Landlord ‘ignorance’ about wear and tear vs damage is getting costly

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Educating landlords about what constitutes wear and tear could reduce the number of costly deposit disputes, according to the Association of Independent Inventory Clerks (AIIC).

Those landlords who can’t distinguish between the two are likely to raise disputes over negligible wear – and are more likely to lose them, particularly without a thorough inventory.

The AIIC says relying on knowledgeable inventory clerks can protect both tenants and landlords but also reduce unnecessary disputes.

Mydeposits reports that rental deposit disputes between landlords and tenants amounted to a costly £27 million in 2021 – an average of £1,005 per tenancy.

AIIC chair Daniel Evans (pictured, below) says the money wasted on unnecessary disputes could be reduced with better understanding of fair wear and tear, which describes the deterioration of the condition of the property as a result of reasonable use by the tenant.

Damage caused by negligence does not fall under this criteria, but items, fittings, or fixtures that have been worn through natural use would be classified as fair wear and tear.

When a home’s wear and tear is assessed, average useful lifespan of an item, expected usage, who is renting the home and the length of the tenancy are all considered.

“We recognise that deposit disputes cannot be prevented altogether but if issues arise, the only way to ensure the right amount of money from the deposit is received is by relying on an inventory,” says Evans.

“Landlords can do their bit by making sure all the correct information and documentation is provided throughout the tenancy. This will ensure that adjudicators have sufficient evidence and neither parties are left to bear the brunt of unnecessary costs.”

Read more: A handy end-of-tenancy checklist.

View Full Article: Landlord ‘ignorance’ about wear and tear vs damage is getting costly

Landlord insurance pay-outs remain steady despite increasing claims

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Market analysis from Total Landlord Insurance reveals that the average proportion of a landlord insurance claim being paid out has fallen by -33 per cent since before the pandemic. 

The research shows that: –

• In 2019, landlords submitted insurance claims totalling £2.5 million to Total Landlord Insurance, with fire and water damage leading the way as the most expensive claims. Of this total, £2.1 million or 86 per cent was paid out by Total Landlord Insurance. 

• By 2021, however, the picture had significantly changed. The total sum of annual landlord insurance claims rose from £2.5 million to £4 million, while actual insurance payouts remained steady at £2.1 million. 

• This means that the proportion of total claims paid was 53 per cent in 2021, a drop of -33 per cent compared to 2019.

• It’s interesting to note that the biggest decline in the proportion of claims paid between 2019 and 2021 was for those related to landlord liability insurance – insurance that covers the landlord in the event that a tenant is injured inside the property.  

• In 2019, landlords submitted liability claims of £44,400, 68 per cent of which was paid out by the provider. In 2021, however, total liability claims rose to £125,500, of which just 8.6 per cent was actually paid – this marks a decline of almost -60 per cent compared to 2019. 

• It’s a similar story with storm damage claims. In fact, Total Landlord Insurance doubled the amount it paid out for storm damage claims between 2019 and 2021, but the amount being claimed rose even more, from just under £338,000 to more than £1.5 million.

View Full Article: Landlord insurance pay-outs remain steady despite increasing claims

UK’s annual house price growth slows to 10%

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The UK’s annual house price growth slowed to 10% in August – down from July’s 11%, according to the latest Nationwide house price index.

The data also reveals that prices rose 0.8% month-on-month after seasonal effects were taken into account.

View Full Article: UK’s annual house price growth slows to 10%

Student landlord fears over periodic tenancies dismissed

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It looks like student landlords will have to move to periodic tenancies for their rental properties – according to the Department for Levelling Up, Housing & Communities (DLUHC).

While the Renters Reform Bill has still to make its way through Parliament

View Full Article: Student landlord fears over periodic tenancies dismissed

Expat landlord fails to keep up-to-date and lands hefty fine

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A landlord living Down Under who failed to convince a tribunal that she wasn’t to blame for having an unlicensed HMO has been hit with a £17,784 bill.

Renee Daff admitted she had failed to get a licence under Tower Hamlets Council’s selective scheme but tried to argue that she was unaware of the requirement and that when she applied, she was advised the property was exempt because she had stated on the application form that the property was occasionally her residential address.

Statutory obligations

A First Tier Property Tribunal heard that as well as the flat in Tannery House, Deal Street, she owned another property in the same block on a shared ownership basis and another property in Greenwich. Daff argued that she had met all of her other statutory obligations as a landlord and had been a member of the National Landlords Association until 2014; although living in Australia, she still used their website to carry out reference checks for prospective tenants and received their emails about relevant legal changes.

Widely published

The tribunal ruled her ignorance wasn’t excusable and that the exemption argument wasn’t relevant. It added: “The inference to be drawn is that the requirement to obtain a licence would also have been widely published on the website. Therefore, the respondent’s ignorance of this requirement did not provide her with a complete defence.”

While tenants Aris Gyalui and Adriel Aiach-Kohen – represented by Justice for Tenants – had had £2,292 deducted from the tenancy deposit as a result of hanging items on the walls, the tribunal made a rent repayment order representing approximately 80% of the total rent paid by them.

View Full Article: Expat landlord fails to keep up-to-date and lands hefty fine

Expat landlord fails to keep up-to-date and lands £18,000 fine

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A landlord living Down Under who failed to convince a tribunal that she wasn’t to blame for having an unlicensed HMO has been hit with a £17,784 bill.

Renee Daff admitted she had failed to get a licence under Tower Hamlets Council’s selective scheme but tried to argue that she was unaware of the requirement and that when she applied, she was advised the property was exempt because she had stated on the application form that the property was occasionally her residential address.

Statutory obligations

A First Tier Property Tribunal heard that as well as the flat in Tannery House, Deal Street, she owned another property in the same block on a shared ownership basis and another property in Greenwich. Daff argued that she had met all of her other statutory obligations as a landlord and had been a member of the National Landlords Association until 2014; although living in Australia, she still used their website to carry out reference checks for prospective tenants and received their emails about relevant legal changes.

Widely published

The tribunal ruled her ignorance wasn’t excusable and that the exemption argument wasn’t relevant. It added: “The inference to be drawn is that the requirement to obtain a licence would also have been widely published on the website. Therefore, the respondent’s ignorance of this requirement did not provide her with a complete defence.”

While tenants Aris Gyalui and Adriel Aiach-Kohen – represented by Justice for Tenants – had had £2,292 deducted from the tenancy deposit as a result of hanging items on the walls, the tribunal made a rent repayment order representing approximately 80% of the total rent paid by them.

View Full Article: Expat landlord fails to keep up-to-date and lands £18,000 fine

Tenant Track and Trace – GDPR?

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Hi All, I have a tenant who is subletting (I don’t know any details of their agreement except that the person is living in the room and causing a lot of issues with the other flatmates) and now has stopped paying rent in response to me serving a S21 on him.

View Full Article: Tenant Track and Trace – GDPR?

This Friday: Update your property knowledge

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If you want to be a successful property investor, it’s really important to keep up to date with changes in the property industry such as finance, legislation and market trends etc.

There is a lot happening right now

View Full Article: This Friday: Update your property knowledge

Rent cap on social housing – is the PRS next?

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The government has unveiled a consultation to impose a rent cap on social housing next year – at below the rate of inflation.

The move is aimed at helping tenants with the cost-of-living crisis.

However, with PRS rents rising quickly and tenants’

View Full Article: Rent cap on social housing – is the PRS next?

Is this HMO persecution from the council?

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Hello everyone, I have just renewed my HMO licence with no conditions.

However, the council still demands trivial and unnecessary work which the Inspector ‘discovered’ during his visit, ie removing door draught strips so smoke would set off alarms

View Full Article: Is this HMO persecution from the council?