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

The importance of paperwork….any paperwork

Increasingly I am seeing more and more tenants come to me with letters, not notices, from their landlord claiming there are thousands owed in unpaid rents.

The tenants, of course are adamant that they have paid in full and on time, but the landlord, when asked are unable to produce a full statement of account from the commencement of the tenancy to date.

The main problem is landlords and tenants fail to keep the arrangement business-like and fall fowl of agreeing to accept/pay rent by cash, not getting a receipt or a landlord may agree to let a tenant off one month due to repairs or such like, but fails to clarify this in writing then years down the line cant recall the agreement.

From the moment a tenancy starts and you receive the first month rent and deposit, you should start to keep track of these funds, even if it is nothing more than an excel spreadsheet.

If it can be avoided, don’t accept cash but if you do always always issue a receipt and note down that it was received in cash.

I recently had a case where a landlord had claimed over £8k was owed in unpaid rent from the date the tenant moved in in 2007, there was no record of the rent due/paid and after a strongly worded email the landlord finally sent me a hand written rental account, however after spending hours trawling through the tenants bank statements I managed to account for nearly £5k of these alleged unpaid months.

As the tenants was unable to prove the remaining £3k the landlord proceeded to court, and as I’m sure you can all predict, the judge didn’t even entertain the case as the landlord could not provide proof the rent had not been paid.

The moral of this story is, make sure you always keep accurate records no matter how simple, because it could mean the difference between winning and losing in court.

When is a Section 21 not a Section 21........ when it doesnt say it is

Over the last few weeks i have seen a startling increase in the number of tenants coming to me with notices given to them by their landlord which are actually invalid and Ihave had the task of writing to all of these landlords to tell them they will now have to serve another 2 months notice.

The problem is, these landlord seem to think all they need to do is write their tenant a short letter asking them to leave in 2 months time......WRONG

if your tenant is on an Assured Shorthold tenancy then you need to serve the correct notice which in the absence of a breach of tenancy will be a section 21 notice.

The reason these notices are invalid is because nowhere in them does it state that possession is required under section 21 of the Housing Act 1988.

The section number and Act are important because if you need to apply to the court for possession the judge will know which grounds, why and what procedure should have been followed in order for the judge to make an order of possession or in some cases to not grant an order at all.

So in these cases I have written to the landlord explaining the error and advising that if they  still wish the tenant to leave, then they will need to serve a valid section 21 notice giving 2 clear months notice to vacate from the date the notice is given, to help further I also include a template Section 21 notice so they can see what it needs to contain.

I admit that my letters have not always met with the gratitude I would have expected and on several occasions I have received rather abusive phone calls from these landlords

Serving a section 21 is basic landlord admin and should not be proving such a problem, I can understand that landlords may wish to keep outgoings low but cutting out the agent, but in these cases it may actually end up costing a landlord much more, if their tenant allows them to go to court only for the possession claim to be thrown out and the landlord is left to pay the court fee, which I am sure would be much higher than the cost of an agent or membership to one of the many Landlord associations around the country that will have a template Section 21 notice ready for you to just fill in the blanks.

So come on Landlords, get your finger out and do your research and PLEASE serve your notices correctly

I refer to an article by Paul Shamplina which revealed over 62% of landlord notices are incorrect.

http://www.property118.com/landlord-action-study-landlords-notices/66672/

Dear letting agents & Landlords.... Please know your tenants rights

Dear letting agents & landlords,

I would just like to mention that just because you own/manage a property, does not give you carte blanch to behave in anyway YOU feel fit

 When a tenant signs an assured shorthold tenancy, this means that you have given them, in law exclusive possession, clearly not many of you know what exactly this means....

It means that the tenant can exclude ANYONE including YOU!!!

This means that you must give the tenant notice if you wish to enter the property, if they say no, then no means no!  It doesnt mean turn up anyway and let yourself in, it doesnt mean enter the property when the tenant is out, it doesnt mean come to the property and weed the garden

And letting agents, you cannot put clauses in your tenancy agreement saying you can conduct viewings in the last month of the tenancy, you have no legal right to do this and you are
1) in breach of the tenancy agreement 2) you have committed an offence by inserting an unfair clause in the agreement that is adverse to the law of entering a property and 3) if you do not have the tenants permission to enter the property and you do, you are commiting a crime and the tenants have every right to call the police.

So please be very careful when and how you enter your tenants property.

I am currently dealing with a huge increase of these exact issues and i am coming down very hard on letting agents and landlords.

Know your rights and more importantly know your tenants rights!!

Housing Crisis.......not just a lack of good landlords

As a tenant and a housing adviser it is also good to hear a landlords' side to the "Housing Crisis" and apparently there isn’t one, the real issue is just lazy moany tenants who should be grateful that landlords even exists…. Really?

Is this the reality or am I missing something?........

Both from my daily work and personal experience I know exactly how hard it is to rent a property let alone the unachievable thought of owning my own place.

1st you have to find a property, by this I mean somewhere that is in a half decent area that is on a semi ok level of repair and cleanliness. 2nd if going through an agent you have to find £500+ just to be referenced, although in my case, I paid my fees, was never referenced and told by the agent its up to them if they reference tenants, they don’t have to reference them all, but still charge all applicant the same……interesting 3rd after being (or not being) referenced 9 times out of 10 the agents round here will tell you that you failed referencing for no apparent reason, keep your money and you are back to square 1 If you are lucky enough to get to step 4, then you have to find 6 weeks worth of rent for deposit, 1st months rent and the cost of moving, this is a hell of a lot to find when over 50% of your monthly wage goes on rent alone.

Most tenant stay in a undesirable property just because its all they can afford. Then comes the issue when the landlord puts the rent up, £25-£50 per month may not sound a lot but when you are already pulling your belt in as much as you can to make ends meet this small increase really cant be afforded. So you say you cant make this extra payment and ‘Poof’ appears a section 21 notice… So back you go to step 1 and now with the added pressure of only having two months to do it in.

Most landlords don’t understand how difficult it really is for tenants, they see us as an endless supply of income, I often come across the attitude, “well if you don’t want it 10 others out there will” but will they really??

Rents are higher than the average wage yet landlord insist on charging the highest rents possible and then point the finger at tenants for getting into arrears. Landlords have got it too easy… they can serve notice to have you out of their property with no reason at all, and with no regard for how it will impact on that tenant.

Landlord kick up a fuss when a maintenance issue is reported and immediately blame the tenant for breaking whatever it is I agree that in some cases the eviction process does need to be fast-tracked for people who are constant non-payers of rent.

I don’t agree with S21s being given out like sweets whenever the landlord has the hump. Longer tenancies of 3-5 years and regulated rents will help keep people in homes, there is a huge lack of good standard private rental property out there and even more of a lack of professional landlords.