An interview on the Tenancy Deposit Scheme

I did my first recorded interview yesterday. It was an interview of Lawrence Greenberg who runs the Dispute Service Ltd, one of the three companies contracted to run the new Tenancy Deposit Scheme ("TDS"), scheduled to start from April 2007.

I am afraid you can't listen to it unless you are an annual member of Landlord-Law as it is a 'members only' content. However I think Landlords will find it very interesting. Here are a few points which arose from my talk with Lawrence and his colleagues during my time with them.

Landlords must have a detailed inventory. It is clear that in a dispute where there is no inventory, landlords run the risk of losing their case simply because of the lack of inventory. They need to be very, very detailed.

Photos are a waste of time unless they are very clear and focused and contain a ruler or something similar to show the scale. I have to say that photographs clients have sent to me in the past when I have been advising about their tenants liability for damage, have generally been pretty useless.

Tenants need to protect their position and make sure that any damage to the property or its furniture is marked on the inventory at the check in meeting, otherwise there will be no way to prove that the damage was not done by them, and they will be at risk of having to pay for it out of their damage deposit.

I did not discuss any actual fee charges with Lawrence, but I suspect that the cost of the insurance scheme may be more than people think, especially at first. Not so much perhaps for agents who are members of one of the national associations (particularly those who are already clients of the Dispute Service’s existing TDS scheme), but for private landlords who may be an 'unknown quantity' and therefore a higher risk.

Of course landlords who do not want to pay for TDS can use the custodial scheme (this is not the scheme run by Lawrence’s company but one of the two others). However if so they will have to hand the deposit over to the scheme. One of the people I spoke to (not Lawrence) expressed doubts as to whether the company running this scheme, Computershare Investor Services PLC, would be able to make a profit, as the government is not making any contribution to their running costs, their only income will be the interest on the deposits held, and part of this will have to be paid out to the tenant.

Anyway it was great fun doing the interview, just like a real radio journalist! I had a chat with a BBC man a few months ago who gave me a few tips, one of which being to look the interviewee in the eyes during the interview so you can judge when to speak. I did find that a great help.

I shall have to do some more …

Trends in buy to let

There is an interesting article here on buy to let mortgages (which will be 10 years old this summer) which shows that they are highly successful and indeed less risky (for the lender) than residential mortgages as only 0.68% are in arrears of more than three months, compared to 0.97% of normal loans.

Buy to let mortgages now account for 8% of the housing stock in the UK and the buy to let market is worth over £73 billion. However the average property portfolio is still fairly small although it has apparently has increased from three per landlord in 1996 to seven this year, and research has revealed that 83 per cent of landlords plan to increase or maintain their portfolios in the next six months.

However in the future this dominance of the market by small investors may change. This article in the Times indicates that larger investors, such as pension funds, looking for a steady income flow, may be looking to increase their investment in this area. We could be also looking in the future at considerably more ‘build to let’. This is common in Germany, Holland and several other European countries, where many people live for years or even decades in blocks of flats owned by banks or other financial institutions, but is fairly rare in the UK.

The disincentive for the larger investors may be that residential property is management intensive - finding tenants, chasing rent arrears, dealing with repairs - and the large city investors (suggest the Times) would not want to be directly involved in this work.

However there is no doubt that residential property has proved itself over the past 10 to be a sound investment and no doubt will remain popular, at least with the smaller landlord, and possibly also with the big boys.

My talk at London Landlords Day September 2006

You may be interested to see a recording which was done of a talk I did at London Landlords Day last September on Essential Legal Points for Landlords here. Be warned that the first few minutes is the camera running before I start talking (there is a long shot of the emergency exit notice for example and quite a lot of the walls).

I am a bit in two minds about giving this link because as usual my hair looks dreadful, but I do cover quite a bit of ground, if the subject of landlord and tenant law interests you.

Which UK law is most in need of reform?

There is an interesting article in The Times online today, where members of their law panel nominate the area of law they consider to be most in need of reform.

I like the answer given by Professor Adrian Briggs, who suggests that law which affects ordinary people should be written in a language which is easy for them to understand. This is also reflected in the response of Andrew Arden QC who says that some legislation almost looks as if it were deliberately designed to be unintelligible to those whom it most affects, citing the Housing Benefit Regulations as an example.

I would add that if the Law Commission has spent a considerable amount of time working on a much needed piece of legal reform, for example the Renting Homes Bill, carrying out huge amounts of public consultation, it seems madness not to use it. But maybe it will be included in the next Queens Speech.

What piece of legislation do you think is most in need of reform?

Legal Professional Training Ltd

A new year, a new business venture. This year it is a new training company called Legal Professional Training Ltd, "LPT" for short.

LPT has been some time in the making. I and several others were to do some lecturing last year for a training company which then went under. We were a bit upset about losing the potential earnings, and some of us decided to go it on our own. Eventually LPT was formed. Basically it consists of me, Martin Iller, Deputy District Judge, author and solicitor, Diana Iller (yes, former wife but a long time ago – they are still speaking) solicitor, and Director of Postgraduate Studies at Thames Valley University, and my husband Graeme, employment specialist and a former trade union man. Martin and I are going to do the housing courses and Diana and Graeme do the employment/discrimination stuff. I think we will all make a good team.

If we can battle our way through the paperwork that is. We incorporated on 4 December 2006. Jordans did that – they were very efficient and helpful, no problems there. The problems are mainly with getting the bank account opened. We all live in different places (well, not Graeme and I, but the others do) so it is a nightmare getting the papers signed plus the bank then went and lost them, so most of it has to be done again. And until we have a bank account we cannot really register for VAT or do anything else much. So as I have some courses I want to start advertising, they are being run technically as Landlord-Law courses ‘in association’ with LPT for the time being. Hopefully we will not have to do this for too long.

So what sort of courses will we do and how will they be run? Well for the online training we are using an open source course management software called ‘Moodle’. I had never heard of it before Martin mentioned it but it is really good. Apparently Open University use it and lots of schools and colleges. We now have a moodle training site and I have done a fair bit of training on how to create the courses.

We also want to do some traditional face to face training, and will be looking to develop courses and such over the year. We will also do in house stuff if people want it.

So there you are. I spent much of the Christmas period creating two moodle courses (in between cooking turkey and watching Dr Who DVDs with my offspring) one of which is ready to roll and the other is scheduled to run for four weeks from the end of March.

The main course in March is on tenancy agreements – so many people fail to understand the Unfair Terms in Consumer Contracts Regulations 1999 or even realise that they exist. I saw a tenancy agreement provided by some landlord software only the other day which was way out of date and wide open to successful defences by tenants against possession claims (e.g. for rent) during the fixed term. More courses are to follow, on contracts of employment and discrimination law, just as soon as the employment team can find time to create them.

To find out more, why not visit our web-site at www.professionallegaltraining.com?

Five things

To those who do not know, there is this sort of tag thing going around, I do not know where it came from, but UK legal bloggers are all tagging each other to tell 5 things about themselves that others don’t know about, and then tag 5 other bloggers. I have been tagged by two sites, Impact and Family law.

I don’t mind telling 5 things about myself you probably didn’t know, if you don’t mind reading them. Here goes:

1. In the late 1980s I took a year out to travel and spent about 7 months in Mexico. I learnt Spanish and stayed on a farm and had a great time. I have forgotten a lot of the Spanish but I expect I could get it back if I tried (although my language ability is about moron level, I learned at about half the speed of everyone else).

2. I originally studied geography (at Hull University) – at that time I no more thought that I would end up a lawyer than go to the moon (law students were sad people who spent most of their time on the second floor of the Brynmor Jones library). I am still interested in environmental matters, as you can see from much of this blog

3. After Hull, I went for teacher training, but gave it up after teaching practice, as the prospect of spending the rest of my life trying to teach 15 year olds who did not want to learn geography, was to awful to contemplate. Best decision of my life (almost).

4. I don't like potatoes. This means that a fish and chip supper is a bit of an unbalanced meal for me. Everyone always assumes that everyone likes potatoes as a matter of course.

5. I don’t drive. When I was young I couldn’t afford it. Now I’m older I am too scared to learn. Its not a real problem though. What you have never had you don’t miss, and it is of course better for the planet. Besides, my husband is a much better driver than I could ever be.

The second stage of the tagging exercise is a bit of a problem as I think most of the bloggers I know of have already been tagged. Still here goes. Corporate blawg, Legal spy, Terminological Inexactitudes, Head of Legal, and the Criminal Solicitor. All good blogs.

Landlord success in disability discrimination case

There is an interesting report in the Times on a case, Williams v Richmond Court (Swansea) Ltd (heard on 14 December 2006), on disability discrimination. The landlord was appealing against the Judge's finding against him at first instance that he discriminated against 81 year old tenant Mrs Williams who had requested he install a stair lift, as she found it difficult to use the stairs.

The Court of Appeal found that the landlords did not discriminate, as the reason they had refused to install the stair lift was not because Mrs Williams was disabled. The reasons given by them for refusing consent included, (i) that the other tenants had voted against the proposal; (ii) aesthetics; (iii) the cost of repair; (iv) inconvenience to the residents as a whole; and (v) the Disability Rights Commission code of practice made it clear that it was not under any duty to make reasonable adjustments to the premises.

The Court of Appeal said that Judges have to carry out a two-stage exercise. First, it was necessary to identify the relevant act or omission on the part of the appellant, and second, it was necessary to look to comparators to see if they were or would have been treated differently.

Here, none of the reasons given by the landlord for refusing consent related to Mrs Williams’ disability. The underlying complaint was that the they had failed to put her in a better position than that to which she was entitled by her underlease, namely by failing to take positive action and providing consent to the installation of the stair-lift.

Landlords will no doubt feel fairly pleased at this judgment. I am sorry I am unable to provide a BAILLI link but the case does not appear to have been reported there yet.

Two more bad landlord stories

Landlords may moan about the new HMO licensing rules, but two stories which have come my way recently show that there are still bad landlords out there.

Firstly, this report on Youillscar Mohammed a Landlord in Glasgow who not only let out HMO properties without the proper fire precautions, but asked tenants to lie for him so he would not have to pay the license fee.

Then there is our old friend, ASBO landlord Dickens from North Wales, who has (according to a report in the Daily Post) recently had charges brought against him under the gas safety regulations. Although apparently he has now sold most of his portfolio, so the tenants of Conwy are now fairly safe from him.

I dare say these are not the only offenders. Although I agree that the disparity in the license fees across the different authorities is unfair, I do think that basically the regulation of landlords, at least in the more vulnerable HMO area, is justified, if it helps prevent this sort of thing, and keeps tenants safe.

Publishing for profit

I get sent books from time to time to review for my Landlord-Law site and I recently received a copy of Regulating Conditions in the Private Rented Sector: A Practical Guide, by Caroline Hunter and Andrew Dymond from Arden Chambers published by Thomson/Sweet & Maxwell. I was quite looking forward to receiving this, as the authors are distinguished lawyers and it is an area of law which I write about quite a lot. However although it will undoubtedly be a very useful book for me which I expect I will use a lot, I am a bit disappointed.

My main gripe is that virtually half of the book is appendices, most of which are extracts from statutes. However is there really any need for statutes to be reproduced in text books any more, in this age of online legislation? Particularly since the UK Statute Law Database has been published (although admittedly it would not have been made public when this book went to press).

At £85 this is not a cheap book. It is about an inch thick and on first glance you might think, "OK, eighty five quid for an inch thick book of analysis on a new area of law from specialist counsel, that’s acceptable". But is it acceptable to be paying effectively forty pounds for a reproduction of statutes which you can get free on the internet? It would be very easy just to have a list of relevant statutes and the url of the Statute Law Database and leave it to the reader to look them up. This book is after all aimed at the professional legal market, virtually all of whom will (or should) have broadband on their desktop computers and probably also their laptops. But if the statutes were eliminated, would we still feel happy about paying eighty five pounds for a slim volume of just half an inch thick? Probably not.

The internet is changing everything. I suspect that lawyers, a deeply traditional species mostly still steeped in paperwork and pink tape, will one day wake up to fact that legal publishers are charging a fortune for something they can now get easily for free, and refuse to pay any more. However this may not be until the younger solicitors trained on computers and the internet start to make partner status.