EXCLUSIVE: How agents and landlords are ‘taking risks’ when sharing referencing info

admin    Uncategorized     agents

An investigation by LandlordZONE into data privacy within the private rental sector has revealed how many letting agents and landlords are sharing information about tenants’ referencing information in contravention of GDPR regulations.

In particular, many agents are getting caught out when there’s a problem with a tenancy and the landlord wants to see the referencing information on which an agent has based their decision.

In theory, they can only share what has been agreed between all parties and within their contracted agreement, usually just a copy of the reference summary confirming the check’s outcome. But when tenancies get into trouble, landlords often then ask to see more detail about a tenant’s background when they challenge the agency’s initial decision to approve a tenant.

Data protection law

Landlords and letting agents are likely to be data controllers under the UK data protection law and should be registered with the Information Commissioner’s Office (ICO), which advises they must be clear with tenants about what data they will collect, why they are collecting it, what they will do with it, who they will share it with, when it will be destroyed, and what the tenant’s rights are in relation to that data.

Vouch founder Simon Tillyer tells LandlordZONE that agents also need to make sure they’re not sharing the name and contact details of a referee as this is personal identifiable information of another individual – not the tenant – which they don’t have grounds for sharing with the landlord. Publicly available information relating to court judgements and bankruptcies would be ok to share.

Legitimate interest

For anything else, an agent must ensure they have a reason to share that information by making a legitimate interest assessment. Adds Tillyer: “Should there be a challenge, they will be able to demonstrate their justification to support the action they have taken.”

He says it is best to have clear T&Cs between agent and tenant which set out that any information used in their application for the property, including the tenant referencing, may be shared with the landlord.

In the case of rent guarantee insurance, it’s often a condition of the policy that satisfactory referencing has taken place; sharing a copy of the reference would be under the ‘performance of a contract’ lawful basis and therefore acceptable, says Tillyer.

“However, best practice would be to extend T&Cs wording to include that sharing the information with the landlord may include for the purposes of insurance.”  

Sensible view

Angharad Trueman (pictured), vice president of ARLA Propertymark, believes agents and landlords must take a sensible view about reference requests.

“The information is of legitimate interest to the landlord and the legal contract is between the tenant and the landlord,” says Trueman. “However, in practice, when information is requested I would always recommend reaching out to the tenant to inform them and have that conversation.”

As many agents may not be completely aware of their responsibilities, Ahmed Gamal, founder of Rentd, advises that one way to negate any breach of GDPR regulations is to allow technology to do the heavy lifting.

“With Rentd, the tenant shares information directly with the landlord and only the landlord,” he says. “Once their offer is accepted, the applicants are referenced based on the information provided with their offer.” 

The ICO’s data protection self-assessment checklist is here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: How agents and landlords are ‘taking risks’ when sharing referencing info | LandlordZONE.

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Tenant referencing queries throw spotlight on data privacy laws

admin    Uncategorized     agents

Letting agents have been urged to swot up on GDPR guidance to avoid falling foul of rules over the sharing of tenant details.

Some are getting caught out, particularly when there’s a problem with a tenancy and the landlord wants to see the referencing information on which an agent based their decision. In theory, they can only share what has been agreed between all parties and within their contracted agreement, usually including a copy of the reference summary confirming the check’s outcome.

Data protection law

Landlords and letting agents are likely to be data controllers under the UK data protection law and should be registered with the Information Commissioner’s Office (ICO), which advises they must be clear with tenants about what data they will collect, why they are collecting it, what they will do with it, who they will share it with, when it will be destroyed, and what the tenant’s rights are in relation to that data.

Vouch founder Simon Tillyer tells LandlordZONE that agents also need to make sure they’re not sharing the name and contact details of a referee as this is personal identifiable information of another individual – not the tenant – which they don’t have grounds for sharing with the landlord. Publicly available information relating to court judgements and bankruptcies would be ok to share.

Legitimate interest

For anything else, an agent must ensure they have a reason to share that information by making a legitimate interest assessment. Adds Tillyer: “Should there be a challenge, they will be able to demonstrate their justification to support the action they have taken.”

He says it is best to have clear T&Cs between agent and tenant which set out that any information used in their application for the property, including the tenant referencing, may be shared with the landlord. In the case of rent guarantee insurance, it’s often a condition of the policy that satisfactory referencing has taken place; sharing a copy of the reference would be under the ‘performance of a contract’ lawful basis and therefore acceptable, says Tillyer. “However, best practice would be to extend T&Cs wording to include that sharing the information with the landlord may include for the purposes of insurance.”  

Sensible view

Angharad Trueman, vice president of ARLA Propertymark, believes agents must take a sensible view about reference requests. “The information is of legitimate interest to the landlord and the legal contract is between the tenant and the landlord,” says Trueman. “However, in practice, when information is requested I would always recommend reaching out to the tenant to inform them and have that conversation.”

As many agents may not be completely aware of their responsibilities, Ahmed Gamal, founder of Rentd, advises that one way to negate any breach of GDPR regulations is to allow technology to do the heavy lifting. “With Rentd, the tenant shares information directly with the landlord and only the landlord,” he says. “Once their offer is accepted, the applicants are referenced based on the information provided with their offer.” 

The ICO’s data protection self-assessment checklist is here.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tenant referencing queries throw spotlight on data privacy laws | LandlordZONE.

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Government commits to shop rental auctions

admin    Uncategorized     agents

Despite strenuous objections from industry professionals and landlords, it seems the government is determined to press ahead with its scheme to “solve” the problem of vacant high street premises.

Draft Levelling-up and Regeneration legislation has now been published which includes this controversial measure.

The draft Levelling-up and Regeneration Bill was published on 11 May 2022 and it contains full details of the government’s proposed high street rental auctions process, and how local authorities are to control who landlords can rent to, along with a raft of other property related measures.

The government says the Bill will “unlock new powers for local authorities to bring empty premises back into use and instigate rental auctions of vacant commercial properties in town centres and on high streets.”

Government literature states:

“The Bill will also directly give local leaders the powers they need to regenerate their communities, and transform their high streets and town centres.

“A new infrastructure levy will see the big developers contribute more towards better local roads, schools, hospitals, and genuinely affordable housing.

“Communities will also receive a share of the Levy revenue raised – as long as they have a parish or town council – and we are exploring how this could be expanded.”

The new proposals include:

• New powers for local leaders to run High Street Rental Auctions, where they can auction off tenancies in shops that have been vacant for over a year.

• Councils will be able to double council tax on empty and second homes, “ensuring everyone pays their fair share towards local services and boost levelling up.”
• The ‘al-fresco dining revolution’ will be made permanent, “injecting new life into the high street through creating a sustainable process for communities, business and local authorities, making it permanently cheaper and quicker to get a licence for outdoor dining.”
• A new locally set infrastructure levy, charged on the final value of property when its sold, to replace much of the “broken” S106 payments system. “This will see the big developers contribute far of the money they make from developments towards building better local roads, rail, schools, hospitals, and more affordable housing.”
• Legislation to make it easier for councils to regenerate their town centres through Compulsory Purchase Orders (CPOs), making the process quicker and easier to use.

Designated areas

The local authority will be empowered to designate a street or an area as being important to the local economy because of the concentration of high street uses. These high street uses are defined in the Bill across shops, offices, restaurants and light industrial, but does not include warehouses.

Once an area has been designated as such, any vacant units will be included in the scheme to force letting through a rental auction. This would be where it is considered by the local authority that occupation is beneficial to the local economy, society or environment.

A vacancy is defined in the Bill as a property in one of the designated areas that has been unoccupied for 366 days or more. This raises questions about what exactly is unoccupied, what about pop-up short term licences, what if the owners use it for storage?

By defining premises as the whole or a part of a building or any part that could with reasonably adapted, it seems it would allow a local authority to specify which part is to be let, for example just the ground floor retail unit of a three story building.

How will forced letting work in practice?

The Local Authority will serve a letting notice on the landlord preventing it from letting for up to 10 weeks without the consent of the authority, unless a contract has been already signed with a tenant.

The authority will have control over the landlord’s choice of tenant during the notice period. Any letting must be for at least a year and the will lead to the premises being occupied by “the regular presence of people at the premises.”

If the landlord fails to find a suitable tenant – one acceptable to the local authority within the initial letting notice period, then a process of a countdown to a letting auction begins.

The auction itself will be controlled at the discretion of the local authority in that the authority will ultimately choose the successful tenant: not necessarily the highest bidder.

The legalities

Further clarification is to be forthcoming as to the terms of any lease between the parties, but this, it would seem, has the makings of a legal nightmare: what about pre-tenancy works and who pays for these, how is the rent set and on what basis, for example turnover rents? What about the responsibility for repairs and maintenance, full insuring and repairing lease? What about responsibility for delapidations? What about security of tenure? The list of questions goes on.

These measures, it seems, ride a coach and horses through the Landlord and Tenant Act 1954, legislation that has governed commercial tenancies in England & Wales quite successfully for many years.

Property professionals and landlords have expressed serious misgivings about how this scheme can be made to work with any degree of success, and without causing commercial property owners serious financial losses.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government commits to shop rental auctions | LandlordZONE.

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East Midlands leads growth in existing tenancy rent bills

admin    Uncategorized     agents

UK rents are rising at their fastest since 2016, according to the latest ONS Index of Private Housing Rental Prices.

In the 12 months to April, excluding London, rental prices increased by 3.4%, while in the capital, they increased by 1.1%, up from an increase of 0.4% in March – the strongest annual growth there since November 2020. Private rental prices have grown by 2.5% in England, by 1.7% in Wales, and 2.9% in Scotland in the last year, with the East Midlands seeing the highest annual growth in prices (4%), and London the lowest.

New tenancies

While the latest Zoopla figures showed rents on new tenancies rising by 11% to hit a 14-year high, the ONS index looks at all tenancies, where rents are rising more slowly. Zoopla’s figures also revealed that rental growth in London had risen by a staggering 25% in the first quarter of the year.

Tenants flocking to the capital are driving up rents, according to estate agent Hamptons, which reports that a record 30% of homes let in London this year went to people who previously lived outside the city; those from the Home Counties now account for more than half of tenants moving in. 

Rents surging

Dan Wilson Craw, deputy director of Generation Rent, says rents have been surging since offices and universities opened back up last year, and more people moved back to cities than there were homes available. He adds: “Now landlords are trying to raise rent on existing tenants knowing that if they can’t afford it, it won’t be hard to find a new tenant. This is unsustainable, particularly for the 39% of private renters who rely on Local Housing Allowance which has been frozen.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – East Midlands leads growth in existing tenancy rent bills | LandlordZONE.

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CPI inflation rate hits 9% in the 12 months to April 2022 – Bank of England gives up?

admin    Uncategorized     agents

The latest inflation figures released today by the Office of National Statistics indicate CPI inflation has reached 9.0% in the 12 months to April 2022, the highest rate since recording started in 1997, and up from 7.0% in March. CPI monthly inflation increased dramatically in April to 2.5%

View Full Article: CPI inflation rate hits 9% in the 12 months to April 2022 – Bank of England gives up?

Commercial Rent (Coronavirus) Act 2022 ends government interventions

admin    Uncategorized     agents

The government recently passed into law the much-anticipated Commercial Rent (Coronavirus) Act 2022. This effectively ends government interventions to prevent tenant insolvencies during the pandemic, largely in the form of the extended moratorium on tenant evictions for non-payment of rent.

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Can they build another 2 storeys on top of my block?

admin    Uncategorized     agents

Hi everyone, I own a top floor flat in a 3 storey flat roof 1960’s Block and the new freeholders have sent us all a letter saying they intend to build a further two storeys of flats on top of the building.

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Ignore new fire safety regulations at your peril, HMO property managers warned

admin    Uncategorized     agents

Property managers have been urged to get up to speed with new fire safety rules and regulations that put more responsibility on them to protect tenants in HMOs.

As part of the Fire Reform White Paper, the Fire Safety Act will ensure all blocks of flats are properly assessed for fire safety risks and the Fire Safety (England) Regulations will help people feel safe in their homes.

Grenfell Inquiry

It paves the way for meeting many of the remaining Grenfell Tower Inquiry recommendations and aims to deliver fire safety improvements in multi-occupied residential buildings by making sure fire and rescue services have the information they need to plan their response to a fire and by imposing a minimum frequency for checks on all fire doors in mid and high-rise blocks of flats.

The government has launched a new consultation on its plans to support residents who would find it difficult to evacuate a building. It includes a proposal known as Emergency Evacuation Information Sharing which would require someone to be responsible for fire safety in their building, who could also assess the needs of the most vulnerable residents and consider what might reasonably be done to mitigate any risks to fire safety. 

Risking lives

HMOs sometimes hit the headlines for not considering residents. Last year, landlord Thirunaukkarsu Kulandaisamy, of Littleover, who risked his tenants’ lives at an HMO by failing to protect them from a fire, narrowly avoided jail. Firefighters discovered the power to the fire alarms was switched off, fire doors were inadequate, tenants did not have any means of escape and the emergency lighting was not working. 

Sean Hooker, head of redress at Property Redress Scheme, says a good number of property managers are not ready, or have yet to even start, their preparations. “Hopefully this White Paper process…will help the smooth implementation of the new regime,” he says. “Ignoring these changes will lead to claims for redress and in the extreme cases, a criminal prosecution – so do not take these responsibilities lightly.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Ignore new fire safety regulations at your peril, HMO property managers warned | LandlordZONE.

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