Watch those pennies or it could cost you dear!

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Landlords and agents will need to be especially careful taking holding deposits when the Tenant Fees Act 2019 comes in to force on June 1st. No more than “one week’s rent� may be taken. That is defined as “the amount of the annual rent payable in respect of the tenancy immediately after its grant

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Landlords are calling for housing courts…

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Evictions:

With the government’s commitment to abolishing the section
21 no-fault eviction process comes the necessity to improve the alternative
eviction process – section 8 and its existing 17 grounds for possession.

Whereas section 21 allows landlords to evict without giving
a reason, and often with no need to attend a court hearing, section 8 does not.
This is an adversarial system where the onus is on the landlord to prove, in
court, that the reason for their possession claim is a legitimate one which falls
within the scope of one of the 17 grounds.

It often results in a degree of contention and argument,
which invariably leads to excessive delay and expense.  

Recently released official data shows that it is now taking even
longer than previously for landlords to repossess properties through the courts
– 17.3 weeks on average for a claim to result in a repossession. This is not
surprising given that county courts have been closing their doors and reducing
capacity right across the country.

The Government’s plans to scrap Section 21. This means that if landlords are not to be driven out of the rental market completely, some effective alternative to these long delays, and the minefield of section 8, has got to be found.

Housing Secretary James Brokenshire has promised to speed-up the eviction process through the courts, but what exactly does this mean? Will there ever be the resources to provide a really effective improvement to court processes? Anyone who has experienced the county court process could certainly be forgiven for being very sceptical about that.

Landlord groups are calling for a complete overhaul of the system, with the provision of specialist “housing courts�. This is something that has worked very well in Australia for many years, but again, does the Government have the commitment for this, and if it has, does the Ministry of Justice have the resources to implement it?

David Smith, policy director for the Residential Landlords
Association (RLA) has said the latest data on evictions shows that the courts
are unable to manage repossession claims within any timescale which landlords
would consider acceptable. And that’s before
section 21 is abolished. What are the prospects after it’s abolished?

He said: “The courts are simply unable to cope when
landlords seek to repossess property for legitimate reasons.

“The processes must first be fixed to ensure landlords are
not unduly frustrated when wanting to reclaim their property in the face of
tenants failing to pay their rents or committing anti-social behaviour.

“Before seeking to scrap Section 21 repossessions ministers
urgently need to give confidence to landlords and tenants that the courts will
first be substantially improved to speed up access to justice. That means
establishing a full and proper housing court.�

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Landlords Alliance – Emergency Euro Elections Statement

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The Landlords Alliance was set up to represent and fight for private landlords. We never planned or envisaged getting into politics; yet events have forced us to confront reality.

May’s failed administration wants to scrap Section 21s, which will create potential lifetime tenancies and prevent landlords from having control over their own property.

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Three ways to avoid 3% SDLT surcharge on BTL property purchases

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Ranjan Bhattacharya – Baker Street Property Meet

In 2016, Chancellor George Osborne introduced a 3% SDLT surcharge on all investment property purchases. Many buy to let investors stopped buying in high value areas like London and the South East because the SDLT surcharge made the purchase uneconomic.

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Only 15.75% of NLA landlords now support Tories

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Private landlords have lost faith in the Conservative Party, with only 15.75% of NLA members now saying they would support them in an election. Are Landlords now the elephant in the room for the Tories?

This polling, conducted shortly after the once strongly pro-business party announced its intention to abolish the no fault section 21 possession process and end fixed-term tenancies

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Building Control certificate issued but not communal

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We have come across an interesting wrinkle in building control. We own a lot of apartments in a building (about 25% of the building) and have been issued with LABC building control completion certs for each unit with no caveat on them.

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Privatisation of the Private Sector Landlord

admin    Uncategorized     agents

Make No mistake both The Conservative Party and The Labour Party intend to Nationalise The Private Sector Landlord. The scrapping of the Section 21 Notice, which both are committed to, means just one thing. Lifetime tenancies!

For the Private Sector Landlord (PSL) he will never get his money out and we will be back in the Pre 1989 situation of Lifetime Tenancies which can be passed onto the next generation of tenant.

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Warning: Tenant Fees Ban commences 1st June

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Fees Ban:

The Tenant Fees Act 2019 commences in force from 1st June 2019 and applies to England only for now, but is likely and has the facility to be extend to Wales. Scotland of course already has an equivalent set of legislation.

The new Act restricts payments that landlords and letting
agents may ask a tenant of a residential letting in England to make in connection
with their tenancy, and it includes certain student lettings and residential licences.

The Act also covers the capping of tenancy deposits and
holding deposits, with various conditions attached, and puts restrictions on third-party
contracts that a tenant or guarantor can be contracted to be bound by for
services such as insurance.

It is therefore very important for landlords and agents to
have a clear understanding of these regulations as there are stiff penalties
for failure to comply.

Note: These brief guidelines
are based primarily on English law and are not a definitive interpretation of
the law. There is more detail in the Act itself. Every case is different and
only a court can decide, so seek expert advice before making or not making
decisions.

Effectively, the Act bans all payments a landlord or letting
agent may take from a tenant except those expressly set out in the Act as “permitted�
payments. These are:

1. Rent –
   which will include an advance payment for the first rent period, which must be
   the same as all the subsequent rent payments. In other words, the first period
   cannot be loaded to recover costs
2. Holding
   Deposit – refundable, and no more than the equivalent of one week’s rent,
   with its terms of refund and retention set-out clearly in writing
3. Tenancy
   Deposit, sometimes referred to as a security or damage deposit, again refundable
   and capped at no more than five weeks’ rent, if the total annual rent is less
   than £50,000, or a maximum of six weeks’ rent, if the annual rent exceeds
   £50,00
4. Amendments,
   mid-tenancy, amendments requested by the tenant are capped at £50, unless a
   greater cost can be fully justified.
5. Early
   Termination, payments associated with this when requested by the tenant
6. Provision
   of Utilities, such internet services, telephone, TV licence and council tax
   when appropriate.
7. Default
   Fees, when the tenant defaults on rent payments orother permitted payments specified in the tenancy agreement, including
   such items asreplacement of a lost
   keys, etc.

There is considerably more detail within the Act itself –
see the link below – so landlords and agents should familiarise themselves with
the detail.

There are some severe sanctions for non-compliance for
landlords, letting agents and also for company directors in person. Enforcement
authorities may force the repayment of any prohibited payments together with
interest, tenants can apply to the First Tier Property Tribunal to recover any
prohibited payments together with interest, and landlords and letting agents
may face fines of up to £30,000.

The likely Impact on
Businesses:

Many letting agents, particularly small-scale single
practices may find it has a major impact on their profitability without passing
on the loss of fee income in the form of additional fees to their landlord
clients. In a competitive environment they may find this difficult.

Where the fees are passed on to landlords, in turn their
profits will be squeezed without passing on these costs in the form of higher
rents to their tenants. Again, in a competitive environment this may or may not
be possible depending on the circumstance.

Ultimately though, it is more than likely that rents will
rise overall for all tenants, but it may save those tenants who are regularly stung
by excessive fees by some high street agents. On the other hand, those tenants
who have rented direct from landlords, who don’t normally charge fees, may find
their market rent levels increasing.

Landlords and agents need to think carefully about their business
strategies going forward and adjust their budgeting accordingly, in the
knowledge of how the Act will affect them.

Tenant Fees
Act 2019

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Landlord Action invites Housing Minister to “work together� on changes to possession process as 38% of landlords will consider selling up if Government scraps Section 21

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Founder
of Landlord Action, Paul Shamplina, has written to the Housing Minister,
Heather Wheeler, inviting her to gain a greater understanding of the possession
process before making drastic reforms. 
This comes after a survey¹ carried out by Landlord Action has revealed
that 38% of landlords will consider selling up if the Government goes ahead
with plans to abolish Section 21.  A further
33% said they would only continue being a landlord with significant changes to
Section 8.

The Government has expressed a desire to encourage longer-term tenancies, which
Landlord Action agrees makes sense for those that want them, such as families.
However, with the current average tenancy life-span already four years and one
month, and with approximately 90% of tenants ending tenancies themselves, there
is growing concern that abolishing Section 21 is not the right approach to achieve
this.

According
to the survey, 70% of landlords would be less willing to consider a longer-term
tenancy if Section 21 was no longer available to them, and a staggering 85%
said they would be more selective with their choice of tenant.  “If
this was the case, the Government’s efforts could end up being
counter-productive and harming the most vulnerable tenants� says Paul
Shamplina, founder of the regulated law firm and eviction specialists Landlord
Action. 

He
continues: “Encouraging longer tenancies will
only be possible with major investment in housing courts to help speed up evictions,
which currently take 22.8 weeks from gaining possession to issuing a claim for eviction²,
and clarification regarding new grounds within Section 8 to protect landlords.

“It is clear from our survey that with
so many other obstacles already faced by landlords, such as the introduction of
more regulation, the reduction in the tax relief that landlords can claim on
mortgage interest and a three per cent Stamp Duty surcharge on buy-to-let
properties, there is a real possibility of the but-to-let market significantly shrinking
over the next five years meaning higher rents for tenants.�

With a long pedigree of working with Government on reform and legislative change, for example giving evidence to the Select Committee tasked to reform Section 21, Paul Shamplina, has now written to the Housing Minister, Heather Wheeler.  

Concerned
that, despite the opportunities for tenants, the Government may not have a
clear handle on unforeseen consequences that changing the law around Section 21
will present, Mr Shamplina  has invited
Heather Wheeler to attend Landlord Action’s offices in Borehamwood to see first-hand
the work Landlord Action carries out, meet their team of solicitors and share
their experiences of the court process.  He
has also invited the Housing Minister to attend an eviction with him and see
the reality of what happens on the ground in order to support the government’s
work in formulating policy and new law which presents equal opportunity for everyone
operating in the PRS.

 Â¹ Survey responded to by 263 landlords

²
Ministry of Justice

ENDS

Landlord Action
Public Relations:

Helen
Evison, Landlord Action PR, t: 01276 804411, m: 07920516577

Paul
Shamplina, Founder, Landlord Action, t 0330 134 2857

EDITORS NOTES

About Landlord Action

Landlord
Action is part of the Hamilton Fraser Group of companies, including mydeposits,
Property Redress Scheme, CMP and Total Landlord Insurance.  It is based at the Hamilton Fraser Offices in
Borehamwood.

Landlord
Action is a UK based organisation helping landlords, letting agents and other
property professionals. As a champion for landlords, it has campaigned extensively
and was instrumental in getting the law changed to make squatting a criminal
offence.

It
was founded in 1999 as the first ever fixed-fee tenant eviction specialist,
they revolutionised this area of legal practice. They have now acted in more than
35,000 problem tenant cases and are considered the authority in this field.

Landlord
Action is authorised and regulated by the Solicitors Regulation Authority (SRA
number 605660) and runs a free advice line to help landlords and property professionals
understand their rights: 0330 134 2857

www.LandlordAction.co.uk

About Paul Shamplina

Paul Shamplina is one of the key founders
of Landlord Action with 25 years’ experience in the legal field. He has previously
worked as a legal clerk, private investigator, debt collector and certified
bailiff.

He has appeared regularly on TV and radio and lectures across the UK at landlord seminars and events and still works full time in the office, heading up the team of advisors.

Paul believes passionately in the rights of the landlord and is always available for comment on any landlord/tenant matters.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord Action invites Housing Minister to “work togetherâ€� on changes to possession process as 38% of landlords will consider selling up if Government scraps Section 21 | LandlordZONE.

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38% of landlords will consider selling up if Government scraps Section 21

admin    Uncategorized     agents

Founder of Landlord Action, Paul Shamplina, has written to the Housing Minister, Heather Wheeler, inviting her to gain a greater understanding of the possession process before making drastic reforms.  This comes after a survey¹ carried out by Landlord Action has revealed that 38% of landlords will consider selling up if the Government goes ahead with plans to abolish Section 21.  

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