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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Still “too many” cases of rogue letting agents says SAFEagent
Despite recent regulatory changes and industry initiatives there are still “too many” cases of criminal letting agents stealing landlord and tenant cash, says membership-based campaigning group SAFEagent. The comments come as the organisation kicks off SAFEagent Awareness Week from 15th to 19th May which is designed to highlight to consumers the “importance of choosing a professional agent who is part of a Client Money Protection (CMP) Scheme run by a regulatory organisation”. SAFEagent, which has 3,000 member agents across the UK and has been running for six years, recently won official backing for its ongoing client money protection campaign when in March this year the government said CMP would be made mandatory for all agents. Mandatory CMP “While SAFEagent is delighted that the campaign has finally achieved its goal of mandatory CMP, it is not yet law,” a statement from the organisation says. “This still leaves consumers at risk if their chosen agent does not have client money protection.” John Midgley, Chair of the SAFEagent Steering Group (pictured), says: “Choosing a letting agent without CMP in place therefore remains a massive risk for both landlords and tenants. We’ll continue to campaign, raising awareness among consumers of the importance of only using…
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Savills wins Appeal Court case over unpaid £150,000 commission
It has been revealed that Savills has won an Appeal Court case and is now due a commission of some £150,000 for the sale of Mill Ride Estate near Ascot in Berkshire, which sold for early £7 million in 2012. The estate used to be land and stables but during the 1990s was laid out as a golf course with a clubhouse (pictured). It was bought by Sidemanor Ltd in 2003, a company owned by London and Argyll-based businessman Peter Blacker (pictured, left) Savills were instructed to sell the property in 2012 and produced several valuations ranging from £2.5m to £10m, the higher of which assumed that planning permission could be gained for a large detached residence within the estate’s grounds, and vacant possession of a cottage. Savills also produced a document outlining what was to be sold including how, should the property sell, they would be due to a fee. This included the recommendation that the estate be sold via “private treaty” and that “we suggest that the estate is offered for sale as soon as planning consent has been granted and we advise that the marketing is initially carried out on a very private basis,” said Savills director…
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US homeowner sues portal over online valuation. Could it happen here?
One of the best-known property portals in the US is being sued by a vendor over its online valuation of her home in a suit filed at an Illinois court. Real estate lawyer Barbara Andersen alleges that the sale of her townhouse, which she has been trying to sell in the town of Glenville and that’s listed on Zillow overlooking a golf course for $626,000 (pictured, right), has faced a ‘major roadblock’ because property portal Zillow’s automated valuation system puts her townhouse at considerably less – $562,000. The lawyer is not seeking damages but instead is asking the portal to amend her property’s ‘Zestimate’. But the portal told The Washing Post that it believed her claim was “without merit”. Like Zoopla, Rightmove, Mouseprice and others in the UK, Zillow has been offering ‘appraisals’ of properties for over a decade and has always put home valuations across the US at the core of its business. Critical And as in the UK, many agents and homeowners in the US have been critical of these estimates. “If you could commoditise property and price it accurately per square foot [via an online tool] then I would be out of a job,” says property expert…
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City firms bid to replace tenant deposits with insurance passport
A tenant deposits platform backed by two major City firma has launched with the aim of competing with the current cash deposit schemes. Backed by both Hiscox insurance and credit score provider Experian and accessed via an iPhone app, InsureStreet says it will issue renters with a digital ‘RentPassport’ that validates their profile and then provides them with an instant insurance quote to cover their deposit. Tenant deposits Instead of paying a cash deposit, renters make a one-off payment for an insurance policy that covers them for the duration of the rental contract. InsureStreet claims that in most cases, this insurance premium will be less than a tenth of the cost of a deposit, and that the system will reward good tenant behaviour by offering lower premiums at renewal. The app is free for agents, landlords and renters to download and use, the company says. But what’s not clear is whether the premiums paid by renters for the insurance will be included in the looming letting fees ban. The Negotiator asked CEO Tahir Farooqui (pictured, below) about this. He replied that: “We absolutely support the letting fees ban and so do many of the property partners we are engaging with” which would indicate…
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EasyProperty withdraws advertising claims after ASA probe
Online agent easyProperty.com has agreed to withdraw several claims about its service from any future advertising following a complaint to the Advertising Standards Authority (ASA). The complaint was made by a member of the public who had clicked on a link within a Google-sponsored search result to an ad that included: “Get an offer within 20 weeks”, “Save £2809 on estate agent fees”, “No commission fees” and “Save with low fixed fees”. After contacting easyProperty, the complainant was quoted a saving of less than £2,809 and “was not given an explanation of how the advertiser could get them offers within 20 weeks”, the ASA says, and then challenged whether the claims in the ad were misleading and could be substantiated. Claims removed EasyProperty has now removed “Get an offer within 20 weeks” and “Save £2809 on estate agent fees” from its advertising. It also agreed in future ads to use less definitive savings claims – such as ‘You could save’ and that they would make it clear that the ‘offer within 20 weeks claim’ actually referred to their money back guarantee offer, whereby consumers would receive a refund if their property wasn’t sold within 20 weeks. On this basis and…
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Jeremy Corbyn reveals Labour will crack down even harder on rental sector
Labour leader Jeremy Corbyn has announced that if he wins power the private rented sector would see the introduction of tougher regulation under his government. He told The Guardian newspaper today that this would include more secure tenancies, the adoption of the Conservative’s plans to ban outright fees charged to tenants, and the prevention of unreasonable rent increases. He said these would all be wrapped up within a new charter of private tenants’ rights. “We will tackle soaring rents in the private rented sector through regulation,” Jeremy Corbyn also announced on his campaign website. Labour also plans to build a million new homes including half a million new council properties during its first five years in office. “We will rebuild and transform Britain by building council homes and homes that first-time buyers can afford,” he says. Priorities “There are obviously many priorities but the crisis of housing and setting in train a housing programme that would build more council housing at socially affordable rents and ensuring there is proper regulation of the private rental sector is a very high priority for me,” Jeremy Corbyn told The Guardian. Labour strategists believe housing is one of the key concerns of ‘generation rent’ while official…
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Former Ascot property developer jailed for £640k fraud
A former Ascot property developer, who hijacked details of an offshore company in the British Virgin Islands and forged documents to commit fraud and evade VAT, has been jailed for three years and seven months. He was also trading while disqualified as a company director. HM Revenue and Customs (HMRC) investigators discovered that in June 2011 Keith Conner, 55, hijacked the details of the British Virgin Islands registered company, Pruton Investment Holding Ltd, to buy and sell a residential property in Thurloe Square, Kensington, London. Conner then forged a Power of Attorney document, in the name of a Malaysian businessman, to transfer the £309,000 profit from the London sale into a company bank account he controlled. A similar property deal in October 2011 involved the purchase and immediate sale of a business property in Earls Court Road, Kensington. Conner again hijacked the details of a company to commit the fraud, this time a UK based company, Bishopsgate Homes Ltd. Investigations showed that signatures had been forged on the contracts, leading to £331,000 in profit from the sale being paid into another bank account Conner controlled. The directors of the UK business had no involvement with their company being used for…
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Scottish letting agents welcome new regulation
The Letting Agent Code of Practice Regulations will come in to law in Scotland in January 2018. Measures within the code include setting up a Letting Agent Register.
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TDS issues reminder on Immigration Act
New legislation on the Right to Rent came into effect on 14th November 2016 and The Tenancy Deposit Scheme has issued a reminder for letting agents.
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Theresa May does it her way – 8th June is Election Day
Election Day has been confirmed by Parliament and it will take place on 8th June 2017 – and by a massive majority of 522 to 13, a result that must have delighted the Prime Minister, Theresa May who needed 434 votes to go ahead. Mrs May urged the British people to ‘put their trust in me.’ Nine of the 13 MPS who voted ‘No’ were Labour: Ronnie Campbell (Blyth Valley), Ann Clwyd (Cynon Valley), Paul Farrelly (Newcastle-under-Lyme), Jim Fitzpatrick (Poplar and Limehouse), Clive Lewis (Norwich South), Fiona Mactaggart (Slough), Liz McInnes (Heywood and Middleton), Dennis Skinner (Bolsover) and Graham Stringer (Blackley and Broughton). the other four were Alasdair McDinnell, SDLP and Independents Lady Hermon, Michelle Thompson and Natalie McGarry. David Westgate, Chief Executive of Andrews Property Group, was surprised, but says it’s business as usual, “Theresa May’s announcement that she intends to seek the support of MPs to hold a snap election on June 8 undoubtedly came as a surprise, but we must not let it destabilise the property market. Elections can lead to uncertainty and that can affect confidence; however the mechanics of the market are such that it is driven by demand and that remains extremely high at the moment. We need to seek ways…
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