Tessa Shepperson Newsround #66

Our usual roundup of news from the past week.

The Tenant Fees Bill

This has been in the news again this week as the government has issued new information about the default charges that landlords and agents will be able to impose on tenants.

Apparently, they will have to prove the charges by submitting an invoice to show the cost incurred.  This will, say the government

put a stop, for example, to tenants being charged hundreds of pounds for a damaged item that actually only costs a few pounds to replace – such as £60 to replace smoke alarms which the local council would have replaced for free.

There is also going to be a fairly quick timetable for paying back unlawfully charged fees.

Mind you, if the agents breach these rules – how are they going to be enforced?  This is the big problem with all the letting agent regulation.  It is mostly enforced by Local Authorities, usually trading standards.  And they don’t really have the staff.

Landlord Law members note that David Cox of ARLA Propertymark will be doing our September training webinar when he will be bringing us up to speed on new developments.

Retaliatory Eviction Report

The CAB has issued a report on retaliatory eviction which indicates that the measures in the Deregulation Act 2015 have not been much of a success.  The unsurprising conclusion they come to is

Tenants who made a formal complaint to either their local authority or to a redress scheme had a 46% chance of being issued with a section 21 eviction notice within 6 months of doing so.

As is so often the case one problem is Local Authority underfunding:

Local authorities rarely serve the notices required to protect tenants due to the lack of resources and a preference for informal negotiation.

They make three suggestions to deal with this:

1  Protect tenants from retaliatory eviction from the time they make a complaint to independent redress or ombudsman schemes.  The problem here though is that only letting agents are (at present) required to join these schemes.

2  Allowing tenants to leave a property early if landlords fail to comply with their legal responsibilities (which sounds fair although I can see tenants making false claims just to have an excuse to move out early), and

3  Introducing mandatory three-year tenancies – which are the subject of a government consultation recently closed.

Three-year tenancies

The RLA published their response to the consultation giving three main objections:

• The need to get to know the tenant before offering a longer term tenancy.
• Restrictions in mortgage conditions and insurance policies preventing the offer of longer-term tenancies.
• The complex court process to regain possession. Some 55% of landlords in their consultation saying they would be willing to consider longer tenancies if a more efficient eviction process were available.

Although the word on the street is that the government have decided to ditch the three-year tenancy plans as the consultation results show that most tenants don’t want them.

In fact, if the issues above were resolved, they could well be more popular among landlords, who like the idea of long-term tenants and no voids.

Too many HMOs?

There is an interesting post on Property Industry Eye which speculates that overselling of HMO properties may, outside of London, be the next property scandal.

Over the last few years, companies have sprung up everywhere offering to source, renovate and manage HMOs – with promises of huge returns and future riches.

The reality we are seeing is very different. In my area thousands of rooms have been created, but for a market of maybe just hundreds of people.

Going on to say that

The only winners here are the developers who are selling a dream that is not a reality.

So if you are looking to invest outside the capital, you may want to think twice before investing in HMOs.  Which are a difficult type of property to manage anyway as they are very heavily regulated and the penalties for non-compliance can be fierce.

The author of the article recommends investors go for freehold family homes instead which generally perform well.

Snippets

• A landlord has been given a suspended prison sentence for failing to maintain gas appliances
• An article in the Telegraph looks at how property guardianship can help older people and looks at a ‘socially responsible’ guardian company
• A landlord in Glasgow has been fined for ‘spying’ on his tenants with CCTV cameras
• Landlords in East Anglia have lost thousands after a rogue letting agent disappears
• A scheme to rent out tiny pods to low-income earners in Barcelona has been blocked
• Renters in London are urged to join the London Renters Union.

Newsround will be back next week.