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The Future Doesn't Look Bright For Landlords

Posted on 14 May, 2019 at 11:20 Comments comments (0)

Alarm bells over the health of Britain's private rented sector have been raised for the second time in two weeks, leading some to worry that a rental crsis is on the horizon. 

Many landlords will have seen their profits slashed over the past three years as biting tax changes have taken their toll. Two pieces of legislation, one proposed and one incoming, are likely to have a further impact on landlords in the coming years..

Landlords have issued a stark warning over the health of Britain's private rented sector as more and more property investors look set to sell up in the face of falling profits.

The findings follow a wide-ranging study of almost 2,500 landlords by the Residential Landlords Association study released last week, which found that a quarter of private landlords are looking to sell at least one property over the next year.

Letting Fees Comes Into Force 1st June 2019

Posted on 9 February, 2019 at 7:35 Comments comments (2)

The introduction of a ban on fees charged by landlords and letting agents looks set to finally become law on June 1st this year, the government has announced.

Following it's third reading in the House of Lords, the Tenant Fees Bill is likely to receive Royal Assent in the coming months.

Speaking to The Lords, Lord Bourne of Aberystwyth said: "We need to enable agents and landlords following Royal Assent to become compliant, but we intend for the provisions to come into force on June 1st 2019.

"This would mean the ban on letting fees would apply to all tenancies signed after this date".

The new law will not just mean a ban on letting fees, but also the majority of other upfront fees payable by tenants to rent a property in England.

There will also be a cap on the amount of refundable deposit a tenant would be required to pay to the value of five weeks' rent as well as a cap on the amount of holding deposit a tenant will be required to put down to secure a property to the value of one week's rent.

The government believes the Bill will make renting in England fairer and more affordable for tenants by reducing the costs at the outset of the tenancy, at the same time as improving transparency in the private rental market.

David Cox, Chief Executive of ARLA Propertymark, said: "With the Tenant Fees Bill completing it's passage through the House of Lords, it appears the Tenant Fees Ban will come into force on June 1st 2019.; subject to parliamentary scrutiny in the House of Commons.

"This now gives agents the legal certainty they need to prepare for a post tenant fees ban world. To learn about the intricacies of the legislation, we encourage agents to come to our regional meetings".

Why Section 21 is necessary

Posted on 22 January, 2019 at 5:50 Comments comments (0)


Currently, there is a nationwide campaign headed up by Generation Rent and supported by The Salvation Army and Crisis amongst others. The campaign has over 50,000 signatures so far, calling for Section 21 to be scrapped.

NO-FAULT EVICTIONS

Section 21 evictions, also known as no-fault evictions, are used when a landlord needs the property to be vacated for any number of reasons at the end of a tenancy agreement. These can include the following, althought the Section 21 Notice does not require any rationale for a notice to be served:

* Wanting to sell the property

* Wanting to move into the property themselves

* Wanting to renovate or extend the property

LANDLORDS

For landlords, Section 21 Notices are neccessary as it gives them the ability to regain possession of their property at the end of a tenancy agreement without need for justification.

When there are reasons for repossession before the end of the contract, the only way they can do is with a Section 8 Eviction Notice where they'll need a reason such as damages or rent arrears.

LACK OF SOCIAL HOUSING

The real issue appears to be the lack of social housing because if there were enough social housing available for tenants, there would not be so much reliance placed upon the private rental sector and therefore there would be more stability for those that rent.

The current situation is that the affordable housing supply is low. Whilst right-to-buy gave people the financial incentive to own their own property, the government hasn't been replacing these properties. This in turn, has meant that those who would have ben able to live in council housing have had to enter the private rental market; this has left landlords inundated with the type of tenants that may be reliant on benefits, that may be vulnerable, or have any number of other issues, making the private rented sector not the most appropriate solution. However, without the availability of social housing it is the only solution.


IMPORTANT CHANGES FOR LANDLORDS

Posted on 15 December, 2018 at 7:05 Comments comments (0)

If you rent out a property classed as a House in Multiple Occupation (HMO) you need to make sure you are aware of some recent changes.

A HMO is a property that is rented to a number of unrelated tenants who share facilities like bathroom or kitchen. They can include shared houses or flats above commercial premises.

On October 1st, mandatory HMO licensing was extended to include one and two storey properties. An HMO must now be licensed if: 

* it is let to five or more people from more than one household.

* at least some tenants share a kitchen or bathroom

and

* it is not a purpose-built flat in a block of three or more flats.

The government has introduced these changes with the intention of raising standards and so that good landlords who work hard for their tenants do not face unfair competition from rogue landlords who ignore their obligations.

Application forms are available at local council offices or on their websites.

Failure to apply for a licence if one is required is a criminal offence and may result in prosecution or a civil penalty.

Landlord Legislation

Posted on 14 September, 2018 at 6:05 Comments comments (0)

We now live in a world where a good managing agent is worth their weight in gold, but a poor one can be a massive liability. Minor compliance failures can cause significant problems for landlords.

Gas Certificates and Section 21.

Posted on 4 August, 2018 at 8:20 Comments comments (0)

Landlords, did you know that if you did not provide a gas safety cerificate at the start of a tenancy (be it a first agreement or written renewal after 1st October 2015), before the tenant moved in, you may find that any Section 21 Notice served during the term is invalid.

If you gave your tenant a tenancy after 1st October 2015, but failed to serve a gas safety certificate prior to them moving in, then your AST will be treated as an assured tenancy and possession using a Section 21 Notice will not be possible, just as if you failed to protect the tenant's deposit within 30 days.

Landlords need to be aware of the risks that if they go to court, their case may get struck out by the judge. We are sure more judges will be briefed about this legislation and more tenants will be informed about this type of defence.. If you are a landlord in this situation, then you may have to rely on a Section 8 procedure, but this is only possible where there has been a breach of tenancy.

The only way in which this can be rectified is with the introduction of new legislation.

Landlords should take the following actions to ensure they are compliant with current regulations regarding gas safety certificates:

- Ensure that tenants are provided with a gas safety certificate in advance of the start of their tenancy and certainly before the tenant moves in.

- Also remember as well as the gas safety certificate, you must provide a valid energy performance certificate (EPC) and a copy of the new updated (9th July 2018 ) government 'How To Rent Guide'.

- Keep a detailed record of the date and time of issue of the certificate on the tenancy file. Ideally, the tenant should sign an acknowledgement to confirm date and time of receipt. This could then be used as evidence in any susequent possession action.

- In a case where a gas safety cerificate was not served at the start of the current tenancy and a replacement tenancy is being contemplated, ensure that the latest certificate is served before the replacement tenancy begins.

Three Year Tenancy Agreements

Posted on 16 July, 2018 at 7:40 Comments comments (0)

The government intends to hold a consultation on tenancy agreement lengths, with the proposal setting out the shortest term being three years with a six month break clause.

As it stands, around 80% of tenancies in England and Wales are either six or twelve month assured shorthold agreements; any changes would be significant and have a huge impact on both the tenant and the landlord.

NOT EVERYONE WANTS A THREE YEAR TENANCY.

The proposal brings into question the flexibility that may need to be given to tenants who don't want or need a three year agreement; not everyone has a lifestyle that suits such commitment. For example, students or those who find their family is expanding and need more space , or those who may experience a relationship breakdown.

Not every person renting wants a long-term agreement; research has found that 40% do and 40% don't with 50% being happy with the current situation.

FAMILIES IN RENTAL ACCOMMODATION

The reason for the consultation is the governments growing concern with the number of families facing short-term rental accommodation. Housing Secretary James Brokenshire commented "It is deeply unfair when renters are forced to uproottheir lives or find new schools for their children at short notice due to the terms of their rental contract".

General Data Protection Regulation for Landlords

Posted on 22 May, 2018 at 7:45 Comments comments (0)

What are the implications of GDPR for landlords? Everyone's asking at this time with the regulation coming into effect on May 25th.

The short answer is: Not as much as you might fear. This summary is intended as a pragmatic briefing for landlords to be able to carry on their business and remain compliant.

Why are there not a lot of implications for landlords? Because if landlords are already compliant with existing data protection regulations, there's little extra to consider.

The main concerns of data protection and GDPR are 'Who you share'other personal data with, and that data is used for the 'purpose' for which it was obtained - subject to certain exceptions mentioned below.

(1) Registering with The Information Commissioners's Office each year at a cost of £40.00. Existing and in future.

If the landlord processes / stores personal data electronically (would include keeping tenants numbers on your phone) then you should register.

It could be considered a matter of scale and personal judgement. Are you a landlord with a few properties where you keep paper copies of certain documents such as tenancy agreement, gas safety certificates in a file or folder?

If the landlord can operte their business in the above manner, then registering with the ICO can be legitimately avoided (see www.ico.org.uk  Registration Self-Assessment).

If you complete this self-assessment - 

Q1. Do you use CCTV for crime prevention? If answer NO and

Q2 Are you processing personal information? If answer YES (which ALL landlords do) and

Q3 Do you process the information electronically? If answer is NO

then you are under no obligation to register, although you may do so voluntarily.

(2) Under GDPR, all landlords will be data controllers and will collect / use/ process and store necessary information securely and without improper disclosure. (This is what landlords already do).

One of the main principles of GDPR that will affect some businesses and probably estate / letting agents, is that data may only be used for the purpose for which it was collected and with the specific consent of that person. In other words, a business or agent couldn't store client details and mass-mail them about an unconnected matter / offer.

As a data controller, there are up to 6 lawful basis upon which data may be processed. Landlords will use up to 4 of them. You don't have to pre-specify which individual ground different items of information are being collected, viz: 

CONSENT - Tenants provide personal data on request. S/he can withdraw this consent, but if there's another lawful reason why a landlord requires to retain it (legal obligation or legitimate interest) it may be retained.

If the data subject (tenant) asks for information to be removed / deleted, and a landlord has one of the lawful basis for retaining (see below), they should be told they can complain to the Information Commissioner.

CONTRACT - Collecting details to decide / form a contract (tenancy agreement).

LEGAL OBLIGATION: For example Right to Rent, HMRC and compliance with various regulations and legislation. Court action for tenancy issues - Possession. A civil action can be brought up to 6 years after an event and retaining information about a tenancy could be justified on this ground.

LEGITIMATE INTEREST: Notifying legitimate interested parties , e.g. council tax and utility providers.

Landlords will require a LOT of personal data, financial, credit, next of kin, employment, etc, etc. in order to make a business decision on granting a tenancy, and GDPR does not prevent this. Just store it and use it in accordance with the above.

(3) Data must be kept safe and secure. If a landlord was storing personal data electronically, then the device should be password

- protected. Storage in paper form in secure location in a locked cabinet. Most houses are hopefully secure.

(4) Third parties processing / passing information requires and always has the consent of the subject unless another lawful basis applies. This isn't rocket science and if a tenant reports a plumbing issue, landlord would e-mail tenant (thus keeping a record) if they agree to their contact number and name being provided to a plumber. Otherwise there are going to be a lot of 3-way conversations on arranging suitable appointments.

Having provided this information, the data processor (landlord) has to be assured that the third party is data compliant.

The legislation suggests that you should ask for a copy of the contractor's data management policy before disclosing data.

For longer term relationships such as letting agents, data policies should be requested (and retained) for assurance that each are complying with the data protection principles. But for ad-hoc repairs - are landlords going to contact various plumbers and ask them to e-mail their data protection policy before the customer's details are provided? It can be hard enough to get a plumber already!

Landlords can pragmatically comply with the spirit of the legislation by asking the contractor via e-mail to delete the contact details of the tenant on completion of work. As a business with similar obligation for accounting as landlords, they will have to retain the address and landlords contact / payment details, which you will of course have consented to.

A Data Privacy Fair Processing Notice should be given to a data subject (tenant) explaining how you will handle their data.

Accent Lettings & Management can provide you with a sample copy of a GDPR Data Privacy Fair Processing Notice - just ask us (you don't have to be an existing client).

Charter For Rent Cheats

Posted on 25 March, 2018 at 0:15 Comments comments (0)

Plans to cap security deposits for private rented housing to six weeks rent risk creating a charter for rent cheats warns the country's leading landlord body.

Research by the Residential Landlords Association (RLA) has found that 40% of private landlords have faced tenants not paying their final month's rent in the past three years.

The new cap is proposed in the Government's Draft Tenant Fees Bill and the RLA is calling for this to be increased to eight weeks to cover the costs if the final month's rent is not paid and to ensure there are sufficient extra funds to deal with any major problems some tenants leave behind.

The RLA is also warning that the Bill risks becoming a missed opportunity to improve the position of tenants. It is calling for proposals to enable tenants to transfer deposits from one home to another rather than having to raise fresh funds each time they move as they wait for their last deposit to be paid back.

It also wants the tenancy deposit process to be brought into the 21st Century by enabling papers confirming that deposits have been protected to be sent to tenants electronically which currently cannot happen.

The Office for Budget Responsibility has again warned that plans to ban letting fees paid by tenants could lead to rent rises as a result of fees being passed on.

Commenting, David Smith, the Policy Director for the RLA said: "Ministers need to address the problem of tenants failing to pay rent every bit as strongly as rogue landlords. It is not unreasonable that landlords should have the security to know that funds are available to cover the uncceptable practice of tenants who do not pay their rent at the end of the tenancy and, in some cases, leave the property in an unacceptable state.

"In a quest for quick popularity, the Government's plans risk becoming a missed opportunity for fundamental reforms to improve tenant's ability to access rented housing."

The research findings are contained within a report by the Residential Landlord Association's (RLA) research exchange, PEARL. Almost 3,300 landlords responded to its questions.

Cuddly Corbyn wants to give tenants the right to keep pets.

Posted on 19 February, 2018 at 6:20 Comments comments (0)

In an effort to win over animal-loving votes, the Labout party wants to give tenants a default right to keep pets in their rented home.

Landlords can only refuse permission under the 2015 Consumer Rights Act if it is reasonable to do so, for reasons such as the animal's size, possible damage and impact on future rental demand.

However, Labour wants landlords to have to prove the pet will be a nuisance before keeping it can be refused. Therefore, this would stop landlords being able to advertise properties with a no pet policy.

The plans also include giving low income earners help with vets bills!

Labour party shadow environment secretary, Sue Hayman, said: "People shouldn't be denied the joy of keeping a pet just because they can't afford a home of their own. For the majority of people under 30, buying a home is sadly less and less an affordable option.

"I believe the five million households who are forced to rent really shouldn't be denied the joy of keeping a pet. Pets are not only good company, but they can also help to reduce stress to their owners.

"So we want to consult with landlords to see if we can give tenants the default right to keep a pet in their home, so long as they're not a nuisance. It's important we don't just design policies for those fortunate enough to own a home and we reflect the needs of the many, not the few."

The National Landlords Association's (NLA), Richard Lambert, said: "Around half of landlords say they are reluctant to allow renters to keep pets due to a perceived added risk of damage to the property and the increased cost of repair at the end of a tenancy.

"You can't take a blanket approach to keeping or refusing pets. The NLA has consistently supported schemes that encourage landlords to take on pet owners, such as The Dog's Trust's 'Let With Pets', but landlords should have a right to refuse permission so long as they can justify their decision.

"For example, common properties in the PRS (Private Rented Sector), such as high rise flats or those without gardens, may simply not be suitable for keeping some animals nor beneficial to their welfare."

In addition to the last comment by Richard, some leasehold property covenants preclude keeping pets in the building.


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