Regulator forces high profile letting agencies to refund clients after Coronavirus complaints

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The Competition and Markets Authority (CMA) has threatened to come down hard on the holiday home rental sector, prompting at least one company to change its cancellation refunds properly.

After the CMA announced an investigation into
cancellations and refunds, Vacation Rentals voluntarily changed its policy on
offering refunds to all customers whose trips were cancelled.

The company – which operates sites including
Hoseasons and Cottages.com – had told customers they couldn’t have a full
refund if a booking was cancelled due to the coronavirus outbreak.

It’s now reversed that decision and has promised to communicate its new policy clearly on its website and via social media, and to update the CMA with monthly reports on the number of refund offers that have been made and accepted.

Covid taskforce

It was one of a number of companies reported
to the CMA’s COVID-19 Taskforce. Common complaints include companies
refusing to provide full refunds at all or offering only vouchers instead of
cash refunds.

The CMA has vowed to continue its inquiries into the holiday accommodation sector, which could lead to court action against companies which don’t comply.

The CMA says it would expect a consumer to be
offered a full refund where a business has cancelled a contract without
providing any of the promised goods or services, or when no service is provided
by a business.

Or, for example, because the delivery is prevented by Government public health measures, or if a consumer cancels, or is prevented from receiving any services, because public health measures mean they aren’t allowed to use the services. 

Read more about the CMA.

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Concern grows among landlords and legal experts over proposed Coronavirus insolvency legislation

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Draconian new insolvency laws are set to
cause commercial landlords big problems.

The second reading of the Corporate Insolvency and Governance Bill – being debated in the House of Lords today – aims to help tenants stave off insolvency during the crisis but has big implications for landlords.

While the Government wants
to safeguard tenants, particularly those on the high street, against aggressive
debt recovery actions during the lockdown, there are fears the result will be landlords
with reduced negotiating power and less incentive for corporate tenants to pay rent.

The Bill effectively removes the insolvency
process from the landlord’s armoury in rent recovery as they’ll be blocked
from chasing rent payments for at least 90 days.

It includes a temporary ban on landlords using
winding up petitions between 27^th April to 30^th June,
where a tenant can’t pay its rent bills due to coronavirus.

Landlords also won’t be allowed to start recovering rents
unless they’re owed at least 90 days of unpaid rent, while the previous minimum
was seven days.

Accountancy group Moore claims the legislation weakens property investors’ negotiating power.

Tip too far

Director Chris Tate says: “The
scales now threaten to tip too far in favour of big multinational corporate
tenants against landlords who might be small private investors or pension
funds.

“For some smaller landlords the
suspension of rent payments could put them under acute financial pressure.”

He adds: “This latest bill will further
incentivise corporate tenants to not pay rent even if they can afford to. The
legislation should at least allow landlords to charge a sensible level of
interest for the late payment of rents over the last few months, if this is not
stipulated in the lease.”

Moore suggests the Government should consider asking businesses that have reported a turnover of £45m or more last year and forecasted free cash-flow for the next quarter of 5% of sales to pay the rent due or a proportion of it.

Read more about government attempt’s to regulate the commercial property market during the crisis.

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What Planet Are They On?

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If it wasn’t enough that we are now expected to provide housing services for free for very lengthy periods – due to the eviction ban – where tenants decide not to pay the rent, the left are also trying to get rent arrears cancelled and even rent-free housing.

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Solicitor to launch class action lawsuit against investment guru Samuel Leeds and others

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Disgruntled property training course attendees
are gearing up to bring a group action against ‘investment guru’ Samuel Leeds –
and there’s still time for others to join them.

Jarmans Solicitors is set to pursue the action
on behalf of dozens of former trainees of the evangelical-style
guru, who claims that his investor clients can make their fortunes, after
attending pricey ‘crash courses’.

It says of property courses: “The so-called
sacred lessons can be easily researched online. There is no guarantee. Most
victims – sorry, devotees – make no money at all and indeed lose money as they
are often sued for the remaining fees once they are locked into the system.”

The solicitor put out the call for possible claimants earlier this year and is encouraging others to contact it to discuss their case. Last month, solicitors at the firm had spoken to 70 people about their dealings with Samuel Leeds and reported that more calls were coming in daily.

Strength in numbers

It believes there’s strength
in numbers, as legal costs can be shared with other claimants and are initially
fixed fee. It’s not yet clear whether the litigation would
be against both his company as well as his personal name, and other companies.

In recent months, Leeds has hit the headlines for all the wrong reasons; a video was posted online of him verbally abusing and publicly shaming a keyworker on one of his courses while Lord Sugar has snubbed Leeds in a video message denying all links with the self-styled guru after he claimed to have been mentored by him.

In January, the BBC’s Inside Out investigation team broadcast
a programme highlighting the tragic case of Danny Butcher, a former soldier who
killed himself after trying to clear his debts by enrolling on a £13,000 course
run by Property Investors.

To help bring higher standards and greater transparency to the sector the Property Investors Bureau recently launched the Property Educators Accreditation Scheme.

Visit Jarmans Solicitors.

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Free mentoring service launches to support letting agents during the Coronavirus crisis

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A foundation has been launched this morning that is to begin offering business owners working in the letting industry both mental health and business advice mentoring to help them through the Coronavirus crisis.

This is no back-room, home-spun charity. The former CEO of hybrid lettings agency Purplebricks, Michael Bruce, who has amassed a £35 million fortune after the company floated in 2015, is backing Agents Together with £1 million of his own cash.

Landlords may run a sceptical eye over the organisation at www.agentstogether.co.uk but it has laudable aims – to help the owners of Britain’s SME letting agencies navigate a path through both the pandemic and the looming economic downturn.

Bruce is calling on anyone with experience of the property industry to sign up to be mentors for lettings agency owners, and the foundation hopes to set up a permanent network of these mentors across the UK.

Agents Together will also be buying in clinical expertise to help agents who are experiencing mental health issues such as depression and anxiety, and has also signed up several famous business gurus to lend a hand too.

Bruce has told LandlordZONE that although the foundation’s free services are for estate agents, this includes people who have hybrid roles – for example many landlords are also letting agents and vice versa.

Hope

“Agents Together is a Foundation born out of hope that the impact of Covid 19 has presented a collective opportunity to come together to change the narrative for estate agency,” he says.

“Our mission is to ensure we do not miss this once in a lifetime opportunity to support each other through the difficult times ahead, embracing the power and energy of the industry to build towards a better future raise professional standards and change perceptions to unlock a greater understanding of the role and worth of a professional agent”.

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Even more worrying requests by the Select Committee

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At the beginning of May we responded to a Call for Evidence to an Inquiry by MHCLG. Our ‘evidence’ and criticism of the governments treatment of the PRS in general and more specifically during the Suspension of Possession proceedings was brutal.

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