Regulation & Law
News articles looking at national legislation and local regulation and the application of law to the residential property industry.
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Buyers should be forced to take out property fraud insurance, says lawyer involved in landmark case
As the conveyancing industry prepares to hear the outcome of the appeal in a landmark property fraud liability case, the legal firm representing one of the vendors in involved has called for all property buyers to be forced to take out fraud insurance. “I do think [it] would be sensible to look at the possibility of making it compulsory for buyers to take out fraud insurance on every transaction,” says Steven Porter, Partner at JPC Law (pictured, below). “The cost, as matters stand, is relatively small and with compulsory insurance the premiums may even become cheaper due to the economy of scale.” The appeal concerns two key test cases. Conveyancing solicitors Mishcon De Reya and Owen White & Catlin were sued by their buyer clients after fake vendors fraudulently sold properties and received the funds before the problem was spotted. Mishcon De Reya and Owen White & Catline lost the initial property fraud case and went to appeal, which was heard last week. A decision is expected any day. Steven says that if the two buyers involved in the appeal – Dreamvar and his client P&P Properties – had taken out fraud insurance “it would have meant that both would…
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Purplebricks Australia fined £11,200 after regulator receives complaints about its fixed fees
Purplebricks Australia has been fined AU$20,000 (£11,200) by the Queensland Office of Fair Trading (OFT) following complaints that it had misled customers about its fixed-fee offering, and not followed accounting and other business rules. OFT says it received “several complaints” about misleading claims both on Purplebricks’ website and within advertising. In a similar way that some consumers and agents complain about Purplebricks in the UK, it was claimed that Purplebricks was not clear that its fees were charged whether a property is sold or not. “Between November 2016 and June 2017, Purplebricks Australia Pty Ltd, entered into agreements with consumers who were not made aware of the terms of the fees charged,” a statement from the Queensland Office of Fair Trading says. “Consumers were also misled about additional services offered by Purplebricks, despite the agency advertising ‘low, fixed fees’ for their services when selling property. “Purplebricks [also] failed to fulfil some of its regulatory obligations about use of appropriate accounts software, use of a non-Queensland bank account and notification of substitute licensees and other places of business.” In a statement to Australian website Financial Review, Purplebricks’ CEO in Australia, Ryan Dinsdale (pictured, above), said his company had worked with the…
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Prime Minister to force councils and developers to build more affordable homes
The Prime Minister Theresa May has delivered her long-promised keynote speech on how she’s going to achieve her government’s ambitious house building targets. As well as a promised reform of the national system of planning, she also included a strong challenge to builders that her government would only continue to support them via schemes such as Help to Buy if they started building more affordable homes. She also called for developers to “do their duty” and stop using the viability assessment process to “dodge their obligations”. These are reviews that builders can request that councils undertake to work out how profitable a development is likely to be, and if necessary reduce the number of affordable homes within a site. A report by Shelter in November last year revealed that at sites where viability assessment were undertaken, 7% of homes were affordable. Some 28% of property developments are supposed to be affordable, on average. While speaking against a backdrop of bricks at the Royal Town Planning Institute in London – which some commentators on Twitter were less than kind about (see below) – May revealed a major reform of the National Planning Policy Framework. This is designed to release more land…
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Faster home purchases promised as Land Registry begins putting councils’ local search data online
The Land Registry is to begin digitising the UK’s hundreds of Local Land Charges or ‘local searches’ registers in a bid to speed up the house buying process, a move it claims will help up to 125,000 house purchases over the next two years. Waiting for local searches to be completed by councils can be both frustratingly slow and, the Land Registry says, varies widely across the UK in speed and cost. This has created a ‘local search lottery’, it claims. Costs vary from £3 to £76 to complete searches which in some areas can take up to 30 days to complete, unnecessarily holding up thousands of home purchases every year. Local Land Charges information, which include checks on restrictions such as tree preservation orders, listed status and conservation areas, will soon be available within an updated central online database that solicitors will be able to access as either searchable PDFs or Excel spreadsheets. “This is a significant step forward in the Government’s ambition to make the house-buying process simpler, faster and cheaper,” says Land Registry Chief Executive Graham Farrant (pictured). The digitisation project has begun at 26 local authorities and the first to offer the service will include Blackpool,…
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Agent behind tenant fees ban e-petition reveals what he thinks of government response
Firstly, thanks to everyone who has supported our campaign so far. It shows the strength in our views and in my opinion outweighs the 4,700 [consultation process] responses on which the draft [Tenant Fees Bill] was based on. Do you think they made the 4,700 people who offered their feedback aware that their rents will be dramatically rising come 2019 (which has been widely acknowledged and wholly ignored)? Perhaps the government should take some feedback from the people who will be losing their jobs/businesses? And perhaps they should take some feedback from the people that will no longer be able to pass references because their affordability no longer meets the higher rents threshold which would you believe, has been acknowledged…and ignored. To say I am disappointed with the response would be a huge understatement and to be honest is a mockery to the hours committed to raising awareness and acquiring signatures. Tenant fees ban At no point does this response consider that a fee cap would be a fair and just solution nor do they make any attempt to explain as to why it would not be a fair and just solution – instead admitting that enforcing a complete ban…
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Government rejects agent’s petition calling for tenant fees cap
The Government has rejected a petition signed by nearly 10,400 agents that proposed a tenant fees cap instead of an outright ban. Started by 29-year-old letting agent Rob Farrelly (pictured, below) who began his own business Friend & Farrelly Property Services eight years ago, e-petition 206569 was signed by agents all over the UK. In its response to the e-petition, the Government has revealed its determination to plough on with its draft Tenant Fees Bill published on 1st November, saying it wants to see a rental market in which landlords and not tenants are the primary customer of agents. As well as reiterating its belief that a fees ban will improve transparency and affordability for renters, and that fees are still not clear or explained, it claims that “many letting agents and landlords acknowledge that fees charged to tenants are currently not at a level that is justifiable and agree that intervention is necessary”. “The Government does not believe that a cap would be effective and is likely to lead to a race to the top in terms of fees charged. A ban is easier to understand and enforce.” Agents are also able to see a glimpse of the future…
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BBC Panorama to put no-fault evictions under spotlight tonight
The darker side of the rental sector is to come under the spotlight this week when the BBC’s Panorama programme looks at Section 21 no-fault evictions. This is to include comments from Landlord Action’s Paul Shamplina that the increase in their use is in part down to the government’s recent tax changes, and that banning Section 21 evictions would only compound the current housing shortage, not help alleviate it. Due to be broadcast today at 8.30pm the programme is to look at whether tenants should be better protected from this type of eviction process, and why so many landlords employ it. No fault evictions The issue has been high on the political agenda for some time – no-fault evictions were effectively banned in Scotland on December 1st last year, and the Labour party has said it will introduce similar, more secure tenancies in England and Wales if it gains power at the next election. The most recent research into no-fault evictions by the Joseph Rowntree Foundation shows that the number of tenants evicted each year was 10,000 more in 2015 than in 2003, and that this increase is “almost entirely” down to the more frequent use of Section 21 notices.…
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Another city council applies to Secretary of State to ban To Let boards
To Let boards in five key student-dominated streets near to Lincoln city centre are to be banned after a survey found that a quarter of all properties featured boards. Describing them as “eyesores”, the city’s council says it has recently undertaken several consultations with residents in the affected areas and that 85 of the 134 respondents said they favoured a total ban. The council has now applied to the Secretary of State for the Regulation 7 Direction to be removed for the streets most affected – Monks Road, the West End, Sincil Bank, Union Road and Waterloo Street – and, if granted the powers, the council says it will ban To Let boards outright. “It’s shocking to think that some parts of the city have around 25% of the properties covered in To Let Boards, and between the years 2004 and 2016 we have seen the number of complaints grow steadily, so we are aware that there is a problem,” says City of Lincoln Council Planning Manager Kieron Manning (pictured, left). “Now we have Executive approval, we can carry out the wishes of the majority of residents and apply to have the boards removed.” Local agents aren’t happy about the…
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Government starts consultation on single housing ombudsman for whole sector
The government is to introduce a single ombudsman to cover the whole of the property industry including for the first time both new homes and rented property, and has announced a consultation. There are currently four different complaints bodies in housing and not all those operating within the industry must join them, a ‘gap’ that the government says it wants to close. The private treaty and lettings sectors have three ombudsman – although one of the recently said it was withdrawing from the market – plus there’s an additional ombudsman for the social housing sector. But private landlords are not currently compelled by law to join a redress scheme or be accountable to an ombudsman. Eight weeks The proposed initiative kicks off with an eight-week consultation which the Ministry of Housing, Communities and Local Government (MHCLG) says will help “shape a simpler and better complaints system” and that in future disputes will be “resolved faster” and homebuyers and tenants will be able to access compensation. The MHCLG consultation will look at various aspects of the property market including whether or not a ‘whole industry’ ombudsman is really needed, but also look at whether builders should be included in the scheme; how…
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Rogue estate agent forced to cash in pension to pay back fraud victims
A rogue estate agent has been reduced to living in a caravan and has had to cash in his pension after being returned to court two years after initially being convicted of fraud to pay back the friends and clients he stole money from. Russell Baker, 60, is now thought to have taken £400,000 from people in and around Bovey Tracey (pictured, right) and South Dartmoor in Devon during 2013 to help keep his sales and lettings business, Ashby’s, afloat even though he knew the people he borrowed the money off would not get it back. Baker was a director of three companies which claimed to operate as estate agencies in Devon, all of which have now been dissolved. These are Ashby’s Estate Agents (Devon) Limited, Ashby’s Estate Agents Limited and Baker Lewis Ltd. He had originally told those giving him the money that he wanted to use the cash to buy out a business partner and solve a cashflow bottleneck, but also used classic ‘rob Peter to pay Paul’ tactics to try and keep his business going. This included pocketing one couples’ £22,500 pre-contract deposit for a property purchase, Devon and Somerset Trading Standards Service found during its investigation…
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