Tag Archives: Landlord Issues

11Jun 2013

Utility Companies Who Expect More Money Cause Headaches in Rental Properties

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By Craig Smith

Utility Companies

Over the past few years we have seen an increased amount of people who have some form of poor credit. It doesn’t seem unusual these days for someone to have a CCJ or a repayment plan with a debt management company but it sometimes the lesser known about forms of debt management that can have a knock-on effect for other people.

For instance, most gas & electricity suppliers will install pre-payment meters if a customer is constantly late with their payments or doesn’t pay at all. This might seem like a fair form of punishment for non-payment but it is the Landlord and even the next tenant who are left to pick up the pieces.

One property that we manage was fitted with pre-payment meters for that reason and this was only found out when the tenants moved out. (The utility companies have no dealings with the agent or Landlord once the tenant is responsible.) The Landlord ended up having to top up the meter once the tenants had left as it had still been left in debt and to ensure it was kept topped up to keep the heating etc ticking over. Then, when the new tenant moved in, the energy company stated that the new tenant should pay on time for the next 12 months before they would even consider changing the meters back again!

There is one certain company that ask for a deposit of £100 each for gas & electricity supplies otherwise they will take further action. Just a few weeks ago we had a property come empty that was supplied by Utility Warehouse and they requested such a deposit. They informed us that the deposit would only be waived under 3 circumstances. The first was to setup a monthly direct debit for the payments which is unnecessary as the property would only be empty for a few weeks. The second was to have prepayment meters installed which would cause yet more disruption to the Landlord and the property. So, we opted for the third option which was to change to another supplier.

All this is just so much hassle considering only a small amount of energy is used during an empty period, and given the fact that we always take move in & move out meter readings for each tenancy there should be no incorrect billing whatsoever!

Going back to my first point here, how does any of this help somebody who has had financial difficulty to get back on track?! Some of these utility companies seem determined to make life difficult and don’t seem to be able to make a reasonable decision for the right circumstances!

21May 2013

Current Property News: Queen’s speech skims the surface, but reactions dig deep!

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By Steve Roulstone

r_seaman@hotmail.com

 

Many have commented on the Queens speech and it will come as no surprise that it is the element included in the forthcoming immigration bill that I now make the subject of my latest Blog.

Content.

Much has been said about the lack of detail contained within the speech and most will see this as a hastily included promise, aimed mainly at the ears of those who chose to support UKIP at the recent local elections. I believe they would probably be correct to do so! I do not wish to comment on the political rights or wrongs of this situation, but there is no doubt the clamour to make political gain from the lack of detail have themselves repeated the same lack of detail in what they have written.

A R L A

Rather, what detail is known, confirms that anybody writing without including how the current checking systems work in our Industry are showing themselves to be short on knowledge and it would appear, purely intent on causing embarrassment to the Government or making some kind of gain themselves. The best report and summary of where we actually are with what has been suggested against how the Industry deals with references now, comes from A R L A who have summarised very simply the reality of what is being suggested.

In the know!

What happens within the vast majority of Agencies in the UK is that professional referencing is carried out by professional referencing agencies, which include taking the potential Tenants National Security Number which assists in confirming identity and employment records. In effect, we are already able to confirm very easily the status of all applicants, meaning the check is already being carried out and is therefore available for any Landlord who wishes to avail themselves of the services most Letting Agents offer.

In the know but not known!

It is the Landlords who take advantage of the system to accept Tenants without ensuring such checks are carried out that are being addressed by this potential legislation. This point is missed by nearly all reports as the writers pursue their own cause through print. It is therefore hardly a blind leap, to see just how easy it would be too introduce the same tests carried out for others, to the few who have created the apparent need for action to be taken.

Sensible reaction.

Mine is a small point but relevant none the less and I just hope that the promise not to introduce yet another hurdle for the vast majority of honest good Landlords to jump, is upheld, especially when all Landlords who utilise our system for example are in effect already complying. Now for those who read my ramblings regularly, I am reaching for the cupboard and reaching for the drum!

Professional.

What I do not agree with, is yet again it seems the clear and once and for all legislation required to turn the industry into a professional service is being sidestepped. Whether it is via licensed Agents or registered Landlords, the solution lies with the Government that has the strength to research and legislate in an organised and industry sponsored manner. Every professional body would work alongside a Government to produce what would deal with all of these side issues in one step and give the public the comfort and trust all professional Agents and Landlords justifiably feel they already deserve.

 

12Apr 2013

Rental Property Info: Evicting Tenants Not as Easy as it Sounds

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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!

31Jan 2013

Lettings Advice: The Importance of Good Property Management

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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.

15Nov 2012

Rental Property News: Survey Shows High Number of Properties Left in Poor Condition

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By Craig Smith

At the end of every tenancy comes the day that a lot of Landlords and tenants both dread… the day the tenant hands the property back to the Landlord. The actual arrangements can be simple enough but sometimes the property can be returned in a less that satisfactory condition.

Landlords Not Happy

A recent survey of 300 Landlords by Meet My Agent suggests that 73% were not happy with the condition in which their rental property was returned to them. This doesn’t necessarily mean that the properties needed a complete refurb but can mean items such as cleaning or repairs were not up to scratch. That said, the survey also suggests that 41% of Landlords’ properties have needed a complete refurbishment following a tenant vacating which is staggering!

Our Recent Statistics

I’ve looked back through our most recent 20 check outs and can conclude that, in general, more properties have issues upon the tenants vacating than those that don’t. The split is 60% that have issues, whether it is something small such as a couple of hours cleaning or more in depth works, to 40% that were left with no issues whatsoever and are ready to be occupied again.

Facts Instead of Presumptions

To get a better picture I think it is more important to look at the actual level of works required rather than just looking at the number of issues. Looking back again at the 60% which needed works, I cant find a single one which didn’t need some form of cleaning following the tenant vacating. Again, this doesn’t mean that these tenants have lived in squalor, (far from it!) but does mean that the property wasn’t left in such a clean condition as when the tenancy first began.

3 out of those 12 needed items other than cleaning such as replacement items but none of these were anything too major.

Preventing Extra Works

One way to better the chances of a property being returned in good condition is to not only take an inventory at the start of the tenancy but also to tell the tenants what you would expect. Part of our usual process is to send a short set of guidelines to the tenant which lists some of the most commonly forgotten items. Some of the main concerns mentioned above include dusting down skirting boards or making sure a kitchen extractor hood is left clean.

Best Practice

Through the experiences this office has gained we find that advising tenants before they vacate can help to ensure a property is returned in a good condition. Of course this isn’t always the case but it does all add up to ensure a smoother handover!

05Jul 2011

Property Rental Advice: Unregulated Agents May Not be Properly Trained

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By Craig Smith

There have been a number of news articles recently about the number of letting agents going out of business whilst still in possession of money that is owed to Tenants and Landlords. Sometimes the office may relocate to save costs but sometimes poor communication can lead to a lot of confusion and Landlords being out of pocket.

Professional Bodies

There are a number of professional bodies that agents can join, there is ARLA, RICS and NALS to name just a few, and Castle Estates Staffordshire is an ARLA regulated agent. By being members of a governing body, this can give Landlords and Tenants reassurance that their money is safe and protected as necessary.

Is Your Agent ‘In the Know’?

There is no current law that says a letting agent must be governed and near enough anybody could start their own letting agency. Some of these agents may be charging very low management fees which will no doubt attract some Landlords due to the lesser amount of money that they would have to pay out. But do some agents have the experience and the knowledge to manage a property correctly?

We are proud to have 4 fully ARLA trained staff in our office and 3 more staff members currently working their way through the training material and examinations. By having staff members completing this training, they show that they understand the current legislations and practices that dictate the world of lettings as well as receiving regular updates in lettings news.

Safety Risks

As mentioned earlier, some agents may not have the experience or the know-how when some matters arise. In turn, this could compromise Tenant safety during a tenancy, for example not having a Landlords Gas Safety Certificate completed each year. The safety check is perhaps the most commonly thought of but there are dozens of other examples, such as the Fire & Furnishing Regulations Act 1988 where furniture provided by a Landlord must meet certain safety criteria.

So Who Can We Trust?

There are a number of unregulated agents who are more than trustworthy and we do not aim to ‘tar everybody with the same brush’ where this is concerned. Likewise, there are still a few rogue agents who will be regulated but may still choose to deal in an inappropriate manner. Sometimes the best marketing tool is the simplest… recommendation! 

28Jun 2011

Cost Cutting Leads to More Disputes Between Landlords and Tenants

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By Craig Smith

In recent years, the country has been through a recession (some people would argue that we a still in the recession) and the cost of living seems to be ever increasing. Not only the cost of food and necessities but the cost of fuel has risen dramatically in just the last few months. This has had a knock on effect in the way that some properties are presented at the end of some tenancies.

Increasing Disagreements Between Landlords & Tenants

We have seen an increasing number of disagreements between Landlords and Tenants over some items which may be considered insignificant in the scheme of things. For example, a shower curtain may be left in a well used condition at the end of a tenancy by a Tenant who doesn’t think they should spend £10-20 replacing it. However, the Landlord may also be less willing to replace it as they may see this as an unnecessary expense. This then leads to a dispute between them and can sometimes turn what was a perfect tenancy into a feud.

Deposit Disputes

Thankfully, we don’t have a great deal of deposits that go through the DPS adjudication process (please refer back to our blog relating to best practice for deposits) although it is increasingly difficult to reach an agreement between both parties. We act as agents on behalf of our Landlords which means that some Tenants see us as ‘taking sides’ This isn’t the case and whilst we do work for Landlords primarily, we always try to reach a fair decision. For example, a Landlord who may be trying to charge £100 for that shower curtain probably wont get his money if the case went to dispute.

Issues at the Start of a Tenancy

Not all disagreements occur at the end of a tenancy. Some Landlords may not see the need to clean a property before tenants move in or have those little jobs finished. This then comes back round in a circle at the end of a tenancy when the Tenant may feel that they should leave it in the same condition.

What to Do?

Best practice dictates that a property should always be presented clean and in good condition at the start of a tenancy. By doing this, there is a benchmark for how the property should be returned when a Tenant vacates. Although wear and tear can only be expected, properties should always be presented as you would like to find it!

24Feb 2011

Deposit Protection Issues: Best Practice

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By Craig Smith

Since 6th April 2007, any deposit taken for a property that is being let with an Assured Shorthold Tenancy Agreement in England or Wales must be registered with one of the three approved deposit schemes. This can sound like another hoop for Landlords to jump through but the results of not properly registering a deposit can be costly.

Does it make any difference?

In a word… yes! It is not just a case that the money has to be protected but by registering the deposit with an approved scheme, the money can be held in a secure account and is protected for both parties. Each scheme also have their own dispute resolution service which can be used as an alternative to court action if the Landlord and Tenant disagree about any costs at the end of a tenancy. The adjudication service will take into account any evidence from Landlords and Tenants, which is where a good inventory and check out report come in to play!

Tenant Find properties, who deals with the deposit?

Tenancies where an agent only finds a tenant for the property but does not manage it can sometimes be a grey area depending on who registers the deposit. Castle Estates can still register a deposit on the Landlords behalf although would not be able to get involved in any claims at the end of the tenancy. Please feel free to contact us for further information.

So what if it isn’t registered?

If a Landlord fails to properly register a deposit they can be forced to pay back the full deposit, plus 3 times the amount of the deposit to the tenant. And on top of this, a Landlord would not be able to issue a Section 21 notice requiring possession of the property. Not only would it costs 3 times the amount of the deposit, it would also take a lot longer to gain possession of the property.

When should the deposit be registered?

Any monies taken as a deposit should be registered within 14 days of the Landlord receiving it. This is regardless of whether the tenancy has already started or is to start at a later date, although if the monies are paid but the tenant backs out of the deal, don’t forget that the money should be paid back to the tenant!

Where do we go from here?

Always make sure that your deposit is protected, if it falls under the legislation. A good agent will always look after your investment as if it were there own. If in doubt, please do contact us for further advice.