It’s been a hot topic in the private rented sector recently: should all landlords be regulated in order to ensure tenants aren’t targeted by rogues? So far there have been a number of statements from those both for and against mandatory regulation of the private landlords, and now it seems as though landlords on the Isle of Man are weighing into the debate, especially as legislation may pass there in the near future. Continue reading
Under new government plans by 2018 any property that has an Energy Performance Rating of ‘F’ or ‘G’ will no longer be allowed to let out their property until improvements are carried out, and from 2016 all private landlords will not be able to refuse a tenant’s request for reasonable energy efficiency improvements to their properties. This is why the government set up the Green Deal scheme, which allows landlords to have energy saving upgrades to their properties for free, as it not only helps the government reach their sustainability targets but also helps lower tenants’ utility bills. Continue reading
So far there have been numerous landlord and letting agent associations that have criticised the new Immigration Bill which states that it will now be a landlords’ responsibility to make sure all their tenants are in the UK legally. Many have had concerns over how the plan will work, and others are saying that it is unfair for the government to make landlords spend their own time and money doing a job that they believe is the government’s responsibility. Continue reading
If you are a landlord in England or Wales you will already know that once you take a deposit from a tenant you must by law place it in a deposit protection scheme within thirty days. You must also give your tenants information about the scheme that you chose, and provide them with a copy of the paperwork, or you could be eligible to pay a fine of up to three times the amount of the original deposit. Continue reading
Last Friday we wrote a post discussing how under the government’s new Immigration Bill landlords will soon be expected to vet all their potential tenants in order to make sure that they are in the country legally. So far there has been a massive amount of criticism from private landlords over these new plans, especially as so many are concerned that vetting all their new tenants will be expensive, time consuming, and confusing. Continue reading
Due to the state of the economy many banks are becoming more stringent when it comes to lending mortgages, which has led to many people struggling to buy their own home. This has put even more demand on the private rented sector, and while buy-to-let landlords are more likely to get mortgages from the bank, there are still difficulties some face when it comes to making sure they are getting a good deal and not end up paying for expensive fees and charges. Continue reading
Due to the huge demand for private rented accommodation throughout the UK, more and more landlords are choosing to expand their property portfolios and enlisting the help of letting agents in order to manage their houses and tenants. However, there have been complaints from both landlords and tenants over rogue letting agents who charge large fees yet do not provide the services they promised, which has led to the government deciding to introduce regulations for all letting agents.
Unlike estate agents, letting agents are currently unregulated by the Office of Fair Trading, however there are some that have voluntarily signed up to licencing schemes such as Arla, the Royal Institution of Chartered Surveyors, The UK Association of Letting Agents and the government-backed National Approved Letting Scheme. Last week the House of Lords voted in favour of regulating the industry, and if the House of Commons agree the regulations could come into effect as early as next spring.
In an interview with the financial times, Lady Hayter, a Labour peer who spearheaded the amendment, said: “This is the right thing to do for tenants and landlords. The government says they want to increase the private rental sector but you will only bring in new landlords if they feel confident that a letting agent will look after their property properly, will choose good tenants and won’t run away with their money. This is good for the private rental sector.”
Those who work in the lettings industry also welcomed the move, with managing director of the Association of Residential Lettings Agents (Arla), Ian Potter, said: “The news that the House of Lords is in favour of regulating the lettings industry marks a significant win for professional lettings agents up and down the country, who are doing a good job every day, but whose reputation is being tarnished by rogue agents.” Over the past five years The Property Ombudsman has seen complaints concerning letting agents double, and last year there were around eight thousand complaints from landlords and tenants.
Landlords can generally rely on their landlord insurance policy to help them with court costs and legal fees if they want to file a dispute against their letting agent, however due to the lack of regulations at the moment many cases are often thrown out. Hopefully, the introduction of new regulations for letting agents will not only improve the industry’s reputation but also benefit those letting and renting private rented accommodation.
Due to the fact that many people living in the UK are struggling to get on the property ladder the popularity of right to buy programmes has increased dramatically, which is where those living in social houses are allowed to purchase their property after living there for five years at a discounted price. However, during the first five years the property is still owned by the landlord who can make decisions when it comes to maintenance and repairs for the property as long as they consult their leaseholders first.
There have been many disputes over the years between landlords and leaseholders over the cost of property repairs and who should pay how much, a large amount of which have even ended up in court. One such case that has been discussed in the press recently involved the property giant Daejan Investments and the tenants of one of their properties who claimed that the landlord failed to consult them before undertaking repairs on their building. Originally, the courts sided with the leaseholders meaning that they no longer had to pay the sum of £56,000 each, but just the minimum amount of £250 instead.
Now, the UK’s most senior judge, Lord Neuberger, has overturned the decision as he felt that even though the landlord was guilty of not consulting with its tenants properly, the amount the tenants now had to pay was too low. This decision has caused widespread shock across the legal world, as before now courts were known to side with leaseholders over landlords during this type of dispute, and this new decision will change the whole way that these types of cases are resolved.
Discussing the decision, a partner at the law firm Devonshires, Nick Billingham, said: “Lord Neuberger said it wasn’t a charter to ride roughshod over the rules, but that we need to come up with a structure with which they [landlords] have to comply, but if they don’t comply then tenants shouldn’t get a windfall.”
This is good news for social landlords as it means that they will no longer either win or lose in this type of case, but find a new middle ground which is fair for both them and their tenants. It will also be interesting to see how these legal changes will not only affect social landlords, but also private landlords, tenants, landlord insurance providers and other industries that are connected with the rented accommodation sector.
Evicting a tenant isn’t easy, especially as all landlords have to go through the courts in order to get a possession order before they can legally evict their tenants. Many landlords used to find this difficult due to the fact that it could take a long period of time for the courts to decide whether to agree to a possession claim, meaning that if a tenant is defaulting on payments then the landlord would continue to lose money.
However, the courts have now introduced an accelerated procedure meaning that landlords no longer have to wait for a long period of time to find out if they are allowed to evict their tenants and recoup their losses. This has led to a massive increase in the amount of possession claims being issued to the courts, with the latest statistics showing that last year there were 103,329 possession claims, between 67 and 80 per cent of which led to a possession order.
Most of the time landlords apply for a possession order when their tenants consistently default on their rent payments, and with the upcoming welfare reforms it is likely that even more landlords will be going to the courts in future. Michael Portman, Managing Director of LetRisks said: “With rents rising by up to 11% in some areas, tenants are faced with rising rental and living costs. For some, the pressure is too great and they fall into arrears with their rent.”
“The continuing rise in possession orders is a sign that the situation is getting worse. Letting agents need to advise landlords on how they can reduce the risk to landlords. One simple way is legal expenses and rent insurance which gives landlords piece of mind and more importantly insurance cover, arrears and legal costs of evicting the tenants.” Landlord insurance providers can often help when it comes to evicting tenants, especially when it comes to costs, however landlords have been advised that if they wish to evict a tenant they need to make sure they comply with the procedures.
Landlords who wish to evict tenants must firstly fill out a Section 21 notice accurately before sending it to the courts; otherwise it could be thrown out. Last year, seventy per cent of possession orders were dismissed due to the fact that the information on the Section 21 notice wasn’t filled out properly, meaning that landlords faced even more delays and costs from the process.
In April last year legislation changed concerning Tenancy Deposits, and the Residential Landlords Association (RLA) has stated that they are concerned that some landlords are still not entirely sure what is required of them, which could lead to them ending up in court. The recent case of Ayannuga vs. Swindells has highlighted the importance of landlords handling their Tenancy Deposits correctly, especially as the landlord eventually had to pay £950 to the tenant.
The court heard that the landlord had not stuck to regulations as he had not provided an information leaflet to the tenant concerning how the Tenancy Deposit scheme worked, even though he had undertaken the other regulations set out by the government. The current rules state that all landlords that take a deposit for an Assured Shorthold Tenancy must firstly protect the deposit in one of three government approved schemes within thirty days of receiving the money.
After this, landlords must issue the tenant (or whoever has paid the deposit on behalf of the tenant) two documents within thirty days – the first being a completed copy of the Prescribed Information including any scheme leaflet, and the second a copy of the tenancy deposit protection certificate. Finally, landlords have to set out clearly in their tenancy agreements how the deposit is being protected and where.
If found guilty of not adhering to all of these regulations, landlords can find themselves having to pay out three times the amount of the initial deposit – which is what happened to the landlord in this case. The RLA have therefore said that it is important for all landlords to make sure they talk to the provider of their deposit protection scheme in order to make sure that they do not miss anything out.
If you do forget to place your tenants’ deposit in a government scheme, or issue the correct paperwork before the thirty day deadline, then you will be subjected to a fine unless you are lucky and given some leniency as long as you fix the situation immediately. Also, be aware that some landlord insurance providers may also have clauses in their contracts that state that they will not cover you if you do not comply with the Tenancy Deposits regulations, so you could end up having to pay for the fines out of your own money.