Tenancy Deposit Protection - 62% failure

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

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

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

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

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

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

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

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

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

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

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

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

Solicitor sues the court!

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

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

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

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

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

Thank goodness for Geograph

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

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

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

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

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

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

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

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

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

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

Tesco Law in action

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

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

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

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

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

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

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

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

NLA / NFRL merger challenge

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

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

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

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

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

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

The future is orange

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

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

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

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

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

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

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

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

Malcolm reversed

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

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

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

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

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

Councils get tough on HMO regulation evaders

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

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

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

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

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

More tenants evicted by landlords mortgagees

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

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

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

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

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

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

Stand your ground on damage deposit claims

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

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

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

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

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

Agents letting property subject to a re-possession order

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

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

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

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

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

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

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

What do other people think?

Inside track bubble bursts

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

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

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

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

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

The problem of landlord regulation

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

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

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

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

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

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

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

Credit crunch problems

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

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

Bad news for us all.

The Rent Arrears Action Plan

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

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

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

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

Local authority takes action on illegal HMOs

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

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

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

Policing the Landlords

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

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

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

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

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

Bernstein and Floyd

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

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

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

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

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

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

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

OFT challenges unfair terms in landlords agency agreements

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

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

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

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

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

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

More on the new tenancy agreements

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

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

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

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

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