To protect yourself and your clients when letting a property, it's crucial to have a written letting agent terms of business agreement in place.
A letting agent terms of business agreement allows a letting agent to manage part or all of the lettings process of a property on behalf of a landlord. A let only letting agent will source a tenant and hand over the management to the landlord at the start of a tenancy. A full management letting agent will manage all aspects of the tenancy before and during the tenancy.
A full management letting agent will take care of all aspects of letting and managing a property. This means sourcing and referencing tenants, preparing an inventory, registering a deposit, collecting rent from the tenant and conducting routine property inspections. The letting agent will also be the tenant's point of contact for repairs and other tenancy related issues.
An overseas landlord is a landlord who owns property in the UK but is not a resident in the UK. Overseas landlord might live abroad for professional reasons and may choose to let out their property to generate some rental income whilst they are away.
Overseas landlords are still liable to UK income tax from their rental properties and they must be aware of their responsibilities. When letting property and collecting rents for non-UK resident landlords the letting agent is obliged by the Income Tax Act 2007 and the Taxation of Income from Land (Non-Residents) Regulations 1995 to deduct tax (at the basic tax rate) to cover any tax liability, unless the Landlord has been authorised in writing by HMRC to receive rent gross. In this situation, the Agent also requests that the Landlord appoints an accountant or reserves to the Agent the right to employ a suitably qualified accountant in order to manage correspondence with the Inland Revenue.
A letting agent terms of business must outline any additional responsibilities a letting agent will take on behalf of the overseas landlord as well as the associated costs.