Category: Agents

Many landlords actively opt not to let their property to anyone who is receiving state benefit for fear they may end up in rent arrears. It is not strictly illegal for landlords to state they do not wish to let to tenants claiming Universal Credit – although it may be found to be discriminatory should a tenant decide to pursue their case in court – and many do exactly that. But those days may now be over.

Almost one million people have applied for Universal Credit since the government closed non-essential businesses around the country and urged people to stay at home. This means that most landlords, who have never previously let their property to a tenant who is claiming benefits, now will. 

So what should landlords who find themselves in this situation do?

Caridon Landlord Solutions which specialises in providing advice to private landlords, letting agencies and housing associations on Universal Credit and Housing Benefit, offered this advice in Landlord Today and it may be helpful to take note of it.

• Communicate with your tenant and support them as much as you possibly can.  If they are having to apply for Universal Credit, it is most likely because they have lost their job or had a significant drop in income. They will be concerned they could also lose their home. 
• Where possible, consider a rent reduction to meet the housing element of Universal Credit. Some rent to help cover a mortgage is better than nothing, or if at all possible, offer a rent holiday.
• If your tenant has had to apply for Universal Credit because of COVID-19, they will require a letter from you verifying the rental amount, the address of the property they reside, and when the tenancy commenced. This will help them to qualify for the housing element of Universal Credit which will go towards covering their rent.
• Work with your tenant to establish key dates, such as the tenant’s Benefit Assessment Period (the date their entitlement begins) so that you can see how it falls in line with the Tenancy Agreement.

Many tenants prefer to have the housing element of Universal Credit paid directly to the landlord so they can manage the rest of their finances themselves. This is called an Alternative Payment Arrangement. Landlords should discuss this with their tenants and if in agreement, fill out a UC-47 form to apply for this.  If the tenant is already in arrears, the landlord can also apply for Third-party Deductions to reduce them. This means an additional amount is taken monthly from the claimant’s personal allowance

 To clarify the rules on this, earlier this month the Department for Work and Pensions (DWP) published updated guidance for landlords with tenants in receipt of Universal Credit. The guide explains what landlords can do to help tenants prepare for their move to the single Universal Credit benefit payment and make rental payments directly to their landlord themselves. It also explains what support is available for tenants who may need help moving to the new system. Click here to read the guide and find out more.

Sherrelle Collman, managing director of Caridon Landlord Solutions, says thousands of landlords who have no previous experience of the benefits system, will now have tenants on Universal Credit and many will be anxious because of the criticism it has received since its introduction. However, she adds: “The good news is that more resources have been deployed to local authorities to help claimants, and measures such as immediate access to Advance Payments, increases to Universal Credit and raising the Local Housing Allowance rate from April, are being put in place”.

In the current climate, the last thing on many tenant’s minds will be moving. However, there are all kinds of reasons why people decide they are not happy where they are living and seek to leave – sometimes in the middle of their tenancy agreement. So here are some insights into what landlords can do if this happens to you.

In principle, tenancy contracts are binding upon both parties and hence can be enforced in a court of law. But in practice, negotiation is generally more effective and less costly than litigation. So good communication – if possible – will help.

When tenants give notice, try to determine their reasons and see if you can address them.
There are basically two reasons why tenants exit contracts early. The first is that circumstances have changed (either their own or something related to the property) and the second is that they are dissatisfied with the service they are receiving as customers.

In either case, there may be situations where your tenants feel that they have been let down by you (or your representatives) and are therefore perfectly entitled not just to break their contract but to get their deposit back. In fact, you may discover that they are absolutely right.

If the tenant’s circumstances allow, see if you can claim some form of compensation.
If the tenant’s circumstances are changing for the better (or at least are no worse), then the most pragmatic approach may be to split the difference with your tenant and see if you can come to some form of settlement.

When considering this option, remember that your claim against your tenant (if any) would be civil, not criminal. This has several implications and one of them is that a court would expect you to take reasonable steps to mitigate your loss and hence your tenant’s exposure to any claim for damages.

Given the demand for rental property in the UK, it’s probably fair to say that most landlords should be able to have new tenants in place within two to three months of their old ones leaving.

That being so, you could request either that your existing tenants find a new tenant who is acceptable to you or that they pay a break fee equivalent to two to three month’s rent to allow you to find someone else.

The advantage to you is that you (at least) cover the costs of changing over the tenancy without the hassle of having to pursue civil action. The advantage to the tenant is that they can move out without the concern of being pursued for costs and/or of having their credit records negatively impacted.

If the tenant’s circumstances have taken a turn for the worst, it’s usually best just to accept it.

If your tenants genuinely can’t pay then you are not going to get your rent. There is no point in pursuing the matter through the courts. Even if you get a judgment in your favour, you still have to collect the money and if they don’t have it, then you can’t get it. You can damage their credit record, but that won’t do you any good. If they go bankrupt, then your CCJ will be erased but your costs will not.

If your tenants can pay, you can, in theory, force them either to stay put or to pay you compensation to leave, but you could end up wishing you hadn’t done either. Disgruntled tenants can do a lot to sabotage the re-letting of a property and the internet has increased their power. In short, you could be trading a small, short-term upside for a lot of long-term downsides.

The Government has announced a change to the way landlords carry out ‘right to rent’ checks during the coronavirus outbreak. The right to rent scheme requires landlords to check that all tenants who are living in their properties have the correct legal status to live in the UK. But last night the Government said, with immediate effect, the Home Office will no longer require landlords to see original ID documents and will allow checks to be undertaken over video calls. From today, prospective renters can submit scanned documents, rather than originals, to show they have a right to rent.

Despite this relaxation of the rules, these checks are still necessary and it remains an offence to knowingly let a property to anyone who does not have legal immigration status in the UK. So if a prospective or existing tenant can’t provide any of the accepted documents, landlords should use the Landlord Checking Service for their own peace of mind and to avoid legal action being taken against them.

PlanetRent, our free automated lettings app is designed to help landlords with their right to rent checks and make the whole process easier. PlanetRent keeps a log for you of right to rent checks being accepted and reminds users that this is a mandatory requirement. The app also enables users to keep passports & visas on record and warns landlords if they expire.

The Government gave no indication of how long these changes might be in place. However, Home Secretary Pritt Patel made it clear that once the temporary changes end, landlords and employers will be asked to carry out the full checks on those tenants who rented a property during the pandemic.

Landlords can read the full guidance here to find out what this means for you.

A complete ban on evictions and ‘additional protection’ for renters have been announced, coming into force from today. But what does this mean for landlords and tenants in reality?

First, the court service has now suspended all possession hearings. This means that no cases that are already in the system  – or those due to be heard – can be taken to the stage where a landlord can evict a tenant. No evictions will now take place for any reason and the ban will initially last for 90 days, but it might be extended if necessary. 

According to Landlord Today, “The Government has taken this measure to protect private and social renters, as well as those with mortgages and those with licenses covered by the Protection from Eviction Act 1977”. The new measures will apply to landlords and tenants in  England and Wales.

However, it is important for renters to note that these new government guidelines clearly state that tenants are still liable for their rent and they must do all they can to pay their landlord as usual. If renters find themselves in financial hardship due to the impact of the COVID-19 outbreak and are struggling to pay their rent, Government support is available. Go to the www.gov.uk website to find out more about the package of support that is being delivered by the Government in response to the pandemic. 

However, if a tenant does think they will have problems sticking to their rental agreement, the first step is to speak to their landlord. The Government is actively encouraging landlords and tenants to speak to each other and work together to put in place a sensible – and affordable – payment scheme. This is something that we wholeheartedly support.

The Government’s aim in all this is clear. As Housing Secretary Robert Jenrick said: “no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.”

With new rules in place, landlords will now have to give their tenants three months’ notice if they want to end the tenancy. To clarify, this means the landlord can’t apply to even START the court process until the end of this three-month period. 

The biggest question for tenants who may find themselves out of work or laid off without pay due to business closures caused by the coronavirus is, how do I pay my rent? To try and tackle what is likely to be a widespread problem, the Labour party has published draft legislation of its own ahead of the government’s emergency bill, which goes before Parliament this week.

Leading property lawyer Justin Bates of Landmark Chambers has been heavily involved in drafting the legislation. Giles Peaker who also “had a bit of a hand in this” has posted the details of Labour’s proposals on the Nearly Legal website.

The aim of the Landlord and Tenant Temporary Provisions Bill 2020 – Coronavirus emergency rent relief,  is to establish that “for assured, assured shorthold, secure or Rent Act tenants, where there was failure to pay contractual rent that was in any way related to the effects of the coronavirus during a designated period, this would not count as rent lawfully due for the purposes of the relevant rent arrears grounds of possession”.

This does not mean that tenants don’t have to pay their rent. Arrears would have to be paid eventually. But they could not be used as a reason to start possession claims, now or in the future.

Giles Peaker also points out that, “Where the tenancy may be subject to a section 21 notice, this draft [bill] does not stop potential service and proceedings under s.21, as it is impossible to establish the reasons for a section 21 (and some uses of it may be for such things as recovering an abandoned property)”.

The Residential Landlords Association (RLA) and the National Landlords Association (NLA) are also calling for a package of measures from government and mortgage lenders to support tenants and landlords affected by the coronavirus. This includes:

• temporary scrapping of the five-week wait before Universal Credit claimants get their first payment,
• pausing the final phase of restricting mortgage interest relief to the basic rate of income tax, and
• ensuring lenders look sympathetically on requests by landlords for mortgage payment holidays where their income is being affected through reduced or non-payment of rent.

The Acorn union which supports tenants, workers, and residents, is also calling for a “rent holiday” and to protect tenants from the threat of eviction.  

In the meantime, the situation with possession claims in general, including section 21 based claims, remains unclear. Like most aspects of business over the next weeks and months, it will be a case of wait and see. The Grenfell Inquiry was halted yesterday as one key player needed to self-isolate and two others are over 70 and have been advised to stay at home. If this scenario, as seems likely, is played out across the courts then there will be no way to pursue claims for repossession on any grounds for perhaps many months to come.

London Mayor Sadiq Khan launched his re-election campaign today. He is hoping to win votes by promising Londoners that he will introduce rent control in the capital if he is voted in for a second term in May. Speaking in Hackney, the Mayor said that if he wins a second term, that would give him an “undeniable and irresistible” mandate to enforce rent controls.  

But there is a problem with this pledge: capping rents is not something the Mayor has control over. Rent control has to be agreed by central government and there is nothing to suggest that this policy would be acceptable at Westminster. It would also put him at odds with landlords, with the Residential Landlords Association and the National Landlords Association calling out the policy as”disastrous”.

Sadiq Khan claims he has “massively increased” affordable homes in London but has been blocked from making private rent more affordable. However, rival Tory mayoral candidate Shaun Bailey said rent controls always led to higher rents.

The other candidates in the race are also promising to improve the London housing market:

• Liberal Democrat Siobhan Benita plans to bring thousands of empty homes back into use and use TfL -owned land to build rental homes;
• Green Party candidate Sian Berry would freeze rents;
• Independent candidate Rory Stewart pledges to establish a Mayor’s Building Company to build hundreds of thousands of new homes; and
• Tory candidate Shaun Bailey promises to build new homes in London via a City Hall-controlled building programme that would assume control of the building process in London.

Maryanne Bowring, Group MD at Ringley has consistently argued against rent control. Commenting on the London Mayor’s pledge, she says: “Rent controls have time and time again been proven not to work in cities across the world. The war on landlords by all sides needs to stop. The biggest casualties will be renters being forced to pay more as buy-to-let investors sell up after facing the threat of reduced returns: they already have to grapple with harsher regulation, extra stamp duty, and reduced mortgage relief.

 “Build-to-rent will bring much-needed supply but still only makes up a fraction of the market and any form of rent control will discourage further investment into the sector, reducing the supply of potential new rental homes.”

Maryanne’s view is that London has a huge unmet demand for rental properties and any policies that restrict new supply – like rent controls – will only force rents to rise. “This could lead to the creation of a rental black market,” she says.

A key part of any property agent’s role is to safeguard money on behalf of their clients, who should be able to trust that they are properly protected. At Ringley, we are a member of the RICS Clients Money Protection Scheme which gives all our customers peace of mind that their rent and deposit monies are in safe hands. Unfortunately, a small number of agents out there flout the rules.

So here’s a cautionary tale for anyone responsible for other people’s money. An Essex estate agent has been disqualified from managing companies for five years after she failed to safeguard £28,000 worth of tenants’ deposits and rent destined for landlords.

Jane Hipkin Russell’s residential sales and lettings agency went into liquidation in August 2018. Investigators from the Insolvency Service found that Hipkin Russell, as sole director, had failed to comply with legislation requiring all tenant’s deposits to be placed in a recognised scheme.

The company had no record of 11 tenants’ deposits totalling £12,000 that had been received between March and August 2018. Nor had deposits received between April 2017 and August 2018 totalling £20,000, been paid into a government-backed statutory deposit protection scheme.

In addition, the company collected just over £7,000 of rent from tenants between March and August 2018. This should have been paid over to the tenants’ landlords but had instead been spent on the general running costs of the business. In total there were more than £28,000 worth of losses to tenants and landlords.

We hope this disqualification will serve as a deterrent to rogue agents who bring the whole of our sector into disrepute.

Do you rent a home with a Hotpoint or Indesit washing machine? If so, read on…

Whirlpool has been regularly updating the Office for Product Safety and Standards on the progress of its washing machine recall programme. The company announced in December that half a million washing machines sold under the Hotpoint and Indesit brands in the UK and Ireland between October 2014 and February 2018 could be affected by a flaw with the door-locking system. This could lead to the machines overheating and posing a fire risk. Consumers were advised to log onto a dedicated website and find out how to check whether or not their machine is affected.

If this is you, here’s the latest data from the company, published last week. Under the recall, consumers with an affected washing machine are entitled to a free replacement or repair. Old machines will be removed, and replacements installed, at no cost to the consumer.

Since December, more than 1.7 million people have logged on to the recall website for more information and just under 125,000 have been found to have faulty machines.

In total

• 44,437 machines have been replaced (free of charge)
• 41,245 machines have been confirmed as not having the affected lock mechanism
• 22 machines have been modified with replacement parts

The average time taken from a customer registering their machine with Whirlpool to having their issue resolved is just under a month.

Of the number of washing machines Whirlpool estimates are affected by the safety issue, only 31.7% have been registered. So landlords, if you have a Hotpoint or Indesit washing machine at your property, go to the website today and find out how to check the model number. If the machine is affected contact Whirlpool, who will resolve the issue. Renters with potentially dangerous appliances should also check with their property manager that steps are being taken to keep them and their families safe.