Tag Archives: Castle Estates

By Steve Roulstone MARLA

R&L Insurance

Landlords Legal Expenses and Rent Guarantee (LERG) Insurance is a vehicle that has been available for many years to protect Landlords from loss of rent and the cost of taking action against Tenants not fulfilling their obligations. The knowledge their income is protected has to be a serious consideration for all Landlords.

Only one way do it – the right way.

As both a Landlord and a professional Letting Agent holding LERG cover is a position I always recommend. Almost all LERG policies as a prime benefit of full management carry professional referencing as a prerequisite to being able to take the insurance so further credence is given to the Tenant wishing to rent your property when a pass is achieved. In fact, it could be said Landlords without LERG are taking unnecessary risks if, when presented with the option, the Insurance is not taken out.

Security in the System.

Yet amazingly, I have been advised of situations where agents acting on behalf of a Landlord, instead of offering referencing services to their client, simply requested ‘Referees’ from the prospective Tenant and then asked for a Guarantor, presumably because they did not like the look of the Tenant!

Renting your House or Home

I wish here to give as much credence to the ‘Agent’ as possible, but as a Landlord, I would not be happy committing the security of my property to somebody who decided themselves if the person in front of them was a good Tenant or not. We all think we can take such decisions because we have the necessary experience and after the years I have spent in this industry I would consider myself to be a good judge, but I would never put myself in the position of taking a risk with somebody else’s investment! This is simply not a good idea where referencing is concerned.

Follow the professional recomendation.

 

 

If industry bodies such as ARLA recommend referencing and or simple credit checks to ensure security through agents, then surely all agents should make such arrangements to protect their clients. But let’s look from an even simpler prospective, if you are supposed to provide professional services as an industry representative, no matter what the industry, surely, you should always offer the best service possible? If instead you cut corners, how can you call yourself a professional?

By Steve Roulstone

Shelter part 5

 

The Governing Bodies.

As a member of ARLA and TPO I will restrict my review on professional bodies to these two organisations and what they recommend, but I have to state at the very beginning, how much easier it would be if legislation was passed which embodied such recommendations in the same way as RICS codes of practise are adopted by the Government.

There is no doubt that bodies such as ARLA and TPO will have to come off the fence and state their opinion. Because at present, the advice listed is about clarity and visibility if fees, not about the level of fees. RICS who the Courts would turn to for guidance in any court case, agree with my opinion, Peter Bolton King in an RICS Blog on the subject states: Shelter’s proposal does little to protect exposed renters to all manner of unethical practices on the part of unscrupulous agents.

Another vote for legislation and a weighty one at that! But consider the opposite for a moment? If Shelter get there way, Tenants will lose the protection that they possess as a fee paying customer, there interests will still be subject to the correct duty of care and from what seems to be happening in Scotland, yet another barrier between Landlord and Tenant will not be introduced. All of this, in an Industry that would still remain unlegislated, for their recommendation, whilst supporting legislation, does not include it. Surely what Shelter should be doing, rather than just shooting from the hip, is working with the Industry, to push for the legislation those who believe in professionalism are seeking already.

There is another area where I believe Shelter to be wrong and that is in the area of choice. Some 20% of UK housing stock is now available through the private rental stock. That is choice in anybody’s book and to state that Tenants are forced down the route of high fees is not true, certainly not in my town. Through choice, Tenants can walk away from high fees, just as Landlords have the choice to resist Agents that charge unreasonable fees to Tenants. Only yesterday, I drove past an office advertising to Landlords, that they could rent their property at no cost to the Landlords at all!

It is clear from such instances that Shelter has some justification for what they are attempting and I must make it clear that I agree in principal with their case. What is also clear is that I do not agree with their assumptions and methods, but whilst some agents advertise in this manner, they will always have an ear. What is needed is debate and discussion as the more people who are made aware the better for the industry. All could take action in their own way, hopefully against those who give credence to Shelters cause.

In summary, I was always taught that it is better to lean on an open door than try to smash them all down? The picture painted is I believe unreasonable, but not without cause. The aim however is somewhat misguided and would do better and I believe achieve much more, if accompanied by legislation that was enforceable. In the meantime, healthy debate will spread the knowledge of what is happening and I encourage everything that is done to further healthy knowledge.

By Steve Roulstone

Shelter part 4

High fees.

As a Letting Agent of some fourteen years, I am happy to confirm that my Wife and I now make a good living from the Business that we run. It has taken many years of hard work and long hours but this very statement is subjective and as two people who started their working life in a two up two down terraced house, I know that our description of a good living is well below the expectations of most when using these words to describe their lifestyle.

This is the point, what some call excessive, others call standard. Add this to how you differentiate between differing more expensive to live areas of the Country and the question of ‘what is acceptable’ becomes difficult to answer! You can then add to this, the level of service provided and the reflective charges made for higher quality services. They do exist and should not be ignored.

What however cannot be ignored and where I am totally in agreement with Shelter, is where charges levied are beyond what is reasonable and where the service delivered does not justify such charges. I would add, especially where Tenants are charged in order to advertise reduced prices for Landlords.

There is no doubt this is seen as a marketing strategy and an acceptable way in gaining those all important new Landlords. Locally to me, we have vehicles carrying Company logo’s proudly stating how low there charges are. I am not aware of what they charge their Tenants, so would not point the finger, but as the market becomes more and more competitive, more and more Agents respond by cutting prices. The fact remains, the opportunity to reduce charges to Landlords whilst increasing Tenants fees exists with no restraints.

I would associate this practise to how rouge agents who do not deal with Tenants deposits correctly are dealt with. Does that mean all Agents should be tarred with the same brush?

I think not and believe that a fair charge can easily be configured, even with the option for Tenants who wish to sign up for higher level services, which we should not remove from the market place. Let’s look to application fees again for Mortgages. They operate well from an industry that is well regulated, yet the choice is out there and we all know that fees need to be considered. Is it really outside the realms of possibility that a similar situation could not be delivered for Letting Agents?

If they are transparent, capped in law and understood what the minimum available for the fee that is charged is, then surely we have a framework for Agencies to be included in a professional industry, through which, licenses are offered for compliance.

Get it wrong, the license is revoked. Service levels need not be affected; proper fee paying diligence would be a consideration for both sides and recourse still available for the Tenants. I call that a win win!

Finally, a look at the Professional Industry view will be the focus of Part 5.

By Steve Roulstone

Shelter part 3

Agent and Landlord fees.

I think it a good starting place to look at why charges are introduced to Tenants. Letting Agents unlike car rental Companies for example, do not own every house and therefore reap no benefit from the rent. Yes of course, the end result is to provide a service for the Landlord to provide a Tenancy that is acceptable, insurable and above all efficient as far as care of the property and payment of the rent is concerned, but that is not to say that the Tenant does not benefit from the process by ensuring their needs are covered through the process.

We discuss affordability before any fees are taken, to ensure they approach referencing in the right way, the need for guarantors and additional supportive paperwork to get them through the process, which is all treated with confidentiality and respect for their own circumstances. Time is taken to discuss and arrange further visits to the property to cover their requirements and to measure for curtains or furniture as part of the service. If this element is removed, I do not see how this will benefit any Tenant or procedure of renting a home. Rather, by being a fee paying part of the process, they have rights and they need to be respected during the process that they pay towards.

I cannot help but feel that Tenants would be better served by Shelter, if they looked to ensure they received better service for their part of this process, rather than this sledge hammer approach.

So let’s look at what the Landlord is charged for that service.

He also pays a fee up front, which on average should be split down the middle between Tenant and Landlord. If the service commissioned is a ‘Tenant find’ service, then the Landlord will usually pay a substantially higher fee, but the Tenant fee should remain the same.

The Landlord then, in the case of a fully managed property, continues to pay a monthly fee against the rent collected. I can only comment on our office, but in order to provide the best service for our Landlords, which Shelter do recognise is where our legal responsibility lies, charges made to Tenants during Tenancies are wherever possible, reduced to the minimum, reflecting the work being undertaken, or indeed avoided if at all possible. This means we do not insist on new agreements and the evidence is that Tenants like the option of choice this gives them, as in reality, our Tenants appear to stay longer than the average. Shelter believes all Tenants should be given much longer Tenancies. I doubt many would wish to sign for the five years they feel should be available and I say this as a Tenant myself.

The tenant pays to be referenced, which apart from confirming the affordability, also ensures the Landlord can take Insurance against any unpaid rent and to cover legal expenses if action needs to be taken. From the Tenants perspective, the affordability is no different than the assessment made when applying for a mortgage, yet I see no claims that Mortgage companies (the financial beneficiary) should pay for application procedures in the same way.

Tenants also pay for the documentation raised to move them in. This more often than not reflects their individual situation, regarding pets or lifestyle, as well as being enshrined in Law to ensure they are protected.

Therefore, reasonable charges are in my opinion justified and rather than challenge the legitimacy of any such charge, it is the level of charges that should be addressed and this will be the subject of part 4.

By Steve Roulstone

Shelter part 2

The Shelter perspective:

Shelter answer many questions within their report, far too many for me to comment on in these pages, but clearly they see high fees as the issue, but do not support a reasonable charge, rather preferring that all Tenants should be able to rent property at no charge. I do not understand why and see the reasoning behind their assumption as a strike against any organisation that has to be able to make a profit rather than a conclusion that makes any sense.

They fail to recognise that many Agents are reasonable and charge fees far lower than what they call unfair, making charges easily visible and making it possible for Tenants to remain within the property of their choice with very little financial impact for the life of the Tenancy. At Castle Estates, as a Franchise organisation, we were all taught the need to have fees which are justifiable. We are now independent offices, but the replies I received to my question of fees before writing this Blog from our offices, all confirmed rates around half of the average quoted by Shelter.

Whilst on this tack, what about the information they make this judgement upon? Where did that come from? They state on two occasions in the report that 1 in 4 people in England and Wales have complained about being overcharged by Agents. But then, if you read carefully, confirm that the 1 in 4 is actually based upon those who responded to a request for information in the first place and so forgive me, but in my opinion, it is better described as from the complaints received, 1 in 4 related to Agents fees, because unless Shelter can tell me differently, people who have nothing to complain about, would rarely respond or contact them? Perhaps they can confirm to the contrary?

They also state that a complete ban on Letting fess is the best solution, because they have conducted many surveys and mystery shopping schemes around the Country, but do not actually give any other figures or conclusions about the surveys other than the 1 in 4 figure. I would like to see this figure clarified and further proof of why  a total ban is the only solution, because the impact they see from what has happened in Scotland is clearly only considered from the Tenants point of view and for any change to be fair, surely all sides need to be considered?

The implications I know of, without having to check many sources, is the that many Tenants are now aware that they can pursue more than one property at no cost to themselves and decide which property is more suitable as the process continues. In one case, a Landlord paid for four sets of referencing fees before finding a Tenant that would complete. In one case, being advised the day before a Tenancy was due to start that they were not preceding. The result in another case was the property was taken of the market in support of a prospective Tenant, for four weeks and yet they still advised the Agent concerned, that another more suitable property had become available.

There are those who would say so what to these details, but Landlords, who Shelter clearly agree are desperately needed in the housing market, are having to now respond to the whim of Tenants. Is that what Shelter wish to propose through the whole Country?

I could go on, but will just restrict to asking again, why are reasonable fees not an acceptable solution? Shelter state because they could be challenged through the Courts! Well forgive me, but I thought the point of the Courts was for all practises to be able to be challenged? Rather, legislative restrictions to fees would be created through the Courts. Is that not a fairer way rather than a total ban?

By Steve Roulstone

Shelter part 1

The introduction:

Two weeks ago, Shelter launched a campaign to remove Tenant Fees from the current standard practise of renting a property through Letting Agents. The outcry from the Industry could be heard loud and clear as calls to action were sounded. What is needed is a realistic look at the reasons why and the current practises of the Industry and through several Blogs I will look to state the case for those concerned as it currently exists, along with my own take on the subject.

The Blogs will mainly consider Shelter’s stance as the impact of and reasons why the campaign was launched at all is considered from all sides. This is a debate that will run and run, but one that could have been tackled already if the Government of the day had listened to the clamour for licensing that is supported by those who link themselves, through professional bodies and through our membership of approved recourse agencies, to the word ‘professional’ at all levels.

I will also comment on the impact of the process in Scotland where such legislation was introduced as far back as 1984, but as Shelter recognises, only truly took effect with legislation allowing recourse last year.

Shelter make many claims in their report, but one thing stands out quite clearly in how they describe both the industry and what they believe should happen and that is that they do not fully understand the industry and how it should operate. I say this because they clearly recommend that legislation could be introduced alongside the existing Estate agency legislation that oversees that particular section of the industry, but fail to recognise, that for many years, the majority of those who charge high fees, are in fact Estate Agents who Let property as well.

Even the suggestion, that an industry that deals with such complicated legislation as Letting Agents do, should be dealt with by linking us to Estate Agency legislation makes no sense. Rather, what this industry requires is legislation to ensure that not only are Letting Agents registered, but that they are also qualified. That is legislation that needs to stand alone and indeed, only then, could Estate Agents who, let’s face it, have turned to our industry for survival after the collapse of the sales market, be seen to understand and be aware of just how complex this market is.

Of course the problem with such statements is that there are plenty of Estate Agents who do know and have always known how to run a Lettings section. Just as there are plenty of Letting agents who have spent years taking advantage of Tenants. I admire and object to both accordingly, but to suggest that some ‘bolt on legislation’ could solve the overall issue, is short sighted, in my opinion.

Indeed there is plenty wrong on all sides and what this campaign does do is give the opportunity for the overall scenario to be discussed. I for one welcome that opportunity and by writing what I hope will be an informative article, hope to clarify some of the statements that are currently flying about.

I do however fully understand and accept that in many cases Tenants are overcharged for the process. The most worrying fact that has come out of the report is that many Landlords are not even aware that charges are levied upon Tenants and surely therefore, would not be aware, that many Tenants are starting Tenancies in their property, feeling they have been taken advantage of and somewhat cheated from day one! As a Landlord, that is a situation I would wish to avoid, at all costs!

By Steve Roulstone

Perfect Tenant

I have just finished reading an article in a magazine called the Negotiator, designed for the industry, most articles are centred on some professional within the trade, being given the opportunity to sell their wares. In this article the case was being made for referencing potential Tenants and how this particular referencing agency boss was convinced that the better the level of referencing carried out, the better the Tenant that would be produced.

There is of course an easy case to be put forward to support this argument, but in reality I do not feel this is even half the case that needs to be considered. To me, referencing is an absolute must, but in the interest of the Landlord, this is so that the Tenant concerned can be insured through a rent and legal expenses insurance. It really is that simple. By referencing, past performance is assessed, affordability is confirmed and future actions can be insured. Not a difficult decision.

But is this enough to find the perfect Tenant? That was the gist of the article and where I would have to disagree.

We have a very simple policy with Tenants. Look after them well and they will look after our Landlords property. I speak from the position of being a Landlord and at present a Tenant as well, so it is with personal experience that I know our policy stands up to the actual reality of living in rented property.

That reality is that although as industry professionals we know that what the Tenant is paying for is the right to live at the property concerned, all Tenants need to feel that they are also paying for a level of service which, whether through an agency or renting direct from a Landlord, if they are left feeling that this relationship is one sided, they will be left feeling it has not been delivered and that nobody cares.

I cannot recall how many Landlords have informed me about how disappointed they were at the state of a property when a Tenant left, but too many times when I ask if they have visited that same property during the Tenancy, or been in touch with the Tenant, the answer has been no. If the Tenant does not have an outlet for their findings when living at a property, the feeling of being abandoned slowly turns to a feeling of anger. The rest is human nature. If nobody else cares, in their opinion, why should they? 

That is why we ensure Tenants have a voice. This principal does not mean that we should comply with all Tenant wishes, not at all, but that those wishes should be given time and a platform. By working with your Tenants, they will respect your role and in my experience the property as well. The objective of this principal for us is simple; happy tenants look after the property and pay the rent. That, we know, is exactly what our Landlords require. That, I believe, is much closer to a perfect Tenant.

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

One common issue reported by a lot of tenants is that of damp appearing in a property. But it isn’t necessarily damp that is the issue as a lot of ‘damp’ turn out to be nothing more than condensation which can be cured with a few simple pieces of advice.

Condensation Problems

The majority of these issues are, of course, condensation. This can come about if there is a lack of ventilation in a particular part of a property where the moist air can’t escape. Although we are approaching the winter months and the temperature is gradually getting colder (although hopefully not too cold this year!) it is still important to ensure rooms are kept well ventilated, mainly when showering or cooking.

Both of the above generate warm, moist air which can mostly be seen on window panes. What can’t always be seen is the amount of warmer air that cant escape and will eventually appear as black marks or peeling paint on walls or ceilings. We tend to find that most of these reported problems occur in bathroom or upstairs bedrooms, bathrooms due to the obvious showering & warm water and bedrooms as a lot of people prefer a nice warm bed to go home to and leave windows etc closed.

Putting a Dampener on Things

The symptoms for damp and condensation can be very similar; typically a black or mouldy mark and a musty smell where it has occurred. When someone notices a mouldy or wet patch on a wall or ceiling it is easy to mistake this for damp, particularly in older properties such as Victorian terraces. Damp is usually caused when there is a leak of water into the property such as a leaking roof or gutter or water coming up from the ground through the walls.

The repair job might not be as big as it sounds and can sometimes be fixed with a couple of hours work from a local trusted builder. From experience in our office, items such as a slipped roof tile, blocked/broken guttering or a crack in the outside wall are the most common causes of this.

Putting the Damage Right

For condensation the best cure is to keep the affected areas well ventilated (for example, using extractor fans where there is one and opening windows to keep air flowing through) and to wipe down any areas where the mould appears to help prevent it spreading. It will take time for it to eventually die down but with some good ventilation and some old fashioned elbow grease you should soon notice the difference.

As above, damp may need a little more than just cleaning but a good builder can recognise exactly what needs to be done to cure the problem. Once the job has been finished you will probably need a few coats of good paint or stain block once the moisture has dried up to stop the marks from appearing again.

Big Difference

Condensation usually occurs higher up in rooms whereas damp can lurk around outside walls where moisture can come in rather than it trying to get out. Sometimes it is better to do some investigative work yourself before involving any costly call out charges.

By Steve Roulstone

I posted a Blog a couple of weeks ago about what encourages a Tenant to stay longer in property and the answer both backed by the facts about the length of time our Tenants stay and what the Castle Estates group confirm, is the need for them to have confidence in their position. This involves allowing them to have control of their agreement by NOT being tied down to a new agreement every year.

Reasoning.

It is worth repeating quickly what this means. Tenant’s who are asked to sign a new agreement every year, are by doing so actually being asked a simple question – Do I want to be tied down for another year? In effect, they have their flexibility taken away from them. Instead what we believe in is allowing the contract to role on month by month (Periodic) and handing the control (when they wish to give notice) over to the Tenant. The actual reality is that Tenants stay longer when they do not feel pressured.

Shelter proposal.

Shelter feel that the market needs a five year agreement and I agree with William Jordan of Jordans Rentals (in his piece in Property Drum) that Shelter are approaching the issue from the wrong point. I do not know many Tenants who would agree to sign a five year agreement; in fact I would never recommend advertising a property as available on a five year agreement as it would greatly reduce the interest. What Shelter has missed is that it is not security people wish for, it is flexibility!

Moving on.

It is because Tenants want to be able to move when it suits them, not the opposite and as for Landlords giving Tenants notice to sell the house etc, well it is my experience that this happens very infrequently. Rather, it is when a Tenant gives notice in by far the majority of cases that a Landlord may make a decision to remove the property from the market. Also, it cannot be forgotten that we act for Landlords as their agent and this is a legal fact that cannot be ignored. But if a Tenant wanted a five year agreement and the Landlord was happy, this can already be arranged by using agreements available now, so why change?

Fees.

But there is another area which I alluded to in my original post which also needs to be addressed and this is where Shelter has a point. Too many Agents use the new agreement stance as an income stream by charging the Tenant for every new agreement signed. This has three real time implications. Firstly, they are taking advantage of the Tenant and reducing their upfront Landlord fees. OK for Landlords, but, Secondly, this gives credence to the Campaign waged by both Shelter and CAB to remove all Tenant fees (as, may I remind everybody, is already the case in Scotland) and long term will not do Landlords any favours, just to take short term advantage of Tenants.

Landlords pay costs.

Thirdly, by allowing Tenants to stay under a periodic agreement resulting in Tenants staying longer in the house, in reality, if (and when) a Tenant leaves because of being asked to sign a contract extension, it is the Landlord who is put at risk in having an empty property between Tenancies and losing out on rent, even if this is only for two weeks between Tenants!

Conclusion.

These are the reasons I put to why Shelter are approaching the matter from the wrong end, systems develop and patterns emerge because of the way the market takes them – market forces at work. That some see an opportunity to take advantage is, in my humble opinion, what needs to be dealt with here. Agents can be accommodating and property is available already long term and we are of course asked the question at times, but in reality, flexibility is the answer, not longer agreements.

There is more to follow on this subject and I will be adding to and commenting on what is currently a very live debate very soon!