Sunday, October 25, 2009

How to protect yourself against rogue landlords

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

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An interesting article in the Cash section of the Observer today looks at the increasing tendency of tenants to check up on their landlords before signing a tenancy agreement. And quite right too! As has been reported on this blog in the past, innocent tenants have been known lose their homes at short notice and through no fault of their own, due to their landlords dishonesty. To quote the article:

"When the Council of Mortgage Lenders (CML) started compiling buy-to-let data in the second half of 2005, only 200 investment properties were in mortgage arrears of three months or more. By the first half of this year, this had soared to 5,400. Repossessions of investment homes also climbed, from 400 to 2,800, during the same period."
Rules are now being put in place to protect tenants from this sort of thing, but even if they do not actually get evicted, the threat of eviction can cause massive worry and upset.

So what can tenants do to protect themselves? Referencing a landlord in the same way that landlords reference tenants is one good option. The article refers to TenantVerify, a service used by many landlords. However there are now also special services being developed for tenants, for example that provided by Rentchecks.com which costs £24.95. You need to get the landlords permission to carry out the check first, but if the landlord refuses to give this, that is a bad sign in itself and indicates that he has something to hide.

The article also points out that if the tenant rents via an agent who is regulated by one of the professional agent organisations such as ARLA, this will offer some protection, as "a good Arla agent will check the landlord's mortgage and insurance company have been informed the property is rented." However you cannot guarantee that this will be done, and as many agents are in financial difficulties, it is possible that they will not enquire too deeply if they think it will scare off a new customer.

There is no doubt though that using a regulated agent is safer than using an unregulated one, who may turn out to be a 'cowboy' who will provide a poor service, or even 'do a runner' taking with him other people's tenancy deposits and rent. The agents regulation organisations to look out for are:
  • ARLA - the Association of Residential Letting Agents
  • RICS - the Royal Institute of Chartered Surveyors
  • NALS - the National Approved Letting Scheme
  • NAEA - the National Association of Estate Agents
All of whom will have client money protection in place, a complaints procedure (via their professional organisation), and whose staff are likely to have been properly trained. It is also a good idea to check whether the agent is registered with the Property Ombudsman.

Another thing tenants need to check, is what is being done about their tenancy deposit. Most tenants should now know that deposits need to be protected by one of the government authorised tenancy deposit schemes, but it is surprising how many people, including many landlords who should know better, are unaware of this. For example in a recent survey the DPS discovered that some 30% of deposits were still not being protected. Talk to your landlord or agent about this and find out which scheme is being used before paying the money over.

The article concludes by saying that if tenants find debt collectors knocking at the door this is bad news and they should seek advice from a reputable organisation such as the Citizens Advice Bureau as soon as possible. Another good choice is Shelter who have a free housing advice helpline on 0808 800 4444.

However even if the worst does come to the worst, thankfully it does look as if more lenders are now willing to appoint a receiver instead of evicting the tenants, and if you find yourself in the position where your landlords lenders are threatening to evict you, you should contact them and suggest this to them. Or get Shelter or the CAB to help you with this.

Have you had problems with your landlord? Or have you any tips on checking up on landlords before renting? If so please leave a comment, below, I would love to hear from you.

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2 comments:

Lukie said...

I am about to embark on a research project into this matter. I myself am tenant, but have never experienced the repossession. I was astonished to find the huge gap in the market regarding tenant protection. To your knowledge, are the recently available landlord checker the only options out there??

Tessa Shepperson said...

The only service available for tenants that I could find when researching for this article, was the one from RentChecks.com. This does not mean that there are not others, but if there are, they are not easily found via Google.