Is YOUR letting agent following the law on rental deposits?

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Government reveals that six local authorities are looking into multiple breaches of deposit law by letting agents.

Some letting agents around the UK appear to be ignoring
the Tenant Fees Act, with at least 18 possible investigations pending which
could result in prosecution, it has been reported.

Camden, Westminster, Hammersmith and Fulham, Tower
Hamlets, Stoke on Trent and Leicestershire are all looking into issues around
deposits raised by tenants.

Tower Hamlets Council has served three notices of intent
for breaches relating to taking excessive deposits, taking multiple deposits
for the same property and failing to return a deposit within an acceptable time
frame.

However,
ARLA Propertymark points out that the sector is currently in a transition
period.

Chief
executive David Cox tells LandlordZONE: “If the
tenancy was signed and dated on or before the 31^st May 2019,
then the agents can charge a checkout fee up until the 31^st May
2020 as the Tenant Fee Act does not apply to those tenancies. That’s the advice
we have always given out.”

Following the Act’s introduction in June 2019, the maximum
fee allowed is five weeks’ rent for security deposits, and one week’s rent for
holding deposits.

According to the National Trading Standards Estate and Letting Agency Team, these cases could total £45,000 of financial penalties if the agents are found to have breached the legislation.

A spokesman for the National Trading Standards Estate and
Letting Agency Team says they are now seeing some authorities act against
agents who seem to be charging prohibited fees.

He says: “Many
tenants find themselves in vulnerable positions and are concerned about
retaliatory action if they complain about prohibited tenant fees. If you’re a
tenant, we want to make sure you’re absolutely clear: the landlord is not
allowed to serve an eviction notice if they haven’t paid back prohibited tenant
fees.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Is YOUR letting agent following the law on rental deposits? | LandlordZONE.

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A day in the life of HF Assist

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Last month we reported that Hamilton Fraser, parent company of the Property Redress Scheme (PRS), mydeposits, and Client Money Protect (CMP), had launched a new helpline for letting agents, HF Assist.

In our new ‘Day
in the life of HF Assist’ posts, each week the HF Assist team will highlight
questions from customers and share their answers with us.

In our first Q&A, we discuss the upcoming tenant fee ban
transition deadline, Energy Performance Certificate (EPC) renewals, and tenancy
agreement charges.

Q1: The tenant fee ban
deadline of 31 May 2020 will soon come round. I am working through our
tenancies and making sure we have returned all surplus deposits over the 5 (or
6) week cap.  Is there anything else I
need to be aware of?

Answer:

It’s always good to get ahead of the game.  As well as checking which deposits are over
the cap, be sure to check the history of the tenancy too.

Landlords and letting agents are not obliged to
immediately refund part of a tenancy deposit that is above the cap but which
was paid before 1 June 2019. If a tenant signed a tenancy agreement before 1
June 2019 (and that tenancy is continuing or is a statutory periodic agreement)
then the tenant will be bound by the terms of that contract until it is either
renewed or terminated.

This means that you will be required to refund the deposit
at the end of the tenancy in the usual way and any new tenancy agreed after
this will need to comply with the tenancy deposit cap.

Did you know?

HF Assist Premium subscribers can
download a free template for assured shorthold tenancy agreements. Find out
more here.

HF Assist and mydeposits have
both received calls from landlords and letting agents confused about whether
they need to return
deposits for ongoing tenancies signed before 1 June 2019. We clarify the
situation in our previous post here.
mydeposits’ deposit calculator can help landlords to comply with the Tenant Fees
Act.

Q2: I have a tenancy where the exiting EPC has expired.
Do I need to renew it? The tenant is likely to stay in the property for some
time yet.

Answer:

An
EPC is valid for 10 years after an energy survey is carried out on a property.
It can be used multiple times during this period.

EPCs
have been required by law since 2008 in England and Wales. Since 1 April
2018, all new lets and renewal tenancies must have a minimum energy performance
rating of E on an Energy Performance Certificate. These regulations will come
into effect for all existing tenancies on 1 April 2020.

For
your current tenant:

• There’s no need to
  renew the EPC before 1 April 2020 unless you are going to extend or renew the
  tenancy

• Come 1 April 2020
  you will need to renew the EPC in any event

• If you do start
  looking for new tenants, an EPC needs to be made available to prospective
  tenants as soon as you begin marketing the property

Failure
to provide an EPC when required can result in a £200 fine per dwelling.

Did you know?

The MEES
regulation deadline is soon approaching, giving landlords until the 1 April
2020 to bring their properties to a minimum Energy Performance Certificate
(EPC) rating of grade E.

Find
out more about the new Energy
Performance Certificate: Keeping your property green. And in a previous
LandordZONE post we look at MEES
regulations: What you can do to prepare for the legislation deadline.

Q3:
We have a tenant who is on benefits and as a result their landlord’s insurance
premiums increased by £200 per year.  The
landlord told me last week that he wants me to make the tenant pay him £200 to
continue living at the property. He has told me that this is allowed because
the Tenant Fees Act allows him to change the tenancy agreement (and charge
another £50!).

Answer:

The legislation allows a charge to be made for changing the
tenancy agreement, but only where the reason for making the change is reasonable.
Requiring the tenant to pay an amount of money to continue living at the
property is prohibited under the Act and not, therefore, a reasonable change.

Requesting a prohibited payment is a breach of the Tenant Fees
Act 2019. A breach of the legislation will usually be a civil offence with a
financial penalty of up to £5,000, but if a further breach is committed within
5 years of the imposition of a financial penalty or conviction for a previous
breach this will be a criminal offence. The penalty for the criminal offence,
which is a banning order offence under the Housing and Planning Act 2016, is an
unlimited fine.

Did you know?

HF Assist can offer
expert advice on tenancy agreement processes and what you can and can’t charge
fees for.

The HF Assist helpline provides expert guidance and information from call handlers who have
both legal and lettings experience. The service can be accessed by phone,
email, and live chat during business hours. Upgrading to a HF Assist Premium
subscription provides a 24/7 legal helpline covering all types of legal issues
related to a letting agent’s business plus other useful extras.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – A day in the life of HF Assist | LandlordZONE.

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Court tells landlady to pay tenant compensation after shocking (and illegal) eviction

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Case of landlady who thought she could evict her tenant because he had not signed an AST or passed referencing reveals her shocking ignorance of the law.

A landlady
who chucked her tenant’s belongings into the garden and changed the locks
without giving him proper notice of eviction has had her appeal against a
£7,000 fine rejected.

In November 2019, Lydia Suleaudu, of
Monteagle Court in London, was found guilty of illegally evicting her tenant
from the property in Ringwood Crescent, Bristol (pictured).

He had started renting a room in January 2018
but two months later returned home after working away to find a note on his
bedroom door giving him notice to leave.

The tenant contacted Bristol Council and then
went back to the property to find the locks had been changed and all his
belongings in the front garden. Ms Suleaudu refused to let the tenant back in
and an investigation was launched.

Reference checks

At a magistrates’ court hearing, brought by
the council’s Rogue Landlord Unit, she claimed he was not a tenant as he hadn’t
been given a tenancy agreement and that she was waiting for reference checks to
be completed. As a result, she thought she didn’t need to follow the legal
procedure for eviction.

However, the court heard the notice was
invalid as it didn’t comply with legal eviction procedures and that her tenant
was a residential occupier. She was fined £1,500 and ordered to pay him £490 compensation,
as well as almost £5,000 in prosecution costs and a victim surcharge of £150.

Ms Suleaudu appealed the conviction but lost the case and
now has to pay an additional £1,383 in costs.

Councillor Paul Smith, cabinet member for housing, says:
“It is important for all landlords, even those renting only one or two
properties to understand their responsibilities for renting to tenants. We hope
that other landlords will see this as a clear message that we are here to look
after tenants across the city.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Court tells landlady to pay tenant compensation after shocking (and illegal) eviction | LandlordZONE.

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Call of the Week: Deposits and the tenant fees ban in England

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This week the advice team were able to assist one of our members with a matter relating to their tenancy deposits. They had deposits that were protected in schemes for some of their tenancies that were above 5 weeks’ worth of rent, and wanted to know if and when they should go about refunding the […]

The post Call of the Week: Deposits and the tenant fees ban in England appeared first on RLA Campaigns and News Centre.

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Freeholder charging £36k for a new roof for my BTL Flat!?

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I am extremely ill informed as to what to do next. If someone could point me in the right direction, whether it be advice on here, or which professional I should be taking to about this  – I am happy to pay for a solicitor if that’s what’s needed

The building is a 2 story Edwardian house that was converted into 2 flats in the 70’s I believe.

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LATEST: Landlords do not have to return deposits for ongoing tenancies signed BEFORE June 1st last year

admin    Uncategorized     agents

The tenant fees ban and its five-week cap on deposits does not come in fully for all tenancies until later this year, landlords should note.

Government authorised tenancy deposit protection
provider mydeposits
has reported a rise in calls from landlords and agents who mistakenly believe
all deposits must comply with the cap by the end of the Tenant Fees Act
transition period on 1 June 2020.

Some of this confusion could be due to an article
from the DPS, which incorrectly states that all three of the Government
authorised tenancy deposit schemes advise that deposits over the cap amount
should be returned to the tenant, including
for tenancies entered into before 1 June 2019.

The deposit cap, which was introduced under the
tenant fee ban last June, set a cap on the amount that can be taken as a
security deposit (five week’s rent for tenancies where the total annual rent
for the property is less than £50,000 per year, six week’s rent where the total
annual rent for the property is between £50,000 and £100,000 per year).

Rental cap

But the cap does not
apply to on-going tenancy agreements signed before 1 June 2019.

If the tenancy agreement was signed before that date
and rolls into a statutory periodic tenancy, then the deposit does not need to
be reduced until it ends or is renewed, and a new tenancy agreement is signed.

At this point the deposit cap will apply and any
excess deposit must be refunded.

This wasn’t clear in the Government guidance on the
transition period, which came out quite late, but has now been clarified in the
Government’s updated Tenant
Fees Act 2019: Guidance for landlords and agents.

Head of Dispute Resolution at mydeposits, Suzy
Hershman, explains: “We’re advising our landlords and agents that if the
deposit was taken before 1 June 2019, and the tenancy is ongoing, the deposit
cap does not apply.”

Hamilton Fraser’s new helpline for letting agents, HF Assist,
has also received several calls from letting agents, confused about whether
they have returned all surplus deposits in advance of the impending transition deadline
of 1 June 2020.

HF Assist Project Consultant, Mike Morgan, comments:
“While it’s encouraging that so many agents are getting organised, we have been
surprised by the calls we are getting on this.

“We’re advising agents that, as well as checking
which deposits are over the cap, they need to make sure they check the history
of the tenancy too. Knowing when the tenancy started and is ending is key.”

In a nutshell

By reducing the cap and refunding a proportion of
the deposit to their tenants unnecessarily, landlords and agents are leaving
themselves with less protection than they would have had against bad tenants.

Pet point

Any landlords and agents who took a pet deposit before the tenant fee ban came into force will have to refund the deposit when a new tenancy agreement is signed, as this is no longer permitted under the tenant fee ban. For more information, read the Government’s guidance on the Tenant Fee Act, or you can access mydeposits guidance here . Please note this advice applies to England only.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Landlords do not have to return deposits for ongoing tenancies signed BEFORE June 1st last year | LandlordZONE.

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Stamp duty overhaul could be put on ice in Budget

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The property industry will be hoping that housing is a top priority in the upcoming Budget, set to be delivered by new Chancellor Rishi Sunak on March 11. It is the first Budget from the new government elected in December and although it could be a quiet day for the private rented sector

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West Midlands landlord is first in UK to be slapped with Slavery & Trafficking Risk Order

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Kashmir Binning ignored official warnings that his properties were being used by a Polish ‘slave gang’ and must now pay fines totalling £14,000 and adhere to strict rules.

A
rogue landlord who ignored the plight of hundreds of Polish slaves housed in
his three Birmingham properties has had a landmark court order made against
him.

Kashmir
Singh Binning leased the houses to a Polish gang that trafficked up to 400
vulnerable people in houses across the West Midlands, forcing them to work on
farms and rubbish recycling centres.

The
victims endured squalid conditions, slept on dumped mattresses and had no
working toilets, heating, furniture or hot water in some of the properties.

A
judge granted a Slavery & Trafficking Risk Order against Binning – the
first of its kind ever secured under Modern Slavery legislation – which runs
until 2025 and binds him by various conditions: not to accept cash payments
from tenants, to agree to property inspections every three months, and to
provide the local authority with signed tenancy agreements containing details
of all occupants.

Detectives
investigating the trafficking ring had advised Binning, from Kirkham Way in
Tipton, in August 2016 that his properties were being used to house slavery
victims. Despite this, he continued to rent them out.

His
Queen’s Head Road property was largely gutted by a fire in December 2015. A
fire safety report revealed the house had no smoke detectors or fire doors and
was home to several Polish nationals, despite tenancy documents showing it was
leased to one person with no scope for sub-letting. 

Binning
didn’t co-operate with Birmingham Council’s enquiry and also failed to act on
anti-social behaviour concerns at his properties or carry out remedial work
when inspectors found widespread mould and damp.

Detective
Sergeant Mike Wright says: “Binning’s role was pivotal to the group being able
to house victims easily, quickly and at affordable cost. He was friends with
some of the suspects and willing to turn a blind eye.”

Binning was also ordered to pay £14,000 in court
costs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – West Midlands landlord is first in UK to be slapped with Slavery & Trafficking Risk Order | LandlordZONE.

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Is the no-deposit scheme correct?

admin    Uncategorized     agents

I would appreciate your views on the following. I had a new tenant sign up for a 12 month (fixed-term) AST for a room at £550 pcm.

I gave the tenant the option of providing a deposit equal to 5 months’ rent or for him to set up an arrangement with a no-deposit scheme equal to the value of 8 weeks rent.

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Protestors force TV star’s property seminar to be called off

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Organiser tells LandlordZONE that it sympathises with protestors but says its courses promote professionalism and the provision of quality properties.

Scottish protestors have picketed and shut down a property investment seminar run by TV star Martin Roberts in Scotland.

The country’s tenants’ union Living Rent surrounded the entrance to the Making Money from Property event at Edinburgh’s Hilton Hotel, which aimed to show attendees how to maximise profits, calling for rent controls.

One of a
series of events organised by Martin Roberts from BBC’s Homes Under the Hammer, it was called off after 50 protestors gathered
outside and challenged organisers.

A
spokeswoman for Asset Academy, which runs the events, told LandlordZONE: “We
appreciate that high rents in city centres are causing issues, and have
sympathy with the concerns of tenants in these places and any groups
representing them. 

“However,
the property training courses that Martin Roberts has co-developed with Asset
Academy are designed to show people how to do things correctly. We teach how to
be a proper, professional landlord, who abides by regulations and offers
quality properties in the much-needed private rental sector.”

Although Roberts himself wasn’t at the
Edinburgh event, aspiring landlords were expecting tips about how to acquire
finance, beat the competition, and calculate their maximum price – complete
with training videos and e-books.

Despite the setback, the Martin Roberts roadshow continues its journey around
the UK, hitting Luton and Taunton on Wednesday and Northampton and Exeter on
Thursday, with more locations planned throughout March. The free two-hour
sessions are a taster of the presenter’s three-day property training workshops
which will set you back £997.

Living Rent
says these seminars underline the need for the Scottish Government to introduce
rent controls, so that tenants aren’t forced into poverty by high rents. Living
Rent member Claire Thomson says: “The fortunes these people promise don’t come
out of nowhere, they come from tenants who are already desperately struggling
to make ends meet. It has to stop.”

One of the
protest organisers, Gordon Maloney, adds: “This action showed that tenants
aren’t going to just sit back and allow rents to continue going through the
roof if the Government doesn’t act.”

The group says the costs of renting in
Scotland’s capital continues to rise at eye-watering levels, and that between
2010 and 2019, the Lothians saw the average price rent for a two-bedroom
property rise from £665 a month to £972, a 46.3% increase.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Protestors force TV star’s property seminar to be called off | LandlordZONE.

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