The Must-Known Legislation To Let A Property Compliantly

Landlords, are you aware of the two main pieces of legislation that you need to comply with to remain safe and compliant? 

In the ever-changing private rented sector, it can be difficult to keep up with the latest laws and regulations that govern this space. However, failing to meet the government’s requirements can result in serious consequences in the form of; notices, fines and prosecution.

That’s why we at Concentric Sales and Lettings are focused on helping you get the compliance information you need on all aspects of Landlord law. In this blog, we’re going to dive deeper into the two pieces of landlord legislation designed to ensure the safety of your tenants within your private rented properties. These two laws are The Landlord and Tenant Act 1985 and the more recent Homes for Fitness & Habitation Act 2020.

 

The Landlord and Tenant Act 1985

Section 11 of the Landlord and Tenant Act 1985 details a landlord’s obligation for repairs. Simply put, as a Landlord, you must ensure the safety of your rented properties.

Specifically, you must ensure that the air, space, water, and heating of the property are properly maintained and kept safe. The law also clearly states that you must carry out repairs on your properties as and when they are due. 

This brings up the question – when are repairs due? 

The legislation states that repairs should be carried out on a “reasonable timescale” based on when you are first notified of the repair requirement. “Reasonable” is somewhat subjective and difficult to define but generally depends on factors such as (a) whether or not the tenant is living in the property and (b) whether or not the severity of the repair warrants an urgent response.

Major repairs (as in water gushing through a ceiling) are required to be acted upon immediately. You, as a Landlord, should take all reasonable steps to carry out any maintenance work or repairs to the best of your ability. Some repairs may take time to be rectified, but as long as you have taken the steps that you can take, the law will consider it reasonable. 

 

Protect Yourself Against Claims

We recommend that you always act as quickly as possible when carrying out repairs for your tenants. This is not just for the comfort of your tenants within your rented property. It is also one of the best ways to protect yourself from potential claims that the tenant may choose to pursue against you. 

Under the law, tenants have the right to report any outstanding maintenance issues to the local authority. The council may then decide to carry out a full inspection which can often lead to a much longer list of repairs. 

It’s important to remember that you are not the only person given responsibilities under Section 11. Tenants are also obligated to “behave in a tenant-like manner”, meaning that they are required to take care of the normal maintenance activities that keep the property clean and functional. This includes things like changing lightbulbs, keeping the drains clear, cleaning the gutters, and other similar activities. Now that we’ve covered the first piece of legislation for landlords let’s cover the second, more recent law. 

 

Homes for Fitness & Habitation Act 2020

This law does not replace the one we’ve discussed but creates additional rights and responsibilities. Generally, it focuses on areas that are not necessarily covered under the Landlord and Tenant Act 1985. There are two key factors you should be aware of when it comes to this law. 

First, this act gives tenants the right, for the first time, to take a Landlord to court for not maintaining their repairing obligations. The government has removed the requirement to first go to the local authorities and has enabled the tenant to go directly to the courts. Landlords must be aware of this change.

Secondly, Landlords are now responsible for hazards and repairs within communal areas throughout the tenancy. You are obligated from the moment the tenancy begins through to the conclusion of the tenancy to ensure that the property is fit for human habitation at all times. The only way to achieve this is through regularly inspecting the property. You must not rely on tenants to report repairs because they do not always do so. 

 

Final Thoughts

Your main focus as a Landlord should be to ensure that your tenants are safe at all times. Failure to comply with these laws can result in; prosecution by the tenant in court, penalties issued by the local authority, fines, and improvement notices that can restrict your right to gain possession of your property. 

With over 170 different pieces of legislation regulating the private rented sector, you may be wondering how to be compliant as a Landlord. 

Fortunately, we have created several resources to help you stay safe, compliant, and up-to-date. That’s why we run a quarterly webinar hosted by Dawn Benett, where we spend 2 hours diving deep into various pieces of legislation that you need to know about. Click here to register for FREE today!

Should Your Address Be On A Tenancy Agreement?

Landlords, did you know that there are over 170 separate pieces of legislation that directly impact the private rented sector? Here at Concentric, one of our big goals is to help educate you to be able to navigate this maze of rules and regulations so that you can stay safe and compliant. 

While you may prefer not to share your residential address with your tenants, did you know that there are laws that govern whether or not you are permitted to withhold your address? The two main rules that apply to your address are Section 47 and Section 48 of the Landlord and Tenant Act (1985). Let’s get into them. 

 

What Section 47 Means To Your Tenancy Agreements

Let’s start with Section 47. Section 47 of the Landlord and Tenant Act of 1985 states that a landlord’s address must be present on all documents that are, in fact, a demand for payment. The document that most commonly falls within the purview of this legislation is your tenancy agreement. This means that you, as a landlord, have a legal obligation to include your residential address on your tenancy agreement. Is your address present on your agreement currently? If not, you could be falling foul of this regulation. What does this mean? 

Your tenants are not legally liable or responsible to pay any rent they may owe you until you have shared your residential address. The law is clear. If you’re using an agent, you are not permitted to use your agent’s address. Rather, the address on the agreement must be the landlord’s residential address, wherever that is in the world. The reason this legislation applies to the tenancy agreement is that it is, in the eyes of the law, a demand for payment. Until and when you have provided your residential address, the tenant does not legally have to pay. It makes sense that you, as a landlord, may feel some reservations about having to share your home address with your tenants. However, in the private rented sector, this is a given right that the tenants have been legally granted. Section 47 grants tenants the right to identify the person from whom they are renting. 

Moreover, if the tenant makes a formal demand, in writing, to you as the landlord or your agent, each party is obligated to respond to that request within 21 days. As we have already mentioned, failure to supply the information within that timeframe could result in the tenant refusing to pay rent until the information requested has been provided. In that situation, the tenant would be in their full legal rights to withhold payment from you, the landlord. 

 

Why You Need To Know About Section 48

The other significant rule that impacts whether or not a landlord must share their address is Section 48 of the same law. Again, this section focuses entirely on the landlord’s address. However, in this case, the legislation refers to an address being given to a tenant in England or Wales for the sole purpose of serving notice to that tenant. In this case, landlords have more flexibility, as the address can be that of your agent or your place of business, depending only on your preference. If you are a company landlord, then the address to provide tenants, under this section, would be the registered address of the business.

Ultimately, these sections of the Landlord and Tenant Act of 1985 do not carry penalties or fines if you are in violation. However, that does not mean that they are inconsequential. The ultimate penalty could be that your tenant simply chooses not to pay the rent. In that event, the law would not require the tenant to pay until the residential address of the landlord was provided. 

 

Conclusion

To recap, Section 47 places a clear obligation on landlords to provide their residential address to their tenants on their tenancy agreement and on any other documents that are payment requests. Section 48 requires that landlords share their business address (or the address of their agent) when serving notice to tenants, only when the tenants reside within England or Wales. 

We hope that you’ve found this information useful. It’s important to always stay informed about legislation so that you can remain in compliance and continue to serve your tenants. If you’re curious about where you can get more information on the latest and most important legislative updates, our very own Dawn Bennett hosts a quarterly webinar where she drills down into a variety of the many pieces of legislation that apply to our industry. 

Landlords Heading To Liverpool As The City Property Market Booms

A new report has revealed Liverpool is the place to buy for landlords – but anyone looking to add to their portfolio should act quickly, as property prices are on the up faster there than in other locations.

The report (commissioned by London’s Beauchamp Estates and Liverpool’s Logic Estates, with analysis by Dataloft) describes the city as a ‘regional powerhouse’, stating residential property prices have risen more quickly than anywhere else in the last five years – including the capital.

But this surge shouldn’t deter potential investors, because prices there are still affordable compared to other key locations. The report looks at the Liverpool Waterfront, where an average-priced apartment would cost just under £240 per square foot. This compares to around £353 (per square foot) for a similarly well-positioned property down the road in Manchester and £678 (per square foot) in London.

Buy-to-let landlords are also collecting higher rental yields – with an average of 6.4% across all apartments in Liverpool, compared to 5.5% in Manchester and 4.5% in London (of the cities included in the survey, only Leeds saw a higher rental yield for all apartments, sitting at 6.7%).

And there are also seemingly more renters to attract – 55% of the city’s population live in private rented accommodation, compared to 27% in the capital and 17% across England as a whole.

However, while this report extols the virtues of buying in Liverpool, it’s worth noting that there are multiple favourable locations which have emerged as key investment hotspots in recent reports.

The Buy To Let City Tracker research undertaken by Aldermore Bank saw Bristol top the list of best places to purchase an investment property, based on indicators including average total rent, short and long-term returns, percentage of vacant housing stock, and number of renters.

Second place was Oxford, with Cambridge coming third, followed by Manchester and Luton to complete the top five.

And in a third piece of research – this time conducted by Compare the Market – Birmingham topped a list of the 20 best places to be a landlord in the UK, with Bradford, Coventry, Bolton and Burnley also making it into the top five.

Client Money Protection Scheme will now be mandatory

From 1st April 2019, it has become mandatory that all property agents hold a registered membership with a certified money protection scheme. This is by way of insurance for landlords and tenants, to prevent rogue agents from keeping back money from deposits and rents if something goes wrong. Let’s look at what this means for landlords, and what you should be looking out for when you employ an agent to manage your properties.

Imagine your horror if you learned that the agent you’d trusted with your deposit money had shut up shop and had got on a plane using your money. What would you do, as a landlord? In the past, if your agent wasn’t a member of a money protection scheme, you’d be the one who was out of pocket, and as such you would be liable for reimbursing that money to your tenants.

Scary thought – and although rare, some landlords sadly faced this scenario. Imagine if you had a portfolio of 10 properties, and you lost the deposits for all of them. Assuming you worked on one month, at, say £500 as the average monthly rent upfront, that would put you at a massive £5,000 loss. That’s a lot of money to recoup.

That’s why it’s absolutely vital that you ensure that the agent you have employed, and have entrusted to take care of your money, is registered with a money protection scheme.

And as of April 2019, it has become law that all property agents are insured under a money protection scheme, and that they let you know which one. They are required to have the information displayed on their premises, and should also state the company they use on their paperwork when you employ them. If they don’t you need to ask for it.

Where can I find out if my agent is insured?

Now that agents have a legal obligation to be insured by a money protection scheme, they should have the name of the company they use, as well as the certificate of membership displayed on their premises, and on their website. Most agents will have the logo displayed on their home page (sometimes you’ll find it at the bottom of the page, along with other memberships and governing bodies they are part of). If you don’t see it, drop them an email, or call them to ask them to provide you with a copy of their certificate of membership.

Government approved CMP schemes are as follows:

If you see any of the above logos on the agency website, you can be assured that they are covered, and therefore so are you.

I’m an agent – what if I’m not a member of the Client Money Protection Scheme?

As of the 1st April 2019, it is a legal requirement that you are a member of one of the approved schemes as detailed above. Your local authority can and will fine you if you are found to be in breach of the regulations.

The penalty for not being a member of a money protection scheme can be up to £30,000. There is also a fine for not displaying membership, and not informing clients of change of membership, which can be up to £5,000.

What are the joining fees?

The fees for agents are set up depending on your total property values. Following prices are as a guide, and may differ depending on which suppliers you use:

Up to £500K – from £360 + VAT

£500K to £1M – from £575 + VAT

£1M to £3M – from £1,020 + VAT

Concentric Compliance Director Dawn Bennett discusses the Client Money Protection Scheme at our recent landlord seminar event:

Article 4 and HMO’s

What exactly is Article 4?

In simple terms, Article 4’s were put in place a few years ago to manage the growth of HMO units in certain areas, and have been rolled out by councils across the country recently. If a proposed HMO is to be in an Article 4 designated area, then any would be HMO landlords would have to seek planning consent under Article 4 in order to be able to set up and operate a HMO in that area.

The other thing to consider however if you are planning to buy, set up or convert a property to a HMO, is whether the property needs a license. 

The rules around licensing have changed since October 2018, and as a result many landlords who previously did not need a license, now dounaffected are now classed as HMO.

Am I a HMO landlord?

It seems like a silly question, but there are surprising number of landlords who are renting out licenseable HMO properties without even being aware of it. We covered the subject in our previous post here, but it’s worth re-visiting some of the facts of what we mean when we refer to a HMO.

If you are renting a property to three or more people, and at least one of those people is unrelated, then it’s likely that you have a HMO unit and many new rules will apply to you. That’s because unless all three members of a household are  related or living as one family unit, they cannot be classed as one household. Confused? Let us explain in a bit more depth.

My brother’s uncle’s sister’s friend

Let’s say that you’ve rented your house out to a married couple. That couple are classed as family, and are therefore one household. You wouldn’t need a licence for that. Incidentally, if the couple were unmarried, they would still be classed as such providing they are living in the property as a couple, and not as friends.

Now, the wife has a friend who’s looking for a room. If she moves in, then she is classed as a household on her own. So therefore, you now have two separate households living under one roof, and under the HMO rules this is deemed as a HMO unit. 

Changes to licensing

The BIG change however is that previously you only needed a licence if your property was three or more storeys and 5 or more people residing... That’s no longer the case. You will now need a licence even if your property is a two-storey dwelling or a self-contained flat, bedsit or bungalow. (basically the 3 storey element has been removed) 

How can I check if my property needs a licence?

If you’re still unsure, you can easily check by contacting your local authority, or checking their website for information. But because some of the legislation is relatively new, always make sure that you get any verbal confirmation affirmed in writing – you don’t want to be caught out by being given the wrong information!

Other requirements

Once you’ve established that your property is in fact a HMO, and that you need to apply for the licence, there will be other criteria which will need to be met. HMO’s are required to comply with certain regulations, under things like fire safety, gas safety, smoke alarms fire doors and a number of other things. If you speak to your local council, they will be able to advise on the criteria you need before you apply. It’s vitally important that you ensure that all of these measures are in place, as if you fall foul to any of the required criteria, you could be facing some quite hefty fines.

Concentric Compliance Director Dawn Bennett discusses Article 4 and HMO's at a recent landlord seminar event:

Could Brexit be good news for landlords?

2019 is proving to be an unpredictable market for properties in the UK. As with many other industries, people are hitting pause in anticipation of the outcome of the Brexit deal. Evidence suggests that over the past few years, people putting a mortgage down on a property has fallen, and continues to do so, while people renting privately is rising, at roughly the same rate.

This of course, is not all down to the Brexit effect – the rise of house prices over the past decade will always determine the number of house sales, in part because there have been some major changes in both economy and regulations, making it harder for the new generation of 20-somethings to make their way onto the ladder. But it seems, those same threats are encouraging people to take the less risky, and more flexible option, of renting. And it seems logical that the fear of Brexit has had quite an impact.

The 2019 rentals market

Property experts predict that we will see these trends continue into 2019, which will see the market slow down at a steady rate. In contrast, this proves to be a positive for property investors and landlords, because those same experts are predicting that the uncertainty of Brexit will further fuel the huge demand for rentals in the UK, particularly in the private sector.

Figures show that across England and Wales, the number of rentals has risen by 17.4% year on year, and 24.6% in London.

It seems then, that Brexit is having no effect on the rentals market as a whole – demand is still growing for good rental properties and looks set to continue to do so.

Ongoing shortages

Contrary to the belief that rentals will begin to decline following less migration from Europe post-Brexit, there is still a huge shortage of affordable rental housing due to the ongoing chronic undersupply and difficulty in getting a mortgage due to new restrictions. This doesn’t appear likely to let up, as Government intervention makes it more and more difficult to purchase property in the UK with new legislations and tax changes.

There is more demand than ever for rentals, and that demand has increased since this time last year, and some experts are advising that property developers take advantage of the current climate and levelling house prices while they can. We are still in the very strong situation whereby the income from rents is significantly more than the cost of buying a property even with a mortgage attached.

The next five years

Along with the increase in the number of rentals, it has been predicted that due to the sheer demand of rental properties, the price of rents will increase by around 15% in the next five years. This is from a report published by the Royal Institute of Chartered Surveyors.

It ties in with the increase in demand, of course, but also follows the impact of taxes in the buy-to-let sector, which is affecting landlords decisions in buying property. This in turn is creating a further shortfall, which is having a knock on effect on the rental demand.

It seems evident that for those landlords and property developers who are able to stand firm through the current uncertainty, there could be rewards to be had, as there will never be a shortage of people looking for properties to rent.

Sally Lawson CEO of Concentric says, “after 3 decades in the rental sector and at least 2 recessions, the rental sector has held firm, never waning, with steady growth every year since 1987, and predicted to grow from being 20% of the entire uk housing stock to over 50% by 2050, I see no signs of this trend changing in the near future, Brexit or no Brexit, people have to live somewhere”

Client Money Protection Review – Our statement

After attending the annual ARLA Propertymark Conference and Exhibition yesterday, Concentric HQ are pleased to confirm that the government have accepted the Client Money Protection Review (CMP) and will be introducing mandatory CMP for all letting agents.

Housing minister Gavin Barwell announced: “We’re accepting these recommendations... Today we confirmed we'll require all agents to protect the client money they handle.”

Presented by Baroness Hayter and Lord Palmer, the review called for all letting agents to use the scheme, which recompenses landlords and tenants should their funds be misappropriated, by law. This now means that rent, deposits and other client funds will be insured in the event of letting agents entering bankruptcy or committing fraud, meaning tenants and landlords can always claim their money back. While still under discussion, letting agents that do not comply will face heavy penalisation, and could potentially face a lifetime ban from lettings.

Chief executive of ARLA Propertymark, David Cox, commented: "Working together we have managed to convince the Government of the merit of compulsory CMP... With the ban on letting agent fees on the horizon, this is more important than ever before, so we are very pleased the Government has agreed to take it forward.”

As members of regulatory body ARLA Propertymark, Concentric welcomes this news and sees it as another big step toward total regulation of the private rented sector. We have always been proud to offer transparent client account services and feel strongly that all letting agents should offer the same.

7 things landlords might not know about LHA tenancies

It’s a common phrase you see rounding off nearly every rental listing - “No DSS”. DSS – being the now-defunct Department of Social Security – refers to LHA tenants, the catch-all term for low-income tenants who claim Local Housing Allowance (LHA), named after the now-defunct Department of Social Security. 

LHA tenancies have become a bit of an enigma due to the lack of uptake on them. As such, they are an untapped market for many investor landlords, and offer a great opportunity to create a solid portfolio. 

Much is said of LHA tenancies in the lettings world – they’re unreliable lets, they’re a one-way ticket to rent arrears, and so forth - but it’s important to separate the truth from the myth. Here’s some facts you might not know about LHA tenancies:

1)    LHA is a capped flat rate allowance, calculated based on the size of a tenant’s property and the area in which they live. This means tenants need to source a property before their allowance can be calculated. Potential LHA landlord investors should research market values of low-income areas and make sure any properties they would like to let would qualify to be LHA-funded.

2)    Only 30% of available properties in a given area in the UK are affordable to LHA tenants with an even smaller percentage actually renting them due to “No DSS” policies. Due to supply and demand, if you have an affordable property, you could tap into a pool abundant with potential tenants.

3)    Landlords by default can have LHA paid directly to them if the tenant incurs 8 weeks’ arrears, but can apply for direct payment BEFORE this happens. Contrary to popular belief, local councils assess applications on a case-by-case basis and are open to paying landlords directly for a variety of reasons. If you have concerns about a tenant’s ability to pay, council help is always available.

4)    Many local councils, housing charities and letting agencies host direct letting schemes to introduce landlords to low income tenants. This means LHA tenancies are often easier and quicker to set up, which could benefit landlords dealing with vacancies and short-term lets.

5)    Some local councils in Northern England are part of the Empty to Plenty scheme, which helps house LHA-qualifying tenants by guaranteeing the safety and compliance of landlords. The scheme aims to reduce empty properties by assisting landlords with their lets, including options such as leases through housing associations or refurbishment loans for derelict properties of up to £15000. 

6)    As part of the Green Deal, LHA-qualifying tenants can also claim government benefits for replacing old appliances with new, energy efficient models. This means landlords could potentially have boilers, ovens and other expensive appliances upgraded at zero cost.

7)    If it is found that your tenant has been fraudulently claiming LHA and you have been directly receiving the payments, you will not be responsible for the repayments as long as you can prove you were not aware of any wrongdoing, so keeping of records is vital when handling LHA tenancies. 

Due to landlord reluctance, LHA tenants have developed a less-than-favourable reputation, but not all LHA tenants are the same – they can be employed or unemployed, disabled or fit for work, have families or be single. Specialising in LHA tenancies could prove to be a worthwhile investment – not only would you helping many people in need, but you could build a strong portfolio that generates regular cash flow. 

If you are interested in letting to LHA tenants, always have a full discussion with each applicant about their financial situation, what requirements they have for their property and request a full reference. If you’d like further help, you can get in touch your local Concentric branch, who can offer you further guidance and support on meeting LHA property standards and sourcing tenants.

The Election of Donald Trump: Will it affect the UK Property Market?

If you were to sum up 2016, in one word, what would you say? It’s certainly been full of surprises. Britain rocked the country by voting to leave the EU, David Bowie passed away and the world is still trying to get it’s head around the fact that Donald Trump was elected President of America.

It’s an unusual year to say the least.

However, whenever something new comes to fruition, the first thing that run through our heads, is whether or not it will affect us, and more importantly, how. And when it comes to the UK property market, there is a chance that the election of Trump could in fact result in an influx of companies and investors heading to the UK from Europe, China and the Middle East.

In the path of uncertainty and instability, people tend to consider their options. Facing both the unknown and an uncertain market, investors could feel reluctant to invest on American soil. And when it comes to property, central London property is certainly appealing.

Simon Tollit, central London’s Sales Director of Sotheby’s International Realty is of the opinion that Trump’s election will actually increase investment into the Uk’s property market, with a particular emphasis on London. It’s a sound choice for anyone who is destabilized by the idea of a new elected party and the possibility of policy changes.

Interestingly, despite property prices rising by 13% in the UK, they’ve actually fallen 10% for those investing with the dollar. Combine this with the appeal of historic London, steeped in culture and opportunity, and it’s easy to see why the UK’s capital is such a desirable option.

Back when Brexit was all kicking off, President Obama warned the UK that leaving Europe would be detrimental for trade deals However, Trump has suggested the opposite, publicly showing his support for Brexit, which means favourable trade deals could benefit the UK’s property Market.

Charles Curran, the Principal of Maskells, is also of the opinion that the election will benefit the UK property market.

He stated: “Sterling has already strengthened against the US dollar which, notwithstanding a potential [interest rate] hike in the US in December, may start reducing some of the post Brexit inflationary pressure in the UK. This is good for mortgage payers as it reduces the likelihood of the Bank of England’s hand being forced to increase rates to counter a strong dollar; the currency in which many of imported products are priced.”

However, London house prices could in fact rise until policies have been put in place by Trump. It’s also important to note that it’s impossible to say for definite the impact the election will have on the UK’s property market.

For landlords though, it’s food for thought.

Effective regulation or more burdens?

Proposed changes for the housing sector through the Housing Bill 2015

The government is proposing quite a few changes to the housing sector at the moment and is currently in discussion with the industry as to how these will be implemented across the board which landlords may need to be aware of as it will affect both landlords and agents.

The bill in fact covers many areas, not just the PRS (Private Rented Sector) but within this article I want to look at the items that directly affect us as residential property practitioners

Rent Repayment orders and Civil Penalties

These are being discussed around “why they should be issued” and “the amount of time” that rent should be paid back to the tenant for.

Firstly should rent repayment orders be allowed to be issued for if the landlord has unlawfully evicted a tenant, and should they also extend to category 2 hazards within the HHSRS?

If the rent repayment orders were extended to include the category 2 hazards, this could result in repayment for something as simple as an unsteady banister which may only require remedial actions and could be deliberately caused by a tenant, so I feel this would be a mistake. In relation to how rent repayment orders are issued, these should not be automatic, but should be issued only after an improvement order has been issued and a reasonable time to fix has passed. 

In relation to the amount of time rent should be repaid for, this should be for a maximum of 12 months or the length of the tenancy that has passed, or else a tenant could get paid back rent for a period they were not in occupation, which would be unfair.

Banning Orders

The first call to look at is the call for banning orders on landlords and agents that flout the law, this has been in place for many years for estate agents, but not letting agents, and discussions are in place as to how this could work.

There are 3 key points to consider:

“Who” should be banned?”

Consider you run a large letting agency organisation and one member of staff does something to fall foul of the regs and then as a result the entire company receives the ban instead of the individual, that would mean severe loss of jobs etc as a result of one persons actions. Alternatively consider that the “company” receives a ban for operating illegally, this would not prevent the directors as individuals of that company setting up under a different company and trading again. So the call from ARLA is that it needs to be the individual that commits the offence, that is blacklisted not the company. 

“Who can do the banning?”

Consider you have properties in many regions and the councils are given the powers to issue the bans, there could be a discrepancy between one district and another as to what practices are acceptable and which are not, or the level at which they would take the action, we all know as landlords that when working with council officials, the differences between working with one and another, sometimes can be immense. Effects of a ban, would lead to extreme financial hardship, inability to cover mortgages, reputational damage and much more, and I believe that something of this severity, should only be allowed to be issued by a judge, who has considered all points, with rights of appeal in place and for a set period of time, to make this a fair scenario for all.

“Who would be told about it”?

The final point here that is a concern, is that once someone has been added to the banned list, where does this information go? ARLA has called for the banned lists to be made public knowledge, purposefully so that tenants can be aware of banned and also for agents, when recruiting staff, they can check to see if the member of staff is on the banned list or not, as the reputational damage of employing such an individual could be catastrophic for the company’s reputation.

Abandonment

One rather more welcome proposal put forward is to simplify the route to achieve possession following a tenant abandoning a property. The proposed changes and discussions here are around:

Currently this is a very lengthy process, having to issue a section 21 and wait for it to expire, and seek possession through the already clogged court system. The proposed changes, would mean a no court option of a notice being issued to the tenant and a reasonable timescale left before taking over the property, with a maximum of 6 months to return to the property

ARLA has proposed that the 6 month timescale is far too long, and in fact a tenant could actually abandon go and rent something else and then come back and demand his old property back after the previous landlord has re-let it, so ARLA request that this timescale is reduced to 2 months as opposed to 6 and has also asked that the length of time a landlord has to store the tenants furniture past vacation (currently 95 days) is reduced.

Civil Penalties

It has been proposed that Civil penalties be allowed to be issued by councils for breaches of standards/regulations, which would remove matters from the court system and be clearer in the penalties that may be incurred for any breach.

This would make sense and standardise the penalties across the board, which at the moment are irregular at best and could be used for breaches of licensing rules, hazardous disrepair, poor sanitation and infestation, but care needs to be taken for damp and overcrowding, to ensure that the landlord was aware of the level of occupation before fines issued, and that any damp is not in fact caused by condensation, which in many cases is actually a lifestyle issue.

Another point in question is in relation to who keeps the fines, If the councils were allowed to keep the fine to be ring fenced for further housing enforcement, this could help improve the sector for the compliant landlords and remove the rogues as they would have more funds to pursue the non-compliant landlords.

Client Money Protection for ALL letting agents

ARLA has also submitted a draft amendment proposing the requirement for all agents to have Client Money Protection as standard, so that this offers the same level of protection in the property sector as the Financial Services Compensation Scheme (FSCS). Currently it is estimated that agents hold over 2.7 billion in client funds and yet there is no requirement for this to be protected legally.

Although by letting through an ARLA agent, you will be protected by client money protection, a code of practice and audited accounts, to make sure all is running smoothly. In 34 years, only 12 claims have been made for misappropriation of funds within ARLA, demonstrating that this structure, does offer great protection.

At the moment the housing bill is still working its way through parliament and the above are not set in stone, but this article is intended to give you an overview of what is being discussed at the top level of industry and an insight into perhaps what might be coming our way soon, but the message is clear, be a good landlord be a good agents, do things properly and stay complaint or else the road is going to be a rocky one moving forward.

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