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.
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.
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.
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.
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.
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.
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.
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!
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
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 …
I have written in the past about problems with the courts. That was about a court order having the wrong court details. In the past few weeks I have had, not only a further instance of the court / order mixup, but two very serious errors in the text of orders sent out to me.
One, which was an order relating to an Employment Tribunal award, actually gave us, the solicitors, as the defendants and not the real defendants! God knows what training the clerk who did it was given. To do them justice the court amended it pretty swiftly once we had pointed out the error (I wrote them a stern letter). Hopefully it will not affect our credit rating.
The other mistake was saying in an order for possession that the order was made under discretionary grounds when it had actually been made under mandatory grounds. A copy of Counsels’ endorsed backsheet soon sorted that out, but it just goes to show that you have to be really careful.
Sorry about the break in transmission folks. My muse has been busy with other things recently, but hopefully will be back on the blog job in the new year.
In the meantime, I wish you readers all the best for the Christmas holiday, followed by a happy and prosperous new year.
A friend of mine who sits as a Deputy District Judge told me of an interesting case recently. Apparently a local authority tenant had moved out of his rented property, thereby losing his security of tenure and making his tenancy a common law one. The landlords had therefore served a notice to quit (as this is the appropriate notice for common law tenancies) and sought possession of the property.
However in the tenancy agreement there was a clause saying that the tenant could only be evicted after service of a notice of possession as provided under the provisions of the Housing Act 1985. This is the notice which is normally served for secure tenancies but which had not been served in this case as the tenancy was no longer secure. My friend concluded therefore that as no such notice had been served, he was not able to make an order for possession.
His view was that there is no reason why a landlord should not enlarge the tenants security of tenure under the terms of the tenancy agreement, and that if the landlord does this, it should be binding upon him.
In the same way, in the case of Welsh -v- Greenwich London Borough Council, wording in the tenancy agreement was held to enlarge the landlords repairing obligations.
The moral being that local authorities should be more careful about the clauses included in their tenancy agreements. And that they should comply properly with the provisions of their tenancy agreements once these have been issued. And perhaps most importantly of all, they should ensure that their tenancy agreements are drafted by experienced housing lawyers and reviewed regularly.
I have seen a couple of reports recently on the internet (here and here) saying that a study by Heritable Bank has recommended that the HMO system be reviewed, as there is such a wide discrepancy between the license fees charged by different local authorities, and also a wide variation in the way they deal with licensing generally.
Strangely, I cannot find any mention of this report on the Heritable Bank web-site, although maybe I am not looking in the right place.
However everyone who has anything to do with residential landlord and tenant law and practice, must know of this wide variation in license fees, which many feel is wholly unacceptable. It has been mentioned several times on this blog, and I have also been developing a list of different license fees, which you will find here. Fees on this list run from about £30-50 per room or unit to £1,100 for Newcastle (as mentioned in the articles). In fact though, the most expensive Local Authority to my knowledge is Southend. However they cunningly disguise their high charge by saying that it is £660 for two years, whereas most authorities charge for a five year period. The Southend fee for a five year period works out at £1,650.
There is no doubt that the new HMO regulations have greatly upset landlords, and I believe that many former HMO landlords have now sold up altogether. On the whole I do not think that the regulations are too excessive. The worst problem, that of the wash hand basin requirement for large HMOs, has now been dealt with. The regulations were only introduced last year and perhaps should be given a bit longer to bed in before any revisions are made. However I do think that the wide fee variation is generally undesirable and this aspect should be looked at. Whether it will or not, is of course another matter.
I am just recovering from an exhausting week. Thursday saw the first course we have run via our training company Legal Professional Training Ltd. It was a good day, but involved a huge amount of work and administration, and left me feeling like the proverbial limp dishrag.
Things were not helped by the fact that I had also been working on an upgrade of Landlord-Law for several weeks, which went live the following day. Not very good timing. Particularly as the upgrade went wrong! A rather overlong period then ensued of checking things on the live site, finding that they did not work properly or were not there, emailing my web-designer, and finding that she had gone out! Its all been sorted out now (well I hope it has …) but it was not a good time. I am pleased now its done though.
The upgrade includes a new Tenants Problem Solver, a new extensive section of the site with articles and information geared at problems experienced by tenants. Most tenants should now be able to afford to read it, as the other major introduction is a new membership fee of £4.70 for three days. So anyone can afford to take a look, so long as they can pay by credit card.
Hopefully this new section will not alienate my landlord members – the problem solver sets out tenants obligations as well as their rights, and good landlords (of course all my Landlord-Law members are good landlords) have nothing to fear from well informed tenants.
The week has ended with the broadband connection on my main computer suddenly going off (I am writing this on the laptop). I assume that a connection has disconnected but can’t work out which. There are so many wires under my desk that it is impossible to keep them in order (I have tried), or to work out what is wrong, even if it were possible to see them properly which I can’t. Another job for my computer service company I think.
So, one of those shattering weeks when good and bad come together in a climax at the same time so you don’t know whether to be pleased or in despair. I expect you get them too. Maybe next week will be calmer.
The Local Housing Allowance Scheme, discussed in my earlier article regarding landlords from Blackpool, is due to be rolled out across the country in 2008. The main criticism from landlords is that under the new scheme the rent cannot be paid to them direct any more. It has to be paid to the tenant, unless either the rent is in arrears of eight weeks, or if the tenant is adjudged to be 'vulnerable'. However in both of these cases the direct payment takes some time to be set up, during which time arrears may be accruing making the tenant vulnerable to a claim for repossession.
Many tenants also are unhappy about not being able to elect to have the rent paid to their landlord direct. They would much prefer to know that this is being done and that their home is not at risk. If they want rent to be paid direct, it seems ridiculous that they should not be allowed to have it.
The reason given on the DCLG web-site for the enforced payment to tenants is
"Personal responsibility: Empowering people to budget for and to pay their rent themselves, rather than having it paid for them, helps develop the skills unemployed tenants will need as they move back into work"
However it is noticeable that this personal responsibility is not being encouraged where the landlord is a social landlord, or where the benefit is for mortgage payments. Only the poor old private landlord (with considerably less political clout than the social landlords and the banks) is going to be vulnerable to having his rent spent on drink and drugs in an effort to encourage personal responsibility among his tenants.
There may though be an answer. I attended a Landlords Forum meeting at Suffolk Coastal Local Authority recently where a lady from a local Credit Union told me that they are now setting up special accounts for tenants so the rent can be paid in and then paid out to the landlord. This is better than having the LHA paid to the tenants bank account because, as it is only being used for the transfer of the housing allowance, the money is not at risk of being swallowed up by the tenants overdraft or being spent by the tenant (perhaps in error, perhaps while under the influence) on other things.
Even more interestingly, we were told by a gentleman giving a talk on Local Housing Allowances, that section 94(3) of the Housing Benefit Regulations 2006, provides for the tenant to request that the benefit be paid to another person. This is the statutory authority for setting up the Credit Union payment, however he speculated that the tenant may also be able to use this section to request that the rent be paid to the landlord!
Looking a little closer at the regs, section 94(1) seems to be providing against this. If this is the case though, that means that the only person the tenant is not allowed to request the rent be paid to is the landlord – the person he is legally liable to pay the rent to! How mad is that? Are there any human rights ramifications here?
Still, the Credit Union idea seems like a very good one, and I commend it to you.
Landlords in Oxford who let to three or more unrelated tenants who share amenities (i.e. bathroom, toilet, kitchen and living space) beware! Your city council is seeking to extending the current mandatory licensing scheme (which just applies to the larger properties of three or more stories and five or more occupiers in two or more households) to all HMOs. This will include, for example, three students sharing a small two story house or a flat. See the report from the Oxford Mail here.
The city council say that 26% of houses in Oxford are privately rented (many presumably to the large student population), 61 per cent of HMOs are below standard in terms of fire precautions, and 29 per cent of HMOs have below adequate management. The Council hope that extending the licensing system will allow them to change this. I hope they have sufficient manpower to deal with the massive amount of extra work they are taking on.
No doubt other cities with large student populations will in due course be looking to do the same as Oxford. Although of course much of the student population in Oxford comes from a ‘posh’ background, so they may be under more pressure to deal with the problem of sub standard student accommodation.
The city council have started public consultation on the proposals. If you want to be involved in this the email address is hmos@oxford.gov.uk or contact the HMO licensing officer on 01865 252307. After this process they then have to apply to the government so the extending HMO licensing regime is not going to come into force until next year at the earliest.
There is an interesting article here on the new government ‘pathfinder scheme’ for the payment of housing benefit. This was initially set up in 2003 in a few pilot areas and is gradually being rolled out across the country. A fixed rate of benefit, known as a local housing allowance, is paid for all properties of the same type, and which is not linked to individual rents. The tenant can therefore shop around, and if he finds a property with a cheaper rent, can keep the difference.
However the aspect of the pathfinder scheme which annoys landlords is that the option which the parties had under the old scheme for tenants to elect to have their rent paid direct to the landlord, is no longer available. Some of the Blackpool landlords are claiming that the rent payments are too much of a temptation for some tenants who are using the money for drink, drugs and lottery tickets.
The problem, they claim, is particularly acute in Blackpool as it has such a large private rented sector. It is also apparently the ‘drug death capital of the UK’, and a local coroner has recently claimed that benefit money is helping to fund the cities drug problem.
Landlords have been complaining about the pathfinder scheme ever since it was first set up in 2003, claiming that many tenants will not be able to resist the lure of these lump sums of money being paid to them, to fund their drug and similar problems. However areas where the scheme has been piloted have not apparently had that many problems. Skeptics claim that this is because the rate of benefit set in pathfinder pilot areas has been more generous than in other areas. When the scheme is rolled out nationwide, they claim, this generous rate will not continue and huge problems will result.
If a tenant in receipt of local housing allowance falls into arrears, there are two options for the landlord:
1. To try to persuade the Local Authority to pay the rent to him direct. There is a general rule that this will be done if the tenant is in arrears of more than 8 weeks. The DWP Resource Centre on benefit states on this point
"If rent arrears are owed, the local authority will arrange to make payments direct to the landlord unless it is not in the customer’s overriding interests to do so. However, landlords are encouraged not to wait for the 8-week period to be reached before contacting the local authority."
The landlord may also be able to persuade the Benefit Office to pay the rent direct on the basis that the tenant is ‘vulnerable’. Information on how Officers are to identify potentially vulnerable claimants can be found in paragraph 5.30 onwards in the Local Housing Benefit Allowance Guidance Manual, to be found online at the DWP web-site.
The main criticism of both of these options from landlords, is that it takes time for the benefit office to be persuaded and the new arrangement set up, during which time they are not receiving any rent.
2. To bring proceedings for possession. This is unpopular with landlords as it can take up to six months (more if the landlord is unlucky) to recover possession of the property, during which time he will not be receiving rent and will have to pay court and legal fees.
Also, although this will resolve (at a cost) the individual landlords problem, the tenant will still need housing, and his addiction problems will not be helped by being evicted from his home. The problem to society therefore will remain.
The Blackpool landlords suggest that landlords who are accredited should be permitted to have rent paid direct to them, if the tenants agree (and many probably would). The Local Authority say that they cannot do this as it is not permitted by the scheme rules. However the government might want to consider this option, if it wishes to encourage accreditation and thereby improve standards.
Readers may be interested to learn that I have been contacted by a landlord who tells me that his tenant is defending, or rather seeking to overturn, a possession order obtained via the accelerated procedure under section 21, under the provisions of the Disability Discrimination Act 1995. This is the very situation I was concerned about when I wrote my earlier posting on the Malcolm case.
The landlord brought the claim after it became apparent that the tenant was spending her housing benefit on other things, although this was not specified in the particulars of claim, which (as is usual) gave no reason for the claim other than that the notice had been properly drafted and served and that the tenant had not vacated. Her lawyers however are claiming that the reason why she has not paid her rent is because she is suffering from a mental disorder, and therefore the landlords action in evicting her is discriminatory and unlawful.
The landlord is aghast at this claim, as if it succeeds he is faced with the prospect of this tenant remaining in his property indefinitely, free of charge. How, he asks, is he expected to pay his mortgage and other expenses on the property? Is this really what the draftsmen of the DDA 1995 intended?
The tenant is in receipt of legal aid and the landlord has been told by her lawyers that they will fight the case all the way to the European Court if necessary. The poor landlord however has no legal assistance and is unable to afford expensive legal fees (particularly as he is not receiving rent!).
If this claim succeeds, bearing in mind that the landlord had no idea that the tenant was suffering any mental problems, it will have serious repercussions throughout the whole of the letting industry. The landlord has agreed to keep me informed of the outcome of the case.
Following on from my previous item on the Equality website, I was interested to see this item in the Times Law section today on John Wadham who is heading up the new Equality and Human Rights Commission.
This article makes the point that the new commission not only covers areas of law formerly dealt with by three separate commissions, it also has a budget to enforce the Human Rights Act. It will be really interesting to see how that works out.
How will it affect housing law? The main area that I can see at present is defending possession claims where the defendant is being evicted for some reason connected with their disability. It will be interesting to see if this will be largely confined to the social landlords or whether it will extend to the private sector (something discussed by myself and Nearly Legal in my previous post on the Malcolm case).
Can anyone see any other potential areas of conflict?
While doing some writing for Landlord-Law I discovered that the new Equality Web-site is live. This was set up by the Equality Act 2006 which also set up a new Equality and Human Rights Commission. This will deal with discrimination over all areas, rather than, as before, just concentrating on specific areas such as race, and disability. The act also gives the commission power to make regulations regarding other types of discrimination, such as religious belief and gender.
The three earlier commissions, The Commission for Racial Equality (CRE), The Disability Rights Commission (DRC), and The Equal Opportunities Commission (EOC) have now been merged into this new organisation, which has a web-site at www.equalityhumanrights.com. Any attempt to reach the old web-sites will just take you here.
It is a very clear web-site. All the fussy content of the old sites is gone. Anyone searching for information about their rights will find it quite easy. There is also a section for advisors which, again, is very clear, if rather sparse.
In fact the whole site has a ‘light on content’ feel about it, perhaps because it is so new. I spotted a A-Z index at the bottom but this just lead me to a registration page. It was extremely irritating however, having registered, to be told that access was denied and that the page had been disabled! (Was it because I said I am a lawyer? Am I being discriminated against?)
Still, if you are looking for information on any sort of discrimination this is a good place to start. Although like most sites aimed at the general public it is rather light on authorities.
I did my Q&A this morning, something I do every other Sunday morning, and which see I wrote about nearly a year ago on this blog. I always get far more questions than the 10 that get answered (I had 32 today I think) and the same old questions still keep cropping up.
For example, unbelievably, there are still landlords who think that they can go in and change the locks if their tenant has not moved out after the notice period of the possession notice expires. I still get loads of questions on damage deposits, and from the way some of these are worded it is apparent that the landlords are failing to protect deposits under the statutory tenancy deposit schemes. Properties are still being let in a poor condition, and there still appear to be quite a lot of dodgy and/or useless agents, greedy landlords, and clueless (or thick) tenants about.
No change there then.
