Tag Archives: renting

Are you having abandonment issues?

Lucy Regan, London Representative for the NLA advises landlords on the issue of tenant abandonment.

Abandonment isn’t something that happens often in the private rented sector but when it does it can be distressing and confusing. But how do you know if your proREGAN Lperty has been abandoned and what are the steps you need to take?

Things you need to consider

Has the property been abandoned?

First of all a landlord must decide if the property has been abandoned. If a tenant has given notice or handed back the keys this is then termed ‘surrender of tenancy’. Secondly a landlord must establish the reason: there may be a valid reason as to why a property is left unattended, for instance a hospital stay, an extended holiday or the tenant has gone to prison.

Insurance

Your insurance may not be valid if the property has been left unattended for more that the stipulated period. This could prove costly as empty properties are susceptible to squatters and vandals.

How to check that property has been abandoned

  • Contact – A landlord should first attempt to contact the tenant. If they do not respond to calls, voicemails, text messages or emails, it could be the first bit of evidence that the property has been abandoned?
  • Is the tenant still making rent payments? – When did they stop? Is that normal or have they been late with payments before?
  • Are the tenant’s possessions still at the property? If they have been removed, it could be another tick in the box of abandonment. Checking for possessions can be difficult. In some cases a landlord may be able to see through a window, but if this is not possible, they must then seek permission from the tenant to access the property. But with the suspicion of abandonment this may not be possible. However if a landlord thinks the property is in an unsafe state they may enter, but they must be cautious and make sure there is a clear reason for entering. It would also be a good idea to have a witness come along.
  • Is the tenant claiming housing benefits? If so, then a landlord can contact the Housing Department. They may even be in contact with the tenant and could shed some light on the situation.

Where do you stand legally?
A landlord needs to be aware that the tenant is legally entitled to return and take up residence again, and that the landlord is responsible for the tenant’s possessions.

If a landlord takes over the property and re-lets it, there could be serious trouble as it is a civil offence relating to the breach of the existing tenancy contract. It is also a criminal offence to prevent the continuation of the tenancy.
There have been cases where landlords have been fined up to £20,000 for re-letting their properties when then tenant is clearly not coming back.

The safest way to deal with abandonment is to get a court possession order before taking over the property.

What to do next

If a landlord has established significant evidence that the property has potentially been abandoned they should follow these steps:

  • Remember to ensure that all communications and actions are documented.
  • Make sure that there is a witness available and willing to give a statement at any time when at or dealing with the property and tenant. A local authority’s Tenant Relations Officer can help with this.
  • Serve an Abandonment Notice. This note must be placed on the tenant’s door. However, be aware that this may attract squatters, so do it as discreetly as possible. It is advisable to take a picture of this with a newspaper to show the date. To be safe, post a copy through the door. After five days, the locks may then be changed (unless already done so to secure the property or see to any present dangers).
  • Any possessions remaining in the property must be stored for a reasonable amount of time.
  • Under no circumstance must you deprive the tenant of their rights to access.
  • Inform the local authority rent officer of your actions in writing.
  • Seek expert advice: the NLA advice line is on hand for NLA members.
  • Always obtain a court possession order before taking over the property or re-letting if there is any doubt.

To avoid getting into this kind of situation it is best practice to get a thorough reference on the tenant at the start of the tenancy. Check for rent payments, and visit the property regularly. If you are on good terms with a neighbour, you could ask them to keep an eye on any suspicious movements, or provide a weekly cleaning service.

Finally, it is a good idea to build up a relationship with the tenant and make them aware that if they do go away for an extended period of time that they can let you know.

New guidance to promote successful tenancies

Make sure you know your rights as a renter

Make sure you know your rights as a renter

New guidance has been produced to help private renters in England who are looking for a house or flat to rent.

The guidance has been produced by the Department for Communities and Local Government (DCLG) and provides a checklist of the most important and common aspects to help protect renters from problems at every stage of looking for, and moving in to, private rented property.

The guidance is for renters who are entering in to an assured shorthold tenancy (AST) agreement – the most commonly used tenancy agreement in the private sector – but doesn’t cover lodgers or people with licences , nor tenants where the property is not their main or only home.

What’s in it?

It provides a host of information that should enable a better understanding about the rights of the tenant, and their responsibilities so that a positive relationship with their landlord can be maintained. It contains lots of detailed information about what to consider:

  • before searching for a property –  whether through  letting agent or directly from a landlord;
  • once you’ve found a place –information about the important documentation tenants should receive from their landlord or agent;
  • during the tenancy –  including the rights and what’s expected of tenants, and how to deal with problems or issues;
  • When the tenancy is coming to an end –how to renew or extend the tenancy and how the property should be left upon tenancy expiry to ensure no issues arise.

What if problems arise?

The guidance also contains important information about tenant’s legal rights and offers further sources of information and support for renters who experience problems during the tenancy, such as:

  • financial problems
  • Concerns over the safety of the property
  • Fear of or actual harassment by the landlord/ illegal eviction.

Download the full guide now

You can download the guidance from he DCLG’s website here.

Most of it will equally apply if you are in a shared property but in certain cases your rights and responsibilities will vary.

Laying the foundations for private renting?

Alex Marsh, Professor of Public Policy at the University of Bristol, talks about the Government's Housing Strategy, published last month.

The long-awaited Housing Strategy for England Laying the foundations – has now arrived. The headlines were dominated by the mortgage indemnity guarantee, restarting “shovel ready” developments, and revitalising the Right to Buy. But what does the strategy have to say about private renting?

The chapter focusing on private renting opens with a statement of support for the sector, which the Government identifies as playing a key and increasingly important role in the housing market. The sector has witnessed significant recent growth, but high levels of demand mean affordability is deteriorating in some areas. The Government’s strategy has a dual focus: boosting overall supply by encouraging investment and tackling the minority of rogue landlords. In fact, rather more space is devoted to discussing investment.

Private renting in Britain is increasingly dominated by landlords operating on a small scale. So the Government continues to pursue the Holy Grail that has eluded housing policy for the last 30 years – greater institutional investment. We’ve had the BES, which gave the sector a short-term boost. We’ve had HITs, which sank without a trace. We’ve had the recent arrival of REITs, but largely to the benefit of commercial property investors. The Government is going back to the idea of REITs to see if it can be tweaked to entice investment into residential property.

It may be that this time things are different. The Chancellor’s Autumn Statement raised the possibility of new financial vehicles to encourage pension funds to invest in infrastructure. The broader investment environment is currently hostile. The risks associated with more exotic investment strategies are considerable. Residential property may be looking like an increasingly plausible option for a dependable income stream, especially as the Government strategy explicitly acknowledges the need to ensure that welfare reform does not unduly disrupt investors’ income expectations.

There are already some interesting developments occurring – such as the Build to Let Fund created by Bouygues and Grainger – in the search for appropriate vehicles for investing in private renting. The boundaries between tenures are blurring in other ways: for example, Sovereign, one of the largest housing associations in the country, have just announced an expansion of its operations in the market rental sector.

There is the potential for some large organisations to enter private renting, bringing with them professional property management expertise and the scope for brand recognition and reputation. This could alter the competitive climate in interesting ways.

The strategy reaffirms the Government’s commitment to avoid unnecessary regulation on landlords, but then goes on to state that:

we are … looking at measures to deal with rogue landlords and encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes.

It says little more than that.

Pressure on the Government to act here is undoubtedly building. The Localism Act will mean more homeless people being housed in the private rented sector. Welfare Reform will mean those people are likely to have less money to pay the rent. Yet, budget cuts mean local authorities have less money available to take enforcement action. Any reputable landlord watching Channel 4’s Dispatches programme last Monday will no doubt be concerned that the action – or inaction – of rogue landlords puts the sector under the spotlight and damages its reputation.

We await further details of the Government’s thinking.

Alex Marsh is Professor of Public Policy at the University of Bristol

Rent Arrears: In the ‘normal course of business’ or ‘way too high’?


Carolyn Uphill, NLA Director and Local Representative for Manchester, questions whether any other business would accept their customers failing to pay.

All businesses have bad debts and Buy to Let is, after all, a business. Albeit one the Government doesn’t truly recognises through the tax system. A ‘normal’ allowance for this is in the region of 5% of turnover but rent arrears are running at more than twice that figure.

According to one set of figures recently published 10.7% of all UK rent was either unpaid or late by the end of August. This is an increase from the July figure for unpaid or late rent, which stood at 9%. Another source found that tenant finances took a “turn for the worse” in October with 10.1% of all rent late or unpaid at the end of the month, compared to 8.6% by the end of September (LSL Buy-to-Let Index Oct 2011).

Which ever way you look at it, this is still a huge slice of income to write-off. As rents rise, benefits reduce, and unemployment grows things may only get worse. So is Buy to Let a viable business?

For the answer we need to look back to the business model. All businesses need to factor in the possibility of bad debts but take every possible step to avoid them.

Just as a business takes up trade references you should not let anyone into your property without fully referencing them and establishing that the property is affordable to them within their income bracket.

Never let a debt accumulate. Rent is in arrears the day after it is due; so monitor your payment receipts and contact the tenant as soon as a payment is overdue.

Whilst landlords must never harass a tenant it is always the case, just as in business, that he who ‘shouts loudest’ is more likely to be paid. So be firm but polite, enquire if there is a problem, offer to discuss and/or help with this as appropriate, perhaps they have changed job and have a different pay-day, and try to agree a definite date by which matters will be resolved.

Good communications, built right from the start of the relationship with your tenant, may help to resolve any problem which arises.

Taking the matter to court should always be a last resort. This will take time, indeed the closure of some county courts will make this slow process take even longer, and involve the landlord in extra costs whilst rent remains unpaid.

Statistics also show that an increasing number of tenants are raising a defence, at the last minute, which delays a possession order. Just as a business must get their paperwork right and provide no grounds for a counterclaim when seeking payment on a contract, landlords must make sure that they have met their maintenance and repair obligations towards the tenant.

Rent arrears will continue to be a problem but the wise landlord will take a very businesslike approach to his selection of tenants, and his relationship with them throughout the tenancy, to maximise the possibility of being paid on time and in full for the service he is providing.

 

Why hast thou Article Four-saken me?

Ken Staunton, NLA Head of Regions discusses the spread of Article Four Directions

Unless you’re an avid member of the National Trust (or happen to live in a conservation area) Article Four of the Town and Country Planning Act was probably not a major topic of conversation up until a year or two ago.

All of that has changed, thanks to some of the last actions of the previous Government in the Spring of 2010.

Up until April 2010 private homes housing fewer than six unrelated individuals, irrespective of their tenure or occupiers, were classed by planning regulations as ‘dwelling houses’. This was based on the notion that it does not make a great deal of difference to local infrastructure whether a household accommodates three unrelated sharers or an average sized family.

So far so good. Or so you would think….

Despite their own evidence to the contrary (see the 2008 Rugg Review of the Private Rented Sector anyone who is interested), the last Government decided that the over- concentration of Houses in Multiple Occupation (HMOs) was a problem of national significance. They then introduced legislation creating a whole new ‘use class’ for planning purposes. From that point onwards, a property could be either a ‘dwelling house’ or an ‘HMO’ dependent on who lives there.

Long story short, the Government changed colours and amended this legislation to remove the automatic need to obtain permission to change a house from definition to another, but allowed local authorities to require such an application in their area if they so choose.

The problem is that this is a little more than just a labelling exercise. Increasingly local authorities in England are using this new found option to arbitrarily limit new shared homes within their boundaries. So far, more than 30 have started down this path, with a few opting to forego the usual notice period and jump straight to implementing ‘Article Four’ notices (as the regulation is known) with immediate effect.

Some argue that this is social engineering of the worst kind; others describe it as nimbyism of the worst sort. Whatever the label the net impact is that the availability of shared housing is to drop at a time when demand is high and getting ever higher thanks to Government policy.

In January, single Local Housing Allowance recipients under the age of 35 will only be able to claim for a single room in a shared house (currently the threshold is 25.) This combined with other welfare reforms and an overall housing shortage is predicted to increase demand for shared accommodation by more than 60,000 individual units.

My question to Government, both local and central, is where are these homes supposed to come from? This at a time when so many local authorities simply want to push those on the lowest incomes and with the greatest need elsewhere.

Landlords around the country cannot afford to ignore this issue. To see if you’re affected, or to let us know that your area is considering an Article Four Direction, please visit the NLA’s website and help us to ‘Save Shared Housing’.

Crime and Punishment?

The NLA engages with the powers-that-be on a wide array of issues which impact in one way or another upon a landlords ability to carry out his business. This also means that on occasion we have to look at very emotive issues which carry with them a significant political element.

One of the most important, and emotionally charged debates which the NLA takes part in is that of possession i.e. why, when and how should a landlord be able to legitimately obtain vacant possession of his property and on what basis he may not.

Where tenancies are concerned, we’re quite lucky in the UK. Thanks to decades of hard work by the NLA and others, the statutory frameworks in the British Isles represent a pretty good balance between sufficient security to make the PRS attractive to tenants and adequate protection for landlords’ investment to make letting a viable business. Frustrating and time-consuming as it can be, ending a tenancy in an orderly fashion when things go wrong is possible and (relatively) straightforward.

But…what about when the person occupying your property is not a tenant? What about when there are people living in your property without permission, removing your, extremely valuable, asset from circulation and endangering your business?

This has been the question underpinning a great deal of debate recently as the Government in Westminster decided that the time was right to revisit the issue of squatting in South of the Border.

This is also where the heavily politicised element appears.

The Government demonstrated a belief some months ago that squatting should be criminalised in England and Wales (as it is in Scotland by the way). As is expected of it, the Ministry of Justice (MoJ) issued a consultation paper over the summer inviting comment on a number of proposals for dealing with the matter of squatting.

By virtue of their ownership of property, landlords tend to have greater exposure to squatting than most of the population, so you’d expect the NLA to be involved in discussions with Government about this – as we were and continue to be. The NLA was one of more than 2,000 stakeholders to submit comments on the consultation.

The sheer volume of responses led us to believe that it would be some time, possibly the New Year, before a response would be issued by the MoJ. Hence our surprise this week when Secretary of State for Justice Ken Clarke published the following amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill:

To move the following Clause:—

 ‘(1)    A person commits an offence if—                   

(a)    the person is in a residential building as a trespasser having entered it as a trespasser,                    

(b)    the person knows or ought to know that he or she is a trespasser, an              

(c)    the person is living in the building or intends to live there for any period.       

(2)    The offence is not committed by a person holding over after the end of a lease or  licence (even if the person leaves and re-enters the building).                     

(3)    For the purposes of this section

  (a)    “building” includes any structure or part of a structure (including a temporary or moveable structure), and  

(b)    a building is “residential” if it is designed or adapted, before the time of entry, for use as a place to live.                      

(4)    For the purposes of this section the fact that a person derives title from a trespasser, or has the permission of a trespasser, does not prevent the person from being a trespasser.       

(5)    A person convicted of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding 51 weeks or a fine not exceeding level 5 on the standard scale (or both)

(6)    In relation to an offence committed before the commencement of section 281(5) of the Criminal Justice Act 2003, the reference in subsection (5) to 51 weeks is to be read as a reference to 6 months        

(7)    For the purposes of subsection (1)(a) it is irrelevant whether the person entered the building as a trespasser before or after the commencement of this section.’.

This creates the offence of squatting – which I am sure many landlords who have suffered at the hands of trespassers in the past will welcome.

The question which still remains though, is how does this move help to regain possession of a property?

If an arrest for suspicion of squatting is made, will a landlord be able to simply take his property back on the presumption of guilt?

As criminal cases tend to take precedence over civil cases will landlords have to wait for the outcome of a prosecution before re-letting property?

The NLA is certainly not opposed to the idea of criminalising squatters – but surely the priority must be returning property to its rightful owners. Crime and punishment can follow once justice has been served.

For more information about squatting and the its potential criminalisation please visit the NLA Website here: http://www.landlords.org.uk/news-campaigns/campaigns/squatting

Getting off to a good start!

Julie Woolfenden, NLA Local Representative for Shropshire and North Wales, explains how to set up the perfect tenancy; the property, the law, the rent and the little perks!

Renting is becoming the preferred choice of tenure for more and more people. Even Prince William and Catherine, Duchess of Cambridge, having tied the knot in a spectacular ceremony at Westminster Abbey are now renting a cottage on Anglesey where William is serving 3 years as a Search and Rescue Helicopter Pilot at RAF Valley.

However, Royal or not, there are still certain things that a Landlord/Tenant relationship needs for the successful creation of a new tenancy.

During my years as a landlord renting properties to families, I have developed a set of procedures for starting a tenancy – from when my new prospective tenant(s) first views the house to the day when (s)he finally moves in and I hand over the keys.

Firstly, the property needs to be ready; everything spick and span and in full working order together with the Gas Safety Certificate, the EPC to hand and a robust inventory.

If the prospective tenant views and is interested in my property I give them the EPC and an explanation of what it is, as in my experience, tenants rarely know about them.

We then discuss:-

a)      The rent – Working tenant versus benefit tenant and how / when the rent will be paid.

b)      Deposit – A quick explanation about protecting it.

c)       References – Absolutely vital and if a Guarantor is involved they need to be credit referenced as well.

If everything is OK, I issue the tenancy agreement (in duplicate) usually a few days in advance of the agreed start date of the tenancy, giving the tenant an opportunity to read it. If they are claiming benefits the Housing Benefit Office will need a copy prior to the beginning of the tenancy.

As for paperwork when the tenant moves in: Two signed copies of the tenancy agreement, key receipts, utility meter readings, receipts for the Gas Certificate and EPC and the signed inventory. To safeguard myself and supplement the inventory I usually take an audio video, with the tenant in shot, showing the house and the garden. I make two CD copies – the tenant keeps one and signs for it. The tenant also has one copy of all the paperwork and I keep the other.

I also demonstrate how things work; especially the heating and hot water. I tell them where the cold water stop cock is and leave instruction manuals for all appliances. Other useful information I pass on to my tenants is when bin day is and if the electricity / gas is on a card meter where they can go to get the card topped up.

Finally, a card welcoming them to their new home (or even a bottle of wine) is a nice gesture and I find tenants really appreciate it.

I give the tenant my contact details and explain the deposit will be protected and that I will let them have all the relevant paperwork shortly.

About a week into their tenancy I give them a quick ring just to check they are settling in OK.

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