee reduces to £75.