Landlords are sleepwalking into trouble

Landlords are sleepwalking into trouble.

So the Deregulation Act has been in for a month. Landlords and agents now have more obligations to contend with prior to commencement of a tenancy or a renewal. And most landlords know nothing about it. If you are not going to trouble of reading the act, then expect trouble.

Landlord Action was asked to sit on a House of Commons committee to assist with the formation of the Act. It was a lengthy process and we tried hard to protect the interests of honest landlords.  It was said that the Act was pushed through to tackle rogue landlords who make tenants’ lives miserable. However, I do have concerns that some elements of this will have a negative impact on the vast majority of ordinary landlords. Here are some of the issues that I believe are going to come up – and every landlord should be aware of.

Tenants must be issued with a ‘How to Rent’ guide so that they understand their renting responsibilities. Landlords must also provide up-to-date Gas Safety, Energy Performance and Smoke Alarm certificates, and ask tenants to sign receipt of these.

My advice is to get this done at the same time as signing the tenancy agreement. If you fail to do so and the relationship with the tenant breaks down for any reason, a tenant may make it difficult for you to gain access, which could prevent an engineer carrying out the necessary inspections and providing relevant certificates. Landlords who do not do this WILL NOT BE ABE TO SERVE A SECTION 21 NOTICE if required at a later date.

Landlords can now only serve a section 21 notice after the first four months of the tenancy and not at the beginning, as many had previously done. The new section 21 notice will make landlords’ and agents’ lives a lot easier, combining the old section 21 fixed-term and periodic notices into one simpler form. You do not have to give a specific end date, just at least 2 months’ notice in writing. We thought this was a good idea when we participated in the drafting.

The new notice is for use with tenancy agreements granted after 1 October 2015. For any tenancies prior to the 1st October 2015, the old rules (and old notices) still apply. However, in October 2018 all tenancies (regardless of the date they were granted) will be subject to the new rules. It’s possible we may also see a lot of landlords allowing their agreements to go periodic rather than renewing their tenancies because they are worried about the new rules. In addition, I think letting agents will start charging landlords monthly management fees, as they may not be able to charge for the tenancy renewal if it is not being renewed.

The biggest change, in my opinion is the ‘Retaliation Eviction’ rule, which is something I opposed when giving evidence to the All Party Parliamentary Group last November. I was worried that some tenants would abuse the system and try to get away with not paying rent to landlords.

Tenants must now put their complaints of disrepair in writing to the landlord. The landlord then has 14 days to respond, setting out when they will arrange an inspection, how they are going to remedy the repair issues and timescales for these to be carried out. If the landlord ignores the tenant’s request, the tenant must make a complaint to the Environmental Health Officer (EHO) at their local Council. I have raised concerns all along about the staff shortages at councils and how quickly an EHO will be able to attend following receipt of a complaint from a tenant. Will the landlord still be receiving rent in the interim?

If the property is deemed in poor condition, the EHO can serve an Improvement Notice on the landlord. The landlord then has to attend to the works and is unable to serve a section 21 notice within 6 months from the date of the Improvement Notice. I’ve always worried about the fact that some unscrupulous tenants could damage the property on purpose, prevent the landlord from gaining access, and submit an argument regarding wear and tear. If there are not enough officers to carry out inspections, landlords will be subjected to even further delays in gaining possession. The tenant still has an obligation to pay the rent under their tenancy agreement.

My other concern is that not enough landlords will know about these recent changes. We now have something like 1.6 million landlords in the UK and 78% of them own just one property.  I would encourage the Government to put some funds towards educating landlords, rather than just leaving it to the responsibility of lettings agents/landlord associations. Only last week I presented to about 70 landlords and agents in Manchester. I’d say at least half of the room were unsure about the Deregulation Act, highlighting the need for greater publicity promoting these changes.

As an example of the need to heavily promote any legislative changes, we still receive 5-10 calls a day from landlords who want to evict their tenants but have failed to protect their tenant’s deposit. Even worse, some have not even heard of the deposit scheme which came out in April 2007!

We must also bear in mind the Government has just announced that ‘Right to Rent’ will launch on 1st February 2016. This means landlords will be responsible for checking their prospective tenants’ documentation, including UK or European Passport status, to ensure the tenant has the right to residence in the UK or EU. If the prospective tenant turns out to be an illegal immigrant, then the landlord could be fined up to £3000 per tenant.

So landlords – please understand your obligations stay on top of changes and management. Or instruct an agent – it may be a lot easier.

Precise Treatment Reduces Pain

Detail needs experts. Expert time is worth it when it saves you a costly mistake. Main objective: Get the property back. Best action: Very precise treatment.

Serving a notice is actually the most important part of the possession process.

It isn’t complicated but one tiny error can cause dreadful problems.

That’s why we say, don’t DIY and don’t use internet amateurs. It’s not worth it.

1. Compliance Errors
If the tenant doesn’t leave at Step1, the notice had better be valid. Because then it has to go to court. Any little error can get a case thrown out. And you have to start all over again.

2. Attempting Short-Cuts.
In an effort to be quick, some internet services aimed at landlords are using short-cuts around the process. But if the tenant doesn’t leave (50%) these practices can backfire at court and the case thrown out.

3. Trying to Save Pennies.
Internet services have mushroomed and landlords can expect to get what they pay for. To get the process done PROPERLY it takes a certain amount of time for an expert to look over a file and be accurate. Our fees cover that expert time.

Chasing courts for dates, arranging advocates and preparing court papers is time consuming. Especially if you’ve never done it before.

Some landlord and agents have served notices themselves. They believed they were saving a few pounds but it often ended up costing them more.

If you lose a claim, the court can order you to pay the tenant’s defence cost, which can run to hundreds or thousands of pounds.

Our in-house Solicitors are there to get your property back as fast as they can. And we protect landlords and agents from themselves.

As experts, we know that in the rush to get things done, errors can happen. And those errors can can come back later to mess up your case – and the whole process has to start again.

You can speed things up – give us accurate information quickly. Help us to help you.

There are services on the web who will prepare papers BUT they get you to pay the court-fee separately and get you to sign the court papers – so in fact they don’t represent you!

If your notice (at Step1) wasn’t drafted or served correctly you risk wasting your court fees and losing a whole lot of time because of a small error.

We won’t let your case anywhere near a court until we have checked every little detail. To make sure you don’t waste time or money, at Step-2 we first only charge part of the fee.

If your notice is fine, then you just pay the balance of the fee and we issue the claim. If there is a problem with your notice or paperwork, we will advise you what to do next.

Courts take the view that possession proceedings can make someone homeless. So they are very careful. If there’s any error in the notice, they throw the case out. It’s the process. Get it right or lose.

If the notice is invalid, you have to start all over again. The weeks or months you’ve waited are wasted. If there were rent arrears, there are now more.

If there weren’t rent arrears, they might now start. More fees. More lost rent. And still no possession. Tenants can be alerted to making a counter-claim.

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