Call of the Week: Tenant Fees Ban and deposits

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This week our advice team were able to help one of our members with a question relating to tenancy deposits and the end of the transitional period of the Tenant Fees Act 2019 in England. The Tenant Fees Act, which came into force on June 1st 2019, introduced a deposit cap of 5 weeks’ rent […]

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‘Coronavirus evictions ban has given my fraudulent tenant another four months rent free’

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Thousands of landlords have been left in limbo by the evictions ban including Cheryl Jervis who was due to evict her tenant on the evening the ban was announced, and has been taunted by him since over his ‘rent free’ gift from the government.

LandlordZONE last week highlighted the plight of the estimated 5,000 landlords who are in limbo following the government’s decision to suspend evictions in late March.

While the policy was heralded as a much-needed protection for tenants against losing their homes during the crisis, what’s less publicised is that a small but significant minority of deliberately fraudulent tenants are delighted to be given extra time to enjoy their homes rent free.

We talked to one landlord duo, Cherly Jervis and her husband John, who have found out the hard way how the legal system turns a blind eye to tenants keen to game the evictions process in their favour.

Several years ago the pair emigrated to New Zealand before moving to Australia and, because they had originally sold their UK home, later on decided to buy an apartment (pictured) in their old home town of Grayshott as both a UK bolthole but also as an asset from which to generate an income.

When Cheryl visited the UK last year she interviewed a 50-something prospective tenant and his wife multiple times, gained exemplary references from the husband’s employer and solicitor, took a deposit and then signed a tenancy agreement.

Happy to rent

She then returned to Australia, happy that she had a tenant for the apartment after the renters, who are of Dutch origin, said they had to stay in the UK while the wife underwent treatment for cancer before moving back to Holland.

And then it began to unravel. The couple didn’t pay any rent from the outset and did not respond to any messages for months. The tenant did eventually make contact via email to say he was unhappy with the flat because the area was too noisy, revealing that he was to leave the property and did not intend to pay the outstanding rent.

It was then that the couple probed his references more deeply, and discovered that he had left his job and that the solicitor’s reference was a forgery.

Forged reference

After being challenged about his references, the tenant then threatened the couple with violence, after which Cheryl reported his threats and forgery to local police who said they were aware of his activities, that he had staged the same tenancy fraud before but that there was little they could do about it.

Cheryl then contacted Landlord Action to arrange for his eviction via a Section 8 notice and, after two court appearances during which he claimed incorrectly that the wrong paperwork was served on him, was on the verge of being evicted.

“Finally, with bailiffs booked in, we thought we could rid of this nasty specimen and get our flat back,” says Cheryl.

Evictions announcement

But, on the 24^th March, the day set for the tenants to move out and after a two-month delay imposed by the court, the government announced that it was effectively shutting down the evictions system that evening.

The Jervises were already facing an eight month period without rent but now face waiting until at least July and, given the court delays likely after the Coronavirus crisis over, September before they can regain possession.

“I get that the government don’t want anyone turfed out of their home onto the street during the crisis but our tenant was a known criminal whose clear intent was to defraud and the process of eviction had come to end,” says Cheryl.

“The law is an travesty because it’s totally on my tenant’s side even though he forged his way in our flat and has not paid a penny in rent for months on end.

“My tenant knew that it would take at least six months to get him out and played the system accordingly, and yet the courts and judges aren’t able to tell the difference between tenants in need of help, and fraudsters like our tenant, who has since sent me emails pointing out the happy news that he will be staying for longer rent free.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Coronavirus evictions ban has given my fraudulent tenant another four months rent free’ | LandlordZONE.

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Meet the landlord going the extra mile for his tenants and key workers during Covid-19 pandemic

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We are living in unprecedented and unpredictable times. For the last few months, the NRLA has been contacted by many members, letting us know what they are doing to support both their tenants and local communities at this time. —– The country has been in lockdown now for just over five weeks, in order to […]

The post Meet the landlord going the extra mile for his tenants and key workers during Covid-19 pandemic appeared first on RLA Campaigns and News Centre.

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Blog: University body shares NRLA calls on student rents

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Student landlords are facing a unique set of challenges during the coronavirus pandemic. NRLA Chief Executive Ben Beadle has written to Universities UK to ask for their support in ensuring students honour rental contracts.  These are difficult times. The country remains in lockdown, with communities across the country –indeed the globe – reeling from the […]

The post Blog: University body shares NRLA calls on student rents appeared first on RLA Campaigns and News Centre.

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Avoid the courts! Mediation service launches to help landlords and tenants resolve arguments

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A tenancy mediation service has been launched today that aims to help landlords, letting agents and tenants sort out problems more cheaply and speedily than going through the courts.

Property Redress Scheme has launched PRS Mediation earlier than planned to support landlords and tenants struggling with the impact of the pandemic.

It says the Government is likely to continue urging them to negotiate and reach an agreement, rather than go to court in the future, as the confidential process allows disputes to be resolved much quicker and with less cost. ]

And there will be an even
greater need for end-of-tenancy mediation when the Section 21 possession
process is removed.

After a landlord calls PRS mediation, an independent mediator contacts the tenant to see whether they’re happy to liaise with the mediator, before discussing the issues raised, with a view to coming to an agreement on either paying a reduced rent, deferred rent or settlement amount, with agreed ending of the tenancy.

Struggling to pay

Sean Hooker, head of redress
for the Property Redress Scheme, says:
“As a landlord, it also enables you to
demonstrate to the court that you have attempted to resolve your issues before
coming to them.”  

Paul Shamplina,
founder of Landlord Action, adds: “Our
recent survey found that 74% of landlords have already been contacted by
tenants who are struggling to pay rent due to reduced or terminated employment
resulting from the pandemic.

“With the reality that life will not return to ‘normal’ for some time,
the most sensible solution is mediation, particularly as landlords will be
unlikely to be able to gain possession of their properties for six to nine
months or more.”

Property Redress
Scheme believes if landlords have problems with future possession claims, using
the mediation service will demonstrate their readiness to engage with tenants
through alternative dispute resolution.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Avoid the courts! Mediation service launches to help landlords and tenants resolve arguments | LandlordZONE.

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Post Covid-19 Property Opportinities – Baker Street 29th April

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Join me, Shaf Rasul from Dragons Den, Simon Zutshi and Ranjan Bhattacharya live for an online Baker Street Property Meet at 7pm on 29th April 2020. 1000+ property investors will be attending, so secure your spot now.

REGISTER HERE IT’S FREE!

The post Post Covid-19 Property Opportinities – Baker Street 29th April appeared first on Property118.

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LATEST: Tenants negotiating lower rents with landlords as they stay put

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Latest research from leading lettings agency reveals record number of renters staying put and renegotiating lower rents during March, a trend that is likely to accelerating this month.

Over two thirds of tenants renewed their rental agreements during March and many negotiated lower rents as they stayed put to weather the Coronavirus crisis, a leading lettings index has revealed.

Estate agency Hamptons International says 70% of tenancies that were due to renew last month re-signed their contracts, the second highest proportion to do so since the company’s index began six years ago.

Tenants, aware of the economic problems the Coronavirus crisis was likely to create, have clearly been negotiating with existing and prospective landlords to reduce their outgoings during the year ahead.

Rent renewals

Renewed rents fell across three regions – the South East (-1.4%), the East (-0.4%) and Greater London which recorded the biggest year-on-year fall (-2.2%).

Also, although the average rent of a newly let property increased to £980 pcm in March, up 1.2% year-on-year, the rate of rental growth more than halved since February, when rents rose 3.3% year-on-year.

And as lockdown measures were enforced during
March the number of new applicants registering to rent a home fell by a third compared
with the same period in 2019.

“Once lockdown restrictions ease, we expect activity levels to rise. Renting offers more flexibility than buying a home, so as uncertainty rises, so too does the demand for rental homes,” says Aneisha Beveridge, Head of Research at Hamptons International.

“But although demand for rental accommodation is set to increase, and there are already signs of it picking back up again, the longer-term economic damage to people’s jobs and incomes means that rents on newly let properties are likely to fall between 2% and 5% this year.”

Read advice about tenancy agreements.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Tenants negotiating lower rents with landlords as they stay put | LandlordZONE.

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BREAKING: NRLA launches campaign to have abandoned rental properties exempted from council tax

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The National Residential Landlords Association says thousands of landlords face paying the tax through no fault of their own as tenants abandon tenancies or go home to their families during the pandemic.

Private landlords shouldn’t
be forced to pay council tax on properties left empty because of the
coronavirus, according to The National Residential Landlords Association.

It’s calling on the
Government to tell councils they should exempt these houses from
their demands.  

The NRLA says a significant
number of rented homes are empty because tenants were unable to
take up tenancies or have chosen to move out to be closer to family during the
lockdown.

Landlords would then become liable for the council tax on the property and have no realistic prospect of finding new tenants. 

41% worried

Its recent survey found
that 41% of landlords are concerned about having to cover the unexpected costs
of utility bills and council tax.  

Chief executive Ben Beadle
says: “It is manifestly unfair for landlords to be asked to pay council tax on
properties which are empty, and likely to remain so, because of the impact
of the pandemic. 

“Whilst
we remain supportive of the measures taken so far by
the Government, landlords are being asked to absorb more costs at a
time when they are least able.  

“Unlike most small
businesses and the self-employed, there has been
no direct support package announced for landlords. Removing
this unnecessary burden would at least help those landlords who are
struggling to cope with drastically reduced income.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: NRLA launches campaign to have abandoned rental properties exempted from council tax | LandlordZONE.

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LATEST: Government protects commercial tenants from aggressive debt recovery by landlords

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Ministers have moved to protect tenants from aggressive winding up orders and statutory demands, and also give them more breathing space during the pandemic.

New legislation is to be introduced to stop
heavy-handed commercial landlords putting pressure on high street tenants who
can’t pay their rent during the pandemic.

In a move which aims to prevent aggressive
debt recovery and protect high street jobs, landlords won’t be able to send
their tenants statutory demands and winding up petitions until at least 30^th
June – as part of the Corporate Insolvency and Governance Bill.

Tenants will also get more breathing space to
pay rent as landlords now can’t use Commercial Rent Arrears Recovery unless
they are owed 90 days of unpaid rent.

The Government says most landlords and
tenants are working well together to reach agreements on debt obligations, but that
some landlords have been putting tenants under undue pressure by using aggressive
debt recovery tactics.

But the government is also calling on tenants to pay rent where they can, and to recognise the strain felt by commercial landlords.

Kept afloat

Business Secretary Alok Sharma says it’s vital that
businesses are kept afloat so they can continue to provide jobs the economy
needs beyond the coronavirus pandemic.

He says: “Our unprecedented package of support can help
commercial landlords, including through the recent expansion of the Coronavirus
Business Interruption Loans Scheme.”

Adds Sharma: “I know that like all businesses they are
under pressure, but I would urge them to show forbearance to their tenants. I
am also taking steps to ensure the minority of landlords using aggressive
tactics to collect their rents can no longer do so while the COVID-19 emergency
continues.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Government protects commercial tenants from aggressive debt recovery by landlords | LandlordZONE.

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INTERVIEW: ‘Good dialogue with tenants has kept rent payment defaults to just 10% of portfolio’

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Claim is made by boss of Liverpool property management firm who says ‘tidal wave’ of non-payment has so far failed to materialise during pandemic, but he warns this month’s pay day will be next big test.

The expected “tidal wave” of tenants
not paying their rent has failed to materialise, according to one letting
agent.

City Residential in Liverpool reports that proactively engaging with tenants and landlords has resulted in them both understanding each other’s financial position during the lockdown – and only a 10% drop in its rent roll, rather than the expected 30%, MD Alan Bevan tells LandlordZONE.

“Overall, we’ve been delighted by
the response. At this point in time we have
yet to see the ‘tidal wave’ of non-payment by tenants that many industry
commentators had predicated.”

It has made agreements with about
10% of its tenants over paying reduced rent and Bevan says landlords have been
generally receptive, with some proactively offering to help out if needed.

He adds: “During conversations
over the past few weeks with landlords we have reiterated our belief that it’s
better to have an investment property occupied and rented, even if the rent is
lower than what they have achieved in the past.

“Logically, this is particularly relevant during the crisis when it is very difficult to re-rent a vacant property due to the restrictions on movement.”

Pay day

However, Bevan says that the true
extent of the financial hardship on the city’s private rented sector, or how
rents will be impacted, may only become clearer at the end of the month, nearer
pay day.

He predicts a short-term increase
in supply of apartments to let, partly because many overseas students have returned
home, leaving their properties in the middle of their tenancies.

City Residential has also seen a big increase in landlords, both individual and corporate, who had previously offered short-term lets but now want the safety of a more traditional assured shorthold tenancy rental model.

Read more about rent defaults during Coronavirus.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – INTERVIEW: ‘Good dialogue with tenants has kept rent payment defaults to just 10% of portfolio’ | LandlordZONE.

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