Guarantee for natural void periods?

Reply to the comment left by "Vanessa Warwick" at "19/08/2013 - 21:59":

Hi Vanessa

Northwoods Guaranteed Rent Scheme is certainly the best promoted scheme of it's kind. However, my understanding is that Northwoods considerable assets are not put on the line to back the guarantees which are individually underwritten by their franchisees. That's unless you consider their group credibility to be an asset of course.

I have a friend who was shocked when she used Northwoods and didn't receive a rent payment for two months. I read the agreement and sure enough, that was the basis of the contract. Moral of the story, due you due diligence, understand what you are getting into a read the contract before signing it.

I appreciate that Northwoods are your clients Vanessa and that they also sponsor Property Tribes. I have the same situation in that my partners and I have recently acquired a stake in Letting Supermarket and they are also major sponsors of Property118. Therefore, to an extent, both of our perspectives must be considered by outsiders to be biased.

I have tried to give a realistic overview of both businesses without saying that one is better than the other, I am sure that you have done the same. We don't all drive the same cars and we don't all spend the same money on them or expect them to do the same things. It's just the same with letting agents. People need to know what questions to ask and then to pick the one that's right for them.
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Hi Mark,

I am not sure what Northwood being a sponsor of PT has got to to with this, other than PT would only partner with reputable companies.

What might have more to do with it is that I am a client of Northwood! I have let property through them, although not used the guaranteed rent scheme.

I was just sharing what I knew so that the original poster could understand the integrity of the Northwood GR Scheme. I hoped that what I shared would help them reach a decision whether it was right for them. I do not benefit in any way from sharing such information and I was not even aware that you were promoting an alternative scheme.

I made it clear that my understanding was that the Northwood GRS was for a very particular type of landlord, not for every landlord.

However, I do agree with you to due diligence on anything involving decisions around property investment.

Thanks Vanessa, it's no secret that my family also own National-Lettings which is geared towards supporting self managing landlords. Horses for courses I suppose but as you know, I have never been a big fan of rent to rent schemes despite having done a Joint Venture with Justin Selig of Landlord Action and The Law Department to help rent to rent companies by making the correct agreements available to them. Like it or not, the Northwoods Guaranteed Rent Scheme is a Rent To Rent scheme which operates the management model as opposed to what I consider to be the safer and more preferable commercial lease model operated by the likes of housing associations, councils and Group 4 security.
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Mark,

The value of any guaranteed rent scheme is the integrity of the company/person offering it, not the way it is set up or which piece of paper you have.

If a company has a good reputation and long trading history, that to me is more of a guarantee than a newbie fresh of a rent-to-rent course with the correct piece of paper.

The main consideration is the protection of both the landlord and the tenants through offering Guaranteed Rent.

For the record, Northwood's Guaranteed Rent contracts have been approved by Property Ombudsman and Trading Standards.

Integrity is very important but a guarantee from an insurance company or a FTSE listed company is worth far more in my opinion. Just bear in mind that the guarantee being offered may well be a new company formed to purchase a franchise and the owner of that franchise may have borrowed heavily to purchase it.

I agree that Northwoods training will be far superior to the courses offered by rent to rent gurus and I would also expect their contracts to be very well written. They are, after all, the market leading letting agency franchise in the rent to rent management sector.

As I said in a previous post, Northwoods stake their reputation on the integrity of their franchisees but I dont think the group guarantees the underwriting of the guarantees provided by their individual franchisees. It would be nice is Northwoods would come along and confirm this one way or the other.
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Watch out for a TV programme in September called "Rip Off Britain" where the seedy side sub-letting and Rent to Rent are set to be exposed.

Paul Shamplina of Landlord Action is involved in uncovering sub-letting and rent 2 rent scams set up incorrectly, and putting the landlord and sub-tenants at risk.

Reply to the comment left by "Kirsty McGregor" at "19/08/2013 - 19:24":

Dave is right, the agreement you sign with the agent will not be an AST, but it can still be a non-Housing Act tenancy, meaning that you will still have rights as a landlord.

If you decide to sign an agreement with an agent offering Guaranteed Rent make sure you read the agreement from beginning to end and ask questions if you are unsure about anything.

In particular I would recommend that you look out for information regarding:
- circumstances in which the guaranteed rent will not be paid
- what will happen if the agent fails to pay you as agreed
- who will evict the (sub-)tenant should it be necessary to do so and who will pay for this
- the length of notice periods
- the condition of the property

Wow thank you , all very useful comments from some clearly very experienced people. What a great forum!

Reply to the comment left by "Mark Alexander" at "20/08/2013 - 10:08":

Hi Mark

I read some comments you made about visiting prospective tenants and one or two other procedures you carry out. I wish to consider these for future use. For the life of me I cannot remember where the comment is, despite reading it only a couple of days ago. Can you help? It would be good to have a thread on this topic.

Jay

Reply to the comment left by "Kirsty McGregor" at "20/08/2013 - 14:53":

No problem! I should point out that I work for Northwood (I did add this when posting my comment, but didn't realise it wouldn't show up), I am the Compliance Manager and based at the franchise office.

We are of course not the only company offering Guaranteed Rent, but as Vanessa mentioned, our agreements are reviewed by Trading Standards.