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Can You Believe It ? Landlords Legal Political Tenants

Discrimination ? Really !

Reports of “Direct Action” being taken against a number of Letting Agents who advertise their properties on a “No Benefits Tenant” policy come as no surprise given the militancy of the anti-landlord brigade. Supported by Shelter and other organisations, it is likely that we will see an increase in this kind of activity as the problems with the Universal Credit system unravel (read more), and more and more landlords will be given no choice but to stop taking benefits tenants. Unless Landlords, Letting Agents and our representatives fight back with the truth about this high risk sector, the militants will successfully get their emotionally charged message through to the sympathetic ears of our anti-landlord politicians.

Any landlord who has ever rented to Benefits Tenants will know that there are genuine claimants and there are those who are the complete polar opposite, but whichever camp they are in, all benefits tenants come with a high level of financial constraints, and that is why they are high-risk. We doubt that anyone who has managed a benefits tenant would disagree that they are high risk and high maintenance, whether that is from the perspective of receiving the rent, or having to sort out the benefits paper-work,  or from a behavioural aspect, there are undoubtably more issues to deal with than there is with a standard tenancy and therefore more to do and more to manage.  When you add into the mix, the current turmoil in the Universal Credit system and reports that rent arrears are rocketing because the system can’t cope, you can see just why so many landlords will go stay clear of this high risk sector.

Despite what many seem to think, being a landlord is no different from any other business. It’s all about making the right decisions for the business with regards the risks the business takes or is willing to take. All business owners have to manage risk, and if they get it wrong, they pay the price, and landlord are no different.  Most landlords are amateur landlords, they may own one or two properties and therefore they do not have the luxury of a high cash-flow business which could help take the hit when a benefits tenancy goes wrong. This means landlords, like banks, building societies and other businesses, must make an assessment based on the probability of getting paid.  Landlords who have mortgages still have to pay the mortgage when the rent is not getting paid, they cannot do what tenants do and simply stop paying without any consequences!  And landlords who do have mortgages must consider that most Buy To Let mortgage contracts have an explicit condition preventing landlords from renting to Benefits Tenants, which means if a landlord did, they would be in breach of their mortgage contract.

Where a landlords business is unique and differs hugely from many others is that if the landlords tenant choice is wrong, the cost and time of putting things right or getting back on track is huge!  You cannot name another business where the provider of a service is legally required to provide that service when that service is not being paid for?  And for the provider of that service to regain their service/product they must go through a series of legal steps, culminating in a court hearing, but all of this whilst still not being paid for their service!  This is the reality in the world of a landlord, so if being a landlord isn’t high risk, we really don’t know what is!

We understand what Shelter are attempting to do with their emotional anti-discrimination, campaign, but they are wrong to do it without balancing the argument and addressing the main points which concern and affect landlords who do not wish to rent to benefits tenants.

Landlords (or anyone else for that matter) should never be prevented from making pragmatic commercial decisions about their business based on risk and if that risk is too high, they should never be forced into doing so by some ideological belief that they are wrong whilst others are right!

OneLandlord

 

 

Categories
Landlords Legal Political Tenants

Are We At Peak Landlord ?

Thousands of Irish landlords will be given millions of euros worth of Budget 2019 tax breaks to stop them from fleeing the market before any fresh clampdowns are introduced. It is thought that the Irish Government will confirm that landlords will be given 100% mortgage interest relief on any loan used to pay for a rental property from next year alongside a separate scheme involving a 4% annual capital gains tax relief capped at five years for landlords who buy and retain a rental property where someone is already living. In addition, a three-year €300m affordable housing scheme will see  9,000 homes built a year and a €154 Housing Assistance Payment budget rise are all in the Irish Governments proposed package for the rental sector. Read More

Compare what the Irish Government are doing with what has happened over the past two years in the UK and you have two very distinctive takes on how valued and important private landlords are. Here in the UK, have we now come to a point where we have reached Peak Landlord ?  Recent reports might lead you to that conclusion……

A report released by the Royal Institute of Chartered Surveyors (RICS) paints a picture of rising rents and a reducing number of private landlords, and as far as the RICS is concerned, the blame lies squarely with the Governments treatment of private landlords and the PRS.  From a deliberate attack on tax allowances, to the ill thought through Right To Rent (landlords acting as border agents) to the rip off local government accreditation schemes, landlords have simply had enough.

We can only guess what George Osborne intended when he removed mortgage tax allowances and other tax incentives from the PRS and increased stamp duty on second and subsequent home purchases, but what we do know now is that it was the catalyst for the start of the end of the Buy To Let phenomenon. It is highly likely that his aim was not so much the raising of revenue for the treasury (although they are never against that!) but moreover to put a stop to, or at least dramatically reduce the number of individuals investing in the Buy To Let sector, and if that was the reason then it appears to have worked. What is currently a trickle of landlords leaving the sector is forecast to become an exodus, as more and more legislation and financial cost is piled upon the sector, and the recent Tenant Fees Bill has added more regulation and more costs to the life of a landlord.

Many individuals entered the Buy To Let sector as an alternative to their poor performing pensions and their even worse performing savings accounts, and who could blame them?  Others entered the sector by complete accident, never intending to be landlords, but often inheriting a property which they either couldn’t sell or didn’t wish to sell at the time. Now, many years later, the housing market has changed, many have had their experience as landords and didn’t like it, never realising the cost and the hassle of Buy To Let.  On top of this, the political and social environment in the rental sector has become much more hostile. So who can blame the many “accidental landlords” and smaller scale landlords from cashing in and using their cash to buy that longed for Motor Home or Holiday Home, thats much more fun!

And there are those landlords who make a living from this complex sector; we know them as the “Professional Landlord”.  Whilst it’s acknowledged by most that the “accidental landlord” would eventually leave the sector when the time was right for them, the case for the “Professional Landlord” is somewhat different. They have a different stake in the private rental sector and for private landlords to be considering quitting the sector is something the politicians need to be concerned about.  Let’s face it, professional landlords are not in this sector for altruistic reasons (although there are many great landlords who do help their tenants in more ways than are ever reported),  they are in it for financial reasons and if those financial reasons do not exist, then there is absolutely no reason for them to stay, it would be the same with any business.

Some professional landords will stay the course and some, (but not all) will take advantage of the inevitable rise in rents, the laws of supply and demand never change, even in the hardest political environment. How these professional landlords deal with regulation and a very inhospitable tax regime only time will tell.  But typical of this Government and its attack on private landlords is their complete lack of foresight; because when landlords do start to exit the sector in large numbers, who will be there to replace them if the sector is hindered through an inefficient tax regime, over regulation and a political ideology which creates a hostile environment?  Even today, when we are arguably at “Peak Landlord” there are not enough properties to supply the demand in the PRS, so in a growing population, which is far more demanding of housing flexibility than it ever was in the past, the future of renting in the UK does not look rosey!

If the Government are hoping that the Corporate Sector will step up to the plate and take up the slack through such schemes like Buy to Rent, they need to beware that corporations do not like over regulation, they do not like bad or unfair tax regimes, they do not like uncertainty and they do not like hostility, either from the consumer or from the politicians.

Government inhospitable tax attack, income & stamp duty

The controversial removal of tax allowances under Section 24, and the assessment of profit based on turnover is unprecedented in the history of business in this country and put simply, is an attack on small businesses. Section 24 of the Finance (no. 2) Act 2015 means that over half of UK landlords will be pushed into a higher rate of tax despite their income not having increased, and many will end up renting at a loss.  Why would anyone allow themselves to be pushed unnecessarily into a higher rate tax band ?  But if this in itself is not a good a good enough reason to quit the sector, let’s take a look at some others which might be;

Local Council Accreditation Schemes.

We think this is going to be the biggest single reason why landords will leave the sector and the government really do need to get to grips with it. It’s not because landords are unwilling to be regulated, there is little doubt that they have shown that they are. It is because Accreditation Schemes and their cost are simply expensive and unfair  and offer nothing in return (although this may change due to a Judicial Review of HMO Licensing – read more).  To give you an idea of the cost of these schemes, and which direction these licensing schemes are heading, the Nottingham wide licensing scheme registrations (yes, Nottingham are not messing around, they’re licensing the whole of the city!) is £780.00  per property whilst in Leeds, for one post code area the cost is £825.00. These are just two examples of an expanding system of licencing. For landlords, this is a huge amount to pay out per property so to think that this cost will not be passed onto the tenants is pure madness.  And to add insult to injury, these fees are none transferrable, which means that if a landlord sells the property to another landlord, the new landlord has to pay for a new licence fee!  That does not sound at all fair to us; if you drive four cars, do you need four driving licences ? Landlords are not against being licensed, providing it is a fair scheme, but nobody will convince landlords that these licencing schemes are anything other than a tax raising scheme.

Minimum Three Year Tenancies.

We’re not really sure how this will work and if we’re not sure, it doesn’t bode well for those out of touch civil servants in Whitehall but the ONLY way this could work is for tenants and landords to be allowed to opt in or out of a mandatory three year tenancy.  Landlords have their ears to the ground and know more about what their tenants want and what they need, more so than some Whitehall mandarin who is only listening to Generation Rent and Shelter. (Shelter who by the way have never let out a single property!).  Landlords are saying very clearly that long term tenancies are not needed and that the short term system works perfectly well so mess with it at your peril.

Tenant Fees Ban

Soon, Landords and Agents will no longer be even allowed to cover the basic cost of such important things as Background Credit Checks, ID checks, and Right To Rent Checks (which the government insist we do). What exactly is wrong with charging tenants for their credit searches and their background checks?  Do the powers that be realise that tenants don’t always tell the truth, they conveniently forget that they have a large outstanding county court judgement, or that they were once evicted from a tenancy, only remembering when presented with the information on the credit search!, why should a landlord have to pay for someone else’s lies?   And what exactly is wrong with charging tenants for the cost of setting up a tenancy, providing it is reasonable and not excessive?  If you apply for a mortgage, you will be charged for such things as the valuation fee, the lenders administration fee and even a product arrangement fee, often running into thousands of pounds.  Landlords are not against the regulation of  Tenant Fees, and even a cap on the fees, but to ban them outright is grossly unfair and just one more reason why landlords are leaving the sector.

Increase in Regulation.

Companies are used to regulation and in this Country, on the whole, companies are pretty good at being regulated.  We are aware that regulation is needed to weed out bad practice There are now over 150 regulations which landlords must follow, and there are more on the way.

A Labour Government will beat the private landlords to a pulp!

If landlords thought that the support they receive from the present Tory Government is inhospitable and not conducive to conducting business in a fair way, just wait until (if) a Labour Government comes to power, then it really will become armageddon for landlords.  To be fair to them, and unlike the current government, the Labour leadership and their supporters have made no secret of their distain for private landlords.

Rent Caps (Labour).

This is probably the first thing that a Labour Government will do.  Rent controls have been used in the UK before, with the majority of privately rented homes being subject to some form of rent control until the late 1980s.  Local officials set the maximum amount that could be charged based on the age and location of a property, the quality of any furniture and the assumption that there was no shortage of other, similar homes for rent in the area. This resulted in an inherent under-investment over a number of years in housing stock and important property maintenance as landlords just didn’t have the funds to invest and lenders and funders were not interested in the sector.  Everyone knows it won’t work, but they will do it anyway.

Removal of Section 21 Possession

There is now a strong movement for the removal of the Section 21 possession notice. Those wishing to abolish it refer to it as “No Fault Eviction”, it’s a way of gaining empathy for the tenants who are evicted under this method.  Because of the use of this term, it makes it sound like tenants are being evicted through absolutely no fault of their own, and by implication, only the landlord can be blamed for their situation.  But dig deeper and you will find that the majority of Section 21 Notices which make it to Court, are actually served because of problems with the tenancy, usually rent arrears, and Section 21 is used by landlords because the alternative, which is Section 8, is complicated and often unfair.  Do you know of any other business which is legally obliged to provide a service to a customer who doesn’t pay for that service, and the only way that business can get their hands on what is rightfully theirs, is to take their customer to court whilst that customer is still using the product and not paying for the service? You couldn’t make it up!

The removal of the right of a landlord to refuse pets

In the UK, I’d like to think that we are all still animal lovers, but loving animals should not mean that you have to accept them as the default position in a tenancy, should it?  Landlords who do not allow pets, do so because of previous experiences, usually bad ones!. Badly behaved pets cause landlords lots of problems;  bad odours, torn and ripped carpets and furniture, dogs that chew door frames, skirting boards and kitchen units.  Dogs that constantly bark and upset neighbours because they are left alone all day. tenants who don’t look after their pets and don’t know how to look after their pets,  the list goes on. Under Labour’s plans, which it says it wants to discuss with landlords and tenant bodies, there would need to be evidence that the animal was a nuisance for permission to be refused.  Who’s going to pay for the damage, for the smells, because from experience, we know that the tenant won’t? This proposed policy is ridiculous and an interference in something that has nothing what soever to do with the government. It is landlords who are the best people to determine whether they want to allow pets in their properties, not tenants and definitely not the government!

5 year minimum tenancies

Our thoughts on the conservative governments policy for the introduction of an unnecessary three year tenancy is only exasperated by the fact that the labour party want to introduce a minimum five year tenancy!  A compulsory three year minimum tenancy period will wreak havoc with the PRS so imagine what a five year minimum tenancy period backed by a labour government would do !

£30,000 minimum fine!

In September 2018, Labour tabled a motion which would see “unscrupulous landlords” handed a £30,000 fine for a first offences, and an unlimited fine for any further offences ! The worrying thing here is what exactly is their definition of “unscrupulous landords”?

 


Add all of the above to the realistic fact of more tax rises for landlords and the inevitable interest rate rises and nobody could possibly be surprised that landlords are now selling up. And whilst we are not professing to be expert economists or even predictors of the future, it’s hard to see just how the two main parties will be able to support private renting in the UK without undoing most of the damage that has and will be done, but by then, it’s likely to be too late.

Without the private landlord, there is no Private Rental Sector, and without the Private Rental Sector there will be nowhere for Generation Rent to live. Governments will have a serious political and financial problem on their hands if they reduce the size of the PRS when the population is on the increase, and  they will never have the public money to build the huge amount of houses needed for the rental sector.

Given everything we now know, why would anyone remain a landlord?  Well, they don’t have to, because the one major point that the politicians have alarmingly overlooked is that it is not mandatory to be a landlord, as things stand today landlords can sell their properties, which they are doing. Unless of-course the politicians bring in a law to stop landords from doing so, and  let’s face it, that is not beyond the realms of possibilities!

 

landlords en-mass are now saying; 

‘We’re off, someone turn the light out when they’ve finished wrecking the PRS”! ,

 

 

Categories
Can You Believe It ? Dear Tenant Landlords Political Tenants

An excellent landlord!

This is OneLandlords response to Penny Anderson, the Guardian’s landlord friendly feature writer who has penned an article about “How to be an excellent landlord” ( click here )

In her article, Ms. Anderson sets about explaining her ten point plan on how landords should treat their property and their tenants. There is of course, nothing wrong with this, we all need help and advice sometimes, but as this particular help is from Ms. Anderson and her Guardian friends, don’t expect it to be either useful or friendly. However, do expect it to be patronising, and remember when reading it, that this is from the same person who in a recent article, called landlords “oppressive” simply because they ask for background checks on potential tenants!

In return for her warm and comforting words of wisdom to landlords, OneLandlord has provided some equal words of wisdom to Ms. Anderson and her merry band of Generation Renters ?  Below (listed 1-10) is Ms. Anderson’s recommendations to landlords, and our response to her is below each item;

1. Do repairs promptly.

We agree, landlords should do repairs promptly, not least because it’s in their interest to keep on top of the properties maintenance. But they can only do those repairs when or if they are told about them. Tenants have a responsibility to report repairs to their landlord but many do not, at least not until the simple repair has become a full refurbishment!  Tenants who do not pay their rent have a habit of not saying anything about repairs until they eventually catch up on their rent, that’s when the landlord gets the long list of repairs which the tenant failed to report earlier, most of which are now quite big jobs but would not have been had they been reported on time – was that something to do with the rent arrears ?  Oh, and whilst on the subject, don’t forget that tenants also have a responsibility for repairs, the minor ones!  So please don’t call the landlord at nine o’clock on a Sunday evening to inform them that a handle has fallen off a cupboard door, why not try fixing it, like we all have to do!

2. Don’t visit unannounced.

Quite right, landords should not just turn up unannounced, but tenants should allow the landlord access when they are given the correct notice instead of refusing it! (which, by the way, they agreed to when they signed their tenancy agreement). Tenants who do not allow landlords access to inspect, or worse, do not allow access for important safety items such as gas certificates (yes, I know it’s unbelievable, but it’s true!) must have something to hide mustn’t they, or why would the prevent it?  And then there are those tenants who don’t allow access for landlords to show prospective tenants around the property when they themselves are leaving the tenancy.  Tenants that do this are preventing the landlord from earning their legitimate income, why would anybody want to do that?

3. Treat letting homes like a business, not as if you are graciously allowing strangers to stay in your home.

Somewhat contradictory to Ms Andersons later recommendation in item nine where she doesn’t want landlords to be friendly!  The fact is that tenants are strangers aren’t they? at least they are until the landlord gets to know them. A landlord can only know who they have in their property once the tenant has the keys, by which point it may be too late. Many landlords will have lived in the property as their main residence and may find it difficult to disassociate themselves, so in these circumstances, a bit of understanding might not go amiss. And, whilst it is still the law, let us not forget who’s name is actually on the deeds, the person who pays the mortgage, and therefore who actually owns the property – the landlord!

4. Be mindful that human beings, not vermin, pay to live in your property.

The use of the word “vermin” sums up this person (and her newspapers) hatred of Landlords. I can’t think of any landlord I know who would treat people as as “vermin” and this particular “how to be a better landlord” comment from Ms. Anderson simply isn’t worth OneLandlord responding to – we have no words!

5. Provide good-quality fittings and furniture.

Indeed, but the deal should work both ways; tenants should return those same good quality furniture and fitting as good quality furniture and fittings,  and not in the total disrepair landlords often get their property back in;  and “fair wear and tear” doesn’t even come into it!

6. Do not store your own possessions in the property’s precious cupboard space.

We agree, the properties cupboard spaces and indeed other spaces, such as the garage or sheds should be there for the exclusive use of the tenant during the period of the tenancy. So why oh why do so many tenants leave their unwanted items in those exclusive places when they quit the property?  Why do tenants send messages to landords saying such things as “we thought you might need these?”  well think again, landlords don’t need tenants old items, those items which tenants can’t be bothered taking to the local tip!.  So, yes, please do have exclusive use of any storage, but please take ALL your belongings with you when you leave!

7. I shall say it again: let us decorate.

Ok, go ahead and decorate, but don’t leave your psychedelic, grunge, goth, garage or other freaky and badly done DIY decorations for the landlord to try and attempt at re-letting the property, because the landlord won’t be able to!  If the landlord asks you to put the property back to as it was when you moved in, then put it back, and that doesn’t mean doing a poor “dot and dab” cover up job because you can’t be bothered to do what you agreed to in the first place!  Of-course as landlords, we know that tenants won’t do this, they’ll simply walk away and leave it for the landlord re-decorate, and that is why landlords do not like tenants to decorate!

8. If you are tolerant of occasional late payments, for example, tenants may not call at 2am on a Sunday demanding urgent hot water repairs, accepting that it takes a while to summon elusive plumbers.

The truth is, tenants tend to demand urgent heating/water repairs, not because they know or understand that it t takes a while to get a plumber/engineer out, but because tenants tend to call at 2am on a Sunday morning expecting someone to be with them at 2.30 am on a Sunday morning!   And seeing how you mentioned 2.00 am on a Sunday and not 2.00pm on a Sunday afternoon, do you possibly think it’s fair and reasonable to call any one at that ungodly hour in the morning, unless it was a real emergency?  Let’s face it, not having hot water isn’t exactly an emergency is it?

9. Don’t be creepy, expecting tenants to become mates, like the former landlord who was most put out when we rebuffed his offer to come round for “a smoke”.

We honestly do not know of anyone who would wish to become best mates with their tenant, and we couldn’t think of a worse business/client relationship to do this! So this one does surprise us little!  But if there is an explanation, it’s probably a brand new landlord who is somewhat whet behind the ears and a bit excited about the prospect of being a landlord. Leave it a year and we’re pretty confident that the tenant, the LHA, the government, HMRC, journalists like you, the courts and the system will have ground them down to the point that they’ll probably wonder why the heck they even bothered being “friendly” in the first place!

10. If you plan on selling up, inform your tenant first, not last, as has happened to myself and several friends.

Given the notice periods needed for the landlord to get vacant possession, we can’t see how this could be the case.  But if it is, we don’t think tenants are going to need to worry  about this for much longer.  Looking at the ways the government, local authorities and other anti-landlord bodies are trying to restrict landlords businesses, some agencies and others are getting very excited about the world of anti-landlords and see it as an opportunity to stop landlords selling their property at all, unless there is a good enough reason ! like they may be facing bankruptcy for example! It’s hard to believe but it is actually true.

As in all walks of life, there are two sides to every story. Ms. Anderson takes the side of the Tenant, this is what she does and this is her right, but there is no balance in her article and there is a complete lack of understanding of the landlords side, but that figures!

Categories
Landlords Legal Tenants

Tenant Background Checks!

At some time or other, most landlords will experience some kind of problem with a tenancyit’s just the nature of the game! We hope serious tenant and tenancy problems don’t happen to you but they might, so you need to know what do you do to prevent potential problems in the first place.  Whilst the risks cannot be completely eliminated, it makes sense to use all the tools at your disposal to reduce those risks as much as you can, and to give yourself an understanding of the person or persons you are just about to grant a tenancy to.

A tenant background check is what every landlord needs before they grant a tenancy, but do landlords need to spend hard money on a tenant background check or are there ways of making an assessment of the tenant before committing to purchasing tenant background checks ? 

A Tenant Background Check is the “process of looking up public records, and commercially available records as well as the financial records about a particular person. Usually, a Background Check is a process  normally undertaken when someone applies for a finance, maybe a mortgage or a loan and in these circumstances, background checks are normally mandatory.

A Tenant Check for a landlord is not normally as in depth as one for Bank or Mortgage Lender but never the less provides sufficient information for a landlord who is keen to be certain that a potential tenant has no bad credit history or no eviction history.

Tenant Background checks are important because they allow the landlord to be more informed about potential risks of a tenant. However, there are ways of assessing a potential tenant before entering into the formalities of a tenant background check and here are just a few tips from OneLandlord.com

Gut Feeling

As the landlord, you will likely meet the person who is going to rent your property from you, good old fashioned “gut feeling” is about as good as any other barometer for initially assessing the potential of a tenant. True, it’s not going to give you information about their background, but you will be able to work out pretty quickly if you are happy to rent your property out to this person or persons. If you are happy with what you see and hear from them, you can move to the next step and arrange formal background checks.

Social Media:

Today, most people live their lives on Social Media and the information they put out there is normally in the public domain, so it’s really easy to find and it can give a great insight into someone’s life style, and the kind of person they are.  It never ceases to amaze us what people will put on Social Media and what you see in person may not be the same person who appears on Social Media, and what they tell you to your face, may not be the same as they reveal on Social Media. We think that Social Media is one of the best ways to find more about potential tenants and whether they are who they say they are!

Google Search:

A Google Search of the persons name can reveal a great deal about someone, even news events and press publications can be found easily with the help of a Google Search. In the past, we have uncovered serious criminals from a simple Google Search, revealing things which no Tenant Background Checks could have ever revealed!

On Line Tenancy Application

At OneLandlord.com, we have created a unique on-line tenancy application which helps landlords assess the suitability of a prospective tenant. The Application will check for certain information revealed by the prospective tenant and will inform you if there are any concerns. It won’t make a formal assessment or approval, only you can do that, but what it will do is highlight points which you may not otherwise consider and it will allow you to either decline the application or proceed to the next stage, which of course is the formal tenant checks, in other words, it will help you filter out non desirables and time wasters before you spend any money on background checks.

Tenant Background Checks

The types of Tenant Background check you may need, depends on how deep you wish to dig and about the minimum information you need, these could include:

Credit Check – Address Verification
Credit Score –
ID Check
Right To Rent Checks
Employment References
Landlord or Lender Reference

The bare minimum should be a basic credit check, but we believe that it’s always worthwhile putting calls into employers and landords (where applicable), just to find out as much as you can about your prospective tenants.

What You Should Be Careful Of !

Most landlords are trusting, some might even say naive and this can be damaging!  What we say is that you should take a step back from your normal trusting nature and make an assessment based on the fact that despite how nice your prospective tenants may appear, you don’t know them. This is simply our experience, but we suggest that you be suspicious of anyone who is not listed on the Voters Roll, especially if they cannot be traced at all, or if they have not been on the Voters Roll for some time. It is not illegal not to be on the Voters Roll, and it’s certainly not uncommon, but it is also quite common not to show on a Voters Roll search when someone is trying to hide an address for some reason, maybe because they have bad debt or even an eviction at the previous address.

In circumstances where a person is not listed on the voters roll, you must insist on some form of proof of residency (POR), such as bank statements, utility or council tax bills or other official documents, but never ever accept personal mail!  You should also try to obtain proof of residency for the period that they have said they live where they live, not just for a snap shot month or week. For example, let’s say that a prospective tenant has stated that they live at an address and have lived there since 2015, a search does not show them listed on the Voters Roll, so as a bare minimum, you need them to prove that they actually do live there and that proof should be one item of proof from each of the last three years. If they do not come back to you with that proof, then it’s likely they weren’t telling you the truth in the first place!

Bad Debts, CCJ’s etc.

This is a judgement call for you to make, many people have “blips” on their credit file and it does not mean that they are going to be a problem, but if banks and building societies use this information to make an informed assessment of the risk, then you should too, if it’s good enough for them, then it has to be good enough for you!  Don’t simply ditch the prospective tenant because of a poor credit score or a judgement order, there may be a reasonable explanation, but use the information you have available, combined with all the other information you have to make an informed decision. However, where there is a poor credit rating or bad debt showing on someones profile, then the old caveat is very relevant “buyer beware”!

We hope that this article has helped you understand what you need to do to make a reasonable assessment on a Tenant, one final thing we would say is that if you are unsure, or there is a bit of a blip on their credit file, but you feel that you would like to offer them a tenancy, then only do so with the support of a Guarantor or you might regret it later!

OneLandlord.com provides Tenant Background Check to Landlords to find out more, to to www.oneandord.com 

Categories
Landlords Legal Political Tenants

Death of the AST!

As the the current housing minister announces a consultation period on three year minimum tenancies, with minimum grounds for eviction, (read here), alongside “Generation Rent ” asking that landlords should not be allowed to sell their properties to FTB’s, (read here), should private landlords be asking themselves whether they are going to get trapped in a market which is moving more towards secured tenancies than assured short hold tenancies, and if they do get trapped, what are the escape routes?

The suggested longer term tenancy model is a three year tenancy with a six month break clause. The main components would be:
Three year tenancy but with an opportunity for landlord and tenant to leave the agreement after the initial six months if dissatisfied. If both landlord and tenant are happy, the tenancy would continue for a further two and a half years.
Following the six month break clause, the tenant would be able to leave the tenancy by providing a minimum of one month’s notice in writing.
Landlords can recover their property during the fixed term if they have reasonable grounds. These grounds would be in accordance with the existing grounds in Schedule 2 of the Housing Act 1988 and include antisocial behaviour and the tenant not paying the rent. Landlords must give the tenant notice (which would follow the notice set out in section 8 of the Housing Act 1988 for the ground or grounds used). Additionally, there would be grounds which covered landlords selling the property, as is currently possible in the model tenancy agreement, or moving into it themselves. These grounds would require the landlord to provide at least two months of eight weeks notice in writing.
Rents can only increase once per year at whatever rate the landlord and tenant agree but the landlord must be absolutely clear about how rents will increase when advertising the property. Any agreement on rent should be detailed in the tenancy agreement.
Exemptions could be put in place for tenancies which could not realistically last for three years, for example, accommodation let to students or holiday lets.

As landords, we are expecting to get the raw end of the deal, let’s face it, we don’t have much public support do we? If we take the current rules of engagement, we can expect that a three year tenancy will restrict the rights of a landlord even further, making it almost impossible to gain access for such things as inspections or to re-let, and it will no doubt increase the landlords responsibilities for maintenance and repairs.

It’s true to say that many landlords may not be against longer term tenancies if they did not detect the smell of being conned, but they do!  Most landlords are only too happy when they have tenants who pay their rent in full and on time, behave in a responsible way and look after the property in a responsible manner.  But these tenants are the exception and not necessary the rule, and it is this which is not understood by our legislators and Generation Rent.

Most landlords will find it difficult to recall a time when they were asked for a tenancy for much longer than 12 months, let alone 36 months so is there really such a large call for three year tenancies? (Labour want 5 years!). Despite the consultation period, we don’t think the Government will listen to landlords and most think it’s a done deal.  It is likely that landlords would have to  offer a three year tenancy as a matter of course, but that the tenant may be allowed to choose not to accept the term, so would that mean that they revert to an AST, and if so, what would be the minimum?  And what would happen to the short-term let sector, where flexibility is of the essence, there has been talk of scrapping six month tenancies, but what about people who want a six month tenancy, or less, this is a huge market for the PRS  and we predict a disaster if this isn’t taken into consideration.

Would there be new laws for gaining possession of a longer term tenanted property?, surely, there would have to be!  We can imagine a situation where legislators consider the length of time a tenant has occupied a property when relating to the notice period they should be given for possession/eviction by the landlord.  Currently, a landlord must provide a tenant with two months notice period whilst the tenant must provide the landlord with one months notice period, and no notice period at all if they leave on the last day of the fixed term tenancy. Now if that seems somewhat unfair (which it is), consider that this rule is for a six month tenancy, what would the notice period be for someone on a three year tenancy who had by definition “created a home”? Our guess is that it’s going to be much longer than two months, and if it isn’t in the early launch period, it won’t be long before it is.

Any landlord who has experienced an eviction will know the cost in both time and money, and longer term tenancies will mean longer and costlier eviction periods given the current system. It is likely that the only way a landlord will be able to gain possession is under the current Section 8 rules (expect these to be amended) and given the calls for the abolishment of Section 21, which will probably come about at some time in the near future, landlords should not think for one moment that Section 21 will apply for long term tenancies, it won’t be around to apply!

But if we dig deeper, other problems appear;  as an example, what about a landlords breach of their mortgage covenant !  The vast majority of private rental sector property is mortgaged with Buy To Let lenders, and those lenders are only in the sector because of AST, which allows them a reasonably speedy recovery period (possession) of their security should they need to possess. With the introduction of three year tenancies, lenders will not easily be able to gain possession of their properties which will mean that many, if not all landlords will be in breach of their mortgage terms, surely lenders will not allow this to happen without legislation to protect themselves.  Or if lenders are not responsive, perhaps the government can apply the three year minimum term rule to properties that are purchased after March 2019 and for unencumbered properties?  You can see the BTL market coming to a complete halt, would you go out today and purchase a BTL?

Here at OneLandord, we simply do not accept that there is such a big demand for three year tenancies, yes, Generation Rent may have some valid points about families putting down roots, but we don’t believe it is a national problem.

The vast majority of landords do not get asked for long term tenancies;  in nearly all cases, tenants want an initial six to twelve months, with an option to renew or they are often happy to go periodic after the fixed term. The flexibility that short term tenancies offers the PRS far outweighs the need for longer term tenancies and in many parts of the country, it would be almost impossible to rent properties with a three year term. AST’s provide flexibility to tenants as well as landlords, people on short term contracts, people on minimum income and benefits etc cannot and will not want to commit to three year tenancies, we simply believe that if this proposal is pushed through, it will backfire and will have a detrimental affect on the investments made by landlords into the PRS.

You may not agree with our comments or even our sentiments, but if you do, and because we think this will be a very significant change to the PRS, we are asking all our OneLandlords member to complete the on-line Government Survey with their views about this proposal,  and you can do this by following this link

Martin O’Hearne

OneLandlord

Categories
Can You Believe It ? Landlords Political Tenants

Oppressive Landlords !

We simply have to write in response to yet another “landlord hate” article from the Guardian. Written by Penny Anderson, this article is about the Governments proposed minimum three year tenancy period and goes a long way to show that Ms Anderson has little or no understanding of the Private Rental Sector, or even the larger world.

To read the article, click here

The article starts with Ms. Anderson’s nostalgia of the private rental sector;

“In the good old days, when knights were bold and children were happy with an orange for Christmas (that is, about 20 years ago) life for flat-hunters was simple. Find a flat; view it; decide you like it; maybe grab a quick landlord reference; pay one month rent in advance then another month as a deposit; and hey presto, in you move”

What she conveniently forgets is that industries and sectors mature, lessons are learnt (many at great expense) and those lessons are acted upon, normally by those at greatest risk, and in this regard, landords are no different. Twenty years ago, landords may have been trusting, even naive, but with experience of tenants and how the system and the courts work against them, landlords are no longer quickly and easily going to hand over their highly valued asset to someone they have never met before, before at least doing some due-diligence!

Her complaint appears to be that landlords are simply becoming too cautious, that pre-occupancy checks are too complex and she’s even complaining that many housing associations are now insisting that prospective tenants demonstrate their benefit to the community!  Well, what a great idea, and exactly what is wrong with that?  I have no doubt that Ms. Anderson will live in some leafy suburb where the only noise she will experience will be the barking of a Pug dog as the post man delivers the post, or the cooing of the Doves as they wake in the early dawn, but to those living in Social Housing, knowing that your neighbour is not a raving nut-case who is going to hold all night parties and stink the landings out with the smell of Wacky-Backy can only be of great relief, and it smacks of hypocrisy that this policy is criticised by those crying out for landlords to be more responsible.

And her criticism of landlords does not stop there, she goes on to write;

“Tenants get no assurances from mysterious landlords, who could be dangerous criminals or serial bankrupts about to lose the property. Must landlords provide proof that they, too, have never paid a utility bill late? Of course not”.

It’s hard to believe that such a naive statement could be written by a professional journalist!  Didn’t it cross her mind that tenants too could well be criminals and indeed bankrupts or may have been evicted for not paying rent?  If it didn’t, let me tell her that bad tenants do exist, tenants do try to hide bad debt and evictions and there are far more cases of landords being attacked, and even murdered, than there are of tenants being attacked. Landlords, especially those dealing with “vulnerable tenants” run huge risk to themselves and their properties and nobody blinks an eye-lid.  Landlords do not have access to the criminal register to check if tenants could be dangerous criminals, murderers or pedophiles, but is seems in Ms. Anderson’s world, that it is only landlords who have the potential to be dangerous criminals, with everyone else being the victim?

Landlords face huge costs when a tenancy goes wrong and when tenants stop paying rent, any landlord who has experienced the process of possession or eviction will know what it entails; the cost is huge and the time is extreme. Landlords should be entitled to take what ever references they need to satisfy themselves of the risk they are taking. In other industries, it’s called a Risk Assessment and is pretty normal across the board.  Would you expect to get a mortgage or a loan without providing proof that you can afford it or proof that you have a good credit rating? Would you walk on scaffolding without knowing it wasn’t going to collapse,?  So why can’t a Landlord employ a “risk assessment”?  And wouldn’t it be irresponsible of a Landlord to allow a person to take on a property that they could’t afford, no doubt Ms. Anderson and her chums would quickly blame the landlord for being irresponsible when the tenancy goes wrong.

I absolutely refute that all landlords require a pristine credit rating, but where there is evidence of a bad debt, such as a Money Order (CCJ) or bankruptcy, the landlord has every right to know about the circumstances so that they can make an assessment and if necessary, they are within their rights to ask that that tenancy is supported by a Guarantor, there is nothing wrong or onerous in that. And to imply that Landlords are now asking for CV’s before granting a tenancy is simply rubbish and is really scraping the sensationalism barrel.

Where exactly is the balance in this article and why does Ms. Anderson write sweeping generalisations about landlords? Ms. Anderson may be or may have once been a tenant, we don’t know that, and she may have friends who are or were once tenants, again we don’t know that either. But what we do know is that being a tenant does not make her an expert in this field, walking a mile in a landlords shoes may go someway to helping her understand her subject matter before writing such hateful statements in future.

The solution we are told by Ms. Anderson is affordable social housing;

“The solution is a mass programme of genuinely affordable social housing, with rents at roughly one quarter of average incomes, as in the olden days. This would mean tenants could afford their rent, unlike the current situation where they struggle to pay, not because they buy avocados for all their friends but because rents are stratospheric”.

From what we can make out, Ms. Anderson is suggestion that the Private Rental Sector is abandoned and that everyone currently living in PRS property moves en-mass to Social Housing when it is built (when!). Can you imagine a situation where people don’t have a choice, are housed in purpose built, in-expensive (because with the level of building proposed, it will have to be cheap), badly designed property (because it always is), living next to tenants who have not been vetted (because that will be outlawed in Ms. Anderson’s solution)? What a great idea, let’s make everyone equal and put them all in Social Housing, just like the Soviets did!

The vast majority of  landlords are good people who simply wish to rent their property and get paid, that’s all they ask. They don’t seek to run it as their full time business and they don’t seek to become rich. All landlords know that as with any walk of life, there are some bad people amongst them and landords will readily acknowledge this, unfortunately, it hard to get some people to acknowledge that there are are also bad tenants.

Some tenants may want three year tenancies, but the overall majority do not. In the 20 or so years that I have been a landlord, I cannot remember once being asked for a three year tenancy, in fact, I’m certain that this would have scared plenty off!  I have no doubt that in the interest of chasing votes (which by the way, they will not get), this government will not listen to landords and will push this policy through.

We have no doubt that Tenants will be able to sign up to a three year tenancy and leave when they want to leave. Landlords will be forced to grant three year tenancies but will not be allowed to get their property back when they want, that is pretty much the experience of landords anyway, so not much will change except the problems become bigger and more expensive for landlords. So may we suggest that whilst they are re-writing the tenancy laws, and to help avoid any further confusion for landlords, the Tories should rename the Landlord and Tenant Act theTenant and Tenant Act!

 

 

Categories
Evictions Landlords Legal Possession Section 21 Section 8 Tenants

“Evicted For No Reason”

On Wednesday 21st February, the BBC aired their flagship documentary programme, Panorama, and this week it was about the Private Rental Sector and what has become known as “No Fault Evictions”.  This programme has come about because of the widely debated Section 21 Notice and whether tenants deserve more protection from Landlords, or whether new rules to outlaw the Section 21 would make the housing crisis worse. Some still say that The BBC strive to be impartial, many others have different thoughts.

In my view, this programme was heavily tilted towards the Tenant and their rights and did not interrogate them about their responsibilities.  The continued use of the term “No Fault Eviction”, which has become fashionable from such anti-landlord places like “Shelter” and “Generation Rent” was a blatant attempt to brainwash the viewers into thinking that tenants who are served this notice are not at fault.

The reporting positioned the viewer to believe that Landlords were simply turning tenants out of their homes and kicking them out on the street for no reason whatsoever (no fault). The programme never sought to explain the process of the Section 21 (that is the correct term for this possession notice) and why it came about in the first place, and that a Landlord has to go through a process and the Courts for the eviction to be legal. The reporter, Richard Bilton didn’t explain the law and how it protects tenants who are in a Fixed Term Tenancy, nor did he explain the many reasons why a Section 21 cannot be served, and he didn’t even attempt to mention the many imbalances in the law which favour tenants, one for example where a tenant does not have to give a Landlord any notice to bring a fixed term tenancy to an end (they can simply up and leave on the last day of the tenancy without giving notice) whereas the Landlord must provide the tenant with two months notice at all times – how does that sound fair ?

Richard Bilton stated that last year that there were more than 24,000 of these “No Fault Evictions” (perhaps making the viewer think that 24,000 households were kicked out of their homes without one single fault!). The implication that Landlords kicked 24,000 households out of their homes simply because Landords felt like it is a dreadful accusation and should never have been allowed to go unchallenged, and of course, the reporter asked the inevitable question “So should tenants be evicted when they haven’t done anything wrong?”

Later in this article I have written about what I believe the BBC should have investigated if they are to be seen by all their viewers and licence fee payers as being impartial and balanced, but before we get there, here’s an overview of the story line and my comments about the particular tenants in this “documentary”.

The McGlashan Family

Richard Bilton introduced us to the McGlashen family just as they were packing up their household belongings and loading them into a Van. The viewer was told that “They have fallen out with their Landlord” but we were not told to what extent that fall out was and what caused it in the first place, we simply had to believe that there had been a falling out. We were then told that the Bailiffs were due to turn up “tomorrow at 11.00 am”. If you know what the process for the Section 21 is, this meant that the McGlashen’s had taken their “fight” all the way to the very end and had not left the property on the anniversary of the two month notice period, costing their Landlord more in Court costs. Most Landlords who have been through this experience will know that the time scale involved to get to the point of the Bailiff visit can be up to six months, well beyond the two months notice period, and during that period, Landlords can expect little or no rent.

Once again, we were reminded that this was a “No Fault Eviction” but we did know why the tenant had fallen out with her landlord, obviously it wasn’t her fault!  We were also told that the Landlord wanted to increase the rent by £400.00 per month, which was another reason for the eviction. As a percentage, could you imagine what level of increase the rent would be if  increased by £400.00 per month? it would be huge by any measurement, but yet again, it went unchallenged and without proof.  With no independent evidence to confirm this alleged rent increase, we were left with Laura’s word against the Landlords.

As the the family were now officially homeless, they were moved to a B&B because they could not afford London rents. The B&B looked pretty bad to say the least and I have every sympathy for anyone who ends up in a place like that, but I am not convinced that the reasons behind this eventuality are wholly the Landlords and that the Tenant was totally innocent and at no fault.

Laura’s story ended with her leaving the B&B and being found a property, which of course is good news. We were told that the she didn’t get the time to move her furniture out of the property and now her landlord is ignoring her calls. If that is indeed the case, then the Landlord is breaking the criminal law so Laura has redress and she should use it. Tenants are very heavily protected in this respect and I know many Landords who are frightened to even go anywhere near belongings obviously abandoned by tenants, long after they have left. We were then told that Laura had lost her job and that she blamed it on the eviction and moving home, but she would wouldn’t she?, and all along, the BBC let all of this go unchallenged!.

Richard Bilton quite rightly pointed out the importance of the Private Rental Sector (PRS), but added that it’s growth was due to the housing shortage. Around 13 million people access the PRS, so couldn’t the growth of the PRS be to do with such things as migration, changes in how households now live together (or don’t), or even the flexibility that the PRS offers our flexible workforce? It’s just a thought, and worth throwing into the mix!

He also stated that Tenants in the UK were the least protected in Europe but we were told by a Solicitor specialising in Housing Law that the rules and laws are mostly in favour of the tenant, something which every Landlord know to be true, and which this reporter should have investigated further, after all, the BBC managed to find the time to establish that the UK PRS is less regulated than their European counterparts. Had the BBC investigated the solicitors remarks, they would have found that she was indeed telling the truth.

Ava from Croydon

Ava was now living in a Converted Office Block after being evicted twice before, apparently both under Section 21(no proof of that!).She’s now homeless so the Council have housed her in the “office block”, which actually is a flat which has been converted from an office block – obviously, they wanted you viewer to think that she had been kicked out under a “no fault eviction” and that she was now living in an some old office!. Despite working full time, Ava couldn’t afford another rental home after her two evictions and that this was the fourth place she had lived in in eighteen months, that was something I certainly wanted to know more about but we didn’t find out!  Why was Ava evicted on two previous occasions and why wasn’t she interrogated on this point and could these “evictions” have something to do with her not going back into the PRS,? I suspect so. Surely, two evictions and four moves in eighteen months would warrant questions from any self respecting reporter, living in four properties in eighteen months should certainly raise more questions.

Julie The Beautician

It was claimed that Julie was the victim of a “Revenge Eviction” for complaining about her property.  We were told that Julie had lived in the house for four years and had always paid her rent. Apparently, she complained repeatedly about problems such as a leaking shower. We were also told that Julie was offered a new lease, which she didn’t sign and after three months the Landlord issued the eviction notice. I couldn’t believe this too!  This lady has accused the Landlord of evicting her for her simple complaint about the leaking shower, but he then offered her a new tenancy,  which she chose not to sign, does this make any sense?  Exactly what is the Landlord to do in a situation where a tenant will not renew their tenancy, just wait around until they decide they will? We were told that Julie’s Landlord had said he carried out the repairs but was fed-up with her trivial complaints and that was her only “fault” but did you really believe this?  As a Tenant, it is Julie’s prerogative not to sign a new tenancy agreement but it is also her Landlords right to ask her to leave if she chooses not to sign, what is wrong with that? Could you imagine a situation where Tenants could do what the heck they wanted but Landlords didn’t have any power over the properties they actually own?  One thing is for certain, if that happens, the PRS in this country will collapse overnight.

Julie also stated that she had spent nearly £40,000 to “live here” and she’s got nothing to show for it.  May I remind Tenants and Julie in particular, this is called rent, you are paying for a roof over your head, that is what you are paying for ! Julie’s story ended by being told that the property she was going for had “fallen through” and that her “bad landlord” had extended her tenancy. In the end, she managed to secure another property and that’s a good news story, but I for one would really like to know the true extent of what caused Julie to lose her property in the first place!

Then Richard Bilton gave a brief section of the programme over to a Landlord (yes, that’s correct, three tenants, one Landlord) and how precarious the PRS can be for them too, actually saying that “bad tenants can quickly cost you thousands” (under statement) and that Section 21 evictions can feel like a lifeline for Landlords – he now refers to it as a Section 21 Notice and not a “No Fault Eviction”!

Francis Carpenter

Francis works as a hotel cleaner and also rents out two properties and she’s not happy with one of her tenants and despite her punk appearance (no issues there, we were all punks once), she is very typical of an amateur Landlord. It seems that her tenant has been a bit naughty and installed a satellite dish and changed the utility meters without permission, the rent was late and then the tenant decided that he couldn’t pay and wanted to pay half the rent at the beginning of the month and half at the end.  Obviously, Francis is going to be hugely out of pocket, rightly pointing out that you can’t go to a supermarket and pay for some of the shopping now and the rest of it later.  Richard Bilton said that the tenant always paid the rent “eventually” and that he had a school aged daughter and the eviction could leave them homeless, perhaps he should have thought about that!  He asked the Landlord if she was being a “bit brutal” by using the Section 21, but it seems to me and to anyone else that this was probably her only option. It appeared to me that the reporter was quite nonchalant about the rent, stating that the rent was paid “eventually”!   But just how would he feel if the BBC didn’t pay his wages when they were due and got round to paying him “eventually” ? Like him, the Landlord has bills to pay so why is it acceptable?

What has happened here is a breakdown in the relationship between the Tenant and the Landlord and my impression is that if the Tenant had adhered to the obligations of his tenancy, this Landlord would not have been seeking his eviction, why would she? this is true of most eviction situations.  Oh, and just one other small point, this tenant has been evicted twice before, but yet again, this was mentioned as an aside and we didn’t get any information on this.

Francis has been trying to evict the tenant for five months, the court have granted the tenant for an extension to the eviction and this has been granted!  Francis is typical of everyday Landlords, she works full time and rents out one or two properties, she probably can’t afford rent arrears because she will have a mortgage to pay and the legal costs associated with evictions will likely cripple her,  but because she’s a Landlord, she will always be seen as the villain of the piece.

Scotland

The law has changed in Scotland and Section 21 is no longer permitted, but we are told that the new rules offer something for “Landlords too” in an attempt to show that it works both ways; fairness and all that!. Apparently if tenants are three months in arrears, Landords can then get them out ! Could you imagine not paying somebody their wages for three months, or small business’ being unpaid for three months and then having to go through the process of “getting them out”! The BBC presented the Scottish abolition of the Section 21 as a good move, but it is far too early to know this yet and how could they know this in any case? From the Landlords I speak to who have property in Scotland, most of them see this a big mistake and a backward step which will result in a reduction in investment in the Scottish PRS, time will tell but you cannot force Landlords to buy properties, but they can choose to sell!

The Section 21 Notice

In my experience, a Section 21 is nearly always used because the Landlord needs to guarantee possession of their property and does not trust the Courts to give them that guarantee when they use a Section 8 Notice (which is the other option).   Section 21 is normally used for the following reasons;

  • Landlord-Tenant relationship breakdown.
  • Tenant not paying rent on time or not paying the rent at all.
  • Tenant not looking after the property.
  • Tenant wilfully damaging the property.
  • Landlords personal circumstances have changed.
  • Landlord wishes to sell their property (usually accidental Landlords).

What some members of the media and some politicians are implying is that when a tenancy goes wrong, Landords do not need to use the Section 21 Notice because (if there is a fault), they have recourse to the Section 8 Notice. The majority of the Grounds (or faults) for which a Landlord can issue a Section 8 Notice are known as  “Discretionary Drounds”,  which means that the Court has the final say or “discretion” as to whether or not to grant possession of the property to the Landlord (their property by the way!).

Because the Courts do not like making people homeless, they will nearly always use their “discretion” to prevent this from happening so on the whole, they will not evict tenants unless they really have no choice and that would only be because the notice is being issued using one of the very few Mandatory Grounds (more on that later).  But even then, the tenant can frustrate the process and purposely delay the eviction, even when proof exists of their fault.

The very least the Panorama team could have done is explain why Landords often have little choice but to resort to the use of the Section 21 Notice and whilst it is somewhat complicated to explain, the viewer needed to be told that the use of Section 21 is nearly always because Landlords does not trust or have confidence in the Courts to act in their interest, despite the reasons and evidence provided. Using two examples, one of Rent Arrears and one of Anti Social Behaviour (which are the most common grounds for eviction), I will try to explain as simply and succinctly as I can why a Landlord would choose to use a Section 21 notice and not a Section 8 notice .

Rent Arrears

If a Tenant is eight weeks in arrears, the Court must grant possession of a property when a Landlord serves a Section 8 Notice, this is because being eight weeks in arrears comes under the  Mandatory Possession rules.  This “fault” is actually known as a “Ground” and eight weeks in arrears is Ground 8 of Section 8, and is the most common reason why tenants are served with a possession notice. However, if the tenant is less than 8 weeks in arrears, let’s say they are 7 weeks, it is no longer classed as a Mandatory Ground but becomes a Discretionary Ground, which means the Courts have the discretion wether to grant possession of the property to the Landlord or not. Experience shows us that when a tenant gets to this level of arrears, it is highly likely that the relationship with the landlord has already deteriorated beyond being salvaged (tenants don’t return calls, avoid contact with the landlord, ignore the situation etc) and by this point, the landlord no longer trusts the tenant and wants them out. But if you are faced with a situation where the Court will not grant you (the owner of the property) possession because there is no “mandatory reason” to do so, you may be forced into going down the Section 21 route, which would guarantee you the possession you are seeking. In this example, anybody with any amount of intelligence can now see that all of a sudden, this route is no longer a “No Fault” eviction but is a “No Option” eviction. The Landlord does not trust that he will get possession from the Court so he opts for the guaranteed route, and who can blame him?

Anti Social Behaviour

Under Section 8, there are five Mandatory (guaranteed) Conditions under which a landlord can obtain possession where a tenant is guilty of anti-social behaviour;  The tenant, a member of the tenant’s household or a person visiting the property has been –

  1. Convicted of a serious criminal offence and the offence was committed on or after the 20th October 2014.
  2. It has been found by the Court to have breached an anti-social behaviour injunction (obtained under Section 1 of the Anti-Social Behaviour Crime and Policing Act 2014 (ABCPA 2014).
  3. Convicted for a breach of Criminal Behaviour Order obtained under Section 22 of ABCPA 2014.
  4. Convicted of a breach of a notice or order to reduce their noise in relation to the tenant’s property under the Environmental Protection Act 1990.
  5. The tenant’s property has been closed under a closure order obtained under Section 80 of ABCPA 2014 (what used to be known as a crack house order) as a result of anti-social behaviour in or near the property and the total period of closure must be a continuous period of more than 48 hours. This applies whether the closure is under the order itself or under a preceding closure notice which has to be served before the closure order can be made.

That’s all well and good, but the problem with these “Mandatory Grounds” is just how are they enforced if a Landlord does not know whether or not any of these breaches have occurred, or even if the Tenant has a criminal record or has a violent past (or worse) when they are not allowed to do the necessary and important background checks which would reveal this information?  Could you imagine trying to enforce a Ground of which you cannot obtain any evidence? You couldn’t make this up!

Most people would consider Anti Social Behaviour to be bad behaviour!  But all other aspects of Anti Social Behaviour (the ones which you and I would not put up with) are classed as “Discretionary Grounds”, meaning that the Court, (not you or the tenants neighbours) will decide whether or not the tenants behaviour was indeed Anti Social.

So, let’s assume you have a house full of cannabis smoking, loud music playing, property destroying tenants, and to add insult to injury, they’re one month behind with their rent! Of course, they weren’t like this when they took the tenancy, but Landlords are often trusting and naive!  Understandably the Landlord (and the Landlords neighbours) would like the tenants out;  the neighbours are calling the Landlord all the time about the problems, the noise is constant and the street stinks of cannabis, not to mention the swearing and general bad behaviour.  The police won’t help as they say that smoking cannabis for personal use is no longer classed as illegal and noise is not a problem for the Police but a problem to be dealt with by the local council (and we all know how long that takes to sort out). So, if this Landlord serves the Section 8 Notice using the relevant Discretionary Grounds, the Court will make the decision as to whether or not to grant the Landlord possession of their property and they will insist on evidence, so the Landlord would be expected to get witness statements and perhaps even video evidence!

And then there’s the cost to consider; It is the Landlord who has to pay out for any Court Action taken against the tenant and those costs do not come cheap!  Could you imagine a situation where you pay upwards of £1,000 for Court Action only to be told that you cannot have your property back and the tenants simply get a slap on the wrist. You are told to come back if the problem persists, and guess what? – you have to pay again for the privilege!  The Landlord and the neighbours know that their tenant won’t change and that not too far in the future, they will have to go back for another hearing.

But a Landlord could also go down the Section 21 route, and this would guarantee possession of the property, without any further court costs or court visits or without having to gather evidence to prove what everyone already knows. If you were this Landlord, what would you do? You would take the so called “No Fault Route” wouldn’t you? because you have no other reasonable option . but to take the “No Option Eviction”

These are just two examples of the decisions which Landlords have to make every day. I am not saying that the Section 21 route is not abused, it may well be, but to suggest this is happening on an industrial scale and using the scare mongering term of “No Fault Evictions” is simply unfair, unfounded and a the lack of investigation is a dereliction of the duty of a professional journalist. This Panorama”investigation” has left more questions than it has answered. In the interest of fairness and balance, I have tried to do Panoramas job and explain the Landords side, one which seldom is told and is probably more nearer the truth than the one which Panorama put out.

Where will this lead?

We now know that Section 21 is the target of such organisations as Shelter and Generation Rent and they have support of Labour who think that Section 21 should be banned across the UK. The present Government disagree with this, but they are very flakey and they run with the Hare and hunt with the Hounds so you can expect this to change as the political wind changes direction.  And we also know that many of the Labour loath private landlords and view property ownership as theft so you don’t have to be a genius to know what the life of the Private Landlord will be if Labour gain power!

Section 21’s were originally brought in to remove the stall in an under invested and backward rental market and it worked. Lenders started lending, funding the growth of the PRS and we all know that funding is the life line of any business and of all economies. Lenders have a responsibility to their borrowers, not to tenants so outlawing Section 21 is highly likely to send Buy To Let lenders running for cover. A bank cannot possibly lend to a Landlord who cannot regain possession of their property, (and it is very important to remember that it is the Landords property) or whose attempts to regain possession of their property are frustrated at every opportunity by tenants. local authorities, citizens advice and the courts, which in turn is supported by the political elite. Removing Section 21 will put the breaks on landlords investing in this sector and will cause many to leave!

And finally, we know that millions of people have arrived in the UK in the last 15 years and many more are yet to arrive. Just exactly where of how would these people have been housed without the assistance of the PRS, and where will they be housed in future without a strong PRS?. No matter how many promises are made by our politicians, they will never build the amount of housing which this country needs, not now, not ever, so they meddle with the PRS at their peril!