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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Two agents investigated by ASA over misleading online property ad complaints
Two agents have been investigated by the Advertising Standards Authority (ASA) this week for misleading online property ads following complaints from the public. The more serious of the two was a complaint about two digital adverts by Lincoln-based agency Mundys Property Services. One featured the claim that it offered “100% tenant satisfaction – Let with confidence – 100% of our tenants would be happy to let through Mundys again” and a second that included the text “Mundys… A customer survey about our services produced a 100% satisfaction rating”. The claims were based on a 2013 survey of tenants moving into properties let by the company. The complainant challenged whether the “100% satisfaction” claims were misleading because the survey didn’t canvass the tenants about the company’s overall service. After being approached by the ASA, Mundys said they would removed the ads and would not use the claims again – although at the time of publication the ad remains on one of its website home pages (pictured, left). Online property ads In a less serious case, Reeds Rains Ltd was referred to the watchdog after a complainant spotted a listing on Rightmove for a rented property that featured an expired 50% discount…
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Rogue agent: Ombudsman bans firm for 10 years over unpaid £181,000 award
In a shocking case of a rogue agent, a firm in Luton has been banned from The Property Ombudsman for ten years after failing to pay an award of £181,254 after it was found to have ‘deliberately’ not passed on substantial amounts of money to a landlord. Altavon Property Managemnet Ltd (APM), which was dissolved late last year but had been trading for three-and-a-half years prior to the award, was asked by a local landlord to manage 31 properties on their behalf based on a two-tier agreement. The landlord rented the properties to APM in return for a fixed return over a set period, leaving APM to manage and rent the properties to whoever they saw fit. By December 2016 APM was behind in rent payments to the tune of £57,000 and continued to miss payments, eventually leading the landlord to complain to TPO. Rogue agent After finding in the landlord’s favour, a large award was then agreed, based on the monies owed plus £200 for each missed payment and compensation for aggravation, distress and inconvenience. But APM failed to pay the award and, after being referred to its Disciplinary & Standards Committee, has now been expelled from TPO for ten…
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Letting fees ban will NOT become law until at least Spring 2019
The recently-renamed Ministry of Housing, Communities & Local Government (MHCLG ) does not expect the letting fees ban to come into force until Spring 2019, it has confirmed. In written evidence made this week to both the Select Committee hearings that scrutinised the draft legislation, and to the National Approved Letting Scheme (NALS), MHCLG has revealed that it will be at least 15 months before letting agents and landlords will no longer be able to charge fees to tenants. Introduced by Sajid Javid in November last year, the draft legislation was given a thorough savaging by experts during the hearing on Monday and will now go to a third reading in the House of Commons before moving to the Lords. letting fees ban MPs were told at the hearing by experts from Shelter and the University of York’s Centre for Housing Policy that a letting fees ban could easily lead to higher rents as banned fees were added by landlords to the rent over the length of each tenancy, and also reduce the quality of rented accommodation as landlords tightened their purse strings. “We’re pleased to see more clarity on the timetable for implementation of the ban – it’s much…
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Phew! Property auction guide prices are not misleading, says advertising watchdog
A complaint against leading auctioneer SDL Auctions by a member of the public to the Advertising Standards Authority (ASA) that its listed property auction guide prices were misleading has not been upheld. In an important judgement for the property auction industry, the ASA did not agree with the complainant, who had attended an SDL auction in Birmingham on the 6th July. The complaint in effect challenged the bedrock of the auctioneering industry – that houses often sell for much more than their guide price, and that guide prices are often changed during the run-up to auctions as vendors change their minds on their desire reserve price. £1 properties During the auction, at which several properties were offered with a guide price of £1, the complainant said many properties offered at the auction sold for significantly more than the guide price, and challenged whether the auction brochure’s guide prices were therefore misleading. After examining SDL Auctions’ catalogues for the auction and other paperwork, the ASA has concluded that because the company defined the difference between a guide price and a reserve price prominently in its catalogues, and because it routinely updates properties’ guide prices during the run-up to auctions to keep…
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Dominic Raab is the new Housing Minister
The cabinet shuffle continues at No 10 Downing Street, so we now know the identity of our new Housing Minister: Dominic Raab MP for Esher and Walton, in Surrey. He will work in the newly-named Ministry of Housing, Communities and Local Government, which is headed by Sajid Javid. How their respective roles will converge is not yet clear. Aged 43, ‘Dom’ (to his friends) was an international lawyer at Linklaters before joining the Diplomatic Service. He was elected to Parliament in 2009, as a Conservative MP with 59% of the vote. In June 2017, he was re-elected and appointed Minister of State for Justice. Away from the House, he may be found wearing a black belt or training at his local boxing club, so we’d best keep friendly with our new Minister – the 16th in 20 years. Raab’s appointment will make him the 16th holder of the title of Housing Minister in just over 20 years, taking over from Alok Sharma, whose tenure of the title has been just six months. The average term of each housing minister has been approximately 16 months. Alok Sharma, has now been appointed Employment Minister, in recognition of ‘the difficult work he undertook in…
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Universal Credit is “car crash” for tenants, landlords and agents, says MP
Universal Credit has been an “ideological error” for the 1.2 million tenants on housing benefit within the system as well as landlords and agents, it has been claimed by Stephen Lloyd, MP for Eastbourne (pictured, right). This is despite the Chancellor’s measures in his budget last November, which attempted to mitigate the financial stress of those moving to Universal Credit falling into rent arrears as they awaited payment. Stephen’s comments came during a debate he led in the House of Commons this morning during which speakers from all sides of the political spectrum savaged Universal Credit and its effect on the housing sector. As well as dramatically increasing the number of people presenting themselves to councils as homeless after being evicted from private rented properties for rent arrears, Universal Credit has made many private landlords reluctant to rent to claimants, he said. “Many years ago I warned that this would be a car crash, and it has become one,” he said. Quoting figures given to him by the Residential Landlords Association, he said 87% of landlords will not rent their properties to Universal Credit claimants and that among those who did, 38% have experienced rent arrears problems. He then called…
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Tenant fees ban WILL drive up rents and lower property standards, MPs are told
MPs put the new housing minister Sajid Javid’s tenant fees ban legislation under scrutiny last night, and it was proven to be lacking on several fronts. Landlords are likely to increase their rents across the tenancy to pay the extra costs of running a tenancy, something the new law can’t stop, and that there is a substantial risk local councils will impose unjustifiably high fines on agents and landlords to finance enforcement, in the absence of government support, it was claimed. The other key criticism made during the session was that the draft bill is likely to be self-defeating – lower fees will mean letting agents are less incentivised to help landlords run their properties professionally. These views were all the more surprising given they came from experts from the policy end of the sector, not agents. The two-hour long session was held by the parliamentary committee that oversees Sajid’s department, the Select Committee that oversees the newly renamed Department for Housing, Communities and Local Government. Tenant fees ban Headed up by MP Clive Betts plus 11 other MPs, it quizzed three experts in the field about how effective the bill will be. These were Shelter’s Head of Policy Kate…
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Scotland leads the way in conveyancing with seven-days-a-week service for buyers
The weekend has always been every agent’s nightmare when a sale is going through the final stages as conveyancing solicitors down tools for a – probably – well-earned rest. But that is set to change in Scotland after a conveyancing firm announced that it is to begin a seven-days-a-week service to help buyers gain the competitive edge. Unlike other conveyancing firms including those in England and Wales that offer online case tracking and call-centres over the weekend, Edinburgh and Glasgow-based Gilson Gray says it will offer a full service including ‘live’ partners on hand to give advice. Weekend legal advice is a key differentiator in Scotland. There solicitors are the first port of call for buyers hoping to make an offer and, therefore, waiting for a whole weekend for their offices to open can be a disadvantage. Gilson Gray’s service will be offered to private purchasers at first before being rolled out to housebuilders, developers and mortgage brokers, who will be able to help their customers get ready to buy a property faster. “Traditionally, people look at a range of properties over the weekend and if they see one, they have to wait until the Monday to contact their solicitor…
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Many rental properties not affected by letting fees ban, study reveals
The letting fees ban may not impact agents as much as many feared it would, a survey of 30,000 agents has found. Three quarters of those who responded to the survey by The Negotiator in partnership with Spark Energy said between 10% and 25% of their properties under management would be affected by the tenant fees ban, and that only 2% said that ‘most or all’ would be affected. But the issue continues to worry agents, 68% of whom said it still remains their biggest worry for 2018, the survey – which is published in full within the latest issue (pictured) of The Negotiator magazine – found. Among the agents who responded 86% had 500 properties or fewer under management, 8% had between 501 and 1000 and 6% managed more than 1001 properties. But on the ground, agents currently have more pressing operational issues to worry about than the fees ban. Nearly a half of the agents said their biggest issues were damage to properties by tenants while 36% said problems with rental payments came second. Some agents are also becoming irked by what they see as ‘over regulation’ of the rental sector. Among them, 45% said there was too…
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Government reveals HMO and ‘rogue agent’ crackdown
Housing minister Alok Sharma is to proceed with plans to significantly widen HMO licensing in the UK, and has also published the range of criminal offences that will soon trigger letting agents and landlords being automatically banned from the sector. The new measures will introduce significant additional responsibilities for landlords, letting agents and property managers, and stiff penalties for those convicted of certain criminal offences. The HMO measures, which apply to England and are to be introduced in April 2018 – assuming parliamentary approval – will see some 160,000 additional properties brought into licensing. The proposals frame these as those housing five or more people from two or more separate ‘family groups’. This significantly widens the range of property types included within HMO regulations, which used to only include properties with three or more storeys. Now, apartments and smaller houses will have to be licensed if they fit the new criteria. Enough is enough and so I’m putting these rogue landlords on notice – shape up or ship out of the rental business.” Alok Sharma, Minister for Housing Also, bedrooms offered by landlords and letting agents within HMOs will soon have to meet a new minimum size standard of 6.52…
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