Beware hidden rental costs

Frances Gleeson explains how to spot pitfalls in the lease
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The Independent Online
PRESENT housing market conditions mean that more and more people are seeing renting as a more attractive proposition than buying.

With house prices in the doldrums, a home is no longer seen as an investment, and job insecurity and negative equity have made potential buyers more cautious. Renting is seen as simpler and more flexible.

In many ways this is true. But if you don't read the small print of your lease and negotiate a fair deal, renting can become a costly headache. It is important to remember that a lease is legally binding, and the wording will have a specific legal meaning. If you don't understand it, get legal advice. The main expense for the tenant will be the rent. Check the lease yourself to see whether it provides for rent increases. The Housing Act 1988 allows some tenants to get an assessment of the rent by referring the matter to the Rent Assessment Committee for the area.

Find out whether the tenant will have to pay the connection fee and deposit for the supply of utilities and the quarterly bills, and who pays the council tax.

Make a note of what furnishings are supplied with the property and what you will have to supply. Most properties are let fully furnished, but one landlord's idea of fully furnished may be different from another's.

Find out if there is an additional service charge for the cost of maintaining and repairing communal areas in flats, such as hallways and grounds. Find out what the services are and the average service charge over the years. Ask to see the accounts and inquire whether there are any unusually high expenses envisaged.

Normally the landlord pays for repairs to the property itself, and to the furnishings provided. The only time a tenant should pay the repair or replacement bill is when the item is damaged by deliberate misuse.

The lease will, however, usually require the tenant to leave the property in a similar state to its condition at the start of the lease. The tenant should make sure that fair wear and tear is allowed for, otherwise he could find the landlord arguing that everything should look like new.

The only way of recording the original condition of the property is for the landlord to make a full and detailed inventory of the contents. You should take the time to check the inventory is correct before you sign it. If an item is in a bad state of repair, you should make a note of this on the inventory. Most landlords take a deposit, usually equivalent to a month's rent, at the start of the lease. This is refundable at the end of the lease, less any deductions the landlord has made for non-payment of rent or damage to the property.

The lease will state how long the tenant may live in the property. During this period, the tenant is obliged to pay the rent and see all the obligations of the lease are fulfilled, even if no longer occupying the property. It is sensible to insist the tenant has the option to end the agreement before the term expires.