Partner Article

Pitfalls of unprotected tenancies

A North East property expert is warning inexperienced landlords about the pitfalls of letting property without having the necessary covers in place to protect both them and their tenants.

Ajay Jagota, managing director of KIS Lettings, which has branches in South Shields, North Shields and Sunderland, is concerned about those landlords who cut corners – whether they do it knowingly or not.

He said: “The private rented sector is attracting more landlords than ever before and many of these are letting property for the first time.

“Many new landlords are what we refer to as ‘accidental landlords’, they are renting out of financial necessity rather than choice. There are also those entering the rented sector as a better form of investment over a traditional savings account or pension.

“These inexperienced landlords need to make sure they have a secure and legally-backed agreement in place with tenants to protect both parties.”

Ajay is particularly concerned with landlords like those highlighted in the national press,who neither put the deposit into a tenancy deposit scheme nor have insurance in place - they may face losing thousands of pounds.

As a former property developer and experienced landlord, Ajay understands the importance of establishing a financially secure rental agreement. At KIS Lettings he has worked with Prestige Insurance to develop and introduce a unique product for his landlords.

The product relies on a guarantor agreement rather than the tenant having to pay a deposit.

Ajay added: “Even rental deposit schemes can prove complex for landlords with any disputes and any cases that go to arbitration are time-consuming and frustrating.

“We’ve created a product that works for both landlord and tenant. The tenant doesn’t have to find a deposit to move in and the landlord has a market advantage over other landlords who are charging a deposit and the security of a guarantor.

“The bottom line is that landlords need to be aware of their legal responsibilities before taking on a tenant. For many first time landlords entering the market at the moment, managing a property will prove much more time consuming and complicated than they imagine.

“Employing a professional letting agent may prove to be a worthwhile investment to ensure the transition from property owner to landlord is taken care of with ease and minimal stress.”

KIS Lettings, which was established in 2006, charges a 5% management fee and allows landlords 24-hour online access to their property portfolio.

This was posted in Bdaily's Members' News section by Ajay Jagota .