Happy Tenant Residential Property Management Terms of Business - The Happy Tenant Company

Terms of Business

Terms of Business (05/18)

1. act in accordance with the terms of business described in this document
2. become a Landlord
3. pay the Management fee plus VAT in the sum set out in the Fee Schedule for each property that is managed by The Happy Tenant Company.

The Management Fee is payable on the commencement of your agreement. The period of your agreement is 12 months. You can cancel your agreement at any time within the first 14 days and you will receive a full refund of your management fees.

Thereafter if you wish to cancel your agreement you can do so by giving us 3 months written notice (on a property by property basis) and on such termination a pro rata share of the Fee will be credited to you. We will notify you regarding the renewal date of your agreement and we will take this fee from the rent we collect on your behalf. If we are holding insufficient funds to pay our fees and/or we do not collect rent on your behalf, we will request you to settle the outstanding amount within 30 days of the dated invoice. We reserve the right to cancel your agreement if you fail to act in accordance with these Terms of Membership. If we do have to cancel your agreement we shall give you at least 14 days’ written notice and credit you with a pro rata share of your management Fee.

Unless instructed otherwise, we will collect the rent from the tenant in accordance with the tenancy agreement and pay the same into our client account. Once the funds are cleared we will endeavour to transfer funds to your nominated U.K. bank account within 2 business days, less any agreed, approved and/or necessary deductions. Please note that it can take up to 10 working days to process certain payments. We are not liable for bank charges and/or fees incurred on your own accounts because of any delays in payment. Your rent payments will come with a statement of account detailing all income and expenditure per property and the balance of your float account.

Also included will be invoices from contractors / suppliers, if any. You will be able to see that you only ever pay the contractor’s cost price and that we add no mark-up. All our contractors’ cost prices are available on request. We will email all statements and documentation to you.

Where the rent is not paid within 7 working days we will send reminder alerts to the tenant by text, email and/or normal post. If the arrears are the equivalent to 2 month’s rent, we may instruct a third party to prepare and serve a formal notice on the tenant. It is usual for this cost to be deducted from the tenant’s security deposit as an agreed deduction under the tenancy agreement, however if this cost is not paid in this way for any reason then it will ultimately be your responsibility. In the event the rent continues to remain unpaid a Property Manager will then discuss with you the next steps to be taken. We will not, at any time, be liable for non-payment of rent or any loss or delay incurred in attempting to regain vacant possession. If you have a rent insurance policy already in place, please inform us as this may be necessary.

The Happy Tenant Company, at our discretion, will deal with any estate/letting agents instructed by you or us to market your property. This can include negotiating the estate/letting agent’s commission all the way through to the tenant moving into the property. We will not be liable for any direct or indirect losses caused by estate/letting agents or use of their tenancy agreements. We will pay the agents on your behalf out of the first months’ rent and in some cases, future month’s rent where there is a balance owed.

The estate/letting agents on our approved panel

do not charge our Members any renewal fees. However, you may be obliged to pay this type of fee in accordance with your existing arrangement and/or where you engage estate/letting agents yourself.

During your agreement, we will require a “float” account of £500 (unless agreed otherwise) per property in order that we may deal with the day to day issues arising from managing your property. These may include maintenance matters reported by your tenant, gas safety and EPC certifications, inspections etc.

Our Property Manager will administer all works up to the value of £500 (unless we have a different agreement in place) without reference to you; however they will contact you for consent to proceed with any work that costs that exceed the float amount (or any higher limit you set in advance) save that in the case of an emergency and/or or where you are in breach of your

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statutory obligations, where our Property Manager will have the discretion to act as they see fit in order to protect your property and your interests. If you instruct a Property Manager to do so then they will obtain quotes for any costs over the float amount and submit these to you before instructing a contractor to commence work.

Our Property Manager will pay all contractor invoices as they fall due from your float/balance on your account; however, we will only be able to instruct contractors to undertake works where we have sufficient funds from you to do so. We cannot be held responsible for any loss or damage suffered when we do not hold sufficient funds. To keep your float account at the relevant amount we shall ‘top up’ your float account from any rent we receive. There may be times when you will be contacted by a Property Manager with a request for a payment for works as the amount of float held, current invoices to be paid and the pending rent due would mean we hold insufficient funds to cover the approved works.

Our Property Manager will always try to use our vetted and approved contractors in respect of all issues that may arise in relations to your property; however, except in the case of any out of office hours emergencies, we will be happy to use your own nominated contractor provided they are readily available and hold public liability insurance. Simply provide the details of your preferred contractor to us. Please note in case of any out of office emergency we will only use our own contractors in all circumstances. We do not mark up any contractor’s fee and benefits of the favourable rates we have negotiated with our contractors is passed on to you in full. We will, as your agent, instruct all contractors on your behalf. It is therefore very important that you understand that ultimately it is your responsibility to pay all invoices for all work when they become due.

You will need to inform us of all service contracts, warranties, and guaranties in respect of the property in writing – we cannot be held responsible for your failure to inform us.

As part of our standard terms of business, we do not carry out any inspections during the tenancy. However, if you require such an inspection then a Property Manager can arrange for this out on your behalf. It’s useful to know that, where a Property Manager arranges for an inventory report to be taken at the commencement of the tenancy, they can request for the same inventory clerk to undertake a mid-term inspection at a favourable rate.

Depending on your arrangement with any estate/letting agent we can arrange for a

professional independent inventory clerk to carry out inventory reports, ‘check-in’ & ‘check-out’ reports. Full details regarding these issues are described in the General Terms & Conditions section. At the end of the tenancy we will send you a copy of the check-out report and you will need to confirm what deductions, if any, you wish to make from the deposit. Deductions should be fair and reasonable and will take into consideration wear and tear. They are not intended to give you ‘betterment’ and must be supported by the tenancy documentation (inventory, check in report, tenancy agreement, check out report, deposit certificate & photos). Any proposed deduction should be provided to us at the earliest opportunity after the tenant has vacated the property. If after a reasonable time you are unable to reach an agreement with the tenant regarding how the deposit should be administered, some or all the deposit may be passed to the Tenancy Deposit Scheme (TDS) along with the details of the deposit dispute and tenancy documentation in order for them to make an adjudication. We are not liable for any failures (including compliance with the relevant time periods) in respect of any report not arranged by us.

We will charge you an administration fee of £250 plus VAT for us to deal with a dispute on your behalf.

For registering/renewing the deposits with the TDS on your behalf, we will charge a nominal minimum administration fee of £25 plus VAT.

If your membership commences mid-tenancy you will not need to move the deposit from an approved scheme.

Please check your insurance policy as many of them require you to notify your insurance company should the property be vacant for more than 30 days.

Where necessary our Property Manager will be happy to, subject to written instructions, liaise with your solicitors, accountants, superior landlords, block agents and mortgagees with respect of all matters directly relating to the tenancy. In the event you would like us to liaise with any of the aforesaid parties in relation to a matter not directly in relation to the tenancy (if we are able to assist) then we will be happy to do so and will agree a fair and reasonable fee with you at the relevant time.

We do not provide a Block Management Service (including collecting ground rents) nor do we undertake this responsibility on either an official or unofficial basis.

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Please note that your Membership does not include the following; registering the deposit, overseeing or processing insurance claims, lender valuations, the sale of the property, letting fees, legal proceedings (we do not accept service of proceedings on your behalf), refurbishment works, attending leaseholder meetings, court hearings and/or on-site visits. Where we can, the Property Manager will be happy to oversee any of the aforesaid and will come to a mutually agreed fee with you at the relevant time.

General Terms and Conditions

We will make payments to you by bank transfers to a UK bank account. Should we be required to make an alternative method of payment (e.g. Telegraphic Transfers/CHAPS) you will be liable for any costs incurred.

To enable us to carry out an effective service, a full set of keys including any entry codes, alarm codes and/or door fobs should be supplied to us. Keys will be held in a secure location and no details of the property address will be marked on them. If keys are unaccounted for we will not accept any liability other than the cost of replacing lost keys. Each tenant will also require a full set of keys. If necessary we will arrange for additional keys to be cut and deduct the cost from your float account.

It remains the tenant’s responsibility to set up and cancel their account(s) with utility suppliers and local authority at the commencement and end of the tenancy. Should we receive any bills for void periods where it is your obligation to pay then our Property Managers will pay these, on your behalf, providing you have the funds in your float account.

It is your responsibility to redirect any mail. We accept no liability for any lost documents sent to the property for you during or in between tenancies.

Where any fees are owed to us, we will make any deductions necessary from monies held or future rent payments we receive.

We do not pay interest on any monies held by us.

To prove damage or loss that occurs during the tenancy we strongly recommend that a professional independent inventory clerk provides a report of the inventory (including fixtures, fittings and contents), the condition of the property as well as a “check-in” report at the commencement of the tenancy. We also strongly recommend a professional independent inventory clerk provides a “check-out” report at the end of the tenancy. The

costs incurred are your responsibility (although it is quite usual for the tenancy agreement to provide for the tenant to pay for the check- out report) and may vary from property to property. Our Property Managers will arrange for the relevant reports but we do not accept any liability for any losses resulting from errors or omissions in any report provided by an independent third party.

Contracts may be signed electronically and we may ask you and/or the tenant(s) to sign documentation in this way.

You undertake to fully indemnify us against any costs or liabilities incurred provided they were incurred on your behalf.

The Furniture and Furnishings (Fire) (Safety) (Amendment) Regulations 1993
Furniture and soft furnishings within the property must comply with the above regulations.

Electrical Equipment (Safety) Regulations 1994 You should provide instruction manuals for any item of electrical equipment that has been provided by you for the tenant(s) use. All electrical appliances should be safe to use and checked regularly to comply with the above regulations.

Gas Safety (Installation and Use) Regulations 1998
A gas safety check should be carried out annually by a gas safe engineer. It is a legal requirement for a pass certificate to be in place on a tenanted property. Criminal charges may be brought against you for non-compliance of these regulations, which may include a fine and/or a prison term. Our Residential Asset Managers will automatically arrange for this check to be carried out during the tenancy should we be provided with the date it is required to be renewed. Please note that a tenancy cannot commence without a passed gas safety certificate in place.

Part “P” Building Regulations (Electrical Safety in Dwellings)
The above regulations require a qualified person to carry out certain electrical work at residential properties. Our approved panel of contractors will only send competent and qualified tradesmen to properties to carry out this type of work.

Smoke Alarms and Carbon Monoxide Alarms Under current legislation being the Building Regulations 1991, it is the law that all newly built

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premises from June 1992 must have mains fitted smoke alarms with battery backup. If battery operated smoke alarm is fitted to the property you must ensure that they are in working order at the start of a tenancy. We strongly recommend that carbon monoxide alarms are fitted to all properties. If our Residential Asset Managers are requested to test the alarm they will instruct a contractor to do so at your cost.

Energy Performance Certificate (EPC)
It is a legal requirement for you provide any prospective tenants with a copy of the energy performance certificate (EPC) prior to prospective tenants signing a tenancy agreement. A copy should be provided to us prior to the marketing stage of the property or our Residential Asset Managers should be instructed to arrange for an EPC to be carried out at your expense by one of our contractors.

Mortgage
You may need your mortgagee’s written consent to the proposed letting.
If the mortgagee requires a copy of the tenancy agreement our Residential Asset Managers will supply a copy upon request. If there are any special terms within your mortgage regarding the type of tenant you are allowed this must be made known to a Residential Asset Manager in writing prior to the commencement of any tenancy.

Sub-letting
If you are a leaseholder, you will normally require the consent from your superior landlord, freeholder or their managing agent before you can sub-let the property.

Insurance
You should arrange suitable cover for your property and items within the property during the course of tenancy’s and void periods. We are unable to sell or offer you insurance products. Our Residential Asset Managers will notify you of any damage to the property that may be caused by an insured risk. You will have to make a claim direct to your insurance company. We are not liable for accidental or intentional damage to the property or any fixtures or fittings. Our Residential Asset Managers are happy to arrange quotes for any work that may be required in order to assist you with your claim. You confirm that you have buildings and contents insurance cover for the property including third# party liability and that the insurer has been informed about the letting of the property.

Taxation
As per The Taxes Act 1988 And The Taxation Of Income from Land (Non Residents) Regulations 1995. you are responsible for notifying Her Majesty’s Revenue & Customs (HMRC) of the tenancy, where the Landlord of the property resides abroad. HMRC will hold The Happy Tenant Company, as your Agents, responsible for the payment of any Tax liability which arises on rents collected on your behalf, unless an Approval Certificate is provided by HMRC in line with the Finance Act 1995. Accordingly, if you are resident abroad for six months or more per year, it will be necessary for us to deduct monies at the appropriate rate and hold such an amount until either an Approval Certificate has been received or until these monies are forwarded to HMRC which we are now obliged to do on a quarterly basis. Where we do not collect the rent, we will advise the tenant that you are an Overseas Landlord and to withhold tax on rents, unless you supply the tenant with an Approval Certificate. Similarly, if at present you live within the UK but subsequently move abroad, it will be necessary for us to commence this deduction from the time that you leave this country. The monies deducted will be held until the quarterly returns are made to HMRC and will not earn interest on your behalf. The eventual liability for tax may be less than the amount forwarded to HMRC. In this event you will have to liaise with HMRC directly and The Happy Tenant Company will not be liable for any refunds. In the event that you are not accepted by (or choose not to join) the Non-Residents Landlords Scheme, we may make a charge for forwarding monies to HMRC. Under Section 19 of the Taxes Management Act 1970, The Happy Tenant Company are legally compelled to disclose the following information to HMRC on an annual basis: i) names and addresses of Landlord(s); ii) address of The Property being let; iii) amount of income we have collected on behalf of the Landlord.

Where the property is held in joint names, each Landlord is responsible to inform the HMRC separately, if they are Non-Resident for UK tax purposes.

Relevant Legislation
You are required to comply with all relevant legislation and have been made aware of your responsibilities including without limitation in relation to the Housing Act 2004 about any Houses with Multiple Occupants licensing requirements and the Landlord and Tenant Acts 1985 & 1987.

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HMOs
Certain types of property may require a HMO licence before they can be let. These are defined as occupying three or more people who are not related. Please check http://www.direct.gov.uk/en/HomeAndCommun ity/Privaterenting for further information. In some cases licenses may be required for non HMO’s. It is your responsibility to determine whether you need a property license and to obtain that license. The Housing Health and Safety Rating System (HHSRS) is a risk based evaluation tool to help local authorities identify and protect against potential risks and hazards to health and safety from any deficiencies identified in dwellings. It was introduced under the Housing Act 2004 and came into effect on 6 April 2006.

Data Protection Privacy Notice
We use the information you provide primarily for the provision of property services to you and for related purposes including:

  • updating and enhancing client records
  • analysis to help us manage our business
  • statutory returns
  • legal and regulatory complianceOur use of that information is subject to your instructions, data protection law and our duty of confidentiality.Please note that our work for you may require us to pass on such information to third parties such as contractors, legal providers, insurers, deposit protection scheme, utility companies, local authorities, debt collection agencies, inventory clerks Our practice may be audited or checked by our accountants or our regulator, or by other organisations. We do not normally copy such information to anyone outside the European Economic Area, however we may do so however when the particular circumstances of your matter so require. All such third parties are required to maintain confidentiality in relation to your files.You have a right of access under data protection law to the personal data that we hold about you. We seek to keep that personal data correct and up to date. You should let us know if you believe the information we hold about you needs to be corrected or updated.We have appointed the CEO, as our representative for the purposes of the Data Protection Act:

Data Protection in Respect of Money Laundering Checks
We may receive personal data from you for the purposes of our money laundering checks, such as a copy of your passport. These will be processed only for the purposes of preventing money laundering and terrorist financing, or as otherwise permitted by law or with your express consent.

You consent to us retaining such data for longer than the five-year statutory period, unless you tell us otherwise.

Data Protection – Your Obligations
If you send us personal data about anyone other than yourself you will ensure you have any appropriate consents and notices in place to enable you to transfer that personal data to us, and so that we may use it for the purposes for which you provide it to us.

Money Laundering
To comply with the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2003 we will require you to provide us with proof of your identity and your address such as driving license with photo, passport with photo, council tax, bank statement and/or utility bill. We must see original documents from which we will make copies and store them on your file. Companies should provide us with a director’s ID, certificate of incorporation, latest accounts and the most recent Companies House return.

Amendments
We reserve the right to make changes to this Terms of Business not more than twice per annum except where legislation makes it necessary. That said we will always notify you in advance before any change takes place and will never break our promise to freeze your fee for 24 months and never to mark up a contractor’s cost price.

Miscellaneous
This Terms of Business is our agreement with you (the “Agreement”) and contains all the terms agreed between you and us and replaces any and all previous agreements whether written or oral. A waiver by either you or us of any terms or conditions of this Agreement in a particular instance shall not be deemed or construed to be a waiver of such term or condition for the future. All rights remedies undertakings and obligations contained in this Agreement shall be cumulative and none of them shall be in limitation of any

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other right remedy undertaking or obligation of either party.

We shall be entitled to assign our rights and/or obligations under this Agreement upon giving you 14 days’ written notice.

If any clause or part of this Agreement shall for any reason be adjudged invalid by any court of competent jurisdiction such judgement shall not affect the remainder of your agreement with us which shall continue in full force and effect. No term of this Agreement shall be enforceable under the Contract (Rights of Third Parties) Act 1999 by any third party.

The Happy Tenant Company will always endeavour to provide the highest level of service. We do not however accept responsibility for any loss suffered by you as a result of any of the following: any delay in paying you or overpayment made to you in respect of your property rental accounts, any failure by the tenant to conform to the terms and conditions of the tenancy agreement, failure to move in any tenant / commence any tenancy due to the lack of a valid legal documentation, any issues that arise as a result of contractors who have carried out work at the property whether instructed by us or not and/or any failure by you to comply with current relevant legislation. Whilst we will endeavour to provide the highest possible level of service, we do understand that sometimes things may not go according to plan and so a copy of our internal complaints procedure can be obtained from our registered office.

You warrant that you are the sole/joint owner(s) of the freehold/leasehold property and that you are lawfully entitled to let the property described in the Membership Form (and any additional properties you may add to your Membership from time to time) for the full period of any tenancy agreement and you indemnify us against any cost or expenses incurred by us in the performance of this Agreement.

By signing the Membership Form and/or making payment of the Membership Fee you confirm that this Terms of Membership will apply to any current tenant(s) as well as any successive tenant(s), to all the properties listed in the Membership Form (and any further properties you may add to your Membership from time to time). Where there is more than one owner of any property you undertake that these Terms of Membership shall apply to all such owners jointly and severally and you indemnify us in respect of any breach of the Agreement.

This Agreement shall be construed according to the laws of England and the parties hereto hereby submit to the exclusive jurisdiction of the English Courts.

The Happy Tenant Company reserves the right to amend these terms at any time with 30 days written notice.

Schedule of Letting Service
Viewings: We shall instruct letting agents from our Panel of Letting Agents (Approved Agents) to value, advertise, market and conduct viewings of the property with a view to securing suitable tenant(s). Approved Agents shall be instructed at the preferential rates we have secured and which shall be notified to you at the time the relevant Approved Agent is so instructed. You shall also be entitled to instruct further letting agents to also advertise, market and conduct viewings of the property with a view to securing suitable tenant(s) (“Your Own Agents”) and we shall provide the same services in respect of those Your Own Agents as we do in respect of Approved Agents. Both “Your Own Agents” and Approved Agents” shall collectively be referred to as “Agent(s)” below.

Offers: We shall keep you informed through email, unless instructed otherwise, of all offers secured by an Agent from potential tenant(s) in respect of the property.

References: Once an agent has secured a satisfactory offer from a potential tenant(s) the main commercial terms of which have been agreed by you, the Agent shall then conduct a reference of the potential tenant(s). You will be emailed, unless instructed otherwise, a copy of tenant reference report and related documents (like bank statements, payslips, utility bills, etc) for your consideration and consent.

Move-In: Where the tenant is procured by an Approved Agent and the references approved by you, we shall arrange to move the tenants into the property, and protect the deposit with The Dispute Service (TDS), where we hold the funds for the deposit.

Move-Out: When the tenants leave, we will arrange a check-out inventory, and deal with any dilapidations. Where we hold the deposit, we will arrange for the deposit (less any deductions) to be returned to the tenants and notify The Tenancy Deposit Service (TDS) to unprotect the deposit.

Tenancy Agreement: Where the tenant is procured by an Approved Agents we will issue a tenancy

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agreement in our standard form, unless instructed otherwise.

Collection of Rent, Deposit and payment of charges: You shall be liable to pay the Agent their fees (plus the VAT) which for the avoidance of doubt shall be in addition to the Membership Fees. This will be taken by the relevant Agent or The Happy Tenant Company from the first month’s rent which the Agent or The Happy Tenant Company will collect. If there is a surplus after the Agent has been paid its fees any balance will be paid to us and used to pay the balance of any contractor’s fees that are owing. In the event there is no such surplus you shall pay the balance of any contractor fees and /or any sums owing to the Agent immediately on the commencement of the tenancy.

Property Services: We will instruct the relevant property management service contractors to carry out all services requested by you (as indicated on the front page of the Property Form) like Gas Safety Inspection, Inventory, etc. To do so we will require the relevant costs to be held on account in advance of us instructing the relevant contractor to undertake the works. We shall inform you of these sums (or provide you with a best) on acceptance of references and you shall pay such amounts to us immediately. PLEASE BE ADVISED THAT WE CAN NOT MOVE A TENANT INTO A PROPERTY WITHOUT A VALID GAS SAFETY CERTIFICATE.

Deposit: If we let your property to a company rather than a person or the annual rent is equal or more than £100,000 then there is no statutory requirements to register the deposit. In all other cases, we shall arrange to deal with all issues regarding the registration of the deposit and coordinate the return of the same to tenant(s), landlord(s) at the end of tenancy. We are registered member of The Tenancy Deposit Scheme (Membership No: G09210)

Fee Schedule.
Weekly Rent……Membership Fee (09/16) (Per Property, per Annum)

£0 – £400……………………… …………………. £1000

£401 – £650…………………………… ……….. £1250

£651 – £1000……………………… …………… £1750

£1001 – £1500………………………………….. £2750

£1501 – £2000………………………………….. £3750

£2001 – £3000………………………………….. £4750

£3001 – £4000………………………………….. £5550

£4001 – £5000………………………………….. £6570