Sole Agency
Where Cocoon Lettings & Management are appointed to act on a sole agency basis, we shall be the sole agent for a period of 6 weeks, commencing from the first day of marketing. It is important to note that if you instruct another agent during this period you will have to pay the commission due under this agreement to us regardless of whether or not you also owe a fee to the other agent. If we are unable to let your property you may withdraw your instructions by giving Cocoon Lettings & Management 14 days written notice to expire at the end of the 6 weeks of sole agency or anytime thereafter.
If you abort the letting of your property without serving the above notice, or become unable to accept any applications for tenancy presented to you, then you will be liable to compensate Cocoon in part for the cost incurred to market your property up to a maximum of £650 (inc VAT).
Joint & Multiple Agency
Where Cocoon Lettings & Management are instructed on a joint or multiple agency basis, increased fees apply as set out in point 25 of this document. We require notification of any change in the advertised asking price within 24 hours of you notifying another agent.
1. Commission and fees
1.1 The landlord should read the Terms & Conditions carefully and in particular this section which clearly sets out Cocoon Lettings & Management’s fee structure and service charges, including any renewal, extension or continuation of the tenancy on either a fixed term or periodic basis. In the case of extension or renewal fees, these fees are payable by a landlord to Cocoon Lettings & Management whether or not we are instructed to act on your behalf.
1.2 The below commission is payable by the landlord to Cocoon Lettings & Management following the introduction of a tenant who enters into a tenancy either directly or indirectly, or by way of introduction from an existing tenant found by us.
2. Let Only
2.1. Our commission is calculated at 6% (+ VAT) of the gross rent for the full term of the tenancy agreement, and at a reduced rate as shown below for any renewal, extension or continuation of the tenancy whether or not we are instructed to act on your behalf.
2.2. Payment is due in full at the start of the tenancy. Fees will be deducted from the initial rent received from the tenant at the commencement of the tenancy. If the letting fee is more than the initial rent the balance must be paid to us at the commencement of the tenancy. After the initial fixed term has elapsed, and if the tenancy is to be renewed or extended, we will charge a renewal fee to agree and renew the tenancy documents (see ‘Renewal’).
2.3. Should the tenant(s) exercise an agreed break clause, and Cocoon Lettings & Management are not instructed or are unable to find replacement tenants for the property, fees paid relating to the remainder of the term will be refunded within 14 days of the vacating date.
2.4. If our fees are not paid within seven days of the commencement of the tenancy, interest shall accrue on a day to day basis on the sum due at a rate of 3% above the Bank of England base rate.
3. Rent Collection
3.1. Our commission is calculated at 8,5% (+ VAT) including the commission for the Let Only Service of the gross rent throughout the term. If our instructions to rent collect are terminated our fees remain payable as per the Let Only Service for the remainder of the term.
3.2. After the initial fixed term has elapsed, and if the tenancy is to be renewed or extended, we will charge a renewal fee to agree and renew the tenancy documents (see ‘Renewal’).
4. Managed
4.1. Our commission is calculated at 14% (+ VAT) for management, including the commission due for the Let Only and Rent Collection service, of the gross rent throughout the term and any extension or renewal. If our instructions to manage are terminated our fees remain payable on a Rent Collection or Let Only basis for the remainder of the term.
5. Let Only Service:
5.1. The services included in our Commission are:
– Full lettings valuation report and advice on rent achievable.
– Property photography.
– Erect a marketing board, unless specifically instructed otherwise.
– Comprehensive web portal marketing, as well as reviewing our database.
– Accompanying interested applicants on viewings at your property.
– Negotiating any offers on your behalf with applicants and obtaining consent from both parties as to the terms of the offer.
– Obtaining and validating tenant references and completing ‘Right to Rent’ checks. If the references are unsatisfactory and you decide to accept the tenant, we will require an indemnity stating that you have done so.
– Arranging for the set-up of standing orders for the payment of rent direct to the clients account.
– Collecting the first month’s rent paid by the tenant before the commencement of the tenancy.
– Collecting the security deposit paid by the tenant and if required, register the deposit in a deposit protection scheme at a separate cost
– Processing deposit deductions if agreed by both Landlord and Tenants at the end of the tenancy; however in the event of any deposit dispute there will be a charge to the landlord in order to mediate a resolution.
– Operating a secure key tagging system so that a third party cannot identify to which property a set of keys belong. In the unlikely event that keys are lost or unaccounted for, Cocoon Lettings & Management’s liability is strictly limited to the cost of cutting a new set of keys.
– Arranging inventory check in and check-out reports at a separate cost.
– Handing over keys and emailing a legally compliant ‘move in pack’ to new tenants on the first day of the tenancy.
6. Rent Collection Service:
6.1. Includes all the points listed in our Let Only Service plus:
– Contract drafting and supply to both landlord and tenant, allowing either party to seek independent legal advice should they so wish.
– Set up of tenant’s standing order to the Cocoon Lettings & Management client account, monitoring payments received, and advising the client of any non-payments within 14 days of the due date.
– Collect the rent for the full duration of the tenancy and forward it to you less any deductions for our fees and expenses.
– Monthly statements sent to you.
– Contact the tenant by telephone, e-mail, and letter at regular intervals if there is non- payment of the rent. Should legal action be required in order to recover rent due, the client will become responsible for instructing their solicitors and for any fees or charges made by them.
6.2 Further Conditions for Let Only and Rent Collection Services:
– You must ensure the property has been cleaned to a professional standard (based on the assessment of an independent inventory clerk) prior to the commencement of a new tenancy.
– Cocoon Lettings & Management will require a minimum of two sets of keys prior to the tenancy commencing, ensuring a set is provided for each tenant. If the property is managed by Cocoon Lettings & Management, a further set is required for our retention.
– We advise you that if you withdraw from the letting process after an offer from a tenant has been accepted, that tenant may decide to take legal action against you. However if they accept your decision they may expect you to reimburse any reasonable costs incurred by him or her.
– Please note that if you instruct us to proceed with a proposed tenancy on a Let Only basis and subsequently withdraw your instructions, you agree by signing this agreement to meet some of the costs and expenses incurred up to the sum of £600 (+ VAT).
– If you instruct us to proceed with a proposed tenancy on a Rent Collection basis, the service can be terminated by giving two months written notice subject to a minimum appointment of four months.
– As a registered landlord you must inform Cocoon Lettings & Management of any change in your residency.
– We do not forward mail as part of our service, and advise you to have it redirected via the post office.
– Please note that if you choose our Let Only service or Rent Collection service it will be your responsibility to arrange repairs and provide tenants with all instruction manuals, guarantees, and maintenance contracts. If you fail to do so you may incur costs and the tenant may be entitled to compensation.
7. Managed Service:
7.1. Includes all the points listed in our Let Only Service and our Rent Collection Service plus:
– Investigation of defects which may come to our attention or be reported to us via the tenant. Work costing up to £200 (+ VAT) will be carried out without further instruction from you. You must inform us in writing if you would like us to obtain quotes for works costing less than £200 including VAT.
– Where works are likely to exceed £200 we will contact you prior to instructing works, except in the case of an emergency. You the landlord are liable for all invoices and costs from the contractor.
– Where works are likely to exceed £500 we will contact you and provide 2 estimates, except in cases of emergency. Upon your acceptance of an estimate, we will instruct the works.
– 24 hour emergency contact facility for tenants.
– Property inspections carried out every 6 months.
– Transfer of utilities, subject to supplier’s names and account numbers being provided in each case. Please note that some utility companies may only accept authorisation from the owner or the tenant of a property, therefore Cocoon Lettings & Management cannot accept responsibility should our instructions not be acted upon.
– Notifying the local authority of the change of occupant for council tax purposes at the commencement of the tenancy.
7.2. Further Conditions for Managed Service:
– You must ensure the property has been cleaned to a professional standard (based on the assessment of an independent inventory clerk) prior to the commencement of a new tenancy.
– Please note that Cocoon Lettings & Management will not undertake works prior to letting unless sufficient funds are held to cover the cost and the landlord has requested in writing for us to carry out the work.
– We will endeavour to use contractors you have specifically nominated for repair work but cannot guarantee to do so, provided the contractor can prove relevant qualifications and public liability insurance.
– For a managed service we will hold a £300 maintenance float which we will deduct from the first month’s rent to enable us to instruct works to be carried out at the property, both in an emergency and in the normal course of management. This balance must be maintained as Cocoon Lettings & Management cannot service any outgoings exceeding the amount held.
– If at any time we do not hold sufficient funds to settle an invoice, we may provide your contact details to the supplier so they can apply to you for payment.
– The landlord must supply Cocoon Lettings & Management with copies of all instruction books, maintenance agreements, and guarantees for all the appliances in the property. If the landlord fails to do so and Cocoon Lettings & Management instruct another contractor, the landlord is liable for the costs incurred.
– Unless otherwise agreed in writing in advance Cocoon Lettings & Management’s appointment as the managing agent is for the duration of the tenancy and any renewal or extension of it to the same tenant. The managed service can be terminated by giving two months written notice subject to a minimum appointment of four months.
8. Renewal
8.1. For clients using our Let Only service a renewal fee of 3% (+ VAT) of the annual rent is payable in order for Cocoon to renew a tenancy.
8.2. For clients using our Rent Collection service an administration charge of £199 (+ VAT) will be applicable for all tenancy renewals.
8.3. There is no renewal charge for clients using our Managed service.
8.4. Towards the end of the initial fixed term we shall:
– Contact you to find out if you would like to renew the tenancy and agree any renewal instructions. We will advise as to whether a rent increase is appropriate depending on market conditions and the lease. You must confirm to us in writing if you would like the tenancy renewed, extended or notice served. If you prefer to negotiate directly with your tenant our fee remains payable.
– Negotiate between the two parties if requested
– Prepare the extension document for both parties
– Try to ensure that both parties sign the extension documents by the start date of the new tenancy period.
– Forward signed documents to the relevant parties.
– Arrange for the tenant to amend their standing order if the rental amount has been revised.
Our administration fee is payable within 14 days of the invoice date.
9. End of the Tenancy
9.1. A check-out report will be carried out and any missing items or damage will be recorded. Copies of the check-out report will be sent to both parties. For our Let Only or Rent Collection services it will be up to the landlord to mutually agree deposit deductions, if any, with the tenant. If the landlord requests that Cocoon Lettings & Management conduct deposit negotiations, an additional charge will apply.
9.2. If our client uses our Managed service Cocoon Lettings & Management will obtain estimates (if appropriate), submit proposed deposit deductions, if any, and carry out negotiations on the clients behalf.
9.3. Tenants are entitled by law to receive their deposit within 10 days of their request.
9.4. If the tenant intends to raise a dispute, this must be submitted in writing to ‘My Deposits’ within three months of the end of the tenancy to be considered.
10. Security Deposit
10.1. The required security deposit amount will be no more than five weeks rent. Cocoon Lettings & Management hold the deposit as stakeholder which means we will not release the deposit to either party without the written agreement of both parties. Disputes must be resolved by the parties, My Deposits, or the court.
11. Inventories
11.1. Unless instructed to the contrary we will employ on your behalf an independent inventory company to produce and check the inventory at the commencement and termination of the tenancy. This is a compulsory requirement if we are providing our Managed service.
11.2 The fees for the inventory and check-in at the commencement of the tenancy and check out at the end of the tenancy are payable by the landlord. The appropriate sums will be charged at the commencement of the let except in the case of the check-out fee when the landlord is using our Rent Collection or Managed service. In this instance the fee will be deductible from the final month’s rent.
12. Gas Safety & EICR (Electrical Installation Condition Report)
12.1. It is the responsibility of the landlord to have all gas appliances and gas installations pipework checked for safety once a year by a ‘Gas Safe’ registered engineer, and that accurate records are kept of those safety inspections and any work carried out. These regulations came into effect to ensure that gas appliances are properly maintained in a safe condition to avoid the risk of carbon monoxide poisoning. A copy of the Gas Safety Record (GSR) must be given to each tenant at the start of the tenancy and within 28 days of the renewal of the GSR. If Cocoon Lettings & Management are managing your property we will arrange for an annual inspection by a qualified engineer and deduct the relevant amount from your account. Any works required as a result of a gas inspection must be carried out straight away. Cocoon Lettings & Management will not start a tenancy until we are in receipt of a current GSR.
12.2 It is the responsibility of the landlord to have the electrical installations at the property checked and certified by a qualified electrician and to provide a ‘satisfactory’ EICR (Electrical Installation Condition Report) prior to any new tenancy. If Cocoon Lettings & Management are managing your property we will arrange for an inspection if required, by a qualified electrician and deduct the relevant amount from your account.
13. Safety Regulations relating to Let properties.
13.1. The Electrical Equipment (Safety) Regulations 1994
States that all portable electrical appliances supplied in rented accommodation must be safe. Cabling, fuses and plugs must also be inspected and replaced when necessary to the correct rating for the particular appliance. This applies to both new and second hand appliances and covers all electrical items supplied for the intended use of the tenant. All new appliances must be CE marked and instruction booklets for all appliances must be given to the tenant at the commencement of the tenancy. Any appliance without written instructions must be removed from the property as unsafe. The only safe method of ensuring that these appliances comply with the regulations is to have them tested by a qualified electrical engineer. We will only use the landlord’s contractor as long as that person complies with the regulations.
13.2. Please note that electrical testing of portable appliances is recommended if we are providing our Managed service. In these instances Cocoon Lettings & Management can arrange for an inspection by a qualified electrician and deduct the relevant amount from your account.
14. Furniture and Furnishings (Fire) (Safety) Regulations 1988 as Amended
14.1. The above regulations were amended in 1993 and have set new levels of fire resistance for domestic upholstered furniture and furnishings. It is now an offence to ‘supply’ in the course of a business any furniture, which does not comply with the regulations. This includes supplying furniture as part of a residential property. The regulations apply to sofas, beds, bead heads, children’s furniture, garden furniture suitable for use in a dwelling, scatter cushions and pillows and other similar upholstered items. All furnished property available for rental must contain furniture that complies with the regulations.
14.2. Any additional or replacement furniture supplied must comply with the regulations. Any furniture manufactured after March 1990 is likely to comply but if the appropriate labels are not affixed to the furniture, compliance is in doubt and checks should be made with the manufacturer. By signing the Terms and Conditions the client confirms that the property complies with the above regulations.
15. Smoke Alarms and Carbon Monoxide Alarms
15.1. Under current Building Regulations (1991) it is the law that all newly built premises from June 1992 must have mains fitted smoke alarms with battery backup. The same criteria apply to a house in multiple occupation.
15.2. Other properties also require smoke & carbon monoxide alarms by law. If battery operated smoke alarms are fitted to the property the landlord must ensure that the alarms are in working order at the start of the tenancy. If a member of Cocoon Lettings & Managements’ staff or the inventory clerk is unable to reach the alarm to test it Cocoon Lettings & Management will arrange for a contractor to visit the property and test the alarm. The cost of the visit is the responsibility of the client and will be deducted from the initial rent payment.
15.3. It is also a legal requirement that carbon monoxide alarms are fitted to a property with gas appliances. If you wish us to arrange the fitting of alarms you must advise us in writing. The cost will be deducted from the rent.
16. Energy Performance Certificates (EPC’s)
16.1. All properties being rented out must have an Energy Performance Certificate with a rating of E or above. An EPC will last for 10 years. Cocoon Lettings & Management cannot commence marketing a property until we are in receipt of a valid EPC.
16.2. We can arrange an EPC prior to marketing the property at an additional cost.
17. Insurance
17.1. Your property and contents must be comprehensively insured to include third party liability. You must inform your insurers of your intention to let the property as failure to do so may invalidate the policy.
17.2. It must be noted that Cocoon lettings and managements’ standard Managed Service as set out above does not apply when the property is not let, but we shall be pleased to discuss your requirements for management during void periods, which is subject to a separate charge. Your insurance company may have a requirement, that for cover to be maintained, the property has to be visited at certain intervals.
17.3. Where it is in the clients’ best interests and in the absence of a tenant, Cocoon Lettings & Management is obliged to carry out remedial emergency repair work to a property. Where we have not been instructed to manage, the client agrees to pay the invoiced costs on demand together with a £120 (+ VAT) administration fee. Any such works will be to ensure the vacant property is left safe and secure and Cocoon Lettings & Management will take no responsibility nor accept any liability for any consequential loss or damage.
18. Legal Services
18.1. Should any rent arrears or breaches of covenant be brought to our attention you will be informed. Thereafter should legal action be thought necessary, you will be responsible for instructing your own solicitor, for which an hourly charge will be made.
18.2. For our Managed clients Cocoon Lettings & Management makes no charge for the serving of a Section 21 (1)(b) Notice (two months’ notice to vacate the property if it is an Assured Shorthold Tenancy) or Section 21(1)(4) Notice (a minimum two months’ notice to vacate the property if a periodic tenancy has arisen which has to expire at the end of a rental period). However there would be a charge for our Rent Demand and Let Only clients. If requested to serve a Section 8 Notice (a notice advising the tenant on a specific breach which needs to be remedied or legal proceedings will be taken) there would be an additional charge for Managed, Rent Demand and Let Only clients.
18.3. If a client wants to represent themselves at a possession hearing Cocoon Lettings & Management cannot assist in the completion of the court papers on your behalf as we have no rights of audience.
19. Income Tax
19.1. You will be liable for tax on rental income and you must inform the Inland Revenue that you are letting the property.
19.2. There are a number of allowances that you can claim against the rental income. You should seek advice on these allowances from your accountant or from the Inland Revenue website which can be accessed at www.hmrc.gov.uk. For tax purposes you must keep all of your invoices for six years. You should also be aware that Cocoon Lettings & Management forwards a form to the Inland Revenue annually detailing all landlords whose property Cocoon Lettings & Management has let regardless of the country of residence of that landlord.
19.3. If the landlord is resident abroad for more than six months in the tax year or a company registered overseas, the Inland Revenue require Cocoon Lettings & Management to deduct income tax at the basic rate from the payments received. Please ask for an application form. Unless Cocoon Lettings & Management is in receipt of a letter of authorisation from the Inland Revenue, we will withhold monies from rental received as advised by the Inland Revenue. No interest is payable on monies held. The appropriate form for applying for an approval number can be downloaded from www.hmrc.gov.uk/cnr/nr_Landlords.htm. Should an approval number not be obtained for each person who owns the property and Cocoon Lettings & Management have to retain tax at a basic rate, we will charge and deduct from your account a £120 (+ VAT) administration fee.
20. Change of Ownership
20.1. If during the first 12 months of the tenancy, the property is sold or passed on with the benefit of the tenant in occupation; Cocoon Lettings & Management will look to the original landlord of the property for the outstanding commission up to and including the 12th month of the tenancy.
20.2. These fees do not apply if the new landlord signs our terms and conditions.
21. Liability
Cocoon Lettings & Management will at all times endeavour to carry out all services with reasonable care and skill, but will accept no responsibility for any loss or damage suffered by you as a result of the following:
a) Any delay in payment by us in relation to the settlement of your accounts relating to the property;
b) Any failure in carrying out any visit to the property or to notice any latent defects or matters concealed from our representative;
c) Any failure of the tenant to observe the terms of the tenancy agreement or comply with any obligation imposed by statute;
d) Any defective workmanship or problems associated with contractors instructed to do work on your behalf provided that
Cocoon Lettings & Management can show that they have used due diligence in the selection of their contractors;
e) Any failure by you to comply with all relevant safety or other regulations;
f) Any failure by you to comply with the terms of any relevant lease, mortgage, or insurance policy relating to the property;
g) Any failure by you to maintain adequate insurance cover;
h) Any agreement made directly between the landlord and tenant without Cocoon Lettings & Management’s knowledge.
22. Termination
22.1. Either party has the right to terminate this contract in writing:
– upon the tenants’ vacating the property;
– if the other party breaks any important term or condition of the contract during the tenancy, the party has been notified in writing and has failed to remedy the breach within 30 days, and monetary compensation is wholly inadequate.
22.2. Either party may withdraw instructions for the Rent Collection service or the Management Service for the property upon giving two months written notice, but not earlier than the end of the first six months.
22.3. Should there be a legitimate, fundamental, and enforceable breach of any term of this contract by Cocoon Lettings & Management, a landlord may terminate this contract immediately upon giving written notice.
22.4. If Cocoon Lettings & Management consider that the landlord is in breach of any regulation or obligation relating to the property, we may give you seven days written notice of termination.
23. General Data Protection Regulation (GDPR)
Cocoon UK will collect, process, and use your personal data to market your property, keep you informed about the progress of your let and to exchange information with third parties such as inventory clerks, contractors, referencing partners and other estate agents who may be linked to the transaction. We will also send you information about products and services from ourselves and third parties which we believe may be of interest and relevance.
24. Joint and Several Liability
Where the landlord is more than one person, each person forming the landlord will have joint and several liabilities for all the fees, commission, expenses and outgoings of Cocoon Lettings & Management for any work or services carried out on behalf of the landlord.
25. Definitions
In the terms and conditions the following definitions apply:
a) Use of the singular includes the plural.
b) Use of the masculine includes the feminine.
c) “Landlord” or “client” or “you” or “yours” means anyone owning an interest in the property, whether freehold or leasehold, entitling them to possession of it upon the termination or expiry of the tenancy.
d) “Tenant” means anyone entitled to possession of the property under a tenancy agreement.
e) “Property” means any part or parts of the building boundaries fences garden and outbuildings belonging to the landlord. When the property is part of a larger building the premises includes the use of common access ways and facilities.
f) “Inventory” or “inventory and/or schedule of condition” means the document drawn up prior to the commencement of the tenancy by the landlord or the inventory clerk, which includes all the fixtures and fittings in the property.
g) “Term” or “tenancy” means the fixed term of the tenancy agreement and any extension or continuation of the tenancy whether fixed term or periodic arising after the expiry of the original term.
h) “Deposit” means the money held by Cocoon Lettings & Management in a stakeholder capacity during the tenancy in case the tenant fails to comply with the terms of the tenancy agreement.
i) “Stakeholder” means that deductions can only be made by Cocoon Lettings & Management from the deposit at the end of the tenancy with the written consent of both parties.
j) “Tenancy agreement” means the contract drawn up between the landlord and the tenant specifying the obligations of the two parties
k) “we” and “us” means Cocoon Lettings & Management whose registered office address is First Floor, 16-18 High Street, Kingston upon Thames, Surrey, KT1 1EY.
