What it takes to build a leading property business with Kristjan Byfield from the Depositary

And why you should always tailor your contracts

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In this episode, Legislate meets Kristjan Byfield, director of Base Property Specialists, co-founder of The Depositary and company director of Jack Property Maintenance. Kristjan shares how he built his property businesses and why contracts always need to be tailored to your specific situation.

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Charles Brecque: Welcome to the Legislate Podcast, a place to learn about the latest insights and trends in property, technology, business building and contract drafting. Today, I'm excited to welcome Kristjan Byfield on the show. Kristjan is the director of Base Property Specialists, co-founder of The Depositary and company director of Jack Property Maintenance. Kristjan, thank you for taking the time. Would you like to please share a bit of background about yourself and your companies?

 

Kristjan: Yes, Charles, thanks for having me. Yes, so, I have been an agent for about 21 years. I started my own lettings agency with my business partner, that's Base Property Specialists. We started that back in 2004, so that's an eighteen year old business. Very much meet the demands of that business, we started a maintenance company which literally just services our clients. It's not a business available to other entities. We started that, I'd guess probably 2008, 2009, and then Depositary which is a prop tech software product for letting agents. We started building that in 2016, launched that in 2020. So, that's a, sort of, streamlining and automation tool for the end of tenancies. So, yes, those are the businesses. I also sit on the Zoopla lettings advisory board. I spent two years on the seat of the UK prop tech association, so, yes, anything residential, lettings and tech orientated, I tend to be involved with.

 

Charles Brecque: That's a very impressive career and yes, you're quite a serial entrepreneur. So, through those twenty years in property, what's been your favourite moment so far?

 

Kristjan: My business partner and I started Base because we felt that landlords and specifically tenants were being massively underserved by the vast majority of the market. So, we felt there was a better, more service driven way to look after landlords but especially with regards to tenants. We've seen that, sort of, yes, pay off. We've got a very loyal client base. About 80% of our growth is through referral and recommendation. We have a fantastic tenant community. Anyone who thinks you can't get tenants on board just probably isn't trying hard enough. We've got some great tenant advocates who've brought friends and family on board to rent other properties with us, who rented with us ten, fifteen, eighteen years ago and are now property owners and are now coming back and giving us their properties, their investment properties that they've bought. So, yes, I think that in itself has been quite rewarding. I'd say probably crystallising that was probably 2016, at the ESTAS. I think you interviewed Ben from the ESTAS recently. So, we've been a huge advocate of the ESTAS. We've been entering the ESTAS for, I think about twelve years. We're a huge advocate for what it does in terms of, again, really validating what you do through customer and client feedback and focusing on a service element. In 2016, we were very lucky to I think win five awards at the ESTAS, including two of the UK Grand Prix awards. I think we won gold for landlords and silver for tenants, which as a little single branch office, was quite a humbling moment. We never really had aspirations to compete nationally. Our motivations behind entering the ESTAS was very much hoping that we could compete on the London stage, but also to enable us to benchmark where we're delivering the service we thought we were and giving our clients the opportunity to give us quite candid and frank feedback and I'm glad to say that, yes, that largely seems to be the case. I think to date, I think we've got nearly 700 ESTAS reviews on their review panel and I think our average score at the moment is something like 97.5%. So, yes, I won't be happy until we get to 100%, which will never happen, so I'll never be quite content. Yes, I think 2016 was the moment it crystallised for us, sort of, achieving that.

 

Charles Brecque: Congratulations and congratulations on those awards. What do you wish you had known before entering the world of property or starting your businesses twenty years ago?

 

Kristjan: I think from an entrepreneurial point of view, everything takes longer than you think it's going to take. So, just cut yourself some slack. You're not going to build a multi-million pound business over weeks or months or even a few years. It takes time. There are different strategies but yes, really just to be patient and I think the other thing which took a little while to learn is, I have become, from a business perspective, very much a, sort of, believer in karma. There's been some quite major events over the last eighteen years which at the moment in time they happened, they felt like the end of the world and like the biggest kick in the teeth ever but one to three months later, something else happens and you're like, thank God that did or didn't happen because otherwise, this wouldn't have been able to happen. Yes, I think the only example that immediately springs to mind is when we were starting the business up and we were actually, we nearly opened our first office up in North London because my business partner and I at the time were living in North London and that was the motivation behind opening an agency in North London. Literally the day before we were due to finalise the contract and sign, the landlord screwed us over and gave the whole shop to his cousin, which at the time felt like the biggest slight and the biggest disaster, right at the start of our journey, ever. Only for us to rethink where and why and that was when we decided, let's go and explore Shoreditch and came down here and we were like, yes, this is the spot and so delighted we made that move. I don't think the company would be quite the company it is now, had we opened where we originally intended to. That's just one example but I think, yes, being able to take, like I said, what at the time feels like a major slight or a catastrophic event and accept the fact that it's almost never as a bad as you think it's going to be.

 

Charles Brecque: Yes, that's great wisdom and I definitely can relate to setbacks but I guess with the right mindset, you can identify new opportunities or perspectives that just weren't imaginable before. You mentioned obviously one of your goals is to get to 100% score on ESTAS. What is the vision of the next goals/milestones for the next five, ten years?

 

Kristjan: I think the main thing for us is, we never stand still. Our business has never been the same from one year to the next. We're constantly tinkering and that will be a variety of things. At the moment, we're undertaking quite a lot of changes in terms of the staff and the structure, the staffing here and my partner and I have been in the office every single day of the week for the last eighteen years, apart from when we happened to be on holiday but other than that, yes, we have been here from the start to the end of the day, five, sometimes six days a week, for eighteen years and we're finally putting the framework in place that will enable, hopefully, that to change a bit. So, that's quite a major shift for us but actually, I find that quite exciting because the part I've always enjoyed is working on the business and this should give us more time to work on the business and work more closely with our staff and with our team and helping them grow and develop. So, yes, I think that's really exciting but for us, it's about constantly evolving. Nothing in our business is sacrosanct, nothing is set in stone. So, we're always looking at new ways we can do things, we're always trying to discover problems within the business, whether that be, like, a lack of operational efficiency or a recurring mistake that we make or something that constantly gets, what's the word I'm looking for, sort of, questioned by a certain party because there's obviously something we're not explaining. So, we're constantly trying to look and pick apart the business and think about different ways we can do things. We try not to look at things from the perspective of a letting agent. I think a lot of letting agents out there operate in a way that, oh, this is how I've always done it my whole career, so this is how it's done. We've always tried to look at-, not to look at things from that perspective, really look at a problem at face value and look at a genuine solution. A couple of examples I can think of that, that we run a couple of services through our letting agency, which we've run for a decade now. So, one we call basic appliances. So, we keep a stock of fridges, fridge freezers, plug in radiators, combi ovens and hot plates and the first thing we do at one of our managed properties, if a tenant calls up and says, my fridge has broken down, the first thing we do is we dispatch a fridge completely free of charge. We don't charge our tenant or landlord.

 

We dispatch a fridge immediately to the property, usually via Uber or I chuck it in the back of my truck or through Zipvan and we try within hours to have a product on place so they've got an immediate and temporary solution. That then obviously resolves any immediate crisis for the tenant. It gives us and the landlord breathing space to explore the issue and the possible solutions, without having to make a rushed or hasty decision. Then once we've fully solved an issue, once we've bought a new fridge freezer, whatever it is, then we'll just ask the tenants to give it a clean and we'll pick it up. So, that's something that came out of, you know, really looking at that issue. Most tenants frustration is the time it takes to resolve an issue and with things like a fridge freezer, with things like your cooking, your heating, they have a pretty direct and immediate impact on your tenancy. Actually, us solving that problem is actually quite easy. It's very low cost and it solves a massive problem. So, we've done that for ten years. Another scheme we rolled out around the same time was we rolled out a service we call Maintenance. Literally what that is, all of our tenants get a, sort of, basic property life skills tutorial when they move into a property with us. So, we'll first of all run through the logistics of the property. So, we'll make sure they know where the bin stores are, where their meters are located, where the stopcock valves are, where the fuse board is, where the heating controls are, all that sort of practical stuff, make sure they know those things and then we will run through basic skills like how to bleed a radiator, how to top up the pressure in your boiler, how to maintain your drains, how to maintain your appliances, how to look out for signs of condensation and how to address that. So, it's typically about a twenty to 30 minute life skills tutorial and yes, we've done that for ten years. Whenever we've dug back into the data on that, we've seen reduction of maintenance issues reported of about 30%, largely because we're just giving tenants the skills and the knowledge to deal with it themselves and we're also empowering those tenants with skills that should potentially be useful for the rest of their lives.

 

Whether they're renting or owning, they now know when their boiler cuts out not to straight away call a plumber out, they'll go and check the pressure first, check the fuses and things like that. So, I think those are a couple of examples of us looking, where does a problem lie and what's the solution and once we've landed on a solution, is it commercially viable and is it something that we include as part of our service or is it something that is charged as a premium or an optional extra? We try to steer away from optional extras, in terms of we try to-, in fact, I don't think we have any. We tend to deliver an all encompassing service. I've always been very candid that we're very lucky working in London. Our average rent sits around £2,000 a month. So, nearly double the national average and yes, so, we get paid very handsome fees by our clients and so we've always taken a route that we want to deliver them the best possible value for money that we-, and also try and deliver their tenants the best experience possible so that they will look after the property as much as possible, they will stay as long as possible, they will, yes, pay their rent on time and half the time, they'll even go, I'm moving out but a mate of mine would like to move in after me. So, yes, those are a couple of examples of how we try to look at things not from an agent or a landlord or a tenant perspective but just, what's a problem and how can we try and solve it.

 

Charles Brecque: Those are two very novel solutions that I haven't heard before from any other agents. Congratulations and I guess that also helps explain your great score on ESTAS. As a business owner and also letting agent, I imagine there are quite a few key contracts that you interact with. What are they and what can you share about them?

 

Kristjan: So, as a letting agent, obviously key documents are our business terms and conditions with our clients and obviously, primarily, our tenancy agreement and documents surrounding that Section 21 notices, prescribed information etc. Yes, they're vital documents. I'm always slightly surprised when I see agents or business owners in general take a slight laid back approach to contracts. Like, anyone got a contract for this I can use? We've always seen that as a pretty critical and fundamental part of our service delivery. So, terms and conditions wise, we feel like a contract should be all encompassing and should be very clear. Likewise, for tenants, we did a massive overhaul of our contracts probably about a decade ago, where we did a ton of research and we basically completely reinvented our tenancy agreement. It grew by about 40%, became a much bigger document but we changed the layout, we segmented the contract into really clear and logical areas. We did a lot of work on the language used, to try and make it really just play Layman's English as much as possible, and also to be as clear as possible. We go into a lot of detail around things like, what's a tenant liability if they lost their keys. We will talk about the structure that we will potentially change at least one lock at the property, that we will need to get X amount of copies cut. We make sure they understand it's not just replacing the lock, we will need to get copies for each tenant, we'll need a management set, the landlord will probably need a set. So, again, we try and make sure that we've got a lot of minutiae within our contract. Once in a blue moon, we'll have a tenant, sort of, push back and be like, A, God this contract's long and B, hold on, my flat doesn't have a garden and my house doesn't have a water softener and we've obviously got all these clauses which are quite bespoke to different properties and obviously, we don't tailor every single tenancy agreement on that basis but by and large, and actually, several solicitors that we've worked with over the years as either a client or a tenant have actually complimented us on the clarity of our contract, the detail that we go into.

 

So, yes, I think contracted documents form a really important part of your business and obviously, on the software side of the business, we have our terms and conditions, our business terms, contracts that our agent clients sign up to and then obviously, we've got our privacy and usage terms tenants are made fully aware of-, tenants and landlords are made fully aware of when using our platform. Yes, look, it's really important. I think way too many businesses, like I said, take a really laidback approach to their contracts. I'm always amazed when someone is perfectly happy and willing, like I said, to use a standardised document that they've downloaded from somewhere or some document that some person they don't even really know has agreed to give them. So, no, I think contracts is, yes, as an agent, I think it's one of the core fundamentals of delivering the services to agents-, sorry, to landlords and tenants.

 

Charles Brecque: Yes, that's great, and at Legislate, we definitely try to make our contracts easy to understand, easy to read and also, readable in different views, as a PDF with the language but also, as a set of questions and answers, because not everyone can digest a piece of text in one go. Then having everything online also is a great way to prove your compliance because it's one thing saying that you've given the information, it's another thing proving it. If you can do, that's great. Kristjan, I'm conscious I've already taken a lot of your time, so I'm going to ask you the closing question we ask all our guests. So, if you were being sent a contract to sign today, what would impress you?

 

Kristjan: So, I think, look, anyone not doing contracts on a digital platform, I just don't understand businesses that aren't facilitating contracts on digital platforms. I do still come across it and astonishingly, I sometimes work with tech companies who don't use digital contracts. I think that is really a necessity nowadays, for anyone to readily and easily access and sign a document, I think it's got to be on that. Then really, what we've already talked about. I think anyone supplying a contract has a duty to ensure that contract is by and large clear and easy to understand and comprehensive. Yes, I think anyone hiding behind a contract written in legalese, which no-one really understands-, my God, some of the head leases I read on properties that date back to 1920 or whenever they were written up, I'm sure it was some sort of bet had at a pub of what's the most convoluted language we can use. Yes, some of them are horrendous but I think, yes, really those two points. Digitally facilitated and easy to digest and understand.

 

Charles Brecque: That's a great answer to the question. So, yes, thank you very much for being on the podcast and best of luck getting to your 100% score on ESTAS.

 

Kristjan: No worries. Thanks a lot, Charles. Cheers.

 

Charles Brecque: Thank you, bye.

 

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