Editorial – September 2016

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Tomorrow, 1^st October is the anniversary of the introduction of a whole bunch of new regulations to hit the private rented sector (PRS).  Not since the introduction of the assured shorthold tenancy (AST) has so much change affected the private residential landlord.

Our lead article this month spells out the consequences and gives some pointers as to what landlords and agents should be doing to cope with all this change. There is no doubt we have entered the age of the landlord administrator, not the casual let-and-forget variety we have become accustomed to in the past.

This is hardly likely to abate in the future, with more regulations for agents in the pipeline, the coming energy efficiency standards, where a minimum of an EPC rating “E” will be required after April 2018, and it is likely that electrical system and appliance checks will become mandatory before too long.

Two upcoming Landlord shows will be well worth a visit if you get chance: the Landlord and Letting show takes place at City Hall Cardiff on Wednesday the 12^th of October, and the Landlord Investment Show will be held on Thursday the 13^th at Manchester United Football Club (Old Trafford) – see more details in this issue. Get yourself along to one of these events and bring yourself up-to-date with all these latest changes.

If you are really serious about understanding the legal requirements, the 1 day workshop with barrister Sam Madge-Wyld and Tessa Shepperson – “The Easy Law Training 2016 Legal Update” – is designed to bring landlords and agents you up-to-date with all latest landlord & tenant legal changes over the past year, and as we have seen, there are plenty of them this year.

If you can’t get along to any of these events I would urge you to read some of the coverage on the legal changes in this issue and on the LandlordZONE® website – it takes a little effort to acquire new knowledge, but it will pay off in your business many times over. Remember, a bad tenancy, a tenancy gone wrong can easily cost you up to £10,000.

The best way to deal with a bad tenant is to avoid him or her in the first place and in that regard checking out your tenants using a reputable referencing agency is one of the most sensible things you can do. TenantVERIFY®, reported in this issue, has just announced the launch of its new website after many years of operation with its original website. They have also issued their recommended 20 point checklist for screening tenants, which any landlord or agent can use – a 20 Point Checklist  – TenantVERIFY® Recommended Screening Checks.

It’s worth bearing in mind what Albert Einstein once said – “Any fool can know. The point is to understand.”

Good luck with your lettings.

Tom Entwistle, Editor

… LandlordZONE.

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New Letting Regulations start to bite…

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Tomorrow is the 1^st anniversary (1^st October 2015) of the introduction of a whole new set of rules which have turned the business of letting residential rental property into a paper chase – an evidence-based process.

Fail to collect the evidence, meaning documents to prove that you followed a strict process, and you could be liable to a fine, in some cases, or you may find yourself in serious trouble if you need to use the Section 21 eviction process.

The time is fast approaching when some landlords will need to seek possession for tenancies which started under the new rules – those commencing on or after 1^st of October 2015 – so I foresee many landlords falling foul of these new rules.

The government’s strategy, a rather clever one, to try to improve letting standards, is to use the threat of withdrawing the real benefit of a no-fault eviction process – Section 21 – by imposing specific prior criteria upon the landlord or agent: serving the correct documents at the start of every tenancy; protecting the deposit, serving correct deposit notices; and responding adequately to requests for repairs. In addition, since last February, strict Right-to-Rent regulations must be complied with.

These are quite reasonable demands on a landlord, and not all that difficult to achieve for the diligent landlord or agent who has the correct administrative systems in place.  The problem is many landlords have become accustomed to taking a casual approach when putting a tenant in their property.

The new landlord, the so called “accidental landlord”, those who just don’t keep themselves up-to-date with the legal requirements, and finally the rogues who rarely follow the rules; all are vulnerable if their tenants want to enforce their rights, or they house the small minority who quite simply abuse those rights.

Many landlords feel the law is stacked against them. Well generally that’s not the case in my view; the Assured Shorthold Tenancy (AST) in England has stood the test of time, it protects the tenant as well as the landlord, but ultimately it gives the landlord the a no argument, no legal challenge right to possession if things go wrong.

Yes, some landlords have abused this privilege, but given it takes months of notice and legal process to actually achieve possession, it’s pretty rare if not impossible for a tenant to be evicted “at the drop of a hat” as many of the homelessness charities imply. Most landlords are at their wits end before they invoke this process.

We all know that the overwhelming majority of landlords want to follow the rules, provide good quality accommodation at a competitive price, and do all they can to keep their tenants as long as possible – changeovers cost money.  And by far the majority of tenants are satisfied with their rental accommodation and their private landlord’s service.

The LandlordZONE® website is full of information, as well as high quality forms and letting agreements, to help those landlords and agents who take the time to read them and use them. Letting is not “rocket science”, but it does now more than ever take some preparation and organisation in terms of getting your systems in place – you need good administrative skills if you are to avoid problems with your tenancies.

Perhaps one of the most insidious pieces of legislation passed recently, and which landlords now face, is the so called “retaliatory” or “revenge” eviction regulations. These prevent landlords seeking possession when a tenant has filed a complaint, and the landlord has not responded adequately.

With winter coming, inevitably the problem of dampness and condensation raise their ugly heads in rental accommodation. If you have a property which is susceptible to condensation – we’ve all seen those ugly pictures of black mouldy walls – then it’s easily interpreted as dampness by the authorities – the environmental health officer with little experience of this may condemn the landlord, when in fact it’s the tenant’s doing. Drying clothes on radiators, failing to heat the place properly and not opening windows or using extractors to vent steam, they create category 1 or 2 hazards out of nowhere.

These repair situations are extremely difficult to deal with faced with an obstructive tenant – any tenant refusing entry for repairs creates a nightmare situation when it can hold up an eviction. Tenants in financial difficulties will often throw up a “smoke screen” for landlords by requesting repairs, just to delay payments. With the new rules on repairs reporting it rather plays into their hands.

I’m afraid age and experience makes me cynical in these matters, but I’m already seeing evidence of tenants presenting landlords with a list of repairs when they have been sent a demand for overdue rent.

There are ways and means of dealing with all these situations effectively, but it requires knowledge and good preparation. Below is a list of information links that will help you tackle these problems:

• The new Section 21 Rules

• Doing Risk Assessments

• Repair Reporting Issues

• Protecting Deposits Correctly

• Discrimination and Immigration Checks

Do yourself a favour, do some useful reading and bring yourself up-to-date with the latest changes in the lettings rules and how to deal with them. As the 12 months’ anniversary of many of these new rules approaches, tomorrow, be prepared and you won’t fall foul.

Tom Entwistle, editor, has had many years’ experience developing, letting and managing residential and commercial property. Give your feedback here: editor@landlordzone.co.uk

… LandlordZONE.

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PRA confirm new increased BTL stress testing and underwriting standards

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The Prudential Regulation Authority (PRA) have now confirmed to lenders what they expect the minimum standards of Buy to Let underwriting to be. These standards will have to be in place by 1st January 2017 for rental stress testing and by 30th September for other minimum affordability and risk checks. The PRA have confirmed the… Read more

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Scottish Councils blamed for not protecting tenants

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As reported by The National newspaper, a majority of Scottish people believe that councils should be doing more to enforce laws that protect tenants against rogue landlords. The safety of tenants in the Private Rented Sector (PRS) was highlighted according to a new poll. Homelessness charities including Citizens Advice Scotland (CAS) and Shelter Scotland claim […]

… LandlordZONE.

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