Right to Buy or not the Right to Buy.... a Cheeky little number

As I am sure you are all aware, the Housing and Planning Bill had its last day in Committee yesterday in the House of Commons.

You may be forgiven for thinking that we are now fast approaching the final jump to Royal Ascent... sadly at the 11th hour 2 new clauses and 1 new Schedule have been slipped in to upset what had been a rather well balanced apple cart.

These amendments seek to prevent  new periodic secure tenancies from being granted (subject to very limited exceptions, mostly to be set out in additional legislation) and replace them with fixed term tenancies of between 2 and 5 years.
These fixed term tenancies will principally mirror the model of the current flexible tenancy,

Now here is the science bit......

A local authority who decides to grant a fixed term tenancy of 3 years or less, will, under this proposed clause, be able to avoid the option for tenants to Buy their council property.

Right to Buy eligibility commences after 3 years of being a tenant (s.119(A1), HA 1985
So.... if councils grant tenancies of 3 years or less and dont renew them, the tenant never becomes eligible to take up their Right to Buy.
On top of this, even if a council does grant a 5 year tenancy and the Right to Buy eligibility is met after year 3, the tenant will only be eligible for the minimum price discount on the cost of the property, This is because the additional discount (1% p.a. for houses or 2% p.a. for flats) only arises after the fifth year (s.129, HA 1985). So, a five year tenancy which is not renewed means the tenant will never get the “length of occupation” discount.

As we know there is seldom any joined up thinking in Housing legislation after all  one of the main reasons for creating secure tenancies under the Housing Act 1980 was precisely to facilitate the Right to Buy.

on a slight side note: Succession to a tenancy is also under fire, with proposals that the spouse or civil partner only succeeds to a five year fixed term tenancy

The Bill comes back for Report Stage early in 2016  So watch this space to see how this little gem unfolds

Homeless reviews.... Only if you pay up first

Now i am sure many of my industry peers will have come across this problem before, however its a first for me having recently changed the Borough i work in

I saw a client who had been given a Not Priority Need decision, as i always do i put in to review this, as i can mostly find an error when trawling the housing file

Now the previous Borough council i worked with were very helpful and would supply the housing file , albeit after some vigorous chasing, free if charge

So you can imagine my surprise when this local council refused to release the file without £10 payment

Now i appreciate there is no law stopping them from charging, but this hit me with a dilemma.

Who pays the £10?

I work for a charity we have no spare funding for this

The client is homeless with very limited funds, £10 to them is a lot of money

I tried to reason with said council, but no joy and as they outsource the review, another situation i had not come up against before, the reviewers were threatening to carry out the review without my input

Thankfully the client is now house and not under homeless duty

But i am still left with the dilemma for future clients, if a client cannot afford to pay for their housing file is this in someway discriminating against their legal right to review?

Im not a solicitor so any input would be appreciated 

  

New Rules for Section 21 Notices

From 1^st October, changes to the way a section 21 notice can be served will come into force.

These changes will start to effect assured shorthold tenancies due to hit the 6 month mark in April

These changes are a combination of the Deregulation Act 2015 and The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015

These changes ONLY apply to NEW tenancies starting after 1^st October 2015, this WILL include any RENEWAL tenancies where a new fixed term tenancy is drawn up, this will NOT affect any tenancy migrating onto a statutory periodic tenancy from a fixed term.

The section 21 notice will also now be in a new prescribed form.

Landlords and letting agents will not be able to issue a section 21 notice at the commencement of a tenancy, this is currently normal practice. A section 21 will not be able to be served on a tenant until 4 months have passed from the start of the tenancy.

New Time Limit: A possession claim cannot be started on a section 21notice after the end of 6 months from the date the notice was given. Or for a s.21(4) notice where the notice period has to be longer than two months, a possession claim cannot be started based on that notice more than 4 months after the end date specified in the notice
Section 21s will now also have a shelf life, if possession proceedings are not brought within 6 months of serving the notice, the notice becomes invalid and a new notice must be served

New legislation to protect tenants from retaliative evictions.

Tenants in private rented accommodation ONLY, will be protected from eviction if they have made a legitimate complaint about the condition of the property to their landlord.

 

This New Retaliative Eviction law will come with rules which must have been followed Before a Section 21 notice is served by the landlord

• Tenant must make a formal written complaint to the landlord of the disrepair/condition
• Landlord has 14 days to respond (an adequate response by the landlord is a response in writing which—provides a description of the action that the landlord proposes to take And sets out a reasonable timescale within which that action will be taken)
• If no response from landlord – a section 21 served now would be invalid.
• Tenant must then report this unresolved issue to Local authority
• ONLY once the local authority has confirmed that the repair needs to be carried out to prevent a potential risk to health and safety, will the new rules come into play.
• The landlord will not be able to evict a tenant for 6 months

A landlord will also be prevented from evicting a tenant where they have not complied with certain legal obligations such as

• Supplying Gas Safety Certificates
• Supplying Energy Performance Certificates.

This restriction would be lifted as soon as these documents are provided

If a Property is on the market for sale, then it is likely the new rules will NOT apply to Section 21s regardless of the condition of the property

A section 21 served after 1^st October, will not be required to expire on the last day of a period, all that will now be required is two clear months notice. To accompany this is the requirement to repay the tenant pro rata the ‘unused’ proportion of any rent paid in advance where the s.21 expires in the course of a rent period and the tenant leaves.

The Something Must Be Done Bill, Calais edition

The Rent Act 1957 introduced the requirement for a court order for eviction from a tenancy. That is 58 years of eviction without due process of law being unlawful. But no matter, for Something Must Be Done to deter people who have spent months on perilous journeys across continents and are currently sleeping under an old tarpaulin. Nothing is more likely to make such desperate, traumatised people turn their faces from England, pick up their tarpaulins and walk away into France than knowing they will not get the security of occupation offered by Housing Act 1988 or Protection from Eviction Act 1977.
And that is just one of a whole series of wizard wheezes announced by the Communities Secretary (and Home Office) today. Here is the whole lot – minus, of course, any of the crucial details.

Measures in the forthcoming Immigration Bill will go further, and will enable landlords to evict illegal immigrant tenants more easily, by giving them the means to end a tenancy when a person’s leave to remain in the UK ends – in some circumstances without a court order.
This will be triggered by a notice issued by the Home Office confirming that the tenant no longer has the right to rent in the UK. The landlord would then be expected to take action to ensure that the illegal immigrant tenant or occupant leaves the property.

This, of course, runs roughshod over centuries of land law, in which an estate in land in wholly distinct from any mere personal characteristic. Uncertain terms, contractual periods that are potentially no such thing, and of course, eviction on the say so of the Home Office, who always get things right. Where is the route of appeal? Where is the possibility for scrutiny by the Court? Hard to say until the detail becomes clear, but there is enough here to make it likely that the legislation will be a complicated mess.
I spent an idle few minutes earlier today considering how many ECHR rights such legislation might breach. It became easier to count the ones it didn’t. Assuming that we haven’t actually been taken out of the Convention by the time this enters law, ‘proportionality’ is going to have do an awful lot of stretching to cover breaches of P1A1, Art 8 and Art 6. Incompatibility beckons…
And there I collapse, it is impossible to satirise, or even mock, such a catatonically dim-witted, legally illiterate, wholly unnecessary, thoughtless proposal.
But of course, it doesn’t end there. Yes, ‘right to rent’ will be extended nationally. Even though the evaluation of the West Midlands pilot hasn’t been completed and despite early evidence that British citizens without a passport were being turned away by landlords. What chance would a Zambrano carer have?
This is an odious law. We have always said so. Now we will have a chance to see just how bloody stupid it is on a national scale.
And then ‘rogue landlords’ (but not as we know them).

There will be a new criminal offence targeted at unscrupulous landlords and agents who repeatedly fail to conduct the “right to rent” checks or fail to take steps to remove illegal immigrants from their property. These landlords may face a fine, up to 5 years imprisonment and further sanctions under the Proceeds of Crime Act.

But then again, the NLA welcomed ‘stronger eviction powers’, their main concern being that these immigrant types, once they lost their right to rent, might turn out to be dangerous to, um, landlords, with Richard Lambert, NLA chief exec saying:

“I do worry in the case of an illegal immigrant you possibly have a despairing person in a desperate situation. That often leads to people doing very desperate things. Who knows? Barricading themselves in? There is the risk of defending themselves with all the force they can muster. It could put people in potential danger.”

Yes, Richard, that is the real risk of this proposed legislation. How could we have overlooked it?
The DCLG continue:

Forthcoming legislation will create a blacklist of persistent rogue landlords and letting agents, helping councils to focus their enforcement action on where it is most needed, and keeping track of those who have been convicted of housing offences.
And new measures will prevent a landlord or letting agent from renting out of properties if they are repeat offenders.

‘Rogue landlords’? In a remarkable redefinition, it appears that a rogue landlord will now be someone who doesn’t evict their tenants without getting a court order.
But I suspect that the PRS landlords will not be remotely happy at the prospect of a 5 year prison sentence for messing up immigration status checks.
The ‘blacklist’? (perhaps a slightly unfortunate term in the context of anti immigrant legislation) – well we will have to wait and see what is involved there. Given the lengths that the MoJ went to to resist a FOI request for details of prosecutions of landlords, this could be interesting, so long as it is not restricted to breaches of ‘right to rent’.
The other announced measures are:

• a new tougher fit and proper person test for landlords of properties that have to be licenced, to ensure they do not pose a risk to the welfare or safety of tenants
• extending Rent Repayment Orders so local authorities can claim back rent payments from landlords who abuse the Housing Benefit system by failing to ensure the property is maintained to a good standard
• enabling local authorities to issue penalty notices for certain civil offences, with the money retained by the council and used for housing purposes
• permitting the sharing of Tenancy Deposit Protection data to help councils crack down on rogue landlords who knowingly rent out unsafe and overcrowded accommodation
• enabling landlords to recover abandoned properties more quickly without the need to go to court.

Again, the devil will be in the detail. ‘Penalty notices for certain civil offences’ is downright odd, as a) these are civil offences and b) councils aren’t the claimant in civil matters.
Sharing of TDS data will, I have no doubt, be with HMRC as well as councils. Landlords and agents take note.
Easier recovery of ‘abandoned properties’ by landlords? Hmmm. Again, devil in the detail, but unlikely to be good.
At a time when housing law needs a serious reconsideration overall (and Scotland and Wales have gone some distance in that regard), I despair at this petty, pointless, vicious, knee-jerk pandering. This atrocious Something Must Be Done legerdemain. And we know there is more to come…

credit
http://nearlylegal.co.uk/blog/2015/08/the-something-must-be-done-bill-calais-edition/

Clock is ticking for Landlords to Protect Deposits 23rd JUNE 2015

Landlords are being warned that they have just a matter of weeks to protect tenancy deposits, or face thousands in fines.

The new Deregulation Act means more tenancy deposits are now under deposit protection law if received before 6 April 2007, and gives landlords until only 23 June to register them in a government approved scheme.

Otherwise they face a penalty of between one and three times the value of the deposit and restrictions on regaining possession of their property.

A series of controversial court rulings brought urgent need to clarify the law when consternation arose over which deposits must be protected and in what circumstances prescribed information documents must be given to tenants. If landlords do not give tenants full written information about their protection they still face the fine, even if the deposit is protected.

Deposits must now be protected by 23 June if received before 6 April 2007 and if the tenancy renewed on a periodic basis after that date. Government approved scheme, the Tenancy Deposit Scheme (TDS), has warned landlords that time is running out.

Chief executive Steve Harriott said: “Landlords have only a matter of weeks to comply before the amnesty ends and penalties take effect. A small number of deposits are exempt but I would urge any landlord who holds an unprotected deposit to register it online with Tenancy Deposit Scheme immediately to avoid any future problems.”

If a tenancy renewed on a periodic basis before 6 April 2007 deposit protection is not compulsory. However the landlord will still be prevented from regaining possession using the standard section 21 notice unless they protect or return the money.
Steve Harriott also said the act has highlighted that many landlords have failed to protect deposits even under the existing laws.

“We have seen a surge in landlords contacting us in recent weeks. Many have only just become aware that they should have already protected deposits; a stark reminder that thousands of landlords have been falling foul of deposit protection law, often unknowingly.”

The new law has also been the source of great relief for landlords and letting agents. The Court of Appeal decision in Superstrike v Rodrigues (2013) came with the implication that landlords could be penalised for not serving new prescribed information to tenants at every renewal even if no circumstances had changed. A requirement widely seen as straying from the intentions of the scheme, documents now only need to be issued a second time if there is a change in tenants, landlord, property, or tenancy deposit protection scheme.

www.landlordtoday.co.uk

Vulnerable homeless adults could be housed by local authorities

 

A Judgement of the Supreme Court given on 13 May 2013 has raised hopes that vulnerable homeless people currently denied access to social housing will now be housed. Prior to the Judgement in Kanu v LB Southwark [2015] UKSC 30, people applying to be housed under the homelessness legislation had to demonstrate that they were vulnerable when compared to the ordinary homeless person in order to qualify to be housed. Following the Judgement, applicants now only have to demonstrate that they are vulnerable when compared to the ordinary person if made homeless. This means that many homeless people suffering with mental health issues such as Anxiety, Depression or Post Traumatic Stress Disorder or physical health issues such as Diabetes or mobility problems, who would previously not have qualified to be housed by local authorities, could be entitled to accommodation.

It is currently unclear how local authorities will provide the extra accommodation needed, with the housing stock already stretched to the limit in many areas. In 2012 over 1.8 million people were assessed as needing social housing and placed on the waiting list accordingly. By 2014 this had been reduced to just over 1.3 million people, primarily by local authorities introducing stricter criteria backed by the government rather than the housing need being met. In the current climate, with the government announcing plans to introduce the right to buy for housing association tenants, it is unlikely that the increased demand for social housing resulting from this decision will be met by an increased supply of social housing. The more likely response to this judgement will be for the government to legislate as soon as possible to prevent vulnerable homeless people from accessing social housing, with local authorities making increased use of gate-keeping tactics to prevent homelessness applications from being processed whilst the new legislation is prepared.

Vulnerable homeless people are encouraged to make homelessness applications without delay to ensure they take advantage of the opportunity to access social housing. 

Written on 05/06/2015 by Blavo & CO's Adrian Smith

What does it mean to be Homeless

In recent months I have seen a huge increase in the number of Private renting tenants coming to me with S21 in hand claiming they will be homeless

Obviously my first job is to ensure the S21 is valid and all the admin is in place.

But this is the easy part.

 

My next challenge is to try and explain to a full-time employed couple, why the local council do not “HAVE TO” house them just because their current landlord has served them with notice.

My First question…..If you are currently privately renting, why don’t you just look for another private rented property?

The surprise answer “we cant afford Private rented”

I reply .... But you can afford the property you are currently in?

“Yes, but we want a council house as the rent cheaper and we are entitled to one"

                            "oh Joy"

I try to explain that the local council has a set of criteria for people to be eligible to be placed on the waiting list for a council property, I also explain our local figures

The council only has 10,200 properties in their housing stock 150 of those are private rented properties Let through the Help-to-rent scheme. There are currently 4,600 people on the active waiting list and a further 4500 on a deferred list waiting for their chance to get on the active list

I explain that this couples' chance of getting a council house are very slim with approx. a 7 year wait.

Then comes the mantra  “But we will be homeless!!”

 I then explain their legal right of remaining in the property until a warrant is finally obtained….. Nope they don’t want to hear this

So I then go through the 5 legal tests for homelessness

• Eligibility
• Definition of Homeless
• Priority Need
• Intentionality
• Local connection

Most people at this point fall down on Priority Need and/or local connection, I then throw in that if the council do have a duty to house you under Homeless Legislation, they can discharge their duty ANYWHERE in the UK…. So it is possible you maybe housed in Devon or Leeds or maybe even Central London, if there is not a suitable property locally for you

They then sit and pout because  they want to live in this area and they expect me to magic  the Perfect Property out of my desk drawer.

I have to tell them, that I am sorry but your best option is Private rented, nothing stopping you asking a new landlord for a 12, 24 or 36 month AST if that would give them peace of mind

It is at this point people usually leave my office telling me how unhelpful I am and that I only want to help people who shouldn’t even be in this Country and that they have worked all their lives and the Council "owe" them a house

But I just smile and say  “I’m sorry I cant help, but Private Renting isn’t that bad… after all you are doing it already”

Bombshell as Cameron announces mandatory licensing of landlords

Written by: ROSALIND RENSHAW | MAY 22, 2015    Property Industry Eye

Prime Minister David Cameron is set to introduce a mandatory licensing regime of private landlords.

What is being described as a bombshell is outlined in a speech Cameron gave yesterday on immigration.

Most commentators have so far focused on his announcement that the current ‘right to rent’ trial in the midlands whereby landlords or their agents must check the immigration status of tenants is to be rolled out nationwide.

But Cameron added that a new mandatory licensing regime will be introduced. There are no details, for example as to whether it will include letting agents. However, this does seem highly likely given that agents act for landlords and can legally  bear responsibility for ‘right to rent’ checks and other duties.

Until now, the Tories have always walked away from such a policy. The last Labour administration said it wanted landlord – and letting agent – licensing but never introduced it.

But this is what Cameron said: “There are other ways we can identify those who shouldn’t be here, for example through housing. For the first time we’ve had landlords checking whether their tenants are here legally.

“The Liberal Democrats only wanted us to run a pilot on that one. But now we’ve got a majority, we will roll it out nationwide, and we’ll change the rules so landlords can evict illegal immigrants more quickly.

“We’ll also crack down on the unscrupulous landlords who cram houses full of illegal migrants, by introducing a new mandatory licensing regime. And, a bit like ending jobs when visas expire, we’ll consult on cancelling tenancies automatically at the same point.

“It’s not just through housing and jobs; we can track down illegal migrants through the banking system too.”

 

The full speech is here: https://www.gov.uk/government/speeches/pm-speech-on-immigration

Tax Relief Changes for Landlords

Landlords can no longer claim tax relief for the replacement of free standing white goods in unfurnished residential lettings, HMRC have confirmed. This measure came into effect in April 2013 and will therefore affect rental accounts and tax returns for the 2013-14 tax year onwards.

Unfortunately another rule prevents residential letting agents from claiming capital allowances. That is why the Wear and Tear allowance for residential landlords exists. In April 2011 the concessionary 10% allowance was replaced with a tighter statutory basis giving the same relief. It covers the provision of movable furniture such as beds and suites, televisions, fridges and freezers, as well as soft furnishings such as carpets and curtains.

A previous concession originally provided incentives for residential landlords to maintain their unfurnished properties by offering tax relief for the costs of replacing white goods and other furnishings. This incentivised landlords to replace items such as worn out furnishings and broken fridges. It is this incentive that no longer exists. Furniture which has a useful life of less than two years doesn't count as capital expenditure so a tax deduction can be claimed for the full cost in the year of purchase.

Under the new rules landlords who provide some furniture but not enough to qualify for the Wear and Tear Allowance won't be able to claim for the cost of renewing it unless it is permanently fixed to the building. This seems inequitable but there is a solution. Furniture to be provided to tenants can be leased by the landlord. The rules only require that an asset be provided not owned in order for it to qualify for a tax deduction. By renting furniture instead of buying it you can obtain a tax deduction for the cost of partly furnishing a house.

Despite this the withdrawal of the renewals allowance could give rise to additional costs for private landlords and these costs may be transferred onto the tenants, thereby increasing tension between landlord and tenant over costs and maintenance.

What can be classed as a ‘replacement’ or a ‘repair’ is sometimes complex turning on fine distinctions. Given the removal of the renewals allowance we may see more arguments with the tax office about what can be justified as a repair instead of a replacement on the basis that repairs are allowable but replacements may not be. It is advisable to seek professional guidance from a tax adviser to ensure that you are maximising your deductions against rental income, given that the tax rules regarding what can be claimed have now changed



Robert Bradley is principal of Bradley & Associates
http://www.concentriclettings.co.uk/about-us/news/tax-relief-changes-for-landlords/

New rules on when to serve a Section 21 notice

From October 2015 The Deregulation Act 2015 s36 will bring in new legislation to set time limits on when a Section 21 notice can be served.

Landlords and letting agents will not be able to issue a section 21 notice at the commencement of a tenancy, this is currently normal practice.

A section 21 will not be able to be served on a tenant until 4 months have pasted from the start of the tenancy.

For Periodic tenancy, a section 21 now no longer needs to end on the last day of a rent period

For example if rent is due on 12th the last day of a period would be 11th.

This has been removed by the insertion of subsection (4za) into Section 21 of Housing Act 1988

Retaliative Evictions

From October 2015 The Deregulation Act 2015 s33 will bring in new legislation to protect tenants from retaliative evictions.

Tenants in private rented accommodation only, will be protected from eviction if they have made a legitimate complaint about the condition of the property to their landlord.

However the law, as always is not as cut and dried as this, the New Retaliative Eviction law will come with rules which must have been followed Before a Section 21 notice is served by the landlord

•              Tenant must make a formal written complaint to the landlord of the disrepair/condition

•              Landlord has 14 days to respond (an adequate response by the landlord is a response in writing which—provides a description of the action that the landlord proposes to take And sets out a reasonable timescale within which that action will be taken)

   The Section 21, if served now would be invalid.

•              Tenant must then report this unresolved issue to Local authority

•              ONLY once the local authority has confirmed that the repair needs to be carried out to prevent a potential risk to health and safety, will the new rules come into play.

•              The landlord will not be able to evict a tenant for 6 months

A landlord will also be prevented from evicting a tenant where they have not complied with certain legal obligations such as

•              Supplying Gas Safety Certificates

•              Supplying Energy Performance Certificates.

    This restriction would be lifted as soon as these documents are provided

If a Property is in the market for sale, then it is likely the new rules will not apply to Section 21s regardless of the condition of the property

.  These new regulation only apply to tenancies commenced or renewed on or after the day the provisions came into force.

 

 

Gas Safety is no Joke



 

Research has found that private rental landlords in the UK are openly ignoring Gas Safety regulations, It would appear this is not just an oversight, with 75 % of tenants left without a valid record for their entire tenancy

Annual Gas safety inspections (GSI) have been a legal requirement in rented properties for some years now and i would think that even the most naive of landlords would at least know about this one piece of legislation if nothing else.

So you can imagine my shock when this week i have dealt with 3 cases where a landlord has not had a GSI carried out.

The first, bit of an accidental landlord, had a new boiler installed 2 years ago and assumed it was like a new cars' MOT and he didnt need a GSI for 3 years, happily a quick phone call and some advice and a recommendation of a good Gas engineer and crisis averted.

The second, not so cut and dried, the landlord had purchased the property 5 years ago with the current tenant in occupation, the previous owner/landlord has religiously had GSI carried out, when the new owner took over, in his wisdom decided that as there had been no issues reported with the last lot of GSIs and he had all intentions of replacing the boiler in a year or two he couldn’t really see the point in paying to 'service' something he was indenting to replace.

A phone call this time didnt do the job and a strongly worded letter has been sent his way, if no reply and no GSI is done, we all know what my next step must be.... HSE

Now for my personal favourite, this landlord rented out his property for the first time in 2008 using a local letting agent, a GSI was done.

when the first tenancy expired the landlord ditched the agent and took over the rental himself.

There were a further 7 tenancies.... but no further GSIs

After a little investigation it transpired that the gas engineer instructed in 2008 was actually the landlords own contractor this would show the landlord was fully aware of his legal responsibilities.

This case has resulted in a call the HSE and an immediate investigation, going by the information on HSE website a landlord can face a fine of upto £20k for every GSI not carried out and if the case is taken to High Court can face imprisonment.

A recent case Health and Safety Executive v Raymond Williams 2015 A landlord from Torquay illegally carried out annual gas safety checks at his properties despite not being a registered gas engineer, a court has heard.

He potentially put his tenants’ lives at risk by carrying out the statutory safety checks himself between April 2013 and October 2014. He also fraudulently filled out landlord’s gas safety documents using a fake Gas Safe Register number.

 HSE prosecuted the landlord at Torquay Magistrates’ Court after his work was investigated following a complaint from one of his tenants.

The court heard that the landlord carried out his own safety checks at five properties in Torquay and one in Newton Abbott. The checks should only have been carried out by a registered Gas Safe engineer to ensure the highest standards are met.

The landlord pleaded guilty to four breaches of gas safety legislation and was fined a total of £12,000 and ordered to pay £418 in costs.

Carbon Monoxide is a silent killer, Department of Health research showed that around 4,000 people will present themselves at hospital with CO symptoms in a twelve month period. In the last year there have been more than 50 deaths as a result of CO poisoning, with 16 of those attributable to faulty gas appliances

As a landlord if your tenant dies and no GSI has been carried out this is a criminal offence and you maybe up on a murder charge.

For the sake of £60 per year, why put lives at risk and face huge fines that outweigh any pennies you may have saved.

The Deregulation Act 2015 & Tenancy Deposits

 

The Deregulation Bill received Royal Assent on 26^th march this year and became The Deregulation Act 2015.

This Act contains important changes to deposit legislation which hopes to clarify the headcahes created  by the court cases of Superstrike vs Rodrigues and Charalambous vs Ng.

 A brief reminder of the cases

In Superstrike vs Rodrigues the judgement stated that a statutory period tenancy which arose after the fixed term had ended, should be seen as a ‘new’ tenancy and ruled that a deposit taken on Tenancy agreements entered into  before the Tenancy law was in place on 6 April 2007 and which then either renewed or continued as a periodic tenancy should have been protected (or re-protected) with the up to date prescribed information (PI) served on the tenant.

In Charolambous vs Ng the judgement stated that even though a deposit was taken before tenancy legislation on 6th April 2007, because it had not been protected and PI served, a Section 21 notice served on the tenant was invalid.

So what had  the Deregulation Act 2015 put in place?

1.If you took a deposit on any Assured Shorthold Tenancy (AST) before April 2007 and have not protected it.

You must protect the deposit and serve Prescribed Information by 23rd June 2015, otherwise you will not be able to issue a Section 21 notice at any point in the future.

However, it’s important to note that there are no penalties for any landlords who don’t protect deposits in these circumstances. This effectively confirms the decision in Charalambous vs Ng.

 2.If you took a deposit on a tenancy after  6 April 2007 and protected and served the PI, and the tenancy has since either rolled into a periodic or been renewed, then as long as the deposit is still protected in the same scheme and the tenancy details have not changed you will be deemed to have complied. In other words, this specific change overturns Superstrike vs Rodrigues judgement.

 3.If you took a deposit on an AST before April 2007 and the AST subsequently rolled into a Periodic or was renewed after April 2007, then the deposit must be protected and PI served by 23rd June 2015. You will not be able to serve a Section 21 notice and WILL be liable for penalties for non-compliance until you’ve protected the deposit.

 4.The final change (which isn't in relation to Superstirke or Charlambous) allows the agent’s details to be used on the PI where they have taken and protected the deposit on the landlord’s behalf. Previously there was doubt as to whether the agent’s details could be provided instead of the landlord’s when the agent took the deposit and protected it on the landlord’s behalf.

Why is Private renting such a dirty word?

On a daily basis I advice people on their housing situations and the options available to them
Most people are couples living with the in-laws overcrowding a house that really isn't made for 2 couples and the kids

When advising people of their options I must give all information both good and bad
Even now I am still surprised at the amount of people who still immediately disregard the option if private renting
Most say they can't afford it without even taking the time to look into local market prices, the others are scared by media horror stories of rogue landlords terrorising tenants and not allowing them to live in a property as their home

Yes, I admit the upfront money required to rent is a big hurdle, 1st months rent, 6 week deposit and letting agent fees and you are suddenly laying out the wrong side of £3k
And yes, you do have the worry of being asked to leave hanging over your head
BUT on the plus side of private renting you can chose exactly where you wish to live, rent a property within your own budget and if something goes wrong such as the boiler, you pick up the phone and its sorted
There are more and more products coming onto the market to help people to access private rented as a viable long term option
Many local council have renting incentive schemes which will help with the financial burden and pay rent and deposits
If you are employed you can now get a deposit bond for a minimal fee which covers the length of the tenancy for the full amount of the deposit but for as little as £60 up front

Most people still have the general belief that getting a council house is easy and the answer to everything for long term hassle free living
But the reality since the Localism Act 2011 is very different, councils overhauled their allocation policies meaning it is harder to get a property, and once you have a council property you will more than likely be given a 1 yr introductory tenancy, after which you can be quickly evicted if you have breached the terms, if you are not evicted you will probably be issued a flexible tenancy with a maximum term of 5yrs, there are no more life time tenancies and if your children have fled the nest by the time 5 yes is up, councils have every right not to renew your tenancy and downsize you

The security that used to come with a local authority property no longer exists, with this in mind the sensible thing to do would be to streamline the private rental sector to make it more attractive as a first housing option, longer tenancies, more structure to evict if tenants breach the terms and financial incentives for people looking to move and improve their circumstances

Private rented should be the first and best option available for our generation not a tabo that puts the fear of god into people

 

Landlords, don't be lazy..... do your homework

Even after all these years in the industry, I am still surprised at just how little landlords know about the business they are about to embark on

I think renting a property us the only business people embark in without doing a single piece of research on their chosen subject.

In not other industry would you find a complete novice signing a legally binding contract handing over the most expensive purchase he ever made to the hands if a complete stranger, without even checking the legitimacy of that person

I mean, would you happily hand over the keys of your shiny new car to a guy you'd never met in the hope he brings it back in one piece.... No, of course not because that's just madness

Yet everyday landlords are happy to hand over they and exclusive possession of their properties to tenants who they don't know and then run around like headless chickens whinging that the property got wrecked, the rent went unpaid..... What did you really expect from a complete stranger?

Landlords are in the news a lot in the last week because of this very reason, I'm sure we all saw the latest programme with Landlord Action explaining how they successfully evicted another tenant.....

But the bit they fail tobtell you is the fact the landlord was too dam lazy to do the job properly in the first place

•Did the landlord check the prospective tenants Immigration status as per the new regs?
•Did the landlord carry out referencing of the prospective tenants?
•Did the landlord ensure his tenancy agreement is up to date and not still harbouring clauses now seen as unfair under OFT guidance?
•Did the landlord protect the tenants deposit & issue PI within the time frame
•This list is quite extensive and I am still shocked when I see how slapdash landlords are when it comes to renting a property

I can guarantee a landlord will spend longer reading the small print ofbhis new phone contract than he will researching the rental industry and checking a applicants tenantability

If you are a lazy landlord and don't do your homework then I'm afraid in my opinion you can't then go around complaining that your tenant was bad...... You'd have already known and avoided that tenant and your current financial headache ifbyou had just taken some time and done your homework

You cannot expect a model tenant if you decided not to be a model landlord