Block managers under fire over ‘large commissions’ paid to them by insurance firms

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Companies selling multi-occupancy insurance will have to act in leaseholders’ best interests under new proposals from the Financial Conduct Authority (FCA).

It is demanding new rights and protections to improve the transparency of the multi-occupancy leasehold buildings insurance market.

Under the plans, leaseholders would be defined as customers of buildings insurance and firms would not be allowed to recommend a policy based on commission or remuneration levels.

 Insurers and brokers would also need to provide more information about insurance policies to leaseholders, including detail of any commission paid.

An FCA review found average per policy insurance broker commission rose by 46% between 2019 and 2022.

There were also “significant shortcomings” by some brokers in applying fair value rules to their remuneration practices – and the impact on those paying the costs of multi-occupancy buildings insurance.

It reports that leasehold buildings insurance premiums have risen significantly since the Grenfell tragedy, with leaseholders facing much higher costs.

Large commissions

Sheldon Mills, FCA executive director of consumers and competition, says: “Our review revealed large commissions paid by some brokers to freeholders and third parties, like managing agents, with little evidence of any value added to justify these payments.

“We are taking action against these practices, and we won’t hesitate to take further action if brokers don’t comply with our rules.”

Andrew Bulmer, chief executive of The Property Institute, welcomes the focus on tighter regulation, fairness and transparency.

He tells LandlordZONE: “We remain firm in our position that leaseholder distress caused by an increase in insurance premiums, a lack of transparency and information, and suspicions for the potential unmanaged conflicts of interest, highlighted by the FCA, must be resolved to bring transparency and fairness to millions of leaseholders.”

Read more about multi-occupancy insurance.

View Full Article: Block managers under fire over ‘large commissions’ paid to them by insurance firms

BREAKING: Government considers harsher penalties for ‘sex for rent’ landlords

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A new law to crack down on predatory landlords who exploit vulnerable people for sex in return for free or discounted rent is being considered, Home Secretary Suella Braverman (main picture) has announced.

Her department is seeking the views of victims, the police and charities as part of a call for evidence launching today to better understand the scale and nature of the ‘sex for rent’ exchange in the UK.

‘Sex for rent’ arrangements are already illegal under the Sexual Offences Act, and landlords can already be prosecuted for attempting to engage the practice.

The consultation will look at whether these laws go far enough, or if new measures are needed to tackle the issue and better protect vulnerable people from harm.

The practice has been in and out of the headlines in recent years, including the high profile case of Christopher Cox who, in May 2022, was found guilty of the crime and jailed for 12 months.

Exploited

“It’s wholly unacceptable that vulnerable people, and particularly young women, are being exploited in ‘sex for rent’ arrangements,” says Braverman.

“This is an abuse of power which puts people in desperate situations and has no place in our country.

“The launch of this public call for evidence brings us closer to ending this deeply harmful trend and better protecting victims.

“And it is another example of how this government will not stop in our efforts to bring more sexual and domestic abusers to justice.

According to research by polling firm YouGov, carried out on behalf of the housing charity Shelter, nearly 1 in 50 women in England have been propositioned for ‘sex for rent’ in the last five years.

Read the consultation in full.

View Full Article: BREAKING: Government considers harsher penalties for ‘sex for rent’ landlords

EXCLUSIVE: Jersey landlord leader slams rent controls and ‘open’ tenancies plan

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Jersey has launched a consultation into sweeping reforms including rent controls and open-ended tenancies, prompting fears that they could force more private landlords to quit the sector.

The island’s government aims to increase protections for both tenants and landlords under the new residential tenancy law which promises more security of tenure and protection against revenge evictions, increased minimum notice periods for tenancies and a limit on the amount and frequency of rent increases during tenancies.

A new housing tribunal would also be set up to consider a wide range of residential tenancy issues.

Rent controls would require all tenancies to specify terms for rent increases, introduce limits to the amount and frequency of rent increases and specify a minimum notice period of eight weeks.

The States is also considering adopting a more nuanced approach such as averaging annual RPI changes to specifically help during times of high inflation.

Jersey Landlords Association has been fighting creeping regulation for the last few years. 

“The impact of rent controls and open-ended tenancies will be that landlords will be less likely to invest in their properties, which will result in less tenant choice,” chairman Guy Morris (pictured) tells LandlordZONE.

“We believe that the majority of Jersey landlords have already done their best not to increase rents by anywhere near the Retail Price Index.”

He says that any while this piece of legislation would be hard to stomach, introducing it with landlord licensing and changes requiring landlords to ensure buildings are more carbon-neutral all at once could tip people over the edge.

“I think that if all these proposals go ahead, there will be more people leaving the sector, particularly accidental landlords,” adds Morris, “and that only makes the current supply problem even more challenging, especially as our planning committee has knocked back a series of new housing developments recently and our government is set to introduce a new tax on profits generated by the sale of re-zoned land for development.”

The eight-week public consultation ends on 9th June.

View Full Article: EXCLUSIVE: Jersey landlord leader slams rent controls and ‘open’ tenancies plan

Landlords see a massive increase in fraudulent tenancy applications

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There’s never been a tougher time for the private rented sector (PRS) with demand soaring and stock dwindling tenants are struggling with finding a place to live.

This leaves tenants battling it out for properties but some face extreme vetting procedures to access homes to rent.

View Full Article: Landlords see a massive increase in fraudulent tenancy applications

How can I get my rent arrears?

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Hello, I have obtained an eviction order giving my tenants 14 days to leave. I do not expect them to do so, so will need the bailiffs. They are £8,100 in rent arrears.

How can I get my money?

View Full Article: How can I get my rent arrears?