Leaving assignees to find their own rental homes in the United Kingdom can be a serious mistake. The UK rental system is frustrating and highly inconsistent, which is why the services of a premier home finding firm are so valuable to Employers and their assignees. First the assignee and Spouse have to decide on a good location for their rental home. This means having to approach numerous rental (“letting”) agents that serve the assignee’s chosen areas to find out what homes are available. This becomes doubly difficult if a specific area has not yet been chosen. There is no multiple listing service and finding rental homes and deciding on specific locations purely through internet research is very unsatisfactory. Regional markets differ considerably, both in terms of costs and rental practices and procedures throughout UK. London is a market all by itself. Agents cannot be relied upon to advise assignees or corporate employers. They work for landlords who pay them large commissions! They are not licensed or subject to regulation by the State. There’s no mandated training. Literally anyone can open up a rental agency business overnight in the UK! Letting agents’ offices are dotted all over the place and each neighborhood may have scores of such agencies operating within them. They do not generally cooperate with each other or share listings. Doing all the legwork needed to find suitable rental homes that are available can be a real nightmare without professional home finding assistance. And, so far, we have only considered the first stages: i.e. choosing the right search area and finding the right home. Once a home has been chosen, there are various other tricky issues to be handled. Among them are:
- Putting forward the right proposal to the landlord’s agent
- Negotiating a reasonable rent
- Negotiating lease terms that safeguard your interests
- Dealing with inventories/schedules of condition
- Hooking-up utilities, registering for council tax
- Handling all the other settling in issues
- Even in a slow market, the best homes tend to be snapped-up quickly. This makes it all the more difficult for unrepresented assignees to secure their first choice of home.
For all these reasons, it is wise to employ a professional home finding service like Saunders 1865 to represent the interests of the assignee and the Employer and to provide independent advice and robust advocacy throughout the process. After all, landlords employ agents to represent their interests and get the best terms for them – employers who do the same for their employees make a wise decision that saves them money in the long run.
Avoid relying on letting agents who claim to offer a “free relocation/home search service”. As I have explained, letting agents represent the interests of their paymaster, the landlord, exclusively; so how can they possibly be relied upon to negotiate the best terms for your company and your assignees?
COMPREHENSIVE SUPPORT – A Typical Program:
Essentially, there are 5 elements:
Getting the Brief right is a two-way process. A home finding specialist listens to the needs of the assignee in order to develop a needs analysis. What are their lifestyle needs? What are the schooling needs? How do they enjoy themselves – tennis, golf, horseback riding, boating? Their current lifestyle will provide a very good indication of what their needs will be when they get to the new location. This analysis is best done before they leave. However, in today’s fast paced world, we often don’t have that luxury, in which case, the process has to be compressed and perhaps performed on the fly! Flexibility in the service-delivery process is vital in today’s world. The other part of this process is to provide information to the assignee and Spouse – information that will help the incoming family make good decisions about search area, neighborhoods, cost of living, and so on. The 3 critical words here are, MANAGE THEIR EXPECTATIONS. The home finding specialist needs to prepare them – especially with regard to any potential negative factors. If you prepare them in advance, chances are they will handle some of the challenges that much better. By way of a small example: they need to be prepared for the fact that homes are smaller in the UK – room dimensions are much more compact. Also, homes are more expensive compared to most other parts of the world. (We don’t want stuff like this to come as a shock to them!) At the same time the positive, compensating aspects of the UK should be reinforced – the rich cultural experience, the history, and the easy access they will have to the Continent for wonderful short breaks. It is important to reinforce their decision to come to the UK.
Proper research requires powerful resources that include upto- date databases of all agents and other sources of rental homes in the search locations. This is the only effective way of accessing a great selection of available homes – and it can be done in a fraction of the time that it would take a assignee and Spouse acting without assistance. Matching sourced homes with the Brief requires expertise to avoid wasting the assignee’s time. Letting agents seldom give you the whole truth. Their goal is to get as many prospects as possible to see their listed homes on the principle that “if you throw enough mud against the wall some of it will stick”.
The tour days require a great deal of advance planning if they are to be productive. Planning the tour days is a big job in itself, involving arrangements being made with a large number of different letting agents. The objective is to have a plan prepared that will maximize the use of the assignee and Spouse’s time and make the whole experience as pleasant and productive as possible for them. An experienced consultant should meet with the assignee and Spouse and accompany them throughout the tour days. The consultant should keep the management team back at the office fully informed as to how the tour is progressing. Provided there is proper back-up support, (a) the tour arrangements can be amended immediately according to the feedback from the assignee/Spouse; and (b) offers can be submitted at once by the office-based negotiation team.
Most service providers in the UK are not geared-up to work in this optimum way. Even the biggest relocation companies tend to farm out the whole job to a one-manband (“kitchen table”) operator. As a result, while the tours are going on, nobody is doing anything else on the assignment. Most crucially, nobody is even submitting offers because everything is left to the in-car consultant. Bottom-line? There’s a bigger risk of losing the ideal home to another bidder!
Effective negotiation of the rent and related provisions can yield substantial savings over the life of the assignment. assignees should never be left to do this on their own. There is no such thing as a standard lease in the UK, although the letting agent will often protest that their lease is “the standard form”. What they mean is, it’s their standard form! Believe me, it will require amendment! Negotiating a lease/tenancy agreement involves much more than price & length of term. The document has to be negotiated line by line, to protect the interests of the Employer Corporation and the assignee. Negotiating lease agreements is a skill that is quite different from other skills that are needed in the process. For example, the skills required for taking good care of a jetlagged, sometimes irritable assignee/Spouse during the tour days, are wholly different to the discipline of negotiating the detailed terms of a lease/agreement. You will find some specific pointers on leases later in this report.
5. Settling-In & Ongoing Support
This involves hooking-up utilities, closing-out every aspect of the transaction and making sure everything is in place for move-in day. Arranging or advising upon an “inventory check-in” or schedule of condition is one major component of this final stage. Ideally, beyond home finding assistance, there should be ongoing support to assist the assignee and Spouse (as well as HR) throughout the lease/tenancy to assist with all maintenance, admin and other issues that arise. Employers are increasingly seeing the business value of such programs in relieving key employees (as well as hard-pressed HR staff) from the inevitable chores and trivia surrounding the day-to-day management of lease agreements. Such comprehensive, ongoing support also makes renting in the destination area that much more palatable to assignees and their Spouses.
What Should Be in Your Leases?
I mentioned that leases have to be negotiated, in essence, clause by clause. The negotiation of UK tenancy agreements/leases is, in itself, a subject that would justify a stand-alone educational report. Here, I’ll just mention a few pointers on what should be/not be in your leases. This short list is far from exhaustive. WHAT TYPE OF LEASE? Should it be a Company Let or an Assured Shorthold Tenancy? Do you want it to go in the Employee’s name? These matters should be decided at the beginning of the process.
- DEPOSIT: If you must pay cash deposits, something that ought to be avoided if possible, it should be kept in mind that some UK landlords see deposits as another legitimate profit center. We have seen cases where landlords have tried to pocket deposits of well over $50,000.
- To guard against this, make sure the deposit is held, not by the landlord, but by an agent “as stakeholder”, i.e. in trust. This means that the money can’t be released without agreement or a court order. Secondly it should be held in a designated Client Account and not mixed up with the agent’s own money.
- DILAPIDATIONS: The UK word for breakages/damages to the landlord’s property. There should be an embedded machinery – that is to say a formula – in the lease agreement setting out how dilapidations will be assessed. The arrangements for inventory check out and check in are important here; the process needs to be spelt out, including a timetable for when the deposit is to be paid back.
- DISPUTES: There needs to be a formula in the lease stating clearly how any disputes will be resolved.
- REPAIRS: The lease must say who is responsible for what – for example, plumbing problems, leaks, upkeep of appliances. Some of these issues will be covered by statute, but it is far, far better to spell everything out clearly for the avoidance of disputes.
- PERMISSIONS: You don’t want your assignee kicked out of their home through no fault of their own, simply because the owner didn’t get consent from a superior landlord or lender. This should be part and parcel of the lease review role.
- BREAK CLAUSES: Seek the terms you want – preferably a unilateral break provision. Be on the look out for agents dropping in an unwanted landlord’s break.
CHOOSING A UK RELOCATION SERVICES PROVIDER:
Take care to select an experienced, well-established provider with the necessary resources and local know-how to do a really effective job for you on the ground in UK. Guard against using kitchen-table operators, who may not be able to provide an acceptable level of support to your assignees and your company. As I’ve said above (and it bears repeating), assignees who are out on tour will need the option of being able to open-up negotiations on a home they’ve seen, so they don’t lose it while they are still touring other homes. Also, they may decide, whilst out on tour, that they want to look at homes in entirely different areas the next day or that afternoon. In these sorts of situation there must be a support team back at base who can handle this work. If the whole service provider is, in effect, in the car for the day with the assignee, none of that can happen and time (and possibly the assignee’s first choice of home) may be lost.