EXPERT: Why are so many agents and landlords ignoring fees law?

admin    Uncategorized     agents

The Tenant Fees Act has been in place for nearly four years but is it shocking how many property professionals, also known as letting agents, are either not aware of its existence, or believe they can charge a fee as long as they call it something else.

I have looked at the 34 most recent cases heard by First Tier Tribunals relating to Tenant Fees Act and any financial penalties awarded.

Shockingly of these cases only ten were brought against landlords who were self-managing, the rest were all against letting agents, a number of which where high street national agents which, in my opinion should have known better.

The most common complaints raised by tenants were:

• Refusing to refund holding deposits 58.8%
• Early termination fees 14.7%
• Security deposit over 5 weeks 8.8%

For this last category all three were brought against self-managing landlords.

And in all but four of these cases, the Tribunal found in favour of the tenant and ordered the agent/landlord to refund them in part or full.

The tribunal awarded the return of over £11,500 of prohibited fees to tenants or £385 per case on average.

More worryingly many of the agents who defended their cases claimed the holding deposit was ‘a reservation cost’ or ‘advanced rent’.

It’s clear that several well-known agencies have recently tried to disguise a prohibited fee by claiming that an Assured Shorthold Tenancy has not been created and therefore the Tenant Fees Act doesn’t apply.

What is seriously concerning is the fact that landlords who are clearly taking heed of ‘unconscious incompetence’ and putting their trust in letting agents to manage their asset within the law are being let down at the very first (and can I say) rather basic hurdle.

If property professionals aren’t aware of the regulations how can the negative reputation surrounding the private rented sector ever improve?

Here’s my guide for both landlords and agents

What is a holding deposit?

A holding deposit is a payment made to a landlord or letting agent to reserve a property.

The holding deposit cannot be more than 1 weeks’ worth of rent and the property must be removed from the market.

Since the introduction of the Tenant Fees Act there are now have some strict rules that need to be followed when taking a holding deposit.

I will just point out that a holding deposit is not a legal requirement and doesn’t have to be taken, but if one is taken then the following must be done correctly.

Only one holding deposit can be taken for a property

It is not uncommon for some landlords and agents to take more than one holding deposit and then simply refund those who don’t pass referencing or fail to refund anyone in one of the cases at the Tribunal.

Receipt and Holding Deposit information

When a holding deposit it taken, it is a legal requirement to provide the tenant with a receipt for the funds as well as a document that sets out what the holding deposit it for, how long it will be held and the clear reasons for refund and for withholding it.

Failure to provide this to the applicant could mean you are subject to a find or having to refund the monies.

Provide a copy of the tenancy agreement

A draft copy of the tenancy agreement must also be given to the applicant when the holding deposit is take, this document can have water marks to show it is a draft, but it must contain the terms of the tenancy that the tenant will be expected to enter into

14 days to enter into a tenancy

Under the Tenant Fees Act, you have 14 days to enter into a tenancy agreement from the date the holding deposit is paid, if this is not possible, may be due to referencing not coming back in time, then the agent or landlord would need to sign and agreement to extent the time. If this is not done then the holding deposit must be returned in full on day 15.

When can a holding deposit be withheld?

Failed referencing

It is not uncommon for applicants to fail referencing, but this is not automatically a reason to withhold the holding deposit.

Only if applicants have provided false or misleading information that would have made you move forward with he let would give you reason to possibly withhold if they failed referencing.

Not entering into a tenancy

If the tenant fails to take reasonable steps to enter into the tenancy, then the agent or landlord could retain the holding deposit, but if it is the agent or landlord who is dragging their feet then the holding deposit should be returned if the tenant pulls out of the let.

If either party changes their mind

If the applicant changes their mind before the let is agreed, then the landlord or agent can usually retain the holding deposit, as long as the agent or landlord have not done something to force the tenant to change their mind.

Also, if the landlord changes their mind, then the holding deposit would need to be refunded as long as the reason for the change was not a deliberate act to mislead by the applicant.

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View Full Article: EXPERT: Why are so many agents and landlords ignoring fees law?

Registration and planning consent needed for holiday lets

admin    Uncategorized     agents

A consultation has been launched by the government to protect the UK’s ‘cherished towns’ that will see holiday homeowners being forced to get planning permission for letting their property and if it is in England, it will need to be registered.

View Full Article: Registration and planning consent needed for holiday lets

Landlords and agents in London see a big rise in licensing fines

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London’s councils look set to double the amount in fines they collected from landlords and agents last year under selective or additional licensing schemes, one company is reporting.

Geospatial tech firm Kamma says that in the last three months

View Full Article: Landlords and agents in London see a big rise in licensing fines

BREAKING: Government moves to restrict Airbnb lets in holiday hotspots

admin    Uncategorized     agents

The Government has revealed plans to force those seeking to convert homes in short-let properties within England’s holiday hotspots to seek planning permission first.

Such powers for local authorities are to be consulted on by the Department for Levelling Up, Housing and Communities prior to any legislation.

The aim of the initiative is to ‘help support local people in areas where high numbers of holiday lets are preventing them from finding affordable housing’.

Exemptions to the rules are also being proposed to enable those who let out their homes to make money from their properties for up to a specified number of nights in a calendar year without the need for planning permission.

The Government says it wants to ensure the country “reaps the benefits of diverse and sustainable accommodation and support the visitor economy, while also protecting local communities and ensuring the availability of affordable housing to rent or buy”.

Benefits

Secretary of State for Levelling Up Housing and Communities, Michael Gove adds: “Tourism brings many benefits to our economy but in too many communities we have seen local people pushed out of cherished towns, cities and villages by huge numbers of short-term lets.

“I’m determined that we ensure that more people have access to local homes at affordable prices, and that we prioritise families desperate to rent or buy a home of their own close to where they work.

“I have listened to representations from MPs in tourist hot spots and am pleased to launch this consultation to introduce a requirement for planning permissions for short term lets.”

The new proposals within the consultation come as the Department for Culture Media and Sport also launches a separate consultation on a new registration scheme for short-term lets, which is due to be introduced through the Levelling Up and Regeneration Bill, which is currently going through Parliament.

Culture Secretary Lucy Frazer adds: “This new world of ultra-flexible short term lets gives tourists more choice than ever before, but it should not come at the expense of local people being able to own their own home and stay local.”

Speaking on the BBC’s Today radio programme, Malcom Bell, Chair of Visit Cornwall. “In principle, [these planning rules are] a good idea but we need the public register first…it’s something that we’ve been lobbying for over the past five years.

“We need to get the balance right between the economic benefit of short-term lets and losing community vibrancy.”

Read more about short lets.

View Full Article: BREAKING: Government moves to restrict Airbnb lets in holiday hotspots

Property Investors Awards 2023 Nominations Now Open

admin    Uncategorized     agents

We are delighted to announce that nominations for the 2023 Property Investors Awards are officially open. This year there are 20 different award categories to nominate for, which is more than ever before.

We invite you to take this opportunity to submit your nominations and have the opportunity to be nationally recognised for your property investment successes.

View Full Article: Property Investors Awards 2023 Nominations Now Open

Sellers under pressure after 11 months of falling demand

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Homebuyer demand has now been down for 11 consecutive months – with new properties and agreed sales also taking a downturn, RICS reports.

The cautious market is still seeing house prices fall with agents predicting this trend will continue for the next 12 months.

View Full Article: Sellers under pressure after 11 months of falling demand

OPINION: Yet another property training company bites the dust!

admin    Uncategorized     agents

I have lost track of the number of firms offering property investment courses and investment vehicles that have gone bust in my own experience, some offering dodgy training courses or imaginative investment schemes of one sort or another, and right down to those plying outright scams.

Asset Academy Limited was a property training organisation linked to well known TV personality and “Homes Under the Hammer” presenter, Martin Roberts.

The firm, which was fronted by Roberts as their “Brand Ambassador” went to the wall recently owing creditors over £3million.

Quite how a training organisation, with little in the way of overhead should owe so much money beggars belief?

Nevertheless, the company went into administration according to Company’s House records owing that enormous sum. Roberts, through a complicated web of listed companies, and his wife Kirsty, were directors of the failed company, though they claim to have had little involvement in its running.

According to newspaper reports the company has laid off all its staff. It has left in its wake a trail complaints from would-be property investors who claim to have been cheated out of thousands of pounds in cash payments. Many claim to have been chasing the company for refunds, but sadly, now, there is little chance of them getting anything back.

Anyone with an interest in property will be familiar with the BBC celebrity Martin Roberts who hosts the popular and seemingly ubiquitous “Homes under the Hammer”, a programme which has had a very successful formula and proves to be an informative and interesting programme.

Robert’s involvement in this venture however, it would seem, has been an unfortunate segue which threatens to tarnish reputations.

Personal experience

Many years ago now, after having received several flyers through the mail about a “Martin Roberts” training event, I decided to go along to one, at a Manchester venue near me, to find out what this was all about. I suppose curiosity got the better of me and the prospect of listening to a TV celebrity first hand got the better of me.

However, this was not to be! I turned up at the event, joined the small audience and to my surprise, no Martin Roberts? Maybe he would be on later after the speaker who was confronting us. But no, I was to be disappointed.

Instead we were all assailed by this presenter (not a very slick one either) who was telling us how he had become a multi-millionaire property tycoon, and how we could be one too. What’s more, we wouldn’t need to put any money down to do it?

I’ve been in property for over 45 years and involved in property events for over 20, so you can imagine, I was approaching this with my cynical hat on – I had seen it all before. The presenter proceeded to explain to this quite obviously naive and inexperienced crowd that the starting point to their property investing career, their road to virtually instant riches, would be to apply for as many credit cards as possible, go away and sign up for a dozen, that would be good.

You’ve got to remember this was when property was booming and money was cheap, banks were falling over themselves to lend and people were being made redundant. I imagine that for some in the audience, it was their last roll of the dice. So, in a nutshell, the strategy was to accumulate these credit cards and max them out, to get yourself a run-down property at auction, renovate it, then mortgage it and take out a chunk of cash, before moving on to the next deal.

Well, I had no doubt that this strategy could be applied successfully by about 1 percent of the population, but certainly not by this inexperienced and seemingly desperate bunch of would-be property tycoons I was sat among. In fact, it would have frightened me to death to attempt such a risky feat!

During questions, asked of us by the presenter, my reply went down like a lead balloon. It certainly deflated his sales patter balloon, and he made it plain I wasn’t welcome. The point was I felt sorry that he was misleading people.

They come and they go…

Over these many years in property, and doing the property event circuit, I’ve seen so many of these so call property “trainers”, property “experts”, property “gurus” (guru used as it’s easier to spell than charlatan) and downright scams artists, so many in fact that I’ve lost count.

It’s hard to believe how easily they take people in with their slick brochures, presentations, websites and taster days. They take people for thousands of pounds in fees for, in the main, information that’s readily available for free. Select a decent book on Amazon, written by a bona fide property expert, with some real world experience, and you will learn more.

But people like to be led, they like reassurance and they like to be told what they want to hear. They’re often sold a dream which turns into a nightmare!

Yes, it’s certainly possible to make a lot of money in property given the right approach, but not overnight and certainly not stress free with “no money down.” There are some legitimate property educators who do a good job, without charging excessive amounts of money, but you need to do some research to find them – see below.

Research, research and research…

All property investment should start off with a good deal of research, whether that’s finding a good location and a good property to invest in, sourcing finance, finding the right book or indeed finding some help through an educator.

You don’t need to look very far with a company like Asset Academy Limited to realise its risky to invest in its training – its TrustPilot entries – https://uk.trustpilot.com/review/assetacademy.co.uk are crammed full of very negative one-star reviews, peppered with a series of 5 star reviews which tip it’s overall score, but which seem decidedly overly-glowing to me?

Martin Roberts has been described in the press as an “advanced speaker” for the firm, offering to share his knowledge of buying at auction, though when I check the Asset Academy website today, still live – https://www.assetacademyonline.com – all reference to Martin Roberts seems to have been removed.

My colleagues at LandlordZONE have written recently about the dangers of property courses offering quick routes to success and how to avoid them if you want to get help with your property investing education from reliable sources.

I would endorse this approach and suggest you follow their advice:

Investors looking for trustworthy and ethical operators should turn to the PEAS or Property Educators Accreditation Scheme.

Launched in 2021 and backed by LandlordZONE, its founder Cyril Thomas said at the time:

“PEAS will help future students looking for a property educator to discover ‘the good guys’ who have signed up to be ethical and transparent, and that it will strike a balance between cooperation and enforcement”.

View Full Article: OPINION: Yet another property training company bites the dust!

Yet another property training company bites the dust!

admin    Uncategorized     agents

I have lost track of the number of firms offering property investment courses and investment vehicles that have gone bust in my own experience, some offering dodgy training courses or imaginative investment schemes of one sort or another, and right down to those plying outright scams.

Asset Academy Limited was a property training organisation linked to well known TV personality and “Homes Under the Hammer” presenter, Martin Roberts.

The firm, which was fronted by Roberts as their “Brand Ambassador” went to the wall recently owing creditors over £3million.

Quite how a training organisation, with little in the way of overhead should owe so much money beggars belief?

Nevertheless, the company went into administration according to Company’s House records owing that enormous sum. Roberts, through a complicated web of listed companies, and his wife Kirsty, were directors of the failed company, though they claim to have had little involvement in its running.

According to newspaper reports the company has laid off all its staff. It has left in its wake a trail complaints from would-be property investors who claim to have been cheated out of thousands of pounds in cash payments. Many claim to have been chasing the company for refunds, but sadly, now, there is little chance of them getting anything back.

Anyone with an interest in property will be familiar with the BBC celebrity Martin Roberts who hosts the popular and seemingly ubiquitous “Homes under the Hammer”, a programme which has had a very successful formula and proves to be an informative and interesting programme.

Robert’s involvement in this venture however, it would seem, has been an unfortunate segue which threatens to tarnish reputations.

Personal experience

Many years ago now, after having received several flyers through the mail about a “Martin Roberts” training event, I decided to go along to one, at a Manchester venue near me, to find out what this was all about. I suppose curiosity got the better of me and the prospect of listening to a TV celebrity first hand got the better of me.

However, this was not to be! I turned up at the event, joined the small audience and to my surprise, no Martin Roberts? Maybe he would be on later after the speaker who was confronting us. But no, I was to be disappointed.

Instead we were all assailed by this presenter (not a very slick one either) who was telling us how he had become a multi-millionaire property tycoon, and how we could be one too. What’s more, we wouldn’t need to put any money down to do it?

I’ve been in property for over 45 years and involved in property events for over 20, so you can imagine, I was approaching this with my cynical hat on – I had seen it all before. The presenter proceeded to explain to this quite obviously naive and inexperienced crowd that the starting point to their property investing career, their road to virtually instant riches, would be to apply for as many credit cards as possible, go away and sign up for a dozen, that would be good.

You’ve got to remember this was when property was booming and money was cheap, banks were falling over themselves to lend and people were being made redundant. I imagine that for some in the audience, it was their last roll of the dice. So, in a nutshell, the strategy was to accumulate these credit cards and max them out, to get yourself a run-down property at auction, renovate it, then mortgage it and take out a chunk of cash, before moving on to the next deal.

Well, I had no doubt that this strategy could be applied successfully by about 1 percent of the population, but certainly not by this inexperienced and seemingly desperate bunch of would-be property tycoons I was sat among. In fact, it would have frightened me to death to attempt such a risky feat!

During questions, asked of us by the presenter, my reply went down like a lead balloon. It certainly deflated his sales patter balloon, and he made it plain I wasn’t welcome. The point was I felt sorry that he was misleading people.

They come and they go…

Over these many years in property, and doing the property event circuit, I’ve seen so many of these so call property “trainers”, property “experts”, property “gurus” (guru used as it’s easier to spell than charlatan) and downright scams artists, so many in fact that I’ve lost count.

It’s hard to believe how easily they take people in with their slick brochures, presentations, websites and taster days. They take people for thousands of pounds in fees for, in the main, information that’s readily available for free. Select a decent book on Amazon, written by a bona fide property expert, with some real world experience, and you will learn more.

But people like to be led, they like reassurance and they like to be told what they want to hear. They’re often sold a dream which turns into a nightmare!

Yes, it’s certainly possible to make a lot of money in property given the right approach, but not overnight and certainly not stress free with “no money down.” There are some legitimate property educators who do a good job, without charging excessive amounts of money, but you need to do some research to find them – see below.

Research, research and research…

All property investment should start off with a good deal of research, whether that’s finding a good location and a good property to invest in, sourcing finance, finding the right book or indeed finding some help through an educator.

You don’t need to look very far with a company like Asset Academy Limited to realise its risky to invest in its training – its TrustPilot entries – https://uk.trustpilot.com/review/assetacademy.co.uk are crammed full of very negative one-star reviews, peppered with a series of 5 star reviews which tip it’s overall score, but which seem decidedly overly-glowing to me?

Martin Roberts has been described in the press as an “advanced speaker” for the firm, offering to share his knowledge of buying at auction, though when I check the Asset Academy website today, still live – https://www.assetacademyonline.com – all reference to Martin Roberts seems to have been removed.

My colleagues at LandlordZONE have written recently about the dangers of property courses offering quick routes to success and how to avoid them if you want to get help with your property investing education from reliable sources.

I would endorse this approach and suggest you follow their advice:

Investors looking for trustworthy and ethical operators should turn to the PEAS or Property Educators Accreditation Scheme.

Launched in 2021 and backed by LandlordZONE, its founder Cyril Thomas said at the time:

“PEAS will help future students looking for a property educator to discover ‘the good guys’ who have signed up to be ethical and transparent, and that it will strike a balance between cooperation and enforcement”.

View Full Article: Yet another property training company bites the dust!

Claiming EPCs will cost £1000s to upgrade from D to C ‘inaccurate’ says expert

admin    Uncategorized     agents

There have been many articles in the media stating that it will cost £5,000 to £6,000 to improve a residential landlord’s EPC from D to C.

James Tanner, whose family operates a London-based PRS portfolio, and who also runs a consultancy to help landlords improve their energy efficiency and EPCs, says that this is not what he sees on the ground.

“It is only when upgrading from an E, F or G to a C will a landlord face such high costs,” he says.

“I’ve been in this sector for 15 years and my experience tells me that it will cost most landlords substantially less to upgrade their properties to an EPC band C from a band D.

Real-world costs

“In my opinion most of this published data is based on desktop research and using averages, which doesn’t point to what the real-world costs are likely to be,” he adds.

“Releasing this kind of high cost analysis is only going to unnecessarily drive more landlords out of the market, reduce stock and drive rents even higher.

“An average property in the UK has an EPC of D with an EPC score of 60, so upgrading from 60 points to a C (minimum 69 points) is a nine-point increase, and usually that doesn’t require expensive work.

“There are a number of inexpensive and simple measures a landlord can take such as new LED eco-bulbs costing a few pounds and adding TRV radiator valves – if the property does not have them – for example would improve the EPC at least one point for each measure.”

Improvements

It’s also important to point out that some landlords have already made energy efficiency improvements since they last had an EPC done, as EPC certificates must be carried out every 10 years.

These landlords may not need to spend any money at all but instead get an up-to-date EPC carried out, which Tanner says is particularly so for landlords with a current EPC score in the mid to late 60s.

“From my experience of helping landlords improve their EPC to a C the expensive of improving from D to C is substantially less than £5,000, although of course every property is different,” he adds.

View Full Article: Claiming EPCs will cost £1000s to upgrade from D to C ‘inaccurate’ says expert

COMMENT: Landlords have ‘nothing to fear from looming Decent Homes Standard’

admin    Uncategorized     agents

Nearly two thirds of landlords support the Government’s plans to introduce a set of minimum standards for the private rented sector, it has been claimed.

BTL lender Paragon Bank says its polling among some 500 landlords reveals 62% either strongly or generally supported the Decent Homes Standard for the private rented sector.

Richard Rowntree (pictured), Paragon Bank’s MD of Mortgages, says: “The vast majority of landlords have nothing to fear from a Decent Homes Standard as they are providing a good quality home to their tenants already.

“It’s the minority of landlords who don’t meet these standards that are tarnishing the wider reputation of the sector.”

This new standard was included within the government’s recent ‘A fairer private rented sector’ white paper published last year, which is expected to enter parliament as draft legislation next month.

As well as the Decent Homes Standard, it will also include extra cash for local authority pilot schemes to bolster policing of bad landlords, something Paragon says good operators within the PRS are increasing annoyed about.

Three quarters of those polled said they felt frustrated that Local Authorities don’t act against landlords who let sub-standard homes.

Decent improvements

Despite this, a new report by the lender points out that the Government’s own data highlights how the ratio of non-decent homes within the PRS has been reducing over the past 15 years from 44% in 2008 to 23% today.

The addition of good quality homes has diluted the presence of poorer stock; in 2008, 1.8 million privately rented homes were classed as decent, rising to 3.3 million in 2021 – an 83% increase.

There has also been a reduction in the number of properties classed as non-decent – falling from 1.4 million to 990,000, a 29% reduction.

View Full Article: COMMENT: Landlords have ‘nothing to fear from looming Decent Homes Standard’