Tessa Shepperson Newsround #90

Another Friday, another Newsround.  What do we have for you?

Right to Rent

This is the challenge to the governments Right to Rent policy brought by the Joint Council for the Welfare of Immigrants (JCWI)  and supported by the RLA and Liberty.  In a reserved Judgement handed down last week, the Judge found that the policy was in breach of Human Rights law.

We published a post by David Smith last week on right to rent implications, Ben wrote a piece and I wrote about it on the Landlord Law News blog here.  The solicitor in the case, Giles Peaker of Nearly Legal wrote about it here.

This decision has been supported by practically everyone other than the government who have got leave to appeal and a written statement has been published.

The important thing for landlords and agents to remember is that the scheme is still law until it is revoked so you all need to carry on doing your checks.  Sorry!

Although as David said in his article

That said it would be a challenge for the Secretary of State to levy a penalty or commence a prosecution against a landlord or agent who had got their checks wrong at the moment as they would be doing so based on a piece of legislation which has been held to be without foundation.

Unless you are swimming in money though (to pay any fines) it’s probably best not to test this out.

Client Money Protection

If you are an agent trying to comply with the CMP rules and are not a member of a regulated body such as ARLA you may come across the same problem as the agent discussed in this Property Industry Eye post.

He banked with Lloyds and was horrified to hear that he would have to open a separate client account for each landlord. The agent told Eye:

We manage about 100 properties for landlords, who mostly have just one property each. To open and run 90 different client accounts would mean that I would have to employ a full-time accountant.

We are a small business, and what the bank is asking is impossible.

So he will have to change his bank.  But I suspect Lloyds may not be alone in this policy (do comment below if you know of any others).

Eddie Hooker, CEO of Client Money Protect, one of the schemes not tied to membership of a regulated organisation such as ARLA, told EYE:

It has been brought to the Government’s attention that some banks are not in a position to open a client account for letting agents.

The Government has requested that authorised schemes give letting agents a grace period of 12 months starting from April 1 to open a client account if it can be shown that they are trying to obtain one from a UK regulated bank.

The position of Client Money Protect is that we want to assist agents with complying with the law so we will adhere to the grace period, but we expect evidence from the letting agent that they are in process of obtaining a client account.

Practically speaking it may be easiest to see which of the regulated schemes is the cheapest and join that.

Stamping out ‘No DSS’

The Housing Minister, Heather Wheeler, has said that she is going to be meeting all stakeholders in the PRS to see if they can work out a way to end the practice of landlords and agents refusing to rent to tenants on benefit.  However.

There are two main barriers to landlords renting to tenants on benefits:

• The first is the fact that many mortgage lenders prohibit this.  Ms Wheeler may be able to persuade lenders otherwise, but this may depend on her dealing with the second barrier –
• The problems associated with benefit in particular Universal Credit with the long delays before any benefit is paid out and the fact that the benefit paid is often less than the contractual rent.

It would also help if some Council’s stopped treating landlords as ‘the enemy’.

The problem with insurers failing to provide insurance cover can be solved by using a different insurance company which does (see our free Insurance Mini-course for more on this).

We had a long discussion about these issues in my post a couple of years ago here.

NB If you are a tenant experiencing problems finding a rented property while on benefits you may want to complete the government survey form here.

Snippets

• ARLA Propertymark warns agents to do due diligence on ‘unproven’ deposit replacement schemes.
• An FOI request has shown that deposit a ‘crackdown’ not one prosecution has been brought under the latest anti-money laundering regulations (from June 2017).
• The annual Housing Benefits bill is now an eye-watering £2 billion – more than we spend on the Police!
• Nearly Legal reports on a new case under the Defective Premises Act 1972 on landlords duty to inspect properties
• MHCLA has now published guidance on the Homes (FItness for Human Habitation) Act 2018
• The Ministry of Justice has published a consultation on enforcement of possession orders here.