Landlords – what are your suggestions to better the current chaos in the PRS?

Landlords – what are your suggestions to better the current chaos in the PRS?

by Readers Question

Guest Author

14:03 PM, 28th November 2022, About 2 years ago 35

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Hello, Every landlord, big or small, must by now have felt the effects of repeated changes to legislation and taxation in regards to the PRS.

On any landlord forum you will find lists of landlords giving lists of what is wrong with the system, but I’ve yet to read anybody giving tangible solutions.

So, as a landlord, what are your suggestions to help fix this sh**storm that is the current PRS?

My starter for 1.) Government buys property from landlords who want to sell up at market price minus CGT and any refurb costs. Landlord pays no CGT on the sale, but have the option to refurb (if necessary) to a set habitable condition before sale. Tenants don’t lose their homes, landlords don’t lose money for selling with tenants “in situ”, more housing stock moves back to government ownership, and the revenues lost from the CGT are offset by local council not having to bear the longer-term costs of “rehoming” tenants in hotels/hostels who’ve been evicted by property sales.

2. (This one is bound to be contentious but hear me out)…
Make non-payment of rent a CRIMINAL offence. However altruistic we may wish to be, at the end of the day, in any other sector, if you take something (be it an object or a service) and don’t pay for it that would be classed as THEFT! Most long-term landlords will at some point have to deal with the a**e-tightening ordeal that comes when a tenant stops paying rent. While there will be some genuine cases where circumstances have contrived to put tenants in a desperate hole, in the majority of cases tenants stop paying rent because they know they can get away with it – with little or no comeback. If a tenant owns nothing, doesn’t work, and has no guarantor to answer to, then what do they have of value to lose apart from their liberty? If there is actually a serious consequence (other than 9 months rent-free and moving onto the next sucker) when rent goes into arrears, would this not be more incentive for tenants to pay and landlords not be forced to evict as a consequence? Aside from being fairer to the good tenants who now don’t face eviction (because their landlord has had enough and is selling up), a criminal conviction for rent arrears is a fair reason for automatic eviction (and also future reason for refusal to rent) that could easily be flagged up on a credit check without the costly expense of a “rogue tenant” database. This in turn saves landlords the expenses of s21/s8, and baliffs fees, saves court fees spent on the chancers and time-wasters, and frees up courts for geniune cases where there’s been a valid reason for non-payment.

3. In those cases where tenants believe they have a genuine case against disrepairs/a rogue landlord then rent should still be paid into a holding account with a tenancy dispute company (similar to the deposit companies) until the case is heard. Then if the case is found to be invalid the landlord gets his money due, or money can be taken from the accrued account to pay for necessary repairs etc. None of this unnecessary “rogue landlord” database b****cks, or “no win- no fee” ambulance-chasing lawyers that are springing up.

There’s bound to be holes in my arguments, but what else would you, as a landlord, suggest to make the system better?

Thank you,

Raz


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Comments

The Forever Tenant

15:52 PM, 28th November 2022, About 2 years ago

Here are my thoughts on the above.

1) Great idea. Shame it's not already in place. Probably one of the best ways to get housing back into the public hands and give the governments and future councils an ongoing income.

2) Bad bad bad idea. On so many levels. aside from this being against all other contract law out there, this leads itself to considerable issues.

How late would someone have to be to be considered breaking the law. 1 day after rent is due, 1 week, one month? what if a technical issue prevents a payment coming through?
If someone is laid off, in addition to worrying about another job, do they also have to worry about getting arrested as well?

Laws regarding debts in this country are very specific and debtors prisons have not been around for a long time. We as a country never want to go down the route of jailing people for a debt. This is a terrible idea.

3) I can see this working, although awkward to implement. I believe that similar is done in the US where the tenant will place the rent into a separate account until the issue is resolved, potentially using that money in that account to resolve the issue.

However, considering how many landlords already think that the DPS, TDS, etc are bias against landlords, I doubt that many landlords would wish a third party to get involved in the decision.

I may need to be corrected on this, but unlike the US, there is no system for a tenant to retain rent due to disrepair and the rent must always be paid no matter the severity. of the disrepair.

This one is an awkward one as levels of disrepair can be subjective. So who should pay to have claims investigated?

Smiffy

7:43 AM, 29th November 2022, About 2 years ago

1. The "magic money tree" doesn't exist.

2. As indisputable crimes like credit card fraud and personal banking scams go uninvestigated, the chances of unpaid rent, that will no doubt have mitigating circumstances, getting investigated are nil!

The civil laws we currently have would be okay if Courts applied them as written

Raz

8:44 AM, 29th November 2022, About 2 years ago

Reply to the comment left by The Forever Tenant at 28/11/2022 - 15:52
Re: 2 ) Say for example the existing s8 2months/8 weeks is taken as the timeframe before eviction for non payment. As is, most tenants who genuinely have a reason for going into rent arrears would contact their landlord and explain the situation, and most landlords are happy to try and work with good tenants in this situation and come to an arrangement. (After all, it costs a landlord a hell of a lot more to evict and find new tenants than it does to work with those in true need.) If no agreement is made, in those 2 months the tenant would also have the opportunity to defend their case.
On the other hand, the current system has no method to deal with "professional rogue tenants" with no assets, who consistently and purposely build up arrears, wait for eviction, then move on to the next property to do the same. A CCJ is of no consequence to these people.
While the landlords have to not only put up with up to a year of lost rent while tenants stay put until the baliffs show up, they also have to bear the costs of solictors, multiple court costs for eviction, then possession, then baliffs as well as an MCOL/CCJ. Oftentimes major refurb costs are neccesary, and more rent is lost while doing so, followed by the costs of finding a new tenant.
So how does the landlord recoup his losses? By putting up rents on other properties (if he has them), or just cutting his losses and selling up completely. These professional fly-by-nights are not only affecting the landlord, but also other tenants in the process. It is this situation that has pushed many landlords to stop taking tenants on benefits or those without a guarantor.
While this does not help a landlord recoup all his losses, at least it would help minimise them, and in turn minimise the effect on other good tenants.

Re:3) The tenancy deposit services ARE biased in favour of the tenants, but also many landlords don't realise the value of (or don't bother with) proper inventories, regular property inspections, and understand the basic principle of a tenancy dispute - that they can't come out in better position than when the tenancy began.
I propose a separate entity entirely to deal with disrepair disputes, give landlords a set criteria for what is (or makes) a property habitable (or not) instead of vague and subjective HSHRS standards, and set time frames for different types of repairs. If interest was allowed to be gained on the arrears monies held by the governing entity, in theory this could be self-funding.

Raz

9:02 AM, 29th November 2022, About 2 years ago

Reply to the comment left by Smiffy at 29/11/2022 - 07:43
Magic money tree : Councils in England spent £1.6 BILLION on temporary housing alone between April 21 and March 22. If you take the nationwide average (excluding London) cost of a BTL property at £150,000 that would give just under 10,700 rental properties returning to local government - also creating rent revenue to buy or build further properties.

David Houghton

11:16 AM, 29th November 2022, About 2 years ago

Reply to the comment left by The Forever Tenant at 28/11/2022 - 15:52
Yes you are wrong on your last point. Tenants can withhold rent if there is s11 disrepair. Which is why S8 proceedings can be dragged out, which in turn is why landlords use s21

Susan Bradley

11:16 AM, 29th November 2022, About 2 years ago

1) A good idea if it could be implemented.

2) A bad idea - not because I don't agree with it but because it would be impossible to implement. What you and I would call bad tenants the other side describe as the "most vulnerable". Being totally irresponsible is rewarded in the UK.

3) A good idea and I think it would be widely supported.

However, as with any good ideas that are widely supported those in charge are unlikely to put them in place. The reason for this is that MPs having been putting the "cart before the horse" for the last 30 or so years. They forget that they are there to tell their colleagues what it is that the voters want. Instead, they really do believe they their job is to sell us what the party line is. It began when Tony Blair was successful in amending Clause IV.

Darren Peters

11:24 AM, 29th November 2022, About 2 years ago

1) Has the built in assumption that the council will somehow do a better job than a decent private landlord. Something I find is almost never the case. When you hear about mold in the press it's nearly always council housing.

The council are defacto not held to account - they mark their own homework. Any criticism is always met with, 'it's central government's fault, we don't have enough money'.

The council would be incentivised to squeeze the landlords who have invested in and have decent properties since it's no work for them (short-termism) as opposed to the awful properties that would require the council to make an additional investment.

Switching owners does not solve the housing shortage. More housing stock needs to be built.

Rerktyne

12:06 PM, 29th November 2022, About 2 years ago

There is a more effective way to deal with the housing problem. I know of a very “big” landlord who built his empire on the proceeds of crime. He is actually a good landlord. Good tenants love him. Rogue tenants however manage to break the olympic record when his “assistants” pay them a visit. Those still with kneecaps, that is.

Mick Roberts

12:29 PM, 29th November 2022, About 2 years ago

UC direct payment to Landlords & MAKING UC talk to the very important Landlord would solve thousands of homeless-Maybe 50% & save £6 billion + in one foul swoop.

Instantly stop Selective Licensing which does nothing to improve a house & in fact makes the majority houses worse off from now more admin & less funds. To counteract that, bring in MOT's for houses if u wish, but care must be given for tenants wrecking.

Why are we introducing EPC C RETROSPECTIVELY for houses that tenants have already moved in to 20 years ago, paying very cheap rent, & Govt wants us to spend 30k on heat pumps, underfloor insulation etc. WHILE tenant living there. What does Govt think will happen here? Landlord sells or increases rent no longer can look after tenant.

As it, Govt are telling tenants what they want to hear, which then reduces supply & makes tenants worse off. We have zero competition.

I'll sell all my houses to the Govt yes please.

Makes u laugh, tenant can claim rent from Govt ie. DWP UC, spend it on what they like, but it's not fraud?

U say some great words Raz.

Hamish McBloggs

14:02 PM, 29th November 2022, About 2 years ago

Courts are overworked and we all have to grub around in vaguaries, opinions.

This is the digital age. Perhaps ...

For the average small landlord there is a common set of paperwork and processes.

These should be automated, time stamped and available via a portal accessible to landlords, tenants and their representatives and the courts. 24/7

Paperwork that would be automatically provided and issued could include the how to rent guide, the EPC, electrical certification, gas safety certs etc.

Documentation that govenment departments are constantly changing would be updated and automatically disseminated without a LL haveing to realise via a forum or advisor.

Issue would be via post, email, text, WhatsApp (all of them) and to any representative e.g. a tenant representative at citizens advice or a LL's solicitor. The notices would be presented to the subscriber when logged in.

Documents, just in the same way as courts assume receipt of a notice, will be deemed to have been served after a period of time. This process is automatic and noone will be able to deny receipt of anything.

Deposit protection schemes will continue to operate as they do but they must provide all relevant certifications and notices to the portal. These will then be automatically served without a LL unitentionally forgetting.

Any inventory or condition reports (which could include video) can be stored and made available 24/7

The portal will state what the maximum deposit is so there are no rounding errors leading to a massive fine. The portal would not permit a larger than maximum deposit.

The portal will provide reminders to both LL and tenant. e.g. When the gas cert is due or when wiring inspections must take place.

The portal will automatically reissue how to rent guides when a tenancy moves from AST to periodic together with any relevant documentation.

The portal would provide the 'rent statement' together with warts and all early and late payments.

All information available to all 24/7

A LL may request actions of the tenant or vice versa.

If a notice is to be served eg. s21, then all paperwork is instantly there with no need for either landlord or tenant to scratch around for it. It can be automatically submitted as a package to the courts and the effort required of the judge is then limited to dealing with the judgement and not wasting time checking key paperwork and timelines because these will be correct as it was driven by the portal.

If s21 is restricted or repealed then the portal rules are updated accordingly.

The portal could operate many processes during the tenancy e.g. The landlord can 'book' and inspection. The tenant can counter propose but may not refuse more than 3 times say. The request/refusal history being there for the record.

The portal could 'demand' a deposit be cleared and prevent the completion of an AST (and release of the keys) if a deposit remains unpaid (because it forms part of the agreement).

Witnesses to documentation can use electronic signatures.

The portal can warn the tenant if they are late with the rent and propose opportunities for resolution. Supporting organisations would have the opportunity to get involved and proactively help rather than wait for a tenant, who might not seek help, be worried or frightened.

Another example, a tenant that leaves and takes the keys then 'goes dark' will be given the opportunity return the keys after which they will 'default' and the tenancy is ended without recourse to the courts to regain possession.

Automate the processes regards the stuff that gets left behind. An automatic time limit to collect possessions or forfeit them to the skip.

Allow the cost of the skip to be added to an 'account'.

The portal could automatically issue and publish CCJ's for departed tenants with arrears. No need for the courts.

Poorer performing LL's could be identified and appropriately educated (like driver awareness).

The portal can invoke an eviction with the final judgement with the courts; but it could also fine a LL.

The portal can store police reports for antisocial behaviour. Equally it could carry a complaint by the tenant of the LL.

The portal's rules are amended by central government everytime there is a change in the law. This makes the law makers responsible for their work and means LL's and tenant cannot be caught out. All updates automatically disseminated rather than relying on the LL, tenant or reps to catch up.

The tenanted address could be flagged as requiring a license and the nature of and all paperwork for that license auomatically present. The LA would have to state an inspection schedule and if they don't inspect then the license fee is returned pro-rata. The LA would have to upload inspection reports ... statistics would be available across the portal against LA.

So many more thoughts to add, say ...

but the point of this is that it makes what many small LL's currently do rigourous. It also attempts to improve the tenant's standards. It attempts to make clear LL, tenant, law makers' and LA responsibilities.

And the bottom line is that none of this can be overturned by a court because, simply, it will be right.

Just thinking

Hamish

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