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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Hackney introduces letting fees ban without waiting for government
The London Borough of Hackney has launched a voluntary letting fees ban ahead of the government’s ban expected next year. The borough has called on all letting agents within its borders to “stop unfair charges for private renters” including processing, amending or renewing a tenancy agreement. The initiative is part of the borough’s Better Renting Campaign to promote a fairer renting for the 32,000 households who rent from private landlords within Hackney. “We have long called on the Government to take action to stop this extortionate financial burden placed on private renters,” says recently-elected Labour councillor Sem Moema (pictured, left), who is also a housing advisor to the borough’s directly-elected mayor. “The new housing minister, Alok Sharma, must resist the strong voice of the letting agent lobby and push through this legislation without delay. “But while it’s vital action, a lettings fee ban tackles the symptoms, not the causes, of the housing crisis. “In the absence of any real change on the ground, we’re taking matters into our own hands and are working directly with local letting agents to create a fairer and more transparent private renting system in Hackney, starting now.” The campaign has the official support of one…
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Property Ombudsman expels three agents
The Property Ombudsman (TPO) is on track to expel more members this year than in 2016 after three agents were expelled in one go yesterday. Last year TPO kicked out nine agents but six have already been expelled this year following the latest expulsions, with just six months of the year gone. The three agents are Shields & Co in Nottingham, LPC Lettings Ltd in Liverpool and Blackhorse Property Management Ltd in Bradford (all pictured). Two were expelled after failing to pay awards totalling £11,000 to landlords following complaints to the ombudsman that were subsequently upheld. TPO members are required to comply with any award or direction given by the Ombudsman and accepted by the complainants. “It is important to point out that cases like these are extremely rare and concern the actions of a small minority of agents,” says TPO Chairman Jerry Fitzjohn. “Taking into account the vast number of sales and lettings transactions that take place every year, only a small percentage of consumers contact TPO to complain about their agent, and our recent Annual Report reveals an even smaller number are referred to our Disciplinary & Standards Committee.” Shields & Co had failed to pay a landlord…
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Government reveals promised “urgent” leasehold reform proposals
The government has revealed that its promised leasehold reform proposals will soon ban new-build houses being sold using this type of tenure. It says it will also move to restrict ground rent increases to very low or even zero, all pending an eight-week consultation. The announcement follows February’s Housing White Paper in which the government said “urgent reform” was needed to leaseholds in the UK. There are 1.2 million leasehold houses of which 100,000 feature unfair terms but these will be unaffected by the new legislation. Only future leases will be protected from unfair terms. In the past houses have been sold by developers such as Taylor Wimpey as leasehold, often at reduced cost compared to their freehold counterparts. But they come with greater costs in the long run, the government says. Examples given to support the new proposals include a family home on which the ground rent will reach £10,000 a year by 2060, making it virtually unsaleable and a homeowner charged £1,500 to make a minor alteration to their home. The government is also concerned by the practice of developers selling on freeholds and/or ground rents of leasehold houses, leaving owners “in the dark and facing increasing onerous payments,”…
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TPO awards to complainants rise to over £1million
The value of awards that The Property Ombudsman Service (TPOS) told agents to pay disgruntled customers tripped over £1 million for the first time last year...
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Scarborough landlord licensing scheme launched
Town is latest of over 35 selective licensing schemes to be introduced over past two years.
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Leading solicitor warns of property fraud epidemic
One of London’s leading mid-tier law firms Mackrell Turner Garrett is warning property investors to step up their efforts to protect themselves against fraud.
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Consultation starts on Welsh letting fees ban
The government in Wales has launched its formal consultation on a Welsh letting fees ban in preparation for legislation, with a deadline for agents and landlords to respond of 27th September. Once the consultation process finishes, it expects to bring forward a Fees Charged to Tenants Bill, most likely next year. Wales has already gone several steps further than other parts of the UK in reforming the private rental market following its launch of Rent Smart Wales, its compulsory licensing system for landlords and agents. In its consultation document the Welsh government criticises agents for not supplying tenants with a breakdown of the services they charge for and instead charging flat fees. But although this makes it easier for tenants to compare costs between different agencies, “It lacks transparency” the document says. Welsh letting fees ban Its move to ban fees has been influenced by housing charity Shelter Cymru, which last year released a report on the Welsh private rental market called “Letting go: why it’s time for Wales to ban letting agents’ fees”. In it the charity said fees charged to tenants ranged from £39.99 to £480 and that a third of tenants in Wales pay £200 or more…
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‘Why does our industry allow rogue agents to continue ripping people off?’
One of London’s largest estate agents has called for greater action by the industry and government to eradicate rogue agents after encountering increasing problems recently with rival companies who don’t comply with industry codes of conduct or regulations. LiFe Residential, which has a large HQ near Acton in West London, 13 offices across the capital and 4,000 properties under management, says since November last year it has received more and more cries for help from landlord clients who say they have lost deposits and rents after switching to rival agents who pop up and then disappear over short periods of time. “The fly-by-night nature of these companies, the fact that regulation of the industry is light and that the police aren’t interested unless dozens of people lose money, means these kinds of agents know they have room to operate,” says Jonathan Werth, a director of LiFe Residential. One particularly extreme example of a London agent that closed down owing tenants and landlords thousands of pounds is Oliver Knights Properties Limited, a company that ceased trading in April last year. There are comments on All Agents and many other forums full of landlords and tenants complaining that they have lost money…
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Is new tenant deposits ‘charter’ a blueprint for future rules?
The UK’s longest-established tenant deposits scheme says it may make compliance with its new ‘deposits charter’ a condition of membership in the future. Drawn up with the help of The Property Ombudsman, ARLA Propertymark and RICS, its Code of Recommended Practice outlines the standards it expects of The Deposit Service (TDS) members when protecting deposits. The document also spells out how agents should frame terms of business with landlords and draw up tenancy agreements, complete check in and check out reports and negotiate deposit deductions. Tenant deposits Although TDS says its new ‘charter’ is not compulsory and only previous rules will be enforced formally, TDS says it “does reserve the right in the future to make compliance a membership a requirement”. The company also says that, because it deals with over 15,000 deposit disputes a year, this gives it the “outstanding insight into what causes tenancy deposit disputes, and what can be done better to avoid them arising”. But TDS is careful to point out that its charter does not replace the existing and “much more substantial” deposit codes of practice already in place from the other industry organisations. “It captures, in an easy to understand statement, those ‘best practice’…
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Goodlord! Half of agents support letting fees ban, claims proptech firm
Nearly half of all agents across the UK are in favour of the government’s letting fees ban announced in the recent Queen’s Speech. The claim is being made by lettings and tenancy management platform Goodlord, which says 49% of the 130 letting agents it quizzed were in favour of a ban on admin fees. Some 48% wanted a cap on the size of deposits, a measure also mentioned during the opening of parliament. And a similar proportion of agents also though it a cap on rent rises would be a good idea while 64% of London agents believe the government should build more social housing, although only 54% of those outside the capital believe this. Goodlord says that agents think the sector needs reforming and that overall it is “inefficient” and “lacks transparency” and is often unfair to tenants, the research revealed, and only 42% of the agents though tenants really understand how renting a home works. Moving costs The proptech company says the agents were also “broadly supportive” of ending the current system of landlords being able to terminate tenancies after six months without giving a reason, and that landlords should reimburse them for at least part of their…
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