VAT changes – how these are being dealt with on the Landlord-Law site

Mr Darlings reduction of the VAT rate to 15% from 17.5% has created a bit of a headache for myself and doubtless lots of other UK traders. This blog seems to be the best place to explain the way I have decided to deal with the various prices on Landlord-Law.

For me to change the Landlord-Law membership fees (4.70/£15/£70.50) would involve my web-designer doing work to the site (which I would have to pay for), as online membership purchase is completely automatic and done via a secure server. Were I to drop the prices, the benefit to the customers would be very small - £0.10p, £0.31p, and £1 respectively. As the Landlord-Law service is (in my view) pretty good value anyway, I am going to leave these prices as they are. Sorry!

For the other prices, I have decided to deal with them as follows.

Where the online price is based on an ex VAT round figure I have reduced my price to take account of the VAT fall. This includes Kits 1, 2, 3, and 4 non member prices, all the possession proceedings, and the tenancy amendments service.

Where the total price was chosen because it is a nice round figure, in particular the £75 advice fee, this has been left as it is. I put a lot of work into the advice given and I think clients can (effectively) pay another £1.60. I have also left the possession notice drafting fixed fee of £75 (although this is not used much as most people use the online forms), and the members kit prices for kits 3, 4 and 5. Members buying kits get a lot of support via the online forum so I am not going to reduce these prices.

The other two prices are the non members kit 5 price, which I have reduced to £95 (a bit more than the VAT drop) and my tenancy agreement check price, which has gone up to £391 (a slight increase on the previous fee).

I will take a view on prices generally next year if Mr Darling puts the VAT up again.

Student lettings - new agreements on Landlord-Law

I am just finishing a fairly long running project (about 2 months) to develop some new special tenancy agreements for student lets, for my Landlord-Law site.

Developed initially in response to a query from one of my members on the discussion forum, they are designed to deal with two particular problems with student lets:

• The fact that they are generally signed when the previous tenants are still in occupation (which could potentially cause major problems if they refused to move out, as legally they are entitled to do), and
  
• The fact that landlords will want to let the property for the whole year, but many students will not want to live there over the summer.

It was initially just going to be one agreement. However when I put it out to consultation with the membership, some of them wanted one part and others wanted another, and some said that they would definitely not want that part, so in the end I decided to do a number of different agreements using different combinations.

Then another member sent me his standard agreement for out of season holiday lets so I thought that perhaps I would do one of them too.

So there will eventually be four different types, although at the time of typing this I have not yet loaded up the out of season holiday let one.

Its been a bit of a time for tenancy drafting recently. Apart from these student agreements, I have been asked by clients to do an under 18 tenant (signing jointly with her guarantor), an assured tenancy for an elderly couple renting a flat intended for the rest of their lifetime, and a memorandum for protected tenancies. Heigh Ho!

HMO licensing – tenants entitled to rent refund

I was interested to read the report here about a landlord in Liverpool who was convicted of operating a House in Multiple Occupation (HMO) without a license, and fined £3,000 plus costs. The Council then wrote to all his tenants, who successfully claimed back a part of their rent.

The rent refund application must be made to the Residential Property Tribunal (RPT) who can order the landlord to pay back up to 12 months rent to his tenants. In this case the RPT ordered the landlord to refund three months rent. This totalled £3,900, so in total this landlords failure to obtain a license for his property has cost him over £7,000 (if the costs order is taken into account).

Tenants wanting to make a similar application will find a pdf giving guidance and other information linked from the right hand margin of this page on my web-site www.landlordlaw.co.uk.

Landlords who are worried that their property might need a license, should contact their Local Authority asap. For contact details see the Landlord-Law Local Authority Directory.

Note that we are still compiling our list of HMO licence fees charged by different Local Authorities.

Stop the traffik – charity of the month

Those of us who live independent lives in the west are very privileged. Many people are not so fortunate. Some are bought and sold as commodities. Children stolen or sold by their families into slavery. The reason (or one of them) – so cheap goods can be sold to us. Our clothes, coffee and chocolate.
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Human traffic is the ultimate indignity. So this is why Stop the Traffik is the first Landlord-Law charity of the month.

One way you can help, is to only buy chocolate which is from ethical sources. Download a good chocolate guide from the Stop the Traffik web-site to find out more.

Landlords credit checks and happy tenants – two surveys

Note - the Landlord Law Blog has now moved to www.landlordlawblog.co.uk.

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I have recently been given information about two surveys in the private rented sector.

First survey – credit checks
The first survey is perhaps the more serious of the two. The Letting Protection Service have commissioned a survey of 1,389 private landlords which shows that most landlords do not carry out proper checks before letting tenants in to their property. Their statistics show that:

• 63% of landlords are happy to entrust their home to tenants based on little more than a hunch
  
• Amongst those with bad experiences, 71% of private landlords have been left out of pocket because of unsuitable tenants
  
• 24% of UK landlords allow tenants to move into their property after just one face-to-face meeting
  
• 11% have received threats to themselves or their family as a result of a rogue tenant

Out of the landlords surveyed, only 13% of those questioned cited using a reference or credit search package as their usual method of vetting prospective tenants.

I have to say that I agree with the Letting Protection Service that this is not good news. All the experts agree that the most important aspect of letting property is having a good tenant. Although most tenants turn out to be fine, credit checks and references are essential. For example con men appear respectable and are very persuasive, that is why they suceed. You can’t always trust your judgment, particularly if you are not experienced at letting property.

There are some interesting geographical differences thrown up by the survey, which found "the North West of the country to be worst affected by bad tenants, with 82 percent of landlords faced with bad experiences at one time or another. Landlords in the West Midlands had the least trouble with their tenants, although 63 percent still reported having experienced problems. Their North-Eastern counterparts proved to be the country’s most cautious but, nonetheless, 55% give away the keys to their houses based only on a first impression."

The bigger percentage of problems in the North West may have something to do with Blackpool, which has a massive private rented sector, with many bedsits, and which is said to be the ‘drug death capital of the UK’ – see my blog entry here.

The press release goes on to say "The survey identified the UK landlord’s ideal tenants as middle aged couples - with 15 per cent of respondents finding the demographic the most suitable and reliable. Students and pet owners top the list of the least-preferred tenants and landlords would generally rather have women than men renting their properties."

The Letting Protection Service have of course carried out this survey to give publicity to their new online service. "The LPS" runs the press release "provides landlords with a range of services that have traditionally only been available through letting agents, including the first online quick tenant reference to offer an instant rent guarantee, comprehensive reports on a tenant’s suitability, gas safety inspections and emergency breakdown insurance cover." You can see their web-site here.

Good for them, however it is not true to say that these services have been previously unavailable to landlords. The Tenant Verify service from LettingZone has a good reputation, and further companies can be found via this link. There are many companies doing gas certificates, just look in yellow pages. However if you are a landlord, the new Letting Protection online Service is worth checking out.

Second survey – happy tenants

The second survey was provided to me by the Deposit Protection Service (one of the three companies running tenancy deposit protection schemes). Their survey says:

"84% of tenants get on well with their landlord and nearly a quarter of these described their relationship with their landlord as ‘fantastic,’ while 39% of tenants described their relationship as ‘okay.’ Only 16% of respondents said that they did not have a good relationship with their landlord."

This, they say, disproves the myth that landlords and tenants are always at odds. I would add also that it disproves the poor view often held of landlords in general by people who should know better. Most landlords provide an excellent service (although sadly not all of them).

The DPS Director, Kevin Firth goes on to say "Our figures show that since deposit protection legislation was introduced, relatively few disputes have needed to be resolved through the Alternative Dispute Resolution (ADR) Service".

So that’s nice then. Maybe tenants are a bit choosier in looking for landlords than landlords are in looking for tenants.

Burning wood

A couple of years ago we had an energy audit of our house. One of the suggestions made was that we had a wood burning stove in the living room. So when a small savings policy matured recently we decided to have one installed.

Our energy audit man had recommended a local firm so we duly went to see them in July. They recommended Clearview stoves which they said made the best stoves on the market. So we duly put down a deposit, and arranged for the stove to be installed in October, which was when the policy matured.

The installation, which took 3 days, was a bit of a business. We had to have a new flue liner installed which meant that the installer and his boy spent a lot of time on the roof. Our old gas stove was taken out, the original brick fireplace revealed, and a nice hearth made of old fashioned brick tiles cemented in. Our little black stove now stands demurely on this, its round black stove pipe leading up into the chimney.

Of course if you have a wood burning stove you need wood. We had an initial delivery from a man recommended from our stove supplier some time ago, before the fire was installed. That was fairly expensive but turned out to be very good slow burning wood. We have also had a delivery from a local tree surgeon, which was cheaper but not quite such good quality. The stove seems to eat up wood at quite a rate so we will have to keep getting it in.

I have of course thought about making bricks from our newspapers, and indeed have had a newspaper brick making machine mouldering in the outside shed for some 15 years. I made a few last week but they did not turn out very well. They also took about five days to dry out enough to be able to burn, plus during the drying out process they started to disintegrate. I haven’t given up though. On reflection maybe I need to soak the newspaper longer before putting it in the mould. However, I can see the drying time is going to be a problem.

But it is lovely having the fire. We can watch the flames through the glass door, and the wind in the chimney gives out a soothing background wuthering. It’s a bit more work lighting a wood stove than just switching on the gas heater, but it has much more personality, and has given a whole new look to the sitting room (along with the new hearth rug, and the wood store). It is also nice to know that our heating is not at the mercy of whoever controls the few gas pipelines into this country, plus at a pinch we could also cook our dinner on it (I did do a steak and kidney casserole the day after installation, but my husband said it marked the paintwork).

I will go back on topic with my next post I promise!

God Bless America!

I am not often excited about politics. Certainly not foreign politics. But like many, I have been swept up and away by the Obama campaign.

In common I suspect with many British, I had never heard of Barack Obama until recently, and I suppose vaguely wanted Hilary Clinton to win because I had heard of her, sort of agreed with her, and she was a woman. (And surely anything must be better than the Bush administration …) But then Obama won the nomination and we all thought, who is this man? Learning on the internet that he had written two books, I popped into Waterstones and bought Dreams of my Father to find out more.

It is a wonderful book. Many times I found myself in tears, not only because of the powerful writing and the ideas expressed, but at the thought that this man, writing these words, might one day be president of the United States of America. Having finished it, the following week I snuck in and bought the Audacity of Hope as well (and I think, took the only copy in the shop – surely they should be piled up on the tables?).

This is a remarkable man. I think he brings hope for us all. Not just because in himself he crosses the divide between black and white, but because he is an intelligent man who thinks about things, and he is a powerful speaker who can communicate his vision to his people. Depressing times are ahead. If he can inspire his people, he can help them overcome their problems. Our problems.

Another beacon of hope, is the fact that his campaign was mostly funded, not by big business, but by the ordinary people of America. This means that he owes loyalty to them, not the big corporations. If anyone can stand up to the corporate bully boys it is him.

It was on the bus that I read these remarkable words in The Audacity of Hope :

"Instead of subsidising the oil industry, we should end every single tax break the industry currently receives and demand that 1 percent of the revenues from oil companies with over $1 billion in quarterly profits go toward financing alternative energy research and the necessary infrastructure …"

I was so thrilled by the vision of hope that this presented, that I was tempted to chuck a tenner myself into his campaign fund, although of course I can’t because I am not American.

The environmental problems facing our planet are so huge, we have no hope of dealing with them without America. The depressingly negative attitude of the Bush administration put the whole future of our planet at risk. In private moments I have even wondered if perhaps one day, if things did not improve, the rest of the world might be forced to unite to take hostile action against them. But Obama has changed all that. There are some wonderful scientists and initiatives in America (and also in Britain of course) which only need some support and help to get going. Hopefully they will now get it. And where America leads, the rest of the world will follow.

I am also enormously encouraged by his ability to get people to come together and work together. Like many, I loathe the negativism which pervades politics, and my usual reaction when politicians start their 'yes you did, no you didn’t' routine is to either switch off the TV or (if that is not possible) to walk out of the room. Obama has shown that co-operation and inclusivity can be popular and win votes. Let us hope that we see more of it.