The trouble is that law IS complicated.  Why?  Because we are complicated.  We live such complicated lives, that our laws have to be complicated to cope with them.

Housing law is complicated too.  Very complicated.

Individual property rights

At first blush housing law seems to be just about individual property rights.  The rights of the landlord against those of the tenant.

However it is not that straightforward.  The law also has to take into account the fact that one party (e.g. the landlord) is often in a much stronger position than the other.  For example it is the landlord who normally prepares the tenancy agreement document, and therefore has an opportunity to insert clauses which are against the interests of the tenant (who frequently does not even read it).  When this happens, it is unfair, and so we have regulations to make the unfair terms unenforceable.

Economic influences

Then there are the economic needs of society at the time the laws are made.  For example, tenants rights were greatly strengthened in the first world war, as it was important that housing was available to workers needed for the war effort.

These rights were then consolidated and strengthened, culminating in the Rent Act 1977.  However the tenants’ rights had become so strong, they became a disincentive to potential landlords, who would effectively lose control of their property as soon as it was let out to a tenant.   Largely because of this, the proportion of rented property went from about 80% at the start of the twentieth century down to about 8% in 1990.

However the new Thatcher government, which came in, in 1979, wanted to do things differently.  They introduced a new form of tenancy, the assured shorthold tenancy, in the 1988 Housing Act.  This and the development of the buy to let mortgage completely changed the private rented sector, which went from being virtually non existent to the being the buoyant sector we have today

So much of housing law is politically motivated.  Had the 1988 Housing Act never been passed, the housing landscape would be very different today.

Individual property rights again

However individual property rights are still considered very important.  This is why tenants owning tenancies created when the old Rent Act 1997 was in force still largely retain the rights they acquired when they first rented their property.  It is only tenancies created later which operate under the new rules, and the two systems run side by side.  This means, that to understand housing law you need to learn, not just one housing law system, but several (there are others too!).

The property condition – private issues

Then there are the laws relating to the condition of the property.  This is partly something to be sorted out between the landlord and the tenant themselves under the tenancy agreement contract.  This is largely governed by the repairing covenants set out in section 11 of the Landlord and Tenant Act 1985 which are included by law into all tenancy agreements, whether they are written down in the tenancy document or not.

The property condition – social issues

However the condition of property is also a social matter.  Poor housing is unsightly and can drag a neighbourhood down.  People, particularly children, living in substandard housing often suffer other problems, such as illness, which can impact on society, and cost the government which funds the national health service.

For this reason Local Authorities are empowered to enforce housing standards, under completely separate and different rules, now set out in the 2004 Housing Act.

Political changes

Then there are the problems which come about because of the way our government and political system works.  Rules introduced by one government with one ideology, will be overturned by a subsequent government and party, with very different values.  Often whether a rule applies to you or not, will depend on the relevant time.  So, if you sold a house last year you would have needed a HIP, whereas now you don’t.

All of these different laws and regulations, passed at different times by different governments, lie on top of one another like the skins of an onion.  To understand housing law properly, you need to know them all and understand how they fit together.

It is the same with other areas of law.  Law is complex because our society is complex.

Why lawyers are cagey

This is why lawyers, wily in the ways of the law, will often refuse to commit themselves (particularly as they may be opening themselves up to a compensation claim if a hasty comment is later found to be wrong).  They know that

• things are rarely as simple as people think,
• the person asking the question has probably left out a lot of relevant points which will have a significant effect on his situation and also
• you cannot make law easy and straightforward just by wanting it to be so.

It is possible of course to explain things in a clear and simple style.  However as law, for example housing law, is so complex, the explanation will either be very long, or will be made up of lots of small chunks.

The Landlord Law service

This is what I have tried to do with my Landlord Law web site service.  A lot of the site content is FAQ.  Answers to questions which people have been asking me for years on my Q&A page, and which cover just a small aspect of housing law and practice.  Many of the FAQ are very short.  But the size of the site is very large, and the amount of information there (as I am currently finding out to my cost as I am having to transfer it all over to our new web-site) is very large.

But if you feel that housing law is getting too much for you, it may be able to help.

…..a personal if informed rant!

The Conservative / Lib Deb coalition housing benefit plans

So the new coalition government is gradually putting a plan together and have turned their eyes on housing benefit reforms. They have made bold and popular statements that appeal to many of us, me too, but few seem to be looking at the consequences of what they are saying. If you have worked in housing a long time then they jump out at you like a jack in the box.

I just want to examine one proposal, which is the plan to cut people’s housing benefit by 10% if they have been out of work for 12 months and look at where this will lead us.

Cutting housing benefit by 10% of the applicant has been out of work for 12 months

An innocuous enough proposal and one that will get many nods of agreement. The papers have always been full of articles on benefit cheats, scroungers, mis-use of tax payers money etc.  Just the other day I saw a piece on TV of a man on disability benefits claiming that he couldn’t walk more than a few yards un-aided who was filmed by benefit fraud officers energetically playing football for his local team.

I recently had to deal with a family with 8 children and a ninth due in November whose benefit payments were over £600 a week and that was without housing benefit on top of that. The council have a legal duty to re-house them but don’t have a property big enough so will have to spend thousands finding them a home and keeping them in it.

This prompted much talk in the office about benefit reforms and personal responsibility. Government statements aimed at tackling similar situations will always have emotional resonance for a huge majority of the population. We tend to respond in a knee jerk way…. even me, but what will it really mean if they go ahead with this 10% cut plan, marked for 2013?

Empowerment

A couple of years back the labour government decided to introduce a housing benefit scheme called ‘Local Housing Allowance’.

Basically this means that tenants of private landlords who are claiming housing benefit should no longer have the right to sign payments directly over to the landlord accept in specific circumstances. The reasoning behind this was to stop treating HB claimants like irresponsible children and to empower them to take charge of their finances.

Everyone I know who works in some way in the private rented sector thought this was the most ludicrous idea the government ever had, for 3 reasons:-

• Although some tenants would deal with the matter responsibly, what of the HB claimants with drink, drug or gambling problems or who were just terrible at budgeting ,who suddenly find themselves with an extra 5, 6 or 700 pounds in their bank accounts? How much of it would end up being used as rent?
• Rent arrears would rise and with it evictions and homelessness claims.
• Landlords would be less likely to rent to benefit claimants because of concerns over receiving rent.

The same issues crop up with this proposed 10% cut in HB.

Don’t get me wrong, I am more in favour of personal empowerment than most, but I also know you don’t achieve that by just giving a person their rent payments.

Reluctance to rent

For many years now the windows of most letting agents have had stickers saying ‘No DSS’, (even though this is now defunct) really meaning, no housing benefit claimants. Landlords have similarly been cautious. LHA put many landlords I speak to in a very reluctant mood. Procurement officers that I know working for local authorities tell me how much work they have to do to reassure landlords about tenants they are trying to place with them.

Some councils deposit guarantee schemes have closed down completely when deposits have been withheld because of rent arrears caused by LHA and the deposit scheme budget quickly dwindled.

Once word gets around that there will be a definite cut in HB how many landlords will go back on the standard old ‘No DSS’ approach?  As I have written elsewhere councils are under a duty to provide housing for people who pass the full homelessness assessment route but don’t have enough council housing to fulfil the legal obligation and look to private landlords to fill the gap. The 10% cut will have a big effect here.

Empowerment Revisited!!!!!

The government states that cutting 10% off HB for people who have been on job seekers allowance for 12 months will encourage people to find work.

I am going to sound a bit cynical here so apologies in advance. Just as introducing LHA is not enough on it’s own to empower people, neither is cutting people’s benefits.

Every single day I meet so many benefit claimants who think that once they have filled in the forms their involvement ends there and rent is then the council’s responsibility.

A high proportion of people I deal with don’t even know how much rent they pay or when it falls due because again, to their minds, the council deals with these things.

When a fixed term contract comes to an end most council’s housing benefit teams stop payments until a new contract is issued. I get involved when the landlord complains of rent arrears and the tenant doesn’t even know that HB payments have stopped or why.

My great fear in this is that far from being empowered so many tenants will just accept less housing benefit as an occupational hazard and shrug it off thinking it is nothing to do with them.

Also, and in defence of many, looking for work is one thing, having jobs available to look for is another. The government is already talking about the amount of jobless and for many, depending on the area, working can be a difficult prospect.

Consequences

• If housing benefit doesn’t cover enough of the rent then this gives a landlord grounds to evict their tenant for rent arrears.
• If a tenant then becomes homeless as a result then they can approach the council’s homelessness unit who have a duty in many cases to investigate the claim.
• If they find that a person lost their home through rent arrears they can deem that the person is what is termed ‘Intentionally Homeless’ and refuse to re-house them.

Result?….

• More homelessness claims on already overstretched services having to find 25% cuts to fit the government’s budget.
• More loss of homes and with it weakened communities. How can you sustain a community when people keep moving?
• More families forced to make do, sharing with friends and family or living in overcrowded conditions.
• Damaged ability to rent other properties privately because of bad references.
• Less properties available for rent to benefit claimants.
• Loss of ability to borrow money because of damaged credit ratings.
• Smaller market for private landlords to invest in.
• Increased support costs for people who need social services involvement

And all this because of a populist idea of saving 10% on HB budgets. But how much will this cost a council overall? It costs tens of thousands of pounds to push a single family through the homelessness system, far more than would be saved by a 10% cut elsewhere. The difference is that cuts in HB would come out of the financial services budgets while increase in homelessness and support costs come out of housing department budgets, but all in all it is still the council’s pot.

A new government, new ideas but the same old lack of joined up thinking in favour of a crowd pleasing policy and demonization of people on benefits.

Ben Reeve-Lewis

About Ben Reeve-Lewis: Ben was the Tenancy Relations Officer for Lewisham Council for 11 years, prosecuting landlords for harassment and illegal eviction. Now he is a freelance housing law training consultant with a more balanced approach, delivering housing law courses for the Chartered Institute Of Housing, Shelter etc. His aim now is to help the housing world work as a interdependent system that benefits all

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Locks and keys in rented properties can often cause problems.  Landlords like to retain control over their properties and this includes having sets of keys so they can gain access whenever they want.

Tenants, needless to say, don’t like the idea of their landlord, or indeed anyone else, being able to enter their property when they are not there.

What is the legal situation regarding locks and keys?

Generally when someone signs a tenancy agreement they will then ‘own’ the property for a slice of time. A tenancy is an ‘estate in land’ and different legally from, say, a lodger situation where the lodger just has the right to use the room.
So if the tenant owns the land (or flat or whatever it is) he also has the right to change the locks if he wants. So far as I am aware, under the common law there is nothing to stop a tenant doing this, and he is under no (legal) obligation to give a set of the new keys to the landlord.

However many tenancy agreements now cover this situation and specify that the tenant must not change the locks without the landlords permission.  If the landlord does give permission, this will normally be on condition that the tenant give a set of the new keys to the landlord.

Tenants changing the locks and keys

What is the situation therefore where the tenancy agreement prohibits changing the locks without permission, but where the tenant does this anyway, and refuses to hand a set of the new keys over?

My view is that he will be in breach of his tenancy agreement, but short of getting an injunction (which is expensive and not guaranteed to be successful) there is not a lot the landlord can do about it. Not during the tenancy anyway. After the tenant has vacated he may well have a claim against the tenancy deposit for the cost of new locks and keys.

However this may not always be the case.

Landlords are not entitled to enter the property without the tenants permission. This is a fundamental right tenants have which is included in all tenancy agreements by implication, even if not specifically stated in the tenancy agreement. So if landlords start entering the property without the tenants knowledge or consent, the landlord is in breach of the terms of the tenancy agreement.

Even if the tenancy agreement says that the landlord can go in when he likes.  Any clause like this will be void and unenforceable under the Unfair Terms in Consumer Contracts Regulations.

Landlords using keys to gain access without permission

Over the years I have had countless tenants complain to me that their landlords keep coming into their property. Tenants often find this intimidating, particularly single women tenants with male landlords. I can remember one tenant telling me that she was terrified to have a bath, after coming out of the bathroom one day wrapped in a towel, to find her (male) landlord at the foot of the stairs leering up at her.

My advice to tenants in this situation is just to change the locks. The landlord will not be able to complain about it. Technically it may be in breach of the tenancy agreement, but the landlord’s breach in persistently coming onto the property without permission is far more serious.

A benefit to landlords of not holding keys

Incidentally there may also be an advantage to the landlord in not having a set of keys. If a landlord holds keys, particularly if he is known to enter the property from time to time, he may be in a difficult position if the tenant accuses him of theft of the tenants belongings. If he has no keys he cannot be blamed for anything which might happen in the property, as he has no means of access.

What do you think? Are you a tenant who has been bothered by landlords persistently coming into the property without your permission? If you are a landlord, what problems are caused when tenants change the locks? Have any landlords been accused of theft by their tenants?

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Different strokes for different folks

Some of you may be familiar with the programme ‘Property Ladder’ from a few years back or the even more popular “House Doctor”. Both programmes involved decorating and preparing property for sale. And you may recall the main thing that both presenters emphasised throughout was to not treat the property as if it was your own home but to prepare it for the people who will be living there.

Usually their advice fell on deaf ears, particularly in House Doctor where people were often angry and emotional about Anne Maurice’s advice to take their personality out of the picture and neutralise it.

My advice to you here is …DO THE SAME WITH YOUR LETTING!

Why do landlords fall into this trap?

For many years my job was to prosecute private landlords for harassment and illegal eviction. Obviously I came across what Housing Minister Grant Shapps refers to as ‘Rogue landlords’, armed with knives and baseball bats intent on reclaiming their property come what may.  But, rent arrears aside, by far and away the most common cases of harassment was the result of frustration on behalf of the landlord because the tenant was not using the property in the way the landlord would if it was their home.

This is not a legal problem but a perceptual one. The same one that Sarah Beeny and Anne Maurice encountered in every programme. Why do people do this? I think I know.

Anyone who works in housing will tell you that feelings run very high when it comes to any complaints of people interfering with a person’s home. To every single person a house is more than just bricks and mortar. It represents hopes, dreams, desire for safety and security and a host of other things.

People naturally behave in a protective and territorial way when it comes to their home. An Englishman’s home is his castle and all that. There is a website called ‘Victims of Hedge Abuse’, a gathering place where people living next door to neighbours who grow their Leylandii hedges extremely high can get advice and vent their spleen. On the face of it, it is simply about the offending hedge blocking out light but what drives the frustration and anger is the imposition on the other person’s rights, it becomes a respect issue.

I was once training a group of housing association staff in conflict management and an ex policeman on the course who was new to housing told me that he found dealing with angry tenants far more difficult than cases he worked as a copper because problems in peoples homes were much more deeply felt

Tenant-like manner

Lets get the legal bit out of the way first. As a landlord, when you rent out your property you give up your property rights to it. The person you rent to, now has those. It may be ‘Your’ house but the moment you give them a key it becomes ‘Their’ home and if you go into the house without their permission you will be a trespasser and they can call the police to remove you.

Believe it or not by law a tenant can change the locks to the property and is under no legal obligation to give you a key….this is because, by law, as a tenant, they have ‘Exclusive Occupation’, which means they have the right to exclude anyone they like….including you!

Putting a clause in your contract saying no lock changing will not get you around this legal fact.

Under common law occupiers have the right to use the accommodation in what is termed a ‘Tenant-like Manner’. Now obviously creating neighbour nuisance, selling drugs, digging tunnels in the cellar….(yes really…see “Hackney Mole Man” ) is not tenant-like, but apart from these obvious examples most behaviours should be legally acceptable..

A Common Gripe

I hear so many complaints where someone lets out what used to be the family home and is then crestfallen to see people whose hygiene is not of the landlord’s own standards occupying a home with so many happy memories. Landlords in this situation can become tearful and angry but the fact is people don’t conduct their daily lives to others values.

Now if their hygiene causes environmental health problems it becomes a tenancy breach but generally not otherwise.

There are grounds for evicting tenants where they have let a property deteriorate or have caused vandalism but if your tenant’s behaviour doesn’t constitute that then you probably don’t have a case.

I will keep emphasising this because it is so common – when you rent out a property it is no longer your home.

More Tenant-like manners

Back in the 1990s I had 2 friends living in a shared rented house who were friends with some very famous DJs at the time. Twice every summer they held legendary parties that would take 3 days to prepare for. Industrial sheeting was put down and massive sound systems moved in and on the night the famous DJs would turn up and spin.

If you were the landlord turning up that night you would have been horrified to see your house turned into a dance club, but here’s the switch. Although the house was in a residential street in South London there were never any complaints of noise nuisance, because everyone in the street went to the party. The tenant’s were strict about ensuring that nobody hung around in the front garden so no gate crashers got in and 24 hour hours after the party ended you wouldn’t have known that one had taken place, no burnt carpets or broken fittings, just a normal 3 bedroom residential dwelling, as clean as Barbara Cartlands cushions.

You see having a party in your home is a perfectly tenant-like thing to do. If the noise causes nuisance then it is a tenancy breach but if there are no complaints and the house isn’t damaged where is the legal problem?

For Your Own Sanity

Whether you have 1 property that you let out or 20 don’t treat it as your home. Do what the professional do and accept that it is simply a business investment and that people are going to occupy it and express their lifestyles in any way they choose, because that is their legal right.

You wouldn’t accept a bank or building society with whom you have a mortgage to tell you how you can and can’t live in your home, and the same rule applies to you as a landlord.

I’ll emphasise again, when you let a property out it is no longer your home.

If you can’t separate your emotional attachment to a property then you will have a miserable time of it as a landlord and would probably be much happier doing something else.

When you have an emotional attachment to a property even something as common as rent arrears can feel like a personal insult. In reality it isn’t, it’s just business.

I am not saying that you shouldn’t care. When a tenant moves out and the place is a mess it is extremely annoying and takes a lot of effort to prepare for the next tenant. There are Rogue Landlords out there but there are also loads of Nightmare Tenants. You can have the best references in the world and they will still get through.

The hard fact of the matter is that renting out properties is an investment opportunity and any investment carries with it certain risks. The risk for a landlord is the nightmare tenant, but don’t confuse your tenants everyday behaviour with nightmare behaviour. Distance yourself learn to be philosophical about things……it is so much easier on the blood pressure.

Ben Reeve-Lewis

About Ben Reeve-Lewis: Ben was the Tenancy Relations Officer for Lewisham Council for 11 years, prosecuting landlords for harassment and illegal eviction. Now he is a freelance housing law training consultant with a more balanced approach, delivering housing law courses for the Chartered Institute Of Housing, Shelter etc. His aim now is to help the housing world work as a interdependent system that benefits all.

This is a question I was asked recently, and I am finding it harder than I thought originally, to answer it. The answer I have come up with is that you can, in that it is not illegal, but it may not be a very good idea.

As most of you know, a tenancy or damage deposit is a sum of money paid by a tenant to the landlord which is held during the tenancy, to be a fund the landlord can use to pay for any necessary repairs or replacement when the tenant leaves.

Deposits now need to be protected with a government authorised tenancy deposit scheme, but I have written about that extensively, elsewhere on this blog.

When first asked (in a comment here)  about the need to keep deposits at or below two months rent, my response was that deposits of over two months rent will be deemed to be a premium, and premiums are bad news and best avoided. When my questioner inevitably then asked “why?”, and I started looking more at the detail, things became less clear.

‘Key money’ and premiums in the past

A premium is a sum of money you pay to the landlord as a condition of being allowed to have a tenancy. They are standard practice with long leases, where you generally have a high premium of many thousands of pounds and a low ‘ground rent’.

Originally premiums were often charged for short lets. They were known as ‘key money’. During the first world war they were frequently charged as a way of avoiding the rent control legislation. Because of this they were outlawed, and this prohibition was eventually confirmed in the Rent Act 1977. Premiums were only permitted for long leases, ie leases for a term of 20 years or more.

Under the Rent Act, the definition of ‘premium’ included (s1289(1)(c)):

any sum paid by way of a deposit, other than one which does not exceed one-sixth of the annual rent and is reasonable in relation to the potential liability in respect of which it is paid

Premiums in the Housing Act 1988

The Housing Act 1988, introduced by the still relatively new Thatcher government, radically changed the law relating to renting property, and the law relating to premiums was no exception. Premiums are no longer illegal for assured and assured shorthold tenancies, as they still are for tenancies governed by the Rent Act 1977. However their exact status remains (for me at least) somewhat opaque.

Section 15 of the Housing Act 1988
The main mention of them, that I can find, is in section 15. This section relates to the assignment of tenancies without the consent of the landlord. Something all landlords will be keen to avoid, as they will not want the tenancy legally transferred over to a tenant who may be unsatisfactory and/or unable to pay the rent.

In essence s15 says as follows

• All periodic tenancies will have an implied term saying that tenants cannot assign without the consent of the landlord (s15.1) whether or not the landlords refusal is unreasonable (s15.2)

• If the periodic tenancy is not a statutory one (i.e. if it is not one which is created by any statute, such as s5 of the Act), then s15.1 does not apply if
  • The question of assignment is covered by the terms of the tenancy agreement itself, or
  • A premium is payable on the grant of the tenancy or its renewal

• A premium will be one of the following (s15.4):
  • A ‘fine’
  • Any ‘pecuniary consideration’ payable as well as the rent, or
  • A deposit if this is more than one sixth of the annual rent – i.e. two months.

So basically,

• if you have a periodic tenancy which is not a statutory one, then if there was a premium paid or payable, the landlord will not be able to prevent the tenant from assigning the tenancy if he wants to.

• However if there is no premium, then (for periodic tenancies) the landlord can prohibit assignment absolutely, and the tenant cannot challenge this on the basis that the landlord’s refusal to grant consent is unreasonable.

Is this worth worrying about, I was asked recently, bearing in mind that very few tenancies are contractual periodic tenancies?

My answer is that a tenancy may become a contractual periodic tenancy by agreement with the tenant, and the prospect that the tenant may then be entitled to assign the tenancy without the need for the landlords consent, is a compelling reason for avoiding deposits of more than two months rent in all tenancies.

Even if, in these circumstances, the landlord can end the assigned tenancy under section 21, this will only be after service of a notice of not less than two months, and possibly court proceedings, which could easily take a further two months or more. A tenant can do a lot of damage in four months.

Section 115 of the Housing Act 1988

However there is then section 115, which relates to premiums for long leases. This is saying effectively, that premiums are allowable provided the lease cannot be ended for 20 years after the date the lease was granted.

Does this then mean though, that if a premium is paid, this will effectively convert the tenancy to a 20 year lease? And if so, will the definition of a premium still include a deposit for a sum equivalent to, more than two months rent?

A quick scout around my textbooks, shows a dearth of information on the whole question of the relationship between deposits and premiums. It would be interesting to hear from lawyer readers with their views on this point.

Section 54 of the Law of Property Act 1925

This is the final piece of legislation which I have found which will affect us. The LPA 1925 s54 is the act which states that all deeds transferring or conveying legal title or ownership of property (which includes tenancy agreements as these transfer ownership of the property for a period of time) must be by way of a deed.

However there is an exception to this rule, if the tenancy is to take effect immediately, at a market rent, and provided a ‘fine’ or premium is not payable. You can read more about signing tenancy agreements as a deed here.

Conclusion

To summarise, my researches show as follows:

• If you take a deposit of more than two months, this will be classed as a premium
• If you take a premium, you will not be able to prevent your tenant from assigning your tenancy, if it is a contractual periodic tenancy, and
• You will need to get the tenancy agreement signed as a deed.

I also flag up the possibility that taking a premium may mean you cannot end the tenancy for 20 years.

What do you think? Is there anything I have left out?