Back today from a 2 day Conference (hence no posts for the past 2 days) – what do I find in the news to report?
Agents warned that charging tenants their fees for arranging repairs is illegal
One of the things that letting agents often do is charge a fee or a commission for arranging repair work to rented properties and then pass this cost on to the tenants.
Nor surprisingly a barrister has advised that this is illegal under the consumer legislation. The advice has been made public and you can read it here.
The nub of the advice is that the agent’s costs of arranging the repair work, although recoverable from the landlord by the agent as part of their charges for their service, cannot be passed onto tenants. If this is done it will be a prohibited payment under the Tenant Fees Act. Making the agents liable for substantial penalties.
The opinion does not mention Wales specifically (the opinion refers to the Tenant Fees Act 2019) but I assume the situation will be the same in Wales.
I agree with the report. Another way of looking at it is if you have two tenants – Tenant A and Tenant B, where Tenant A’s landlords use a managing agent and Tenant B’s landlord manage the property themselves.
If they both use the same plumber to do repair works costing £100 – why should Tenant A have to pay the agents commission of £10 and be charged £110 whereas Tenant B only pays the real cost of £100?
It is to cut out this sort of thing that the Tenant Fees Act (and its Welsh equivalent) were passed in the first place. It’s OK for the landlord to use a letting agent to arrange the repair work – but the costs of this should be paid by the landlord, not by the tenant.
Agents urged to respond to the section 21 repeal consultation
I haven’t watched it but I understand that in a live webinar, David Cox, CEO of ARLA urged agents (and landlords but the webinar was aimed at agents) to respond to the government’s consultation on the abolition of section 21.
Making the very sensible point that if over half the respondents expressed opposition, it would be more difficult for the government to enact this.
You will find the consultation here.
Things that have not happened yet
It’s probably worth pointing out here that the two proposals – to remove section 21 and force landlords to sell properties to tenants, have not happened yet and may never happen. They are subject to legislation being passed. Even if legislation is passed the process would probably take a couple of years to complete.
The removal of section 21 looks more likely as most parties seem to support it. Forcing landlords to sell to tenants under a private rented sector right to buy is far less likely.
Both proposals, if implemented, would have a massive and detrimental effect on the private rented sector. Hopefully, this would make any government think twice.
Although this does, of course, depend on the government. We currently have a government which is apparently willing to risk citizens health (and potentially, death) due to medical shortages resulting from a No Deal Brexit – why should they cavil at a small thing like destroying the private rented sector and reducing the available accommodation for people unable to afford (or unwilling) to buy their own homes?
We live in interesting times.
Safer Renting helps tenants
A shout out to Ben’s organisation Safer Renting who have helped two tenants whose possessions were illegally taken by their landlord who locked them out of their rented HMO property on their return from holiday.
Safer Renting helped them recover their possessions and also helped the tenants apply to the First-Tier Tribunal where rent repayment orders were awarded to each of the tenants – together totalling nearly £10,000 which the landlord will now have to pay.
You can read the online report here.
Is the housing crisis due to low-interest rates?
Advisers at the Bank of England have issued a report saying that actually the housing crisis is not due to an undersupply of housing but due to low interest rates. This follows a similar report (which we looked at in this Newsround) by Ian Mulheirn of the Tony Blair Institute.
This view also seems to be endorsed by both left-wing and right-wing economists. Going against the generally accepted theory which is that we need a massive injection of more houses.
Who is right? Maybe it is a combination of both.
Mind you what we don’t really need are expensive ‘golden bricks’ for overseas investors to buy and leave empty. Although I don’t know how prevalent that really is in the scale of things.
When they do eventually increase interest rates though it is going to cause a lot of problems for people currently paying expensive mortgages who may find that they are now unaffordable.
- Can a lettings agency cancel a tenancy contract after a claim of sexual assault?
- Student housing company switches to renewable energy
- ARLA has called for the national rogue database to be opened up to help agents avoid employing crooks by mistake
- Law Society Gazette report on electronic signatures
- About the millions which property fraud is costing the Land Registry