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Landlords Guide

 

Whatever has brought you to this business of being a Landlord – either through design, (investment purposes)  or by accident (inherited a property) then you have to make a decision on what type of Landlord you are going to be.  In Malta unfortunately, there is very little – zero, regulation in place for the Rental Property Market, and that has lead to some unscrupulous and unsavory characters ‘ripping’ off not just foreigners, but local Maltese tenants too.  Sadly this reputation of Maltese Landlords is growing among the Tenant Population, again local Maltese tenants and foreigners.

So at this stage it is time to ask yourself  ‘are you going to be that type of Landlord?’ Of course not!  We have prepared lots of advice and guidance to enable you run your business professionally.  The reality is in an ideal world, a good landlord attracts good tenants.  Good tenants look after your property, pay rent on time and may never want to leave! A property with a good tenant virtually looks after itself, making your investment work for you. On saying that, you have to be prepared and have knowledge on your side. That is why we advise about Insurance, Reference Checking, Leases, Deposits and lots more.  Free advice for all Landlords that you can access at any time and FREE downloads too!

While getting carried away at being the “Landlord of the Year” on the Island, it is wise to get as much information, guidance and advice about letting property because, not surprisingly, not all Tenants are created equal; and it is usually only after something goes wrong that you learn this lesson.

Having been a landlord myself I have experienced some of the more negative issues tenants can create. While you can never guarantee that every tenancy will go smoothly – it is important  that you take precautions to protect your interests, your property and yourself. That is why we create the Landlords Guide.

Tenants of course are viewed as a higher risk than owner occupiers, so it is vital that you have the correct insurance for your property while you are letting out. Lenders can insist on specific Insurance requirements if you are renting out a property that has a mortgage applied. Insurance policies are varied, so it pays to read the small print and get professional advice.

Landlord insurance can cover (among other things) The Loss of Rent if a Tenant defaults on the rent and leaves your property. Legal Costs etc. Also and still very important; you will be provided with Legal Liability to protect you as an owner. Insurance covers both tenant and landlord.  An accident caused in your property can lead to negligence claims against – you the owner.

There are companies in Malta who offer full Landlord Insurance cover.  There is a very good chance that your new tenant will be a foreigner from other EU countries; they will expect the property they rent to have specific insurance’s in place.

Reference Check

It is essential that you obtain a reference check for every adult who is living in you property.  Read More on our Reference Check Guide.  A reference check can be carried out by HomeRentMalta.com free of charge for our Landlords and provides invaluable information to ensure that your tenant is who they say they are.  No matter how lovely they seem, we have all heard the stories of tenants leaving property owing months of rent arrears, utility bills unpaid etc and disappearing; only to move to the next village and the next unsuspecting owner.  A reference check will also confirm employer details and check payments to utility companies.  While the final decision is yours, the owner, on who you allow to live in your property, knowing that the tenant has a good reference can offer peace of mind.

While Credit Referencing is not very common here in Malta (at the moment) in all other E.U. countries Credit Referencing is as common as asking for your I.D. Card here in Malta.  Foreign tenants have come from a country where a contract of any sort involving finance (mobile phone application to a mortgage, even changing a utility company) means a credit check. It is ‘normal’.  The lack of any checks on identification can be part of the problem that owners face with bad tenants.  The credit check is done on a ‘scoring’ system and is logged with other agency’s throughout the rest of Europe.  This fact alone may prevent some of the worst traits that some owners unfortunately  experience. The tenant will know that any default on what they owe you can show up anywhere else in the world when they apply for credit or try to rent another property.

The Contract Lease

When considering a contract lease, ensure that any terms you have discussed with your potential tenant at the viewing is put in writing on the contract.  Landlords can download a concise contract from HomeRentMalta.com.  We recommend that signing between you and your tenant is done with the guidance of a Notary Public/Lawyer or Public Body.  All pages should be initialed and finally signed, a copy for the owner and the tenant. Ideally this document should be witnessed by a 3rd party. Do not allow your tenant access to the property until you have a signed and agreed the lease.

Deposit & Rent

It is normal to expect a deposit and at least one months rent paid in advance from a tenant before keys are handed over.  HomeRentMalta.com does not charge any other fees when you find your tenant. It is not advisable to accept a cheque for funds on the move-in date.  Funds should be ‘cleared’ before agreed dates.  Make it clear to the tenant what the deposit covers and how that deposit is returned at the end of the tenancy, put this in writing in the lease.  State clearly when you expect the monthly rental to be paid and in what manner.  It is typical in Malta for a Landlord to arrive at the property every month and collect cash.  While this is acceptable to Maltese, be aware that foreign tenants will expect to pay through a bank account with direct debit or standing order. This is time saving, and accurately shows when a tenant is late in missing a payment. The threat of bank charges alone can prevent missed payments.  If however, you as an owner wish to collect funds personally then make that clear at any viewing prior to offering a tenancy, then allocate a particular date, and arrange in advance, at least 24 hours notice, of your arrival. Every rental payment you receive should be acknowledged in a written receipt for the tenant.  Download a free Rent Book here.

The Landlord/Tenant Relationship

Letting out property can be an expensive business, (well if you use a High St Agency it can!) An empty property for long periods can also cost you money. Especially if you are paying a mortgage or other loan.  So it makes sense to keep your tenants, when you have them – happy.  You don’t have to like them! But try to think of your tenant as a ‘client’ Sometime you will just have to grit your teeth, but letting out property is a business and a business is there to make profit.  You are not your tenants new Best Friend so give them space, don’t visit the property unless by prior arrangement. Trust your tenant with your property, don’t go snooping around.  If your tenant gets in touch then respond as soon as possible.  Maintenance Maintenance Maintenance!!! If anything needs repaired then FIX IT.  If the repair is not your responsibility then still be obliging and helpful.  A great tenant is a priceless tenant! Think twice before deciding to increase rent.  Fees involved and empty periods don’t make sense to having a happy rent paying tenants.

 

The Utility Bills

This is probably the most hotly contested subject between Landlords and Tenants.  Coming back to what we have discussed already “What type of Landlord are you going to be” The utility bill situation on the Island separates the the average landlord from the great landlord. Read more indepth here However, it is crucial to understand that any person Foreign National or Maltese living in your rented accommodation; that being their primary residence, is entitled to the Residential Tariff with full eco reductions applied.  Any other Tariff that you may have on your meters, while letting out your property on a long term basis is illegal. It may be of course, that you are completely unaware of what the tariffs should be, or what your own meters should be set to. In that case get in contact with ARMS and arrange the correct tariff right away.  We have included all information and handy downloads to help you do this.  There really is no excuse for the utility tariffs being incorrect. It also goes without saying that when the meters are at the correct tariff for the tenants that a reading can be done every day, week or month if required – so that accurate bills are paid to ARMS. When your tenant pays you for the utilities used you must issue a receipt.

Remember that Tenants are also getting informed and gaining knowledge about their rights while renting out a property.  Be one of the Landlords that does it right – because that is how it should be done.

 

 

 

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