Posts with tag: letting agents

The Challenges and Opportunities for Enforcing the Lettings Fee Ban

Published On: November 27, 2018 at 10:00 am


Categories: Tenant Fees Ban

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As part of the Government’s plans to enforce the upcoming lettings fee ban, a new lead enforcement authority will be established for the private rental sector.

According to the draft Tenant Fees Bill, which is currently moving through the House of Lords, Trading Standards will be responsible for enforcing the ban, while local authorities will be able to retain money raised through fines for non-compliance.

But, as has been proven in the past, new laws are only as good as their enforcement. So, what are the challenges and opportunities for enforcing the lettings fee ban?

The challenges for enforcement 

With thousands of letting agents operating across the country, it may be difficult for authorities to fully enforce the lettings fee ban and make sure that all companies are compliant.

Enforcement of existing legislation, such as the requirement for all agents to display their fees, has been, at times, problematic.

According to research in 2017 by the National Approved Letting Scheme (NALS), 93% of local authorities had failed to issue a single financial penalty for non-compliance with compulsory fee disclosure rules.

The Challenges and Opportunities for Enforcing the Lettings Fee Ban

The Challenges and Opportunities for Enforcing the Lettings Fee Ban

Almost two-thirds of councils surveyed admitted that they did not consider displaying letting agent fees a high priority. Furthermore, a third of councils said that they hadn’t allocated staffing resources to this work in 2016/17.

At the same time, 64% of local authorities said that they were yet to assess the impact that the fees ban could have on enforcement.

The Chief Operating Officer of proptech firm PayProp UK, Neil Cobbold, says: “The extra resource of a lead enforcement authority is welcome, but policing the fees ban will continue to be a challenge.

“Consumer awareness will be a key factor. More informed tenants and landlords would be highly likely to notify the relevant authority when agents continue to charge upfront fees or do not cap tenancy deposits.”

Enforcement being taken seriously

In September, it was found that funding for the National Trading Standards Estate Agency Team (NTSEAT) has been doubled. The team, which aims to protect consumers from rogue estate agents, has had its funding raised to £500,000 per year.

Cobbold points out that increased funds for regulating the sales sector may be a sign that more money could be made available to enforce the lettings fee ban over the next few years.

Introduction of the fees ban 

The Government has stated that the fees ban will be introduced in spring 2019 at the earliest, but, since its introduction to Parliament in May 2018, there have been no further announcements regarding the date of implementation.

“This has led people to assume an April start date,” Cobbold says. “Bearing in mind that there are still several steps for the draft Bill to pass through – including a report stage, third reading and amendments stage – we need to keep an eye on the movement of the Bill.”

He continues: “However, the fact that there has been no opposition and that, currently, there are no legal instruments required once the Bill becomes an act, the Secretary of State could look to sign the act into law as soon as the process is due to complete at the end of the year.

“It has always been advised that the CMP [Client Money Protection] legislation would be implemented first (April 1st 2019), so the fee ban being introduced at some point in April 2019 still seems the most likely outcome.”

Cobbold advises: “At this stage, agents should continue to monitor the news for Government announcements and prepare their businesses accordingly.

“Companies that take a positive approach to the fees ban and look to benefit from a more efficient business model are likely to thrive in the years to come.”

We remind all property professionals that we have a dedicated page for all news relating to the tenant fees ban:

Why Independent Inventory Clerks will be Essential Following the Lettings Fee Ban

Published On: November 26, 2018 at 11:09 am


Categories: Tenant Fees Ban

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When the lettings fee ban comes into force for landlords and letting agents next year, independent inventory clerks may prove essential to the smoothness of managing rental properties.

News about rogue landlords and agents letting properties that are unfit for habitation, withholding money without cause, or charging extortionate fees while having little duty of care for tenants have led to a loss of confidence in the private rental sector, along with heaps of legislation.

Why Independent Inventory Clerks will be Essential Following the Lettings Fee Ban

Why Independent Inventory Clerks will be Essential Following the Lettings Fee Ban

Danny Zane, the Chairman of the Association of Independent Inventory Clerks (AIIC), believes: “A negative perception feeds into mistrust and disputes. That is why most letting agents seek out AIIC members as a quality assurance in their inventory process.”

In 2019, landlords and agents may no longer be able to charge fees to tenants under the proposed lettings fee ban. Different agents will use different strategies to deal with this; most will find ways to keep costs down. A positive perception will help them do just that, as word of mouth is a powerful tool – it means that people come to you.

Independent letting agents are already well positioned, as they are likely to live and work in the area that they let properties, so will have a deeper understanding of their communities. This allows them to sell the local amenities, as well as a home, building trust, relationships and their reputations.

“Independent agents have a lot in common with independent inventory clerks, creating a strong business alignment: our members’ independence gives the parties confidence that things are reported solely based on professional knowledge and expertise in an unbiased manner,” Zane says.

Corporate letting agents, too, have been active. The current stigma surrounding the industry has led many to self-regulate, in the hope that this will change the public’s negative perception. Another way to seed trust and enhance their reputation would be to engage with an independent inventory clerk for properties that they manage, market and/or let, even if they have an in-house inventory service.

Zane continues: “Because our members are seen in the marketplace as being fair, impartial and having no strings attached, they can help letting agents position themselves more positively in the public’s mind.”

Even landlords who manage their properties themselves cannot be sure that a positive relationship with their tenants will be as positive at the end of a tenancy.

“Our members always take the time to explain to tenants the inner working of an inventory report, and answer questions that may trouble both tenants and landlords, reflecting positively on the letting agent,” Zane adds. “A good relationship between the parties is vital and mutually beneficial, and I believe our members are part of that.”

Landlords, if you compile your own inventories, we urge you to read our guide on creating a professional report:

Deposit Disputes Remain Low, Despite Higher Number of Rentals

Published On: November 23, 2018 at 9:04 am


Categories: Lettings News

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Fewer than 1% of tenancies in England and Wales ended with deposit disputes in the 12 months to March 2018, according to data from the Tenancy Deposit Scheme (TDS).

The scheme, which is one of the three Government-approved protection services, used its own data, plus freedom of information requests regarding the other two schemes.

The research found that, of the 3.74m deposits that were protected during the year to March, just 0.85% (31,865) resulted in disputes. This is up slightly from 0.83% last year.

However, this is the eighth consecutive year that fewer than 1% of all tenancies ended in deposit disputes, despite the rising number of rentals on the market.

By comparison to this year’s figure, 924,181 deposits were protected in England and Wales in March 2008.

The TDS’s data found that its insured scheme had a dispute rate of 1.14%, compared to 0.49% for its custodial service.

A total of £4.2 billion was held in deposit protection schemes as of March 2017, across the TDS, The Deposit Protection Service (The DPS) and mydeposits. The average deposit value was £1,100.

The TDS’s adjudications process on custodial deposits took just 3.55 days to resolve, compared to 21 at The DPS and 27 at mydeposits.

It took the TDS 14.79 days to resolve disputes in its insured scheme, compared with 26 at the two other organisations.

The most common reason for deposit disputes among TDS users was cleaning, at 54% of cases, followed by damage (49%), decoration (31%), rent arrears (20%) and gardening (16%).

Steve Harriott, the Chief Executive of the TDS, says: “As the private rented sector and the need for robust deposit protection continues to grow, as it has done over the last decade and more, it’s important to take stock of where we are and look for trends.

“Despite the number of tenancy deposits protected increasing by over 300% in the last ten years, the rates of disputes have remained regularly below 1%. That means the overwhelming majority of tenancies end in agreement between the tenant and the landlord or letting agent about how the deposit is awarded.”

He adds: “It’s unsurprising to see cleaning remain as the number one reason for disputes, due to its subjectivity; what might seem clean to one party could be viewed differently by another.”

We remind all landlords, letting agents and tenants to understand their rights and responsibilities surrounding tenancy deposits. Read our helpful guide for free here:

Letting Agents Offering Guaranteed Rent Caught Out by Subletting

Published On: November 22, 2018 at 9:50 am


Categories: Lettings News

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The Advertising Standards Authority (ASA) has upheld two complaints against letting agents that offered guaranteed rent, as it was unclear that they became the tenant and subletted the properties.

The outcome of the investigation suggests that any letting agent following this model must detail the subletting arrangement in any marketing of a property.

The cases were both treated individually, despite the firms – Reliance Property Management Specialists and Smartinvest Capital, trading as Victoria Knight – both being in east London and under the same ownership.

On its website, Reliance said that it offered guaranteed rent 365 days per year, guaranteeing its landlords full monthly rental payments, even when the property is empty.

The complainant claimed that the guaranteed rent statement was misleading, as it suggested that the rent would be guaranteed in all circumstances. They added that the advertisement did not make clear the significant limitations.

Reliance told the ASA that it acted as the tenant, and then effectively sublet the property.

A rent recovery insurance policy allowed the letting agent to claim for unpaid rent where the tenant had defaulted. It also provided cover for legal costs involved in pursuing a tenant.

Two landlords told the ASA that they had continued to receive rent when their properties were empty. However, the ASA said that consumers would not understand from the advert that the guaranteed rent was based on Reliance becoming the tenant and subsequently subletting the property.

It warned that this was material information likely to cause consumers to take transactional decisions that they would not otherwise have taken.

There were also terms and conditions for the arrangement, but a copy of the full terms and conditions was not available for landlords to view on the website. For instance, one term was a limitation on the guaranteed rent for landlords if the property was uninhabitable.

In the case of Victoria Knight, its website read: “We are one of the few letting agents in the country who offer rent guarantee with professional working tenants.

“Our rent guaranteed service offers the assurance of a fixed monthly rental income without all the hassles involved in being a landlord.”

The challenge from the complainant was the same as in the Reliance case.

Again, the ASA ruled that, because Victoria Knight did not make it clear that the agent became the tenant and sublet the property, its rent guarantee claims were misleading.

Both sets of adverts have been banned.

For landlords struggling to understand the difference between a guaranteed rent scheme and rent guarantee insurance, read this helpful guide on Just Landlords’ website:

Inventory Clerks Subject to Abuse when Parties Do Not Agree

Published On: November 19, 2018 at 10:58 am


Categories: Lettings News

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Independent inventory clerks can be subject to abuse when parties within the lettings sector do not agree, according to a statement by the Association of Independent Inventory Clerks (AIIC).

The organisation reminds letting agents, landlords and tenants that one of the reasons that it engages its members is because it is independent.

Danny Zane, the Chairman of the AIIC, says: “As an association, we like to know what drives our members.

“Time and again, our members tell us that they are proud of having no direct links to the landlord, agent or tenant, because this allows them to carry out their job in the manner that is professional, impartial and fair.”

Members of the AIIC are experts in their field and know their market well. They understand that the majority of landlords are not professional landlords and use their portfolios as their pension pot, that tenants’ financial situation or personal circumstances may change, and, equally, that letting agents must make a living.

“On occasions, our members are put under pressure by one of the parties to make changes to their report, and receive verbal abuse or threats of no payment if the changes the party requests are not made,” Zane says. “Most of our members are self-employed and are well aware that their own name is at stake if they are found to be at fault.”

He explains: “As the chair of the AIIC, I would like to remind landlords, tenants and agents that they normally have seven days to bring any omission or inaccuracy to the attention of the clerk. If there is a disagreement as to why the clerk has reported damage, fair tear and wear etc., they should get in touch with the clerk in writing and ask for clarifications. Our members are independent and unbiased, but are always willing to listen.”

The AIIC insists that it is important for the parties involved to be present at check-ins and check-outs wherever possible, let the clerk do their job, then ask the clerk all of the questions that they feel they need to, to understand the what, why, who and when.

“Our members are happy to go the extra mile and spend time talking to the parties if it can help reduce, and even remove, the chance of a dispute,” Zane adds.

“The AIIC understands that, sometimes, people view things differently, and has put in place a formal complaint and redress scheme in the event the dialogue between a member clerk and one of the parties breaks down. In general, the parties involved acknowledge that the unbiased and independent inventory report produced by our members has helped them start and end the tenancy on the right foot.”

If you decide to compile your own inventory, we have a comprehensive guide that will help you provide a professional, thorough document:

Less than Half of Rental Homes Permit Cats

Published On: November 14, 2018 at 9:04 am


Categories: Lettings News

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Less than half (42%) of rental homes on the lettings market allow cats, according to new research from Cats Protection.

Letting agents have been blamed for the lack of cat-friendly rental homes available to private tenants.

Jacqui Cuff, on behalf of the charity, says: “We hear from renters who tell us most adverts state ‘no pets’.

“Often, the reason for not allowing cats is simply habit, with a third of landlords who don’t accept cats saying they didn’t proactively choose to ban cats, but instead followed a standard template or advice from a letting agent.”

Cats Protection has now launched a new campaign, offering guidance to letting agents and tenants to help more renters own cats. The guidance states that properties should be advertised as ‘pets considered’, so that decisions can be made on a case-by-case basis, once the prospective feline tenant has been met.

An example clause says that tenancy conditions can require cats to be neutered, vaccinated and micro-chipped.

The charity says that private tenants who are allowed to own cats often stay in their rental homes longer, look after them better and feel happier.

Cuff insists: “The reality is that cats very rarely cause problems for landlords. In actual fact, many cat owners tell us that having a cat is what makes their house a home, and helps them put down roots and value the home they’re living in.”

Broadcaster Andrew Collins also comments: “Cats are more than just much-loved pets – they’re part of the family and the heart of the home. For me, a home without a cat isn’t a home at all.

“They’ve got an important role to play in the lives of many people – from helping children understand about caring for others, to providing a lifeline to pensioners who may otherwise feel isolated and lonely.”

He continues: “It’s heart-breaking that so many renters are not able to own a cat, but this needn’t be the case.

“Cats Protection’s campaign is a major step forward in modernising how cat ownership is viewed in a rental market that many people now rely on. By helping landlords see the benefits of happy, settled tenants, we can help more tenants experience the joy of sharing their lives with a feline friend.”

You can find out more about the campaign here.