Will self-managing landlords ever embrace tech?

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Small fortunes have been spent trying to persuade self-managing landlords to use online platforms, but are they really needed? We asked one tech CEO to make his elevator pitch.

Hundreds of millions of
pounds have been spent developing online tech to help landlords manage their
properties direct.

And this outpouring of
investor cash appears to be working. When LandlordZone sat down with a dozen
landlords last week to talk to them about their thoughts on the property
market, many but not all had used tech in one form or another to manage their
tenancies or businesses.

We sat down with Calum
Brennan, CEO of England’s largest and oldest online lettings platform
Howsy.co.uk, to find out if all this tech has a future or whether it’s just a
passing tech fad.

What advantages does tech
offer landlords?

Brennan says he started up
Howsy because he believes data can be used to make renting better and, for
example, accurately price properties when they are listed and therefore help
‘shift them quicker’.
But Howsy’s tech can also complete some slightly more Orwellian feats including
predicting when a tenant is going to default on a rent payment, and whether a
landlord should repair or replace a boiler, for example.
“That’s what got me excited,” he says.

Landlord acceptance

Brennan says it used to be
difficult to get landlords to accept tech, but claims it’s getting easier as
they begin to use comparable ‘disruptor’ platforms such as Uber and become
familiar with the advantages of online.

“I recently moved to a small
town near our new Coventry customer service centre and found that I could use a
laundry app to get my clothes dry cleaned; something that would have been
unimaginable five years ago,” he says.

Costs

Brennan says Howsy’s tech enables it to hugely increase the margins that it makes from each property compared to a traditional letting agent and therefore this is passed on to the landlord as a lower fee.

Don’t landlords like local?

“Local expert agents have
much to offer but their service levels and quality can vary from town to town
or area to area, whereas our tech offers a consistent service and a national
brand regardless of where it’s delivered,” he says.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Will self-managing landlords ever embrace tech? | LandlordZONE.

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HMO Landlord Defeats VOA in Land Tribunal Ruling on Banding Individual HMO Rooms for Council Tax

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We published an article a few weeks ago by Andrew Roberts from The Great Property Meet which asked our community for help and guidance for one of his Members in preparation for a Land Tribunal hearing (article link here).

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Cardiff licensing consultation extended over RLA consultation period concerns

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A consultation on plans to renew an additional HMO licensing scheme in the city has been extended. The initial consultation period ran for only seven weeks and was due to close on 31st January, something the RLA raised concerns about in its response to the consultation. Specifically, because the consultation was short and ran over […]

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Scotland mulls reform of outdated commercial lease laws…

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Commercial Lease:

In Scotland (unlike
in England), the law of commercial property leases, when it comes to
ending a lease, is based largely on ancient common law and some
obscure statute law, and is deemed to be out-dated for modern
commercial practice.

Although there has
been a general reluctance to legislate – and in contemplating it
there is disagreement among stakeholders as to what should replace
the existing rules – there is nevertheless concern that the current
system is likely to discourage investors and occupiers, giving
England a competitive advantage when attracting inward investment.

In England and Wales
The Landlord and Tenant Act 1954 (Part II) was an important piece of
legislation which has governed the letting of commercial premises
relatively effectively for many years. English & Welsh Business
Tenancies are primarily contractual in nature, i.e., based on English
contract law, a contractual agreement between the parties and usually
result from a protracted pre-contract negotiation of the terms
between landlord and tenant.

However, in England
& Wales Part II of the Act recognises that business tenants need
protection since they stand to lose their business and any goodwill
they may have built up over years, and perhaps much of the value of
their stock and equipment, if they have to leave the premises
abruptly at the end of their lease term. Therefore, the statutory
rules kick in when the lease terms ends.

So, the L&T 1954
Act is primarily intended to provide business tenants with some
certainty, the right, if they wish, to renew their lease on the
expiry of the contractual term on essentially the same terms, subject
to a review of the rent to open market rent.

The landlord is
entitled to oppose lease renewal on limited and specified grounds
(such as redevelopment), but may have to compensate the tenant. The
downside is that if the tenant contests the issue, the matter is
referred to arbitration or court potentially resulting in significant
uncertainty, cost and delays.

The 1954 Act does
give a degree of certainty for both sides if they follow the
statutory rules, which are quite clear. It is well tried and tested
and many precedents have been set through court cases over the years,
meaning the process, though not perfect, works well for both
landlords and tenants, large and small.

In Scotland,
commercial lease law is a “grey area of lease law” and needs to
be in black and white argues Stephen Webster, a Partner, Commercial
Property, at Urquharts writing for The Scotsman newspaper.

Following an
extensive consultation exercise, the Scottish Law Commission (SLC) is
soon expected to make recommendations for the reform of Scots law
relating to the termination of commercial leases.

Landlords and
tenants will often assume that a Scottish commercial lease will end
on the date the lease says it will, but that is not necessarily so.
Under the Scottish common law doctrine of ‘tacit relocation’, if
neither party has given the required notice to quit in time, the
lease is extended automatically at the same rent and otherwise
essentially on the same terms, for at least a year.

For the unwary
landlord or tenant this can cause much disruption and possibly
financial distress if a new tenant has been lined up, or the tenant
has made commitments elsewhere. On the other hand it can sometimes
work to the advantage of one or other party if they are ignorant of
the rules.

According to Mr
Webster, there is no obvious reform solution in Scotland.

“If tacit
relocation is abolished, should parties have the right to opt back
in? But if they don’t opt back in and then, after its expiry date,
act as if the lease is continuing, does there need to be a new
statutory scheme to regulate what happens (like there is in
England)?” he says.

“…would such a
statutory scheme provide more certainty, or would it just introduce a
raft of new areas for dispute? If tacit relocation is retained, could
its main dangers be addressed by allowing the parties to agree at the
outset that any automatic extension will be only for short rolling
periods, rather than potentially a whole year?”

“Consultation
responses indicate that there is no clear consensus on what should
happen. Tacit relocation operates where neither party has given the
requisite notice to quit. It is therefore vital that landlords and
tenants know exactly what is required (i.e. when notice needs to be
given, what it needs to say, and how it needs to be given).”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Scotland mulls reform of outdated commercial lease laws… | LandlordZONE.

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1p go £4,880: Landlords begin returning deposits as cap regulations kick in

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The new regulations mean that landlords must return cash to tenants if the deposit for a renewing tenancy exceeds five weeks’ rents.

The tenant fees ban and its restrictions on rental deposit size
are beginning to bite with landlord refunds running from 1p to several thousand
pounds, it has been revealed.

This includes one landlord who this week voluntarily paid £4,880
back to a tenant on their refundable property deposit thanks to the new
legislation.

The lucky renter – who admittedly had paid a proportionately
large deposit – was handed the bumper refund recently.

Since the Tenant Fees Act was introduced last June, landlords in
England are paying back an average deposit of £317 to tenants renewing
contracts with them, although one landlord has even paid back just one penny.

The legislation states that a
refundable tenancy deposit must be capped at no more than five
weeks’ rent where the total annual rent is less than
£50,000, or six weeks’ rent for rent £50,000 or above.

It also says that any existing
deposit above the cap should be refunded on a new fixed-term tenancy which is
created on, or after, 1 June 2019.

Deposits have typically fallen from 5.5 weeks rent in
April to 4.76 weeks in December, according to TDS. This is helping renters
across England make an average saving of £163 and £300 in London.

Steve Harriott, its chief executive, says: “Handing over a penny to a tenant might seem a bit pointless, but
we’re pleased to see that landlords are adhering to the new legislation, no
matter how small the refund is.

“The legislation now means tenants can easily see what any given property will cost them with no hidden costs.” Find out more about how the deposit cap works.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – 1p go £4,880: Landlords begin returning deposits as cap regulations kick in | LandlordZONE.

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Fire safety – making sure your tenants are safe

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In the year ending June 2019, 215 people lost their lives due to house fires – including tenants in rented homes. In response to this the Home Office has re-launched its fire safety campaign – including information and advice for landlords and tenants. Landlords’ obligations As a landlord you must: make sure all gas and […]

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When will landlords face greater regulation following landmark Lord Best report?

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Industry players gathered at parliament last night to find out the latest news about greater regulation of the private rented sector, including LandlordZone.

Many landlords may not realise it but they and many of the other players within the private rental market face significantly higher oversight when the Johnson government implements the recommendations of a much talked-about report, most likely in late 2021.

A gathering was held last night at Parliament to bring together all the major parties that will be affected and LandlordZone was there to find out what progress has been made.

The event, which was sponsored by Citizens Advice and was attended by all the major landlord, estate agent and leasehold agents associations, redress schemes as well as the Ministry of Housing, heard from the report’s author Lord Best (pictured, above right), who said the government has yet to commit to a date for moving forward, but was still keen on policing the private rented market better.

“This is a well thought out blueprint for the robust regulation of the sector and brings together all the elements for a safe, professional and reputable industry in which faith can be restored by consumers,” says Sean Hooker (pictured with Lord Best), Head of Redress at the Property Redress Scheme.

Despite the government’s commitments to turn Lord Best’s 50+ proposals into legislation, the event was conspicuous by the absence of the current Housing Minister, Robert Jenrick.

But Lord Best said this was not indicative of the government’s lack of support for the proposals and that the weight of support by the industry for regulation was compelling.
“He was very hopeful the current administration would act accordingly.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – When will landlords face greater regulation following landmark Lord Best report? | LandlordZONE.

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Right to Rent checks carried out by Agents

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The property agent did the Right to Rent checks on a tenant when they initially issued a 12-month tenancy contract to the tenant. The property is fully managed by the Agent. At this point the tenant’s visa did cover for full first 12-month tenancy contract.

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