Poverty is a state of mind. Discuss.

I read on the internet that yesterday was blog action day on poverty. I have rather missed the boat on that, but perhaps I can put in my tuppence ha’penny worth now. And be a bit controversial!

So. Poverty is a state of mind. Is it? If you live in somewhere like Africa during a time of famine, then no, it is real and there is not a lot you can do about it. However if you are lucky enough to live in the first world, then surely there is the opportunity for us all to escape poverty. I would suggest that one of the main thing which prevents this is your state of mind.

Everyone has in them the potential to do well. Everyone. I believe that the two great catalysts for this are belief in yourself and education. Assuming you live in the UK (this is a British blog) education is available to us all. There are evening classes, the open university, or just libraries where you can read books for free or use the internet. If you can’t read, there are classses where you can learn. With education will (hopefully) come belief in yourself and self worth.

Don’t believe negative things that people say about you. For example, many, many women have no ambition in life because they were told repeatedly when they were a child that they were stupid, only fit for marriage, and that their brothers were more important than them. But that’s not true! I believe that everyone has something they are good at or have the potential to be good at. If you think this isn’t true of you, then this just means you haven’t found out yet what that thing is.

Believing in yourself is very important. It carries you forward when other people might drop back. It propels you on to work at something when perhaps it might be easier not to. If you truly believe in yourself, work hard, and are not stupid, then you should eventually get somehwere. (Out of poverty at any rate)

Not being stupid is important though. I don’t think success depends on being very, very clever – just being sensible. And also I think, not being greedy. Many of the problems we have today are down to people being greedy. As we are now finding out.

An example of how important belief is. Two years ago everyone believed in the financial system, so loans were made, and everything ran well. Now people have lost their belief in the system to such an extent that the banks are not even lending money to each other. The difference is a collective state of mind.

So, is poverty a state of mind? Perhaps not, but staying in poverty is, in many cases because of a state of mind. Change the mindset and you have a good chance of changing your life. My recipe for success therefore (moderate success that is, not becoming a millionaire) is education, self belief /self worth, hard work, not being stupid about things, and not being greedy. Try it and see!

Go to work on a poem

When my son Patrick was younger (he is now 12) we often read poetry together, but we hadn’t done any for quite a while. Quite by chance I was looking through a poetry anthology (looking for a reference) recently during that part of the morning before he goes to school, and suggested that we read a bit. I was thrilled when he actually switched off the cartoons and said, yes that would be nice. So this is our new routine.

I tend to be a bit of a re-reader of poetry (rather than reading new stuff), my all time favourites being Ozymandias (Shelley) and The Solitary Reaper (Wordsworth). I am also very fond of my Mothers favourite - Stopping By Woods On A Snowy Evening (Robert Frost). Patrick’s favourite poem seems to be The Snake (D H Lawrence).

I have started reading him the Rime of the Ancient Mariner (Coleridge) which may take us a while.

What shall we read after that?

Strutting my Stuff

I have had a few gratifying initiations to speak recently. Last month I spoke at London Landlords Day and also to the Lambeth Landlords forum, which were both very enjoyable.

This month I am due to speak to the CLT 11th Residential Landlord & Tenant Update Conference 2008 on 23 October, where I will be giving a possession proceedings update. CLT courses are always rather on the expensive side, however CLT have agreed to allow my annual members to attend this (and another conference I am doing in February) at subscriber rates, which means a discount of £100. Members can find out more about this in the Landlord-Law special offers section.

Nothing so far in November (I was invited to do the Landlord & Buy to Let Show in Birmingham, but couldn’t face the travel) but on 3 December I will be doing a presentation at the Residential Landlord and Tenant Update, organised by Professional Conferences, called Possession 'Claims For Private Landlords – A Formula For Success'. One of my co-speakers on this conference will be Jan Luba QC so I am quite excited about that. I have wanted to hear him speak for ages, but as I generally have more than enough CPD (and being a bit of a tightwad) I can never justify the cost of attending his courses.

Finally, I was really pleased to be invited to talk about Landlord-Law at the 2009 Legal IT Show on 4 February. My web designer Gill Bishop will be there with me, to answer all those tricky technical questions on things I don’t really understand. So if you are interested in how the site was developed and how it works, please do come along.

If you would like me to speak to your organisation please do get in touch. I always try to speak when invited if I can, but this is subject to my being able to travel to the venue – I live in Norwich and do not drive, so am dependent on the trains. You can find more about the talks that I can offer here.

Amazon inflation

Having written a book review of Make Cash in a Property Market Crash by Mark Homer and Rob Moore, I went as I usually do, to put a link from my review page to the book on Amazon. I was amazed to see however that the book had a sale price of £105.75. However the book itself, on the desk before me, had a price on the back cover of £16.97.

Either something has gone very wrong, or this is an attempt by the boys (who self published) to ensure that all purchases of the book are via their web-site www.progressiveproperty.co.uk. The boys appear to have few flies on them, so I suspect it is the latter. Needless to say, the web-site provides other (no doubt more expensive) services.

Energy Performance Certificates – have you got yours?

Today is the day that the regulations regarding Energy Performance Certificates (EPCs) come into force.

If you are a landlord you now need to provide an EPC (or a copy of one) to everyone who asks for particulars of your properties, and/or all who view your properties, or at the very latest, by the time the tenancy agreement is signed.

If you are a prospective tenant, you should make sure your landlord gives you an EPC as soon as possible. In todays world of increasing energy prices, gas and electricity bills will be an important part of your outgoings. Properties which are energy efficient could save you a lot of money. It may even be cost effective to pay a bit more rent for them.

But what if the landlord refuses to give it to you, and just laughs at you for asking? Well he does not have to give you one if he thinks that you are not serious about renting the property, or if he has made his mind up not to rent to you (perhaps because he thinks you are a trouble maker for asking for an EPC …).

However if you think he is deliberately flouting the law, you can complain about him to your local Trading Standards Office. They will then contact the landlord, and if they think he is breaking the law they can serve a penalty charge notice, which carries a fine of £200. No doubt once this has happened to a landlord once, he will take care to see it does not happen again!

However there are a few defences available to landlords. One is if they have ordered an EPC at least 14 days ago and despite chasing it up, have not received it yet. The other is if the tenant is so desperate for accommodation that he cannot wait for an EPC to be obtained, provided the landlord serves it on him at the first opportunity.

The general hope, is that having to obtain and serve EPCs in relation to rented property will highlight their efficiency or otherwise (mostly otherwise I suspect for the majority of properties) in their use of energy. Hopefully this will prompt more landlords to do something about it, to make their property more attractive to tenants. Or that tenants will demand that something is done about their expensive to heat properties. Thus helping to improve the carbon footprint of the nation.

Lets hope it does. For more information about energy saving in general see the Energy Savings Trust web-site.

Tenancy Deposit Protection Schemes - news and views

I have seen several news items on the internet recently (eg here) quoting a report from the My Deposits tenancy deposit scheme, which apparently says (I have not been able to find the original report) that tenants are losing out, as 12% of claims are lost by tenants not properly following the terms of their tenancy agreement.

Excuse me, but doesn’t that also mean that 88% of landlords are losing their cases?

Meaning that under this scheme (primarily used by landlords rather than agents), more landlords are found wanting than tenants. Does that not perhaps also indicate that the TDPS was, perhaps, a good thing after all? (Contrary to the squawks of the landlords associations before the schemes were set up, including the NLA which now runs the My Deposits scheme).

Looking around at the schemes web-sites for more news, I see that the Dispute Services scheme web-site states that they are finding that only 2% of cases need adjudication, a lower than anticipated figure. As we do not know the percentage of My Deposits cases which go to arbitration, it is difficult to make much comment. However one could speculate that if there are more disputes in the My Deposits scheme (which is aimed at landlords) than in the Dispute Services scheme (which is aimed at agents), then that would indicate that agents tend on the whole to deal with deposits in a more responsible way than landlords. Needless to say, agents have been saying this for years.

There is also of course the shocking statistic put forward by the DPS of 62% of landlords not protecting the deposit at all (discussed in my post here).

Even though 88% (i.e. most of) of disputes with landlords are won by tenants, I suspect that it is still mostly only the good landlords who have protected their deposits, and that the worst landlords are still getting away with it.

Saving pdf tenancy agreements and forms

The Landlord-Law tenancy agreements are all in pdf format. This has always been the case, for a number of reasons. Most people can access and use pdfs whatever sort of computer they have via the free Adobe Reader (which you can download from www.adobe.co.uk); they are easy (relatively) for me to create; and I can protect the template via the Adobe security system.

However a few landlords have complained that they cannot save the information in the fields. This is of course quite true, but it is nothing to do with me it is down to how the Adobe software works. If you complete a form with form fields using the free reader, when you close or save the document, the information on the 'fields' will be lost. You therefore have to be very careful to ensure that you have printed out sufficient copies of your document before closing.

If you have the Adobe Acrobat software this is not a problem. Acrobat saves the information in the fields, so you can open the document up again later, either to amend the information or print it out again. If you have Adobe Acrobat Pro as I have, you can even change other peoples forms (so long as they have not protected them). However this software is pretty expensive at about £3-400 plus, and most small landlords will not want to pay this. Indeed many of them will be quite happy with just printing the form out, and will not want to store it electronically. After all it is the paper copy with the tenants' signature on, which you will need in court.

However if you do want to save the wording, there is an answer. You need to 'print' the form, using special software. This software creates a new pdf document exactly the same as the document on the screen, so it will include all the information you have typed into the 'fields'. You won’t be able to change anything on this new document though, the fields won’t be there, just the wording you put in them. This could be very useful – for example if you want to email a tenancy agreement over to a tenant.

Adobe has this feature with its own Acrobat software – it used to be called the distiller although it may be called something else now (I am out of touch with what they do). I used to use it all the time (for sending court forms over to clients for them to sign), but then after I had some work done on my computer earlier this year it suddenly started producing a load of squares instead of text. I spoke to my computer people, who did not know how to fix it, but the computer man suggested that instead I use this free software called CutePDF Writer. It worked a treat and I have used it ever since.

So if you are a user of forms with form fields (preferably from the Landlord-Law website!) and want to save a copy of what you have done, but do not want to splash out on the Acrobat program, I would suggest you give it a try.

(Needless to say however, I make no warranties regarding it, and if it trashes your machine I am not liable!! But then I would say that, I am a lawyer.)

Tenancy deposits – another happy customer

One of the tenants who posted comments to my item on tenancy deposit protection - 62% failure, subsequently bought my kit 2 and was on the point of issuing proceedings. She has now contacted me to say that her landlord has finally caved in and paid back the whole of her deposit. "Which", she said, "is all I ever wanted!"

This landlord had made a deduction for 'cleaning' despite the fact that there had been a clear inventory report, and tried to justify his failure to protect the deposit (which meant that my client could not use the free arbitration service to challenge his deductions) on the basis that his agents should have done it.

Obviously he has now taken some advice and found that his position was a bit shakier than he had thought. So it is worth tenants persisting with claims regarding tenancy deposits. Most landlords do not want to risk a court claim if it is clear that they are in the wrong.

See also my earlier post here.

Twitter twitter, tweet tweet …

I have decided to go on to twitter. For those who don’t know what this is, it is one of those social networking sites from America. You sign up and then every now and then you do a tweet. This is a short statement of what you are doing. Like 'I am having a cup of coffee' or 'I have just put the washing into the machine'. Anyone who is interested can sign up to follow your tweets, and find out what you are tweeting about. And you can sign up to follow other peoples tweets.

Put like that it all sounds a bit silly. But I suppose fun. However, there is a bit of marketing in there (being a bit of an entrepreneur I have to think of marketing, it sort of goes with the job, not that I have a job being self employed …).

For example I have discovered this thing called twitter feed. This puts notes of entries of my blog onto my twitter page. So those following my tweets will know when I have blogged. Then I can (and have, you can see it if you look to the left) put a feed from my twitter page onto my blog. So people following my blog can see what I am twittering about. All pleasingly circular and possibly futile.

I haven’t found anyone to follow yet, apart from Nearly Legal. Being of a slightly more mature generation, none of my friends really do that sort of thing. Or at least I have not found any yet, although it is early days. The Nearly Legal tweets are all feeds from the NL web-site, some of which seem to be reports of my postings on my blog. Which of course I already know about, having done them (and of course they are also reported on my twitter page). More circularity.

So what will I twitter about? I will probably use it to tell the world what I am doing on the Landlord-Law site, what new items have been loaded up and the like. I will probably also tweet about work related things I have done, such as talks, conferences etc. And I will probably from time to time just answer the question on the twitter text box, which is 'What are you doing?'. Which at the moment is writing this blog.

Guest article – a view from the United States, from Kelly Kilpatrick

The Landlord-Law blog being a British blog, generally only looks at housing in England and Wales. However, this article, kindly provided by Kelly Kilpatrick, gives a transatlantic viewpoint. Note that the opinions expressed in this article are those of Kelly and do not necessarily reflect mine. If you are outside England & Wales and would like to write something about housing in your country, please contact me.

Consistency in Policy Regarding Tenant-Landlord Relations

Over the last several years, much has been done in the United Kingdom to reform Housing regulations. First came new laws to license owners of HMOs (Houses in multiple occupation). The reasoning behind this was that the owners of these properties were able to make a great deal of money without having to adhere to any sort of standards in regard to their tenants’ conditions.

Many HMOs were seen to be in poor or shabby condition, not providing the necessary function nor were they providing the amenities that the tenants were paying hard-earned money for. Although some landlords are still unlicensed, much progress has come with these reforms, benefiting both tenant and landlord.

The benefit of licensing an HMO ensures that the property in question meets certain standards and criteria. The tenant benefits by having a place to live that meets legal criteria and is suitable for habitation, making it worth the money spent on rent. The landlord, in turn, fixes up his property to meet the criteria and increases the value of his property as well as the amount of rent he is able to charge.

How does this compare with what is done in the United States? Each state handles its dealings with housing quite differently. What’s done in New York is handled in a completely different way than it is in Texas, for example. Housing authorities exist, but deal primarily with government-subsidized housing projects for those who live beneath the poverty line.

Generally speaking, there is a whole variety of ways tenants and landlords deal with one another in the states. In Texas, for example, the landlord of a rental property can ask for references or may not. He can ask for a deposit, and does not have to prove this deposit is protected, unlike the new tenancy deposit protection laws in the UK require landlords to do. Additionally, tenant and landlord can agree upon the terms themselves or sign a leasing agreement. None of this, however, is required by law.

Conditions in housing in the States also vary quite greatly from locale to locale. Since there is no standard law to which all landlords must adhere, the system is quite flawed, filled with fraud and unsettled disputes, much like it was in the UK before these wide-sweeping reforms were put into place. It is common practice to put shabby materials in a rental property, only to be able to subtract it from a tenant’s lease at the end of the term.

Predatory leasing is not practiced out in the open, but many apartment complexes and leasing companies use the old bait and switch to get people in the door in order to lease them something different. Many times, paperwork gets “lost,” and the terms of the lease have been changed, only to be discovered by the tenant at an inopportune time.

Naturally, most people who wish to spend their money with someone who is reputable and has established guidelines for the leasing agreement, as well as terms by which the deposit is released once the rental term is up.

Although it was a tough transition for many Britons, the HMO licensing act, as well as the tenancy deposit protection legislation has provided safeguards for both tenant and landlord alike. This has ultimately changed the face of tenant-landlord relations into a market that is now more consistent than ever before.

***

This post was contributed by Kelly Kilpatrick, who writes on the subject of the colleges for criminal justice. She invites your feedback at kellykilpatrick24 at gmail dot com (although please also post feedback on this blog!).

Credit Unions and Local Housing Allowance

As I have written about before, Credit Unions can provide a useful service to tenants who want their Local Housing Allowance payments to go direct to their landlords. Many tenants prefer this, as it prevents them spending the money by mistake and thereby making themselves vulnerable to being evicted. However under the new rules payment direct to landlords will only be done now in exceptional circumstances.

However some credit unions have a service where they arrange for a special bank account to be set up to receive the payment. They will then pay it over to the landlord. As the money is ring fenced and kept separate, there is no danger of it being swallowed up by the tenants overdraft, and their homes will be safe.

I am now compiling a list of credit unions who offer this service on my web-site www.landlordlaw.co.uk which you can see here. If you know of any other credit unions which offer this can you please let me know.

Affordable housing is not affordable

It seems that 'affordable housing', a term much bandied about nowadays, is actually not really affordable at all. Generally the phrase is taken to mean that the property is available at below full market cost or rent. Much is often made of the 'affordable' element of housing in new developments. However are they really affordable for low income families?

In an article in the excellent Property People magazine (available foc to annual members of my online service www.landlordlaw.co.uk) we are told that the term 'affordable' has recently been defined in monetary terms by a team of researchers (led by Peter Ambrose, visiting professor in housing studies at the University of Brighton, working closely with the Zacchaeus 2000 Trust and London Citizens).

The team calculate that the amount affordable for housing for a family of two adults and two children, living in east London, is £135 per week (at the present time). Not surprisingly the researchers also found that the only housing available at this price is local authority or registered social landlord (housing association) housing. Privately-rented housing or low cost home ownership would is completely out of the question.

So affordable is not affordable. Rather like the accelerated possession procedure is not really accelerated. Does anyone have any other similar examples of misleading phrases from government?

Another mortgagee / tenant eviction case

I have another mortgagee evicting innocent tenant case for you. Here I was consulted by the letting agent who had been contacted by the distressed tenant. She had just found out she was being evicted, after having received the normal notice which is served on the occupier of the property in these cases. My client was furious as he felt that the landlord had deceived him, plus he was concerned that this situation would reflect badly on his agency business, although it was no fault of his. The property had apparently been owned by the landlord for some time, had been previously rented out by another agency, and there was nothing to alert him to the mortgage problems, otherwise (he told me) he would never have taken the property on.

His main concern was for the tenant however, and he attended Court where he spoke to the Judge about the case.

Apparently this was a second mortgage, and the mortgage company had not been paid since the tenancy started three months ago. The agent asked the Judge, on behalf of the tenant, if he would grant a stay or make a 56 day order, to allow the tenant to continue to live in the property until the end of her tenancy. The solicitor for the mortgagee asked for a 28 day possession order. After considering matters the Judge decided to make a 28 day order. However the tenant will have in the region of 2 months in the property before any bailiffs appointment, which will allow her time to find somewhere else to live (although apparently she had fallen in love with the property and will be sad to leave).

I suggested to the agent that he might want to review his agency terms and conditions and consider including a clause (assuming there is not one there already) specifically providing for the landlord to warrant that all mortgage payments for the property were fully paid up and would continue to be paid for the period of the tenancy. This would mean that if the landlord did default, he would be in breach of his agency agreement, which might give the agent more freedom of action. Agents might also want to consider calling for proof that the mortgage is paid up when taking on new instructions, so as to avoid a situation such as that in my previous post, where an order for possession had been made before the property was ever let to the tenant.

With the property crisis deepening, we will probably be seeing more and more of these sad cases.

The Sheffield Case

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

***

The Residential Landlords Association is pretty pleased with itself, as it has successfully challenged a claim by a tenant, supported by the CAB, against a landlord who was in breach of the tenancy deposit regulations.

As regular readers of this and other housing blogs will know, the regulations appear to say that if a landlord fails to protect a deposit under one of the government authorised schemes, and serve a notice containing prescribed information on their tenant, within 14 days of receiving the deposit, they will be ordered by the court to repay the deposit (or protect it with the custodial scheme) and pay the tenant a fine of three time the amount of the deposit money.

There is a lot of confusion about these regulations, and Judges on the whole appear reluctant to enforce them. There are quite a lot of conflicting decisions coming from the courts. However these are all County Court decisions and are mostly unreported.

The Sheffield case (which you can read about in an RLA press release and in an article in the Solicitors Journal) involved a situation where the deposit had been protected, but the landlords agent had failed to serve the notice. The notice was then served out of time, but the tenant went ahead anyway and issued the proceedings. At first instance the Judge made the award in favour of the tenants. However the landlord, funded by the RLA, appealed the decision. It came before HHJ Bullimore who ruled that the landlords were not in breach and the fine was not payable.

However what was not decided at the hearing was whether the landlord would have been in breach if he had served the notice after the issue of proceedings rather than before. The RLA take the view that the it is the date of the hearing which is important, not the issue of proceedings. They base this view on the notes to the Housing Act 2004. These have this to say about proceedings relating to tenancy deposits:

"503. If at the court hearing the court is satisfied that the landlord has not complied with the initial requirements of a scheme or provided the information required by section 213 (6)(a) or that the deposit is not being safeguarded by an authorised scheme the court must either order the person holding the deposit to repay the deposit to the applicant or pay it into an authorised custodial scheme within 14 days of the order being made. The court must also order the landlord or his agent to pay the applicant an amount equivalent to three times the deposit."

The RLA take the wording 'if at the court hearing' at the start of the paragraph to mean that so long as the requirements are satisfied before the hearing takes place, the landlord will not be penalized. However this is not the only interpretation of these words – it could just be a statement of when the decision will be made by the court - it would after all be highly inappropriate for the Court to make any decision before the hearing!!

My feeling is that if the landlord can get off the hook by complying with the requirements on the day before the court hearing, this is grossly unfair. It will in effect be encouraging landlords only to protect deposits where tenants bring court actions, and will mean that it will be virtually impossible for a tenant ever to succeed in such a claim. However I agree that it is unfair to penalize landlords who act in good faith and who only fail to comply through error (as was the case in the Sheffield case, where the deposit had in fact been protected).

We should also remember, that although this was an appeal, it was not the Court of Appeal, so this decision is not binding on anyone. County Court Judges will probably take note of it, but they do not have to follow it. We really need a test case to be taken up to the Court of Appeal.

But isn’t it ridiculous that a major court case has to take place before the effect of a piece of legislation can be known. Surely there must be a better way?

London Landlords Day 2008

Thursday was London Landlords day – this is an annual event put on by all the local authorities in London for their landlords. It is currently run on their behalf by a company called Accession.

I was doing a talk called 'Dealing with Tenants Rent Arrears'. This is a new talk, based largely on my new(ish) Rent Arrears Action Plan section on Landlord-Law. It was just going to be about what to do when tenants fall into arrears with a short section on preventative action at the beginning, but then the organizers in their wisdom sent out a flyer saying (without consulting me first) that I was going to tell everyone how to prevent rent arrears arising in the first place! I wish! Still I decided I had better add a few more slides, so that turned into quite a largish and important part of the talk (which I am now thinking of turning into an article).

I think the talk went well. It was in the auditorium which I think seats about 400. There seemed to be quite a lot of people there for my talk, although it was difficult to see much beyond the blinding lights which shone into my eyes whenever I tried to peer out in the audience.

If you were one of those people, thank you for coming along and I hope you enjoyed it. Some of you took up my invitation to let me have your business card or email address so I could send you a pdf of the presentation. These have all been sent out, apart from a few where I could not read the handwriting. So if you have not had it, that is the reason!

I also took the opportunity (while walking to and from the station) to take a few digital photos of houses and flats in the surrounding area which, being Kensington, is posh. Eagle eyed readers of Landlord-Law have probably noticed that it is now festooned with pictures of property. I now take pictures whenever I go anywhere new, much to the irritation of my family ("come on Mum …"). There are some stunning blocks of posh flats on the Kensington side of Olympia, some of which may well be rented out, although I would surprised if any of them are ASTs (where the rent must be under £25,000). Square clips of these will gradually get onto the Landlord-Law site, hopefully giving it a bit of class, and making it a bit more representative, most of the current pictures having been taken in Norwich.

Apart from a jaunt to Lambeth in a couple of weeks to speak at their Local Authority forum, and my normal slot in the CLT October property conference in October, that is it for my speaking this year. At the moment anyway.

Responsible Renting - the final report

After having got back from holiday, settled back in, and dealt with the back log, etc, I have finally got around to reading what is the final report from the Law Commission on their housing projects.

The new legal team on Nearly Legal got in ahead of me with a rather depressing report, taking the view that the proposals are basically ineffectual, and the government probably won’t take any notice of the report anyway.

There does seem to be a deafening lack of action by the government on the Law Commissions proposals. In particular the Renting Homes report which has been out for several years now. However there are I suppose a number of excuses for this. For example:

• The fact that on the whole the private sector is not working too badly so maybe action here is not as necessary as elsewhere in the economy
• The need for the private rented sector to grow to provide much needed housing and therefore a desire not to 'rock the boat' which may discourage investment, and
• The need for recent initiatives to bed themselves down.

The last of these is I think particularly important. In the space of a couple of years we have had three major changes, the new Housing Health and Rating System, the HMO licensing scheme and the tenancy deposit scheme. Very shortly there will also be the need for landlords to provide environmental performance certificates. These changes all need time to settle down and for landlords to get used to them, before anything else new is brought in.

For example it has taken Local Authorities some time to get to grips with the new licensing scheme which came into force in April 2006. The first year was taken up with setting up the new schemes from scratch, dealing with the initial rush of registrations, and getting used to things. The second year was building on this, so it is only now that Local Authorities are starting to do more enforcement work. I am pleased to see many more reports of enforcement action for landlords default, and no doubt this will continue. It will probably take quite a few more years (bearing in mind the limited staff resources available to most Local Authorities) before they dig out all the recalcitrant landlords, and are able to say that they have most of the HMO landlords in their area properly licensed.

Likewise with the Tenancy deposit scheme. As set out in my earlier post, it appears that many landlords are still not compliant, so again this will take some time to work through.

In the circumstances I think that the Law Commission are right not to go for major change, but to seek to strengthen the existing initiatives. Their main proposals are:

• To make landlord accreditation available everywhere rather than in just a few areas, as now
• To set up a housing standards monitor body to carry out further research, develop a single code of practice, and trial initiatives (such as a scheme for home condition certification)
• To have all letting agents regulated (Everyone agrees with this! Apart from the cowboy letting agents of course)
• And to carry out proper evaluation of any new reforms introduced

This all sounds pretty sensible to me. It will lay a foundation for further work, won’t rock the boat too much and discourage new landlords just now (particularly important in the present economic climate), and probably won’t cost too much. The Law Commission also make the point that there is a cost in doing nothing, as poor housing creates costs elsewhere in the system, and therefore (taking a wider view) expenditure in the field of housing could result in significant savings elsewhere in the economy.

There are a number of other reports which have been published recently (which are set out in the Law Commissions paper), plus there is the report commissioned by the government on the private rented sector being undertaken by the University of York which is yet to be published. It may be that once this is out, and now that the commission has completed its housing project and the government is able to look at it as a whole, together with the other reports, government may now decide to do something. For example take steps to bring the Rented Homes Bill onto the statute book.

If you are interested in housing, it is probably worth getting hold of the report – which can be downloaded from the Law Commission web-site here and in the Landlord-Law Law reform section. As usual it is well written and readable (bearing in mind that it is a legal report). I was pleased to see that Landlord-Law was mentioned favorably (page 17), and also interested to see that the responses via the Landlord-Law answer form provided nearly 30% of the total. There is a very interesting appendix where they report on what people responding to the consultation actually said.

Interesting times ahead!

EPCs - a step in the right direction

Reading my Observer today, I came across an article on Energy Performance Certificates (EPCs), which as many of you will be aware, will need to be provided by landlords to prospective new tenants after 1 October.

The article however is more than a bit on the negative side, pointing out that landlords have no compulsion to carry out any of the recommendations set out in the EPCs, and that older properties will appear in a bad light not withstanding the fact that landlords may have done all they can. It also claimed that the EPCs could cause friction if tenants found that their bills bore no relation to the examples in the EPC, although one source seemed to think that that most people would not take any notice of them (or no one would ever rent a thatched cottage).

All of this may well be true, but surely the point of EPCs is that it will force people at least momentarily to think about energy efficiency, and will make landlords and tenants aware of what can be done to reduce usage. Surely that has to be a good thing?

We keep reading about how we are going to have to take huge steps to reduce our carbon footprint, but whenever any practical steps are attempted to actually do something about it, this barrage of negativity is put up. EPCs are a waste of time. Low energy light bulbs are not bright enough to see by. Wind turbines are noisy and spoil the view. The Severn Barrage will adversely affect migratory birds and fish. This sort of attitude is not really helpful, bearing in mind the amount of carbon reduction we are going to have to do to have any chance of affecting climate change.

I think that EPCs are an excellent idea. In order to do something about a problem you need information to help you make the correct decision, and this is precisely where the EPCs can help. It is not a perfect solution of course (nothing ever is), but it is a start. Some landlords will probably ignore them, as will some tenants, but I expect many others will take notice of them, and will carry out at least some of the recommendations. That has got to be good.

It is all very well people talking about new buildings and eco towns, but most of us live in older properties, which were built in times when energy efficiency was not a priority. We need to adapt our homes to meet the new situation, and many of us have no idea how to do this. Mandatory EPCs to be provided whenever properties are sold and rented out is at least a start.

Tenancy Deposit Protection - 62% failure

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

I read a news items on the Deposit Protection Service website today which reported a survey showing that 62% of private landlords are flouting the tenancy deposit rules, and not protecting their tenants deposits.

If this report is true, and I suspect it probably is, or at least very near the truth, then this means that only letting agents and the better landlords are complying – meaning that those the scheme is really aimed at are ignoring it.

One probable reason for this is that the penalties (in particular the provision for the tenant to be awarded a 'fine' of three times the deposit money) appear in reality to be difficult to enforce. This is partly because the legislation is unclear. Upon careful reading it does not actually say that the fine is automatic if the landlord fails to protect within the time limits (although they do appear to indicate that it might be if the landlord is in breach of his schemes rules - there may be grounds for a test case there).

I am only aware of one case where the tenant succeeded. This was reported in Legal Action Magazine (June 2008) and was where the tenant had actually vacated in response to a section 21 notice served on her. Here the landlord was unable to remedy the position (ie by protecting the deposit out of time) and the Judge reluctantly made the order. However if the tenant had still been in possession, no doubt the landlord would hastily have arranged for the deposit to be protected, and the Judge would then have refused to make the order. The Legal Action report made it clear that the Judge only awarded the fine with reluctance and because the legislation gave him no alternative. (NB I would be very interested to hear of any other cases.)

[Note - since this post was written in July 2008, there have been considerably more cases reported, see the other posts on this blog on tenancy deposits to find them]

What is doubtless happening is that many landlords are taking the view that they will not protect deposits unless tenants threaten court action. However most tenants do not do this. Many will be wholly unaware of the tenancy deposit protection provisions, particularly, for example, if they have only recently come to this country and English is not their first language.

However, even if they are articulate British nationals, most people, even if they have a vague sort of idea that the landlord ought to do something about the deposit, will just assume that either he has done it or that the rules no longer apply. Ordinary people do not go around assuming that their landlords are breaking the law, or threatening court action. Generally people are unfamiliar with the courts and find the very thought of bringing a court claim scary.

One answer I suppose, is to do more to make people aware of the tenancy deposit scheme. Maybe it ought to feature in one of the soaps, there is probably a storyline in there somewhere. The other is to amend the rules to make it clear that if the landlord has not protected the deposit within the time limits, he cannot prevent the tenants succeeding, in a claim for the 'fine', by protecting the deposit out of time.

NB Tenants wanting to bring a claim, should note that there is a do-it-yourself kit (Kit 2) available via my web-site www.landlordlaw.co.uk.

[Note - there a many questions from landlords and tenants in the comments, most of which I have answered (although COMMENTS ON THIS POST ARE NOW CLOSED and no more will be added or answered). Please bear in mind that new cases (and interpretations of the rules) have come along since my answers were given. Note that there are many other more recent posts also on tenancy deposits which you can read via this link.]

[Note 2 - see my post here one year on : Tenancy deposit protction - now only 30% failure]

Solicitor sues the court!

There is an interesting news article in the Law Society Gazette today about a solicitor who is so fed up by the appalling service provided by the Central London County court (CLCC) that he is bringing a claim in the High Court! The claim is for a judicial review to force the CLCC to list a landlord and tenant claim for hearing. The writ claims that "neither letters to the court, nor telephone calls, nor even a letter written under the Judicial Review pre-action protocol copied to the Official Solicitor .. have produced any action."

Of course if you know the court system, you will know that sending a letter is often worse than useless. As things are dealt with in strict rotation, you will receive a reply to your letter of complaint, several weeks after the original problem has been resolved, telling you that it has been resolved (which of course you already knew!). The only way to find anything out is to ring the court, where normally (and invariably for the London Courts) you will have to wait in a queue for hours. Most solicitors do not have time for this.

In the Gazette article, the courts service is quoted as saying that the number of complaints to the courts are down. The reason for this is probably that most people, in the legal profession anyway, have given up complaining as they know it will be no use.

The real reason for all the problems in the courts is of course chronic underfunding. Some courts, I understand, cannot afford to use Deputy District Judges at all, which is why cases are taking so long to be dealt with. They cannot afford to pay good wages to their staff, which is why all the good staff are leaving or have left, and those who take their place are mostly unqualified and untrained. Dealing with the listing of cases is a nightmare anyway, what with having to deal with witness availability on both sides, and it becomes impossible where there are not enough Judges to hear the claims. I feel very sorry for County Court managers and am devoutly glad that it is not me having to do it!

Incidentally, I did give some suggestions for county court fundraising in an earlier post.

Thank goodness for Geograph

When I upgraded up web-site recently I left reviewing the Local Authority Directory for a later date. This is a very large section of the site, which covers all local authorities giving the LA web-site and contact details for housing related information. As there are now so many pictures in the rest of the site, I decided it would be nice to put a picture for every page showing an aspect of the LA concerned. However there is one problem here. I have not visited every borough in the country.

Having got the upgrade out of the way, the directory needed to be tackled. But what to do about the pictures? It would be a bit expensive to buy them in, and I was unhappy about just lifting them from the internet. However, I did a trawl via Google images to see what I could find. What I found, was Geograph.

This is an amazing site, sponsored by the Ordnance Survey. Its aim is to collect geographically representative photographs and information for every square kilometer of Great Britain and Ireland. The pictures are donated by ordinary people who load them up to the site, where they can be viewed online. What is more, they can be reproduced under the creative commons license on web-sites! Voila, my problem solved!

I have decided that, in accordance with the spirit of the Geograph site, I will only use their images in my 'open access' Local Authority Directory, and will rely on my own and purchased images for the commercial part of the site. There is a fantastic selection of pictures to use, many of them of superb quality! Mind you, artistically speaking, there are also a lot of rubbish quality photos, but good show all the same. It has made the otherwise tedious business of reviewing and updating my directory, fascinating.

So, after doing a few amendments to my template (some of you may have noticed that the amended entries have the H1 orange heading, and the unamended entries still have the blue H3 heading), and checking the housing information from the LA web-site, I can then turn to the more interesting business of looking for a suitable picture on Geograph. This of course has the added bonus that I get to find out where the local authority actually is. This may sound silly, but many authorities have names which give no indication (to the average person) of their location. I now know for example that Allerdale is Cumbria, Broxtowe is in Nottinghamshire, and Calderdale is around Halifax.

It is interesting to see what pictures have been loaded up on geograph. It is clear that many of the photographers are keen railway buffs, as there are a lot of rail tracks, steam engines and the like (I have used one of them for Bury). There are also a lot of very nice pictures of canals and canal boats (eg Charnwood), and of course castles, and countryside.

Some of the pictures I have chosen for the site are city scenes, such as Brent and Bromley, others are of special buildings, such as in Cambridge and Canterbury, or show a well known scene in different weather conditions - Looe in winter, and Exmouth beach before a storm, plus a nice sunset for Brighton. There are also a few statutes, such as in Cannock Chase and (my favourite) Cheltenham. Some, such as Dover and Ely could only have one subject. As you can see, it has been fun.

A condition of using the photos under the creative commons license is that the photographer must be credited, and the fact that it is published under the creative commons license must be acknowledged. I have done this in the alt text, which you can see by hovering your mouse over the image, as well as mentioning it in the notes which will go (eventually) on every directory page.

At the time of writing this blog entry I am part way through the E’s so I have quite a lot of work still to do! Mind you, not all the LA Directory pictures are geograph ones, but most of them are.

As a grateful user of Geograph images, I have loaded up some of my own pictures to the site, and will continue to do so, so I can give back as well as take. I hope that some of you readers will also visit Geograph and find it as interesting as I have.

Tesco Law in action

A few weeks ago, I was (initially) somewhat flattered to receive an invitation from a financial organisation (who will remain unnamed) regarding the delivery of a new possession proceedings service.

"I am aware of your expertise in the field of residential landlord and tenant law" ran the letter, "and am writing to you to explore whether we can work in partnership together". Happy to know that at least one person is aware of my expertise, I rang to find out more. However after speaking to the gentleman, my interest diminished considerably, in fact down to zero. The situation was this.

The company wants to offer a cheap and cheerful possession service to the public. However as they are not a firm of solicitors they cannot (as yet) issue the proceedings themselves. They therefore need a firm of solicitors to do this for them. "We will draft all the paperwork" said my correspondent, "all you have to do is issue the proceedings and then, if necessary, instruct the bailiffs".

Sounds good? Well not really. The claims would be issued under my firms name. So if there was anything wrong with them and a negligence claim followed, it would be my professional indemnity insurance which would be on the line. Therefore I would have to check all the paperwork before issue to make sure that it was correct. So there would really be the same amount of work as if I were drafting it up myself. And they were offering to pay me £50.

When I first heard him say £50 I found it difficult to believe that I had heard him correctly. For that I would have to receive the paperwork, open a file, check it was correct, send it off to court, log the details on receipt, instruct the agent to attend the hearing, and then deal with their report. That would be for the straightforward cases where there is no defence filed. As gently as I could, I told him that it was not something I was really interested in.

I don’t know if he will find a firm prepared to work for him. I suspect not. In fact I would hope that no solicitors firm will be prepared to issue proceedings which have not been drafted by a partner or member of staff. And although the company were offering to ‘work in partnership’ I feel pretty sure that if there were any Tesco law type rule changes which allowed them to issue the claims themselves, the 'partnership' would be fairly swiftly ended.

But is this the future I ask myself? Large financial organisations mopping up all the customers and using solicitors at knock down rates, to do the grunt work? Well hopefully not in my firm.

But it would be interesting to know if any other firms have had similar approaches.

NLA / NFRL merger challenge

The big news in landlord world at the moment is the recent announcement of the merger of the two big landlords associations, the National Landlords Association (NLA) and the National Federation of Residential Landlords (NFRL).

However I am sure many landlords will be frustrated to read that there appears to be a question mark over this happening, due to wrangling at NFRL director level. This report states that two of the directors, who were apparently not present at a crucial meeting or party to the merger statement, are thinking of challenging the its validity.

I have to say that I am not really surprised. The world of landlord associations seems to be riven with strife and argument. A few years ago the main organisation was the NFRL. At that time this was an umbrella organisation which most local organisations belonged to, including the NLA (then called the Small Landlords Association). This seemed a very sensible idea as it allowed local organisations to keep their own identity but to work together at national level.

However then, due to various arguments, various large associations left the NFRL to go it alone, including the then Small Landlords Association, and the NFRL as a result became less representative. This was bad news for landlords in general, as smaller organisations carry less clout when lobbying government. (Although the Small Landlords/NLA then went from strength to strength, becoming very large (hence the name change) and they now manage one of the three government authorised tenancy deposit protection schemes.)

Every now and again I received reports (from my landlord association mole) about what was going on, mainly in the NFRL, and it was generally depressing news about director level tiffs and spats. Which I felt was an enormous shame, as landlords need a unified body to speak for them at government level.

So I really hope that this time they will be able to over come their differences (whatever they are – and I am sure that the majority of landlords do not really care what they are) and start to work together for the good of ordinary landlords. Which after all is what they are there for.

The future is orange

If you visit Landlord-Law today, particularly if you have not been there for a while, you will find that it has become rather, well, bright! We have had a bit of an upgrade.

After a rather depressing start to the year (for various reasons) I decided that things needed a bit of a shake up and commissioned my web-designer, Gill, to do me a radical new web-site design. "Nothing is sacrosanct", I told her, "well, apart from the logo of course". Naturally therefore a new logo was one of the first things she did.

It’s a bit different, the new site design. But after all there is no law which says that legal web-sites should be boring, and it is certainly not that. I told Gill that I wanted bright colours ("proper colours") and put an absolute ban on all pastels. Bless her, she did a stonking design.

"What do you think about having a few pictures?" she asked hesitatingly, one day (Landlord-Law 1 being almost entirely text based). "Yes", I said, "why not? Perhaps a few". Which is why you now see at least one photograph on every page, together with Wils cartoons, which I decided to use more lavishly (after all I do have about 6 years worth!)

The use of photos grew like Topsy. After uploading a couple, I was so stuck by how nice they looked, that I decided to use a few more … It was then quite a job to find sufficient. All of our holiday photos have been raided, and in additional I took quite a lot of pictures locally – luckily Norwich has a wide variety of housing types, so I could do the full range, from modern flats to (only one so far) a thatched cottage, plus endless terraced houses.

Most of the photos are by me, the majority taken within about 20 minutes walk from where I live, the rest having been taken on holidays and on the way home from a recent trip to Manchester. My husband took a few, and there are a few purchased photographs from http://www.istockphoto.com. I intend to change the photos from time to time and upload new ones as and when I take them – a new interest in life!

Another new feature of the site, is that it incorporates this blog! If you have not accessed the blog from the site, take a look – it is here.

Of course it is only when I have to check it over that I realise what a very large web-site Landlord-Law has become. I seem to have been working night and day on it for weeks on end (well about three I suppose) so it will be nice to step back a bit, and have a break. Although there are quite a few new things I want to do for the site, and my publisher is talking about a new book …

Malcolm reversed

Landlords the length and breadth of the country will (or should) be celebrating the House of Lords decision in the leading case of Lewisham v. Malcolm, (discussed by me previously here) and the reversal of the previous Court of Appeal decision. This denied Lewisham a possession order on the basis that Mr Malcolm’s subletting of his flat (which in normal cases would have entitled Lewisham to an order for possession without question) was as a result of his disability (schizophrenia), and that their claim for possession was therefore discriminatory.

This raised the worrying (for landlords) possibility of disabled tenants being unevictable, no matter how serious their rent arrears (for example). Or, as Mr Bernstein found, unevitctable under the section 21 procedure, if they are disabled, even if the landlord did not know this.

However it now looks as if these fears are groundless (other than for poor old Mr Bernstein who should have had his possession order months ago) and possession orders will in future only be denied to landlords in cases of obvious discrimination.

Lawyers are less happy with the decision, which they say messes up established employment law principles.

The Malcolm decision is a very long one and although I have tried to read it, it is past 11.00pm (at which time I start to fade ...) and it is difficult to stop my eyes from glazing over. No doubt an authoritative analysis will be posted in due course by Nearly Legal. So I will leave it to him, and go to bed.

Councils get tough on HMO regulation evaders

I have just seen two reports of landlords breaching the HMO regulations being fined.

In Redditch, Nadeem Asghar, (23), pleaded guilty to operating a house in multiple occupation and was fined £2,000 and ordered to pay £1,071 costs.

In Loughborough Mohammed Tayaib Ali Chowdhury (age not given in the report) was fined a swinging £10,000 and £1,015 costs. His property, a three-story Victorian terrace in Toothill Road, Loughborough, was occupied as an HMO by nine adults and two children, without a license.

There seems quite a gap between the two awards, so either the Loughborough Magistrates are considerably harsher than those in Redditch, or there is something we have not been told.

Still, defaulting HMO landlords beware – it could be you next!

More tenants evicted by landlords mortgagees

I have been contacted by another tenant today, who is being evicted by her landlords mortgage company. Her situation is not quite as bad as that of my clients in my previous post, as no order for possession has been made yet (the hearing is in July). However she was not at all happy to receive the notice of proceedings from the mortgagees solicitors two months into an eighteen month fixed term! Particularly as she had just paid to have broadband connected.

Once again I question the role of the letting agents here. In this case the tenant has found out that the landlord has probably been in arrears of rent for quite a long period, it could even be a year. As well as this it seems that the landlord failed to obtain consent for the letting from his head lessor. If a tenant can find these things out, why can’t the agent?

Is it right for a letting agent to be able to let a property which is obviously vulnerable to repossession, and after it is let (and their commission paid – taken from the tenants rent of course), not be liable in any way when the property is repossessed? Should they not be obliged to carry out at least some rudimentary checking?

The agents in this particular case are a large high profile London firm of estate and letting agents. When a tenant is renting a property from a professional agency such as this, they do tend to assume that they will at least be able to live in the property without being evicted two months into the term!

It is arguable that in such a situation, particularly as it is a business/consumer situation, there should be some sort of tortuous liability on the agent to ensure that the properties on their list are not vulnerable to repossession, at least during the initial fixed term.

Incidentally, the Civil Justice Council has recently carried out a consultation on a proposed new mortgage repossession pre action protocol (the consultation period finished on 23 May) but this does not appear to consider the situation of innocent tenants.

Stand your ground on damage deposit claims

In my last post I talked about the case of my poor clients, evicted by their landlords’ mortgagee. In fact the situation was worse that I let on, as not only were they evicted, they also didn’t get their deposit back!

My advice to them was (inter alia) to threaten the agents with an application under the Tenancy Deposit Protection Scheme regulations for the return of the deposit and three times the deposit sum ‘fine’ provided for under the regs. The deposit after all had been paid to the agents. In my view the fact that they had passed it on to the landlord (which turned out to be a dodgy company - almost certainly without assets) did not excuse them from their responsibility to protect the deposit. Otherwise this would be driving the proverbial coach and horses through the regulations. My letting agent client had told me that they would never pass a deposit on to a landlord unless they were 100% certain that it was going to be protected.

Initially the agents tried the brush off – “nothing to do with us, we just found the tenants, you need to claim the deposit from the landlord”. My client then spoke to the Deposit Protection Service, who told him that the agents were right, and that they could not claim the deposit from them.

Thankfully, although initially knocked back by this, my client decided to send a stiff letter to the agents, threatening court proceedings, and claiming the deposit, the 3 x fine, all his expenses (including an item I had privately told him was not really recoverable), and substantial compensation. The agents consulted their solicitors and their insurers, and, to my clients surprise and delight, agreed to everything except the compensation!

So a happy ending and champagne all round! But what a good thing my client took no notice of the DPS and decided to send the letter anyway. Otherwise they would now be several thousand pounds poorer.

Agents letting property subject to a re-possession order

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

***

There is quite a lot of discussion about tenants evicted unfairly by landlords in retaliation for something that they have done, such as complain about repairs. However there is another type of unfair eviction where tenants do not even get the benefit of the two months notice under section 21 which tenants receive in a retaliatory eviction. I am talking about tenants who get evicted by the landlords mortgage company when the landlord fails to meet his mortgage payments.

I was consulted by tenants on one of these cases recently. They had rented what they believed to be their dream home, only to find two months later, the bailiffs at the door. It was a complete surprise to them because the possession order had been obtained before the property had been let to them!

Yes, amazing though it seems, the possession order was made several weeks before the tenancy was granted, and the date for possession in the order had actually expired the day before my clients tenancy started (by the way they know I writing this and have given their consent). Therefore the notice which mortgagees are required to serve on occupiers of properties did not help them, as it had been served over six months ago!

The property was rented via an agency and the question comes to mind – what is the agents obligation here? Under agency law an agent is generally not liable for the acts or omissions of its principal. However what if the property they are presenting to the public as a suitable home, is one which is vulnerable to repossession from the moment the ink dries on the tenancy agreement?

I had a word with one of my letting agent clients about the sort of checks that are generally done in the business against their landlord clients and the properties they take on. It seems that the answer is ‘not much’ Apparently landlords are sometimes asked to sign a form saying that they are authorised to let the property and that there are no legal problems or other problems with it. Well that’s not much good is it? A dishonest landlord is going to sign that without a qualm.

I can’t help feeling that there should be some sort of obligation on agents to check this sort of thing. After all in this case the agent was offering to let through its business, a property which had a substantial defect – i.e. it was vulnerable to repossession at any moment. It seems wrong for the agent to be able to pocket its commission (taken from my clients rent) and then say “sorry gov, nothing to do with me”. Which is in effect what they are doing.

What do other people think?

Inside track bubble bursts

I was amused to read that Inside Track, the company that charged thousands of pounds for courses promising to teach people how to be property millionaires, has now itself gone into administration.

I am not a property investor myself, neither am I a millionaire (I wish!) but I would have thought that if people want to make money from property, something along the following lines would be necessary:

• To be clever (particularly to understand numbers and finance) and to have a large chunk of common sense
  
• To read around the subject (for example some of the books here) and attend talks and lectures (no need to spend thousands, for example there are free talks at property events such as the Landlord and Buy to Let Shows, and David Lawrenson runs modestly priced property seminars in London)
  
• To study the property market very, very carefully in a specific area of the country, ideally not too far from where you live, so you know it really well and can buy sensibly
  
• Capital

I suspect that good people skills and contacts in the building industry would also be important.

Belief in getting easy money by attending an overpriced course pumped up by extravagant claims, would, I suspect be a negative factor.

The problem of landlord regulation

A recent article in Inside Housing looks at how landlords are using the governments review of the private rented sector to call for a review of the HMO licensing system, which they say is not working. One organisation is asking for it to be done away with altogether, allowing landlords to ‘self regulate’.

The main criticism of the HMO licensing scheme is the way the license fees vary across the country, with some authorities charging over £1,500 per property and others charging under £200. I have to say I have a lot of sympathy with landlords complaints here, our own Landlord-Law list of licensing fees shows a very wide variation. This cannot be right.

However in my opinion one of the best chances of dealing with poor conditions in properties and rogue landlords should be via the local authorities and the licensing scheme. The problem is though that in many cases they are not using their powers properly, most likely because of lack of resources. The Inside Housing article mentions a "substantial fine slapped on a Liverpool landlord last month" and this is quoted as showing that the regime is working. I am really pleased that at least one bad landlord has got his comeuppance under the regs, but suspect that there are many others slipping through the net. The fact that this item is newsworthy (when if the councils were doing their job, such orders would be common practice) is telling in itself.

Which is a pity, as if the local authority powers, which they already hold, were being used as they should be, then this would do a lot to solve the problems of substandard housing. It really needs an outside body to enforce standards, it is unfair to expect tenants to have to do this themselves. Not only because they are then at risk of retaliatory eviction under section 21, but also because bringing a legal action is a stressful, and (unless legal aid is available, which often it is not) expensive process which many tenants do not want to undertake.

Furthermore, why should they have to? Under the Housing Act 2004, poor standards are technically a crime and local authorities are the organisation charged with enforcement. We do not expect victims of burglaries to hunt down and prosecute the thieves. Why should victims of substandard housing have to sue their landlords in order to obtain the decent standards they are entitled to under the law? The situations are not wholly parallel, I agree, but it is a valid point of view.

As for the suggestion that landlords should regulate themselves, this is laughable. I wholly agree that many, probably a majority, of landlords are law abiding and provide decent properties which not only comply with the standards but surpass them. However how are these landlords, or indeed the landlords associations, going to do anything about the non compliant landlords? They may not approve of them, but that isn’t going to do any good! The only way that landlords could self regulate would be if membership of a landlords or similar association were made mandatory and the associations given powers to act against members who breach their standards. This is one of the options being looked at by the Law Commission in their responsible renting project. However many landlords associations do not want this role.

My preference would be for regulation of non complaint landlords to be done by an outside body, the most appropriate being the Local Authorities, as they already have powers in this respect. The main reason why this is not being done properly already, is a lack of resources. Which means under funding by the government. Over to you, Gordon.

Credit crunch problems

There is a very interesting, if worrying, article on the Guardian site here about the credit crunch and the effect it is having on housing. I was shocked to read that mortgage repossessions are likely to go up to 45,000, from 8,000 in 2004.

The article also makes other telling points, such as for example the income of support charities is likely to go down as few people can afford to donate, and the value of their investments plummet.

Bad news for us all.

The Rent Arrears Action Plan

In view of the current financial situation, I have added a new members only service to my Landlord-Law site, a Rent Arrears Action Plan. This is in five parts (the first part being preliminary information) and contains detailed guidance to landlords on what they should do from the moment their tenant first falls into arrears, up to considering court action. It contains precedent letters which can be printed off and used, the possession notices, and checklists, so landlords can keep a record of what they have done.

It is important that rent arrears are dealt with promptly, not only for the landlord but also for the tenant. If rent arrears are allowed to build up (and I have seen some horrendous rent arrears in my time) then they will get to such a state that the tenant will never be able to pay them off. Whereas if the tenant starts dealing with them at an early stage, it may be possible for an installment plan to be arranged, which will allow the tenant to stay in the property. The landlord will then not be faced with the expensive of court proceedings, a large rent arrears bill, and all the bother of having to find a new tenant. Often when people fall into debt they will pay the person or company which is shouting the loudest. So if the landlord does not do anything, this will often result in the tenant giving other debts priority.

Even if the tenant cannot afford, long term, to stay in the property, if things are dealt with promptly then it may be possible for things to be kept under control until the landlord can evict the tenant under the cheaper section 21 procedure. This will allow the tenant to apply for local authority housing which, if the tenant has a family, they will be entitled to. However if the tenant is being evicted for serious rent arrears, the tenant may also have lost the right to be re-housed if the Local Authority consider he is responsible for the eviction himself (i.e. because he did not pay rent when he should have done).

Most landlords are reasonably humane people and will want to help their tenants if they can. However, many will not know what to do when tenants fall into arrears, or understand the situation their tenants are in vis a vis Local Authority re-housing. Hopefully this new service will be of assistance.

Local authority takes action on illegal HMOs

I was pleased to read in this report that in Kings Lynn, Local Authority officials are checking up on HMOs. There is not much point in having laws to legislate HMOs, poor conditions in property, and the like if nothing is done about it.

As was pointed out by Mark P in the comment here (you need to scroll down), many Local Authorities are unable to do anything due to lack of funds, so it is good to see that are taking their responsibilities seriously.

My feeling is that the only way properties owned by the worst landlords are going to be improved for their tenants is via action from Local Authorities. Probably the most effective course of action would be for the LAs to do the repair work themselves and then re-coup the cost from the landlord. They do actually have the power to do this now, but perhaps for them to use these powers, their right to recoup the cost from the landlord should be beefed up a bit. If landlords feel that they are going to lose their rent for a few months or years, it may persuade them to put their own house in order, so as to avoid it being put in order for them.

Policing the Landlords

I have just listened to an interesting program on Radio 4 (via the listen again facility) which is on problems tenants at the lower end of the market experience. The presenter finally managed to speak to one of the landlords whose properties featured in the program, who took the view that he was spending loads of money doing up properties for ‘scumbags’, who then don’t look after them properly (leading, he implied, to the condition the presenter found them in). Hmm.

It is very sad that this sort of thing is still going on, and that some tenants are frightened to report poor conditions because they are scared of being evicted. Either legally via section 21 or by the boys coming round to evict them forcibly.

The program mentioned the current review of the private sector being undertaken at York University, and it will be interesting to see if there are any suggestions in the report on how to deal with this sort of thing.

The program pointed out that the majority of landlords are responsible and provide decent properties. No doubt they would be very happy to see the back of the criminal landlord who gives them all a bad name.

At the time of writing you can listen to the program via this link, but I am not sure how long this will stay online.

Bernstein and Floyd

Readers who were interested in my earlier post on the landlord whose disabled tenant appealed against a possession order obtained under s21, will be interested in this quote from the final paragraph in the report in the recent case of S -v- Floyd (with the Equality and Human Rights Commission joined in as an interested party):

one of the members of this court has dealt recently with an application for permission to appeal from a judgment of a Circuit Judge (Bernstein v Tate, December 21, 2007) in a case involving what would normally be a mandatory order for possession under section 21 of the 1988 Act. The tenant claimed that non-payment of rent was due to various health problems including depression, as a result of which she had to stop working, and her incapacity and housing benefit was used in paying off her overdraft instead of the rent. Prior to Malcolm the District Judge made a possession order on the basis that the tenant's disability had nothing to do with the landlord's decision to seek possession. But the Circuit Judge granted a stay, set aside the original possession order and re-listed the matter for evidence of the tenant's disability and further submissions. This appears to have been on the basis that the tenant had a reasonable prospect of success in showing that she was disabled for the purposes of the 1995 Act, and that she was entitled to a stay of the mandatory possession order.

The wording of this quotation seems to imply that the CA do not entirely agree with the Circuit Judge's assessment of the tenant's prospects of success.

The Floyd case itself will bring some comfort to landlords. Here the tenant had an order for possession made against him under the mandatory possession ground 8 as he was over £7,000/123 weeks in arrears of rent. The tenant admitted this but tried, via the appeal process, to prevent the landlord obtaining possession because he suffered a mental disability, citing the Disability Discrimination Act 1995. However the Court of Appeal made it clear that so far as they were concerned, the DDA did not entitle tenants to get out of their legal obligations just because they are disabled:

It is not immediately obvious (a) how the 1995 Act could provide a basis for resisting a claim for possession on a statutory mandatory ground or (b) how a landlord would be unlawfully discriminating against a disabled tenant by taking steps to enforce his statutory right to a possession order for admitted non-payment of rent for 132 weeks. The 1995 Act was enacted to provide remedies for disabled people at the receiving end of unlawful discrimination. It was not aimed at protecting them from lawful litigation or at supplying them with a defence to breach of a civil law obligation. Like other anti-discrimination legislation, the 1995 Act created statutory causes of action for unlawful discrimination in many areas, such as employment, the provision of goods, facilities and services and the disposal or management of premises, but it did not create any special disability defence to the lawful claims of others, such as a landlord's claim for possession of premises for arrears of rent. The legislation is not about disability per se: it is about unlawful acts of discrimination on a prohibited ground, ie., unjustified less favourable treatment for a reason which relates to the disabled person's disability.

However we are all waiting to hear what the House of Lords decide in the leading case of Malcolm, which has been discussed by me previously here. I am sure that all landlords will be hoping that this will make it clear that just because a tenant turns out to be disabled, this does not mean that the landlord will be effectively forced to house them rent free forever. Which would effectively be the case if any attempt to enforce their rights to possession (even where they are supposed to be mandatory) were blocked on the basis that they are discriminatory. Even if (as in the cases of Bernstein and Floyd) the landlord did not actually know that the tenants were disabled.

Note - if you want to read more about the technicalities of these cases, you will find detailed posts on the Nearly Legal blog. However unless you are a housing lawyer (and perhaps even then), you may find it makes your head hurt.

OFT challenges unfair terms in landlords agency agreements

Landlords nationwide will be delighted at the action being taken by the Office of Fair Trading, regarding letting agents Foxton’s agency terms and conditions.

Under these agency agreements, Foxtons claim commission from landlords for tenants found by them when the tenant stays on after the end of the tenancy agreement, even if they (ie Foxtons) are no longer involved in the management of the property, and even if the landlord has sold the property! (In which case the landlord would not be receiving any benefit from the tenant at all.) They also claim commission if the property is sold to the tenant, even though they may have paid no part in the sale negotiations.

Foxtons claim that these terms are fair, but the OFT disagree and have issued a High Court action for an injunction to stop them using them. They are also asking the court to make a declaration that they are unfair, in breach of the Unfair Terms in Consumer Contracts Regulations 1999.

If the OFT are successful, they will be bringing action against any other letting agents which have similar terms in their agency agreements (and there are many!).

This is a much needed action. Landlords have been complaining for years about these clauses which in many cases are ‘money for nothing’.

You can read about the items on the OFT web-site here.

More on the new tenancy agreements

Still working on the new plain English tenancy agreements for Landlord-Law. I had a fair few responses to my consultation and the responses were (one the whole) gratifyingly positive.

No-one said that they definitely didn’t like the new version (there were just a couple of not sure’s), and the main criticism was that it would take up more paper. However unfortunately this is inevitable if you use plain English (which generally means more words – legal jargon is often just legal shorthand) and spread the document out on the page a bit more so it is more readable.

I am actually really glad that I consulted with the members – some of them have come up with some really good points and made me look at things again and often change them. Plus they also picked up a few mistakes I hadn’t spotted!

I am now in the process of re-doing all the different varieties of agreement which is going to take some time. I am also developing a tenancy agreements section. Rather than have the agreements all on one page I am dividing them up, which will hopefully make them easier to find.

The new agreements should hopefully go live soon. I suppose I will then have to review all the other forms!

Plain English tenancy agreements

I haven’t been writing much in the blog recently because I have been doing a lot of other stuff. One the main things I have been concentrating on recently is a new draft of my standard tenancy agreement. I was going to give it an overhaul anyway, then I got involved with a client who wanted one of my agreements to be checked for a crystal mark, and I decided to use this experience to amend and adapt my own agreements to a plain English format.

Plain English agreements now need to be in the first person, so the landlord is ‘we’ and the tenant ‘you’. I found this very strange to start with but now I have got used to it and have come to accept it. It does make for a more approachable document.

I have used this as an opportunity to check and re-do every clause. It has taken ages. I think I have it sorted and then I look at it afresh and find more things I want to change. I think that the new agreement is definitely much better though.

I have also radically altered the design of the agreement. My old agreement was crushed into a small space with fairly small type and close columns. However I have been reading a bit about design (having bought myself The Non-Designer's Design Book), plus I have also been learning a bit more about using my layout software, Adobe Framemaker (using the Adobe Framemaker Classroom in a Book). As I result of this I have created a new design, which you can see here. It takes up a lot more space (13 pages) but I think it makes the document far more readable, and it is much easier to find specific clauses. Having the new design has also helped me amend the wording as well as somehow I found it easier to read and check it in the new format.

I have now taken the perhaps rash step of putting a draft online for my annual members to have a look at and comment on before I use it to replace all my other agreements. I have often had very good ideas and suggestions from members about the tenancy agreements, many of the current adaptations came from members suggestions.

Next I think a design overhaul of the rest of the forms …