Tag Archives: Tenants

A quick guide to residential tenancy possession in England

Chafes Solicitors explain the to go about claiming possession

As a landlord, there are often times when you will unfortunately need to seek possession of your property. For example, if your tenants are in arrears or your property has been damaged through anti-social behaviour (the top two reasons for a landlord being forced to go down this route.)

If your tenants have signed an Assured Shorthold Tenancy (AST), there are two options open to you. So which is the right course of action?

Well, it all depends on your circumstances of course – why and when are you seeking to repossess your property?

As a landlord, you must serve notice on your tenants in order to claim possession and there are two ways for you to do so.

  1. Section 21(S21) – known as an Accelerated Possession Procedure, or
  2. Section 8 (S8) – known as a Standard Procedure

So what do you need to know about both routes?

S21

This route gives you the right to possession at, or after, the expiry of the tenancy period provided you serve a S21 notice to your tenants two months before you wish to claim possession. Remember, you are not automatically entitled to possession upon expiry of the tenancy unless you first issue the S21 notice.

This route means that there is no need for a court hearing so it is likely to be less hassle; providing you have correctly served the S21 notice (and the court papers are in order) the court must order that you can possess your property.

However, the court does not have the power to make a money judgment under this route. So this means it cannot order your tenant to repay any rent in arrears, for example, although it is possible to issue separate legal proceedings in respect of arrears.

S8

Use an S8 notice if the terms of the tenancy have been breached. You have the right to possession on 17 different grounds – commonly rent arrears – and the length of the notice will vary upon the grounds you have sought possession.

See section 8 grounds for repossession for more information.

S8 claims also allow for a money judgment to be obtained along with an order for possession, which the S21 route does not allow.

Bear in mind however that S8 proceedings can often be lengthy as they are likely to be defended by the tenant, so the nature of the breach of tenancy will be important. For example, if your tenants are in arrears you might want to consider likelihood of recovering this money in the long term.

Where both routes apply – such as when the tenancy is ending and there are also rent in arrears – it can be advisable to use the often simpler and quicker S21 route instead as faster possession will allow you to re-let your property sooner.

Regardless of your chosen route, remember that you must have served notice on the tenant before any court proceedings can be begin.

Claiming possession of property can be concerning and stressful for all involved. The NLA can provide advice and guidance for landlords through its Online Library (FREE for NLA members) and Telephone Advice Line (Exclusive for NLA members). Visit the NLA Online Library here.

This blog has been provided by Michael Devlin of Chafes Solicitors LLP.

Deposits: Whose money is it anyway?

Faiz Rashid, NLA Local Representative for Yorkshire, explains the importance of understanding the status of tenancy deposits.

Most landlords ask new tenants to pay a month’s deposit as security in case of any damage to the property or non-payment of rent by the tenant.

It’s the only real protection available to us should things go wrong later on.

However, what happens to that money at the end of the tenancy is also one of the most heavily challenged decisions a landlord has to make.

To deal with these disputes, the Government introduced mandatory tenancy deposit protection for most tenancies in England in Wales in April 2007. This wasn’t necessarily popular with all landlords then (or even now if truth be told) but it was intended to safeguard tenants’ deposits and provide a fairer system for settling disagreements about the return of any disputed at the end of a tenancy.

There are two types of government authorised schemes currently available:

-       Custodial; where the landlord or agent pays the deposit into the scheme, where it will be kept until the end of tenancy.

-       Insurance backed; where the landlord or agent holds onto the deposit but pays insurance premiums to the scheme. This means that the deposit is insured if there is any dispute, and the scheme will repay the tenant the agreed amount directly.

Personally, I use my|deposits for my tenancy deposits. This suits me because its flexible (I can use it around the clock), easy and straightforward. I can hold the deposit myself and am able to simply return it to the tenant at first opportunity at the end of the tenancy (providing all has gone well) which isn’t always so straightforward with the custodial scheme. But the custodial scheme has its merits too, especially if you don’t want the responsibility of holding onto potentially large sums of money for the duration of the tenancy.

Despite some teething problems, largely being addressed by new legislation from next month discussed in our earlier guest blog here, the three Government backed schemes have proved largely successful.

But there is still quite a lot of confusion about the status of deposits in general.

The key point which landlords often get wrong is that the deposit belongs to tenant. It never ceases to be the tenant’s money and should be returned unless the landlord can show that he or she has suffered a financial loss as a result of the tenant’s action or inaction.

This can be frustrating for landlords because as we all know it can be difficult to remain objective when carrying out an end of tenancy checkout – especially where there is obvious damage. This is why conducting a thorough and comprehensive inventory at the beginning of every tenancy is absolutely essential. Note down everything, take photographs, video if necessary and make sure that the tenant signs their agreement.

More landlords fall foul of the dispute resolution process because they cannot prove what condition a property was in before the tenancy began than for any other reason.

Should the need arise – where an agreement can’t be established over the amount of the deposit to be returned to the tenant – at the end of the tenancy all three schemes provide access to alternative dispute resolution (ADR) service gives landlord as well as tenants, the peace of mind.

Also – for all those landlords reading in Scotland, Tenancy deposit protection is coming soon! For information visit www.mydepositsscotland.co.uk for the latest news.

How do you separate a Scottish landlord from his deposits?…….Ask Alex

David Kendall, NLA National Representative for Scotland, airs his views on the creation of Tenancy Deposit Protection in Scotland.

Good old Alex Salmond has done it again. He would hate to admit it but he just loves to copy the English! ‘If England has a tenancy deposit scheme, then so must Scotland’  he said – well not in exactly those words but you get the gist.

At the end of January this year, the draft legislation for a Tenancy Deposit Protection (TDP) Scheme was laid before the Scottish Parliament. With an election looming, the SNP rushed to make sure it was approved before they lost power. Except as we all now know, the predictions were not quite right and the SNP did what the ‘anoraks’ said was impossible and were returned with a majority.

So now landlords in Scotland are likely to be faced with a TDP scheme which will become operational sometime in 2012. However, of course Alex needed to make it a little different from England and there are some differences – which are bound to send the more unscrupulous letting agents running.

The new scheme will only be custodial. Landlords in Scotland are clearly not trustworthy enough to insure their deposits.

But it gets worse!

The scheme is also going to apply to EXISTING tenancies. Therefore, the millions of pounds which agents and landlords have spent on lavish cars, holidays, sorry I mean, put in designated accounts over the last few years, will  need to go into the scheme within a maximum of nine months of it going live.

Okay Mr Salmond, we know there will be no charge to landlords or tenants; we know the arbitration service is also free of charge; but surely you should have taken some responsibility. Who is going to publicise the scheme? Not the Scottish Government. No, the publicity must be provided by the scheme providers and reinforced by their desire to grow their market share.

Of course ignorance is no excuse for non-compliance, but relying on marketing alone to communicate the importance of protecting all new and existing deposits is bound to leave some landlords out of the loop. Which will have serious consequences.

If a landlord does not protect the deposit within 30 days of receipt the tenant can take him to court and will be awarded up to three times the value of the deposit. Alternatively, the tenant could wait until he has moved out of the property and then claim against the landlord within 30 days of leaving the property.

What this means is inventories are really going to need to be up to scratch. Detail everything in the property; the makes of appliances, model numbers, condition, everything. Make sure you take loads of photos. Most importantly, make sure the tenant signs everything when he moves in and remember all paperwork must have dates; do not preprint or write it in yourself.

In England and Wales almost all disputes which end in the tenants’ favour do so thanks to a lack of an inventory or the landlord failing to provide sufficient evidence to justify deposit deductions. So when it comes into force don’t try to ignore TDP, it won’t go away, and it is up to every landlord to make sure he protects himself from unnecessary litigation and cost.

For more information visit: http://www.mydepositsscotland.co.uk/home.aspx

Advice for landlords affected by London riots

No doubt the vast majority of people reading this blog will be appalled by the nonsensical rioting that has taken place across the country in recent days. Many commercial businesses have been affected by fire or looting, not to mention a number of residential properties above or around these premises.

Landlords affected should ensure they check their insurance policies as soon as possible. Most Landlord Insurance policies will cover for damage caused by riot, civil commotion, labour and political disturbances and strikes, but check that rioting is not a specific exclusion in your policy.

NLA Property Insurance emphasises the need for landlords to let their provider know quickly if their properties have been damaged.

Other than this, the best advice we can give is to be careful and check that your tenants are okay. Hopefully those responsible will be brought to justice swiftly and these appalling acts of violence will end.

To join the NLA and take advantage of the on-going support and up-to-date information for landlords, visit www.landlords.org.uk/membership

**UPDATE** 11.8.2011:

Homes affected by Riots – how to claim help

The Prime Minister has today announced a range of support for those affected by the riots this last week. A compensation scheme under the Riot (Damages) Act 1886 has been activated and affected landlords can apply for compensation under this scheme.

Properties and business affected by riots across England will be able to apply under the Riot (Damages) Act for compensation even if they are uninsured or underinsured. The Home Office has also lengthened the period under which a claim can be lodged, from 14 to 42 days from the day of the riot which has caused the damage.

Don’t get caught out – make sure your tenancies are legal

Mary Latham, NLA Regional Representative for the West Midlands, provides some top tips for ensuring your Assured Shorthold Tenancy Agreement (AST) does not fall foul of the law.

While there have been major changes to landlord and tenant law over the last 20 years, the legal focus is still on protecting the rights of the tenants rather than safeguarding the landlords business interests.

Therefore, it is up to me to protect myself and my business.

Tedious as it can seem, my best protection is a thorough paper trail and the most important document is the tenancy agreement; usually an Assured Shorthold Tenancy (AST). There is no legal requirement to use written AST but any landlord who lets without one is taking a huge risk.

ASTs should be written in plain, intelligible English and should clearly state all the important details. Most off the shelf AST’s are fairly straightforward when it comes to the basics. However, I find the ‘small print’ regularly causes problems, which can be significant should problems arise down the line.

If a landlord takes a tenant to Court based on a clause in the AST, the Court will look at whether that clause is ‘fair’. If the Court decides the clause is ‘unfair’ they will remove the clause and the landlord will not be able to rely on it.

For example landlords frequently include a term like: “The tenant will not keep any pets or animals”.

Although this sounds perfectly acceptable to many, as it represents a complete ban on keeping pets, it will be classed as unfair and the landlord will be unable to rely on it in Court.

This is easily remedied though, by adding the caveat:  “without the express prior written permission of the landlord which will not be unreasonably withheld”.  This demonstrates that the landlord is willing to consider their tenants request and should be deemed fair.

In my 38 years as a landlord I have seen many clauses in tenancy agreements that breach consumer protection legislation.

Here are three common unenforceable  clauses I have seen over the years which are almost certain to see a landlord’s case thrown out of court:

1. “Allow the landlord or his/her agent to enter the property with prospective tenants or to inspect the property, during reasonable hours, 24 hours notice will be given where possible”.

The words “where possible” cause problems here as tenants have a right to the quiet enjoyment of the property. A minimum of 24 hours written notice must be given

A landlord cannot enforce any term which requires a tenant to give the landlord access to the property. A landlord may only enter with the agreement of the tenant, or failing that a court order.

2. “At the end of the tenancy, following the return of keys to the landlord, if it is necessary for the landlord to deduct an amount from the deposit for the cost to make good any damage caused to the premises or the furniture the Landlord must inform the tenant in writing within one month of receiving keys and proof of payment of bills. The deposit will only be returned once all outstanding bills have been paid and proof of payment correspond with the final readings”.

This clause has two problems. Firstly, it breaches the Tenancy Deposit Protection rules. The undisputed amount of the deposit has to be returned within 10 working days – together with quotes and receipts to justify any amount to be withheld.

Secondly, if the tenant is the bill payer they have a separate contract with the utility provider meaning that the landlord is not responsible. Therefore you cannot require proof of payment before returning the deposit.

3. “In the event of the rent or any part of it being unpaid for more than 14 days after it has become due whether legally demanded or not if there shall be a breach of any of the obligations on the part of the tenant … the landlord may re-enter the property or any part of it in the name of the whole and immediately the tenancy shall end without prejudice to any other rights or remedies of the landlord”.

This one is straightforward – a landlord cannot repossess a property for any reason without a court order, this is misleading and cannot be relied on in court.

Do not risk writing your own agreement or using one you found on internet. Use a tenancy agreement that has been checked by legal experts to ensure that you do not fall foul of these regulations.

My advice would be to save yourself some time and trouble by using the free NLA AST on our website. Otherwise it could end up costing you hundreds if not thousands of pounds.

If you feel that you need to add clauses to this AST members can call the NLA Advice Line to make certain that your clause is legally enforceable.

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.

www.landlords.org.uk

Time these rogues were dispatched once and for all

Channel Four’s long running ‘Dispatches’ programme took an in-depth look at a subject very close to the NLA’s heart this week, the private-rented sector.

Entitled ‘Landlords from Hell’ and presented by veteran journalist Jon Snow, the programme sought to expose the sorry state of the private-rented sector and the shocking actions of those operating below the water-line at the murky bottom of the PRS.

The two cases highlighted were indeed shocking examples of how poorly one human being can treat his fellows in the name of business.  The two individuals showed no respect for their responsibilities as landlords and displayed utter contempt for their unfortunate tenants –seemingly without facing any considerable sanctions in return.

Above all these people showed that they do not deserve to be described as landlords.

The term ‘landlord’ may not necessarily conjure up an image of noble ideals for the majority, but so far as we are concerned it does mean something.

Being a landlord means that you have agreed to:

  • provide your tenants with a home in exchange for regular rental payments,
  • repair and maintain your tenant’s home for the duration of their tenancy,
  • to allow your tenants to live in a property free from harassment,
  • forfeit possession of a property until such time that a tenancy legally  ends,
  • show your tenants the same degree of respect that you expect to receive.

These ‘landlords from hell’ appeared to display none of the above, choosing instead, to flout the law.

In any other walk of life these people would be considered criminals and dealt with appropriately. The private-rented sector should be no different, the continued existence of these criminal rogue operators makes us all look bad.

There is no defence for these offenders, but it does beg the question; Why so few prosecutions?

There will, no doubt, be much debate following this programme about the need for more regulation of the PRS. However, is more the right response? This is not a new problem, and successive governments have introduced legislation, extended local powers, and modified the various standards regimes.

The problem is that regulation only works when it is implemented and enforced appropriately. The NLA works with such organisations to give guidance on this.

Far from being powerless, enforcement agencies have quite an arsenal at their disposal to target rogue, criminal landlords for example:

  • Environmental health officers are able to serve prohibition or improvement notices in respect of poorly maintained, or dangerous property under the Housing Health and Safety Rating System (HHSRS) requiring emergency repairs or even closing down sufficiently poor properties.  In severe cases emergency repairs can even be carried out without the landlord’s involvement (although at his expense).
  • HHSRS allows agencies to inspect any property – regardless of tenure – allowing them to identify those landlords known to operate below the radar.
  • A local housing authority may use a management order to take control of the management of a poorly managed property, either temporarily or permanently, in circumstances where a landlord has neglected his responsibilities.
  •  Landlords who fail to appropriately license their properties can also be fined up to £20,000 and find themselves subject to a rent repayment order of many thousands more.

Not to mention the many criminal sanctions which a landlord may face if there is any allegation of harassment or illegal eviction, up to and including a custodial sentence.

The real discussion must surely be about why there is such limited enforcement of these existing powers and why instead there is an ongoing clamour for more licensing and arbitrary restrictions of accommodation when demand has never been higher.

No doubt the answer lies in funding.

We all know that enforcement against the bad guys is more expensive than blanket restrictions, but surely it would make sense for everyone if local authorities were able to used the extensive powers they already have to make an example of the very worst criminals masquerading as landlords, abusing their position, their tenants, and devaluing the term ‘landlord’.

www.landlords.org.uk

Nowhere left to go….

We’re told that 2011 will be all about localism. Which is great, local people dealing with local problems in a local way.

However, not everything can be considered in isolation without taking into account the wider context. In the same way that very few housing issues can be viewed without reference to wider social factors.
This kind of lateral thinking is particularly important when you consider the growing number of local authorities attempting to manipulate the housing market in their catchment using new and extended powers. Of course this is nothing new, planning decisions have long controlled the available supply of housing, targets have influenced the type of units built and infrastructure has determined who wants to live where. But the latest moves by some local authorities seem slightly different.

Using part of the Town and Country Planning Act, a few local authorities including Portsmouth and Manchester to name two, are trying to require all landlords wishing to establish a new small HMO obtain planning permission before agreeing a tenancy.

These ‘Article 4 Directions’ effectively roll back housing policy to a pre-election stage, before the Coalition granted permission across the board for small shared houses, whereby households of three or more unrelated people can only share a home (which had previously housed a family) if permission is granted by town hall.
Ideological matters aside, this kind of policy – assuming the requirement is subsequently used to limit the number of HMOs in a town – is likely to have some pretty far ranging consequences.

The individuals who live in shared houses are a varied group drawn from a variety of backgrounds – key workers, students, migrant workers, recent graduates and vulnerable adults. But the one thing they are all likely to have in common is a very limited housing budget. Unsurprisingly, this means that they are unlikely to be able to move to another type of property.

This type of devolution of authority to local councils cannot be done without also shifting responsibility for decision-making.

Which will present local authorities with a number of very difficult questions.

If local communities do not want shared housing in their back-yard that is their right. But I am far from confident that the people making the decisions locally have considered all of the consequences of barring sharers from local communities, whether they are nurses, students, teaching assistants, street cleaners or shop assistants.

If a person on a low income cannot afford to buy or rent a self contained home of their own, and the option of sharing a safe, secure home with others is removed. Where are they supposed to live?

If they cannot live locally, what happens to the local companies they work for? What will happen to the local businesses which rely on them to stay afloat?

Answers on a post-card anyone?

It’s never too late….or is it?

You haven’t got to be particularly well-connected to realise that not all landlords are supporters of tenancy deposit protection (TDP). For many it remains as contentious today as when introduced in April 2007 – and recent developments are unlikely to help change those opinions.

As committed followers of events in the private-rented sector will be aware there have been a number of fairly high profile legal cases in recent months concerning TDP arrangements.

So, shortly before the country fell silent for the annual Armistices Day memorial, the Court of Appeal in London made sure it was heard in relation to the latest of these, the conjoined appeal of Universal Estates v Tiensia and Honeysuckle Properties v Fletcher .

Both cases involved the protection of deposit monies outside of the 14 days provided in the TDP scheme’s rules – but subsequently before the court hearing.

The court ruled, that in line with the earlier case of Draycott v Hannells Lettings, penalties prescribed in the Housing Act in relation to a failure to protect deposits cannot be invoked following late protection according to an individual scheme’s rules.

The result of this judgement is confirmation that landlords should not be ordered to pay three times the deposit amount as penalty for late protection – provided that protection takes place prior to the court hearing. This will come as welcome news to those landlords who have in error failed to protect their deposits immediately.

No need to protect deposits anymore then?

Wrong! The NLA cautions landlords that this decision is not a reason not to protect their tenants’ deposits – or to wait until they are threatened with court proceedings before doing so. TDP is still a legal requirement in relation to most ASTs and failure to comply with the scheme rules of their chosen protection company – which may still require protection within 14 days – could result in administrative penalties courtesy of that scheme.

Further more, Justice Thorpe advised tenants who may need to rely on the Court to enforce the legislation, that landlords should be expected to pay their legal costs.

Landlords should also remember that this case only looked at one aspect of the legislation and that there are numerous parts of the TDP rules which were not touched by this decision – including what happens if proceedings are brought regarding a tenancy which has already ended.

What now?

It is possible that the Government will amend the legislation at the root of these cases to clarify exactly what requirements are ‘in the spirit of the law’ but given the current agenda in Parliament this is perhaps unlikely to happen soon.

In the mean time landlords are advised to continue to register any deposits as soon as practically possible with one of the three Government backed schemes and to check the terms and conditions of their chosen scheme for any requirements which could lead to dispute in the future.

Landlords to be dealt a fair hand?

David Cox, NLA Policy Officer

Landlords could be forgiven for letting out a collective groan when, minister Chris Huhne MP, announced the Government are to push ahead with new measures to encourage greater energy efficiency in the private-rented sector.

But unlike some earlier initiatives, the ‘Green Deal’, is a scheme designed to provide up-front funding for energy efficiency improvements including loft, cavity and solid wall insulation, floor insulation, draught-proofing and water pipe lagging.

Traditionally landlords have proved difficult to target with energy efficiency measures as the arrangement is typically one-sided – i.e. the landlord pays and the tenant benefits; what is known by the technically minded as the split incentive.

However, this scheme looks different:

1. There will be no capital outlay for landlords. The Green Deal financing will be paid back through the utility bills. Therefore, whoever pays the utility bills, pays back the loan.
2. The ‘Golden Rule’ of the Green Deal is that the combined cost of both the utility bills and the loan must be lower than if nothing had been done – so after the measures are installed tenants will be financially better off as they are paying less in utility bills; and warmer.
3. A warm tenant is a happy tenant, and happy tenants are likely to stay or longer; which reduces void periods and the need to re-market.
4. European legislation will shortly require landlords and letting agents to put energy efficiency ratings on all property adverts. A property with a higher EPC rating should be more attractive to tenants and so using the Green Deal and installing the improvements will make it easier to let.
5. Most importantly, these measures will protect the fabric of properties. Energy efficiency improvements reduce damp, mould, condensation and damage from frozen water pipes – so reducing long-term maintenance costs.

However, the devil may yet be in the detail. As with all new legislation, the Green Deal is a carrot to encourage landlords to embrace the energy efficiency agenda. Of course, where there is a carrot there is always a stick and the Green Deal is no exception. If landlords do not take up the Green Deal, from 2015 tenants will be able to demand ‘reasonable’ energy efficiency adjustments.

The NLA has received assurances that a property’s character will be considered in relation to any required works and the ‘Golden Rule’ will remain in force ensuring that the landlord will not be expected to pay any upfront costs.

But if a landlord fails to make requested adjustments – which are practical and covered by the scheme – local authorities may be able to fine them and insist the properties are insulated.

This gives landlords a five year window to insulate their properties free of charge. It is the private-rented sector’s opportunity to prove its social conscience by tackling climate change, that it’s a tenure offering high quality accommodation – once and for all dispelling the myth that landlords don’t care about their tenants. (Not to mention an opportunity to make some otherwise costly improvements).

There may be no such thing as a free lunch – but the NLA would advise landlords to at least take a look at the menu before making up their minds.