Law News

Increase of Government Focus on Measures Tackling Rogue Landlords and Agents

Em Morley - June 19, 2018

By Marc Trup

While most landlords play by the rules, rogue landlords and letting agents in the private rented sector (PRS) have long been a problem in the UK, tarnishing the property industry and undermining tenants’ confidence in rental properties.

The disproportion in power in the PRS often meant that vulnerable tenants lacked legal protection from ruthless landlords, who, in many cases, retaliated against complaints from tenants living in cramped and unsafe conditions by raising rental prices and threatening evictions.

In recent years, the UK Government has introduced new measures to crack down on rogue landlords and strengthen councils’ powers to tackle poor quality homes in the private rented sector. Local councils are being given a variety of new powers to tackle the small minority of rogue landlords who rent out overcrowded or dangerous properties, imposing fines of up to £30,000 for non-compliant landlords.

Increase of Government Focus on Measures Tackling Rogue Landlords and Agents

Marc Trup, Founder and CEO of Arthur Online

Landlords convicted of a range of housing, immigration and other criminal offences, such as leasing overcrowded properties, fire and gas safety offences, and unlawful eviction, will be added to the database and their information will be available to local authorities. This will enable councils to keep a closer eye on those with a poor track record.

Furthermore, an increasing number of councils are launching licensing schemes in order to improve standards in the private rented sector. As of 2018, at least 70 councils have introduced schemes that add to the standard mandatory landlord licensing. More and more councils in England lacking a licensing scheme are consulting about bringing one in.

Government plans also include a national redress scheme during 2018/19 that landlords will have to join, enabling tenants to have a platform via which to complain about poorly managed properties.

In the past month, it has been announced that Client Money Protection (CMP) schemes will become a compulsory requirement for all letting agents from April 2019. The Ministry of Housing, Communities and Local Government has set out regulations for mandatory membership of a CMP scheme by 1st of April 2019. Any company holding client money will be required to be registered under a CMP scheme or face a maximum penalty of £30,000 for non-compliance.

Essentially, CMPs protect the rental money that a tenant pays to a letting agent to pass onto their landlord. There has never been legislation in place binding agents to separate deposit money from their own. This means that many tenants who rent through dodgy agents may never see their money again if the agent’s business went bust.

The main aim of a CMP is to help provide compensation to landlords, tenants and other clients if a property agent mishandles their rent, deposit or any other client funds. The purpose of making this scheme compulsory is to raise standards across the industry in order to protect the consumers who need it most.

Although regulations have been laid, they will not become law until April 2019. This means that, if you are a landlord relying on an agent who does not use a CMP, your money is still at risk.

Marc Trup is the Founder and CEO of Arthur Online

Marc fell into the property sector after selling his first business in 1998 to BUPA healthcare. Focusing on residential property, he built up a portfolio in and around the London area, starting off with a small block of flats.  Over the following 15 years Marc grew his portfolio to manage over 85 properties.  He wanted a system that allowed him to manage the portfolio from his iPhone, while drinking his espresso at the local coffee shop. Having searched online to find an app to help him do just that, he realised that it simply didn’t exist.  So, he founded Arthur Online to make not only his life easier but that of other property managers. Arthur Online is a cloud-based platform that enables property managers to respond instantly and solve problems fast – be it with tenants, contractors, property owners or letting agents.