Posts with tag: letting agents

Tenant Fees Bill Passes Second Reading to go to Committee Stage

Published On: October 15, 2018 at 8:53 am

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The Tenant Fees Bill has passed its second reading in the House of Lords, and will go to the committee stage next month.

Peers debated whether letting agents and landlords should have to keep a paper trail of holding deposits, and whether this charge should be capped at three days’ rent or £50, rather than the one week proposed.

As the bill passed its second reading, peers in the House of Lords criticised ARLA Propertymark (the Association of Residential Letting Agents) for continuing to oppose the lettings fee ban.

Tenant Fees Bill Passes Second Reading to go to Committee Stage

Tenant Fees Bill Passes Second Reading to go to Committee Stage

Baroness Hayter questioned why ARLA was still arguing against the bill: “I am sad to see ARLA, which represents letting agents, still arguing against the bill, claiming that it will harm the private rented sector.

“In fact, it will do the opposite, partly, as I have said, by keeping funds within housing, rather than with agents, but also, vitally, by increasing tenant trust in the private rented sector.

“David Cox, the Chief Executive of ARLA, really ought to know that distrust in agents is not just apocryphal. It is based on hard evidence.

“He should also recognise, as I have long argued to him and his members, that the inherent conflict of interest within tenant fees is unethical and unprofessional.

“No service provider should have both parties to a transaction as clients.”

Baroness Grender also addressed concerns that the lettings sector will be jeopardised, highlighting online agent OpenRent, which has never charged tenants fees.

She cited research from OpenRent, which shows that 64% of landlords support the tenant fees ban, adding: “That begs the question: why are those who represent landlords lobbying against this bill, when most landlords want to do the right thing?”

The Spokesperson for OpenRent, Sam Hurst, responded: “The letting industry has fought this policy all the way, but now it’s clear that, in doing so, they do not represent the sector’s real stakeholders – landlords.

“Anyone could predict that tenants support a ban on fees. But this survey shows that a large majority of landlords do, too.

“Various groups have warned that a ban on tenant fees will be bad for business. But OpenRent has grown to become the UK’s largest letting agent without ever charging tenants these huge admin/agency fees.

“All the key players are ready for positive change in the sector. Government, tenants and landlords are all behind a tenant fee ban.

“Lettings companies can’t ignore this.”

We will keep you up to date with the bill’s progress through the committee stage.

Ban on Letting Fees Moves a Step Closer

Published On: October 9, 2018 at 9:57 am

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Tenancy deposit cap saves average renter more than £100

This week, the next stage of the Tenants’ Fees Bill will be a Second Reading in the House of Lords this week. The reading, which will commence on a Wednesday, 10th October, will pave the way for a ban on letting fees and the majority of other upfront fees payable by tenants to rent a property in England.

It would also cap the amount of refundable security deposit a tenant would be required to pay to the value of six weeks’ rent and cap the amount of holding deposit a tenant could be required to put down to secure a property to the value of one week’s rent.

The government contends that the Bill, having completed its passage through the House of Commons in September, will make renting properties in England fairer and more affordable for tenants by reducing the costs at the outset of a tenancy, at the same time as improving transparency and competition in the private rental market.

The Bill would place a duty on trading standards authorities and district councils to impose new penalties on any landlord or letting agent found to be in contravention of them. These include a fine of £5,000 for a first breach, which would typically be viewed as a civil offence.

A further breach within five years, however, would be viewed as a criminal offence, and subject to an unlimited fine and a banning order offence under the Housing and Planning Act 2016.
Several organisations representing landlords and letting agencies have raised concerns that the abolition of fees will result in rising rent levels.

“With warnings that the policy could lead to rent rises, there is a very real danger that whilst the cutting the upfront cost of renting, tenants will find themselves paying them through higher rents on a permanent basis,” commented the Residential Landlords Association’s (RLA) Policy Director, David Smith.

Instead of banning letting agent fees paid to tenants, the RLA is calling for immediate action to better enforce the law as it currently stands. This includes the government using powers it has so far failed to use to force agents to display the fees they charge in more prominent positions and specify them in much greater detail.

“Laws without proper enforcement serve only to let tenants and good landlords down,” Smith added.

He continued: “Rather than pressing ahead with plans for more legislation in the sector that will take time to be considered by parliament and enacted, ministers could achieve a greater and earlier impact by using the powers they already have to improve the transparency of fees charged by agents.”

All Letting Agents in Scotland Should Now be Signed Up to Register

Published On: October 3, 2018 at 9:24 am

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All letting agents operating in Scotland should now be signed up to a new register in order to legally trade in the private rental sector.

The Scottish Letting Agent Register, which includes a new Letting Agent Code of Practice, was introduced on 31st January 2018, but letting agents had until 1st October 2018 (Monday) to register with the scheme.

It is now a criminal offence for letting agents in Scotland to conduct letting agency work if they have not applied or are not registered on the Scottish Letting Agent Register. Those found to be breaking the new rules could face a fine of up to £50,000 and up to six months’ imprisonment.

The new Register and Code of Practice are intended to increase professionalism in the Scottish private rental sector, and ensure that letting agents are adequately able to handle monies received from both landlord and tenant customers.

Landlords and tenants should take Monday’s deadline as an opportunity to check whether their letting agent is registered and is compliant with the new rules.

The new Register offers landlords and tenants the reassurance that all letting agents have been vetted by the Scottish government, which will also store information on whether an agent has been refused or had their registration removed.

Holding professional qualifications and having previous lettings experience are both compulsory elements of the new registration process.

We have previously shared with letting agents in Scotland the link that enables you to resume or begin an application. Although all applications should have been made already, we will again post the appropriate link: https://lettingagentregistration.gov.scot/

As the new rules have been introduced to protect landlords and tenants, we urge you to ensure that your letting agent (if you use one and operate in Scotland) is part of the new Register. If not, you should find a new, reputable agency to work with.

Lettings Sector Warned to be Cautious of For-Profit Inventory Associations

Published On: October 2, 2018 at 8:48 am

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improve compliance with reports and inspections

The lettings sector, including landlords, agents and tenants, is being warned to be cautious of a rising number of companies claiming to be independent inventory trade bodies.

The Association of Independent Inventory Clerks (AIIC) says that these new businesses have been established to make money, while the AIIC is a not-for-profit organisation.

The AIIC argues that these so-called inventory trade bodies do not offer the correct level of protection for consumers and are damaging for the professional lettings industry.

“It’s a case of wolves in sheep’s clothing,” insists Danny Zane, the Chair of the AIIC. “These companies are masquerading as industry trade bodies when they are, in fact, for-profit ventures offering additional products and software solutions.”

He adds: “Unfortunately, these companies do not protect consumers in the way they should and could leave all parties involved in a rental transaction at risk of significant issues further down the line.”

The AIIC explains that, as the private rental sector continues to grow, more companies claiming to be industry associations have sprung up, and property professionals should be cautious about which organisations they partner with.

The trade body reminds all property professionals and consumers that the presence of an independent, professionally compiled inventory could be invaluable.

An inventory report confirms the condition of a rental property at the beginning and end of a tenancy, therefore making it clear whether any deposit deductions must be made.

Landlords who don’t have a comprehensive inventory available at the end of a tenancy could find it difficult to make deductions, while tenants who rent from a private landlord who hasn’t provided an inventory could leave themselves open to unnecessary costs or disputes.

In the event of a dispute at the end of a tenancy, deposit protection schemes will use an inventory report as their primary source of evidence, further highlighting the importance of providing a detailed and impartial report from a reputable source.

Zane explains: “Letting a property is becoming increasingly expensive and the private rented sector is becoming more widely regulated. Therefore, commissioning an independently compiled inventory from a clerk who is a member of an organisation like the AIIC is vitally important to protect a landlord’s investment and provide tenants with the required level of protection.”

If you decide to compile your own inventory, we have created a comprehensive guide to help you produce a document that protects both you and your tenants: https://landlordnews.co.uk/guides/a-landlords-guide-to-inventories-and-avoiding-disputes/

Landlords and Agents: Deadline for New Section 21 Rules Approaches

Published On: September 25, 2018 at 9:03 am

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Confusion remains ahead of new Section 21 rules being introduced next month. Landlords and letting agents are being reminded about incoming changes to Section 21 notices next month for tenancies set up before October 2015.

Currently, a landlord must provide two months’ notice when issuing a Section 21 eviction notice to any tenant on an assured shorthold tenancy (AST) or periodic tenancy signed after October 1, 2015.

Under the 2015 rules – part of the Deregulation Act 2015 – a landlord cannot serve a Section 21 notice within the first four months of the original AST, if this occurred on or after October 1, 2015.

The Act also says that a Section 21 notice is only valid for six months from the date the notice was given.

After that time has elapsed, a new notice will have to be issued by the landlord.

From October 1 – a week away – older tenancies will be brought in line with the new rules.

Buy-to-let lender Commercial Trust has said it is clear that the rules on two months’ notice and waiting four months before service, as well as the six months validity rule, will apply to older tenancies pre-2015 – but it is unclear if other parts of the legislation will apply to legacy contracts.

It cites a lack of clarity over regulations that a Section 21 notice can only be issued if a tenancy was accompanied by the latest version of the Government’s ‘How to Rent’ guide and if an up to date Energy Performance Certificate (EPC) and Gas Safety Certificate have been provided.

David Smith of solicitors Anthony Gold has also said there are “grey areas”.

He said the obligation to provide a How to Rent guide won’t apply to tenancies that began before 2015.
Addressing requirements to have supplied Gas Safety Certificates and EPCs, Smith said: “The 2015 regulations which specify the prescribed requirements expressly state that they only apply to ASTs granted on or after October 1, 2015, and not to statutory periodic tenancies that came into being on or after October 1, 2015, at the end of an AST granted before that date.

“It therefore seems that until new Regulations are passed to clarify this position, there are no prescribed requirements in existence applicable to old tenancies.

“It is possible that individual judges in county courts will arrive at their own interpretations of the rules. It is certainly an area that requires clarification.”

Less Than a Fortnight for Letting Agents in Scotland to Apply for Mandatory Register

Published On: September 21, 2018 at 8:58 am

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Letting agents in Scotland have just under two weeks to apply for a mandatory register.

To begin, or resume an application, visit: https://lettingagentregistration.gov.scot/

The online application form now allows letting agents without a suitable client bank account and Client Money Protection (CMP) insurance to submit an application to join the Scottish Letting Agent Register.

Agents in the process of meeting the Client Money requirements of the new Letting Agent Code of Practice will be able to apply to join the Register by the October 1st deadline.

However, applicants must have an appropriate client bank account and insurance in place before they will be admitted to the Register.

Further information for agents in this position is on the Scottish Government’s website at: https://beta.gov.scot/publications/scottish-letting-agent-registration-client-bank-account-update/
The Scottish Government has been working with UK Finance, individual banks and industry stakeholders to seek to increase the availability of suitable accounts.
Clydesdale Bank has confirmed that its Professional Firms Client Account facility is now available to Scottish letting agents seeking to open a pooled client account to comply with the requirements of the Letting Agent Code of Practice.

Conditions

If you’re planning to rent your property out to 3 or more unrelated people, you’ll also need a House in Multiple Occupation (HMO) licence.

You must give the council:

  • your name and current address
  • the address of each house you own
  • details of any co-owners
  • details of any agent who will manage lease or occupancy arrangements for you
  • any other information required

To become a registered private landlord, you must be a ‘fit and proper person’. The registration process will take into account:

  • convictions for fraud, firearms, sexual, violent or drug offences
  • any anti-social behaviour orders against you or any of your tenants
  • any unlawful discrimination
  • breaches of letting codes, housing law or landlord and tenant law

When you advertise your property for rent, you must give your registration number in the advertisement.

You must tell the council if your circumstances change or if any information you have provided is no longer correct. If you get an agent to manage lease or occupancy arrangements for you, then you must tell your local council and may have to pay a fee.

Restrictions

Your registration will be valid for 3 years from the date the council approves your application. After 3 years you will have to renew it.

How to apply

You’ll need to apply to your local council. You may need to pay a fee.

Fines and penalties

If you rent out a property without being a registered landlord, you could be:

  • fined up to £50,000
  • banned from being registered for up to 5 years
  • served with a notice stating that rent will not be payable on your property for a certain period

If your tenant or a visitor of your tenant behaves in an anti-social manner, you could be served with an anti-social behaviour notice. If you fail to comply with the terms of the notice, you could:

  • be fined up to £5,000
  • be subject to a management control order where your local council will take control of the property for up to 1 year and receive any rent

You could also be fined up to £1,000 if you:

  • give the council false or misleading information
  • don’t give all the information you’re asked for
  • don’t tell your local council of any changes to the information you have given
  • don’t tell the council when you appoint an agent to act on your behalf