Categories
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 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
Legal Political

Animal or Landlord Rights ?

Today we hear yet another announcement from the Labour Party about the Private Rental Sector. According to reports this morning, under new plans being unveiled by Labour, renters could be given the right to keep pets as Jeremy Corbyn seeks to become the party of animal welfare (he’s certainly not seeking to become the party of the Landlord!)  – Read More 

“Labour will today promise to do more to stop people who do not own their home from having to give up their pets when they move, amid fears animal shelters are seeing an increase in abandoned cats and dogs”.

Are these politicians completely out of touch ?  If there was ever a statement which proves that they do not understand the sector they are meddling in, this has to be the one!  Forget previous none thinking missives; such things as Rent Control and the outlawing of “No Fault Evictions (Section 21)” (they can say not fault, but Landlords know differently), to name but two. This one finally proves they don’t have a clue about the PRS and the life of a Landlord, but they probably don’t care!

Do these politicians really think that Landlords who do not allow pets do so because they are not animal lovers themselves?  Landlords who have this policy, (and it’s not all Landlords) do so because they probably had a bad, and expensive experience, not because they are animal haters!

This might come as a bit of a surprise to our elites, but Dogs chew doors, skirting boards, architraves etc, not to mention that they leave pretty bad dog odours and other things!  Cats scratch, they do the same to doors, and to woodwork and they particularly like wall paper, and not surprising they also leave odours and other things!. Indeed I spoke to a Landlord only this week who was in utter shock when she found that her tenant had a reptile house in their home which resulted in the complete destruction from high levels of condensation of the bedroom it was housed – caused by the high levels of humidity these reptiles need to survive!, and the tenants?, well they left without a trace!

I deal with Landlords everyday who are having issues with tenants not paying their rent, yet they can afford dogs and cats and all the associated costs! where are their priorities? Then there’s the small question about animal management; many tenants simply cannot look after themselves, let alone their animals, these tenants live chaotic lives, so Landords are actually doing them a favour by not allowing pets. Whilst we understand that the Devil will be in the Detail, from this and their previous announcements, in my view, the Labour Party simply do not understand this sector.

Would this policy be an across the board policy? Houses in the countryside are far more amenable to housing dogs than small terrace houses in the inner cities are. How would this new law deal with high rise flats?  Often leaseholders conditions do not allow animals, would they then be breaking the law? And for good reasons, many Local Authorities do not allow animals too, how will that go down with the party faithful or will they be exempt?

If this policy is implemented, how would Landlords deal with it?  We know (because of impending legislation) that Landlords could not increase the amount of the Tenancy Deposits to accommodate what they know would be a cost to them at the end of the tenancy. Would they insist on a special Insurance policy for damage and what would that insurance policy cost and who would pay? Given that charging fees to tenants will be outlawed, would the landlord be expected to pay?. The simple facts are (and every Landlord will know this) that tenants will not take responsibility for the damage their animals do. Tenants are never going to call their Landlord to tell them that the dog has just chewed through the door and to ask them how much a replacement door would be are they?  If the Labour Party think they are, that not only proves their naivety, it confirms their lack of understanding of this sector.

What I say to the Labour Party is stop meddling in something you clearly do not understand, you are doing this for ideological reasons and certainly not for practical reasons. I can see exactly where this is heading and it is my view that something more sinister is afoot!  You can see in time where Landords will not be able to decide on who takes their tenancy and lives in their property, that will be decided by the Government, where will this stop?

Politicians of all parties need to stop for a moment and think about the sector they are constantly attacking and what the consequences of those attacks might be. This sector is essential to the economy, in more ways than one. There are 1.75 million landlords renting out in the region of 14 million homes in the UK and no amount of house building or political promises will be able to replace this scale of renting or get even anywhere near to it, so meddle at your peril!

What the politicians need to quickly realise is that Landords are free (at least at the moment!) to decide whether or not they want to remain in this sector.  When you take away their right to decide what is best for their property and their business (properties they actually own- although you wouldn’t thinks so!) it’s likely that they are going to start to exit the sector, or at the very least, they’re not going to re-invest, especially if they think that the world and their dog are against them!

Martin O’Hearne

CEO OneLandlord.com

 

Categories
Can You Believe It ? Legal Political

Proposed Legislation….

Secretary of State for Housing Sajid Javid confirmed that the government will support new legislation to ensure rental properties are safe for tenants.

The legislation, which will also allow tenants to take legal action when faced with rogue landlords, will be enforced by local authorities. They will be given the power to deal with both social and private sector landlords who rent out unsafe or substandard accommodation.  I find the term “Rogue Landlord” very interesting, who will define what exactly a Rogue Landlord, is it someone who rents out a one bedroom flat to 30 people, or is it someone who doesn’t answer his phone after eight at night?  You might think the answer is obvious, but how can it be?  The term “Rogue” covers such a wide spectrum, for example, is a Rogue  “a dishonest or unprincipled man?” or is a Rogue “a person whose behaviour one disapproves of but who is nonetheless likeable or attractive“?  Both of these are defined in the Dictionary as being Rogues!..

Ok, maybe we’re not so dumb and we can work out what a Rogue Landlord is, but do you get my point? Unless this is thought through, the courts are going to be throwing cases out because someone objects to how they based their assessment of the word Rogue!.  And it’s the same for the assessment of what is “fit for human habitation”, who or what exactly is going decide what the bench mark of human habitation?  I’ve seen plenty of Students turn a perfectly liveable and habitable property into something you wouldn’t put a rat in, so who’s going to get sued in cases like that?  What if the Landlord decides that their tenants have made the property unfit for human habitation, are Landlords allowed to sue their tenants under the same act ?

The new bill ensures that landlords confirm that their property is fit for human habitation at the beginning of each tenancy and throughout the tenancy. Should a landlord fail to do this, the tenant has the right to take legal action in the courts for breach of contract. This will be on the grounds that the home is unsafe for habitation.

I read where the RLA are supporting this legislation, mainly because it brings Local Authorities and Housing Associations into the fold and we agree with that point.  But what the RLA failed to do in their press release was to push for supporting good Landlords by asking for equal legislation for Landlords to have a dedicated Housing Court where Landlords can quickly and effectively enforce the terms of a tenancy agreement rather than having to wait months and spending hundreds of pounds in the process.

It’s just one more attack in a long line of recent attacks against Landlords. There are many pieces of legislation already in place to force landlords to maintain their property and to be punished if they don’t and The HHSRS provides the councils with adequate powers to deal with and enforce virtually all aspects.

The old chestnut of tenants causing damage by drying washing indoors causing condensation in one of the biggest problems faced by Landlords on a daily basis but who is taking the side of Landlords to enforce tenants and their behaviour. If legislation is going to be introduced against Landlords, Landlords should no longer accept damage done by Tenants and should take this attack by MP’s as the turning point to sue tenants for causing damage to the landlords property and the cost of remedial works where they do not occupy the property in a good tenant like manner.

Landlords will need to wise up and start suing tenants where at present, they tend to let tenants get away with much more than they should and we can see that the upping the stakes will be inevitable as landlords are victimized by bully legislation.

Categories
Legal Political Tenants

The End Of Section 21 !

The end of 2017 saw an expected announcement from Jeremy Corby of Labours intention to do away with what has now become known as “No Fault Eviction” (Landlords will know this as a Section 21 Notice) should they come to power.  In 2017, the Scottish Parliament outlawed the Section 21 process of possession and it is yet to be seen what impact this and other recently introduced regulations have had on the Private Residential Sector (PRS).  We are now seeing a concerted effort to publicise the “unfairness” of what is now becoming known as a “No Fault Eviction”

Section 21 was fundamental to the birth of the modern PRS in the UK and it’s introduction released previously constrained mortgage lenders to enter the market in a way they had been unable to in the past. Funding accelerated and Buy To Let was born. Growth in what was until then a sluggish sector moved rapidly and mass housing rental became available to a new and flexible society, the rest as they say is history, only time will tell whether the removal of previous regulations was a good thing or a bad thing, but it’s hard to understand how the housing demands of an increased population would have been met without it.

Everyone associated with the PRS, Landlords and Tenants alike will have their own views on this proposed measure; tenant groups will will welcome it and maybe some Landlords will welcome it too, they will have their reasons.  Those Landlords who have experienced bad tenants and bad tenancy situations will probably not welcome it!  OneLandlord looks at this from the perspective of the Landlord and our view is that it will be bad for the PRS, resulting in Landlords exiting the market with the knock on effect of reduced investment in the PRS which will concentrate the sector even more into the hands of the corporates.

We do not dispute that there are unscrupulous Landlords operating out there, but for some reason, Tenant Groups seem to dispute that there are unscrupulous tenants and that it’s simply all the fault of the Landlord.  We speak to hundreds of Landlords every week over Tenant situations and in our experience,  Landlords do not serve Section 21 Notices without a very strong reason.  Landlords are having to rely on Section 21 because they mistrust the courts and the Section 8 route, they mistrust the system, they mistrust the Local Authority, who nearly always take to support the tenant, even when the tenant has breached their tenancy, basically, Landlords use Section 21 because they have been left with little or no other option.

There is definitely a “momentum” building for the abolition of the Section 21 Notice and a recent article in The Guardian highlights what some see as increasing the problem of homelessness of Landlords using Section 21 to gain possession of their properties, whilst others may see it differently.

Do you have a situation with a tenant that requires expert legal help, OneLandord.com has a team of highly experienced and dedicated legal experts who are here to help and to guide you through the eviction process.  Don’t let any situation get worse than it already is, put your own mind at rest by giving us a call today.

Categories
Can You Believe It ? Legal Political Tenants

Questionable Journalism !

Today I read yet another article in the Guardian attacking private landlords and the PRS, this one is clearly aimed at the “momentum” gathering in certain quarters for the abolition of Section 21 in England and Wales.  Here is a link to the article;  https://www.theguardian.com/inequality/2018/jan/08/how-eviction-leads-to-homelessness-my-youngest-child-doesnt-know-what-a-home-is

The article starts;

The single biggest cause of homelessness today is loss of tenancy – in other words, an eviction. An increasing number of these are “no-fault evictions” – meaning the landlord need not give any reason why they are turfing someone out of their home.

Homelessness and sub standard housing is clearly a serious issue for those poor people who experience it and OneLandlord.com sympathise with anyone facing such uncertainty. The Guardian gave four examples of desperate people affected by the housing crisis.  We feel that The Guardian are intent on making out that because of the use of Section 21 by Landlords, there can clearly be no fault (because they call it a no fault eviction) and therefore they are putting the blame on using this method on unscrupulous Landlords. What these commentators forget is that “no fault” means that the Landlord does not have to provide the reason (or fault) for serving the Section 21, it does not mean there isn’t one!

Kelsie and Shaun  – They were living in privately owned accommodation, but fell behind with their rent and were served with a Section 21 eviction notice.  Surely, any self respecting journalist would have wanted to learn the level of arrears that Kelsie and Shaun had run up, wouldn’t they?  If they “fell behind with their rent” then isn’t this some kind of “fault”, and not the Landlords! Is a Landlord expected not to act when rent arrears occur?

Tim:  It is clearly stated that Tim could not afford the Rent, but it looks like the Landlord is being blamed for acting.  Once again, wouldn’t it have been fair to have some balance and to find out from the Landlord what the level of arrears was before the Landlord acted on serving the tenant with the notice, I think there’s a bigger story here!

Siaron:   The Guardian journalist states that Siaron was served a Section 21 Notice in yet another attempt to make out that it was through no fault of her own, but again we only have one side of the story, the tenants side, we don’t have the Landlords so how do we know that the tenant wasn’t at fault ?

Pauline:

Pauline has lived in nine houses in six years and has been in five houses since her youngest was born!  Is it unreasonable to assume that Pauline has a problem with keeping herself and her kids in a property and that nine landlords (nine properties) can’t simply be “picking on Pauline”.  There has to be a reason why she has lived in nine houses in six years, could it be possible that Pauline is herself to blame for her evictions?   On the face of it, this story smacks of a chaotic lifestyle rather than anything remotely do do with “No Fault Evictions”

With Pauline, the Guardian journalist stated  “The family was evicted from one private house on a Section 21 notice and had just a fortnight to get out” This simply cannot be true, as anybody who has any understanding of Housing Law knows (and if you are reporting on it, you really should!) a Section 21 Notice must provide the tenant with at least two months notice and it cannot beak a fixed term tenancy.  Even when the notice has expired after two months, the landlord cannot gain possession without a court order so where on earth does this journalist get their two weeks notice period from? I suspect this journalist has the Section 21Notice mixed up with a Section 8 Notice, which does provide for two weeks notice and this is due only because of arrears of eight weeks or more, so just maybe Pauline was served with a Section 8 Notice because of her rent arrears, it’s a high probability and that then would not be “no fault”, but it’s yet another example of extremely bad journalism!

In all of these examples, there appears to be no attempt to balance the subject matter by contacting any of the Landlords for their comments. Why wouldn’t they want the Landlord to put their side of the story and in particular the reasons why a Section 21 has been used, or was it?  As anybody who is a Landlord knows, there is very rarely such a thing as a “No Fault Eviction” but you get the feeling that the journalist writing here would not care less about that “minor detail”.

What is happening is a concerted effort by certain politicians and journalists to abolish Section 21, alongside a concerted effort by the same people to alienate Private Landlords and paint all of them as bad and unscrupulous people and to portray all Tenants as victims.

In my experience, the vast majority of Landlords who serve a Section 21 Notice to gain possession do so because they have been left with no other choice. Faced with the complications of Section 8, where many breaches of the tenancy are solely down to the courts discretion, Landlords must look to a guaranteed method to bring to an end a tenancy they no longer wish to provide. We will be in a very dangerous position if politicians and journalists start to dictate to private businesses and private individuals when they can and cannot take ownership of their own private assets, why would anyone even want to be in a business like that?

The most amazing thing about this article is how immediately it contradicts itself, stating that Landlords are using a “No Fault” eviction process to evict tenants with, guess what? Rent Arrears, so who’s fault is that, the Landlords?

Martin O’Hearne

CEO OneLandlord.com