Here are some Friday news items for you:
A ‘damp squib’ of a budget
I put it first but the budget was a disappointing one on housing, particularly for landlords who were hoping for a bit of let up on the relentless tax squeeze imposed on them.
Last weeks Guardian reports on rogue / criminal landlords seems to have got people going.
Our own Ben Reeve Lewis did a post here (when he commented that it is too early to expect names in the rogue landlord database) and the chair of the Commons housing select committee Lord Betts has been asking MPs to clarify their plans:
Clive Betts, the Labour MP who leads the housing, communities and local government committee, wrote that the investigation “highlighted significant issues around the effectiveness of current government policies” for the private rental sector, in a letter sent to housing minister James Brokenshire on Wednesday.
MPs are “increasingly concerned that government efforts to protect the most vulnerable tenants in the sector are not working”, Betts wrote.
Rent Repayment Orders
These can cause significant risk to landlords.
If you want to know more, take a look at this post from London Property Licensing where the author discusses a recent case where a landlord ended up with expenses which exceeded the rental income.
As this case illustrates, it is really important that landlords apply for their HMO license before tenants go into occupation.
Beware, fake tenants
Landlords are advised to be careful about using cheap referencing agents in this Property Eye post. Tony Williams, managing director of UKtenantdata, has reported more tenant fraud which is not being picked up by cheap firms. He said an investigation into some of the tenants
cleared’ by the cut-price referencing firms found: serial sub-letters in London; applicants with non-existent employees; and overseas nationals with no proof of residency or a visa long spent.
As a tenant vetting agency we do have to decline individuals – for example, where there is adverse court data, failed accommodation references or a shortfall in rental affordability.
What is a worry is the increase in blatant fraudulent applications which range from doctored salary slips and bank statements to the complete ID theft.
As the choice of the tenant is probably the single most important single thing in renting, using a cheap referencing company is a false economy,
Landlords discouraged by heavy-handed councils
Everyone knows that we need more decent properties for tenants. So it is worrying to read this post in Property Industry Eye reporting comments from solicitor David Kirwan of law firm Kirwans who says that Councils are driving private landlords out of areas where selective licensing schemes are in place.
For example, local authorities such as Liverpool are inviting landlords who fail – for whatever reason – to register, to attend a voluntary interview under caution – which is the precursor to a criminal prosecution in the Magistrates Court.
I am currently representing decent, professional people who have ventured into buy-to-let only to find themselves facing a criminal record for failing to apply for a licence that in other areas of the city would not be necessary.
We’re not talking about roguish, exploitative landlords here – rather, people who simply saw property as an investment that would see them through retirement.
It is heart-breaking to watch them going through completely unnecessary criminal proceedings, simply for failing to apply for a licence.
He went on to say
While there may be many unethical landlords who absolutely need to be weeded out, they operate in an entirely different manner to the many decent men and women, some of whom are only just entering the rental sector, who simply want to provide good quality rental accommodation.
Landlords are now telling me that, rather than face this sort of frightening action, they will either sell up, or choose not to invest in property in affected areas in the first place. This will then reduce the choice of accommodation on offer for those renting.
Councils take note.
Service of section 21 notice by superior landlord
An interesting case reported on Nearly Legal where a section 21 notice was served by the head landlord. The claim was allowed at first instance and the initial appeal but not by the Court of Appeal.
Giles Peaker sums it up as follows:
The head landlord cannot serve notice on the sub-tenants until the intermediate lease has been determined. Once that has happened, any assured shorthold sub-tenants become the head landlord’s direct tenants, by way of s.18, and a section 21 can be served (assuming that there aren’t other complications with compliance with the regulatory requirements, of course).
- A Nearly Legal post on a case about succession and divorce
- A tenant in Paris has been ordered to pay all her Airbnb earnings to her landlord
- Nearly Legal reports on a couple of technical issues with Universal Credit
- A useful post on landlords plumbing obligations
- A success for landlords in Brighton and Hove where the government has withdrawn permission for a selective licensing scheme