Landlords should not be allowed to let their own properties

Landlords should not be allowed to let their own properties

21:50 PM, 17th August 2012, About 12 years ago 55

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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
So why are landlords allowed to let their own properties?

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!

  1. 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?
  2. 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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Comments

Mary Latham

10:59 AM, 18th August 2012, About 12 years ago

Ben I usually agree with most of what you say because we share a similar reality of the PRS. To be honest when the HA2004 was being discussed I said that there should be compusory licensing of all landlords with a SMALL national fee like a Driving Licence or Passport. In those days I worked closely with some VERY knowledgable landlords on the Executive of the National Federation of Residential Landlords. They told me that what would happen is that the SMALL fee would rise to become part of the income of Government or local authorities and that it would not make a scrap of difference to standards in the PRS just as the Road Fund Licence is not used to improve our roads. I argued that there are many bad landlords who need to be controlled before they bring down the PRS and make people afraid of renting from a private landlord. Mike Stimpson the Chair, told me "We don't want barriers to people investing in property to rent what we need to do is make it easy for landlords to be identified and that means getting them into landlords association so that good landlords can train them up so that they know what they are doing". Time has proven that Mike was right and I was wrong because I cannot see how Licensing of landlords has made any difference to the bad landlords, what do I see is the good guys paying through the nose so that local authorities have the funds to chase the bad guys. Even with those funds there are, 5 years down the line, thousands of landlords who should be licensed that have not come forward and have not been brought to book. I see relicensing fees that have increased by 200%+ on the original fee being charged to those good landlords who did come forward and are now only applying for a renewal.
Mike Stimpson I bow my head to you sir - you were right.

Mary Latham

11:40 AM, 18th August 2012, About 12 years ago

Oi Don't laugh at me Mr A I am not normally a woman of few words. If landlords remain legally responsible for our rented properties and the behaviour of our tenants while they are in those properties, as we do, the same legal system cannot take away our right to complete control of those reponsiblities. That would be like the law saying that I am responsible if a person driving my car breaks the speed limit but I am not allowed to be the person driving my car. In my humble opinion ONLY that ONE point is relevant.
If IO had said list the important issues that need to be addressed in relation to landlords and tenants that would be a different discussion.

Lisé Willcox

10:47 AM, 18th August 2012, About 12 years ago

Mike has had some bad experiences, I don't use agents as I look after my tenants better than they can, I'm available 24/7/365! that's why I never have voids! Recently we fitted adjustments to a house with 24 hours notice, the tenant had a sudden breast removal, (cancer), and was home same day unable to use left arm for 6 months, the council were going to do some more but it was going to take weeks due to red tape., I wanted the best instantly as I know behaviour breeds behaviour and I also happen to care! So I am on FB with my tenants and occasionally u notice a room or a garden and I'm always impressed, I don't do formal checks i just notice when called in to do spot maintenance , we supply white goods so occaisonally we are called out for that aspect too, and then there's the gas engineer (also on FB) information flows and we are like family. It may go wrong one day but the last 7 years with 8 separate properties soon to increase is working for us all. Two tenants are DSS financed and there is no restriction on pets or artistic licence! I think it helps that we are tenants of my father in laws! So we know how it feels not to own your home.

Mary Latham

12:08 PM, 18th August 2012, About 12 years ago

IO I said that a landlord cannot devolve the "legal" responsiblity. Yes a landlord can appoint an Agent to act on his behalf but that Agent is always "acting on his behalf" and it is the landlord who will carry the can if that Agent gets it wrong.
I agree that there are some awful landlords who should not be allowed to let their own properties but I do not agree that good landlords should be prevented from doing so. There is not an Agent in this country who could manage my tenancies as well as I do because I have the vested interest in the well being of my tenants and in ensuring that I comply with ALL the many pieces of legislation and regulation that all landlord should meet. I want to know my tenants and for them to know me, I want tenants to be able to talk to me about why their rent might be late, why they need to take in a sharer, why they need to leave the property before the end of the fixed term and anything that they need me to do to make their homes more suitable to their needs. Even the best Agents haven't got the same vested interest.
When I hold seminars to accredit landlords about a third of the delegates are also Letting Agents and I have some very interesting discussions about what they believe they are allowed to do on behalf of a landlord. Going to court to regain Possession. Taking prospective tenants to view the property "there is a term in the AST and the tenant has signed..." The tenancy must be renewed every 6 months or the tenants must move out at the end of the fixed term because the contract has come to an end. I could go on but I' sure that you see my point.
If you had said that all landlord must be registered and must prove that they are legally compliant I would agree 100%. If you had said that all Letting Agents must be regulated and must prove that they are legally compliant I would agree 100% but when you say that landlords should have no right to manage their own properties.......................

Ben Reeve-Lewis

12:46 PM, 18th August 2012, About 12 years ago

I think we are arguing over the same bone here. When I talk
about licensing I’m not just talking about HMO licensing which has no impact whatsoever
on my area of work with harassment and illegal eviction.

Although I agree that we don’t want to disincentivise
investment in the PRS I think it’s such a lucrative income stream that
landlords are hardly going to abandon it and invest in something else. Money
and property have gone hand in hand for thousands of years.

Mary I would never have expected revenue made from licensing
to be ring fenced to be spent solely on all matters PRS. You can bet your
licensing fee is being spent on social care or even street lighting, once it
goes into the council pot it could go anywhere. This is happening with
supporting people budgets. Money given to councils by government but it isn’t ring-fenced
so gets hived off to pay for some random element that has nothing to do with
vulnerable people. Landlords aren’t the only people losing out.

Council money is becoming more like Universal Credit, a lump
sum to make do with as best you can across the board coz you aint getting any
more.

My argument is, why bother using licensing money to fund
enforcement action? Why not chuck the Protection from Eviction Act 1977, the
Housing Act 2004 out the window and just make licensing mandatory with simple
loss of the licence the penalty for running dangerous properties or not
following the laws?

You wouldn’t need an army of enforcement officer to police
the PRS, just a small group in each council who pulls the plug on those who don’t
meet nationally set standards?

You can be prosecuted for beating the crap out of your
tenant but after your (paltry) fine you can still operate as a landlord. Where is
the sense in that? A few months back we whacked a landlord over an issue and he
was fined £20,000. The property was run by a limited company owned by his
elderly mum. So we won but all the landlord did was close the company. 10
people, 1 years work and for what? A criminal who knew how to play the system

Being a landlord can be a good earner, wouldn’t it be enough
of an incentive to know that your business would be shut down if you didn’t meet
standards?

Forget prosecutions, they are rubbish and do nothing to
address the problem. We need licensing

Mary Latham

12:57 PM, 18th August 2012, About 12 years ago

Lisa What a great post. I am always so proud to be a landlord when I hear from good landlords like you. I hope that you go from strength to strength

Mary Latham

15:14 PM, 18th August 2012, About 12 years ago

Ben when HMO licensing was being discussed, before the HA2004 became law, we were told by Government spokesmen that the local authority could only charge on the cost of adminstering the licence. LAs were not even meant to include the cost of inspecting that was "part of their normal enforcement activities". I still have the paperwork from the late 90's when all this was said. As you have said all this has gone by the board and landlords are now seen as cash cows for local authorities to top up their tills and replace the money that Government has withdrawn.
If you over milk a cow do you know what happens? Don't stand near its rear end!
You might imagine that landlords are making so much money that we will not leave the business but I can tell you quiet clearly that there are many of us just waiting for the property market to pick up in order to do just that. It is not just the cost of licensing, there is the cost of increasing rent arrears and damages/losses, the cost of meeting the needs of an increasingly demanding customer (not that I have a problem with that), the fear of Squatters, Article 4 Directions, loss of direct payment from vulnerable tenants, reductions in LHA rents, cut backs in supporting people funding, increasing ASB from people who should not be living in the PRS because they need the support that we are neither trained nor skilled to supply.
Many of us are at the stage when we no longer want the workload and worry and we will cash in our investments when the time comes. If interest rates rise, as they surely will at some point, many landlords will struggle to survive. You cannot do much with the £55 (minus Council Tax) a room the LHA landords in Birmingham get to house some of the most difficult tenants, especially when an HMO licence renewal fee is £850 and a new licence £1,150
If local authorities cannot afford the cost of enforcing the law that is no more the responsiblity of good landlords than the cost of covering rent arrears is the responsiblity of good tenants.
If you think that you have homelessness and high rents now wait 5 years and I will say "I told you so"
If you want a good PRS work with the good landlords and incentivise don't penalise

Ben Reeve-Lewis

16:56 PM, 18th August 2012, About 12 years ago

"Behaviour breeds behaviour" Spot on the money for me. One of the reasons why it is difficult for me to take action against bad landlords is that so often the tenants are just as bad. When seeking legal action for a landlord to correct their behaviour it comes under a branch of law known as "Equity" and in that area the saying goes "He who comes for equity must come with clean hands". What do you do when a landlord punches a tenant in the face and they respond by nicking the landlords furniture (caught red handed with hired van - happened to me last month, just when I was ready to serve the summons)
I have this theory that the worst landords and the worst tenants have a way of finding each other.
The PRS needs more like you Lise

20:14 PM, 18th August 2012, About 12 years ago

I believe I am a very good Landlord!

It is my belief that, if you look after the property you are looking after
your investment, and the Tenant benefits. I have all the statutory provisions
in place (gas certificate, electrical certificate, energy assessment, etc.), and I bother them for an inspection once every 6 months. Consequently, all my tenants are long term, i.e. in excess of 4 years! I don't have void periods!

I used to employ Agencies, but I found they were ripping me off - one Agency was cleaning out my gutters every month!

There may be bad Landlords out there, but I am not one of them, and I am sick and tired of all Landlords being tarred with the same brush!
Barry Hayden

22:14 PM, 18th August 2012, About 12 years ago

"You can't do an MOT on your own car". Quite right, but you can't do a gas safety check on your own property either. However, you are allowed to drive your own car - you do not need to appoint someone else as a driver.

I think everyone accepts there are bad landlords out there - and there are and should be safeguards so that tenants meeting their obligations can have "quiet enjoyment" of the property. But there are also bad agents. And even having agents may not stop bad landlords interfering - after all the landlord will still have a key and know various details about the tenants.

Or is Mike suggesting that landlords should have an automatic exclusion order banning them from going near their property or tenants?

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