10 things Landlords should be thinking about nowJune 2021
Given the potential total re-opening of the UK on 21st June 2021, it’s now time to address those issues that might have been delayed, forgotten about or neglected due to Covid-19.
- Insurance– is your insurance policy up-to-date and does it contain true and accurate information? Have there been tenancy changes that need to be reported or is the property vacant? It is vital that this information is kept accurate as it could invalidate your insurance or reduce potential future settlements.
- Inspections– have you recently carried out an inspection of the property? During this pandemic it has obviously been more difficult to inspect properties, but it is really important to know what is going on with your property. For instance is your tenant still in occupation or working remotely? Has your asset been damaged during the periods of lockdown and not been reported? Have any new problems developed over the last 18 months that need to be looked at by professionals or contractors? It is so important that you as the landlord, or your managing agent, goes to inspect the property physically.
- Contractors – although many industries / sectors have suffered as a result of this pandemic, the construction industry has boomed. At GJS Dillon we deal with a variety of contractors of all sizes and covering a manner of different services. The consistent message coming back from them all is “we are really busy and we can’t get enough labour or materials”. The knock-on effect is that as a landlord you need to plan maintenance more and be less reactive in order to get contractors when you want them. You should also expect to pay more for contractors and materials as currently demand outstrips supply, which by simple economics means higher prices.
- Health and Safety– it has been a little over 18 months since the first mention of the pandemic which has felt like a long time for all of us. However, although a number of things have stopped during this crisis, time and Health and Safety has not. As such, now is a good time to ensure that all the mandatory health and safety checks (such as electrical and gas testing, asbestos, lifting equipment, fire equipment etc) are all up to date. Who is responsible for carrying these items out will depend on the terms of the lease in place and the current occupational status.
- Covenant strength– there has never been a more important time to monitor the financial strength of your tenants. If you haven’t checked this since the original lease was put in place then it is certainly worth doing. Your managing agent should have this service set up already. It is also worth noting that accounts information can be quite historic and as such you can always go direct to your tenant to ask for up to date final accounts or management accounts.
- Business rates– are you currently paying business rates on empty properties? Have you investigated options to minimise your liabilities? Business rates can be a significant drain on landlord income unless carefully managed and as such it is worth exploring options with your managing agents or rating professionals.
- Utilities –ongoing utilities costs can, if not carefully managed, be a significant ongoing cost for a landlord. These costs typically include water, electric and gas and can escalate due to poor contracts being put in place by utility providers who are historically difficult to deal with. Whether the property is currently empty or let then it is really important to keep a close eye on utility costs which might have a real effect on your margin.
- Lease expiries or rent reviews– it has been a difficult period of time for many landlords and tenants alike and as such it is understandable that lease events may have been postponed. However, it is vital that certain aspects of these matters are carried out correctly and within the time frame set out in the lease. This is a detailed area and one that can have significant ramifications to both landlord and tenant, and as such we would suggest you contact a professional advisor if you have any doubts about the correct process.
- Schedule of Conditions / Dilapidations– Due to recent events it is possible we will see more tenants moving premises within landlord held assets. As such we as professional advisors would always strongly recommend that a Schedule of Condition (SoC) is carried out prior to a new tenancy and that professional advice is sought with regards to Dilapidations on a tenant exiting the premises. These items are best carried out by a trained professional where possible and the costs are usually recoverable.
- Future purchases–In GJS Dillon’s experience we have seen that through sensible landlord and tenant liaison and with the assistance of various Government initiatives, the majority of tenants have continued to pay their rent and have continued to trade. We have also seen an active commercial property market in Worcestershire with both office and industrial sectors performing better than one might expect considering recent events – see our latest market report here www.gjsdillon.co.uk/marketreport. In light of this we believe this period should be viewed as a time of opportunity.
If any of the above has made you stop and think or if you wish to simply talk through your existing portfolio then do not hesitate to contact the Asset Management Team at GJS Dillon. Contact firstname.lastname@example.org or call 01905 676169Return to News