Landlords say they’ll ‘shut down HMOs’ if new rules aren’t amended

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Scores of HMO landlords in Portsmouth have threatened to sell up or convert their properties to family lets once a new additional scheme launches next month.

The scheme extends licensing to about 4,000 three- and four-bed houses from 1st September and has been hotly contested by Portsmouth and District Private Landlords Association (PDPLA).

At its latest meeting, many members said they would shut down their HMOs and regain possession due to tough new space requirements that would prove impossible to meet, as well as the added costs.

Vice chairman Alwin Oliver (main picture) says 95 landlords were in the room and a further 25 online, all listening to the council’s plans. “Sadly, the landlords present did not seem reassured,” he adds.

Stealth

“When we asked the question if any were likely to exit the HMO economy, around 60 hands went up. It was a sobering sight.”

Oliver says one landlord spoke passionately about having helped some former homeless people into tenancies and who will now be required to give notice because of the new space requirements.

“The council are trying to clear the streets of HMOs by stealth,” he tells LandlordZONE.

The fall-out will be tough on those HMO tenants trying to find somewhere else to live in an already overheated market with increasingly fewer shared houses available.

However, if they wait for the bailiffs – believing they will avoid repossession in the knowledge that Section 21 means they are eligible for rehousing (because they are unlikely to be deemed intentionally homeless) – the costs of legal action and lost income for the landlord can be devastating.

“Multiply it by three or four in an HMO that has fallen into additional licensing and few landlords will survive the experience,” says Oliver.

Read his latest blog.

View Full Article: Landlords say they’ll ‘shut down HMOs’ if new rules aren’t amended

Landlords need clarity on changes to EPCs before it’s to late, says property firm

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A well-known property firm has made the unusual move of criticising the Government for not letting landlords know how they will afford and implement the proposed tightending of Energy Performance Certificate (EPC) rules.

The changes, which will see all rented be required to reach a ‘C’ band by December 2025 for new tenancies and December 2028 for existing ones or be excluded from the market, were thrown into disarray recently when housing secretary Michael Gove said landlords should be given more time.

Details of what this will mean, or how landlords will be offered financial help to upgrade properties, have not been released by Gove, other than to say the EPC system needs an overhaul.

Neil Hogbin (main picture) from property management firm Fisher German, says landlords and particularly those of older period properties may need to spend thousands of pounds on their property portfolios to meet the energy efficiency targets, so need certainty around any potential reforms.

“We are already beginning to see a shortage of rental properties in the marketplace as landlords start to sell up,” he says.

Ukraine

“Combined with the increase in energy prices because of the war in Ukraine, there is a further threat that rents will continue to rise to cover some of the costs of the EPC improvements being forced upon private landlords as they scramble to meet the new energy efficiency targets being set. 

“Decent homes in the private rented sector will no longer be affordable to many. 

“We all want to see properties as energy efficient as possible, but the sector needs certainty about how and when this will happen.”

Hogbin says while landlords are looking for a financial package to support improvements to their properties any details of how it will work are unclear. 

“Meanwhile, the owner-occupied housing sector has no minimum energy efficiency requirements at all,” he adds.

“Many of the EPC changes are simply not practical, affordable, or wanted by many tenants – particularly those in period properties.

“It is seen as unfair that the private sector landlords, many of whom provide high-quality well-managed homes, should have to deliver on EPC targets ahead of other housing market sectors.”

View Full Article: Landlords need clarity on changes to EPCs before it’s to late, says property firm

UPDATED: Cleaning is still the biggest cause of deposit disputes

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What is a clean and tidy house to some is and unacceptably dirty mess to others; people have different standards and this will never change.

Alternatively, some tenants are just too lazy to leave the place clean and tidy: dirty carpets and furniture, filthy bathrooms and toilets, and kitchen worktops, cupboards and cookers so full of grease, grime you would need PPE to tackle it and enough rubbish let behind to fill a small skip.

The Statistics:

Analysis of the TDS data by property management software providers, Decorus for Sage, revealed that in recent years, there has been a steady increase in the proportion of disputes being raised by tenants over cleaning issues. In the year to March 2020, this rose to 74%, compared to 67.4% in the previous year.

An older study by agent’s professional body, Propertymark, came to the same conclusions: cleaning is by far the biggest cause of disputes between landlords and tenants, when tenants are leaving.

Tenancy deposits are taken from tenants to protect the landlord, anything which goes beyond normal and acceptable wear and tear can be claimed for. A deposit is an important psychological lever that motivates tenants to return a property in good and clean condition: will I get my deposit back when I leave? This is normally enough of a motivator to get people to clean up and look after the property, but unfortunately this doesn’t always work.

Some tenants just don’t play the game, even to the point of cancelling the last month’s rent. It leaves the landlord to claim against the deposit for the rent, leaving them to whistle for their money deposit money if there are issues, leaving nothing in reserve to cover for items like professional cleaning.

It has to be said that by far the majority of tenants get their full deposit back, but there are cases where a landlord needs to keep all or a part of the deposit for genuine damage or cleaning etc.

Advice for landlords

Paul Oxley, Managing Director of lettings software providers, Decorus for Sage says:

“According to the TDS, many tenants claim that the cleanliness of the property at the start of the tenancy was not clear, or that the tenancy agreement did not make clear what was expected of them.

“So it is vital that landlords have a proper inventory prepared and do a thorough check-in and check-out, so they have the right proof of condition at the start and end of a new tenancy agreement.

“When landlords take the time to spell out tenants’ responsibilities in terms of cleaning and caring for the property, tenants are more likely to conduct their tenancy in a way that is respectful to the property and this minimises any potential damage.

“At the check-out stage, the tenant should be made aware of the areas requiring cleaning and the potential cost involved. It is important to remember that the tenant is only obliged to return the property in the same state of cleanliness as at the start of the tenancy, after allowing for fair wear and tear.

“Landlords should conduct thorough check-in and check-outs at the start and end of the tenancy, supported by a professional inventory. Clear communication on the tenant’s responsibilities when they move into the property will improve the chances of a trouble-free check-out.

“The common mistakes in landlord inventories are essentially lack of detail. Landlords often write just a brief shopping list and often do not have the appropriate photographs and videos, along with accompanying written descriptions to show the condition of the property and its contents.

Find more information about dealing with end-of-tenancy issues, including inventories and cleaning, go here.

Get the Evidence

If the landlord or agent finds the tenant fails to agree to the deposit deductions, landlords need to ensure they have good documentary evidence, such as a thorough and fully detailed inventory, copies of which are agreed and given to the tenant at check-in and check-out. It is imperative that tenants sign their acceptance of the contents of the check-in within seven days of the move in, and this signed copy should be retained by either the landlord.

It is always preferable for both landlord or agent and tenant be present at the time of check in as all the items can then be checked throughout the house, agreed between the parties and the document signed up. It’s always more difficult to get the inventory signed at a later time, once the tenant is in occupation.

When landlords are managing multiple properties it’s easy for documentation to go astray. Software developed specifically for the property industry uses advanced storage methods to combat this common issue says Mr Oxley. Decorus for Sage, he says, their software system backs up information on Microsoft Azure. If inventory information is lost or accidentally deleted, it can be easily restored. The software also runs on cloud servers so logged information can be accessed from any device with an internet connection.”

How to avoid disputes

Paul Oxley here outlines some common mistakes which increase the risk of a deposit dispute:

• Landlords often make the mistake of thinking that inventories can be heavily comprised of photography and video. Completely photographic or filmed inventories without a complete written accompanying report are almost useless.
• If photography or film has been used in the inventory, make sure it is detailed enough and dated. Include photographs of the garden; inside of the oven; interior of the shed or garage; and keys handed over to tenants – these are the main areas of problems that occur and are often down to misinterpretation at the end of a tenancy.
• There is no need to photograph every single corner of the property as this is simply a waste of time – stick to the important things. Films and photographs alone will be of little use in a dispute when an adjudicator is trying to find hard evidence of a particular area.
• Many landlords do not carry out a thorough and full check-in and check-out of the property at which the tenant was present. Landlords and agents who don’t have this available when they go to court have little chance of winning the case.
• Often there is no correspondence with the tenant that is documented and no receipts are kept for the deductions on the deposit e.g., cleaning and repairs.

Decorus, with nearly 40 years of combined experience in the property management industry, says that landlord portfolios are unique which requires a property management software package that includes true two-way integration with Sage accounting software, helping landlords grow their property portfolios further, while freeing up time to spend on tenants.

Hosting software on cloud servers is ideal for businesses working from home and with accounting professionals. It makes the business easily scalable, meaning that storage space can be increased quickly if a business expands. This type of server also comes with built-in security features to keep data safe.

The most common deposit claim issues 

The results of the Propertymark study also show that almost nine out of ten letting agents said the main reason tenants don’t get their deposits back is because of cleaning issues. Basically they leave the property dirty. This leaves the landlord either to do a lot of hard and often distasteful work themselves (remember landlords cannot claim for work they do themselves against the deposit of for tax relief purposes) or employ a professional cleaner to do the work for them, in which case they have an invoice for charges that they can use to claim against the deposit.

Most tenancies are professionally cleaned at the start, so while tenants can clean for themselves, landlords often expect a professional level of cleanliness, similar to that which should be clearly documented in the inventory at the start of the agreement.  What is clean to a tenant is not always so to the landlord, and this is where the troubles start.

General basic house maintenance is the second main reason for disputes, in particular garden maintenance which is usually specified in the agreement. Tenants are under a contractual obligation to do this work and if they fail to do it they will lose out, but only if the landlord has enough paper evidence to win a claim.

The onus is always on the landlord, or the agent on their behalf, to prove their case and this means having good solid paper based evidence – the adjudicator (if the landlord decides to go to arbitration as opposed to a County Court) decides who gets what on this evidence alone, and there is no appeal.

Damage to Contents

Hanging pictures on walls, although desirable to brighten up a plain room, often leaves holes and shaded areas on the walls which involves repairs and redecoration for landlords. Pictures should only be hung with agreement with a landlord, otherwise it’s an issues that causes disputes.

Unpaid rent

Deposits should be held until all rent is paid up to the day of leaving, and any overpaid rent should be returned to the tenant. To ensure that rent arrears can be claimed against the deposit the letting agreement should clearly state all the reasons why a deposit can be retained, usually for:

• Cleaning
• Basic maintenance
• Damage
• Rent arrears
• Keys and locks
• Storing tenants’ left belongings

Propertymark offers advice to tenants:

“When you’re leaving a property you’ve been renting, the general rule is to leave it as you found it. Make sure you haven’t left any personal belongings behind, and that the property is clean and tidy for the next tenants. You should flag any damaged items to your letting agent or landlord during the agreement, so that when you leave, it doesn’t come as a shock.

“This will also help you develop a good relationship with them, which will be useful for any reasonable negotiations about the deposit.

“Finally, you should always take photos of the property at the start and at the end of your contract, so that if you need to dispute any of the deposit deductions, you can evidence your points.”

Source: www.decorus-pms.com

View Full Article: UPDATED: Cleaning is still the biggest cause of deposit disputes

Half of tenants are ‘one pay cheque away’ from homelessness – Shelter claims

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A survey of private renters has found that 51% of them are just one missed ‘pay cheque’ away from being made homeless.

The findings from Shelter also found that more than a third said they did not have enough savings to cover their rent if they were to face unemployment.

View Full Article: Half of tenants are ‘one pay cheque away’ from homelessness – Shelter claims

Student housing shortage worsens across UK cities

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Despite a rise in student numbers heading to university this year, there has been a big 24.5% drop in the number of student homes available to rent, a survey reveals.

The findings from Savills highlight that the number of student homes to rent is lower now than before the pandemic hit

View Full Article: Student housing shortage worsens across UK cities