Deposits, Damage, Dilapidations and Delusional Deductions.....

Even after all these years I am still surprised when a see a tenant whose landlord is claiming Delusional Deductions from a deposit. I am even more flabbergasted by the number of private landlords who don’t feel the need to protect said Deposits at all. I still see numbers of section 21 notices served, but soon find out the deposits are not protected and so have to break the bad news to the landlord that he isn’t getting his property back any time soon. More and more landlords are not having inventories done at the start of tenancies then trying to claim for extremely high figured damages that they can’t prove Repairs, or should I say a lack of them seems to be a trend on the increase too with less landlords willing to put their hand in their pocket to pay for obligated maintenance. Just this week I am dealing with a tenant who reported a boiler not working over 3 weeks ago, so far 1 engineer has attended, condemned the boiler and tenant has been without heating and hot water since, with the landlord stating that he isn’t too worried about replacing it now the weather has got warmer!?! Recently I saw a tenant who had been texted by his landlord to tell him that as his mortgage had gone up the landlord would be putting the rent up as per the next rent payment due, but a whopping £200pm. The tenant was 3 months into a 12 month fixed term (no BreakClause) and landlord has told tenant that if he refused then he would wait until tenant left for work and would change the locks. I appreciate this is only a snap shot of what I see and it is also not a true reflection of all landlords, after all, every walk of life has its bad apples, but I do feel that it is a worrying increase of blatantly flouting the law that is there to protect both parties. Will regulating the industry really help stop this type of practice, or will it be that all good landlords will stand up and be counted (and registered) and all not so good stand back a carry on regardless until the law catches up with them. There is now an increasing trend in lifestyle referencing for tenants which I think is a good idea, but where can tenants go to see how a landlord has previously treated his or her tenants? Most tenancy work well with both parties doing what is expected of them, but there are still the problems of landlords and tenants who don’t.

Generation Rent – Have the Germans Got it Right?

As we all still try and work out how much better off we will be from the recent budget we can be forgiven for thinking that the housing market has come off fairly well, but are first time buyers being pushed further and further away from the first rung of the property ladder. For most people, the only alternative to living with parents is to rent, and with the average age of a first time buyer now 42, an increase of 5 years from January 2011, living with mum & dad may have its drawbacks. With increased talk of a change to the eviciton process making it easier for landlords to evict is in contrast to the call for longer standard tenancies. Are we heading towards a generation that is destined to be renters and witnessing the end of a largely British culture of homeownership, the one main goal that our parents worked hard to achieve in their 20s and 30s. Reports show that homeownership is slumping towards its lowest levels since the mid-1980s, Team that with unaffordable house prices even with the Help to Buy scheme, a continuing shortage of housing stock is still the realisation for most, it seems we are set to see an entire generation unable to purchase their own home as their forefathers did. A rise in living standards since the end of the First World War, when only 23% of property was owner-occupied, saw the gradual upwards trend accelerates in the mid-1970′s. This, however is in stark contrast to the now Housing Minister pledged only that the new coalition Government would do everything it could to help would-be buyers. In 2011, Mr Shapps first speech as a minister was certainly rousing. “These people are not asking for a hand-out; they just want a chance”, he declared. ‘The age of aspiration is back!’ On the contrary, the age of aspiration never stopped. However, with an estimated 1.5 million families with children in rented accommodation, it is unlikely that would-be first time buyers will ever see their aspirations realised. Reports have shown that tenant demand reached new heights earlier this year, with over 81,000 new tenants registering with agents – a 67% increase since the start of the year. On average, properties are being rented out within 12.7 days of being placed on the market – seven days quicker than the start of the year. However, the reports also showed that available properties fell by as much as 6.9%, giving an average 5.8 tenant competing for each property. In spite of the “Englishmans home is his castle” attitude we are trying desperately to hold onto, our European cousins are not so concerned with the whole buying a property stigma that seems to be a driving force for many Britons. In contrast, renting in countries such as Germany is regarded as the norm with most people signing a 7 or 10 year tenancy agreement taking away the headache of unforeseen maintenance such as a new boiler or insurance claim following a flood with it. However, renting is not necessarily the cheapest option for many Germans, for instance in thriving cities like Hamburg, Cologne and Munich, tenants can typically see half their wages spent on rent alone. And the prospect of paying a landlord well into old age appeals to Germans no more than it does to the Brits. The attitude of young Germans is where the similarity towards renting ends. There is not the same sense of urgency and necessity to own their own home and this contrast in attitude reflects the dramatic difference in the housing markets. Over the past 10 years UK residential property prices have nearly doubled, while in Germany they have risen a mere 2%-3%. So what is Germany’s secret to keeping prices affordable, and why don’t more Germans aspire to be home owners? Primarily, the most prominent difference is an abundant supply of good quality rental accommodation. German housing associations and municipal authorities hold about 12% of stock, private housing companies 10%, and property funds about 1%; the rest is held by private investors. Secondly, the Germans watch their pennies. Rigorous lending requirements make sure there isn’t a surplus of housing finance readily available. Germany’s tax system does not exactly favour property owners either. The Property Transfer tax (Grunderwerbsteuer) is approx 5% in many states. There is no doubt that Germany offers its tenants a better deal than here in the UK; renting is much more transparent, with rental values rigorously policed to ensure no one pays over the odds, there is even a website where tenants can check their rent is fair using the rental index [Mietspiegel]. And if the tenant does find they are paying too much, the tenants’ association will step in and get the rent reduced to the ideal value. Rents are tightly controlled and cannot normally be increased by more than 20% nominally over three years. Unlimited contracts are standard and tenants, if given notice, can demand continuation. Property is normally freshly decorated in white before tenants move in, and must be repainted when they leave. Although it does appear that the grass is definitely a shade or two greener in Germany, it is not as fertile as you might have first thought, a deposit in Germany to rent a property is equal to 3 months’ rent. The fact is that wherever you are, you don’t want to be paying rent into your retirement. Although Germany is better value than the UK, buying property is still out of the reach of most. The grim reality of today’s property markets – whether it is Leipzig or London – is that most young people cannot get on the property ladder without parental help or inheriting.

Are we soon to be living in a Dickens novel?

The Guardian, recently reported on a Kent landlord who has issued eviction notices to his all his tenants currently in receipt of Housing Benefit.

The landlord has built up a property empire of over 1000 properties throughout Ashford but has become exasperated with the amount of arrears his tenants on welfare have built up.

I am not a landlord myself, but I can sympathise, landlords like this couple clearly run their properties as a business and the aim of all business is to make profit, if he is not receiving his rent and in addition paying out for court costs for evictions I can see his point, in wanting to swap his current situation for one of employed tenants with a steady monthly income.

And this landlord is not alone, increasingly I see tenants who most times through no fault of their own find themselves claiming housing benefit, but are unable to find anywhere to live because more and more private landlords are choosing employed tenants over tenants on welfare.

I’m sure some people out there may be screaming ‘DISCRIMINATION’ ‘HUMAN RIGHTS’  and yes they have a point, but, the main issue here is not the tenants themselves, it is the funds.

Local Housing Allowance (LHA) was capped, which meant anyone under 35yrs old could only get enough housing benefit to rent a room in a shared house.

And the LHA for someone over 35 renting a 1 bedroom property falls below the average private rental cost.

I found myself in exactly this position in 2012, after working all my life since the age of 15, I was made redundant in Dec 2012, I had minimal savings and rent and bills to pay.

I had to jump through hoops at the council office just to get housing benefit, which was then delayed in being paid to me for 10 weeks because of a ‘backlog’

During this 10 week period my rent was due and went unpaid, may landlord, not a happy bunny, but luckily because I had previously always paid early, allowed me the time while my payment was processed.

Once it came through all was well, except my 4 weekly payment was less than the rent I owed monthly, so I had to top up my rent from the money I received for Job Seekers allowance.

Not ideal as this had a knock on effect to the rest of my out goings, I was lucky in some respects that it was just me, no partner, no kids to feed, but I can see how people can find themselves in piles of debt being on benefits.

But where does this leave the tenants who are on housing benefit?

In short – HOMELESS

Local councils have a catch 22 policy, they will not house tenants who are in rent arrears, yet 9 times out of 10 it is the councils error in payments that have caused the arrears in the first place.

Councils will also not downsize a tenant who is in arrears, so a tenant who can’t afford to keep a 3 bed property and is building up arrears, will not be moved with their debt, to a smaller property with a lesser rent to help them pay off the arrears and manage their rent, because they are in arrears.

Something needs to change with the way benefits are paid, as soon, otherwise we will soon see hundreds of families living on the streets because there is literally nowhere for them to live.

The UK will again look like a scene from a Dickens novel with the poor begging in doorways, urchin children running around the streets with dirty faces, while the rich live in their warm houses.

A frightening but very real vision.

A Section 21....... But not as we know it

Some of you out there maybe following with interest the recent of Spencer v Taylor concerning the serving of a Section 21 notice.

As we all know (I hope)  there are two types of Section 21 notice, one to be served during a fixed term and one to be served when tenancy is periodic, both required different information to be set out in order for the notice to be correct and woe-be-tied any landlord who served the wrong one or got the dates wrong when he applied to the court for possession.

What Spencer v Taylor shows us is that this previous thinking could now not be required.

The Court of Appeal specified that where there was originally a fixed term tenancy then even if a Section 21 Notice is served after the expiry of the fixed term, the landlord can rely on a Section 21(1) Notice. Therefore, provided that not less than 2  months clear notice is given, a Section 21(1) Notice can be relied on at any time. The role of a Section 21(4) Notice does not become redundant but is only relied upon when being served when the tenancy was periodic from the start

It is thought that this new angle on the serving of section 21s could see more tenants evicted and less possession claims being thrown out of court, but in reality will this really be the case.

In my capacity I still see a good number of section 21 notices that have not been completed correctly by both DIY landlord and letting agents, if some still haven’t grasped the logic of two notices for two different tenancies, Fixed tern & Periodic, can we really expect a sudden influx of Section 21s that reflect the revised understanding from this case.

But of course the main point still exists, that regardless of which section 21 a landlord uses, if he/she has not protected the tenant deposit and given prescribed information to the tenant then any section 21 notice served will be invalid any way.

All we can do is wait, watch and wonder …………

Landlords still ignoring the Law books in favour of DIY Lettings

I am always surprised to read a media article of a landlord who has not done the basics when letting a property or blatantly ignored the rules and I am sure we all have a local story we can think of.

However I am becoming increasingly alarmed by the number of tenants, in my local area that I am seeing whose landlord clearly have no idea of the law, or do, but choose to ignore it.

The list of issues is endless, but the most common is landlords still not protecting deposits, in the last month I have dealt with 3 tenants whose landlord didn’t protect their deposit at any point during their tenancy and is now refusing to return it. Shockingly one of these landlord rented his property through an agent, who I would have expected to deal with the deposit or at least advise the landlord of his obligations and the law.

The next most common issue is landlord not allowing tenants to leave a tenancy early – now I know most of you will be jumping up at this point and say “too right”  but I’m talking about a tenant correctly activating their break clause, these landlords are telling tenants the break clause does not apply to them and one landlord even told the tenant “she” needed to serve a Section 21 if she wanted to leave the property.

Now I know this all sounds very unbelievable but I can assure you these are real issues, but where do we start in the education?

Is it up to the government to regulate the industry of both landlords and agents, and if so how is this monitored.

Should the education start with the tenant? If all tenants knew what they should expect would the ‘dodgy’ landlords eventually be squeezed out because they just wouldn’t get tenants.

The letting industry is a viscous circle that has spun on its own for so long I don’t think we will ever successfully stop its motion.

But surely for both landlords and tenants there must be a better way…..?

The End of Deposits as we know them

 The End of deposits as we know them.

I was surprised this morning to read, that The DPS had been axed by the government back in early September.

I know Capita had taken over, then pulled out about 6 months later, but the closers of The DPS really had been kept well and truely under the radar.

All deposits currently protected by DPS have been taken over by MyDeposits, so does this mean we no longer have a FREE scheme for landlords to protect tenants deposits in? It would seem so.
Also MyDeposits have recently changed their policy on how deposits are protected and will automatcally unprotect deposits when a fixed term comes to an end, this means landlords will need to reprotect within a set time line to avoid the penalties and of course pay the cost of reprotecting.

So with less competion in the deposit protection market and as far as I know both remaining schemes charging landlords, will this spell the end of the Deposit up front?

Will landlords want to pay to protect the deposit, which is taken because its what is don't rather than a legal requirement.

I wonder if we will shortly see an increase in insurance schemes and deposit bonds as an alternative to cash deposits, have the government in their hast to make a quick buck actually shot themselves in the foot and signed the death warrant for deposits as we know them.

From Private tenant - to Living on the streets in 3 easy steps

Increasingly I am seeing more and more people come through the door, with eviction notices for rent arrears, nothing new about that you may think, but on brief closer inspection, it transpires that these rent arrears aren’t actually the tenants fault…… I know you are now all screaming  “well of course it’s their fault, they should pay their rent”

In essence I would agree, after all that is the main term of any tenancy agreement, however, many tenants are finding themselves the victim of the benefit caps.

We have all read recently that 1 in 3 council tenants & thousands of housing association tenants have been forced into arrears since April this year, however less is being voiced about the number of private renting tenants who are also finding themselves in rent arrears that they had no control over.

Under LHA rules tenants are only paid for the number of rooms that they are deemed to need not the number of rooms in the property.

This is seriously affecting private renting tenants who have either been on HB from the start of their tenancy or have found themselves on benefits due to redundancy.

The bedroom tax penalises tenants if they have a “spare” bedroom by reducing their housing benefit by up to 25 per cent. As emergency funds from councils dry up, experts warn the situation is expected to deteriorate further over the coming months

Many PRS tenants who could easily afford their rent in the past have found themselves struggling to meet the full cost or in most situations I’ve seen  been served with notice for rent arrears.

Most tenants in this situation are not in any financial position to make payment arrangements with their landlords to pay off the arrears due to the cut in their benefit payments coupled with the lack of employment out there.

Local councils are also wiping their hands of these tenants and seeing them as intentionally homeless due to the rent arrears.

In the last 2 weeks alone I have dealt with 4 families in my local area who this has happened too and the councils are evicting them from the temporary accommodation and ending their duty of care.

So what now for these families who find themselves literally on the street with nowhere to go?

NO private landlord will take them on (rent arrears)

NO local council won’t touch them (rent arrears)

NO Housing association will house them (rent arrears)

And in all fairness who whats to live the rest of their life in a Hostel…

The government really need to sharpen their pencils and make some sense of this mess before most of the UK find themselves living on the streets.