By now everyone has heard of the landmark decision of Lord Justice Lloyd on 14 June in a case that has sent shockwaves through the lettings industry. Put simply, the Court of Appeal decision in Superstrike v Rodrigues states that where an AST started before the advent of the deposit registration regulations but rolled over into a statutory periodic tenancy after 6 April 2007, any deposit should have been registered and prescribed information served. The implications of that decision are significant for the thousands of landlords and their agents who still have statutory periodic tenancies that arose in the months after April 2007. The decision is also a worry for all of those tenants who may have been evicted since then on the basis of an “unlawful” section 21 notice. After all, if the deposit was not registered and prescribed information not served, their landlord was not able to serve a valid section 21 notice to bring the AST to an end.
Since April of 2007 official sources suggest that over 1 million individuals have been forced to relocate in circumstances where, thanks to the Superstrike decision, a possession order was made on an invalid section 21 notice. The implication for landlords, managing agents and the judicial system is troubling. It is doubtless causing sleepless nights for those in the Department for Communities and Local Government charged with bringing some order out of the chaos.
Accordingly, it will come as no surprise for readers to learn that over the last few weeks there have been a number of meetings at a fairly senior level between representatives of the lettings industry, including ARLA, the principal deposit registration organisations and government officials to map out a way forward. Whether Mark Prisk, the current housing minister, will table new legislation to effectively overturn the Superstrike decision remains to be seen. However, with Parliament about to recess as I type this blog, it looks highly unlikely that there will be any significant change in the current position until October 2013 at the very earliest.
In the circumstances what should agents and landlords do if they have a pre-April 2007 AST which is still running on as a periodic tenancy?
The short answer is to refund the deposit as soon as possible to the tenant. Sadly, with the implementation of the Localism Act 2011 last year, it is no longer an option simply to register a deposit late if one wants to serve a section 21 notice. The deposit must be refunded in full.
To make matters worse, even if a deposit was registered on time – and remember time limits changed with effect from 6 April 2012 – if the prescribed information was served late, that now triggers a penalty of between 1 and 3 times the deposit plus the return of the deposit itself.
One intriguing aspect of the Superstrike decision concerns comments by Lord Justice Lloyd which suggest that when an existing AST lapses from a fixed term into a statutory periodic tenancy, it may be necessary to re-register the deposit, or at least re-serve the prescribed information. Logically this must be correct as the effect of the Housing Act 1988 is to create a “different” type of tenancy when an initial fixed term comes to an end. As a purely precautionary measure, therefore, we are now suggesting to all our clients that at the end of a fixed term, prescribed information is indeed re-served. Individual landlords and managing agents should also check with their deposit registration provider as to what else might need to be done to avoid their tenancy becoming a future test case!
One area which is being actively explored by some of the larger national chains is whether the entire problem of re-registration/re-service might be avoided by changing the definition of the fixed term. To avoid a statutory periodic tenancy arising at the end of, say, a twelve month AST, consider adding a rider to the definition of the term. This might provide that the tenancy continues “thereafter on a month by month basis until terminated by two months notice on either side”. Arguably this could prevent the tenancy changing from a contractual to statutory tenancy in the way that Lord Justice Lloyd mentioned in his judgment.
Clearly this has implications for renewal fees and flexibility. Accordingly, landlords and agents should seek professional advice both on the efficacy of adding such a clause and its exact wording.
As always, subscribers to our telephone helpline can receive “free” advice by calling the dedicated line provided. If you are not already a member of the Dutton Gregory telephone helpline service, please telephone one of our team on 01962 844333 for further details.
ROBERT J BOLWELL
Head of Landlord and Tenant Department
e-mail: [email protected]
Mention the word ‘landlord’ to some people and it will yield a reaction of dread or intense anger. Stories of landlords from hell are all too common, and while most are genuine and responsible, a small number of landlords ignoring their legal duties have allowed the few to tarnish the name of the many. If you find yourself in a situation whereby a landlord is refusing to carry out repairs that you feel are his or her responsibility, there are steps you can take.
Build a case
If a landlord is flat out refusing to do repairs or is ignoring your repeated requests, it may be that you have to take legal action; but before doing this you will need to build a strong case, which requires the help of a home or flat inventory company.
An inventory report is generally carried out before a tenant moves into a property and after they move out. However, it is possible to have in-depth reports quarterly, yearly, or at the mid-point in a tenancy agreement. By compiling a report, home or flat inventories can show clear evidence of damage and how a property has deteriorated since a previous report.
In addition to this, you should compile your own portfolio of evidence, by taking photographs of required repairs, copies of medical notes showing proof of your health being affected by the problem, receipts for any money spent on trying to fix the problem, and copies of letters sent to a landlord in relation to repairs.
While building a case, you should continually write to your landlord about the issue.
Contact Housing Standards Team
The next step is to contact your local council housing standards team. Housing standards are committed to ensuring all properties within their borough meet acceptable living conditions. Housing standards will ask for details and evidence of disrepair as well as name and contact details of the landlord. They will then arrange to visit the property and inspect the damage. At this time, the landlord will be contacted and given the opportunity to undertake all repairs. If he or she fails to do so, the council may serve statuary notices, followed by court action.
Taking legal action
It may be possible to take your landlord to court where an order can be given for necessary repair works to be carried out and possible compensation paid to you for inconvenience, damage to personal property and health caused by repairs not being done. Before taking this step though, you should be aware that court action can be a long and expensive process and should always be a last resort.
It is essential that you speak to your solicitor or to Citizen’s Advice before making a decision on legal action, and find out if you are eligible for legal aid. The evidence compiled by a home and flat inventory company and yourself will ensure you stand a good chance of winning in court; however, only ever proceed after having received comprehensive legal advice.
Photo sources: roaringapps.com – everythingsimple.com
Leaving the family home to live in rented accommodation as a student is as daunting as it is exciting. The thoughts of a student are generally consumed by studying and socialising rather than the responsibilities of running a home and living with others. However, the good parts of being a student are definitely made easier if you know your rights and are organised when it comes renting. For the most part, landlords are genuine and caring people that are a joy to deal with, but there also some out there that are not so pleasant and can make your tenancy a misery if you allow yourself to be taken advantage of.
To make your rental experience a memorable one for the right reasons, here are five things that every student should know before renting.
1. Landlords are obligated to protect your deposit
Since April 6, 2007, landlords have a legal obligation to protect the deposits of tenants under the Tenancy Deposit Scheme. Landlords must safeguard deposits in one of three government schemes and inform tenants as to which scheme they are using within 30 days of receiving payment.
2. Don’t rent without an inventory
UK property inventories are provided by specialised inventory services and are designed to monitor the condition of a property and its contents before a tenant moves in and just before they move out. Having an inventory in place helps prevent disputes between landlord and tenant over damages that could result is the withholding of a deposit. If the landlord does not provide you with an inventory to sign, as the tenant you are well advised to compile your own. It is possible to do this yourself using photos and written descriptions; however, using one of the many qualified rental inventory services in the UK will ensure a much more comprehensive document.
3. You must abide by the rental agreement
As a tenant, it is important that you fully understand and adhere to the rental agreement provided by the landlord. The agreement will determine what is and is not possible in the house (i.e. pets, smoking, modifications) and you may be evicted and lose your deposit if you do not abide by the rules. If you wish to make any changes to the property, make sure to first seek permission from the landlord in writing.
4. You may not have to pay council tax
If you are a full-time student, you will be exempt from paying council tax; part-time students, though, will not be. When renting with other students it is wise to stick with people undertaking the same length of study. If you are a full-time student, try to share with other full-time students and vice-versa
5. Landlords are responsible for most repairs
Landlords have a ‘duty of care’ to tenants that involves carrying out most major exterior and structural repairs. Any problems related to the roof, walls, guttering, chimney, and drains must be carried out by the landlord. It is also their responsibility to ensure water, gas, and electricity is always in safe working order.
Most rental agreements will make it the tenants’ responsibility to take care of minor repairs and maintenance related to furniture, décor, and gardens.
Bills aside, renting a home should be an enjoyable experience and armed with these five tips it should be exactly that. One thing you should not forget at the end of your tenancy, though, is your deposit. To get your money back, make sure home or flat inventories have been carried out and signed by both parties. After three years of hard partying, you’ll need that money more than ever!
I received a call from a tenant the other day; he had moved into a property with his partner and had sent the landlord a long list of issues on day one. The landlord kept his response simple, “Sorry, sold as seen” and as far as he was concerned that was it. The tenants subsequently sent me the list and asked for my advice on their position. Here’s the list:
- Lounge walls have lots of scuff marks and needs an immediate re-paint
- Chest of drawers in second bedroom not opening smoothly and needs repairing
- Mould in sealant around the bath needs replacing
- Cushions on the sofa are very flat and uncomfortable
- Only 3 dining room chairs at the table which should have 4
- Lock on the master bedroom door doesn’t work
I can see the landlords point;the tenant saw the house online, viewed the property with the estate agents and wanted it as it was. Yes there are a couple of understandable points within the tenants list, but I imagine on reading it the landlord had the sudden realisation he had some rather pedantic tenants on his hands for the next year! Then I thought are these tenants pedantic or are they just house proud? They have gone through the flat and are not happy about scuff marked walls and mould around the edge of their bath.
I once had two male tenants,professional sharers just out of uniin one of my flats. At the first maintenance inspection three months in they had not even unpacked their moving boxes and it was pretty evident they didn’t clean the bathroom or kitchen either. At the end of the tenancy the mould on the shower and bath seals was almost coming alive!
What I am saying is, is it so bad that you have picky tenants? Are they just trying to make a home for themselves? Surely landlords can be safer in the knowledge that they are taking pride in looking after your investment property as if it was their own rather than using and abusing it leaving you a royal mess to deal with before you can find tenants when they vacate.
As a landlord it’s worth being reasonable when it comes to these kind of demands, maybe give in a little at the start, a couple of hundred pounds on a handy man putting a few things right to get off on the right foot could well be a good investment. Let’s be honest it’s your property and furniture you are improving and tenants who complain about things like scuff marks will probably look after their newly painted walls leaving them in a good state of repair for the next tenants. But be firm and set out exactly what needs doing and what they can expect from you with regards to maintenance in the future, taking this approach should avoid to do lists every month or so!
At the end of the day if your tenants are happy in their rental home they will treat your property with care and respect, they are also far more likely to want to extend their contract if they are happy and along with rental payments being made on time that’s all you want as a landlord isn’t it?
We know that you can’t rely on the luck of having caring tenants when it comes to your flat: take a look at our national property check services.
It’s always a situation you hope, as a landlord, you don’t have to deal with – when a tenant leaves early.
Not only do you have the issues of finding another tenant you also have the potential legal issues to deal with surrounding the tenant’s leaving.
First things first: you should have in your tenancy agreement a clause that covers such an occurrence. This is vital – especially if the tenant’s leaving turns into a legal dispute.
When a tenant puts in a request to terminate and leave early from a fixed term tenancy it is essentially a negotiation between them and the landlord. (The issue is clouded if there is one tenant leaving, leaving others behind and this would be covered by ‘Surrender in Part’ and is a slightly different issue).
A landlord is not obliged to let a tenant break the terms of the tenancy but it’s often common sense to negotiate. You need to calculate any loss of fees you may incur – which in itself may be disputed – or whether your clause for early termination has an actual penalty value to cover the costs you will have to carry and is one agreed by the tenant when s/he signs the contract.
A leaving tenant may also find the landlord a replacement tenant. Do not at any point say yes to the new tenant without carrying out your usual vetting procedures. They may be a perfectly good tenant but they aren’t taking over the tenancy as theirs will be a fresh contract.
This situation is going to occur so it’s more of a situation of how you handle the transition. By working with the leaving tenant you will part on good terms and avoid any missed rent payments.
It’s always wise to talk since any costs you incur funding a replacement will have to be borne by the leaving tenant (or, if you have a penalty clause, the costs will be covered by that).
When a tenant decides to leave a property is something of a legal grey area.
There is no legislation covering this eventuality and landlords need to set the terms for early termination, notice of termination and how the notice is served. This is purely a contractual matter between landlord and tenant.
This termination date needs to be agreed. You should get a proper ‘Surrender of Tenancy Letter’ which will act as a written document and which will then be proof that the tenant has given up possession of the property to the landlord.
If the tenancy agreement between landlord and tenant does not have a break clause and the landlord refuses to accept the termination notice then the tenant is contractually liable to pay the remaining rent balance for the fixed term tenancy.
This is where the art of negotiation is necessary. If there are seven months remaining on the tenancy then you could both settle on four months rent as a settlement to quit.
For more information and advice about how to deal with one tenant leaving during a tenancy, contact the UK’s premium provider of landlord services NoLettingGo.co.uk or call 0800 8815 366.
No Letting Go are the UK’s leading provider of inventory management services, providing check in and check out services, property inventory and condition reports and specialist on site services to landlords, lettings agents and property professionals.
I am always interested in great property stories around the world and read an interesting article on CNN World about how it is now cheaper to buy than rent in most US cities ( http://money.cnn.com/2011/08/16/real_estate/buy_rent/ ) – if only that were the case in the UK.
Nick
With student market nearly upon us, New Student Publications carried out an interesting straw survey on Student Landlord Problems
Different categories were addressed covering areas from unpaid rent to cleanliness issues.
Unpaid rent, filthy tenants and panicking about filling your properties for next year?
The results were astounding, with over 14% of landlords saying that their current biggest problem is just finding tenants to take their properties and fill in any gaps should someone drop out during a contract, with more than 2% feeling like they are struggling just to get viewings. One agent simply said “we have unlet properties remaining for July 2011, the situation is worse than in previous years” In a similar 2009 survey finding tenants was also the biggest problem raised by landlords.
Dirty Tenants
Landlords cited dirty tenants as their second biggest problem, with 16% left to pick up massive cleaning bills, or called out at 4am to change a lightbulb. The general consensus was “students don’t take care of the property or make any effort to keep the house clean.” 3.5% of agents thought that students demanded a much higher standard of accommodation than ever before, although it seems that tenants are unwilling to take out contracts for a full twelve months, with one landlord struggling to get even shorter terms “the majority of people contact me to rent for one or two months.”
Pressure From Pupose Built Halls
Many of the landlords surveyed said that they felt increased pressure from new purpose built student villages found in many city centres; more than 8% of those surveyed would eradicate those villages if we gave them one wish! 2% of landlords are afraid that their properties were not close enough to ‘hotspots’ and so would soon be abandoned in favour of more central locations.
Unpaid Rent
11% of businesses struggle with unpaid rent, while 2% note that this messes with their cash flow and although some are sympathetic to the issues caused by the Student Loans Company, most are fixed on the bigger picture; “a lot of time is spent chasing payment. Students seem to think that it is not always necessary for them to pay their rent.” This coupled with tenants excessively using all inclusive utilities means that businesses are less profitable. One landlord’s wish was simply that we could ‘undo the recession’ as 8 different landlords complained of increases to the cost of maintaining their properties to a decent standard.
Relax Regulations
Bogged down with HMO paperwork and expense? Over 18% of those surveyed would love to change or relax the regulations and the council powers to control them. One landlord stated; “there should be a national guide for HMO legislation.” Some landlords feel so strongly about HMO licensing that they named specific city councils or even actual councillors as their biggest fear for the future. 3 landlords said they had qualms about council schemes to shift populations from one area of a city to another, and how it would affect their business.
Worries Over Tuition Fee Increase
Landlords are worried about the tuition fee increase, with more than 14% saying that if they had one wish, they would fight the fees and leave the system as it stands, a worry which probably contributes to 13% of them saying that they feel the future of the market is uncertain, as some students may choose to stay at home to study. Competition from the university owned housing is a headache too, with 4% saying an increase in that sort of accommodation would be detrimental to their ability to let.
Problems With Advertising
Landlords raised the issue of advertising, when to do it and how the culture of marketing lets so early can damage the business, with nearly 5% of landlords thinking there should be a guideline that means property is marketed in January and not before. 4% thought university accommodation offices charged them too much for advertising, and 5% would like to see cheaper, and more effective advertising available to them.
Deposit Protection Unfair
Some landlords were concerned that the existing Deposit Protection Scheme did not offer them enough scope to reclaim money for damage to their properties. Eight separate landlords would like to see the entire system revised, with 1% of those surveyed listing it as their biggest problem. A case from the survey highlights the DPS’s flaws; “£1500 worth of damage but ex tenants refuse to give consent to DPS to pay the landlord.” And some feel that from a legal standpoint the law does not protect them, 3% of landlords would like to see more legislation to protect the financial interests of the landlord.
Worries Over The Potential Drop In Student Numbers
And what of the future of the student property market? More than half of those surveyed were very worried about the potential drop in student numbers next year, with one landlord summing up the problems this will create; “if student numbers drop because of the £9,000 a year course fees then we might see empty houses, lower rents or both.” A worry shared by 3% of those surveyed, who fear the contraction in the market will mean a forced reduction of rents, while other suggested offering shorter term contracts or starting to appeal to the housing benefit market was the only way to keep the business afloat.
No Problems At All
But this isn’t the full picture. Almost 9% of those surveyed have no major problems with the lettings market, their tenants or filling their properties. One landlord is more than happy with his tenants; “we enjoy our students. We pride ourselves in helping them learn how to care for and run the house. We regard them as ‘professionals-in-training’ and teach them what they should reasonably expect from a landlord and what they should reasonably do as a tenant.” One respondent would use a magic wand to change the public’s attitude towards students; “they tend to live in larger houses that are too big for modern families and therefore almost act as guardians for some of our most impressive architecture. They should be seen as a positive part of any community.”
| Top 5 biggest fears for the future | Number of responses | Percentage |
| Fewer students in the future | 101 | 54% |
| Student villages | 15 | 8% |
| Legislation increasing workload | 15 | 8% |
| Unpaid rent due to fees | 10 | 5% |
| Universities moving into market | 8 | 4% |
| Top 5 current biggest problems | Number of responses | Percentage |
| Bad tenants | 51 | 13.6% |
| Uncertainty for the future | 49 | 13.1% |
| Finding tenants | 48 | 12% |
| Unpaid rent | 41 | 11% |
| HMOs | 17 | 4.5% |
No Letting Go are working with a number of student letting agents and bodies around the UK to help protect both landlords and tenants from many of the issues arising from cleanliness and deposit protection. Better use of Inventory services, checking tenants in, property visits and managing the check out is critical to ensuring that potential problems are dealt with in advance and issues arising from check outs are dealt with quickly and efficiently. Contact No Letting Go on 0800 881 5366 or find your nearest office at www.nolettinggo.co.uk
Compiled by Emma Parker New Student – Student Housing Magazines – www.newstudent.co.uk
The uptake of HomeLet’s new tenant reference, Optimum, which guarantees to remove the tenant if they fail to pay the rent, is up 150 per cent on projected sales figures. With inflation and unemployment rising the popularity of this product has been attributed to growing concern of rental arrears.
Commenting on the news HomeLet MD, John Boyle explained, “Naturally we’re pleased with the uptake of our new ‘Optimum’ reference, we developed this product specifically to counter the concerns of both our letting agent customers and their landlords. With rents remaining high conditions are particularly hard for tenants at the moment. The latest statistics make for grim reading; inflation is way up on the Bank of England’s targets and unemployment is continuing to creep upwards. These and other factors sadly mean that 2011 will be a tough year for many tenants’ which is obviously a major concern for landlords, who are also facing these difficult conditions.”
According to the latest Residential Lettings Survey from the Royal Institution of Chartered Surveyors strong tenant demand resulted in rents rising rapidly in the three months to the end of January. Figures released by the Council of Mortgage Lenders show that number of new mortgages lent to house buyers slumped by 29 per cent in January when compared to December. With lending likely to remain low throughout the year, demand for rented property is likely to push rents up further in 2011.
Matt Billingham, Owner, Billingham Cooke Estate Agents said, “Demand for high quality rented property is only going to increase in 2011. In many areas across the country tenants are already bracing themselves for an expected increase in rents. For many a rise in rents whilst inflation is so high will only increase the pressure on their budgets and many landlords are starting to realise that a service, which provides an element of cover should a tenant fail to pay the rent, is essential.”
Commenting on Optimum, Sara Bailey, Manager, Aquarius Homes said, “More landlords are asking for a service that also offers to protect their investment income. We’ve seen a number of traditionally safe tenants who’ve passed their references with flying colours fall on hard times, especially with the cuts in the public sector. This is a real concern for landlords, especially reluctant landlords or those with highly geared investments.”
John Boyle concluded, “Following the credit crunch, housing agency Threshold reported an increase in threatened or actual cases of illegal eviction. Evicting a tenant can be a difficult, costly and emotional process, and landlords shouldn’t take matters in to their own hands.
“When they’re covered by Optimum, through their local letting agent, our in-house Legal and Claims department take care of everything whilst ensuring that tenants are treated fairly and that every letter of the law is followed when obtaining vacant possession of a property. We also offer a range of products that provide missed rental payments as well as legal cover.”
Source: Property Drum Newsletter
Two lettings firms, one in London and the other in Torbay, have been expelled by The Property Ombudsman scheme.
Madisons of 7, Odeon Parade, 468, London Road, Isleworth, was expelled for failing to pass on rent it had collected and for mishandling tenants’ deposits.
However TPO is required under the terms of the Consumers, Estate Agents and Redress Act 2007, to maintain Madisons’ registration for sales activities.
The Disciplinary Standards Committee (DSC) of the TPO Council considered a number of complaints where Madisons collected rent and did not pass it on.
When the matter was referred to the Ombudsman he determined that the rent should be paid over to the landlords, and that compensation be paid for breaches of the TPO Code of Practice for Letting Agents in the firm’s general failing to provide a service consistent with fairness, integrity and best practice. In one case, although the rents have now been paid, the compensatory award made by the Ombudsman has not been met.
“This has been a sorry and frustrating business for both Madisons’ clients and TPO,” said Gerry Fitzjohn (right), vice chairman of the company operating TPO.
“It concerns us that while we can expel their lettings business from the scheme we have no option but to continue registration for their sales business until the Office of Fair Trading bans the agent.
“In the meantime, it is our duty to make the public aware of the situation regarding Madisons.”
The second firm to be expelled is Torbay Residential Lettings (TRL), of 49 Market Street, Torquay.
The firm had breached several aspects of the TPO Code of Practice for letting agents by not co-operating with the Ombudsman’s investigation, not paying the award made by the Ombudsman after he had found the firm had not registered the tenants’ deposit, failing to complete a proper check-out process, and failing to provide an appropriate form of tenancy agreement.
The Disciplinary Standards Committee (DSC) of the TPO Council, in deciding to expel TRL also noted that one of the directors of the firm had been jailed for three years in January, 2010, for child cruelty and perverting the course of justice.
The remaining director considered that the dispute being decided upon by the Ombudsman was not the firm’s responsibility because the complaint arose from the actions of the jailed director. The DSC took the view that this was not relevant and the firm was liable to meet its obligations as a TPO member.
“Such behaviour is unacceptable,” said Gerry Fitzjohn. “Our scheme’s primary purpose is to resolve disputes between agents and consumers but we also aim to raise professionalism and insist on certain levels of service. Where these are not met, we make it clear that an agent is no longer fit for membership and recommend the public take notice of this.”
TDS state that the following percentage awards (in terms of deposits held) were made during 2010
Percentage of awards made to tenant – 56%
Percentage of awards made to landlord – 42%
Percentage of awards made to agents – 2%
The lack of landlord generated accurate paperwork seems to still be a problem.