Category Archives: Letting Update

By Craig Smith

Message

There has been yet another court case due to confusion around tenancy deposits and this one has sent the lettings industry into a spin about what does or doesn’t need to be done.

The case in question is Superstrike Vs Rodrigues where the Landlord had issued a section 21 notice for the tenants to vacate. The tenancy started before the tenant deposit protection came in on 6th April 2007. The issue with this case is that the tenancy actually started before 6th April 2007 and became periodic after that date. Once the tenancy had become periodic, it was deemed to be a new tenancy in the eyes of the law and therefore the deposit should have been registered. In turn, this meant that the Landlord could not rely on their Section 21 notice for the tenants to vacate.

The tenants challenged the notice that was issued as the deposit had not been protected in line with the Housing Act 2004 legislation. As the wording isn’t all that clear, a lot of Landlords could find themselves in a bad position if they have had long term tenants.

Right now, there will probably be a lot of Landlords checking their files to make sure they are within the law and with good reason! By not registering the deposit as it should have been a Landlord can find themselves not only unable to give notice to the tenant (they could but they would lose if it went to court!) but also having to pay back more than 3 times the deposit amount to the tenant.

Back in November 2012, there was a similar case that caused Landlords to make some important changes to their processes. The deposit may need to be protected, we already know that, but once the tenancy has gone to a periodic status it means that a new set of Prescribed Information needs to be issued to the tenants. This information should already have been provided to the tenant at day one and needs to be given again at the first periodic stage.

This is a process that we, as an agent, have already been doing for our Landlords to ensure that they are protected and not at risk from such cases. It is a very rare instance but one that could have major consequences for any Landlord involved. The deposit protection schemes are yet to release anything further on what they advise Landlords to do.

By Craig Smith

BBC Watchdog 150513 CS

Yesterday the BBC aired a program which looked into the ways that some clients can find themselves being ripped off by rogue letting agents. Some of what was said does ring true as, believe it or not, the regulations surround lettings agents are very loose.

The Big Issue

If you didn’t see the program yesterday, there is a clip of it on the BBC WEBSITE HERE. It featured TV favourite Nigel Havers who had a bad experience himself (quite ironic considering some of the characters he has played on the screen!). Sometimes it does need someone like him to add a little weight to an argument, in this case the argument that there should be stricter regulations surrounding letting agents. Nigel, if you are reading this, we agree with you!

The problem at the moment is that anyone can setup a letting agency with no prior training or qualifications. I was speaking with someone yesterday who has heard of one business selling letting starter kits over the internet for a small fee. So quite literally anybody could be setting up in your area! Apparently the renewal rate after the initial purchase is very low but it is the initial sales keep the money coming in and that particular business afloat. I’m yet to see one of these packs myself (perhaps you have one and could let us know if it was useful?) but without any proper training or support, what is the likelihood of that prospective agent surviving & doing the right thing?

Qualifications

I know we have waffled on about this before but Castle Estates are proud to be ARLA members. It isn’t just a fancy logo that can go in our window and it certainly cant be purchased by just anyone! Anyone who wants to become a member needs to pass examinations (been there, done that) to prove they have the knowledge and what it takes. Or let me put this in another way, your property could be worth a lot of £££’s, would you really want to trust someone to manage it who has no idea what they are doing?

There are 5 people in our office who have currently gone through the necessary training and 1 more studying at the moment. Although these aren’t compulsory in the eyes of the law, we prefer to show our clients we are prepared to do this so that they have faith in us as their agent.

Further Complaint

The other issue that the program highlighted was that of utility companies being very difficult to deal with. The main company named was Spark Energy and I’m not going to comment any further on this at the moment. If you are really interested, just read their reviews in Money Supermarket to make up your own mind.

We used to work with such companies after them making so many promises of great customer service and easy to use facilities but they all seem to fall down. We have had so many complaints from tenants that we now no longer use any specific company and let the tenants decide who they should use. We do still encounter problems, usually relating to specific suppliers, but thankfully nothing quite as bad as some of these reviews report!

By Craig Smith

There are so many scare stories around about Landlords who have lost out due to tenants not fulfilling their obligations. Some of the biggest problems can be rent arrears or not looking after the property as they should do. Trying to evict a problem tenant can be a long and expensive process for a Landlord and even though a notice might have been issued to a tenant it doesn’t necessarily mean that they will leave when they are supposed to!

First Step

The first part of telling a tenant to leave is to issue the correct notice to them. The type of tenancy agreement that is in place dictates the specific type of notice that needs to be given. If the wrong notice is used and the matter goes to court, it will be thrown out and the whole process needs to start again.

The type of notice can also vary depending on why the Landlord wants possession back. Some are known as mandatory possession notices where the Landlord doesn’t need to give any particular reason why they need to take back their property and probably make up the majority of notices issued. Others can be non-mandatory and, if taken to court, a judge will make the final decision as to whether or not possession will be granted to the Landlord. (The judge will also decide on when and not just if!)

Just as importantly, the notice needs to give the right length of time for the tenant to vacate. For example, one of the most commonly used notices is a Section 21 which needs to give no less than 2 months. It can be given for a longer period but any shorter and the notice wouldn’t be valid. In the past, some Landlords have been upset about the length of notice that has to be issued as they might need their home back quickly. It is our job to advise them what has to be done and the consequences of not doing it right!

Council Advice

In most instances a tenant will understand that they need to leave and will do so within the set timescale. Arrangements will be made with the Landlord or agent to hand the keys back and the Landlord gets their property back as they are supposed to.  It is when other parties get involved that the situation can become very complicated and more drawn out.

From experience, if a tenant is moving into a council property then the council will tell the tenant to stay in the property until the very last possible minute. This basically means that it could go through court and organising a date for bailiffs to visit before the council will move a tenant into another home. This is good for the council as it means they don’t have to shell out as much money putting someone into a new home but it can end up costing the Landlord more time & money.

Landlord Selling

We have had a few instances in the past where a Landlord has advertised their rental property for sale once the tenant has been given notice. This, in itself, isn’t a big issue but things can go wrong if a Landlord lets a tenant stay on until the property is sold. Continuing the tenancy on an ad hoc basis may give the tenant longer to find somewhere to live and the Landlord continues to receive the rent whilst the tenant is still there. The issue here is if a buyer is found, the sale completes quickly and the tenant still hasn’t found anywhere to move to. The Landlord could lose out on their sale and have to re-advertise and start the whole process again!

Luckily, we’ve never had such a scenario go wrong but it is always our job to advise our Landlords when such situations arise, even if it isn’t what the Landlord wants to hear. It may seem silly to recommend having the property empty for a short while but it is the most sensible option.

Best Options

All of this might seem quite scary if you’ve never done anything like this before but it really isn’t that bad. Part of letting a property is knowing what to do or if your not sure, always get the best advice from someone who does!

By Craig Smith

The Chancellor of the Exchequer made his budget announcement a fortnight ago and the general consensus is that it has affected the poor for the worse. Perhaps the biggest news at the moment is how the reduction in certain benefits is affecting households around the country with many losing out and finding it even harder to make ends meet.

It isn’t just being able to afford the mortgage or rent that is an issue, the cuts can have had a knock on effect on general living costs and with ever increasing fuel & heating bills, some households can feel their finances running out of control.

Everyday Living

Managing more than 300 properties can have its ups and downs but it does give us a broad spectrum of scenarios to deal with. The properties that we deal with can vary greatly in size and condition, although none that are too bad we hope! There have been instances where even the tenants who seem almost perfect can fall foul to the ‘credit crunch’ and end up in a very quick downward spiral. All it takes is for one person to lose their job, for example, and have no money coming in to provide for their family.

We don’t just see this from tenants, we have had situations where Landlords have had to sell or even had their rental property repossessed as they hadn’t kept up with mortgage repayments.

Tenancy Disputes

The most common example of a dispute arising is when a tenant has left a property which is judged to be in need of works. We have written posts previously on how best to avoid disputes with tenants’ deposits and also the poor condition that some properties have been left in. We seem to live in a blame game culture at the moment where the slightest little niggle or problem results in compensation of some sort to an injured party. This has also found its way into the lettings world where issues that often arise are disputed as being someone else’s fault.

Quite commonly when a tenant leaves a property, and more so now when a problem comes up during a tenancy, it can turn into a game of tennis with neither the Landlord or tenant wanting to take responsibility. Something as simple as a broken door handle can be made into a big issue. The Landlord might think that the tenant has leant on it too hard and needs to pay for the repair themselves, whereas the tenant might think it is a cheap fitting and not made to last!

Of course, there are genuine reasons for wanting to hold back some of a tenants deposit. Maybe the property hasn’t been left as clean as when it was at the start of the tenancy or the garden hasn’t been looked after. (The time of year is a common argument with gardens which should always be taken into account but it is no excuse for extra weeds or damaged items!)

Rise in Deposit Disputes

If no agreement can be reached at the end of a tenancy then the costs can be taken through dispute. They can also be taken through the courts but this is less common as it costs a lot more this way!

Over the past year or so in particular, we have seen a steady rise in the number of people looking to dispute their deposit costs. For larger expenses this is understandable but some can be for smaller amounts, which does sometimes feel a bit like penny pinching!

The Future

It looks as though there is more financial uncertainty to come and we cant see a light at the end of the tunnel just yet. The points mentioned above are becoming common practice so the lettings road ahead could be bumpy!

By Craig Smith

The lettings industry has continued to grow particularly over the last 5 or 6 years where so many people have struggled to sell. Certainly in our office we have noticed the increase in the amount of properties coming in to the rental sector and likewise, the demand from tenants who need somewhere to live! This just goes to show the importance of the need to protect anyone in lettings as there is a lot of money involved around the industry. (Rent payment and deposits perhaps the most commonly known.)

In the House of Lords earlier this month the majority voted to regulate the industry as a whole which could mean all agents and Landlords have to sign up to one scheme. They could also be included in the rules of the OFT (Office of Fair Trading) which could ban rogue agents from trading.

Joining Regulatory Bodies

As we have said before, signing up to a scheme is more than just about being able to display a logo in the window, it means so much more than that. A lot of Landlords do feel safer in the knowledge that their agent is already regulated and that what they are doing is right. Not only is our office registered as a member of ARLA, the majority of staff in our lettings office are also ARLA trained. There are various levels of qualifications available with our individual members having to pass a number of examinations before being able to gain membership. I have been there and done that, so can tell you it takes a lot of hard work to pass the exams and to prove that you have what it takes!

Castle Estates have been trading here at our offices in Stafford for 13 years and have been a member of ARLA (Association of Residential Letting Agents) since almost day one. Being a member of a regulatory body has never been compulsory for letting agents in this country and our decision to join was through choice and not necessity.

Of course, there are other bodies that can be joined which cover different aspects of the business. For example, the SafeAgent scheme is only for agents or Landlords who protect their clients through money protection schemes. Again, we are proud to say that we are part of this scheme so that if ever anything should happen to us, our clients’ money is protected.

The other main body that we are a part of is The Property Ombudsman which means that we have to adhere to their codes of practice. Yet another logo in the window that means our clients are reassured that their money is safe.

Deposit Systems Already Changed

Since 6th April 2007, any deposit taken for an Assured Shorthold Tenancy needs to be registered with one of the three approved schemes. We’ve talked about these until we’re blue in the face in the past so won’t bore you with all the details again now! But this is just another area of the industry that has been tightened up over the last few years with penalties to those who don’t comply.

The idea of the ensuring the deposit is protected is to stop rogue Landlords keeping a tenants’ deposit without a valid reason. Before deposits were registered, it could be costly for a tenant to go through the courts to try and get their money back but each of the schemes operates an easier and fair method of mediating between the parties.

One Scheme For All?

Nobody yet knows for certain how the government backed scheme would work to cover all Landlords or when it would come in to force. We believe this could work well and rogue Landlords could soon be a thing of the past, so we welcome this news with open arms!

By Craig Smith

It only feels like 5 minutes ago since we were marking our first anniversary of blogging and only 10 minutes since we actually started! The fact is we have now been blogging for 2 years and have no plan of stopping any time soon!

Looking Back

As another year goes by we have seen yet more changes in the industry as a whole and as the saying goes; ‘you learn something new every day’. Well we certainly hope that some of our posts have helped to fill the quota! This year we have covered everything from the Localism Act toCoronation Street. OK, so we weren’t exactly gossiping about the characters but more about the gas safety awareness issue raised in one of the storylines.

Over the past 12 months we have seen changes in the gas safety legislation which has caused some of our Landlords to spend some considerable money/effort in having their properties rectified. The gas business is yet another industry where regulations are constantly changing and where something might be perfectly acceptable one year and not the next.

Recently, we have even published some of our blog posts in our local newspaper to help to spread the word more locally about some of the issues we come across. We’ve had a good response to this as we do so of the comments we receive online and it is always nice to know that people not just read but also understand the messages we are trying to distribute.

Moving Forward

As another blogging year comes into view, so do further changes to the way the lettings industry works. Rules and regulations are changing on what feels like a weekly basis which certainly keeps us on our toes!

One such thing is a question due to be asked in Parliament later this month as to whether there should be a mandatory register of residential letting agents. Whilst you might be thinking how good an idea this is or isn’t there are still a lot more details to be confirmed if this were to go ahead. Would the register be kept by the local councils or would it operate on a national scale? Would there be a fee to pay for Landlords to join? How would the register of Landlords be managed to wean out the rogues?

There are some schemes like this already in place in localised areas so we can only presume that any future plans would be very similar to this.

Likewise, there are still a lot of questions that are yet to be answered concerning the Green Deal. (You might remember our recent post about this.) Although this might not apply for another couple of years, plans still need to be made so that Landlords are prepared for what is around the corner.

So here’s to our next year of blogging!

By Craig Smith

In Scotland it is illegal for a letting agent to charge a prospective tenant any fees during the move-in process. Whether it is for credit checks or an administrative fee, it isn’t allowed.

Reasonable Charges

Since the law changed inScotlandwe have always been wondering when it would have a knock-on effect here inEngland. Well, it looks as though the time is now as some local governments are starting to tackle rogue Landlords and agents that charge higher fees.

Before we go any further into this, I would just like to point out that from what we hear from some of our tenants, we are not the cheapest agent in our town for tenants’ fees but nor are we the most expensive. The fee charged to a tenant looking to move into one of our properties covers the costs of the referencing/credit checks, the time to prepare the legal documents and also the check in appointment. If we charged much less, we wouldn’t be able to do half of that list and the tenancy would more than likely go pear-shaped further down the line because we weren’t able to do our job properly! And don’t forget, we’re not running a charity here.

We have heard from tenants who come into our office stories of other agents in the area who seem to charge for anything and everything. Personally, I have never looked any further into this so cant comment one way or another. The one thing I will say is that both tenants and Landlords need to be careful as some ‘rogue’ agents will charge a lot of hidden fees.

Law Surrounding Fees

It is generally well known that if you are going to charge for any service that you offer, you need to make your customer aware before providing the service. You wouldn’t want to eat in a restaurant where the prices weren’t included on the menu, would you?

We have a good legal team here at Castle Estates who always advise us on the latest changes in law so that we know what we are doing is the right thing. Whether you are a Landlord or tenant of ours, you will probably remember seeing a list of our charges in the paperwork you signed before agreeing to do business with us. (If not, double check as they will be in there!)

Tackling the Bad Guys

The government is getting worried as there are a lot more people in the private rental sector than ever before, more than 3½ million in fact. It is no wonder then that there are more and more stories of rogue Landlords trying to rip off their tenants and these are the people the government is looking to tackle.

There is still call to have a register of all Landlords and/or agents who are able to let property. Whether or not this will eventually come about is yet to be decided in parliament and it would be interesting to know if this would be on a national or a local scale.

I believe that it should somehow be linked nationally to prevent any Landlords ‘getting away’ without facing up to their responsibilities. Where we are based, we are only 25 minutes from theShropshireborder so what would stop a Landlord who has properties in both counties being labelled a rogue in one and not the other?

This does look to be moving forward now as this is due to be raised in parliament later this month. So sit tight and lets see where this goes!

By Craig Smith

There was a time when a deal could be finalised with a handshake and that was that. A ‘gentleman’s agreement’ was good enough for most people without the need for any paperwork and trust played a big part in this. These days it always seems best to have some form of written agreement, not just in the lettings world but for almost everything in life. Whether it is buying a new sofa or signing for a mortgage, there always seems to be some form of contract to sign.

The reason for this is simple; it protects all parties involved and everybody should know exactly what they are signing for before they do it. There is even a campaign setup to ensure that any legal agreements are easy to understand and don’t baffle people with its complex wording (you may have seen their logo on something you may have already signed).

Tenancy Agreements

This leads back to lettings as it is always strongly recommended that a written tenancy agreement is in place. Both the Landlord and the tenant should know their responsibilities as things could get very messy should a dispute arise later down the line. A tenant could argue that they weren’t aware of something they had to do, something trivial in the big scheme of things such as clearing out the gutters at a property. But if there is nothing written down, it could be one person’s word against the other!

It isn’t just the actual tenancy agreement that is important, don’t forget our recent post regarding the Prescribed Information for deposits. There is a whole host of other documentation that needs to be sorted out which all adds up to the smooth running of a tenancy.

Regular Contact

Landlords need to remember that a good contact base with a tenant can pay dividends when the tenant vacates. They don’t need to be best buddies but regular contact is always a good idea. Most good agents, ourselves included, will visit the property on a regular basis to check that all is well and to note any issues. We do this around every 3 months or so as this is the industry standard. We don’t want to make the tenant feel pestered but at the same time, our job is to ensure that the property is being looked after and to report back to the Landlord.

Of course, Landlords who manage a property themselves might not have a regular system like this. (We find that having a good software system helps to keep us on track with so many properties to manage!) By keeping in touch regularly and visiting the property is almost always helps to prevent the risk of any disputes at the end of a tenancy.

Well Trained

Landlords who manage their own property don’t need any governing bodies to rent out a property but they do need to be aware of their responsibilities. I would never want a Landlord to ‘walk in blind’ to lettings as there is a lot more to it than just handing over the keys and waiting for the rent to come in. It could end up going wrong and we would always recommend them seeking advice from a professional agent before taking the plunge. (There is talk of having a national register of Landlords but we’ll no doubt find out more on that later.)

At the moment there is no legislation that says an agent needs to have any specific awards or qualifications in order to look after property. Although thinking about it, it would be silly to setup a business and not have any idea what to do! One of the key things that always reassures a Landlord when they look for an agent is the kite marks from specialist organisations, such as ARLA.

It All Adds Up

Some Landlords prefer to manage a property themselves because of the cost of involving an agent. Whilst most agents do try to keep costs as reasonable as possible, Landlords can have tight budgets with mortgages etc.

Regardless of who manages a property, the Landlord should always be aware of their obligations as the consequences for not looking after their property and tenants properly can be dire.

By Craig Smith

In another recent case a Landlord has been found to have not complied with legislation when protecting their tenant’s deposit. It can be a bit of a minefield if you are new to the industry but the rules are becoming clearer and clearer.

Not Just Deposit Protection

Where a deposit is covered by the legislation it isn’t enough to just protect the deposit. The Prescribed Information (PI) must be provided to the tenant at the start of the tenancy, usually within 30 days of the deposit being paid. The PI contains the information the tenant needs to know about where the deposit is going to be held and who has access to it. This recent case also proves that the tenants must be provided with the terms and conditions of the relevant deposit scheme.

What Information to Give?

You may have read my post about the DPS before so you’ll know that it is that scheme that our office uses. We must always give our tenants a set of the DPS terms & conditions which is a lengthy document but is worth its weight in gold should a case arise. The legislation states that it is the responsibility of the Landlord to ensure the information is given to the tenant and it is not up to the tenant to go looking for it. The terms and conditions are an important part of the PI as the case has proven. In this instance, the Landlord had registered the deposit in line with the legislation but hadn’t given the correct PI to the tenants.

There are also a lot more handy documents available through the DPS giving both tenants and Landlords advice on how to use the scheme. Don’t forget that each scheme differs slightly in the way their information is presented and they may not have an official set of terms and conditions, so to speak. 5 minutes checking you have the right stuff is better than 5 years recouping unnecessary costs!

Final Advice

Some of the information that needs to be provided may seem trivial but it is very easy to get hold of. Certainly with the DPS, the documents are free to download and can be found with a few clicks on their website.

The majority of tenants seem to ask what they need to do at the end of the tenancy anyway as the documents seem to get overlooked. You only need to read the details of the case mentioned here to see how really important they are!

By Craig Smith

They say there is a first time for everything and here we are commenting on a big issue made aware by a TV soap!

There is a storyline currently running where one of the residents in Coronation Street has suffered from carbon monoxide poisoning thanks to a dodgy boiler repair. This doesn’t just make good viewing but also raises the awareness of having someone competent to do the right job.

Competent Worker

The boiler had been repaired by a friend with some mechanical knowledge as a goodwill gesture. OK, this is soap land but these kinds of things could happen in your street. What starts as a helpful neighbour could turn into something disastrous if not done properly.

By law, anyone working on a gas appliance such as a boiler or gas fire needs to be Gas Safe registered and hold the necessary skills to carry out any works. Carbon monoxide has no odour and in many cases can kill or seriously harm someone without them having any idea there is a leak.

Work in Other Areas

The same principles apply to other times of work such as electrical installations & repairs and day to day maintenance. Electricians must hold the correct certifications in order to install or replace any fittings or appliance and in general day to day repairs, you wouldn’t ask a roofer to put up some shelves, would you?!

The Consequences

The results of a bodged repair can not only affect the people in a property but also the person who was responsible for the work. With regards to gas safety, the person responsible could not only be fined but could also face a jail term as punishment.

Always Check

This is the reason you should always check who is coming to work on your home. This is important not only if you are an owner occupier but more so if you are a Landlord. If you instruct someone who is not suitably qualified to carry out the relevant works, you could be putting the lives of your tenants at risk and could also be held responsible!