Landlords should not be allowed to let their own properties
I’ve recently had a heated exchange of emails with a chap called Mike who’s opinion is that “landlords should not be allowed to let their own properties”. I invited him to produce an article as he set me a challenge and I wanted him to offer his challenge publicly to the readership of Property118. Mike refused on the basis that we are self interest group and went on to say that he doesn’t expect me to agree with him “because you have a vested interest and are biased”. There’s nothing to stop me writing the article though and summarising the points he made and the gauntlet that he threw down which I refused to pick up unless it was in public forum.
I know Mike is an avid reader of Property118 and even though we had some heated exchanges and several fundamental differences of opinion I will not reveal his identity. He may however, wish to post on this thread – he is a regular poster here under the pseudonym “Industry Observer”.
Mike made some interesting remarks in his emails along the lines of:-
- You can’t do an MOT on your own car just because you own it
- You can’t sell pensions unless you are authorised
- You can’t perform surgery unless you are qualified
And to quote Mike word for word ….
“What chance have private Landlords got of getting it right? I don’t blame them but I do think tenants need protecting from it. Housing is just too important in my view.”
And when I pointed out that a landlord takes on a lot more risk when he hands over the keys to his property than a tenant does when he pays his first months rent and deposit Mike said ….
“Depends if the house is safe of course, whether you have had the gas boiler gas safe registered in the last 5 years, will come barging in when me and my missus are in bed (drunk and with a baseball bat in your hand etc etc) and so on. You get the picture? What risk anyway? The Law is on tenant’s side but only short term all cards are in LL hand in long game.”
This is the gauntlet that Mike threw down ….
“You are convinced any private Landlord should retain the right to let their property and manage it themselves with minimal intrusion and interference from outside. Fine – forget you are an expert and socially conscious and legally aware Landlord. You give me 6 good reasons why these other not their fault necessarily but unaware Landlords should be allowed to. If you get past 3 I will be impressed!!”
Below are some extracts from the emails and the points I made to counter Mike’s arguments. Note that I did not take up his challenge, I want the landlord community to do that because I suspect that as landlords we are going to have to deal with a lot more people like Mike in the not too distant future. Politicians and the mainstream press will no doubt encourage it as it makes for good reading and potential vote winning campaigns. As landlords we are considered to be soft targets. We must unite and fight back!
- Mike, what’s your definition of a competent letting agent? I’ve walked into several letting agents offices with a national presence which are members of ARLA, NALS, SAFEagent, RICS etc. and I have been greeted by completely incompetent clueless bimbo’s offering advice on lettings to both landlords and tenants. These firms operate in every City and most towns. How would you stop this?
- If a licence was no more expensive or difficult to obtain than a TV licence I think that would be fair. Then, when landlords are found guilty of the types of criminal activities you have described below the licence should be revoked. Lesser offences are already punishable by fines, e.g. no gas safety certificate or failure to protect a deposit etc. With regards to lesser offences, licencing of landlords could operate on a three strikes and you are out basis. If it was made illegal for mortgage lenders to lend to unlicensed landlords and for Courts to take possession of any let properties from unlicensed landlords and sell them at auction that would certainly cut out 90%+ of the problems don’t you agree? Trouble is, that’s the concept on which legislation is often first discussed, then the do good numpties in Whitehall start bolting stuff on like exams, compulsory CPD, submissions to regulators etc. and economies go into reverse thereafter very quickly in real terms, viz financial services as a result of the FSA.
So, who wants to be first to take up Mike’s challenge?
“You give me 6 good reasons why these other not their fault necessarily but unaware Landlords should be allowed to. If you get past 3 I will be impressed”
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Member Since September 2011 - Comments: 882 - Articles: 30
10:26 PM, 17th August 2012, About 14 years ago
1.
Landlords
2.
Are
3.
Legally
4.
Responsible
5.
For
6.
Everything
7.
That
8.
Happens
9.
In
10.
Our
11.
Rented
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Properties
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And
14.
Cannot
15.
Devolve
16.
That
17.
Responsibility
18.
To
19.
Anyone
20.
Else
1.
Landlords
2.
Are
3.
Legally
4.
Responsible
5.
For
6.
Everything
7.
That
8.
Happens
9.
In
10.
Our
11.
Rented
12.
Properties
13.
And
14.
Cannot
15.
Devolve
16.
That
17.
Responsibility
18.
To
19.
Anyone
20.
Else
11:09 PM, 17th August 2012, About 14 years ago
For Mike: what is the difference between a landlord and a letting agent?
Comments: 1108
3:23 AM, 18th August 2012, About 14 years ago
Brilliant and emphatic response Mary
Couldn’t have put it better myself!!
8:01 AM, 18th August 2012, About 14 years ago
If Mike had made the point that landlord licencing should be introduced – as recommended in the Rugg report I think – and that we should all belong to a professional body (such as the National Landlords Association) – and that we should, perhaps, undergo “Continued Professional Development” to retain our licence etc ….
I would have supported him in principle ………. but would have challenged how this might be implemented …. and policed ……..
But to suggest – because landlord licencing does not exist – that landlords should rent out their properties by using a letting agents (who are usually less qualified than the landlord) …. or an ESTATE AGENT (who are usually less qualified than letting agents or landlords or pond life) …… is absurd.
I do think the whole letting industry needs much tighter regulation and that is something that we should all be lobbying for ……. so that we can get rid of rogue landlords, rogue letting agents and rogue estate agents so that our tenants are protected.
Member Since November 2011 - Comments: 556 - Articles: 39
8:36 AM, 18th August 2012, About 14 years ago
I actually understand all of Mike’s points, including the
belief that housing is very important but I’m not so strident in support of
them.
I think his car/MOT analogy is a good one.
I am fully behind Mark’s suggestion of cheap licensing with
a 3 strikes and out rule. This is basically what is being proposed in the Welsh
model. I don’t believe it has to be expensive, landlords aren’t cash cows to be
milked by local authorities and the value of licensing isn’t in income generation,
its in the ability of enforcement officers to take swift and effective action.
As you all know I’m a TRO but I rarely get the chance to
enforce because the legislation at my disposal is criminal in the main and we don’t
have the support of either the police or the courts when we try to take action
against a criminal landlord (I refuse to use the term ‘Rogue’ its too all
encompassing and vague at the same time) Plus, even if you are successful the
criminal that you just prosecuted still gets to go on trading.
Licensing on the other hand gives us a quick solution, in
that we can pull the license on the criminal and take them off the board, just
like points on a driving licence. In the Welsh model you have to pass
management of your property to someone with a licence.
Because the vast majority of breaches of landlord/tenant law
that I see are committed in ignorance of the law I would like to see compulsory
training as part of that licence, so that landlords would at least know that
the laws they are breaking are there.
I start training my council’s PRS tenants next month too.
Every tenant who seeks property through us has to go on a training course so they
understand their rights and obligations too and what can happen to their future
lettings if they screw up. We are also guaranteeing to indemnify the landlord
against rent or damage with a bond scheme but that is underpinned with a loan
set up through our credit union and the tenants have to pay into it for the
period they are in the tenancy. Working this way if the tenant leaves with a
clean sheet they actually have some savings and if they default we lose less
money.
Working in this way we hope it will professionalise the industry
and promote self responsibility among our tenants.
Mike is right, housing is too important to leave things
being run as they have been but unlike Mike I don’t believe landlords shouldn’t
run their own lettings. It can be fun and inspiring and we would lose much.
Look at HMO Landlady and what a star she is. What agent could run an HMO like
her? Treating them as if they are part of an extended and dysfunctional family.
Member Since January 2011 - Comments: 12212 - Articles: 1408
8:47 AM, 18th August 2012, About 14 years ago
I agree with you on many things Mark but this is going to be one of those exceptions. Landlords voting for regulation would be like turkeys voting for Christmas. The reason I feel this way is that I pushed VERY hard for the regulation of SARB (Sale and Rent Back) in the hope it would clean up the industry. The result was that SARB no longer exists and that, I believe, is to the detriment of society. If you see the OFT report which lead to SARB you will see that my former company “The Money Centre” pulled together a group of 800 landlords called NASARB – the National Association of Sale and Rent Back. We provided more research and insight than any other contributor, warts and all and clearly demonstrated good practice and working models. Several beneficiaries of the scheme were interviewed by the OFT who said it was a positive life changer for them. Obviously some had also been fleeced by rogue operators. The bottom line though is that regulation hit the industry like a nuclear bomb and killed off the innocent as well as the bad guys. SARB no longer exists. Be careful what you wish for.
Member Since January 2011 - Comments: 12212 - Articles: 1408
8:51 AM, 18th August 2012, About 14 years ago
“We are also guaranteeing to indemnify the landlord against rent or damage with a bond scheme but that is underpinned with a loan set up through our credit union and the tenants have to pay into it for the period they are in the tenancy.”
This is VERY interesting Ben and certainly worthy of an article in it’s own right
Member Since November 2011 - Comments: 556 - Articles: 39
9:09 AM, 18th August 2012, About 14 years ago
No time for an article this weekend but basically many
councils come up with bond schemes which promptly go bust because they just
chuck money into it and the tenants aren’t expected to do anything themselves,
not even pay it back. Its the most shortsighted way of working you can imagine.
I didn’t want that to happen when we got the money from govt
so sat down with the brilliant Liam and Janet from our Credit Union and we
adopted their ‘LoanSaver’ account system.
We put up the bond against rent arrears and damage. The
landlord doesn’t get the money, we just guarantee it in the event of a default.
The CU sets up a loan account the tenant has to pay into
from the start. Many cant afford much but they have to put something in,
usually they just sign child benefit over for 1 child. One of their previous
customers took out a loan a few years ago and signed her child benefit over to
clear it. She forgot she had done it and went back in recently for another
loan, only to find she had nearly £4,000 savings. She cried with relief
apparently.
So this isn’t just about bonds, its about encouraging people
to save and change their attitudes to budgeting ahead of the disaster that is
going to be Universal Credit next year
If the tenant leaves without arrears or a damage claim then
they have savings to move on with. If we pay out then the money they have put
in gets put towards our liability and we chase the tenants for the rest. That’s
the other radical part of the system, they have to pay us back haha
The training bit is linked to the London Landlords
Accreditation Scheme in that the tenants goes on a database as a trained
accredited tenant which we encourage London’s 22,000 LLAS accredited landlords
to take on. Just like we can place criminal landlords on our naughty step
database we can remove tenants from the accredited list.
As this grows over time we hope it will become the London
norm
Member Since January 2011 - Comments: 12212 - Articles: 1408
9:12 AM, 18th August 2012, About 14 years ago
An agent can screw up by “forgeting to renew his PI and CMP” and his Limited Company can go bust leaving the landlord to pick up the pieces and potentially risk personal bankruptcy and/or imprisonment if/when:-
1) a tenant dies due to fire or carbon monoxide
2) the agent forgets to get a gas safety certificate
3) the agent fails to complete adequate due diligence on tenants
4) the agents inventory is defective
5) the agent forgets to protect a deposit
6) the agent enters a tenanted property without permission
7) the agents serves the wrong notices
8) the agent illegally evicts a tenant
Oops!
Mike only wanted 6 reasons didn’t he?
I could go on but having invested £millions into establishing a property portfolio these are just a few reasons why I believe that I (and other landlords) should be allowed to be in control of my own destiny and choose whether I want to appoint an agent.
These answers to Mike’s questions are just a few spin off from the one point that Mary made in 20 parts LOL.
Feel free to add more please.
Member Since January 2011 - Comments: 12212 - Articles: 1408
9:27 AM, 18th August 2012, About 14 years ago
Sounds VERY promising Ben, I hope it takes off. You might even win over the Paul Barrett’s of this world with this LOL