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Practical tips to take over management from letting agents

handing over the baton in a race as a symbol of handover of management of rental property from a letting agent to a landlord

Are you a landlord who’s looking to take over the management of your rental property from a letting agent with tenants in place? Are you wondering what the practicalities involve so that the transition is smooth?

This is a practical guide that takes you through the 10 steps to follow for a smooth transfer of the management of your property from a letting agent to you.

The post draws on my experience as a lawyer and a self-managing landlord who is accredited by the NRLA.

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1. Terminate the management contract with your letting agent

The first stage in taking over the management of your rental property from your letting agent is to terminate the agency agreement, and establish the date of the handover. In many cases, that’s easier said than done, as often letting agents have punitive notice provisions to try to prevent landlords leaving while a tenant they placed is still living in the property.

However, if the landlord is a “consumer” (broadly an unincorporated landlord who is not a full-time landlord), these terms are unlikely to be enforceable. Do, however, take independent legal advice, as it’s a complex area.

I explain more on how to terminate the management contract with your letting agent in the related post below.

>> Related Post: How to terminate the management contract with your letting agents

2. Register with the ICO

person looking at ICO website on mac

Self-managing landlords must register with the Information Commissioner’s Office before they handle the personal data of their tenants and people who apply to rent property.

If you’re not already registered with the ICO, it’s simple to do online by completing the registration form. Click here for the direct link to the registration page on the ICO website. If you own the property in the name of a limited company, it is the limited company that needs to register. If you own it in your name, or jointly with others, the person who handles the personal data should register.

>> Related Post: Which Landlords need to register with the ICO?

3. Get your data and records from the letting agent

It’s very important for you to ask your letting agent to hand over to you the historic data and records about the on-going tenancy when you take over management. You will need this so you can check everything is in order, and if there’s ever a dispute with the tenant.

Under agency law, agents act on behalf of their principals, and the principal (the landlord) has a right to copies of the records. If you have registered with the ICO, the agent can’t use data protection or the GDPR as an excuse. Insist that they transfer the data and records, and go through their complaints procedure and redress scheme if they refuse.

You may already have access to some of the documents on your landlord portal, or in your emails. However, here is a checklist of the copies of documents a landlord should ask their letting agent to provide when taking over the management of a rental property:

  • The full names and contact details of every tenant.
  • Tenancy agreement, any renewal agreements and guarantees.
  • Details of rent increases, including copies of any section 13 notices.
  • Schedule of rent payments made by the tenant.
  • Check-in inventory.
  • All gas safety certificates, EICRs, and EPCs, and proof they were served on the tenant. You will need to prove that the gas safety certificate and EPC was served on the tenant before they move in should you ever wish to enforce a Section 21 notice to recover possession.
  • Deposit information – ask for a copy of the deposit protection certificate. Ask for proof that the prescribed information was served on the tenants within 30 days of the payment of the deposit. You will need this proof if you ever serve a Section 21 notice (unless you give the deposit back). See how to transfer the deposit below.
  • References and credit checks of all tenants, permitted occupiers and subtenants. (Don’t ask for the details of unsuccessful applicants).
  • Documents from the tenants’ Right to Rent checks, and any follow-ups.
  • Any licences and correspondence with the local authority. If the property is an HMO, the name of the HMO manager on the licensing will need changing.
  • Repair log for the property, including any guarantees for appliances or a new boiler.
  • Did the tenant cooperate with access? Has the tenant refused access for inspections or repairs?
  • All inspection reports during this tenancy.
  • All correspondence with tenants, for instance, complaints about repairs, follow-ups after inspections, or letters about previous rent arrears.

>> Related Post: How to carry out a Right to Rent check

>> Related Post: How to serve a valid Section 21 notice

4. Do a compliance audit

landlord audits tenancy documents after taking over from letting agent

Once you have all of the data and records from the letting agent, carry out a compliance audit by asking yourself the following questions:

  • Was the deposit registered within 30 days of the letting agents receiving it? Was the prescribed information served on the tenants within 30 days of receipt?
  • Have the tenants received the most up to date How to Rent guide?
  • Check the rent payment schedule to see if the tenants in arrears. If so, ask to see all correspondence relating to the arrears.
  • When was the rent last reviewed? If it wasn’t reviewed within the last 12 months, check to see if it is below the market rent and consider increasing the rent, if not in a fixed term period. For more details: How to increase rent.
  • Was the Gas Safety Certificate and EPC served on the tenant before the start of the tenancy?
  • What was the date of the last gas safety check and the last boiler service. If more than 12 months ago, book in a gas safety engineer to carry out both as a matter of urgency.
  • When was the last EICR? Was it satisfactory? If a satisfactory EICR was received within the last 5 years, did the agents serve a copy of the EICR on the tenants? If there is not a satisfactory EICR from within the last 5 years, book in a qualified electrician as a matter or urgency.
  • Did the agent carry out the Right to Rent checks? Are there copies of the Right to Rent documents? Is any follow up needed? For more details: How to carry out Right to Rent checks.
  • Check the repair log to see if there are any unactioned repairs.
  • Has the tenant refused access to the property for repairs?
  • Is the property licensed, ie HMO mandatory or additional licence, or a selective licence? If not, check the website of your local authority to check if you need a licence for your property. If you already have a licence, check that the property is being managed in compliance with the licence conditions and whether you need to inform the council that the letting agent will no longer be managing the property.
  • If there is a guarantee, is it up to date with the current rent?

Once you have carried out the audit, make sure you file all the documents electronically, and create an action plan to address any of the issues your audit highlights. Diarise immediately when the next Gas Safety Certificate and EICR are due by putting in a calendar reminder two months before the expiry date, and another two weeks before the expiry date to remind yourself.

5. Do you need a new tenancy agreement?

Legislation has changed a lot over the past 5 years or so, not least in relation to the banning of most tenant fees in 2019 with the Tenant Fees Act 2019. If your tenants are on a periodic tenancy from an old tenancy agreement, it might make sense to ask your tenants to sign a new tenancy agreement. You can include your contact details for the purposes of Section 48 and also include the new payment details in the new agreement. The tenancy agreement can also include the new rent.

If the tenants are in a fixed term, it will probably be better to wait until the expiry of the fixed term before you issue a new agreement.

The NRLA have good templates for tenancy agreements that are up to date with legislation.

Remember that if you enter into a new tenancy agreement with the tenants, you’ll need to serve all of the tenancy documents again. This means the How to Rent guide, EPC, EICR and Gas Safety Certificate). If you are moving the deposit to another account or scheme, you’ll need to serve the prescribed information. More on that below.

>> Useful Resource: NRLA Assured Shorthold Tenancy templates

>> Related post: How to increase rent

6. Contact your tenants with details of new arrangements

Once you have reviewed all of the documentation to see if there are any issues, contact your tenants to explain that you are taking over the management of the rental property.

It’s best to do this in writing, so you can confirm the arrangements for the handover:

  • The date of the handover.
  • The bank account where they should pay future rent payments, and the date of the first rent payment to you.
  • Who to contact for repairs.
  • Set up a WhatsApp group for the property, unless you use a tenancy management platform to manage the tenants.
  • For HMOs, include the name, address and a telephone contact number of the HMO manager in the letter. Also, make sure to replace the existing notice about the HMO manager with the new one. Place it on a notice board in the common parts of the HMO, and send it to the WhatsApp group for the HMO or tenancy management software for good measure.
  • If your address is not already in the tenancy agreement, serve a Section 48 notice. (See below).
  • If your tenants are in rent arrears, you’ll need to follow up on the last correspondence between the tenant and the agent (if any). If there is no correspondence, start to manage the arrears. The NRLA has excellent templates – see the link below.
  • Say you’d like to come for a maintenance visit, and suggest a few times on different days.

>> Useful Resource: NRLA templates on managing arrears effectively

7. Serve a Section 48 notice

If the address for the service of notices in the current tenancy agreement is the letting agent’s, then the landlord will need to serve a Section 48 Notice on the tenant. This is a notice that says where the tenants can serve notices on the landlord. It need not be the landlord’s home or registered office. You can find a template notice in the link below.

On the other hand, if the tenancy agreement already refers to the landlord’s address, there’s no need to serve a s48 notice. If you’re issuing a new tenancy agreement which has your notice for service in it, there’s no need to send a separate Section 48 notice.

>> Related Post: Landlord Guide to Section 48 Notices

8. How to transfer the tenant’s deposit from a letting agent

The first important thing to do is to find out if the letting agent registered the deposit in a custodial scheme or in an insured scheme. This is the difference between custodial deposit protection and insured deposit protection:

  • Custodial deposit protection. The letting agent forwards the deposit to one of the authorised tenancy deposit scheme providers who keeps it in a secure bank account until the end of the tenancy. The scheme does this for free as they keep the interest on the deposit.
  • Insured deposit protection. The letting agent holds the deposit and any interest that accrues, and pays a fee to the scheme to insure it.

If the tenant’s deposit is already in a custodial deposit scheme under your own name, there is no need to do anything as the deposit will just stay there.

If you need to transfer it from the letting agent’s custodial scheme account into your existing custodial scheme account with the same company, it should be straightforward. The letting agent will be able transfer the deposit to the landlord’s custodial account. If you don’t already have a custodial account, it’s easy to set one up and ask the letting agent to transfer the deposit to it. They’ll ask for the number of the protection eg DPN followed by a number for a custodial account with MyDeposits.

Transferring from a letting agent’s insured scheme to a landlord’s insured scheme with the same company is also fairly straightforward. It’s more complicated when the deposit is being transferred to another company’s scheme, but it’s possible to do. The landlord would need to give the letting agent the details of their membership with the other scheme so that they can transfer the deposit protection.

Unless the deposit is staying in your own custodial scheme, you must send the tenants a copy of the new deposit protection certificate, prescribed information and scheme rules, in the same way you would with a new tenancy.

>> Useful Resource: Tenancy Deposit Scheme: How to transfer a deposit from an agent

>> Related Post: What landlords need to know about Deposit Protection Schemes

9. Do your first maintenance / inspection visit

landlord taking notes in a maintenance check

When a landlord takes over management from a letting agent, it’s really important to go to the property to meet the tenants and do a thorough inspection of the condition of the property. There may well be outstanding repairs that the letting agent has not taken action on. It may also have been some time since the last inspection, and there may be a backlog of repairs. Make sure you document everything and follow up with the tenants afterwards if you note any disrepair or if the tenants need to attend to anything eg mow the lawn.

I refer to inspections as “maintenance visits” as it’s more collaborative. The primary aims are to assess the condition of the property and decide what maintenance to carry out. There will always be something, and it’s good to keep on top of repairs.

It’s also worthwhile meeting the tenants in person when you take over to start to build a working relationship with them, and to explain how you will manage the property. For instance, you may use virtual assistants or WhatsApp groups to communicate with tenants. They may be anxious about the change and you can reassure them that you’re a good landlord who looks after their property.

>> Related Post: How to carry out a successful tenancy inspection

>> Related Post: How to be a good landlord

10. Join the NRLA

Self-managing landlords shouldn’t just wing it. There’s too much legislation to play it by ear and hope for the best.

I highly recommend joining the NRLA as they provide a lot of resources for landlords, such as template tenancy agreements, advice on how to manage arrears, and a membership helpline. Their course Landlord Fundamentals is good value, and if you complete it, you will qualify you for NRLA Landlord Accreditation.

If you join the NRLA using this link here, you should automatically get a £15 discount off your first year’s membership. If you don’t see a £15 reduction, enter this referral code: SSAFF15.

NRLA accredited

What must an agent do when the management agreement is terminated?

The Code of Practice for Residential Letting Agents of The Property Ombudsman (TPO) sets out the obligations of landlords when the agency agreement is terminated for any reasons. As well as binding members of The Property Ombudsman redress scheme, members of Propertymark also need to abide by the code.

Section 5q of the Code of Practice, of The Property Ombudsman requires the agent to write to the landlord “promptly” to confirm that they will no longer be acting for the landlord, to enable a “timely handover”, and include the following in the letter:

  • the date of termination
  • details of any liability for fees or charges owed by the landlord to you or any credit or funds owed to the landlord, such as rent paid in advance, or any float held for repairs,.
  • details of any arrangements for the handover of the property, appropriate documentation, keys etc to the landlord or their appointed representative.

The agent must also write to the tenant “promptly” to tell them of the “change in arrangements, including where it is proposed the deposit will be held (if the deposit isn’t already in the landlord’s account). They need to obtain the written authority of the tenant to transfer the deposit, and notify the appropriate tenancy deposit scheme.

Final thoughts

The key to being a successful self-managing landlord is being organised, keeping on top of repairs through regular inspections, and making sure the repairs happen.

If you’d like extra support as you take over management as a landlord from your agent, please join The Independent Landlord Community where you can ask questions and share experience in a landlord-only environment. You can also sign up to my free weekly newsletter to receive updates on what’s important to landlords.

>> Join: The Independent Landlord Community private Facebook group (landlords only)

baton being transferred from letting agent to landlord who is taking over the management

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