Category: Tenants

Landlords – don’t forget, new electrical safety checks are on their way

Lesley Davis Leave a comment

Regulations for mandatory electrical safety checks in rented homes come into force for new tenancies on 1 July 2020. For existing tenancies, the new rules will apply from April next year.

Under the new regulations, landlords must ensure all electrical installations in their properties are inspected and tested by a qualified engineer every five years and a report provided to confirm the property meets the right standard.

Local authorities will enforce the new rules. From July, they can hand out fines up to £30,000 if a landlord doesn’t comply. They can also commission any upgrade that’s needed, recovering the costs from the landlord on completion of the works.  Fines will be retained by the local authority to help fund their enforcement role under the new legislation.

The National Association of Professional Inspectors and Testers (NAPIT) estimates that almost a quarter (22%) of the 4.7 million privately rented homes covered by the new regulations, don’t have a valid electrical safety report. So we are urging landlords to ensure their electrical installations will pass muster. Despite the social distancing required due to Covid-19, government guidelines are clear –  landlords must ensure their properties are safe. This is considered essential work and must be carried out to bring homes up to the correct safety standard.

However, we fully appreciate the problems being faced by landlords at the moment –  and the understandable fears of tenants around letting people into their homes – even to do essential work. So here’s a reminder of what the guidelines say about compliance during the Covid-19 outbreak:

“If a landlord can show they have taken all reasonable steps to comply with their duty under the regulations, they are not in breach of the duty. … A landlord could show reasonable steps by keeping copies of all communications they have had with their tenants and with electricians as they tried to arrange the work, including any replies they have had. Landlords may also want to provide other evidence they have that the installation is in a good condition while they attempt to arrange works.”

Our advice is to be guided by the rules on social distancing and safe working and by your tenants, particularly if they are self-isolating or in a vulnerable group. However, NAPIT thinks there are plenty of rental properties out there that will need remedial works to ensure the electrical installation within the property is in a satisfactory condition. So if you can find an electrical engineer to safely carry out tests and do any work required, go ahead. If not, and you are not putting tenants at serious risk, follow the guidance outlined above and wait until the lockdown is lifted.

By July, when these regulations kick in, the world could look quite different from the way it does today. So, as the government announces an easing of the lockdown restrictions, we’re all keeping our fingers crossed for better times ahead.

Finally, to ensure your properties are always compliant with all the rules and regulations that landlords need to abide by, why not take a look at our new cloud-based PlanetRent platform. Our lettings software means that when the law changes, so do your processes. It’s pay-as-you go, so check it out today and never get caught out by new legislation again.

www.planetrent.co.uk

Why not READ our Property Blog too at www.ringleypropertyblog.co.uk

How long will the eviction ban last?

Lesley Davis Leave a comment
Some rent is better than none so talking to your tenants about rent arrears makes sense

The eviction ban could be extended beyond lockdown, according to Housing Secretary Robert Jenrick. So landlords hoping to replace renters in arrears with new tenants who can pay their rent on time are likely to be disappointed.

Anyone in rent arrears will not be forced out of their home as soon as the eviction ban is lifted. Instead, the Government is to develop what’s known as a “pre-action protocol” that will kick in when the ban is lifted to give renters “added protection”.  The aim is to put a duty on the landlord to act in good faith and try and find other solutions to tackle arrears before starting eviction proceedings.

Speaking to MPs in the House of Commons on Monday, Robert Jenrick explained that the new arrangements would apply at the end of the ban on evictions, which could be as soon as June but may be later in the year.

Right from the start of the evictions ban, landlords have been encouraged to engage with tenants facing financial problems due to the Covid-19 outbreak. Where possible, it makes sense to try to work out an affordable repayment plan so that renters can remain in their homes and landlords continue to receive at least some rent. This particularly applies where landlords are themselves benefitting from a mortgage payment holiday from their own lender. See our blog here to read what we think about this.

Our advice echoes what the Government is saying. The majority of landlords have good relationships with their tenants. Despite the lockdown, communication is vital. So why not reach out to your tenants, just to check-in on them, and let them know you are willing to discuss any problems they may have around their rental payments. Why go to all the hassle and expense of starting eviction proceedings further down the line, when a fair arrangement to pay back rent arrears could keep tenants in your rented property long-term?  

When the ban was announced in March, it sparked fears that there would be a surge of repossession orders in June once it was lifted. But why get involved in legal action at all? Talking to your tenants may be all that’s needed.

www.planetrent.co.uk

Why not READ our Property Blog too at www.ringleypropertyblog.co.uk

New regulations for landlords now in force in Wales

Lesley Davis Leave a comment

New regulations are now in force for landlords in Wales.  The Renting Homes (Fees etc.) (Prescribed Limits of Default Payments) (Wales) Regulations 2020 came into force on 28 April and sets the maximum fee that landlords can charge if a tenant defaults on their rental contract.

If a tenant doesn’t pay their rent, the new regulations set a limit on the amount which can be charged.

  • Up to the end of a period of seven days from when the rent is due, zero can be charged.
  • After the end of the period of seven days from due, 3% above the Bank of England base rate may be charged.

The formula for calculating the 3% plus base rate is:

the aggregate of the amounts found by applying, in relation to each day after the due date for which the rent remains unpaid, an annual percentage rate of three per cent above the Bank of England base rate to the amount of rent that remains unpaid at the end of that day.

The Renting Homes (Fees etc.) (Wales) Act 2019 came into force in Wales on 1 September last year, with the legislation being similar but not identical to the Tenant Fees Act 2019 in England.

In Wales, landlords may now only charge tenants entering into new rental agreements for

  • rent
  • security deposits
  • holding deposits of one weeks rent
  • council tax
  • utilities
  • tv licence payments
  • communication services or
  • payments in default.

Replacement locks and keys

Also with effect from 28 April, if tenants lose their keys and/or need their locks changed, landlords in Wales can only charge them for the actual cost of replacing keys and of changing, adding or removing a lock. They cannot levy an additional service charge for doing so, although they can pass on the charge for a contractor to do the work, as long as evidence of the additional cost is provided in the form of an invoice or receipt.


Landlords who are members of the Residential Landlords Association (RLA) can click here for guidance on the differences between the Welsh and English legislation, download a number of fee ban compliant documents, find out what charges can be made under the fee bans and read some practical tips on adapting to the new requirements.

www.planetrent.co.uk

Why not READ our Property Blog too at www.ringleypropertyblog.co.uk

Why we say tenants need a payment holiday too

Lesley Davis Leave a comment
Pay it forward: landlords are taking mortgage holidays but what about tenants who are facing hardship?

A recent survey by Landlord Action found nearly three-quarters of landlords have been contacted by tenants worried about their rent payments. This highlights the severe impact the lockdown is having on household finances.
 
Mary-Anne Bowring, group managing director at Ringley, thinks renters should have their rents reduced if they can prove they have been unable to access cash through the government’s income support schemes, and their furlough or government money means a reduction in their normal household income. After all, she says, that income is what the affordability of the letting was granted on. In particular, Mary-Anne thinks this should be the case if the landlord is benefiting from a mortgage holiday.  “Otherwise,” she says, “this is a lose-lose situation for the government and the wider economy – which means all of us”.
 
The government has already banned eviction proceedings from happening and is urging landlords to work with their tenants in situations where they are struggling to pay rent. Tenants who are out of work and living on reduced incomes surely have a right to know if their landlord has secured a mortgage repayment or a repayment-and-interest holiday. How can it be right for the landlord to still expect tenants to pay their full rent if they are being propped up by their mortgage lender?  Of course, the government still needs to help renters either not covered by income support schemes or who have not yet received the additional cash.
 
Mary-Anne adds: “The word ‘unprecedented’ has been used a lot in response to the impact Coronavirus is having but statistic after statistic shows a level of damage not even seen during the worst of the Financial Crisis. The government has moved decisively to help protect tenants and landlords, but it is inevitable some households will fall through the gaps as the various income support schemes get up and running and payments are processed.
 
“Transparency is key, and renters have a right to know if their landlord has benefited from a mortgage holiday and, if they are struggling financially, they should be able to request a reduction in rent. Any rent reduction must be conditional on being able to prove financial hardship to prevent abuse of the system and it is important tenants and landlords work together during this uniquely difficult time.”
 

Why the future is still bright for build-to-rent

Lesley Davis Leave a comment
Build to rent remains an attractive long-term investment

The build to rent sector is doing well. According to the latest figures from the British Property Federation, there’s been a 12% increase in the number of BTR homes either planned, under construction, or completed in the last 12 months and that will translate into more than 150,000 additional flats coming onto the market. Outside London, the picture is even rosier with a 58% hike in units since this time last year.

It is too early for the BPF figures to reflect the impact of coronavirus on the build-to-rent sector’s housing pipeline but the BPF’s head of policy, Ian Fletcher, sounded an optimistic note this week,  saying the sector remains attractive to investors. Anecdotal evidence from operators and developers supports their view, so we spoke to Sam Hay, MD of Ringley’s Manchester-based lettings division Life by Ringley, to get her insights into how the sector is faring.

Perhaps surprisingly, with so many people furloughed, rent arrears have not been a major issue to-date. “We have attempted to eradicate rent arrears by staying in contact with residents from day one and keeping them informed of what help is available if needed,” says Sam. “We are also being clear about the information we would require if tenants do feel they need a rent reduction or rent arrears arrangement. It’s important to ensure they understand that there is no rent free period and it will only be a deferral, so it’s better they remain up to date”.

The other potential problem for agents, is how to safely maintain social distance in build to rent blocks, but this is being carefully managed, with communal areas such as gyms, roof gardens and swimming pools currently closed to residents. Visiting contractors also pose a challenge but Sam says those she deals with are still attending blocks weekly to sanitise the communal areas and to attend emergencies – such as a recent sewage leak –  that can’t wait. “We ensure that contractors are not ill and show no symptoms and always communicate with residents in advance so they know a contractor is coming,” says Sam. Life by Ringley is also offering initial virtual viewings for potential tenants and is sending residents a weekly email of suggestions for things to do while in lockdown plus online community chats and quizzes.

Jacqui Daly from Savills residential research, which produces the build to rent figures for the BPF, told Show House magazine this week that once the country is out of lockdown, build-to-rent developers should be confident to progress stalled developments.  “We’d expect high levels of uncertainty to increase demand for rented accommodation as people look to avoid longer term commitments such as mortgages, or if borrowing remains more constrained.  At the same time, we expect to see the leveraged buy-to-let sector remain under pressure, driving demand into build-to-rent”. She said.

www.planetrent.co.uk

Why not READ our Property Blog: www.ringleypropertyblog.co.uk

Virtual viewings – is this the future for lettings?

Lesley Davis Leave a comment
Will viewing homes remotely become the new normal?

In the current climate, if you have an empty or soon-to-be-empty property you may well be worried about finding a new tenant and wondering what your letting agent is doing about it?

At Life By Ringley we’ve got the solution to this problem. In the last few weeks, we have adapted quickly to virtual viewings and they are now on offer to all our clients.

In fact, we’re no strangers to the concept.  As we’re located in Manchester city centre, we often work with potential tenants who are not from the UK, and to whom we show properties via video link before they travel to the country. So when the lockdown was announced we were a little ahead of the game as we had already made videos of most of our properties.

However, like everyone else, we’re on a steep learning curve. The way in which we conduct today’s viewings compared to just three weeks ago is on another level! Our videos are now more like 3D virtual tours and that means we’re able to let properties in a traditional manner, but much more quickly. The virtual process means that we have eliminated the need to travel to and from the property and decisions can be made in an instant. This, in turn, moves along the applications and the move-in process much more swiftly.

All our viewings are conducted via video chat so that a relationship is still created between the potential tenant and the team member. Their questions can be answered there and then without having to allow clients time to watch a video link and then call them back to find out if they are interested in the property.  The technology is flexible and easy to use and we are able to show multiple properties within minutes. The time saved at our end is astronomical and the viewer saves time too – which is what we all want.

Despite the current health emergency, having mastered the basics of video viewings means we can continue with our day to day business. Our next challenge is to make videos of the outside of the buildings we let so we can show our customers the exteriors as well as the common areas. That way they get to see the whole of the building. In the future we also plan to include shots of local restaurants, bars and other amenities close by, so that once those businesses are up and running again we can show the lifestyle that the residents could enjoy by living there.

So if you do have an empty property to let, maybe think about obtaining your own video and using social media to push it out to the local community. Facebook ads are currently extremely affordable and are what is working best for us at the moment.

We truly believe that virtual viewings are the way forward for renters. This technology is something that we will be taking very seriously in the future and investing both time and money to perfect.

Gas safety checks must still go ahead

Lesley Davis Leave a comment
COVID-19 is no excuse to ignore gas safety, says HSE

Yesterday we blogged about EPCs. Today we’re updating you on the need for those all-important gas safety checks during the COVID-19 outbreak.

The HSE is under pressure to extend gas safety certificates from 12-18 months to reduce the number of engineers visiting people’s homes and prevent further spread of Coronavirus.  But despite lobbying from the gas industry the Government is yet to grant an extension and this week the HSE reiterated that gas safety checks must still be carried out in order to protect tenants’ safety. This is felt to be particularly important at a time when most people are spending all their time at home.

Previous guidance from the HSE said that landlords must show they have taken “reasonable steps” to attempt to gain access to a property where they have been denied access due to tenants self-isolating. Now, the HSE, via the Gas Safe Register, has published guidance to show what those “reasonable steps” would look like across a range of different scenarios.

  • Tenant and family are socially distancing – they have no symptoms but deny access. Landlords must show they have taken reasonable steps including leaving the tenant a notice explaining that an attempt was made and write to the tenant explaining that it is a legal requirement. A record of all communication must be kept.
  • Tenant’s household is in isolation or has a vulnerable or shielded person but has contacted regarding a gas emergency. Landlords should ask what the emergency is and tell them to switch off appliances until an engineers has attended. When visiting the property, the engineer must adhere to government guidance on working in people’s homes.
  • A gas safety check is due but landlords are unable to secure an engineer due to staff shortages. If the usual gas engineer will not carry out the gas safety checks, the organisation should contact an alternative registered gas engineer businesses to secure their services.
  • Your landlord gas safety check expires in two months and there may be difficulties engaging a gas engineer or dealing with tenants in self-isolation. Landlords are encouraged to arrange gas safety checks as early as possible, the two-month period to carry out annual gas safety checks should provide adequate resilience in most situations.

There is more advice for landlords on the Gas Safety Register website here.

The HSE says that each property should be considered on a case-by-case basis and when gas engineers are unavailable landlords must take reasonable steps to obtain alternative services. Where this is not possible, landlords must prioritise based on age of appliances, previous work carried out, breakdown history, presence of carbon monoxide alarms, and whether the tenant is considered vulnerable.

Our PlanetRent app reminds landlords when gas safety and other statutory checks are due. PlanetRent is lettings automated – you can track compliance effortlessly and keep all your records easily accessible and all in one place. Why not take a look today. Sign up now – it’s free!

Need an EPC? Here’s the latest advice

Lesley Davis Leave a comment
If moving or selling is unavoidable, you will still need an EPC

Last week, the Government published the latest advice on meeting the regulatory requirement to secure a valid Energy Performance Certificate on marketing a property during the Coronavirus (COVID-19) outbreak. An EPC is a legal requirement when a property is built, sold or let and must be completed by an accredited assessor. This obligation on the part of housebuilders and homeowners remains in place.

Buying and selling homes have effectively been put on hold but there will still be cases where this is unavoidable and there will be circumstances in which renters need to move. Where possible, the parties involved have been asked to agree that the transaction can be delayed, so that an EPC assessment can proceed when stay-at-home measures to fight coronavirus (COVID-19) are no longer in place.

But if moving is unavoidable and the parties are unable to reach an agreement to delay, and a valid EPC is not available from the register, an assessment may need to be conducted. In these circumstances, government guidelines on staying away from others to minimise the spread of the virus must be followed alongside the guidance for carrying out work in people’s homes.

EPC assessments can continue in cases where a property for sale or rent is vacant.

No assessments should take place if any person in the property is showing symptoms, self-isolating or being shielded. So if securing an EPC is critical you should seek to reschedule your appointment when it is safe to do so in accordance with Government guidelines on staying away from others.

www.ringley.co.uk

Four tips for dealing with tenants on Universal Credit

Lesley Davis Leave a comment
Landlords may have to get used to letting to tenants that are claiming benefits

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”.

What happens when renters leave before their tenancy agreement ends?

Lesley Davis Leave a comment
What can you do if your tenants decide to leave before the end of their contract?

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.