FAQ's
Landlords
It can be any length as agreed by landlord and tenant. The norm is 12 months. Sometimes, a landlord agrees to 6 months.
A break clause may be negotiated by the tenant or landlord or both parties, but it must be agreed by both parties prior to signing the tenancy agreement. It is a term which may be negotiated.
Our letting fees are set out in our terms and conditions and our management fees are set out in our Landlord Agent agreement both of which are available upon request. The Estate Agents’ Code of Conduct require that “All fees and additional costs should be included in your terms of business. They should be fully explained and clearly and unambiguously stated in writing.” We fully adhere to the Code of Conduct.
A property requires an Energy Performance Certificate which is the responsibility of the landlord (although we can assist this process if requested). No other certification is required.
No - unlike the UK there is no formal scheme. Your letting agent should hold the tenant deposit in a properly ring-fenced client account (as per Estate Agents’ Code of Conduct requirements). Letting agents are not regulated in Gibraltar and where a tenant deposit is held is not checked. Chestertons hold all tenant deposits in a ring-fenced client account and this account is reconciled weekly.
Where we do not manage the property but find the tenant for the landlord the deposit is most likely held by the landlord although we do not recommend this.
The deposit remains the tenants' money at all times during the tenancy and should not be used to subsidise either the landlord's or the agent's outgoings or expenditure other than by specific mutual agreement (with the tenant) or by express provision of a clause in the tenancy agreement. Some agents do not operate this policy (contrary to the law and standard convention, so be careful).
Landlords should read their landlord agent agreement and tenants should read their tenancy agreement to establish on what basis the letting agent holds the tenant deposit. The agreements should include details of how the deposit will be dealt with at the end of tenancy, including the circumstances or criteria or procedure for its refund. We do not recommend to tenants that a landlord holds the tenant deposit in any circumstances.
A tenant deposit held by Chestertons is held "as stakeholder between the parties". The Estate Agents’ Code of Conduct states that “A deposit is entrusted to you [the letting agent] for safekeeping as stakeholder and should not be renamed or disguised as an introducer’s fee or other brokerage fee.” It is of critical importance to both tenant and landlord that this is understood. Talk to us if you have any questions or concerns.
An agent holding a deposit as stakeholder is holding the deposit in a quasi-trustee position on behalf of both landlord and tenant. The agreement of both landlord and tenant must be obtained (in writing) as to how the deposit is to be disbursed. In the event of a dispute the agent as stakeholder retains the deposit (or the disputed part of it) until the dispute is settled. Chestertons holds tenant deposits as “stakeholders”.
A deposit held by an agent "as agent for the landlord" has, ultimately, to be refunded or apportioned on the landlord's instructions or by the agent under the landlord’s authority. Every reasonable endeavour should be made by the agent to ensure that this process is fair and equitable and supported by appropriate documentation so that a landlord (or his agent) does not take unlawful advantage. Chestertons hold tenant deposits as ‘stakeholder’ not as ‘agent’.
It is negotiable between landlord and tenant but it will typically be the equivalent of between one or two month’s rent.
All estate agents involved in the letting business in Gibraltar must have a Business Licence (otherwise they are trading illegally) issued by the Office of Fair Trading. The Code of Conduct requires that all agreements (landlord agent and tenancy agreement) are in writing and that client monies are held in client accounts. There are no specific provisions in respect of the letting business.
There is no legal definition of fair wear and tear although the House of Lords (UK) defined fair wear and tear as: “Reasonable use of the premises by the Tenant and the ordinary operation of natural forces”, which is only averagely helpful.
Yes - the longer the tenancy, the more natural wear and tear to be expected. Furthermore, the more occupants there are, the higher the wear and tear in all the communal areas, such as the lounge, hall, bathrooms and kitchen. A property occupied by children or pets will undoubtedly encounter more wear and tear than that of an absent tenant. The landlord must accept this additional wear and tear if he consents to a high number of occupants, or children and pets.
Fair wear and tear does not apply to cleanliness. A standard tenancy agreement should ensure that the property is returned in its original state of cleanliness (it does not have to be better than its original state). If it’s not, the landlord can use the tenant deposit to fund such a clean.
No - whilst the tenant has a duty of care to return the property in the same condition at the end of the tenancy as found at the start (allowing for wear and tear) as listed on the inventory report, the law does not allow landlords to claim ‘betterment’ or ‘new for old’ from the tenant’s deposit. The tenant deposit is absolutely not a “new for old” insurance policy.
Betterment is a process whereby landlords use the tenant deposit improperly to replace an old fixture or fitting with a new item at the tenant’s expense.
To avoid “betterment”, there is a technique called apportionment. Apportionment is the process of breaking down the costs of ‘fair wear and tear’ into measurable chunks and thereby allowing a landlord to fairly assign a monetary value to items albeit in a subjective process. For example, if the tenant starts a tenancy with a 3 year old sofa, expected to last 8 years in total, and at the end of the tenant’s 2 year tenancy the sofa is damaged beyond repair not through wear and tear, the landlord has suffered the loss of the remaining 3 year expected 8 year life of the sofa. So the tenant must pay three eighths of the replacement cost of a like for like sofa.
An inventory is a detailed list of all the fixtures, fittings, appliances and other landlord items found within the property. The quality of the inventory is of paramount importance to both the tenant and landlord in order to avoid a tenant deposit dispute at the end of the tenancy. We are confident that Chestertons’ inventory process is the best available in Gibraltar.
The schedule of conditions is the detailed recording of the conditions of the inventory items and a record of the cleanliness of the property and the general items is also recorded.
The worst disputes arise when there is no inventory or schedule of condition undertaken at the start of the tenancy which is agreed by both landlord and agent. Photographic evidence is hugely advantageous. Being able to refer to such a document with photographic evidence at the end of the tenancy helps everyone know where they stand. Landlords and tenants should insist on one as it protects them both. At Chestertons, this is standard.
The ‘check-in’ is the process by which the landlord or agent introduce the tenant to the property at the time of moving in. The keys are handed over and the inventory is completed together with recording the condition of the property at that time. A check-in is often called a “meet and great”.
The ‘check-out’ is the process by which the landlord or agent inspect the property with the tenant (wherever possible) on or before the final day of the occupancy. The keys are handed back and the inventory is completed together with recording the condition of the property at that time
The tenant should have removed all personal items, placed all landlord fixtures and fittings back in the same place that they were at check-in and the property should be in the same (or better) state of cleanliness as it was at the time of check-in. The tenant should be ready to hand back the keys and sign the utility disconnection forms
The landlord (or his agent) must check the final condition and inventory of the property and compare it with the opening inventory. Photographs or other evidence must be provided to support any claim on the tenant deposit by the landlord. Any issues must be highlighted to the tenant. The landlord (or his agent) must then document their findings to the tenant which should justify any proposed deductions from the tenant deposit.
Allowed deductions are unpaid rent (or utility bills), damage (not fair wear and tear), missing items (replacement cost not new for old) and reasonable costs incurred to return the property to the state of cleanliness that it was on the starting day of the tenancy. Tenants should be careful to avoid additional rental charges where the property is not ready for re-letting at the end of the tenancy. For example, if it takes the landlord (or agent) 7 days following the end of the tenancy to remedy tenant defaults then the landlord may be able to charge an additional 7 days rent to the tenant. Chestertons provide a fully itemised statement at check-out for landlord’s and tenant’s approval.
The undisputed element of the tenant deposit is refunded within 7 days of the acceptance by both the landlord and tenant of the checkout statement. The disputed element of the tenant deposit is refunded once the dispute is settled.
Tell us immediately. The last thing you want is a legal action against you for unpaid rent. We will inform the landlord and take it from there. Although legally obliged to pay the rent for the remaining term of the tenancy agreement, there are situations where by negotiation the landlord may consider an early exit. This is by consent and not by any rule in the tenant’s favour, albeit honesty and early warning is always the advice to avoid a fractious and litigious conclusion.
Usually the answer is no unless you can demonstrate that the landlord has breached the tenancy agreement. To prove a breach, the tenant needs to have reported a fault (or a series of faults) which remains unresolved after a period of time. The test is normally that of placing the tenant in the position of the owner, i.e. could the tenant have remedied the fault quicker? Often in Gibraltar, the slowest part of correcting a fault is the availability of a specialist part which can take time to arrive. If the landlord can demonstrate that he has responded to the fault reasonably, using qualified contractors, then despite the fault taking time to remedy, the landlord will not have breached the tenancy agreement. Generally, if the agent acts quickly and manages the fault, it will be difficult for a tenant to prove a breach. Rent can never be withheld whilst a fault is being remedied.
The tenancy agreement requires the tenant to sign utility (water and electricity) disconnection forms (provided by Chestertons) so that once the property (including electrical appliances, lights, bathrooms etc) have been checked by the landlord (or Chestertons acting for the landlord), the landlord (or Chestertons) can submit the forms to the utility provider on behalf of the tenant. If the tenant disconnects the utilities prior to the check-out procedure, the tenant will incur additional costs from his/her tenant deposit to have the utilities reconnected so that the property may be properly checked. Once the property has been checked, Chestertons will submit the disconnection forms prior to the property being re-rented to another tenant, or will reconnect in the name of the landlord if instructed to do so by the landlord. The exposure to the tenant is typically less than £5. Unfortunately, we cannot adopt the UK model of reading the meter ourselves as the utility companies in Gibraltar do not operate that way.
Report it to us and to the management committee of your development. It is likely that your neighbours may be breaching the community rules and we will work with you to take these issues up with the management committee who should deal with the matters within your community. If there is no improvement we will work with you to report the problem to the police and / or the environmental agency. It is unlikely that this can be a reason to break your tenancy unless the noise is loud and persistent enough to mean that you cannot have quiet enjoyment of the premises.
Firstly report it to the resident’s management committee and to us as soon as you can. We can notify the landlord. It is the responsibility of the management company of the building to put this right. If the lift is out of action for a short period then you may have to grin and bear it as it is not the landlord’s fault. It is also unlikely that the lift will be part of the tenancy agreement as it is a building feature and does not belong to the landlord. If the lift is broken for a longer period of time you may be able to negotiate a small discount in the rent for the inconvenience. If you are disabled or infirm and it is difficult or impossible to access the apartment then you may have grounds for an early termination.
Legally no but we recommend that you take out: ‘property owner’s liability’ cover to protect against third party claims; loss of rental income cover if your property is uninhabitable due to an insured peril (for example fire, flood); buildings insurance to cover the original structure as well as any improvements or renovations; and contents cover to protect furnishings and appliances from insured perils. Your service charge payments may include some element of buildings insurance against the original structure but you should check this first and not assume that this is the case. We recommend that you speak with a local insurance broker.
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