The corporate way of dealing with complaints

A couple of weeks ago I was concerned as my online bank statement seemed to be showing me as not having any available cash when I knew for a fact that I did. The lady at the bank told me to speak to their online banking customer services department. I duly did this and they said they would get back to me.

A lady has just rung me about it. As the complaint was made two weeks ago I had forgotten all about it. Also she rang me just when I was in the middle of writing something complex, and I did not particularly want to discuss it, neither did I really want her ringing me back about it.

No doubt she will now tick her boxes to show that she has satisfactorily dealt with another customer complaint, thus improving the banks customer service statistics. It’s a great way of dealing with customer complaints, apart from the fact that the customer (i.e. me) does not feel particularly happy about it.

The Courts have an even better way. It is now almost impossible to get through to the courts to speak to a real person (certainly this is the case in the busier London courts) unless you are prepared to hang on for hours. Although I rang a Court recently which did not even give me that option, but only the option of leaving a message.

So the only thing to do is to write. This leads to the following ridiculous scenario:

1. A client contacts me, unhappy about the court failing to do something
2. I try to ring the court, can’t get through. Not having all day to hang on the phone (I do have other clients) I send a fax, asking what is happening
3. Several weeks later the court write about the thing the client contacted me about.
4. Several weeks after that, I get a letter in reply to my fax, saying that the thing I was asking about was dealt with a couple of weeks ago
5. No doubt the clerk then ticks a box to say that the complaint has been satisfactorily dealt with

This has happened to me several times.

I also know of a case where a solicitor wrote to a court asking them not to list a hearing on a particular day for a particuarly important reason. However the court lost the letter and listed it on that day. When the solicitor rang to complain, he was told that he would have to write in about it!

Its madness!

Canadian landlords trample on tenants human rights, says survey

A newspaper report here, describes a survey in Toronto in Canada which shows that vulnerable people are regularly being discriminated against by landlords. To quote the article:

To test landlord compliance, the centre created five "renter profiles" – a single mother with one child; a black single mother with one child; a single South Asian man, a single man with a mental illness and a married woman on provincial disability benefits.

Volunteers posing as these vulnerable renters made telephone inquires about 982 apartments listed for rent across Toronto last summer. Each call was followed up within 1 1/2 hours by another volunteer with no discernable grounds for discrimination.

Each pair asked the same 12 questions and the landlords' responses were recorded and analyzed for mild, moderate or severe differential treatment.

For example, to gauge discrimination against the South Asian man, one caller used a distinct South Asian accent and name, while the second caller had no accent and used a Western European name.

Discrimination against the South Asian man ranged from not having his call returned to being told the unit was already rented when it was still available.

The South Asian man also faced extra application requirements such as being asked for postdated cheques. And 31 per cent of the time, he was offered fewer move-in incentives such as free cable TV, the study found.

"In some cases, the landlord makes the unit so unappealing that he doesn't have to turn the person down," said John Fraser, the centre's program director.

The centre's results are similar to those from studies in the United States, where community-based organizations regularly monitor discrimination in rental housing, Fraser said.

It would be interesting to see a similar study here in the United Kingdom.

Tenant Txt

I have recently been told about Tenant Txt, a web-site which landlords (particularly those with a large number of properties, and social landlords) can use to contact their tenants.

The landlord signs up to the web-site, and also signs up his tenants. They say whether they want to be notified via text, email or twitter. Then every time the landlord wants to notify them about something he can do this via the tenant txt website.

The site suggests that it can be used to remind tenants of important maintenance repairs, alert people if there is crime in the area, and inform tenants of community events.

If as a landlord you send out a lot of paper notifications to your tenants, this will certainly save you money on paper and postage, and therefore could be worth trying. With the higher subscription prices you can also use it to alert your office and maintenance staff.

There is an initial free trial period, and after that you have to pay. The prices are in American dollars as this is an American site, but that does not mean it cannot be used for British properties. If you try it, post a comment here and let us know how you get on.

65% of ARLA landlords report tenants in arrears of rent

A new report from ARLA gives the unsurprising result that many more tenants are finding it difficult to pay their rent. With the massive number of people being made redundant and the general downturn in the economy this is hardly surprising The question is, what do you to about it? Here are my top tips

If you are a tenant:

• Apply for housing benefit if you think you are eligible. It takes time for the application to go through and rent is paid in arrears so you need to get on with this
  
• Keep your landlord informed. If you cannot afford to pay all your rent, pay as much as you can so your landlord can see that you are trying.
  
• If you are in a muddle, seek advice. You will find a list of debt advisors here.

If you are a landlord:

• Monitor carefully rent payments due to you, and contact tenants promptly if they fail to pay
  
• Attempt to reach agreement with tenants, it may even be worth reducing the rent (better a reduced rent with a known good tenant than a void)
  
• However make sure that letters requesting payment and possession notices are sent out in good time, as sometimes eviction is the only answer, particularly if the tenant is looking to be re-housed by the local authority.

Landlords may be interested in my article on different approaches to dealing with rent arrears, and my Rent Arrears Action Plan.

Possible scam with tenants' deposit money

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

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There has been quite a bit of publicity over the last few months about agents and the unjust charges they impose on both tenants and also the landlords they represent. The CAB did a report on this which I wrote about here. I have now been contacted by a tenant telling me about what he suspects may be another scam by agents (and potentially also landlords), although it is not something he can prove. I copy his email below:

I recently quit a tenancy in Bath and moved to London. The deposit on the Bath flat was held by the DPS [Deposit Protection Service]. I couldn't remember how much the deposit was, but I had the DPS letter saying it was £1050.

While clearing out some boxes, I found some more paperwork: the receipt from the letting agent that showed I'd paid £1575 deposit. I keep my bank statements, and these confirmed the deposit was £1575. The letting agent had placed £1050 with the DPS and kept £525.

A percentage of tenants - especially after a long tenancy - are going to forget the amount of the deposit and / or lose their original paperwork. At the end of their tenancy, they ring the DPS, establish themselves as entitled to the deposit and are told how much was lodged with the DPS. If the letting agent or landlord only lodged part of the deposit with the DPS, the letting agent / landlord get to keep the rest. If the tenant knows how much the deposit was and can prove it, they just apologise and agree to return it.

In my case, the letting agent accepted immediately what had happened, said they'd made a mistake and apologised.

I think it would be hard to detect this happening. I can't prove it wasn't a mistake. I should have checked the DPS letter when it arrived but even if I had, the letting agent would have apologised and placed the correct amount with the DPS.

The scam only works when the tenant forgets the amount and in that situation, they don't even know they've been robbed. The landlord / letting agent get to keep a percentage of deposits they handle. This can be a lot of money if only a small proportion of tenants "forget".

If nothing else this story emphasises the point that tenants must check everything so as to protect their position (and I would add that the correct amount of the deposit should be set out in the tenancy agreement). The agent in this case could have made a genuine mistake of course, but did they? Have any other tenants experienced this?

How to choose the right tenancy agreement- some guidance for landlords

Many landlords don’t bother too much about their tenancy agreement. They consider it to be a disagreeable necessity, something filled with legal ‘mumbo jumbo’, and just try to get the shortest and/or cheapest one they can find.

This is a mistake. A tenancy agreement sets out the rights and obligations between you and your tenant/s, and needs to be clear and unequivocal. You also need to use the correct agreement for the type of tenancy concerned.

Most tenancies nowadays will be an assured shorthold tenancy (AST). However if:

• the rent is over £25K
  
• the tenant is living in self contained premises in the same building as the landlord, or
  
• the tenant is a limited company

the tenancy cannot be an AST (which are regulated by the Housing Act 1988), and will governed by the underlying ‘common law’. You need to use a slightly different form of tenancy agreement which makes this clear. Otherwise mistakes could be made in error, for example by your legal advisor, if he is not made aware of the type of tenancy concerned. This could result in a claim for possession (for example) being thrown out by the court.

Assuming the tenancy is an AST, slightly different forms of agreement need to be used depending on whether:

• there is one or more tenants occupying the whole flat or house, or
  
• there are a number of tenants who all have a separate tenancy agreement for their own room, with shared use of the rest of the property

Other things you need to take into account are:

- Whether, if the term is over six months, you will want allow either party to end the agreement early. This is done by including a break clause

- Whether you will want the rent to be a weekly or monthly rent (most rent is paid monthly).

- Whether you will allow the tenant to have pets (in which case it may be advisable to use a tenancy agreement specially designed for this)

- Whether you will pay the utility bills or whether you will want the tenants to be responsible for this (for example landlords often pay the bills in shared houses).

Finally, when choosing a tenancy agreement it is a good idea to look for one which is written in a plain English style. These are much easier for both you and the tenant to understand, and tenants are more likely to read and comply with something they can read easily.

Landlords will find more information in the Landlord-Law Which Tenancy Agreement guide.

Take your complaint to the Property Ombudsman

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

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I stumbled upon this excellent article on the BBC website today, which is by the Property Ombudsman about his service in respect of letting agents. Due to the problems in the property market, many agents are now turning to lettings and, if they are unfamiliar with this area of work, their customers may have some cause to complain about them. The Property Ombudsman (TPO) is one person they can complain to.

Not all agents are members of the TPO scheme. However you can identify those who are as they will normally display the TPO logo.

Members of the TPO scheme are required to abide by a code of conduct which you can find on the TPO website, and the TPO can award compensation of up to £25,000 in any one case. Alternatively if the complainant is unhappy about the TPOs decision he can still go to the courts.

It is worth looking out for the logo when choosing an agent, either as a landlord or as a tenant, and it is good to know that there is an alternative method of complaint about rogue agents. Since October 2008 all estate agents are required to be registered with an approved redress scheme such as TPO (and can be fined by Trading Standards officers if they are not) although this is not the case with agents who only do lettings. However as always, the worst problems are likely to be with the agents who are not registered.

Revolving door for housing ministers

Did you know that the new housing minister is the ninth since labour came to power in 1997? They are:

1997 – Hilary Armstrong
1999 – Nick Raynsford
2001 – Lorde Falconer
2002 – Lord Rooker
2003 – Keith Hill
2005 – Yvette Cooper
2006 – Ruth Kelly
2007 – Hazel Blears
2008 – Caroline Flint
2008 - Margaret Beckett
2009 – John Healey

How can the department hope to have a consistent policy with so many different ministers? Roof Magazine (the source of this information) is generally approving of Mr Healey’s appointment. However with a general election looming on the horizon, he is obviously not going to have that long in post.

From the press one rather gets the impression that ministerial posts are mere tokens of Prime Ministerial approval or disapproval (depending on the post). However they are also government departments that affect all our lives. It would be nice if after the election, the next housing minister (assuming he or she is effective) could stay with us a bit longer.

Homeless hostel VAT bill withdrawn

Readers may remember that in December I reported that a new homeless hostel in Newcastle was at risk because the VAT had ruled that it was a commercial building and not a hostel (mainly because they did not have a workable definition of a homeless persons hostel) and that therefore VAT was payable. The VAT bill (£315,000) would have put the company into liquidation and put other hostels at risk.

You will be pleased to learn that following an appeal by the company, the decision has been overturned and the VAT bill withdrawn. Phew!

Banks swiping our cash

An article in the Observer today 'Banks exploiting obscure law to raid accounts and recover debts' prompts me to remind readers on housing benefit (HB), or landlords of tenants on housing benefits, of the advantages of using Credit Unions.

If you find it difficult to keep your bank account under control, you are always at risk that your housing benefit is going to be used up and will not be available to pay out to your landlord, thus putting your home at risk. Under the new rules which came into force last year, the new housing benefit, Local Housing Allowance (LHA), has to be paid (save in a few circumstances) to the tenant. Whereas before tenants could ask that it be paid direct to landlords, to safeguard their home.

Quite a few credit unions offer a service whereby they will ringfence any HB/LHA paid in, so it gets paid out to the landlord and cannot be used for any other purpose. I am compiling a list of credit unions offering this service on my Landlord Law site which you can see here. If you know of, or work for, any other credit unions offering this service, please let me know and I will add them to the list.

Credit unions would also be a safe haven for money being saved up for other purposes, to keep it safe from regular banks offsetting it against debts, as described in the Observer article.

FIve legal housing/landlord & tenant law blogs

When I first started blogging in February 2006, there were only a few British legal blogs. For a while I think I was the only blogger covering housing/landlord and tenant law. However since then a few more have started up. I thought it would be nice to list them.

1. Nearly Legal
http://nearlylegal.co.uk/blog
This is my top pick. Started by an anonymous paralegal seeking a training contract (hence ‘nearly’ legal), it has developed into an authoritative source of housing law. During this time we have seen Nearly obtain his training contract and qualify as a solicitor, and he is now working as a housing lawyer in a ‘good’ London firm. Dissuaded from giving up his blog (claiming lack of time) by squawks of dismay from his devoted audience, the blog is now written and run by several specialist housing barristers and solicitors (including Nearly himself) and is, we understand, now citied in court hearings by Counsel and Judges. My favorite moment was a year or so ago, when a junior government minister posted a comment and Nearly thought it was someone playing a joke (it wasn't!).

2. The Painsmith Landlord and Tenant Blog http://painsmith.wordpress.com
This is a fairly recent housing blog, from specialist housing law solicitors PainSmith. However, it is a very welcome addition on the legal/housing blogosphere. The posts are always interesting, well written and accurate, and have often alerted me to points I had not previously been aware of. A highly recommended blog.

3. William Flack Blog
http://blog2.wflack.com
William Flack is a solicitor, and partner in Flack and Co, a small firm specialising in housing and social benefits law in London. William tends to write fairly long posts covering mostly social housing law.

4. Housed
http://rehoused.wordpress.com
A blog about housing law by a bloke doing legal aid housing law work. Posts are often fairly short and there is a lot of comment on working with the legal services commission (a thankless task, I gave it up ten years ago). There are also useful reference pages.

5. Ethan’s Snail in that legal bottle blog
http://ethans-way.blogspot.com
My fifth blog is named after that famous (to lawyers) negligence case. It is an interesting blog with some good posts, but I was distressed to see that nothing has been written since October last year. I was in two minds whether to include it, but have decided to leave it in, in the hope that he will start blogging again.

So thats the five. Six, including mine (the Landlord Law Blog, in case you have forgotten, the one you're reading now). If you know of any other housing/landlord and tenant legal blogs let me know and I will add them to my blogroll (NB I know there are some good property law blogs out there, but this list just covers tenancy law). I will take a look at the non lawyer sites another time.

NLA publishes merger court order

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

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Having been alerted by a twitter posting by the National Landlords Association (NLA) stating that their web-site page on the merger between the NLA and the National Federation of Residential Landlords/Southern Private Landlords Association had been updated, I was intrigued to see that they have published the court order online. Being a lawyer I naturally downloaded this immediately. You can see it here.

It is an interesting document. Not only does it make it absolutely clear that the case has been dismissed in its entirety, it also gives an indication of the level of cost of this litigation to the claimants.

For example clause 7 states that costs are to be paid on an indemnity basis. This means that when assessing the costs bill, the court will be more generous to the defendants than they would normally. Courts only award costs on an indemnity basis if they consider that the losing party's case was singularly undeserving.

In addition, specific awards on account of costs were made of £85,000 to the NLA and £45,000 to the other defendants by 5 June.

FInally, the order specified that the claimants must destroy an electronic database (presumably of membership) provided to them by the NLA under a previous court order, together with all copies. This part of the order was backed up by a penal notice. So if the claimants are found not to have done this, they are liable to be imprisoned, fined, or have their assets seized.

Blimey! A strong order then. It just goes to show that litigation should not be undertaken lightly. If you lose, it can be very expensive.

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Rent increases in periodic tenancies

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

Most landlords know that after the fixed term of a tenancy has ended, if it is an assured or an assured shorthold tenancy, section 5 of the Housing Act 1988 intervenes and provides for a new 'periodic' tenancy to be created. This tenancy runs from month to month (if rent is paid monthly) or from week to week (if rent is paid weekly), and the section provides that it will be subject to the same terms and conditions as the preceding fixed term tenancy.

So that landlords are not stuck with the same rent forever, the act also provides for a special procedure, for these periodic tenancies, for increasing rent. This is set out in section 13. Landlords need to serve a special notice (which must be in the proper form) proposing a new rent. Tenants can challenge this and ask for it to be reviewed by the "Rent Assessment Committee" (part of the Residential Property Tribunal Service). If the rent is not challenged within one month, the proposed rent in the notice becomes the new rent.

But what is the situation where the tenancy agreement already includes a rent review clause? This situation was considered by the High Court in a recent case London District Properties Management Ltd v. Goolamy. Here Mr and Mrs Goolamy's tenancy agreement contained a rent review clause providing for rent to be increased annually by 5%. However the landlords had served a notice under s13 proposing a much higher increase. Which rent increase procedure would apply?

The Rent Assessment Committee held that they had no jurisdiction to review the rent as the clause in the tenancy agreement continued under s5. The Landlord appealed to the High Court.

The High Court allowed the appeal. They pointed out that at the start of section 13 two types of periodic tenancies are mentioned. Statutory periodic tenancies and all other periodic tenancies. With the statutory periodic tenancies, the section 13 procedures take precedence. With the other periodic tenancies, the contractual rent increase procedure (if any) takes precedence. So as this was a statutory periodic tenancy, the landlord could use the section 13 procedure. The case was therefore sent back to the Rent Assessment Committee to review the rent.

So landlords can use the s13 notice procedure when their tenancies run on under statute, even if their tenancy agreements include a rent review clause. Unless of course this case is appealed and the decision overturned.

Tenancy deposits with student lets

Readers may be interested in hearing about the solution to a problem experienced by a Landlord Law member, Roger, who lets to students.

Roger uses a Shorthold Tenancy Agreement (four students per house) and formerly obtained a Rent Guarantee from the parents. The procedure then (i.e. before the introduction of the tenancy deposit protection schemes) was that he would take a deposit (so that they did not go elsewhere and not tell him, which has happened) and wait for the parents to return the Guarantee (which can take weeks). However he was concerned about this procedure after the introduction of the tenancy deposit scheme and whether it would bring into play the requirement to protect the deposit within two weeks of payment.

Roger needs to ensure that the 4 students who have confirmed that they wish to rent a house do not change there minds while he is waiting for their parents to return the signed Rent Guarantee. This is critical because the university issue their list of houses available early in February and if landlords do not rent their house soon after this date it can be very difficult finding tenants.

Roger spoke to an advisor at My Deposits who confirmed that it would be acceptable to take a sum from the tenants, e.g. equating to the first months rent, inform them that this is a 'non returnable holding sum', and not take the deposit until the parents return the Guarantee. At this point the Tenancy Agreement can be finalised with the holding sum covering the first month's rent, the further sum paid at that time being used for the deposit.

My Deposits also confirmed via email that this procedure was appropriate. Their email stated:

"I can confirm this procedure as advised by my colleague is correct. When the monies paid by the tenants is classed as a ‘non refundable holding fee’ this would not require a protection with our scheme until the agreement is finalised and the monies is classed as the actual deposit for the AST agreement. You would then be able to proceed with your deposit protection with our scheme and provide the tenants with the prescribed information as required under the current legislation."

FSA to regulate sale and rent back sector

Homeowners in distress who have sold their property to a 'sale and rent back' company in the belief that they will be able to live their for the rest of their lives, only be to kicked out a year later, will be pleased to learn that this sector is now to be regulated by the Financial Services Authority.

An interim regulations period (while they work out how to regulate it properly - although the draft rules are said to be 'near final') will start on 1 July 2009 and firms will be expected to apply for 'interim permission' between this date and 1 August. A consultation paper is expected for September, with full regulation from the end of June 2010.

During this interim period, firms will need to meet FSA threshold conditions including the requirement to have adequate resources and to be run by fit and proper people. Firms will also have to comply with the Principles for Businesses and meet a number of systems and controls and conduct of business rules.

You can find a bit more in policy statement and in the FSA's statement of the 3 June here.

Night falls on Night Jack blog

A chill wind is blowing through the halls of anonymous blogdom, after the High Courts decision that the writer of Night Jack, an anonymous police blogger who told it like it was, did not have the right to prevent The Times naming him.

I am in two minds about this. On the one hand, if you are employed and want to say truths that your bosses would rather keep hidden, you really have to go anonymous. On the whole, despite the whistleblower legislation, whistleblowers do not have a good track record of keeping their jobs. However whistleblowers often perform a valuable function in bringing to light matters in the public interest, so on the whole they are a Good Thing.

On the other hand, anonymous blogging can allow people to say things, unpleasant things, which they would not normally do in their real name, using their cloak of anonymity to make malicious and untrue statements and spreading false rumours, perhaps for personal gain. I don’t know of any instances where this has actually happened but I can see the potential. In view of the fact that things tend to hang around on the internet, buried in the search engines, for a long time, this is definitely a Bad Thing.

So where does the public interest lie? I suppose really it is on the side of the anonymous bloggers. There are very many anonymous blogs out there, many of them legal blogs, which, as well as being informative, are very entertaining, and the blogosphere would be much a poorer place without them.

Consultation on private housing in Northern Ireland

A report on the BBC web-site states that plans to overhaul the private rental sector are being considered in Northern Ireland.

The key proposals are -

• A central scheme for tenants' deposits so that landlords cannot simply refuse to pay back deposits for "flimsy reasons"
  
• Government deposit guarantee for vulnerable people who cannot afford them
  
• An independent body to manage disputes between landlords and tenants and encourage compliance with their tenancy agreement
  
• New fitness standards implemented by 2015. Landlords penalised if they do not meet these standards
  
• Much greater awareness of the rights of tenants and the responsibilities of landlords
  
• Longer periods of notice to quit for long term tenants.

You can read more about it in the press release from the Department for Social Development in the Northern Ireland Executive.

Time taken to get possession of a property through the courts – an example

One of my clients has a non paying tenant living in a property in the jurisdiction of the Luton County Court. Proceedings were issued on 19 March and an order for possession was obtained on mandatory grounds on 11 May, when the tenant was ordered to vacate on or before 25 May. She did not do so and I was instructed to apply for a bailiffs appointment. The papers were sent out on 29 May.

Today my client asked me to find out what was happening. It took some time before the bailiffs clerk answered the telephone. She informed me that all warrants are now issued in Basildon, so are sent there on receipt at Luton. Our warrant had been issued yesterday, on 10 June. When they get a batch back at Luton they will then fix the bailiffs appointments. They are currently listing for about 8 July, so my client can expect (if he is lucky) an appointment within about two weeks of that date.

So my client having issued proceedings in mid March will not get possession of his property until mid to late July, four months later.

Landlords should be aware that this is the sort of time delay you can expect when issuing proceedings for possession. My client was lucky in that the court made a 14 day order rather than a six week order (which can happen – if it had happened in this case the tenant would have been ordered to leave on or before 22 June). They should also be aware that it can take up to two months for a bailiffs appointment to be fixed in some courts, so it really is important to get on with things, and not delay.

Good news for tenants - receivers of rent now eight times more likley

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

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A report on the BBC site today regarding problems experienced by buy to let landlords indicates that mortgage companies now seem to be more willing to appoint a 'receiver of rent', as opposed to evicting the tenant so they can sell as mortgagee in possession. This is good for tenants, as it means that they can stay on in the property, paying their rent to the mortgage company rather than the landlord.

The report states:

"In the first three months of 2008, there were just 300 receivers of rent appointed, compared with 900 repossessions. In the first three months of this year 2,400 receivers of rent were appointed - an eight fold increase and far more than the number of buy-to-let repossessions."

If you are a tenant whose property is being repossessed by your landlord's mortgage company, it is always worth getting in touch with the mortgage company and suggesting that they should consider appointing a receiver of rent and allow you to stay in the property.

The Woodland Trust - Charity of the Month (June 2009)

Founded in 1972, the Woodland Trust is the UK's leading woodland conservation charity. It has four main aims and objectives:

1. Preventing further loss of ancient woodland
   
2. Restoring and improving woodland biodiversity
   
3. Expanding the area of new native woods
   
4. Increasing people's understanding and enjoyment of woods

At present it is trying to raise sufficient money to purchase almost 400 hectares (1,000 acres) of existing conifer woodland at Cwm Mynach within Snowdonia National Park, a site of extraordinary wildlife abundance, with buzzards, ravens, owls and otters.

To contribute to this or to support Woodland Trust generally, click here.

New tenancy deposit case - deposit paid before 7 April 07

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

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This is a new case reported in the excellent Legal Action Magazine, Saad v. Hogan from the Brentford County Court.

Ms Hogan paid her deposit, £1,000, in November 2005. Her tenancy was renewed in November 2007. In June 2008 the landlord brought proceedings for possession based on the serious rent arrears ground. Ms Hogan counterclaimed for the 'fine' of three times the deposit amount on the basis that the deposit had not been protected, and asked that this be offset against the rent arrears.

The Judge at first instance found for the landlord and made the possession order. This was on the basis that there was no obligation on the landlord to protect the deposit, as no deposit moneys had been paid when the tenancy was renewed in November 2007, but only before the regulations came into force on 7 April 2007. Ms Hogan appealed.

The appeal Judge viewed the case differently. He found it extraordinary that there was no provision in the legislation for this situation. However the main purpose of the legislation was to protect deposits. Although there had not been any physical or electronic payment of money in November 2007, in a sense there had been a payment at that time. He allowed the appeal, and awarded £3,000 to Ms Hogan to be offset against the rent arrears.

As this case was an appeal to the County Court Judge it will have more authority than District Judge decisions. However it will still, technically, not be binding. It would be nice if this could go to the Court of Appeal, so this point could be settled.

However the case does support the view generally taken by lawyers, that deposits paid before April 2007 are caught by the regulations if a new tenancy agreement is given to the tenant after that date.

Dr Ian Gibson MP

Leaving landlord and tenant law to one side for a moment, as a Norwich Citizen, I would like to make a statement in support of Dr Ian Gibson. He is, I know, a hardworking and conscientious constituency MP, who has stood up for what he believed in, and is one of the very few qualified scientists in the house.

When I read in the paper about the 'Star Chamber' hearing which concluded that he should be de-selected, I was reminded of the many cases I hear (when taking statements with my husband for his employment tribunal practice) where an employee is dismissed after a 'disciplinary hearing', which is not really a hearing because the deciders have already made their minds up. However employees can bring a claim to tribunal. Dr Gibson has no redress.

He is reported as saying that he has broken no rules and still has not been told exactly what he has done wrong. From what I have read, it seems that he is being criticised for allowing his daughter and her partner to live rent free in his flat, and then selling it to them at an undervalue. However

• No one is denying that Dr Gibson lived in the flat for about three days in most weeks
  
• His daughter was apparently not permitted under the 'rules' to pay him rent or contribute towards the utility bills (why not?)
  
• It was sensible (prudent even) for security reasons, to have someone else living in the flat, so it was not empty when Dr Gibson was away

As for selling the flat at an undervalue, only Dr Gibson lost out financially here. Sure the daughter had a windfall, but so have many other people in all sorts of circumstances. I can think of far more reprehensible things to do than providing for your family.

I think it is enormously unfair that Dr Gibson has been singled out in this way, when other MPs have not. I would suggest it is the rules which are a fault rather than Dr Gibson. If what he did was so wrong, why did the fees office not tell him so? There is a nasty suspicion as well, that he was thrown to the wolves because he has not been afraid to speak his mind against the government in the past.

I am also concerned that everyone seems to be quite happy for their to be a 'Star Chamber' at all. To quote Wikipedia, the Star Chamber in the sixteenth century became "a symbol of the misuse and abuse of power by the English monarchy and courts". Is this what we want in England today?

I am concerned that most people appear to consider this sort of thing acceptable, and are happy to condone trial by newspaper and dismissal of a decent hard working MP by an process which appears to be unconstitutional and against natural justice.

Landlord licensing and agent regulation – impact assessments now published

Those interested in the governments consultation paper issued in response to the Rugg Report, will also be interested in the impact assessments which have now been published by the Department for Communities ands Local Government .

Impact assessment for regulation of Landlords
This is available to download from here. This shows that there are two options under consideration. The first is full licensing, which would involve a five year fee of £500 per property. The second is a web based national register. This will involve an annual fee of £30-50 per landlord.

Although both options are discussed in the report, it is clear that it is just the second option, the web based register, which is being seriously considered. All landlords will be required to sign up to this, although landlords who are members of existing organisations (presumably landlord associations) will be passported into the register. In return for signing up to the register, landlords will be offered benefits such as free documents e.g. tenancy agreements, and property advertising.

The report analysis is on the basis of 1 million landlords with 3 million properties.

Impact assessment for regulation of Agents
This is available for download from here. There are only two options discussed in the report, doing nothing and mandatory regulation. Regulation is the favoured option.

The report states that there are around 8,000 letting agents, only half of which are members of a professional organisation (such as ARLA or RICS). The large number of unregulated agents is undesirable as they are not compelled to have any client money protection or undergo any training on property management. Apparently some 60% of landlords use letting agents to manage their properties, so many landlords are at risk of poor practice by unregulated agents.

The report estimates that existing members of professional organisations will be passported into the scheme. Others will have to pay a joining fee in the region of £180 pa, and all agents will then have to pay an annual fee in the region of £120 pa.

Implementation of this (which has been widely called for across the industry) will protect both landlords and tenants from fund misappropriation, and will provide a more 'level playing field' for those agents who are currently operating properly (with the associated costs which this involves).

Note that I have set up an answer form for those wishing to respond to the governments consultation paper here. This now provides links to these two impact assessments.

mytenancydeposit.co.uk - not a recognised tenancy deposit company

I, and probably many landlords and other property professionals, have received notifications from both The Deposit Protection Service and MyDeposits warning that the web-site mytenancydeposit.co.uk is not that of a government authorised tenancy deposit scheme.

Landlords and agents should beware. If you protect your deposit with this company, this will not constitute compliance with the tenancy deposit regulations. You will remain vulnerable to a court claim from your tenants for the 'fine' of three times the tenancy deposit amount.

There are only three companies you can protect your deposit with:

1. The Deposit Protection Service - www.depositprotection.com
   
2. My Deposits - www.mydeposits,co.uk, and
   
3. Tenancy Deposit Scheme (from the Dispute Service) - www.thedisputeservice.co.uk

Information on the My Tenancy Deposits site show that it is owned by a company called MTD Secure Limited. A search at Companys House shows that this company was incorporated on 28 January 2009,. The company has offices in Newhall Street, Compton in Birmingham.

Landlords may become liable for tenants' water bills

According to a report in the Times today, the government is considering a report from Ofwat recommending that landlords should be made liable for water bills, if these are not paid by departing tenants,

The reason for this is the high level of unpaid bills suffered by water companies. They are often a low priority for payment as they are not allowed to disconnect. For example the Time reports that Northumbrian Water has increased its provision for bad debt from domestic users by £2 million to £30 million.

Recovery of unpaid bills is difficult. "Quite often by the time we have found out who the tenants are, they have gone," Mr Cuthbert, MD of Northumbrian Water said. "We are talking to the Government about what help they can give us here. One proposal would be to make the landlord liable."

However landlords should not panic immediately as the measure would require primary legislation. A draft report is expected to be published in the next few weeks with a final report later in the year.

Letting to tenants with pets

The Dogs Trust estimate that in the region of 40% of us in the UK have pets. Probably mostly dogs, cats and caged birds. As about 12-15% of the population live in rented accommodation it is fair to say that there must be many potential tenants looking for accommodation who have pets.

However many landlords routinely reject all pets as a matter of course, worried about the potential damage they could do to the property and its contents, and virtually all tenancy agreements have clauses prohibiting pets as standard.

However a report available on the Dogs Trust 'lets with pets' web-site challenges this viewpoint and suggests that many landlords are foolish to reject out of hand many people who would, along with their pets, prove to be excellent tenants. A survey carried out by the Dogs Trust also shows that

• 78% of pet owners reported that they had experienced difficulties finding privately rented accommodation that would allow their pets
  
• 54% of pet owners were never able to find a suitable property that accepted pets, and
  
• 8% of people had to rehome their pet

A landlord therefore who is willing to allow pets in his property will find that he has a much larger pool of potential tenants and is likely to let his property quicker, and to tenants who will probably stay for longer, meaning fewer voids.

In order to assist landlords, at Landlord-Law we have produced a new tenancy agreement specifically for landlords letting to tenants with pets. It contains special 'pets' clauses in the terms and conditions and fields for details of the pets, their vet, and someone who will look after them in case of emergency. You can read about it in the article 'Letting to tenants with pets' which you can download from here.

91% of tenants suceed at arbitration say My Deposits

A news report out by My Deposits shows that 91% of tenants get their money back at tenancy deposit arbitrations. The report states:

"Figures from mydeposits.co.uk show 91 per cent of dispute cases settled by the scheme's independent adjudication service found in favour of the tenant. The average amount in dispute was £733, which is significantly lower than the average deposit of £1,052.

In only nine per cent of cases landlords and letting agents were able to withhold the full deposit."

However the report goes on to say that only a small proportion of deposits, 0.35%, actually go to arbitration. This could mean though that it is still largely only the good landlords who are protecting deposits, and that the bad landlords, the ones who will habitually make unjustified deductions, are still refusing to comply.

It would be interesting if the Deposit Protection Service could follow up their survey reported in July 2008 (and discussed by me here) that 62% of landlords were failing to protect.

The Law Bazaar

If you are looking for a lawyer, there is a new option available now. This is the Law Bazaar (reported by the Guardian here). Set up by solicitor Costas Andrea, fed up with the huge sums made by claims companies just for referring work to solicitors, this allows clients and lawyers to make contact direct.

Lawyers and clients (from any country - it is an international site) can both register on the site free of charge. Both appear as anonymous, although lawyers are rated on the basis of client feedback. Clients can load up details of their case and then lawyers and client can discuss the case before the client chooses a firm to act. At that stage the lawyer pays a modest fee to the site (£50 or £150 for PI cases).

As it is free of charge, all lawyers should register. There is nothing to lose and they may gain some lucrative work.

Landlord Licensing - tell the government your views!

The Government recently published their response to the Rugg Review, which was reported by me here. In particular the report proposed mandatory licensing for landlords and regulation for all letting agents. The report is also a consultation.

As before with important consultations, I have prepared an online answerform to allow people to give their views easily.

On my form, I have reproduced the whole of the government paper (less the footnotes and appendix) and have provided form fields in context so you can read the report and write your response there and then. Your answers can then be sent to us easily by clicking the submit button at the end. We will forward them on to the relevant department.

After the end of the consultation period (7 August) I will be preparing a consolidated report of all answers (annonomised) so people can see what the general consensus is.

You will find the online form here.

NLA/SPLA case dismissed

No sooner do I write a post saying that a case looks to continue than I get an email telling me it has been dismissed!

A news release on the NLA web-site here states:

"On Thursday 21 May, His Honour Judge Pelling QC dismissed the legal challenges to the merger. He also ordered those who brought the action to pay the NLA’s costs."

A full written judgement will follow in due course, and will no doubt be made available via the NLA web-site.

SPLA/NLA merger dispute continues

Landlords and property professionals will have been depressed to read an article by Oliver Romain in the excellent Landlord & Buy to Let Magazine, that the legal action brought challenging the merger of the Southern Private Landlords Association (formerly the National Federation of Residential Landlords) with the National Landlords Association, announced last year (and reported in this blog here) it still continuing.

Apparently at a court hearing in March the Judge asked for members to be questioned about their views. Of the 5,200 SPLA members, apparently 1,720 responded, of which 892 said that they did not support the merger, with a similar number supporting the legal challenge. I make that just over 17% of the total membership, which is not what I would really have called a majority.

However it is a majority of those voting, and Mr Stimpson (who is leading the challenge) claims that this justifies his action. A spokesman for the NLA on the other hand apparently claims that large numbers of SPLA are voting with their feet by moving over to the NLA. A specialist marketing company employed to find out members views, apparently found that most of them were sick and tired of the dispute and wanted nothing to do with it.

It is really sad that those leading landlord associations are embroiled in this sort of dispute, when there are so many important landlord issues for them to deal with. Oliver Romain's article concludes that the parties appear unlikely to settle, so it looks as if a contested court hearing may take place. As the costs of this are estimated at some £800,000, landlords may well question whether this is really in their best interests.

Landlords out of pocket for deposits - DPS may be best after all!

A report published in The Times today highlights the growing problem of landlords having to pay up for deposits, when agents go bust.

Under the two 'insurance based' tenancy deposit schemes (MyDeposits and the Tenancy Deposit Scheme run by the Dispute Service) if the agent deals with the deposit on behalf of the landlord, the agent holds the deposit money. If the agent becomes insolvent, this does not affect the tenant (other than perhaps a delay in getting paid) as the insurance company pays out.

However it will have a serious effect on the landlord. This is because the deposit schemes are entitled to recoup their losses by claiming the money back from the landlord, on tbe basis that the landlord is the employer of the failed agent.

The Times report states that "hundreds of letting agents have ceased trading in recent months" and goes on to report that "MyDeposits has received 279 notifications of a letting agent going into liquidation and being unable to return the deposit". In the majority, if not all of those cases, the landlord will have had to pay.

The problem is more likley to occur with MyDeposits as the Dispute Service are now refusing to accept agents who are not members of ARLA, RICS or a similar professional body.

Landlords letting through non regulated agents should therefore think carefully before allowing the agent to manage the deposit unless it is protected by the Deposit Protection Service where the deposit money is actually lodged with the company so there is no possibility of it being lost.

Pain Smith on Foxtons

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

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I just wanted to draw your attention to an excellent post from the Pain Smith blog here on the Foxtons case. This points out that nothing is decided yet, and nothing may be finally decided for quite some time if the case goes to the Court of Appeal.

Pain Smith also point out that this case will just be about Foxton's terms and conditions. Although it will, clearly, have a huge impact on what other firms can and cannot do in future, there may be circumstances where a clause criticised in the context of the Foxtons case may be allowable in different circumstances.

This is the most unsatisfactory aspects of the Unfair Terms in Consumer Contracts Regulations - until something has gone to court no-one really knows where they are! It is like walking on shifting sands.

CAB report highlights unfair charges to tenants by letting agents

An item on the BBC news site has alerted me to a new report from the Citizens Advice Bureau on fees to tenants by letting agents. The report comments that many letting agents are regularly making unjustified charges to tenants for "tasks that are no more than the routine business of letting and managing a property" (and sometimes for items they are also charging to landlords). For example, the report states:

"Charges included a non-returnable holding deposit, a deposit administration charge, a reference check charge, an administration fee, a check-in inventory charge, a check-out inventory charge, and a tenancy renewal fee."

Of these, I would comment that one inventory charge is fair if the landlord pays the other (ie one paying check in and the other paying check out) provided the fees are reasonable and reflect the actual cost of the work. Reference checks are probably also reasonable, if they reflect the actual cost of referencing. However, the holding deposit should be credited to the rent or damage deposit if the tenant rents the property, and 'renewal fees' have long been considered unfair by many.

The CAB is right to draw attention to these fees. Often tenants feel that they have no choice but to pay as they fear that otherwise they will lose their home. Many agents act responsibly and only charge for what is fair, but there are a large number who do not. The CAB report comments "charges often bear little or no relation to the cost of the work involved and in some cases letting agents appear to make them up as they go along."

The report also mentions the change in attitude of many agents towards tenants before and after they have signed up. This is no doubt true in many cases - to get a flavour of what tenants think of agents you only need to do a search on 'Foxtons' in twitter.

Hopefully things will improve if the agent licensing plans put forward by the government in their recent report go ahead.

What I can't understand about the MP's expense accounts scandal is this ..

Why didn't they see it coming? Surely it must have been obvious after the Freedom of Information Act was passed in 2000 that something like this was going to happen sometime? Surely anyone with any sense would have known that the press were going to probe at some stage, and would have taken care to be careful. It was only a matter of time.

It is also a shame that the good MPs, the ones who only claimed what was right, are caught up with this too. I hope they sort it out soon.

The phrase 'Augean Stables' comes to mind.

A lady at lunch

Had a great time with Graham and Karen on Radio Norfolk today - they invited me to be one of their Friday ‘ladies at lunch’ which was huge fun.

My co ladies were Pam Brooks aka Kate Hardy (in black in the photo), novelist; and Sara Lock (in turquoise), all round good egg who has been on cash in the attic (and who went to school with the fabulous Joanna Lumley). I am the one in blue, with Karen in green. Graham was heavily outnumbered by us girls.

You can listen to the program again (for a limited period) here.

Graham and Karen are having a week on the Wensum next week which sounds fun. I hope the weather is good for them.

Susskind - the end of lawyers?

I have just listened to an interesting webcast of an interview of Richard Susskind here. Susskind is promoting his new book, The End of Lawyers?: Rethinking the nature of legal services, having written several groundbreaking books on the use of IT and technology in the internet in the past.

Susskind covers quite a wide range of legal IT related topics in the interview, but it is some of the comments at the end which are most worrying (for lawyers). Both he and his interviewer make the point that lawyers are not (on the whole) natural innovators and tend to be resistant to new developments, particularly if they are making a good income as they are.

However he believes (and I have to say that I agree with him) that technology and the internet will have huge implications for the profession, and it is worrying that the Law Society and the government are planning new rules and regulations for the future of the profession, without really taking these properly into account.

For example one thing he mentioned was shared knowledge on forums and how this may develop in the future. In fact however this is happening right now, as there are a number of consumer forums where people exchange information about legal matters, for example this forum here on tenancy deposits. Shared knowledge of this kind could well reduce the need to use qualified lawyers in the future.

The conclusion, more or less, was that there will always be a place for some lawyers and the subject is an interesting discipline in itself, but that the profession has probably passed its high point and things will never be the same again. He also made the point that new lawyers are entering an uncertain profession and many law students should be prepared to use their law degree for something other than practising as a lawyer.

The Rugg Report – the governments response

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

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The government published a consultation paper yesterday in response to the recent Rugg Report and the other various reports that have been published over the past few years.

Supporters of the Law Commissions long project and reports, will be pleased to see that this is acknowledged and referred to in the response which confirms that many of the Law Commission’s ideas are being considered. However it also states that they do not think the time is right for the extensive changes in tenure proposed in the Renting Homes report.

No doubt further comments on the paper will be made later, but on a preliminary reading, the following points stood out for me.

The report acknowledges that most tenants are satisfied with their landlords and that the majority of landlords provide a good service. The main thrust of the proposals therefore are intended to support good landlords, improve standards generally across the sector, and drive out the persistent bad landlords.

National Register
The paper proposes a national register for landlords. This will be 'light touch' and mostly web based. Landlords will need to register their name and address, and details of their property holdings, and pay a small fee annually. They would then be given a number which would have to be used in all landlord related paperwork such as tenancy agreements, tax forms, benefit claims, and court proceedings etc. The register would be run by an independent organisation.

The benefits of the register for government is that it would give them accurate statistics, and they could use it as a way of disseminating information to landlords (such as regarding energy efficiency standards). It would presumably also (although this is not specifically stated) help the revenue with tax collection.

Landlords who fail to comply with the regulatory regime or where there are 'persistent abuses' will be removed from the register, be unable to let out property by themselves, and will probably be ineligible to receive housing benefit.

Tenancy agreements
They are considering introducing mandatory tenancy agreements, as suggested by the Law Commission, and are seeking views on how this should best be implemented.

Rent Limit
They propose increasing the limit above which tenancies are not longer ASTs to £100,000 pa (currently it is £25,000 pa)

Regulation of letting agents
The paper concludes that voluntary regulation of the letting agency sector has not worked, and propose full compulsory regulation of all letting agents. This would include

• entry requirements
  
• a code of practice
  
• business and consumer protection (e.g. indemnity insurance, client protection schemes, complaints procedures)
  
• monitoring of compliance by an independent body
  
• enforcement powers and sanctions

Dispute resolution, Courts, etc
The Law Commissions proposals put forward in their Proportionate Dispute Resolution paper are being considered in conjunction with the Ministry of Justice.

Encouragement of investment
They are considering setting up a Private Rented Sector Initiate to encourage institutions to invest on a large scale and in the long term

Support for tenants being evicted by landlords mortgagees
They will be looking to change the law to ensure that tenants in this position are given at least two months notice to find alternative accommodation.

Tax changes
Significantly the report simply says that the treasury is aware of changes proposed (e.g. by the Rugg Report) to the tax system to support the private rented section, and will keep them under review. Which presumably means that nothing will happen.

Local Authorities
They discuss how local authorities can better engage with local landlords, perhaps by dealing with them through their small business unit rather than via environmental health, and by giving better training to staff. Many local authorities are of course already doing this sort of thing.

Accreditation
They would also like to build on the various current accreditation schemes for landlords, perhaps with a view to developing a national standard.

There is a lot more in the report (which runs to 37 pages) but the above gives a flavour of what it says.

The full report can be found here

The paper is also a consultation and various questions are asked at various stages for feedback on particular points. These should be submitted to the department by Friday 7 August. Note that I hope to be able to set up one of my online answer forms for this shortly, so watch this space.

Four more cases on possession proceedings

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

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There are four interesting cases in the most recent edition of Legal Action Magazine on proceedings for possession under section 21 and the provisions of the Housing Act 2004, so I hasten to share them with you. They all cover different points. Although they are all County Court decisions and therefore not binding on other Judges, they show how Judges are thinking and interpreting the statute.

Universal Estates v. Tiensia
Croydon CC, 23 Feb 2009
In this case the deposit was paid in instalments. The tenant, Ms Tiensia, fell into arrears and the landlord served a s8 notice based on rent arrears. Ms Tiensia counterclaimed for the 3 x deposit award on the basis that the deposit was unprotected. The landlord then protected the deposit with MyDeposits and faxed the certificate to Ms T. However the Judge found that this was not enough. The landlord had failed to comply with the initial requirements of MyDeposits terms and conditions, and was thus in breach of s213(1) and (4) and s214(1)(a) of the Housing Act 2004. Order for £7K to Ms T.

I was particularly pleased (and perhaps a little smug) to see this decision, as the point about the failure to comply with the schemes own rules, is something I remember writing about some time ago, but has not so far as I am aware been mentioned by anyone else until now.

Seghier v. Rollings
Bow CC, 6 Mar 2009
Here the landlord, Ms Rollings, only protected the deposit shortly before the hearing and handed the certificate to the tenant at court. However she did not fully comply with the notice requirements, and for example had not handed over the MyDeposits leaflet. Here the Judge 'distinguished' (legal phraseology meaning the two cases are not the same) the Sheffield case of Harvey .v Bamforth (where the landlord won) because here the landlord had not fully complied with s214(6)(a). Order in favour of the tenant.

Beal v. McCartney
Plymouth CC, 12 Mar 2009
Poor old Mr Beal was evicted by his landlords mortgage company due to his landlords mortgage arrears. As he had not been given any information about his deposit by his landlord, he sued for the fine of 3 x the deposit sum. He succeeded and was also awarded £500 damages for the eviction (legal terminology is for 'breach of quiet enjoyment'). However the fact that he was evicted by his landlords mortgage company indicates that his landlord is in probably in dire financial problems, so this may be a bit of a phyrric victory.

Raco Ltd v. Roberts
Central London CC, 6 Mar 2009
Unlike the others in this post, this case is about failure to obtain an HMO license. A good sub heading for this case would be 'if at first you don't suceed, try, try and try again, and still fail'!

Here the landlord had served two section 21 notices and issued two separate sets of proceedings. Mr Roberts, the tenant, defended the first on the basis that the s21 notice had been served before the tenancy was signed and at a time when the property was unlicensed, and the second set of proceedings just on the basis that the property was unlicensed. The two cases were joined and dealt with together. The landlord then served a further section 21 notice (presumably by this time having obtained a license) and applied to the court to have the proceedings amended to rely on this notice rather than the earlier two. However the Judge refused the application as a 1996 Court of Appeal decision (Lower Street Properties v. Jones) has held that the s21 notice must expire before the issue of proceedings. (Presumably Raco Ltd have now changed their lawyers and started a new set of proceedings, but we are not told about this).

In conclusion
All of these cases were resolved in favour of the tenant. This just goes to show how careful landlords need to be to follow the rules properly. If you don’t, you risk not only losing your claim for possession, but also being made to pay your tenants legal costs. Which, if they were in receipt of legal aid, could be expensive.

Starlight Children's Foundation - Charity of the Month (May 2009)

The Starlight Children's Foundation aims to brighten the lives of seriously and terminally ill children by granting their wishes and providing hospital entertainment to help take their minds off the pain, fear and isolation of their illness.

It is also the charity being supported by employment barrister Daniel Bartlett for his ten year anniverary fundraising campaign. Daniel is to be congratulated in raising over £10,000 for the charity. You can read more here.

LHA direct payment e-petition

After my earlier post giving details of an e-petition against the governments licensing plans, I have now learned of another one here requesting Local Housing Allowance be paid direct to landlords.

Petitions seem to be taking off - it is a shame therefore that the government is no longer supporting them, according to this report on the parliament.uk blog.

NLA calls for changes in housing benefit/local housing allowance rules

The National Landlords Association (NLA) has recently started a campaign to change the rules for the payment of housing benefit/local housing allowance (LHA). As has been described elsewhere in this blog, LHA cannot normally be paid direct to the landlord in the way that housing benefit was. The NLA consider that this is unfair, particularly in view of the fact that LHA is paid direct to social landlords and local authority landlords.

LHA can be paid direct in limited circumstances, these are (1) if the tenant is deemed to be ‘vulnerable’ or if (2) he is in arrears of rent of over 8 weeks. However benefit offices are not acting consistently in interpreting these rules. For example many are refusing to accept that rent can be in arrears if it is payable in advance (benefit is paid in arrears) which means it can be well over three months before benefit starts to be paid direct to landlords where tenants are in default. Landlords are finding this unacceptable.

The NLA have recently carried out a survey of their members which shows that over 52% say they are less likely to take on tenants in receipt of benefit and 59% say that they are concerned about rent arrears or local authority maladministration.

They are asking for the following:

• an ‘automatic trigger’ for direct payment to landlords after one month’s rent arrears (as opposed to two months/8 weeks as now)
  
• Better local authority administration of LHA
  
• Better determination of the vulnerability of tenants by local authorities, with clear guidelines being laid down
  
• the creation of local authority links with local deposit guarantee schemes so each new LHA application is accompanied by a deposit guarantee bond.

You can read more about this on the NLA website here.

e-petition against landlord licensing

I have been informed that an e petition to No 10 has now been posted by Mark Horne of Property Hawk. The reasons on the petition are

Mandatory licensing would:
1. Undermine the private property rights of a citizen to do what they choose with their property including letting it to a willing tenant.
2. Not drive up standards in the residential letting sector as suggested.
3. Would duplicate existing methods of control and therefore is unnecessary.
4. Restrict the supply of rental accommodation.
5. Be a tax on the rental sector.
6. Be costly to implement and an added financial burden to the citizen.

If you are against licensing you will find the petition here.
Mind you personally I think licensing is probably a good idea (but then I am a solicitor and not a landlord). I provide details of the e-petion in the interests of democracy! There is no reason why those who feel licensing is important should not post their own petition.

Fast Facts on new licensing plans

The Times in an article today has listed six 'fast facts' on the new licensing plans which are expected to be announced formally in a new Green Paper shortly. They are as follows:

• A new licence-to-let which is expected to cost landlords £50
  
• An independent body which will mediate in disputes between landlords and tenants
  
• A government agency which will find new homes for affected tenants
  
• Landlords who flout basic accommodation standards to be banning from letting
  
• A national watchdog to monitor all lettings agents
  
• A lettings register which will name all agents who have signed up to ARLA industry guidelines

It will be interesting to see how correct these are when the green paper is finally published,

New plans for landlords

Two reports in the press this morning on landlord regulation. The Times reports that ministers are considering introducing licensing (as recommended last year by the Rugg Report). They anticipate that the costs will be covered by the licensing fee, provisionally put at £50, plus there is also a suggestion that the scheme will help the revenue track tax evasion.

The BBC site reports that The Association of Residential Letting Agents (ARLA) is introducing a licensing scheme for its UK members and a code of practice for landlords.

In my previous post on the Scottish scheme (commenting on problems highlighted by Shelter), I suggested that funding implications might put the government off introducing any new schemes England and Wales at this time. However if the scheme assists with the collection of tax, this puts a different light on things.

We are told to expect a Green Paper shortly.

Advice for landlords whose tenants are not paying rent

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

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A report on the BBC web-site today states that more tenants are in arrears of rent now than since the late 1980's. Which is not surprising given the almost daily announcements of redundancies.

Here is a bit of advice for landlords:

• Keep on top of things and contact tenants as soon as they fall into arrears
  
• Be sympathetic to tenants who respond to you, and consider reducing the rent if they are geninely in financial difficulties through no fault of their own
  
• If tenants are on housing benefit/Local Housing Allowance, tell the benefit office - they should make payment direct to you if the arrears reach 8 weeks
  
• However if tenants have not responded when the arrears reach 2 months worth, serve a section 8 notice and consider issuing proceedings for possession. Remember possession proceedings can take months.

For more information see my article 'Dealing with rent arrears - some different approaches' which you can download and read free of charge in this section of my LandlordLaw web-site.

Further guidance and help is available in my Rent Arrears Action Plan.

Good for the Ghurkhas!

If I may go 'off topic' for a moment, I would like to say how pleased I am at the MPs recent vote which hopefully will result in Ghurkha veterans being allowed to live in this country.

Maybe it will cost a bit. However if we can chuck billions at bankers who have almost brought the worlds financial system crashing down, surely we can spare a bit for some respected soldiers who have put their lives on the line for this country?

And good for Joanna Lumley for all the work she has done for this cause.

Power down plugs

Our son brought back a number of E-on power down plugs the other day from school, and tonight I decided to fit one to my computer It was not nearly as simple as it appears on the box, in fact it was rather a difficult job.

After bits of my computer got burnt out by a lightining strike a few years ago (I was lucky not to lose my hard drive) I now put everything, including telephone lines, through a big surge protector. So the power down plug has to go into this, with adaptors plugged into the side of it with all the peripherals.

But then there are a number of things which I don't want to power down when I switch the computer off. The telephone answer machine for one. Then I don't want the broadband to go off otherwise I can't use the laptop via our Wi Fi.

So there I was with a torch, groveling on the floor under the desk, trying to work out what all the plugs are. Its a real cats cradle down there. I have tried to sort it out, honest, but its just impossible. Some of the plugs have labels on so I know what they are, but not all, so then you have to follow the flex through the jumble to find out what it is ...

I think I have it sorted now, and I have labelled a few more of the plugs. We are on course to save the planet and get a few pounds off our electricity bill (every little helps).

I suppose I am going to have to deal with the TV system next...

Landlord registration scheme in Scotland not working, says Shelter

According to a report on the Shelter Scotland web-site, one in four rented properties in Scotland is not covered by the Scottish registration scheme, which came into force three years ago today.

It is not all bad news. The report says that the registration scheme has been an impetus to set up landlord training and advice services. However it is of concern that a quarter of Scottish properties still appear to be outside the scheme.

The Shelter report has a number of recommendations, which include more money to Local Authorities and a campaign to raise awareness.

Although we do not have a registration scheme as such in England and Wales, this was recommended by the Rugg Report which was published last year. However this may be kicked into the long grass now, if ministers that the view that results from the Scottish scheme show that more funding will be required than was originally anticipated. Particularly in view of the current financial crisis.

How safe are you from serious flooding??

I was fascinated to see this map indicating which areas will be flooded if the sea rises, showing the incremental increase in land loss at different levels of sea rise (obtained via a report on The Times web-site). The grey areas show the predicted flooded areas according to the flood level selected by a drop down list at the top left.

As I expect you will now do, I immediately checked our street and was relieved to see that even at 14m sea rise we appear to be safe - maybe we can leave purchasing that cottage in the peak district for a bit longer.

Large areas in (as you would expect) the Fens are due to go however (always assuming the sea does in fact rise) together with much of the coast and a large area centered on Goole in the north.

I suspect that insurance for flood damage in the grey areas will soon become prohibitively expensive. If you are considering moving house or buying investment property - read this map carefully!

More tenancy deposit muddle

One of my clients has drawn my attention to an interesting forum discussion on tenancy deposit claims here.

It seems from this that many Judges (although not all) are taking the view that the fine of three times the deposit amount should not be awarded if the landlord refunds the deposit before the court hearing. The reason for this is the wording of the relevant sections. This is s214 (3) and (4) which say (after the first part of the section says what things trigger a claim):

"(3) The court must, as it thinks fit, either—
(a) order the person who appears to the court to be holding the deposit to repay it to the applicant, or
(b) order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme,

within the period of 14 days beginning with the date of the making of the order.

(4) The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order."

The argument is that the words ‘must also order’ in (4) means that if the award in (3) is not payable because the landlord has returned the deposit, the award in (4) is not payable either. You can only have both or neither.

If a landlord can escape liability by simply handing over a cheque in the court waiting room, five minutes before the hearing, it makes the penalties look ridiculous.

We urgently need a test case to go to the Court of Appeal so we all know where we stand.

Foxtons on Twitter

Having nothing better to do today, while messing around on the computer I did a twitter search on Foxtons. It was interesting to see what came up.

- There were a large number of moans from discontented tenants and landlords.
- There was the announcement of the Court of Appeal's decision (against Foxtons) in the preliminary point in the case brought by the OFT (see more here).
- Finally (and I had missed this earlier) there were, a couple of days after the CA decision announcement, tweets on the possible deal re-financing Foxtons and writing off their massive debt (see the report here on Reuters)

Could all these be connected?

My own view is that I don't want them to go bust before the case with the OFT has gone through to its conclusion. There are so few cases on the Unfair Terms in Consumer Contracts Regulations, we really need this one. Plus it is important now for the letting industry to know where they stand.

Refunds after Foxtons

One aspect of the Foxtons case which I have not seen mentioned is the impact this will have on the status of past payments.

To remind readers, a claim has been brought against Foxtons by the Office of Fair Trading, for a declaration that some of the terms in their landlord agency agreements are unfair under the Unfair Terms in Consumer Contracts Regulations 1999 (see my post here).

The OFT are objecting to clauses which require landlords to pay commission when tenants renew where Foxtons are not managing the property (and even if the landlord has sold the property), and also pay commission if the property is sold to the tenant where Foxtons pay no part in the sale.

We have had a preliminary Court of Appeal decision in the case which says that the ruling (when we get it) will apply to both current and future contracts. The High Court decision is expected shortly.

What I would like to know (and I am sure a lot of landlords would like to know also) is what then is the status of payments already made by landlords under these agreements. If the OFT win the case, then this will mean that these clauses were always unfair and unenforceable. Can landlords claim a refund?? Or offset payments made, against future commission?

Tenancy Deposit Protection – deposits paid before 7 April 2007

I am obliged once again to the Pain Smith blog for drawing my attention to a new County Court case on the Tenancy Deposit Protection Scheme regulations.

One of the many imponderables of the regulations is whether or not they apply to deposits taken before 7 April 2007, where a new tenancy agreement had been taken after that date. In a County Court decision in Clerkenwell & Shoreditch recently, the Judge took the view (in my opinion, rightly) that when the tenancy is renewed (by the parties signing a new tenancy agreement) the deposit is, in effect, taken again and must therefore be protected from that point.

The blog also raises the spectre of periodic tenancies coming into the same category. This is because of section 5 of the Housing Act 1988 which provides for a new periodic tenancy to arise after the expiry of the fixed term. If the courts (and in particular the Court of Appeal) took this view, it would have very serious implicantions for practically all tenancies where the fixed term ended after 7 April.

My advice to all landlords holding deposits (or rent paid in advance) is that you should arrange to have them deposited as soon as possible (if you have not done so already), whether or not the deposit was paid before 7 April 2007. Only this way can you be (relatively) safe from claims from tenants under the regulations.