AST Clauses, Holding Deposits and Affordability Checks

I am wondering if landlords who do not repair/replace appliances when they break down claim the 10% wear and tear allowance from HMRC?

I can honestly say that, having let to all tenant groups in HMO's, single lets and families, across every type of property, I have NEVER spent 10% of my annual rental income on repairs and replacements and I keep everything in full working order and up to date at all times. I hire washer/dryers and the hire agreement includes repair and replacement. I upgrade every three years - this is tax deductible in addition to the 10%, I don't worry about delivery or fitting or disposal of old machines. I give fridge/freezers, dishwashers and cookers to charities who collect them, when they look shabby but are still in good working order. The scrap man is always willing to remove anything that is no longer working. AND still I don't spend 10% annually.

I can't remember when I last withheld monies from a deposit unless the tenant has asked me to use it to pay the last months rent.

I give the Manufacturers In Use and Safety Instructions with every appliance, even the kettle and I offer to demonstrate the use if a tenant is not familiar with the equipment - this is noted on my inventory.

This has worked very well for me for 42 years and I don't understand why it should be an issue for other landlords. Yes I do let to tenants on benefits and have also let to people seeking asylum and, for all these years, to students. I let to people from overseas who are not familiar with the equipment too. I have had a few cases where equipment has not been kept clean and has subsequently stopped working properly - usually cookers or microwaves - but these items are so affordable these days that it is not a major issue.

If I were a tenant and I was asked to sign a tenancy agreement which excluded the maintenance and repair/replacement of the equipment that was in the property at the time that I moved in - I would walk away. If you are renting furnished - take the hit or let unfurnished and stop claiming the 10% tax allowance, its very simple really.

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Reply to the comment left by "Mary Latham" at "08/03/2014 - 16:40":

My thinking was that it would be wise to include such a clause was to limit liability. For an unfurnished flat (no 10% w&t) where I'll nevertheless be providing five or six appliances, I didn't want to be exposed to having to replace several thousands pounds worth of appliances within 6-12 months.

I accept however that it's perhaps ridiculous to cover yourself for such an improbable situation. I certainly wouldn't be using the clause to avoid fixing or replacing appliances. In fact, with appliances these days not lasting very long, I'll be expecting to replace one a year.

Simon I have just taken back a very high end flat which was built to a high spec in 2004 with fitted, top of the market, kitchen appliances - very expensive to replace!! I have had just three tenants in that time and no voids and I have only replaced the kettle, toaster, microwave, cutlery and crockery and toilet brushes at the turn of each tenancy. I am happy to say that I will once again only be replacing these small appliances and that is only because I am so fussy - they are still in perfect working order.

In my experience at the high end people eat out a lot and appliances get very little use. It is always worth budgeting for the worse but I would be really shocked if you were replacing one appliance a year.

In my opinion that clause may make people suspicious and may prevent them taking your flat - landlords have a poor reputation and its important to instill confidence in prospective tenants - just my opinion.

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Reply to the comment left by "Mary Latham" at "09/03/2014 - 11:36":

Thanks for your comments Mary, you and everyone else have convinced me to take out the appliance clause. I suspect a lot of tenants wouldn't notice or worry about it, but I agree it could give out the wrong impression and it's not worth the risk of putting off prospective tenants.

My understanding is that at common law the landlord has no obligation to repair in any case.
In addition the statute defining repairing obligations, that's s.11 of Landlord and Tenant Act 1985, excludes most, if not all, of the appliances from the landlord's repairing obligations.

As such, is a clause explicitly excluding repairs doing anything more than stating the existing situation?

Reply to the comment left by "Romain " at "09/03/2014 - 21:45":

Romain you are right on that as always. S.11 sets out basic obligations for LL repairing the property including gutters, heating, pipes etc. but as you rightly state nothing about appliances. So if LLs want to put something in then the tenancy agreement is the place to do it. But as I said earlier I am not a fan and Mary is right as it gives the wrong impression. To my mind it's either rent unfurnished or rent furnished and be prepared to repair or replace depending on your business model and the local market.

Reply to the comment left by "Gary Nock" at "09/03/2014 - 22:10":

Gary, I agree with you and Mary.

I have read opinions that if a landlord provides appliances it creates an implied contractual term making him liable for repairs unless the tenancy agreement explicitly states otherwise.
However, this does not seem to match with common law and s.11 so I'm genuinely interested in clarifying that point.

Been away a few days and my word this thread has rambled and rumbled on. Am too busy this week for much pro bono work for P118 but here are a few pointers:-

1. If you have suchg a clkause then you must expect never to see the items again as that is what you are saying so,

2. When the tenant claims they have broken dowen they may have sold them but then you cannot do otherwise and

3. The comment on right impression is dead right, it gives an appalling impression, but

4. Here's the big one. If you have such a clause make sure it is especially reflected in the inventory and make sure it is drawn to the tenant's attention as per OFT requirements.

5. Either let with the appliances and repair or take them out before letting.

6. Simon a property with white goods installed by you is not unfurnished, but consider white goods cover provided as a combined policy by your bldgs insurer

7. Finally Gary and Romain as I said of course s11 excludes but the Managament of HMO Regs very much includes it. Provide and you MUST maintain or replace etc

Reply to the comment left by "Industry Observer " at "10/03/2014 - 10:30":

"7. Finally Gary and Romain as I said of course s11 excludes but the Managament of HMO Regs very much includes it. Provide and you MUST maintain or replace etc"

Fair enough.
However, I would think that this only applies to HMOs, for obvious reasons, and is not a general obligation.

The HMO Regs are very specific about this obligation on an HMO manager.

I only mention it from the angle that if a Landlord is going to have one of these repair/replace exclusion clauses in their agreement, which I thnk is totally the wrong place for it anyway as it should be on an individual appliance by appliance basis but even then is poor form.

But in any HMO scanrio it will not be enforceable, which many readers of P118 have.

The only place in my view for any comment about excluding responsibility for any appliance is in the inventory. It is poor form to have it as a standard clause in an agreement and from there it is only a short step to try and disclaim responsibility for other safety related issues too.

I meant to comment on Mary's two latest posts both of which I thought were excellent. The first especially offers a blueprint for anyone aspiring to be a Michelin 3 stars top quality Landlord worthy of Trip Advisor style rave reviews!!