Tag Archives: Tenancy

New model for Student HMOs post Renters Reform Bill? Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property Investment News

For mitigation against the worst implications of the (expected) Renters’ Reform Bill for my Student HMOs, I am mulling a business model change to…. Leasing individual rooms on a fixed-term basis to the PARENTS rather than the occupying students….Will this work?

Here’s my thinking so far…

Lease terms would allow the room to be licenced for residential use by one member of the same household who is enrolled at the Uni with the main purpose being their term-time accommodation (only). The occupying student would need to provide an affidavit stating that the parental home will remain their main residence which they will return to at the end of the fixed term.

The occupying student would have an agreement, on a licence basis, only with their parent, the leaseholder, not directly with (me) the freeholder. It would be basically a Rent-to-Rent arrangement with someone whose interests are wholly aligned with the student occupant and who would otherwise be acting as guarantor in an AST scenario.

On Planning: Use remains “Residential”, and with multiple occupation in the building as a whole; so this is an HMO as defined in Town & Country Planning Act, and the existing C4 Use Class is still the most appropriate, there’s no change required.

On Housing Act (HA): the multiple occupants of the property will all have their main residence elsewhere, i.e., their parental homes (and that’s in writing), and the contracts are not between freeholder and occupants, so: (a) ASTs as defined in HA are NOT required or naturally created, and (b) this is not an HMO as defined in HA either as there are not 3+ persons for whom it is their main residence. If any AST is inadvertently created, that would be between the parent (leaseholder) and the student; the freeholder is not on the hook.

On Council Tax vs. Business Rates: My initial research shows that so long as the Planning Use remains Residential, the Council would not have a good case at all to call in VOA and force the freeholder onto Business Rates and there is Case Law to support that position – but a fair chance the Council might try that if the matter came to their attention.

On general management and maintenance: Logical and prudent to stick to all the normal HMO standards with gas safety, EICRs, smoke alarm test records, maintain and manage to all the normal HMO standards.

Mortgage: Mortgage conditions always state properties must be let on an AST basis, so this will only work on mortgage-free properties.

Deposit: There’s no AST, it’s more of a Rent-to-Rent contract, so any Deposit paid to freeholder by the parent does not need protecting. If an AST is inadvertently created then that is between the lease-holder parent and student, not the freeholder

Collecting Rent: Should not be any harder to collect than with current student fixed term ASTs where the parents act as guarantor.

On HMO Licencing: An HMO Licence would not strictly be required, but likely best to keep paying the licence fee, (a) allows for quick switch back to ASTs and a standard business model if problems arise, and (b) not to draw the Council’s attention by having an unlicenced C4 property.

On Marketing: Would be more limited as some advertising sites do specify that offers being on AST basis is a condition of business.

Please help fill in the gaps, what have I missed?

Anyone else with mortgage-free Student HMOs thinks this might be a workable idea?

Thank you,

Simon


Is there a future market for fully paid in advance 6 month ASTs? Buy to Let News, Landlord News, Latest Articles, Lettings & Management, Property News

Hello, As we’ve now entered a tougher period for the prospect of increased rent arrears, what do fellow members feel about stipulating that all enquirers, for example to a self managing platform like Openrent, are to have the necessary resources to put the landlord into a positive cashflow position in advance?

Then repeated six monthly on new ASTs.

We are constantly hearing about massive competition for property, albeit a little more subdued during the last few months.

Obviously there are numerous instances where this won’t work, due mainly to affordability.

Maybe I’m overlooking a number of regulations meaning you can’t make such a requirement, although I don’t believe it’s the case, so perhaps you can educate me on this.

The tenant could maybe fund it by taking out a personal loan, a private loan, using savings, or asking family such as parents to contribute or lend.

It’s not that uncommon with commercial FRIs for inexperienced tenants to require year one of a five year lease upfront.

Would it not be a way for landlords to fight back a little more control of their own property?

Thank you,

Andrew


Rent to Rent Tips, Advice and Case Study Advice, Buy to Let News, Landlord News, Landlords Stories, Latest Articles, Legal, Letting, Lettings & Management, Property Investment News, Property Investment Strategies, Property News, Property Sourcing, The GOOD Landlords Campaign

We first published this article back in 2013. It has been resurrected because the information provided within it is just as relevant today as it was back then and the Rent to Rent strategy continues to be a hot topic of discussion at many of the UK’s property networking Events.

We produced this guide to share answers to some of the most frequently asked questions relating to this subject, specifically in relation to contracts.

When can tenants be offered a license as opposed to an AST?

The benefits of providing a license is that it is much easier to evict tenants. There is no requirement for a minimum 6 month term, no requirement to give them two months notice and no requirement to obtain a Court order and instruct bailiffs to regain possession if a tenant refuses to move out after the notice period. Furthermore, tenants deposits do not need to be protected in a tenancy deposit scheme if a property/room is let on license or a lodgers agreement, which is a form of license. No wonder Rent to Renters want to offer licenses instead of AST then!

However, licenses can only be used under the following circumstances:-

1) The room/property is being rented as holiday accommodation. You may need to prove that the occupier of the room or property has another residence though, e.g. a place where they are registered on the voters roll.

2) You are a live in landlord. If you live in the property yourself you can take in lodgers

3) If you provide a service such as a hostel or a B&B. For example, if you provide cleaning services including changing the bedding once a week or breakfasts in the morning.

What if none of the above apply?

If none of the above apply then the basis of the tenants occupation of the property is an AST whatever your contract says. This is because legislation in the housing and 1988 (and subsequent updates) and the landlord and tenant act 1985 over-rule whatever your contract says.

What is the right contract to have between the property owner and the Rent to Renter?

First, you need to understand what is the wrong type of contract and why.

Company Let Agreement (AKA corporate letting agreement)

Company Let Agreement (AKA corporate letting agreement)These allow a company to use the premises to provide accommodation for their employees. If you are using a company let agreement and subletting a property or a room within it to a person who is not your employee then you will be in breach of the agreement. Many Rent to Rent companies are using these agreements in ignorance of this fact. They do so because deposits do not need to be protected with a tenancy deposit scheme.

AST (Assured Shorthold Tenancy Agreement)

AST (Assured Shorthold Tenancy Agreement)AST’s do not generally allow subletting, therefore, any subletting without the owners permission is a breach of contract. Furthermore, the property owner could obtain possession of the property after just 6 months, even sooner if you are in breach of contract. If you have sublet the property and your tenants are still occupying the property after the owner has obtained possession you could be held liable and subjected to claims for massive financial compensation.

The correct agreement between a property owner and a Rent to Renter is a commercial lease

The correct agreement between a property owner and a Rent to Renter is a commercial lease.

Don’t use just any old off the peg commercial lease , you need one which is professionally drafted specifically for Rent to Rent which includes clear, fair and reasonable provisions for subletting a residential property. Do bear in mind that the property owner is highly likely to seek professional advice about the contract between you. The owner will generally be advised not to lease the property for more than 5 years and to ensure the lease is contracted out of the landlords and tenant act 1954 to ensure that it is his choice alone whether to offer to extend the arrangement by granting a new lease at the end of the contracted period. The owner of the property will also be advised to ensure that you become responsible for the maximum number of residents, maintenance, basis of occupancy/subletting, licensing and statutory requirements and maximum number of occupants. Therefore, it is important to be able to offer a well drafted document covering all of these points at the earliest possible opportunity. This will give the property owner and his professional advisers confidence in you being a professional operator.

Successful Rent to Rent Case Study

Let me give you a great example of a lady I spoke to about her success story.

She came across a situation whereby an elderly guest house owner had fallen ill and moved into a granny annexe at her childrens home. The Guest House was on the Lincolnshire Coast and the children were based in the Home Counties. The Guest House had been in the family for for two generations and the family are reluctant to sell it. Based on profits, the family were advised by a professional commercial agent that the market rental value for the property was £1,000 pcm. The decision of the family was to let the property for 5 years prior to making a decision on whether to sell it OR for one of her grandchildren to run it OR to continue to rent it as a going concern. As the property was already registered as a guest house it already met all of the requirements to be a HMO. There were no selective licensing or Article 4 barriers to contend with in the area.

The rent to renter I spoke to had interesting plans for the property. She had spoken to the local authorities about the requirement for temporary accommodation for victims of domestic violence and homelessness as a result of mortgage repossessions and other forms of eviction. Her son would reside in the property as caretaker and would also serve breakfast and offer a basic cleaning service including a weekly change of bed linen. Under the circumstances, all rooms could be let on licenses. The profits on this activity amounted to more than £5,000 per month and within a week all 16 rooms were full.

Rent to Rent  Commercial Lease Contract

To have a suitable contract professionally drafted and ready to present to a property owner and his professional advisers typically costs around £3,000. In the case study presented above the lady purchased our Rent to Rent Commercial Lease template for just £97. The document template was professionally drafted by Justin Selig who is a qualified solicitor specialising in property and contract law.  The Rent to Rent Commercial Lease Template has been one of the most popular premium downloads on this website.  The lady in our case study required a few amendments to the standard template due to the sub-letting arrangements in the template being drafted to assume AST’s would be used, however, that was easily sorted by her own solicitor who charged her just £300 to make the necessary amendments. In all she saved over £2,500 in legal fees and now makes over £5,000 pcm from her first Rent to Rent deal. Needless to say, she is now on the lookout for similar opportunities!

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Capita TDP to be taken over by MyDeposits Landlord News, Latest Articles

The Capita TDP (Tenancy Deposit Protection scheme) has been closed to accepting new deposits since the 14th of September this year.

Capita a corporate giant and FTSE 100 company was only awarded the contract by Government to operate the scheme from the 1st April 2013 (no pun intended) in an effort to increase competition and drive down costs for this service. Mydeposits has however stepped in to take over responsibility for Capita TDP protections in England & Wales after confirming their withdrawal from the market.

All of Capita TDP’s existing deposit protections will be automatically transferred to mydeposits from 1st December 2013. Landlords, agents and tenants in England &Wales will also have access to the scheme’s dispute resolution service. Capita TDP has now written to all existing members informing them of the news.

All transferred deposits will continue to be protected throughout the duration of the fixed term tenancy. my|deposits will also reissue a new Deposit Protection Certificate (DPC) and the relevant Information for Tenant’s leaflet for each protection.

Eddie Hooker, CEO of mydeposits, said: “Capita TDP’s existing landlord and agent members can rest assured they’re in safe hands with mydeposits. The experience and knowledge we derive from partnership with the both the National Landlords Association (NLA) and the UK Association of Letting Agents (UKALA) means we’re well placed to manage the handover following Capita’s withdrawal.”

“Landlords, agents and tenants will also have access to our free award-winning dispute resolution service, giving them peace of mind that the deposit will be returned fairly if they’re unable to reach an agreement over its return.”

“We’re on hand to speak to existing Capita members who have concerns regarding the transfer of their deposits. Landlords, agents and tenants can also visit our website www.mydeposits.co.uk where they can find details of the scheme and a range of useful guidance and advice on deposit protection issues”.Capita TDP


Has Capita thrown in the towel on Tenancy Deposit Protection? Latest Articles

Capita Tenancy Deposit Protection is no longer accepting new deposits with effect from 14th September 2013.

Any deposits registered with the scheme will continue to be protected unless otherwise notified.

Landlords, agents and tenants who are affected have been notified in writing.

If you have any queries, please call 08444 129968 or email: info@capita-tdp.co.uk

The above is the message currently showing on their website.

Click the image below for a full screen shot

Has Capita thrown in the towel on Tenancy Deposit Protection


End of Tenancy Deposit Issues – Tenant Requests Advice From Landlords Latest Articles

Hi All,

I realise this is primarily a landlords site, however nothing like hearing it from you on what will hopefully be an impartial landlord view. I like to believe I am a reasonable and honest tenant.

Background:

My landlady owns a number of properties in London (via a company). I moved in and a new AST was signed (3 bed place), as one of the previous tenants was staying it was agreed (among the tenants) the originals tenants would give £100 each (2 left, 2 came in, I was 1 of the new tenants) towards any damages that they have caused. So there was no official “check-out” for them (they were paid their deposit back in full by the landlady).
During this period the landlady placed our deposits in “insured” schemes which are OK but not great and she never dated them properly.

During the next 2 years both other tenants left any new ones came in (they swapped at different periods). New AST were created. In the interim Landlady goes into administration and the receivers stepped in. They placed our deposit into a custodial scheme.

She got out of it by selling a couple of properties and managing to refinance the remaining properties.
After she gained repossession of the property we did another tenant swap and this meant new AST and supposedly a new deposit protection scheme which we never saw (ie. she never applied for one).

Note 1: We have never missed any payments and always paid on time (for the 2.5 years I lived there).
Note 2: Landlady is still owing deposits to 2 other tenants that left almost 1 year ago (to be fair they should have applied A LOT MORE pressure but she keeps discussing different items that she wants to charge them for and delaying the process). She also seems to be dealing with them at individual level (almost as if she rent rooms out and charging for things that were never done like window cleaning).
Note 3: I took 3 days off work to make sure the property was left in excellent condition as I knew this was about to get messy (this inc professional carpet cleaners @ £115, professional cleaners suggested by her @ £135, I bought paint and brushes to make sure my room and common areas were not marked and left in pristine conditions), and paid a checkout report (although I never saw a check-in report).
Note 4: I am still liable to dispute the DPS custodial one as it was dated to finish in August (our tenancy finished in early September), however some of the names of tenants on that Deposit ID are different to the latest tenancy.

Our tenancy ended 6th Sep and the checkout report was issued 16th Sep (as inventory services agency took ages to produce the report).

Now she is doing the same to us, finding things that she maybe able to charge (including broken tile, leaking pipe, cleaning not up to standard [even though she recommended the professional cleaning company], stained sofa), given more time they will keep increasing.

Googling her name reveals some previous court cases and the cleaning company, check-out report company etc from what they told me sound as if she is the same with all her tenants in her other properties.

It obvious she does not play by the book and I have tried to be very patient and rational about all this. But to be fair to her she was patient with signing new ASTs and swapping tenants in contracts (but surely that is a saving on both sides as she does not have to market the property or have any downtime).

Questions:

  • How does she have to officially respond to checkout report and how long until we can start kicking and screaming for our deposit?
  • Given that the deposit is not in a “valid” protection scheme for the latest tenancy is there any mechanism to apply pressure? (I know landlords must place the deposits in these schemes but if they don’t they could have to pay multiples of the deposit… where can I go to talk discuss this option, I don’t want to get to this but will surely use this to keep her in line)
  • Should I dispute the deposit under the custodial scheme which has my name and 2 previous (not latest) tenants [who also have not yet seen their deposit back yet]?
  • How can I fight the several claims for several things which she wants money for?
  • Who do I go to for help on this? for example to take her to court or to dispute this end of tenancy given that it is not to my knowledge on any deposit protection scheme.

Please help, we (3 young professionals) all have 6 weeks rent tied here (not to mention 2 others who have also not yet seen their deposit back).

I appreciate all the feedback I can get. End of Tenancy Deposit Issues - Tenant Requests Advice From Landlords

I have rented different places in the UK over the last 10 years (Surrey and London), I have seen a couple of decent landlords but I have seen mostly awful ones. I do support the requirement for standards (licensing or accreditation), it is getting harder and harder to get on the property ladder and more young people will be renting for longer in the future, it is possible for landlords to keep their investments profitable and not have to play with people lives.

Many thanks

Andre


Landmark Case Shows Scottish Landlords Must Take Deposit Protection Seriously Guest Articles, Guest Columns, Landlord News, Landlords Stories, Latest Articles, Lettings & Management, Property News

A recent case in Edinburgh Sheriff Court saw a landlord who had failed to protect his tenant’s deposit fined £3,450.  This shows that landlords, and their agents, must take seriously their new statutory obligation to lodge tenants’ deposits with one of the approved schemes, and that the courts will take a robust line with those who don’t.  Unlike England and Wales, their is no insurance-based alternative in Scotland and hard cash must be handed over. 

Not only must landlords lodge the deposit within 30 days of receiving it, they must also pass to their tenant certain prescribed information –

  1. Confirmation of the amount of the deposit paid by the tenant and the date on which it was received by the landlord;
  2. The address of the property to which the deposit relates;
  3. The date on which the deposit was paid to the scheme administrator;
  4. A statement that the landlord is registered with the local authority;
  5. The name and contact details of the administrator of the tenancy deposit scheme to which the deposit was paid; and
  6. The circumstances in which all or part of the tenancy deposit may be retained at the end of the tenancy, with reference to the terms of the tenancy agreement.

The Fraser and Pease-v-Meehan case shows that enforcement of this legislation is very likely to be driven by tenants.  Because action can be taken for up to 3 months after the end of a tenancy, tenants are able to do so free of any fear of retribution.  Too many tenancies are simply ended by a landlord because the tenant has been bold enough, for instance, to insist that badly needed repairs are carried out, and changing the tenant for a more compliant one a less costly option for a landlord.  That is a fundamental weakness in renting legislation.  Deposit protection legislation allows former tenants to exercise their rights free of constraint and because of that I think we are likely to see it much more effectively enforced.

John Gell

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Ex tenant problems Latest Articles, Legal, Letting, Lettings & Management

To condense the issues here goes… Ex tenant problems

Tenant on AST which ran into periodic for some two months

Tenant leaves no notice, just four page letter of complaints … staff …. other people… everything !

Worth noting at this point.. no complaints at all when in the property, just one boiler issue which was sorted asap and dealt with.

Before the tenant left we received an email from them asking who the rent money was paid to, name of landlord and where was the deposit. All of the required information was contained in the AST, Deposit Protection Certificate and Prescribed Information.

Legal for landlords had advised me that I did not need to give landlord address as I was the full acting management agent.

The tenant had found out ( I did not know) that the landlords business had been dissolved

The tenant now wants all rent back!

I have paid rent over and never had any returned!

Now the tenant taking me to court asking for some eight months barr 5 days rent back!

The company is still going ( landlord) but under a different name (not Ltd just a Partnership) which was running prior to but I paid to the Ltd company.

The tenant seems to want to sabotage my good name for no reason.

They have been left some three months now but think they can use bully tactics to convince me to part with money that was paid in good will to the landlord.

Advice is much appriciated

Thank you

Donna


Tenant Referencing Using Common Sense Advice, Latest Articles, Property Investment Strategies, The GOOD Landlords Campaign

Common sense tenant referencing was pretty much the only option available when I first became a landlord and started letting property in the late 1980’s. Tenant Referencing Using Common Sense

In this article I am going to explain what my family do to find the next perfect tenant, right from the day an existing tenant let’s us know that they want to move out. More often than not these days, tenants think they can serve notice with just a phone call, email, facebook or text message – more about that later. Continue reading Tenant Referencing Using Common Sense


How ADR works in tenancy deposit disputes Advice, Guest Articles, Guest Columns, Latest Articles

After sharing in discussions on two separate threads (links below) I realise that there is some misunderstanding about how Tenancy Deposit legislation works when there is a tenancy deposit dispute. How ADR works in tenancy deposit disputes

Buy to let anguish – landlord being repossessed – rent paid 6 months up front!

Tenant Disappeared

In the first discussion the tenant is concerned that the landlord will not repay the deposit and in the second discussion it is the landlord who is concerned that the tenant can just walk away.

Whichever type of deposit protection scheme a landlord chooses to use, either the custodial scheme at no cost or an insurance based scheme where a premium is paid, the basic rules are the same.

If the landlord and tenant cannot agree on the amount of the deposit that is returned to the tenant either has the right to raise a dispute with the protection scheme. The dispute is dealt with through Alternative Dispute Resolution (ADR) where independent arbiters make a determination based on the documentary evidence provided by both parties.

Since the money belongs to the tenant unless and until the landlord can prove that he is entitled to compensation for losses or damages the onus is on the landlord to prove his case and for the tenant to dispute it. If the landlord fails to prove his case the deposit will be returned to the tenant.

During the ADR process, if the scheme is an insured scheme the deposit will be held by the landlord and therefore the scheme will ask the landlord to lodge the money with them pending the results of ADR.  Once the decision has been made the scheme will repay to each party the amount to which they are entitled.

The reason this is called “Alternative” Dispute Resolution is that it offers  a “free” alternative to the normal legal system but it does not replace it and either party can, if they wish, take the case to court instead. If either party decides to take the case to court the deposit protection scheme must be informed and once the case is heard they must be given the court documents to prove the result of the case.  They will then distribute the money in accordance with the Court Order.

Neither party can just ignore the request of the other for ADR.

If either party fails to respond to a request from a scheme to take part in an ADR, the other party will win by default unless that party tells the scheme that he is taking the case to court. This must take place within 6 months of the issue being raised.

In conclusion it is not an option for a landlord to ignore a request for ADR where he is holding a deposit because he has used an insurance based scheme.  If he fails to agree to ADR or does not take the case to court within 6 months, the scheme will repay the deposit to the tenant and reclaim it from the landlord.

If the landlord fails to respond at all ADR will look at the case based on the tenants request and will return the money to the tenant.

A landlord who fails to make the payment will be permanently removed from the scheme and his only option in future will be to lodge his deposits with the custodial scheme.

Where a tenant simply does not respond the landlord too can reclaim the deposit from the custodial scheme either through taking it to court or by using the Single Claim Process.

Sources of information

1) DPS – see >>> http://www.depositprotection.com/documents/reclaiming-a-deposit-2013.pdf

2) my\deposits – see >>> http://www.mydeposits.co.uk/sites/default/files/Tenant%20Guide%20to%20ADR.pdf

3) TDS – see >>> http://www.tds.gb.com/resources/files/What%20happens%20when%20the%20Court%20is%20involved%20in%20a%20tenancy%20deposit%20dispute.pdf


Retaliatory eviction – possibility of civil litigation? Latest Articles

We’re a professional couple with a limited company which provides a technology solution to the NHS. It suits our circumstances to rent at this moment in time. Retaliatory eviction

We had a 4-year rental of a lovely apartment until last Summer, when the owner decided to downsize and move back into the property. It was a good relationship, we had treated the property as if it had been our own investment and we parted as friends – with our deposit paid back in full.

After much searching we found a 3-bed town house which appeared to offer us everything we needed. The letting agent was a member of NAEA/ARLA and appeared to be respectable. There were some agreed remedial works to be dealt with and we were given assurances that these would be attended to in due course. We moved into the property in late August 2012.

Sadly, by the beginning of November, it was apparent that the property had some significant problems. There was extensive water penetration upstairs and a rising damp problem to the ground floor. The letting agent was informed immediately, with photographic evidence and a request for urgent assistance. We moved our furniture from the 3rd bedroom.

A ‘trades-person’ appeared in due course, with a notepad and pencil but with no damp meter. A report was promised, but was not forthcoming. The letting agent promised to send another contractor. This one only worked weekends and couldn’t agree a time to call; that visit never took place.

I called the landlords contractor to arrange the remedial work to be completed – missing doors, exposed wires, etc. He visited early November, measured up, made notes, promised to return – but failed.

We spent the most horrendous Christmas and New Year in the house. There was serious damp penetration, black mould which was constantly being removed. Slugs were climbing the walls. The house was very cold and the more that we heated it – the worse the damp became. We telephoned, wrote, sent photographs, yet the letting agent did nothing; there were plenty of replies – unbelievably stating that they were attempting to do everything as quickly as possible. We initially resigned ourselves to getting out of the house at the end of our AST.

In early-February, I wrote the strongest letter to letting agent with photos. A survey was made by Peter Cox, a pretty damning report which agreed with our complaint – serious damp and rain penetration. I wrote again, asking for compensation and a reduction in rent. This was refused. The letting agent had said that the landlord was absent; it transpired this wasn’t the case.

We tracked the landlord down and demanded a meeting. The landlord appeared, agreed with us in full and said that it was the first he knew of the problem. He agreed that we should be compensated and that this was the letting agents responsibility. Our landlord sat in our home, apologising and promised us both that this would be resolved. He remarked how clean we kept the property. The next day he had changed his mind and said that our grievance was with the letting agent. The following day – the EHO (Environmental Health Officer) inspected. That week, the missing doors and exposed electrics were attended to. We sent 2 requests to the letting agent, for the landlords address – these were refused.

A week later we received a section 21 notice to quit. The landlords address was given as c/o a family member in the South – presumably to thwart a legal action by us.

It turned out that the landlord had known of the problems. He’d applied for a grant for roof insulation, in my name – without my knowledge – and prior to our first meeting. It transpired that the letting agents were not members of ARLA or NAEA and we contacted both organisations and Rightmove to get these false affiliations removed. The letting agent claimed an oversight.

We spoke with our MP who has written to the CEO of the local authority, in order to push the EHO. The EHO wrote to the letting agent and the landlord but there was no response. We then began to receive threats from the letting agent to enter the property to inspect and allow viewings; we made a formal complaint to the Police and this is logged with a fast-track number in the event that they continue. We threatened to change the locks and the letting agent replied that this was not necessary.

We defended the section 21 notice on the grounds of incorrect dates and continued to pay the rent. We were not going to be forced out and subjected to costs or inconvenience due to their incompetence. The weather had improved and the house was drying out for the summer and we would tough it out now – having gone through the worst. We have since redecorated all damp affected walls as it is unnecessary to be reminded every day.

Our MP has pushed for resolution; this has mustered a stronger letter from the EHO. There has been no response other than a second section 21 notice. The dates are once again incorrect. The letting agent has put our deposit into a DPS but did not provide the Deposit Protection Certificate or prescribed information until we requested it after five months of tenancy. The prescribed information appears to be incomplete. I doubt that any s21 is valid until deposit is returned and the landlord might be liable for 3x under the Localism Act? Our claim should also be for a reduction in rent back-dated to 11/2012 and should provide compensation for immense stress and upset – particularly to my wife – for the repeated inconvenience, small damage, etc.

We’ve spoken with experts in Landlord/Tenant issues, they’ve seen our file which is very complete and have passed it onto Barristers to evaluate. We have a strong case apparently, but would incur costs of circa £7k to seek compensation/enforcement of duty to repair; we’ve been told that there is little likelihood of being awarded costs – if successful. That’s an expensive ‘point of principle’ for us.

It seems a dreadful situation. We actually like the house and the worst of the problems could be so easily resolved. We must now consider vacating the property before the bad weather sets in again – to remain longer would weaken any case against the landlord and the letting agent. The landlord is inexperienced and his conduct and concern for our welfare has been quite despicable. The promises that he made to my wife and I were instantly forgotten and we would like to do whatever might be done, so that he is taught the lesson.

Please accept our apologies for the long post, is there anything that we could do, other than what the landlord and letting agent expects – that being to vacate and walk away? I feel that someone needs to make a stand here, to create some solid case law if necessary – to protect others faced with similar problems in the future.

Thanks in advance

Roy and Tania


How to help bring about changes to legislation post “Superstrike” Buy to Let News, Guest Articles, Guest Columns, Landlord Action, Landlord News, Latest Articles, Legal, Letting, Lettings & Management, Property Investment News, Property News, The GOOD Landlords Campaign

One of the things that are uppermost in landlords’ minds at the moment is the concern that we are vulnerable to possible litigation following the “Superstrike” case. The degree of that vulnerability varies from landlord to landlord and of course some landlords are not at all clear where they stand.Mary Latham

All of the deposit protection schemes and large landlords associations are working behind the scenes to persuade DCLG to tweak legislation to prevent courts being overrun with cases from tenants who have not actually been deprived of their legal rights but have become aware of the loophole that Superstrike highlighted.  In other words they are not asking for a change in the law which would enable those landlords who do not/did not protect their tenants deposits (HA 2004 & Localism Act 2012) to get away with it.  What they are asking for is a change which prevents those landlords who believed that they were acting within the law from facing litigation from their past and present tenants. These are the landlords who do/did protect their tenants deposits and provided the tenant with the Deposit Protection Certificate and Prescribed Information for Tenants within 30 days of having received the deposit but who were unaware that they needed to provide the documents again, despite the deposit protection continuing and no new paperwork being issued, at the point at which the fixed term of the tenancy ended and a Statutory Periodic Tenancy began (HA 1988). There are also those landlords who have tenancies that began before the Deposit Protection legislation came into affect (HA 2004) and therefore did not protect their tenants deposits. These landlords were also unaware that if the tenancy became a Statutory Periodic Tenancy at the end of the fixed term after the law changed that they should have protected the deposit and served the documents on their tenants. This last point was the crux of the Superstrike case.

In addition to the concerns many of us have about the potential litigation (it has not yet been established that there is actually a threat beyond the circumstances of Superstrike) is the issue of not being able to regain Possession of properties using Section 21 (HA 1988)

In order to convince Government that this is a major problem in the PRS they need to be shown actual evidence and the only people who can give them that evidence is us (landlords and letting agents).  All of the organisations involved in the discussions have produced a short survey to gather the facts.

The combined results will be present to DCLG.

The survey will take just a few minutes of your time and will not ask you to identify yourself.

If you do not take the time and trouble to complete the survey we may lose the argument and fail to get the legislative changes that we all need. 

Please follow the link  below and do your part to bring about a solution for us all before the Courts are filled with cases brought by the “No Win No Fee” people that have sprung up to make easy money from landlords who have simply made a mistake and have not in any way deprived our tenants of their legal rights.

Please also send a link to this article to every landlord you know to make certain they aware of this very important survey.

Click this link >>> https://www.surveymonkey.com/s/NLASS

When I completed the survey I found that I needed to read it first then work out which category my deposits fell into before going back and completing it – which took less than 2 minutes. By doing the calculations for this survey I am now clear of where I stand with each of my tenancies.

This was a useful exercise and may help me going forward when the inevitable happens and a landlord is sued by a tenant for one of the possible scenario.

I think that you may find this helpful too.


Professional Inventories for Landlords – the devil is in the detail Latest Articles

There have been several discussions here about inventories, why they are necessary and which is the best software to use to produce them etc.

What we’ve never had before though is the ability for landlords and letting agents to download a professionally prepared inventory for benchmarking purposes against what they have been doing until now.

With this in mind I  asked two major contributors to our forums and supporters of The GOOD Landlords Campaign for their help.

Sian Hemming-Metcalfe is an independent inventory professional and has produced a sample inventory for ARLA agents LettingSupermarket.com

The inventory comprises 75 pages of detail – take a look if you want to compare it to what you might be producing for yourself.

As you probably know, landlords lose deposit protection arbitration cases more often than they win. This is not because the process is biased in any way, it’s simply because their evidence for claiming damages is insufficient, usually due to the quality of the inventories produced at the point of check in and check out.

It needn’t cost a fortune to have inventories of this quality produced. In the case of LettingSupermarket.com, it’s all part and parcel of the service they provide from just £24.99 a month plus VAT, nothing up-front to pay by the landlord – see this thread where I have reviewed their offering.

To download a copy of the example inventory which Sian produced for LettingSupermarket.com please complete the form below. Details of your enquiry will be provided to LettingSupermarket.com to follow up with a sales call and/or email.Professional Inventories for Landlords - the devil is in the detail

Download the sample inventory

  • Please enter a number from 1 to 999.


NLA warns landlords of “no win no fee” deposit protection lawyers Latest Articles, NLA - National Landlords Association

Speaking recently on BBC Radio 4 Carolyn Uphill, Chairman of the National Landlords Association (NLA) warned landlords to ensure their tenants’ deposits are properly protected and that they’ve fully complied with Tenancy Deposit Protection (TDP) law.

The warning comes after a growing number of information requests to TDP schemes from ‘no win no fee’ claims companies who, on behalf of tenants, are targeting landlords who may not have fully protected deposits.

All landlords in England and Wales must by law protect their tenants’ deposits within a Government authorised TDP scheme and must also ensure that they pass on important information about where and how it was protected – known as the Prescribed Information – to the tenant within 30 days from the start of the tenancy.

Failure to do so could lead to heavy penalties and claims companies seem to be inviting tenants who haven’t received their prescribed information to make a claim against their landlord – even if the deposit is protected.

Carolyn Uphill, Chairman of the NLA said:

“You have to ask where the financial loss for the tenant is. The majority of tenant’s deposits are being protected and ninety nine per cent of tenancies end without any issues over the return of the deposit. Where problems do arise, the tenant has access to a free and impartial decision using the scheme’s dispute resolution service.

“Of course, where there is blatant disregard for the law landlords can have no argument and must be brought to rights. However, these claims firms are looking to exploit those landlords who have protected their tenant’s deposits but may not have properly issued the prescribed information.

“In practice this could simply mean not providing their tenant with a leaflet about where the deposit is protected.

“This sort of action is morally questionable, unnecessarily punitive and will only work to undermine the good relationship that exists between the majority of landlords and their tenants”.

Eddie Hooker, CEO of Tenancy Deposit Scheme my|deposits, also commented:

“It has always been the landlord’s responsibility to protect the deposit and a vital part of the process is to pass the Prescribed Information on to the tenant.

“Landlords must be aware that they are ultimately responsible even if they use a letting agent. Our advice is to check with your agent or directly with your deposit protection scheme to ensure all of your deposits have been properly protected.

“Those who fail to comply with either step of the legislation leave themselves open to potential fines of up to three times the deposit value and could fall prey to these kinds of claims companies.

Mark Alexander, founder of Property118 recently highlighted the marketing activity of these companies – see this thread.

Mark Alexander also commented:-

Following the case of Superstrike Limited vs Rodrigues at the Court of Appeal it is now unclear whether landlords should have re-issued Prescribed Information when when a tenancy became Statutory Periodic at the end of a fixed term. The ruling was that deposits taken pre April 2007 should have been protected when a new statutory periodic tenancy came into being after Tenancy deposit Protection laws came into force. This is because it is now clear from legislation that a Statutory Periodic Tenancy is a new tenancy and that all deposits taken in respect of new tenancies should be protected. What is not clear is whether a deposit which was protected and remained protected needs to be re-protected and new deposit protection certificates and prescribed information to be served. The guidance issued by the Deposit Protection Schemes is  unclear on this point and concludes that only new legislation or a ruling in the High Courts will clarify this matter. To date, no lawyers have publicly announced a solution which could protect landlords and letting agents from claims if such a ruling goes the wrong way.

Tenants Claimline

 


Updated guidance on Superstrike Deposit Protection case Advice

The four tenancy deposit protection scheme providers have collectively issued guidance notes following the Court of Appeal ruling in the case of Supertrike Limited vs Rodrigues. Guidance from deposit protection schemes following the Supertrike Case

Landlords and Letting Agents should note that none of the tenancy deposit schemes can offer legal advice to landlords or lettings agents.

Their guidance is not intended to give legal advice and cannot be relied on as such. If you have concerns you should get your own legal advice based on your own individual circumstances. However they set out their shared understanding of the position and the options they think are available to landlords and lettings agents in the future.

The guidance notes, which are available to download free by completing the form below this article, have been jointly produced by the authorised tenancy deposit schemes:

• my|deposits
• Tenancy Deposit Scheme (TDS)
• Deposit Protection Service (DPS)
• Capita

The Department for Communities and Local Government has met with the tenancy deposit schemes and has received a copy of these guidance notes.

Please download, have a read and then come back here and leave a comment.

You can be pretty sure the Deposit Protection providers will be reading comments left on this forum so don’t miss the opportunity to have your say.

Download the guidance notes here

 


Guidance from tenancy deposit protection schemes following the Superstrike Ltd. vs Rodrigues Court of Appeal case Buy to Let News, Landlord News, Latest Articles, Legal, Letting, Lettings & Management, Property Investment News, Property Investment Strategies, Property Market News, Property News, Tenant Eviction

The four tenancy deposit protection scheme providers have collectively issued guidance notes following the Court of Appeal ruling in the case of Superstrike Limited vs Rodrigues. Guidance from deposit protection schemes following the Supertrike Case

Landlords and Letting Agents should note that none of the tenancy deposit schemes can offer legal advice to landlords or lettings agents.

Their guidance is not intended to give legal advice and cannot be relied on as such. If you have concerns you should get your own legal advice based on your own individual circumstances. However they set out their shared understanding of the position and the options they think are available to landlords and lettings agents in the future.

The guidance notes, which are available to download free by completing the form below this article, have been jointly produced by the authorised tenancy deposit schemes:

• my|deposits
• Tenancy Deposit Scheme (TDS)
• Deposit Protection Service (DPS)
• Capita

The Department for Communities and Local Government has met with the tenancy deposit schemes and has received a copy of these guidance notes.

Please download, have a read and then come back here and leave a comment.

You can be pretty sure the Deposit Protection providers will be reading comments left on this forum so don’t miss the opportunity to have your say.

Download the guidance notes here

 


Is this “The DSS Landlords Ultimate Letting Package”? Latest Articles, Letting, Lettings & Management

Letting Supermarket have launched a new scheme which they have labelled “The DSS Landlords Ultimate Letting Package”. 

The package includes:-

  • Visiting your property, taking particulars and floor plans.
  • Setting up an online account to store your documentation so it can be accessed at any time.
  • Advertising on all major portals including Rightmove and Zoopla
  • Viewings
  • Carrying out an inventory and schedule of condition at the property on check-in with the tenants. Inventory prepared by a qualified inventory clerk
  • Referencing tenants
  • Gas Safety Certificate as required (additionally charged)
  • Tenancy Agreements and guarantor agreements
  • Rent collected in advance with invoice and rental statement.
  • Rent Guarantee & Legal Expenses Cover (now available for applicants claiming benefits)
  • Check in / check out
  • Interim viewings
  • Rent collection
  • Deposit protection (if required). Note that most landlords taking this scheme do request deposits

The charging structure is quite complex as this is dependent upon the number of tenants, whether RGI can be offered and/or is taken up, whether some or all of the costs are to be passed onto the tenant etc. Needless to say, with Letting Supermarket it is always going to be extremely competitive. Quotations are obviously available upon request.

This new package is being released on 1st August 2013.

Letting Supermarket is a member of ARLA and carries professional indemnity insurance and client money protection.

Insurance is underwritten by DAS and administered by Let Alliance.

To register your interest please complete the form below.LettingSupermarket

How to save money and stay protected

Please complete this form if you would like further information
  • Please enter a number from 1 to 999.

 


Private Rented Sector Review – Conclusions and recommendations Landlord News, Latest Articles

The Private Rented Sector Review conclusions and recommendations published by the Communities and Local Government Committee:

Simplifying regulation

1.  We recommend that the Government conduct a wide-ranging review to consolidate legislation covering the private rented sector, with the aim of producing a much simpler and more straightforward set of regulations that landlords and tenants can easily understand. As part of this review, the Government should work with groups representing tenants, landlords and agents to bring forward a standard, plain language tenancy agreement on which all agreements should be based. There should be a requirement to include landlords’ contact details in tenancy agreements. (Paragraph 13)

2.  We recommend that the Government consult on the future of the housing health and safety rating system and the introduction of a simpler, more straightforward set of quality standards for housing in the sector. The Government should also ensure that planning and building regulations are consistent with standards for the quality and safety of private rented housing. (Paragraph 18)

Increasing awareness

3.  We recommend that, once the review of the legislative framework we have called for is completed, the Government, working with tenants’, landlords’ and agents’ groups, establish and help to fund a publicity campaign to promote awareness of tenants’ and landlords’ respective rights and responsibilities. Our recommendation for a wholesale review of the regulation in the sector provides the obvious platform on which to base a publicity campaign. (Paragraph 24)

4.  We recommend that the Government bring forward proposals for the introduction of easy-to-read key fact sheets for landlords and tenants, and consult on the information these sheets should contain. The sheets could include links to further information available online. As a minimum, the sheets should set out each party’s key rights and obligations, and give details of local organisations to whom they could go for further advice and information. This fact sheet should be included within the standard tenancy agreement we propose earlier in this chapter. (Paragraph 25)

Raising standards

5.  Some local authorities are doing excellent work to raise standards in the private rented sector, but there appears to be more scope for sharing this good practice, so that all councils are performing to a high standard. The Local Government Association should, as part of its sector-led improvement role, make sure that mechanisms are in place to ensure all councils learn from the good practice and take effective steps to improve standards of property and management in the private rented sector. (Paragraph 30)

6.  We are concerned about reports of reductions in staff who have responsibility for enforcement and tenancy relations and who have an important role in making approaches to raising standards successful. Given the financial constraints that councils face, it is important to identify approaches to raising standards that will not use up scarce resources. One approach is to ensure that enforcement arrangements pay for themselves and help to fund wider improvement activity. Therefore, where possible, the burden of payment should be placed upon those landlords who flout their responsibilities. (Paragraph 31)

7.  We recommend that the Government consult on proposals to empower councils to impose a penalty charge without recourse to court action where minor housing condition breaches are not remedied within a fixed period of time, though an aggrieved landlord would have the right of appeal to a court. (Paragraph 33)

8.  We recommend that, where landlords are convicted of letting property below legal standards, local authorities be given the power to recoup from a landlord an amount equivalent to that paid out to the tenant in housing benefit (or, in future, universal credit). We hope that such a measure will help to prevent unscrupulous landlords from profiting from public money. Local authorities should be able to retain the money recouped to fund their work to raise standards. To ensure a consistent approach, those tenants who have paid rent with their own resources should also have the right to reclaim this rent when their landlord has been convicted of letting a substandard property. (Paragraph 37)

Illegal eviction

9.  We do not agree that a statutory duty to have to take steps to tackle illegal eviction should be placed on local authorities, as it would be inconsistent with a localist approach. Nevertheless, it is again important that local authorities learn from each other and share best practice on tackling illegal eviction. The Local Government Association should ensure that lessons on illegal eviction are learnt and disseminated. (Paragraph 38)

10.  We are concerned that the police are sometimes unaware of their responsibilities in dealing with reports of illegal eviction. We recommend that the Department for Communities and Local Government work with the Home Office on guidance that sets out clearly the role of the police in enforcement of the Prevention from Eviction Act 1977. (Paragraph 39)

Licensing and accreditation

11.  The idea of national licensing has some merit, and such a scheme could bring a number of benefits, particularly if introduced alongside an effective system of redress. It is clear, however, that the Government has not been convinced by these arguments, and we have some sympathy with the Minister’s assertion that a national scheme could be very rigid. Having tailored local schemes may bring its own costs, especially for landlords operating across several areas, but on balance we would prefer to see local authorities develop their own approaches to licensing or accreditation in accordance with local needs. The Government’s focus should be on giving local authorities greater flexibility and encouraging the use of existing powers. (Paragraph 43)

12.  We recommend that the Government bring forward proposals for a reformed approach to selective licensing, which gives councils greater freedom over when licensing schemes can be introduced and more flexibility over how they are implemented. Councils should ensure that the cost of a licence is not set so high as to discourage investment in the sector. (Paragraph 49)

13.  We recommend that the Government give local authorities a power to require landlords to be members of an accreditation scheme run either by the council itself or by a recognised landlords association. (Paragraph 53)

14.  It is important that local authorities have options and tools to raise standards in their areas. Three particular options are: (1) greater use of landlord licensing schemes; (2) compulsory accreditation; and (3) taking a proactive neighbourhood approach to raising standards. In each of these cases, given resource constraints, the schemes have to pay for themselves, and, as far as possible, place the burden of payment on the unscrupulous landlords, with financial deterrents for non-compliance. Councils should be given the powers to impose heavy penalties on those who do not register for licensing or compulsory accreditation after appropriate notification. Neighbourhood approaches could be funded by local authorities recouping costs from landlords whose properties fail to meet minimum standards. We further recommend that the Government initiate a review of the fines imposed by the courts for letting substandard properties, to ensure they act as a sufficient deterrent. (Paragraph 55)

Houses in multiple occupation (HMOs)

15.  We recommend that the Government conduct a review of the mandatory licensing of houses in multiple occupation. This review should consider, amongst other things, evidence of the effectiveness of mandatory licensing, how well it is enforced, and whether the definition of a prescribed HMO should be modified. (Paragraph 58)

16.  Where there are community concerns about high concentrations of houses in multiple occupation, councils should have the ability to control the spread of HMOs. Such issues should be a matter for local determination. We therefore consider it appropriate that councils continue to have the option to use Article 4 directions to remove permitted development rights allowing change of use to HMO. (Paragraph 63)

17.  Universities have a responsibility to ensure that student housing does not have a detrimental impact upon local communities. They should be working with local authorities and student groups to ensure that there is sufficient housing in appropriate areas and that students act as responsible householders and members of the community. (Paragraph 64)

Safety standards

18.  We recommend that the Government work with the electrical industry to develop an electrical safety certificate for private rented properties. To obtain such a certificate, properties should be required to have a full wiring check every five years and a visual wiring check on change of tenancy. Landlords should be aware of the legal requirement to provide safe installations and appliances. (Paragraph 66)

19.  We recommend that the Government introduce a requirement for all private rented properties to be fitted with a working smoke alarm and, wherever a relevant heating appliance is installed, an audible, wired-up EN 50291 compliant carbon monoxide alarm. (Paragraph 67)

Regulation of letting agents

20.  We recommend that, as part of its consultation on the redress scheme, the Government seek views on how best to publicise such a scheme and what penalties should be in place for those agents who do not comply. The Government should also explore how the redress scheme fits alongside existing arrangements for deposit protection. We further recommend that the redress scheme is accompanied by a robust code of practice that sets out clear standards with which agents are required to comply. (Paragraph 74)

21.  We recommend that the Government make letting and managing agents subject to the same regulation that currently governs sales agents. This includes giving the Office of Fair Trading the power to ban agents who act improperly, and making client money protection and professional indemnity insurance mandatory. (Paragraph 78)

22.  Any proposal to require sales agents to meet minimum professional standards before they begin trading should also be applied to letting and managing agents. In addition, if at any point a requirement for sales agents to be registered with an accredited industry body is to be introduced, this should be part of a wider framework also covering letting and managing agents. We recommend that the Government review these arrangements in two years’ time. (Paragraph 78)

Agents’ fees and charges

23.  We recommend that the code of practice accompanying the new redress scheme include a requirement that agents publish a full breakdown of fees which are to be charged to the tenant alongside any property listing or advertisement, be it on a website, in a window or in print. This breakdown should not be “small print”, but displayed in such a way as to be immediately obvious to the potential tenant. The code should also require agents to explain their fees and charges to tenants before showing them around any property. Furthermore, the code should forbid double charging, and there should be a requirement that landlords are informed of any fees being charged to tenants. If agents do not meet these requirements, the fees should be illegal. Finally, the professional bodies should make a commitment to full, up front transparency on fees and charges a requirement of membership. (Paragraph 83)

24.  We intend to gather further information on the impact in Scotland of the decision to make fees to tenants illegal, and to return to this issue in 2014. (Paragraph 86)

Longer tenancies

25.  The demographics within the private rented sector are changing. No longer can it be seen as a tenure mainly for those looking for short-term, flexible forms of housing. While some renters still require flexibility, there is also an increasing number, including families with children, looking for longer-term security. The market, therefore, needs to be flexible, and to offer people the type of housing they need. The flexibility of assured shorthold tenancies should be better exploited, and the option of using assured tenancies should also be considered where these meet the needs of landlords and tenants. That we are beginning to see some institutions and housing associations offering longer tenancies under the current law suggests that we do not need legislative changes to achieve them. Rather, we need to change the culture, and to find ways to overcome the barriers to longer tenancies being offered. (Paragraph 94)

26.  We recommend that the Government convene a working party from all parts of the industry, to examine proposals to speed up the process of evicting during a tenancy tenants who do not pay rent promptly or fail to meet other contractual obligations. The ability to secure eviction more quickly for non payment of rent will encourage landlords to make properties available on longer tenancies. The Government should also set out a quicker means for landlords to gain possession if they can provide proof that they intend to sell the property. (Paragraph 97)

27.  Some landlords are not able to offer longer tenancies because they are prevented from doing so by conditions in their mortgage. We are pleased that lenders are considering how such conditions can be removed, and that Nationwide Building Society is to begin allowing its borrowers to offer longer term contracts. We urge the Council of Mortgage Lenders to work with other lenders to ensure that they quickly follow suit. Lenders should only include restrictions on tenancy length in mortgage conditions if there is a clear and transparent reason. (Paragraph 100)

28.  We recommend that the Government include in the code of conduct for letting agents a requirement both to make tenants aware of the full range of tenancy options available, and, where appropriate, to broker discussions about tenancy length between landlords and tenants. (Paragraph 102)

‘Retaliatory eviction’

29.  There is a perception amongst some tenants that if they speak out it could result in their losing their home. Tenants should be able to make requests or complain without fear that doing so will lead the landlord to seek possession. We are not convinced, however, that a legislative approach is the best or even an effective solution. Changing the law to limit the issuing of section 21 notices might be counter-productive and stunt the market. Rather, if we move towards a culture where longer tenancies become the norm, tenants will have greater security and also more confidence to ask for improvements and maintenance and, when necessary, to complain about their landlord. Moreover, if local authorities take a more proactive approach to enforcement, they will be able to address problems as they occur rather than waiting for tenants to report them. (Paragraph 105)

Rents and affordability

30.  Problems with the affordability of rents are particularly acute in London and the South East. Although in other parts of the country average rents and yields are relatively stable, we are still concerned that some families are struggling to meet the costs of their rent. We do not, however, support rent control which would serve only to reduce investment in the sector at a time when it is most needed. We agree that the most effective way to make rents more affordable would be to increase supply, particularly in those areas where demand is highest. (Paragraph 110)

31.  There is no perfect way to set rent, but, where longer tenancies are being established, linking increases to inflation or average earnings, or voluntarily agreeing a fixed uplift each year merit consideration and could provide tenants and landlords with a degree of stability, though over time mechanisms may emerge as, for example, in the commercial property sector. Tenants’, landlords’ and agents’ groups should encourage their members to discuss these options at the outset of a tenancy. Existing arrangements for setting and increasing rent are often arbitrary and uneven, and reflect the immaturity of the market. (Paragraph 113)

Placement of homeless households in the private rented sector

32.  We welcome the Government’s use of secondary legislation to clarify when accommodation is unsuitable for homeless households. We expect councils to pay full regard to this order and to ensure that homeless households are only placed in suitable accommodation. Given that many of these households will be vulnerable, councils have a particular responsibility to ensure that the properties they are placed in are free from serious health and safety hazards. We recommend that, as a matter of good practice, local authorities should inspect properties before using them for the placement of homeless households. (Paragraph 117)

33.  All agree that, wherever possible, councils should be placing homeless households within their local area (unless there are particular circumstances that mean it is not in the households’ interests). It nevertheless appears inevitable that councils in areas with high rents, London in particular, will place homeless households outside the area, including in coastal towns. Before any placement, there should be a full discussion with the receiving authority and the prospective tenant and information about the household and its ongoing needs should be shared. The Government should consider making this a statutory duty. (Paragraph 121)

34.  We were pleased to hear of positive examples of work to support homeless households in the private rented sector, including the establishment of social letting agencies and the development of private rented sector access schemes. We encourage the Government to work with local government, the charity sector and industry bodies to ensure best practice is shared and lessons learned. (Paragraph 122)

Local housing allowance

35.  We recommend that the Government take immediate steps to allow councils to apply for a variation of broad rental market area boundaries where anomalies occur. (Paragraph 125)

36.  We recommend that the Government conduct a wide-ranging review of local housing allowance (LHA). This review should assess whether there is greater scope for local flexibility over the setting of LHA rates and the boundaries of broad rental market areas. Local authorities could be incentivised to reduce the housing benefit bill by being allowed to retain any savings for investment in affordable housing. (Paragraph 125)

Data quality

37.  We recommend that the Government establish a small task group of key organisations and academics to consider how data relating to the private rented sector can be improved and made more readily available. In addition, we encourage the National Audit Office to contribute to an effective evidence base about the sector and to draw upon our recommendations when developing studies on housing related topics. (Paragraph 128)

Tax

38.  We recommend that the Government, in reviewing the regulation covering the private rented sector, set out proposals for greater co-ordination between the tax authorities and those regulating the private rented sector. (Paragraph 131)

Increasing supply

39.  We welcome the introduction and expansion of the Build to Rent Fund. The Government should take steps to ensure that the fund makes a net addition to new housing, as well as speeding up the delivery of those homes already in the pipeline. (Paragraph 138)

40.  It remains to be seen how much impact the guarantee scheme for the private rented sector will have in delivering additional new homes. The policy may be well-intentioned in its aim to encourage organisations to have more confidence to invest in the sector, but the Government needs to measure results. We invite the Government in its response to our report to update us on the number of applications it has received for the private rented sector guarantee scheme, and to provide an estimate for the number of additional homes it expects the scheme to deliver. If there is any doubt that the scheme is going to deliver the homes required, we recommend that the Government rapidly explore other options for the use of the resources identified. (Paragraph 142)

41.  We welcome the establishment of the task force to promote and broker investment in build-to-let development, and are pleased that the task force is already in operation. It is important that this task force does not become another quango but quickly delivers on its objectives. We invite the Government, in its response, to set out the progress made by the task force in its first few months of operation. This update should quantify the amount of additional investment brokered, and the number of additional homes it would deliver. (Paragraph 144)

42.  Efforts to promote high-quality build-to-let development have commanded significant amounts of government attention and resources. One of the main arguments in favour of this approach is that it will lead to improved choice, quality and affordability across the whole of the private rented sector. It is too early to assess the impact, but a key part of the evaluation of these measures must be the impact they have on the sector as a whole. If, in a year’s time, there is no evidence of this broader effect, the Government must reconsider its strategy and look to other measures to boost supply across the sector as a whole. (Paragraph 148)

43.  There is an urgent need to boost supply across all tenures of housing. We recommend that the Government revisit the Committee’s report on the Financing of New Housing Supply, and set out proposals to implement those recommendations it initially rejected. (Paragraph 150)commons logo


Tenancy agreements – At the end of the fixed term Landlord Law, Latest Articles

All good things come to an end – and in due course your  tenancy agreement’s fixed term will end too.

What happens then?

When the fixed term ends

Some people assume that the tenancy will end and that if the tenants stay on they will be squatters who can be easily evicted.  However you will probably realise that this is very far from the case!

All assured shorthold tenancies will continue, by virtue of a new ‘periodic’ tenancy which will come into place immediately the fixed term ends, under s5 of the Housing Act 1988.  So if the fixed term ends on 4 July, then the new periodic tenancy will start at about 1 second past midnight on 5 July.

The ‘period’ is linked to how the rent is paid.  So if the rent is paid monthly, this will be a monthly periodic tenancy and will run on from the 5th of the month to the 4th of the month.

So when the fixed term comes to an end – the parties have a choice.  They can either let the tenancy run on as a periodic, or sign up a new fixed term tenancy.

Which should you do?

Well either are fine.  Lets look at the options:

1. Giving a new tenancy agreement.  Letting agents often use this as a reason for a ‘renewal fee’ and are therefore understandably anxious for this to be done.  It can often be the best solution – both parties know where they are, and if you want to increase the rent, including it in a new tenancy agreement which is then signed by the tenant as agreed is probably the best way.

This is also a good time to incorporate any changes – for example if there are new tenants wanting to come onto the tenancy agreement, or if either party want the terms of the tenancy to be changed in any way.

2. Allowing the tenancy to continue as a periodic.  Although this is often thought of as a continuation of the original tenancy, in fact, unless perhaps the tenancy is continuing under a clause in the tenancy agreement, the periodic tenancy will actually be a new tenancy.

This is down to the wording in s5 of the Housing Act 1988 and the Court of Appeal have recently confirmed in the Superstrke case  that this is what happens.  So landlords need to consider whether their tenancy deposit needs to be re-protected and the prescribed information re-served.

Allowing the tenancy to continue as a periodic is often the best choice if the tenants have proved unsatisfactory and are being allowed to stay on approval.  If you issue a new tenancy agreement, then this will cancel any section 21 notice served, meaning that you will need to re-serve and will not be able to issue any proceedings under the notice until the end of the fixed term.

Whereas if the tenancy is a periodic, you will (assuming your section 21 notice period has expired) be able to issue proceedings immediately if the tenants continue to prove unsatisfactory.

Vacating the property and notice periods

Assuming that the tenants do not want to stay on – what are the rules regarding notice?

Generally landlords will want at least 1 month notice, usually more, so they can arrange for checkout meetings and the like.  However if the tenants leave at or before the end of the fixed term they are not actually obliged to do this.  If the tenancy is for, say, six months, and the tenants leave on the last day, then the tenancy will end by what we lawyers call ‘effluxion of time’.

There is no need for the tenants to give notice as the tenancy (that tenancy) ended then anyway.

This is a bit unfair on landlords as it means that the tenants can choose whether to stay on under a periodic or leave by the end of the fixed term, without letting the landlord know.

My tenancy agreement has a clause which requires the tenant to let the landlord know what he intends to do – but breach of this clause will not make the tenants liable for any rent in lieu of notice (if I tried to do this I would risk the clause being found unfair).  It may be sufficient though to allow the landlord to claim any wasted costs due to the tenants failure to provide proper information.

However if the tenant then stays on, even by one day after the fixed term has ended, the periodic tenancy will kick in and they will have to give not less than one months notice if they want to leave.  If they don’t then the landlord WILL be entitled to claim rent in lieu of notice.

But not if they leave on the last day of the fixed term tenancy.

Conclusion

This is the end of this short series of articles on tenancy agreements.  I hope you have enjoyed it.

If you want more, note that I have a lot of guidance in my free Tenancy Agreements 101 which you can sign up for here.Tenancy agreements - At the end of the fixed term


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Order the "Rent to Rent" lease contract template

Rent2Rent companies are using the wrong letting contracts

Whilst I have never been a fan of the Rent2Rent strategy I have to accept that a lot of investors are using Rent2Rent including Housing Associations, Councils and FTSE 250 companies as well as privateers. As it is the mission of Property118 to share best practice, helping these private investors to get their paperwork right fits within our remit, regardless of any other misgivings I might have personally have about the scheme.

What is Rent2Rent?

The way the scheme generally works is that a contract is entered into whereby a property owner rents or signs up to a management contract for his/her property with an investor/manager which includes permission to sublet in return for promises of guaranteed rent, maintenance, management etc. A profit element is built into the deal by investor/manager in the form of a below market rent.

Rent2Rent problems

An example of how things can go horribly wrong is explained in this thread. A property owner was asked to sign an assured shorthold tenancy agreement. To cut a long story short there was a dispute over deposit protection which went to court and the property owner won, even though she had not protected the deposit. She could have claimed substantial damages against the Rent2Rent company but in this instance chose not to. Big lesson learned for the property owner and also the Rent2Renter too!

What are the correct agreements to use for Rent2Rent?

I have consulted with Tessa Shepperson at Landlord Law regarding which type of tenancy agreement should be used. The conclusion was that neither AST’s nor corporate letting agreement are appropriate agreements for the owner and the Rent2Rent company to be using. What is required is a commercial lease drawn up by a corporate property lawyer. Tessa doesn’t get involved with corporate property law so I called in the help of Justin Selig, a qualified and practising corporate property solicitor with The Law department and Landlord Action.

Justin has agreed that subject to demand he will create a legal document template which Rent2Rent companies can  download from Property118 for £97 including VAT. The document will be copyright protected so it can only be used by the person who pays for it and any company in which that person owns more than 26% of the shares. It can, however, be used as many times as that person needs to do so. Therefore there is not a requirement to pay £97 each time the document template is used.

If enough people order the agreements they will be available for download by 31st July 2013. If by 22nd July 2013 there are not enough orders it will be deemed that there is insufficient demand, the project will be scrapped and everybody who has paid will receive a FULL refund.

UPDATE – 23rd July 2013

Sufficient orders have been confirmed and paid for and Justin Selig will have the contracts prepared and ready for us to deliver by the end of this month (July 2013)

UPDATE – 29th July 2013

“Rent to Rent” Lease contract templates are now available for immediate download using the embedded order form below.

Tenancy Agreements between Rent2Rent company and tenantsRent2Rent scheme letting contracts

These will typically be standard AST’s, but there are many kinds. Licences may also be applicable if the tenant has another home. A great article to read about tenancy agreements is this one written by Tessa Shepperson.

VAT on Rent2Rent

Some Rent2Rent investors have set their arrangements up under management contracts and fallen foul of VAT. I have spoken to my accountants and had it confirmed that a commercial lease will get around this problem as the owner of a residential property can not elect to tax for VAT purposes. Therefore, the head lessee (the Rent2Rent investor) doesn’t need to charge VAT to tenants either on this basis.


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