Before appointing LOCAL Lettings as your management company, we understand that you may have a few questions that need answering. To make the process easier for you, we have collated some questions and answers which we hope will resolve your most pressing queries. But if you are still unsure about something, our dedicated Investor Relations Team would be more than happy to assist you further.
Q. What is covered in the management fee?
A. The Management Fee includes the handover of your apartment, the reporting and rectification of any snagging items, client money handling, payment of rent, and property management for your resident. It also includes Investor Relations Team support for you, a welcome pack for your resident, the cleaning and inspection of the apartment before a residents’ move in date, mid-tenancy inspections, and access to a personalised owner’s portal where important building and tenancy documents can be obtained.
Q. When will I start being charged a management fee?
A. We will not charge you a single penny until we have acquired a resident. When the first month’s rent is collected, a ‘New Resident Find Fee’, ‘Monthly Management Fee’, as well as any associated tax, will be deducted from the amount.
Q. Do I pay VAT on my management fee?
A. Yes, we charge 7.5% management fee + VAT = 9%
Q. Will you accept my furniture deliveries?
A. Yes, once you have signed up to our lettings and management agreement, we will use your stored keys to access your property, for furniture delivery and installation.
Q. How will maintenance issues be dealt with on my behalf
A. We retain £250.00 from your first months’ rent to cover any adhoc maintenance. We will always get approval off the landlord before any works take place.
Q. How can I pay my service charge?
A. You can pay your charge via bank transfer and will also receive a unique customer number to make the allocation of your funds, easier.
Q. Can my service charge be deducted from the rental income?
A. Yes, we will be managing the building as well as your property and will therefore send the service charge invoice directly to your rental account.
Q. Can you help with overseas landlord tax exemption?
A. We will assist you as much as we are able to but would always recommend appointing a financial advisor or UK property tax specialist, especially if you are unclear on the UK tax structure for overseas landlords.
Q. How do you calculate the estimated rental amount for my apartment?
A. We use evidence from our neighbouring schemes, and extensive knowledge of the Manchester rental market, to estimate a rental price. Before gaining access to your property, we will conduct a desktop valuation until we can give a more accurate estimation, which would involve a thorough assessment of the apartment, building, and location.
Q. How often will I receive statements?
A. Monthly statements will be issued in line with rental payments. If required for tax purposes, we can also prepare quarterly statements.
Q. How often do you review the rental amount for my apartment?
A. We conduct rental evaluations before new tenancies.
Q. Will there be any fees charged for inventory check-in & check-out?
A. No, our check-in and check-out inventory fees are included in our services.
Q. Will you complete a snagging report?
A. Yes, once the tenancy has legally completed and the keys have been received, we will complete a full snagging report including photos. We will then liaise with developers until any issues have been resolved.
Q. What does the ‘New Resident Find Fee’ cover?
A. This New Resident Fee includes the marketing of the apartment, unlimited viewings, the creation of the shorthold tenancy agreement, tenant and guarantor referencing if required, deposit registration, inventory/ checkout reports, and an interim tenancy inspection report.
Q. Why isn’t my tenant paying any fees?
A. As of 1st June 2019, the UK government passed a tenant fee ban. This means tenants can no longer be charged any administration fees before the start of their tenancy. However, we have built these costs into the £480 (inc VAT) that is deducted from the first month’s rent collection.
Q. How long will it take for you to rent my apartment?
A. It is extremely difficult to predict how long this process will take. However, we always screen potential tenants based on their wants and needs, because it helps us to identify an apartment that suits their criteria. This way, we know we are placing residents for the long term, not the short.
Q. How do you reference a potential resident before they move in?
A. We use a third-party referencing company called, ‘Let Alliance’ who will conduct employment, salary, credit, and previous landlord checks.
Q. Am I able to select the resident that takes my apartment?
A. Yes, if there is more than one offer on the apartment.
Q. Can I set restrictions on the type of resident I want in my apartment?
A. We have set parameters in which you can set certain restrictions on residents.
Q. Can LOCAL collect my keys from the construction team?
A. Yes, once signed up to our lettings and management agreement, we will collect and securely store your keys until we require them for viewings or furniture installation.
Q. Do I need Landlords Insurance for my apartment?
A. At a minimum, we would always encourage landlords to purchase this kind of insurance as well as policies covering rental loss and contents insurance. Building insurance will also cover your property in the event of a fire or leak that damages the fabric of your apartment only.
Q. Do I need to furnish my apartment?
A. The Manchester market is extremely competitive and in 2020, most competitors will be advertising full or part- furnished apartments. To maximise your chances of finding a tenant, we strongly advise you to furnish your flat before allowing us to manage it.
Q. Do I need to provide blinds or curtains for my apartment?
A. Once again, we would strongly advise you to install effective window coverings to increase your chances of finding a tenant. Simple furnishings such as these can vastly improve the appearance of a property and may help it stand out from the competition.
Q. Do I need to pay Non-Resident Landlord tax?
A. Yes, you will need to pay tax on your rental income if you rent out a property in the UK. But if you are a UK resident who lives abroad for more than six months of the year, you are classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC).
Q. I am a non-resident landlord. How do I pay tax?
A. You can receive your rent in full and pay tax through a self-assessment if HMRC allows it. Alternatively, you can have tax deducted from your rental amount by LOCAL or your tenant.
Q. How do I apply for a self-assessment?
A. If you would prefer to pay tax on your rental income via a self-assessment, an NRL1i form will need to be completed and sent to HMRC. If approved, they will send your lettings agent or tenant an NRL Tax Exemption Certificate, preventing them from deducting tax from your rental income. You will then need to declare your rental income via a self-assessment tax return.
Q. If I want tax deducted from my rental income, what should I do?
A. Nothing. We will automatically deduct NRL tax from your monthly rental amount.
Q. Do I need to apply NRL Tax Exemption Certificate from HMRC?
A. Yes, if you are a UK landlord who resides outside of the country for more than six months of the year. In this event, you will need to fill out a self-assessment tax return.
Further information can be found in these guidelines:
Q. When does NRL Tax get deducted from my rental income and how much is it?
A. 20% of your rental income will be deducted from your monthly rent, before being sent to you.
Q. Is it 20% of the full income or 20% after fees have been deducted?
A. This 20% deduction is taken after we have collected the fees owed to us.
Q. If there is more than one person who owns a property, do both parties need to apply for an NRL Tax Exemption certificate from HMRC?
A. Yes, all the owners will need to apply for an individual NRL Tax Exemption Certificate.
Q. I am a Non-Resident Landlord and I have an NRL Tax Exemption Certificate from HMRC for a different property. Do I need to apply for it again for my new property with LOCAL?
A. If both properties are managed by LOCAL and you already have an NRL Tax Exemption Certificate, you do not need to apply for another. However, if your properties are managed by different agents, we will need an exemption certificate for each of them.
If you already have one exemption certificate, you do not need to fill out a new NRL1i form. Simply update your agent’s information by contacting HMRC, who will then send another copy to your new lettings agent.
Q. Do I need any information from LOCAL to apply for my NRL Tax Exemption Certificate?
A. Yes, simply contact our Investor Relations Team and request your NRL customer reference.
Q. Can LOCAL apply for an NRL Tax exemption certificate on my behalf?
A. Unfortunately, no.The landlord or their appointed tax professional must process the application for it to be valid.
Q. When should I apply for an NRL Tax exemption certificate?
A. We suggest you apply for this certificate before you start receiving your rent.
Q. What will happen if I apply for an NRL Tax exemption certificate after I have received my first rental payment?
A. We will deduct the NRL Tax from your monthly rental income and submit it to HMRC. However, this amount will be refunded back to you if we receive an NRL Tax Exemption Certificate before the annual submission.
Q. Do I need to send LOCAL my NRL Tax Exemption Certificate?
A. No, HMRC will send a copy to you and us.
Q. Can LOCAL use the details on my NRL Tax exemption certificate if I receive it before them?
A. No, LOCAL cannot accept the certificate details directly from investors. We must receive confirmation directly from HMRC.