Tag Archives: Shelter

Help regarding being a victim of subletting Latest Articles, UK Property Forum for Buy to Let Landlords

A well known national letting agency franchise office based in Ealing advertised flatshare, I viewed the property and agreed to pursue a tenancy. My agreement is for the duration of 3 months, all bills included.

The tenant I share the flat with (Mr G) was claiming to be a tenant at first with the agent supporting this but is now claiming to be the landlord and he has been subletting this property out for four years. We have written and audio proof of this. Help regarding being a victim of subletting

The agent (who has close relations to the tenant acting as landlord) has confessed that his ‘client’ is subletting.

The owner of the property currently resides in South Australia.

I have reason to believe Mr G is committing benefit fraud as a result of all he has divulged to me regarding his five bedroom villa in Iran and and in Inverness of which he put the ownership in his daughter’s name. He is in receipt of many state benefits including disability claiming he cannot work and earn.

Neither Mr G, acting as my landlord, nor the agent can provide me with a current valid gas safety certificate. I have seen a photocopy of one issued in 2010. Mr G is refusing to provide me with gas central heating, he cannot provide a valid reason of refusal. Two different employees from two different energy companies checked our gas facility two weeks ago and concluded that the cooker is unfit for use and needs replacing for safety reasons and there is an issue with the box that links to the boiler. Mr G is refusing to consider the law and the health and safety of others by not addressing these repairs.

I have documents that state that Mr G is the landlord, which prove he is subletting to me but I have not been provided with documentation to prove whether he may or may not have the actual landlord’s permission to sublet the property.

These are also the points I have raised with the property owners own letting agents, another very large national firm. They have been very sympathetic with my predicament, however, they do stress that the actual landlord “may seek legal action to remedy this situation” and that the actual landlord has no legal obligation to me. I completely understand this and assume this to mean I must leave the property ASAP, although, according to Shelter, my tenancy agreement with the illegal landlord, Mr G, still stands and I have until 3rd December to vacate the property. We are getting conflicting advice so don’t know which way to go next.

Could you please suggest anything?

Thank you so much for your assistance.

Best Wishes

Mrs Saadeh

 


Fit and Proper Landlords and Tenants – Consequences? Latest Articles, UK Property Forum for Buy to Let Landlords

I have heard the words “Fit and Proper” mentioned a lot of late in terms of regulation of landlords and letting agents.

It would appear that society would like fit and proper landlords only to rent their properties to fit and proper tenants.

* When deciding whether or not a landlord is a fit and proper person to let out property the authorities in Scotland perform the following checks to ensure there is no ……

  • Information showing that the landlord has committed fraud, or violent or drug related offences.
  • Evidence of discrimination in any business activity.
  • Information showing that they have broken any other laws in relation to housing.
  • Information showing that they are a bad landlord, or that they have been a bad landlord in the past.
  • Antisocial behaviour problems in any properties the landlord rents out or is responsible for.
  • If the landlord has an agreement with a letting agent (or anyone else who’s acting on their behalf in letting the property), that the terms of that agreement are adequate.
  • Anything else which is relevant.

Now as any NIMBY will tell you, nobody wants a landlord to let a property to a bad tenant in their area. Therefore, the government also want landlords to be responsible for ensuring their tenants are entitled to live and work in the UK and also to be accountable for any anti social behaviour of their tenants. In fact, it was anti social behaviour which spurned the Scottish Government to make landlord registration compulsory. In other words, a landlord could actually be prosecuted for the behaviour of his tenants. Therefore, landlords also need to ensure their tenants are fit and proper law abiding citizens and will not be a nuisance to their neighbours or society in general.

Wonderful you might think!

Fit and Proper Landlords and Tenants

But let me ask you a question; what about the people who are not “fit and proper”?

Where will tenants who are not fit and proper live?

The days of shipping undesirables off to the Colonies or taking them to the nearest place of execution where they shall be hung by the neck until they are dead, dead dead are long gone!

So what’s the answer?

* Source:-

http://scotland.shelter.org.uk/get_advice/advice_topics/renting_rights/landlord_registration/the_fit_and_proper_person_test


Deed of Assurance Document Template Download Advice, Buy to Let News, Landlord News, Latest Articles, Letting, Lettings & Management, Property Investment Strategies, Property News

If you have the right type of properties to attract long term, good quality tenants, don’t stitch yourself or your tenant up with a long term AST. Consider the benefits to all concerned of offering a Deed of Assurance instead. Give your tenants the peace of mind they want and an incentive for them to perform to your requirements impeccably. It’s then a true win/win situation. Tenants know that if they perform you will have to pay up if you take possession of your property. On the flip side you may well stand a far better chance of being able to attract the tenants you really want, a premium rent and less voids periods too.

A Deed of Assurance is a relatively simple legal agreement which sits alongside an Assured Shorthold Tenancy Agreement “AST”. It is a separate agreement between landlord and tenant which does not affect the landlords rights to serve notice or to obtain possession, therefore it does not affect the rights of a mortgage lender either. However, it does offer tenants peace of mind.Deed of Assurance

From a tenants point of view, a Deed of Assurance provides far more flexibility than a long term tenancy because they are only tied in for 6 months and can then move on if they need to. What a Deed of Assurance offers in addition to an AST though is peace of mind.

A Deed of Assurance is a document in which a landlord promises to pay an agreed level of compensation to a tenant if possession is obtained within a given time period. I have never had to pay out compensation and because I’m in the business to provide quality tenants with quality accommodation long term I see absolutely no reason why I would ever need to.

The compensation amount offered by the landlord can be anything but obviously the idea is to agree something which is meaningful to both parties. For example, I offer to pay anything between £1,000 and £5,000 compensation if I obtain possession within the agreed period, providing the tenancy conditions have been observed impeccably by the tenant of course.

Similarly, the agreed period can be as long or short as makes sense too. Typically I offer 3 or 5 year terms but I would happily consider a longer period if the circumstances were right. What this means to the tenant is that if I obtain possession within the agreed period I will pay out compensation. This doesn’t stop me serving notice on a model tenant, it just means that if I obtain possession the tenant is compensated for their inconvenience.

But what if the tenant has not complied with the tenancy? Well that’s covered too. If the tenant does not comply the compensation isn’t payable, that’s very carefully worded into the Deed of Assurance by the solicitors who drafted it. Obviously there could be a dispute over whether the tenant had complied with all of the reasonable conditions in the AST and in that case the tenant would have to make a claim against the landlord for the compensation through the Small Claims Courts.

Deed of Assurance is not for everybody – by offering a Deed of Assurance a landlord is agreeing to pay compensation if they obtain possession of a property within a time scale they commit to with their tenant. It doesn’t always make sense for a landlord to make such a commitment but in some circumstances it can pay dividends. If in doubt, take professional advice.

What do others think?

The simplicity of the Deed of Assurance is its strength. Chief Ombudsman Lewis Shand Smith confirmed this by saying “The Deed of Assurance clearly sets out what the tenant can expect from the landlord and vice versa. In a sector where clarity might be lacking, this is a fantastic development”.

What’s the point of offering a Deed of Assurance?

Demand is very high from tenants who want/need greater assurance from their landlord that they are not going to have to move after just six months even if their tenancy has performed impeccably. Whilst a Deed of Assurance doesn’t actually provide tenants with any greater security of tenure, it’s certainly the next best thing. It’s a landlords opportunity to put his money where his mouth is, or perhaps more to the point, it’s a tenants opportunity to ask a landlord to do so when a landlords says words along the lines of “if you comply with your tenancy you can stay here for as long as you want”.

In practice, by providing properties which appeal to the types of tenants who want extra peace of mind in terms of stability they are also prepared to pay for that peace of mind. Many of my properties are typical family homes near to good schools, otherwise they are suburban bungalows which appeal to baby boomers and retired people. When I explain what a Deed of Assurance is to them they love it and often choose my properties over comparable properties for that reason alone. In many cases I’ve had several people bidding against each other to move into one of my properties despite there being plenty of comparable alternatives at lower prices. The reason they are prepared to pay more is for that peace of mind and legally documented assurance.

 

To purchase the Deed of Assurance document template please see below. The price is £97 for unlimited personal use. 100% of funds raised are donated to The GOOD Landlords Campaign.

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Legal Opinion on the Deed of Assurance

Statutory Compliance – the Law of Property (Miscellaneous Provisions) Act 1989

This simply sets out a list of requirements which must be fulfilled by anybody who wishes to create a valid and enforceable contract for a disposition of an interest in land. If you fail to comply with the requirements you just end up with an attempt to create an interest in land which cannot be enforced. The interest in land that we are concerned with is, of course, the term of years granted to the tenant under an AST. Typically an AST is completed by the production of two identical copies of the tenancy agreement, one of which is signed by or on behalf of the landlord and the other of which is signed by or on behalf of the tenant; however, it is equally possible (but less common) for both copies to be signed by or on behalf of both parties.

Whilst it would be technically possible to modify (by addition) the AST so as to include words equivalent to those contained in the deed of assurance, our legal advisers chose not to recommend this for two separate reasons:

(i) the terms of the assurance are not in fact terms of the AST. The AST is one agreement (which creates an interest in land) while the assurance is a separate collateral agreement which does not create any interest in land. The assurance sets out the landlord’s intention as to the extension of the minimum term provided in the AST and in particular provides for certain consequences that will follow in the event that the intention to extend is frustrated or not performed for some reason.

(ii) the AST is complete and whole and enforceable under the statute because it does not refer (and does not need to refer) to any other document for its terms. The deed of assurance on the other hand does refer to the AST and hence (by virtue of section 2(2)) is deemed to incorporate the AST. Thus (for the avoidance of doubt) the AST is, for the purpose of the statute incorporated in the deed of assurance, although the deed of assurance is not incorporated in the AST.

For those reasons neither the deed of assurance nor the AST would be struck down as unenforceable by reason of the provisions of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.

(B) Why utilise two documents instead of one?

This is where the position of the mortgagee comes in. Although there are countless criticisms that one can validly raise against many of the large buy to let mortgage lenders, nevertheless they are to be regarded as a necessary evil. In very many (albeit not all) cases the ability of the landlord to own the property is entirely dependent upon the mortgagee advancing a large part of the purchase price. Typically such mortgagees are imperious and unyielding and often unreasonable in their attitude to the issue of letting so that they (under their terms and conditions, to which the landlord is forced to subscribe whether he likes it or not) will only permit the creation of ASTs with a short primary term, usually six months and almost never more than 12 months. Their justification for that stance is that they will not sanction any arrangement which might hamper or abstract their ability to obtain possession of the property and sell it with vacant possession in the event that the landlord defaults under the mortgage.

Given that the object of our exercise is to provide maximum comfort to the tenant in terms of the prospect of securing an extension in the effective term of the AST (with compensation available if the extension fails) the arrangement must avoid infringing the landlord’s mortgage covenants and the requirements of the mortgagee while still furnishing an enforceable remedy in the event that the tenant does not enjoy the full benefit of the extended term. Although there is some variation from lender to lender, it is in our experience generally the case that if the terms of the deed of assurance were directly incorporated within the AST itself, then the AST would no longer be acceptable to the mortgagee, resulting in a situation in which either consent would be refused or, alternatively, the landlord would all make breaches in mortgage covenants by entering into the (extended) AST. Obviously, we could never advise a landlord to breach mortgage covenants; apart from anything else it would render him liable to immediate adverse action if he were to do so. The reason why the mortgagees would not consent to the extended AST wording is that, if they were to do so, the tenant would or might have a sound argument against the granting of an order for possession and sale in the event that the landlord were to default under the mortgage.

By keeping the terms of the assurance in a separate deed, the possibility of valid objection by the mortgagee is eliminated. The landlord and tenant enter into a separate arrangement (outside the AST although referring to the AST) and the objectives of every party are achieved.

While we are not exactly “worried about lenders”, we cannot ignore them nor the rights and powers which they enjoy.

The problem is that if a mortgagee approves a document which contains an indication that the tenant will or may enjoy an extended term of tenancy, then, whatever protective wording you may put in, it would always be open to the tenant to argue in court (if faced with the prospect of premature eviction by reason of a landlord’s mortgage default) that he entered into the tenancy agreement specifically in reliance on the expectation of that extension, so that the mortgagee who had approved the wording would be unable to recover possession by reason of the rules of estoppel. That problem does not even arise as long as the mortgagee does not consent to nor approve the document which gives rise to the expectation. In other words, however good your wording might be, the “two separate documents” approach is inherently preferable.

(C) Why utilise a deed (as opposed to a simple agreement) for the assurance?

The decision to proceed by way of deed for the assurance was a “belt and braces” election, based on principles of precaution rather than necessity. When we were setting this up we did consider the possibility of having the assurance contained in a simple agreement, not by way of deed. However, it was perceived that in that case there would possibly be some element of risk or prejudice to the tenant. The problem is that it is arguable that a simple agreement not effected by way of deed might perhaps be unenforceable by the tenant. That is because it is not obvious that the tenant provides any “consideration” for the various promises and obligations undertaken by the landlord which form the core of the assurance. In other words, the landlord undertakes responsibilities that go well beyond his responsibilities under the AST while the tenant does not undertake any recognisable responsibilities or obligations beyond those already contained within the AST. In general under contract law a party can only enforce a promise given by another party if the enforcing party has provided some consideration in return for that promise. That rule does not apply where the promise to be enforced is contained within a deed. That is one of the distinctive features which differentiate between a deed on the one hand and a simple written agreement on the other hand.

The use of a deed might be regarded as overkill and unnecessary but it is safer and better for the tenant to have the assurance terms contained within a deed. There is no downside or disadvantage (apart from the modest requirement that signatures be witnessed) from the point of view of either party by employing a deed as the mechanism for the assurance and so that is what our legal advisers recommended.


The practicalities of a deeds of trust and using a Ltd company in England Latest Articles, UK Property Forum for Buy to Let Landlords

I am a higher rate tax payer and I want to expand my property portfolio further. I want to shelter the rental income from my income tax bracket as I wish to re-invest the money into buying more property. I do not need to draw money from the business. The practicalities of a deeds of trust and using a Ltd company in England

I have read extensively and considering my long term goals, using a Ltd company seems to be the best fit. However, in the current climate, lenders seem to have very low LTV products e.g. deposits required equal 35-45%, which is counter productive to growing a portfolio.

I have read that you can buy the properties as personal BTL mortgages with deposits of 25% and then create a deed of trust to the Ltd Company and benefit from corporate rates on income. However, it’s very hard to be sure this is in reality a workable option as I have many questions where the answers are not very forthcoming.

If anybody actually has any real life experience with this approach, I would really appreciate your help on these questions below:

  • Do you have to tell the mortgage company you are going to put the property into deed of trust to a Ltd company when applying for the mortgage?
  • Do mortgage companies accept this method to managing your portfolio?
  • If you do the deed of trust at the same time as you purchase the property, does this avoid any CGT issues since there would be no gain from when you personally bought the property (no change in Market Value price)
  • Does the deposit you put into the property become a ‘directors loan’ too?
  • How easy is it to re-mortgage the property when you need to re-finance the property?
  • Is there anything specifically that needs to be included in the deed of trust to ensure the income is regarded as that of the business?

Any other comments?

I really would like the advice of somebody who has actually done it or is doing it now as I don’t think everybody really understands the value of a limited company to some investors, especially when they are exposed to super high tax rates above the 40% bracket.

Many thanks

Terry


Alternatives to Landlord Licencing Schemes Latest Articles, UK Property Forum for Buy to Let Landlords

The alternatives to Landlord Licensing Schemes require joined up thinking, changes to data sharing protocols within local authorities and revised high level directives and strategies which must begin at Government level. 

Perhaps the first question to ask is what is Landlord Licensing all about? Is it really about raising standards or is it more to do with raising funds?Alternatives to Landlord Licencing Schemes

Funding

If society as a whole desires that people should not be subjected to sub standard housing conditions then society as a whole must pay to enforce this (howsoever that might be done) whether the money is raised at a local level or centrally.

It is both unacceptable and wholly undemocratic that landlords should be singled out by Government, Councils and Local Authorities to pay stealth taxes badged as licensing fees on the pretence that the money will be used to fund enforcement related initiatives.

Costs associated with licensing schemes imposed on landlords are funded through increased rents. Neither landlords nor tenants want this, particularly as there is clear evidence (demonstrated in this article) that landlord licensing schemes have proven not to be an effective solution to problems in the Private Rented Sector.

Recycling of Court awarded penalties

The high costs associated with prosecuting criminal landlords is borne by Local Authorities, however, fines and penalties go to the treasury. If these funds were to be redirected to the prosecuting authorities this would assist funding of additional prosecutions and create incentives to bring more criminal landlords to task. Continue reading Alternatives to Landlord Licencing Schemes


Stung by the £500pw Benefit Cap, no rent being paid – Help! Latest Articles, UK Property Forum for Buy to Let Landlords

This week I have been stung by my first experience of the benefits cap. Stung by the Benefit Cap, no rent being paid - Help

One of my tenants Housing Benefit has gone down to £30pw from £159pw.

This is the cap where the Government are limiting families to £500pw of maximum benefits and all councils will have it by Sept 2013.

My tenant now gets £310 Child Tax Credit, approx £90 Child benefit & £10 Income Support with loans taken off. With Council Tax & the £30HB, we are about £500. A lot of money I know, but when they’ve had if for years, they’re used to it.

My tenant cannot understand at all that she has to pay any rent out her own pocket – so isn’t going to – so she says.

I’ve given her notice in case things get worse, as mortgages don’t grow on trees.

I don’t want her to go and she she doesn’t want to go either!

She rang me up every week for a year to get a house off me, so we are both valued to each other.

I have contacted Shelter, MP’s, Govt, CLG, Advice Centre, the Council Housing benefit and more and none of them seem to know anything whatsoever about direct payment to a Landlord when tenant is in arrears as a result of these circumstances.

The Local Authority is now saying no provision for direct payment to Landlord when in arrears.

As we all know Universal Credit are talking about direct payment to Landlord because of the big arrears they’ve been getting in trial areas. And as we all know, direct payment when LHA was introduced in 2008 was a no no,until we all moaned enough that is. Now getting direct payment is like taking candy from a baby.

However, I’m hitting a brick wall with direct payment under this new benefit cap.

I thought I was a benefit expert until this week. I’m 99% sure they will do something eventually, when enough people get evicted and moan enough, but I and many others need something positive to happen now.

My Local Authority are not interested, they seem to think it’s  funny that supercool Landlord Mick Roberts is now only getting £30pw when he was getting £159pw and in their eyes, lapping it up.

My tenant is still allowed £159pw under 4 bed LHA rate rules, but it is the benefits cap which is limiting her housing benefit payment to £30pw. Clearly this is the first thing tenants lose when going over the £500pw threshold.

Govt needs to wake up because they haven’t got the houses for for these tenants and wherever this tenant ends up she will only get £30pw towards her rent, so will be in the same boat with any Landlord.

The big families are no longer attractive!

Jeez, I wanted this to be a quick post, but if any experts reading this know more than me and can help, it would be very much appreciated.

Regards

Mick


The evolution of the Private Rented Sector – Deed of Assurance Buy to Let News, Cautionary Tales, Landlord News, Latest Articles, Legal, Letting, Lettings & Management, Press, Property Investment Strategies, Property Market News, Property News, The GOOD Landlords Campaign

TMW now agree to three year AST's - Stupidly in my opinionWhy on earth would The Mortgage Works “TMW” agree to three year AST’s?

More to the point, why would landlords and tenants?

It has always been legally possible for landlords to offer AST’s for up to 3 years and indeed in theory for any fixed term though a term longer than 3 years, even by one day, means the agreement must be executed as a Deed and witnessed. However, until now, you would almost certainly be in breach of your buy to let mortgage conditions if you agreed to a tenancy of more than 12 months. TMW have broken the mould by agreeing to allow landlords to offer 3 year AST’s. However, in my opinion they are doing nobody any favours including themselves.

I have read Shelters arguments about offering stable rental contracts and to some extent I can see where they are coming from. However, I think the concept of longer term AST’s are potentially dangerous for landlords, tenants and mortgage lenders. Perhaps the most compelling evidence for this belief is that Shortholds first made their appearance courtesy of The Housing Act 1980 in the guise of Protected Shortholds. These tenancies had to be granted for a minimum 5 year term and came with other restrictions on notice being given and rent increases.

Although an improvement on the then Secure tenancy regime The Protected Shorthold was not popular with Landlords and the lesson was surely learned with the improved terms applying to Assured Shortholds as introduced in the Housing Act 1988 and amended since.

The concept behind 3 year AST’s

three year AST conceptPeople with children in schools and also retired people want more security of tenure but not at the risk of being tied to one property if their circumstances change. What these tenants don’t like is the idea of a landlord having the ability to serve notice on them after just six months regardless of whether they have been model tenants and just got settled or not.  I sympathise with that and I’ve met several people who have been in that exact position. Indeed one of my former employees was forced to move twice in less than 18 months through no fault of her own. She was a model tenant but in one case the landlords decided to move back to their former property and in the other case the landlords decided to sell. My employee had a disabled daughter and it was very important to her to keep her daughter settled in the same school. She had done nothing wrong but had to deal with a lot of stress and worry, not to mention the expense of having to move.

The problems with three year AST’s

If a landlord grants a three year AST there is no ability to gain possession on “no fault” grounds under section 21 of the Housing Act 1988 unless there is a break clause that can be operated to shorten the originally stated fixed term. This of course defeats the object of a longer term tenancy, certainly from the tenant’s viewpoint. What this means is that there is absolutely no way to legally evict a tenant during the first three years unless the tenant is in breach of their tenancy agreement as mandatory possession will not be available to the Landlord.

What’s wrong with that? I hear you say.

Well just consider a few “what if” examples:-

  1. What if the landlord falls ill and needs to sell to raise cash?
  2. What if the landlord dies?
  3. What if the landlord goes bankrupt?
  4. What if interest rates go up and the landlord can’t afford to pay the mortgage and needs to sell?
  5. What if the landlord desperately needs to move into the property due to an unforseen change in circumstances, e.g. a marriage breakdown?
  6. What if the landlord get’s divorced?

The list is a very long one already and I could go on. The killer blow for me from a landlords perspective is that if the tenant doesn’t comply with the tenancy agreement the only way to get possession before the end of the fixed term is by mutual agreement with the tenant, or by serving a section 8 notice for the breach. This can be and often is challenged though the serious arrears Ground 8 is a mandatory ground, whereas a section 21 notice cannot be challenged other than on its legal validity and ability to enforce it. The reality though is that possession cases under section 8 can be challenged and dragged through the Courts for several months. That could mean months of no rent or a tenant who abuses a landlords property or occupants of neighbouring properties.

My advice to all landlords is not to offer more than a 6 months AST in most cases, 12 months for some student type accommodation where re-letting part way through the academic year is more difficult.

Why would a lender agree to three year AST’s?

Why would a lender agree to three year AST's?To do so is crazy in my opinion.

I’ve read David Lawrenson’s points of view and whilst I concur that a lender “could” appoint a receiver of rents until it is possible to serve a section 21 notice I just can’t see why lenders would agree to that. Perhaps they are doing it just for a bit of positive PR from the do-gooders and hoping that landlords aren’t stupid enough to actually offer three year AST’s?

The mind boggles!

The bottom line for a mortgage lender is surely the ability to be able to recover their debt as quickly as possible if they need to isn’t it? Agreeing to a three year AST not only devalues their security but it also massively limits their recovery options for up to six times longer than they need to commit to, i.e. 3 years instead of six months.

Is a three year AST really that attractive to tenants either?

What if their circumstances change? Do they really want to be tied into paying their landlord for the full three years? Do they really want their estate to be charged rent for the entire contract period if they die? Committing to a three year tenancy cuts both ways. Most tenants would prefer the flexibility of a tenancy with a Council or a housing association because they are not tied in for a fixed period but do enjoy greater rights of tenure. However, Housing Associations only provide around 50% of the UK rental stock with the other half being provided by the Private Rented Sector.

Deed of Assurance could be a far better alternative

A Deed of Assurance is a relatively simple legal agreement which sits alongside an Assured Shorthold Tenancy Agreement “AST”. It is a separate agreement between landlord and tenant which does not affect the landlords rights to serve notice or to obtain possession, therefore it does not affect the rights of a mortgage lender either. However, it does offer tenants peace of mind.Deed of Assurance

From a tenants point of view, a Deed of Assurance provides far more flexibility than a long term tenancy because they are only tied in for 6 months and can then move on if they need to. What a Deed of Assurance offers in addition to an AST though is peace of mind.

A Deed of Assurance is a document in which a landlord promises to pay an agreed level of compensation to a tenant if possession is obtained within a given time period. I have never had to pay out compensation and because I’m in the business to provide quality tenants with quality accommodation long term I see absolutely no reason why I would ever need to.

The compensation amount offered by the landlord can be anything but obviously the idea is to agree something which is meaningful to both parties. For example, I offer to pay anything between £1,000 and £5,000 compensation if I obtain possession within the agreed period, providing the tenancy conditions have been observed impeccably by the tenant of course.

Similarly, the agreed period can be as long or short as makes sense too. Typically I offer 3 or 5 year terms but I would happily consider a longer period if the circumstances were right. What this means to the tenant is that if I obtain possession within the agreed period I will pay out compensation. This doesn’t stop me serving notice on a model tenant, it just means that if I obtain possession the tenant is compensated for their inconvenience.

But what if the tenant has not complied with the tenancy? Well that’s covered too. If the tenant does not comply the compensation isn’t payable, that’s very carefully worded into the Deed of Assurance by the solicitors who drafted it. Obviously there could be a dispute over whether the tenant had complied with all of the reasonable conditions in the AST and in that case the tenant would have to make a claim against the landlord for the compensation through the Small Claims Courts.

Deed of Assurance is not for everybody – by offering a Deed of Assurance a landlord is agreeing to pay compensation if they obtain possession of a property within a time scale they commit to with their tenant. It doesn’t always make sense for a landlord to make such a commitment but in some circumstances it can pay dividends. If in doubt, take professional advice.

What do others think?

The simplicity of the Deed of Assurance is its strength. Chief Ombudsman Lewis Shand Smith confirmed this by saying “The Deed of Assurance clearly sets out what the tenant can expect from the landlord and vice versa. In a sector where clarity might be lacking, this is a fantastic development”.

What’s the point of offering a Deed of Assurance?

Demand is very high from tenants who want/need greater assurance from their landlord that they are not going to have to move after just six months even if their tenancy has performed impeccably. Whilst a Deed of Assurance doesn’t actually provide tenants with any greater security of tenure, it’s certainly the next best thing. It’s a landlords opportunity to put his money where his mouth is, or perhaps more to the point, it’s a tenants opportunity to ask a landlord to do so when a landlords says words along the lines of “if you comply with your tenancy you can stay here for as long as you want”.

In practice, by providing properties which appeal to the types of tenants who want extra peace of mind in terms of stability they are also prepared to pay for that peace of mind. Many of my properties are typical family homes near to good schools, otherwise they are suburban bungalows which appeal to baby boomers and retired people. When I explain what a Deed of Assurance is to them they love it and often choose my properties over comparable properties for that reason alone. In many cases I’ve had several people bidding against each other to move into one of my properties despite there being plenty of comparable alternatives at lower prices. The reason they are prepared to pay more is for that peace of mind and legally documented assurance.

Conclusion

If you have the right type of properties to attract long term, good quality tenants, don’t stitch yourself or your tenant up with a long term AST or Shelters Stable Rental Contract. Consider the benefits to all concerned of offering a Deed of Assurance instead. Give your tenants the peace of mind they want and an incentive for them to perform to your requirements impeccably. It’s then a true win/win situation. Tenants know that if they perform you will have to pay up if you take possession of your property. On the flip side you may well stand a far better chance of being able to attract the tenants you really want, a premium rent and less voids periods too.

To purchase the Deed of Assurance document template please see below. The price is £97 for unlimited personal use.

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Be wary of sub-letting scams! Latest Articles, UK Property Forum for Buy to Let Landlords

Be wary of sub-letting scams!I just wanted to share with landlords that sub-letting scams are on the rise!

It is my belief that these scams produce three lots of victims …. the landlord, the sub-let tenants, and the wider landlord community, who get wrongly blamed as well and lumped into the anti-landlord campaigns run by the likes of Shelter. Continue reading Be wary of sub-letting scams!


Bad Landlords Latest Articles, UK Property Forum for Buy to Let Landlords

Bad LandlordsWhy on earth would anybody want to search Google for “Bad Landlords”?

My stepson (Ilya) bought something to my attention this evening which blew my mind. Ilya is a student at Greenwich University and is studying games development. He’s a self confessed Geek, far worse than me LOL.

Mark, he said, you know you run The GOOD Landlords Campaign?

(me) Yeah

(Ilya) Well I’ve done some research and only 260 people search Google every month to find “Good Landlords”

(me) yeah?

(Ilya) Well for a laugh I checked how many people search for “bad landlords” every month and there’s 720  searching Google for them in the UK alone!

(me) I wonder how many search for Rogue Landlord then?

(Ilya) That’s what I found a bit strange. There’s a charity in London called Shelter and they run campaigns asking tenants to report “Rogue Landlords” so I thought there would be 1,000’s but Google only report 390 monthly searches.

Now make of that what you will. I checked his source and his figures are accurate.

There is even a bad landlords list on the Tenants From Hell website where you can, of course, watch a selection of the anti landlord propaganda video’s from Shelter!

Surely you think tenants would be more interested in finding good landlords than bad landlords or rogue landlords wouldn’t you?

Am I missing something here?

The mind boggles!


Scottish Association of Landlords – dismayed by Shelter Cowboys Slur Landlord News, Latest Articles, Property News

Scottish Association of LandlordsScottish Conservative Housing Spokesman Alex Johnstone and the Scottish Association of Landlords have slammed the language employed by housing charity Shelter in its latest press release which called for letting agents to be regulated.

Commenting, Mr Johnstone said “It is ironic that Shelter uses terms such as ‘Wild West’, ‘cowboys’ and ‘flagrant disregard for the law’, when organisations such as the Scottish Association of Landlords, who also represent letting agents have been advocating change for some time.”

“Shelter’s use of such sensationalist language makes, in my view, sweeping and negative generalisations about the private sector as a whole. This kind of behaviour might well make vulnerable people fearful of seeking a home in the private rented sector, and it’s frankly not good enough. The fact is that the private sector is playing an increasingly important role in providing much needed accommodation, and they themselves are keen to provide a good and fair service.”

Chief Executive of the Scottish Association of Landlords John Blackwood said “For some time, SAL has campaigned for regulation of letting agents in order to protect both landlords and tenants. However we also recognise that many letting agents already offer good management services, ensuring that properties are managed properly and within the law.”

“Instead of indulging in this kind of negative sensationalism on the sidelines, I would urge Shelter to engage with those of us who do actually put roofs over people’s heads and see what we can achieve by working together in a positive and constructive way.”

Mr Blackwood concluded “It is disappointing that Shelter has seemingly abandoned its policy of working in partnership with the private rented sector in favour of demonising an entire sector where by far the majority of letting agents operate reputable businesses.”

Many members are expressing the viewpoint that SAL should take public action against Shelter. One letting agent who is a personal supporters of Shelter even saying he will now stop his donations.

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