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frequently asked questions and guidance to our services

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Student Properties

What is a student Studio?

A Studio is an individual unit within a student accommodation residence – sometimes known as a ‘pod’. The term studio usually refers to a basic room containing a bed, desk, wash stand and wardrobe, but it is also used as a generic term that encompasses all units including en-suites and studios.

How do student properties differ from normal residential apartment properties?

Student studio property investments are similar to residential apartment investments in that the investor owns a long leasehold interest in the property with relevant annual ground rent and annual service charge liability written into the lease. However, student properties come within a specific planning law category and the market for potential occupiers is therefore strictly limited to the university student population. 

Due to the fact that most students only secure their property for the next year in a period of a few weeks (July or August) following exam results, there is a limited period to secure tenants for these types of properties in the key summer lettings period. 

However, general marketing by Fortis Lettings & Management commences in January each year to secure existing students who want to book again for next year or, certain international students who may be arriving early for language preparation courses, certain MBA courses or, European student exchanges under the Erasmus programmes.

How do I know when my unit is let to a student?

Fortis Lettings and Management Ltd (FLM) market the availability of the units via a wide reaching system which channels students towards our internet booking system. 

The local, national and international channels adopted include local University websites, international student agencies, the UCAS website, and, general student accommodation portals.

If your unit is no longer in the guaranteed yield phase and you wish to verify its letting status then please contact FLM who will be able to advise.

What happens to the Property Management Agreement that I signed originally?

The original Property Management Agreement (PMA) was confirmation of letting terms, guaranteed rental values and costs during the initial rental guarantee period.

Once the guarantee period and PMA term expires, Fortis Lettings and Management will issue you with a new Lettings Management Agreement (LMA). This documents operates in exactly the same way as a normal letting agency agreement for any buy-to-let property.
Lettings fees under this new LMA are set at 8% + VAT of rental achieved on the unit and reflect the work of Fortis Lettings & Management in securing tenants for the units and managing the students and the income during the year.

What is the difference between Fortis Lettings & Management Ltd and Fortis Estate Management Ltd?

Fortis Lettings & Management Ltd (FLM) provides marketing, letting and management to the individual apartment/studio units within the building. i.e. They manage the internal property areas and deal with existing and new tenants. 

Fortis Estate Management Ltd (FEM) provides ‘block management’ services and they are responsible for overall management of the structure of the building, setting and running the annual service charges and ensuring that all leaseholders contribute and uphold the terms of their long leases.

How do the students select the units to rent?

Students usually make a selection of the available units via our website and this will be largely driven by the individual student’s budgetary constraints. The studio selection process is then made automatically via our booking system at random.

As standard policy, students are offered a discount on the annual amount (of approximately 2-3% and approximately £200) if they wish to pay the whole rent for the year upfront.
Note: Under certain exceptional circumstances, students may move rooms or vacate the building altogether during the academic year.

What happens if there is no student to rent my unit?

There is a risk that your unit will remain vacant throughout the academic year providing no rental income against your ground rent and service charge liability. This is one of the specific risks of this type of property.

Who looks after the management of the building?

Each individual Fortis building has a management company written in to the lease structure between the landlord and the individual investor tenant. 

Fortis Estate Management Ltd are appointed as managing agents by the individual management companies to provide the estate and facilities management services to the building including the appointment of site staff, placement of insurance and planned and reactive maintenance services.

How does the annual service charge (maintenance fee) operate?

The annual service charge (maintenance fee) is established on an annual cycle between 1st September and 31st August to coincide with the academic year.

A budget is set before the start of each budget year and the ‘on account’ charges are established as quarterly payments (in advance) from this total budget. 

Note: The individual long leases sometimes stipulate that the On account service charges shall be payable by the leaseholder either annually in advance or, monthly in advance – for ease of administration, we operate all on account payments ‘quarterly in advance’ i.e. The payments are due 1st September, 1st December, 1st March and 1st June each year for the quarterly period ahead.

Note: The property managing agent is under a duty to all leaseholders to collect the service charges from each leaseholder in a timely manner so that the appointment and payment of maintenance suppliers is not delayed and building services are fully maintained. Credit control procedures are in place to collect any unpaid service charges which will include escalation through a series of notices and referral to solicitors for formal legal action for breach of any long lease terms.

At the end of each budget year, an account reconciliation is carried out to determine if there has been an under-spend or over-spend of funds during the year. In the event of overspend, each leaseholder will be required to add additional funds by way of a ‘balancing charge’. In the event of an account underspend, each investor will receive a ‘balancing credit’ to their account (unless it is deemed suitable to allocate the underspent amount to reserves or, sinking fund).

What is a Sinking Fund?

A sinking fund is a provision made within each annual budget to set aside an amount for future major repairs or replacements.
The accrual of a sinking fund is considered by ARMA (Association of Residential Managing Agents) and RICS (Royal Institution of Chartered Surveyors) to be ‘good estate management practice’.

The calculation and operation of a sinking fund is not an ‘exact science’ and is open to debate, adjustment and interpretation over the years. A suitable sinking fund accumulation can help investors to avoid heavy one-off costs in future (for example for new roof covering) and it can also act as a selling point to new buyers who can see that the building finances have been managed prudently.

A sinking fund contribution is not repayable to the investor on sale of their unit but provides a selling point for the incoming investor.

Why has the annual service charge estimate increased?

An estimated annual service charge budget is established on building completion to cover the first few years of operation during the rental guarantee period. This budget usually benefits from lower than average maintenance and repair charges as many elements of the building are still under warranty from the original developer, contractor or their sub-contractors.

As the building transitions from the rental guarantee arrangement into a fully accounted annual service charge regime, it is essential that Fortis Estate Management compile a budget which covers all possible cost elements and allows for maintenance of plant and machinery which may be out of warranty period.

Your remittance statement will show you an apportionment of service charges on a pro rata basis (between the original and new budget rates) during the quarter in which your rental guarantee expires. Thereafter, your on account service charges will be applied to your account on a quarterly basis).

What happens when my property needs new furniture?

In order to avoid a situation where individual investors are charged for single items of repaired or replaced furniture in their properties, Fortis Estate Management build an element of cost into the annual service charge budget to reflect a certain number of repairs and replacements each year. 

The budget cost will be monitored and adjusted annually to also accrue for the cost of wholesale equipment changes in future – for example, replacement of all fridges within the building after a certain number of years.

My unit is smaller than other units in the building, do I pay a smaller service charge?

This depends on the wording within your particular lease which deals with ‘apportionment’ of service charge costs. In most cases, the overall service charge costs for the building are split equally between all owners each year. 

However, it some cases, the lease specifies a particular proportion payable by each owner or, simply stipulates a ‘fair and reasonable’ proportion

How do I pay my service charge after the guarantee period has ended?

Your account within FLM will have various debits and credits applied throughout the year to reflect the rental income receipts and the charges relating to ground rent and annual service charges.

FLM will deduct relevant service charge from your rental income and send you the net balance in line with the individual property management agreement relating to your property.

In the event that your unit is unlet during any particular year, then service charges and ground rents can be paid to our office via standing order, one-off BACS payment or, by calling our office with debit/credit card information.

Am I allowed to stay in my unit during the summer holidays?

Due to strict planning regulations and insurance requirements attaching to the building, only registered students are allowed to stay in the property during vacant or holiday periods.

What happens if I want to use another letting agent to find a student for my unit?

Investors are free to use alternative letting agents for their properties but we will remove the availability of the unit from our website and other marketing channels.

What happens if expensive works are needed to part of the building such as the roof or, the lift?

See above comments on use of ‘sinking funds’. In the event that major works or emergency works are required and the sinking fund does not have sufficient funds, then there is a statutory mechanism under section 20 of the Landlord and Tenant Act 1985, (as amended by the Commonhold and Leasehold Reform Act (CLRA) 2002), which allows a landlord to serve a series of notices on the investors (tenants) relating to the works and the costs of those works.

There is a lot of information online relating to this subject and general leasehold matters.

When will I receive the rental income from my property

Fortis account for rental income every quarter in arrears with the academic year commencing in September. If your unit has been let for the academic year, then the first rental payment will be made on 30th November. Subsequent quarterly payments are made on 28th February, 31st May and then 31st August.

Students generally pay their rent in 3 instalments throughout the year although some pay the whole years rent in one lump-sum in September.

Fortis deduct relevant amounts for service charges and lettings management fees before remittance of net rent to the investor.

What if I want to sell my unit?

In some cases, Fortis can act as agents and assist by offering your unit to other buyers within your particular building or, within the group of owners in the rest of our portfolio. Otherwise, various sales agents are available in the market and we can recommend names depending on your particular building.

Can I visit the building to inspect my unit?

Investors are welcome to visit the building to meet with our site staff and look at their unit. We prefer to arrange these visits during holiday periods to avoid disturbance to the students.

What if I breach the terms of my lease?

A lease is a contract document so if you breach the terms of your lease then legal action may be taken against you. The Court could order you to pay damages, legal costs and/or put right any breach. The ultimate sanction open to your landlord would be to seek court ordered forfeiture of your lease and re-possess the property.

Do I need to buy a TV licence for my unit?

The individual student is responsible for obtaining a TV licence for their period of occupation.

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