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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Foxtons branch fined for not explaining tenant administration fee
Foxtons has been fined £2,500 after a tenant administration fee it charges was found to be not adequately explained. The sanction follows an inspection by Trading Standards at its Stratford branch near the Olympic Park in East London. The London Borough of Newham has been cracking down on agents all over the borough over the past two years as part of its Fair Lettings Project, which has sent out reminders about agents’ “obligations to consumers” and inspection teams dispatched to check branches to “ensure they don’t rip off tenants or landlords”. Foxtons was visited in January last year by a local Trading Standards officer who found that a £425 tenant administration fee charged to prospective tenants was not properly detailed. Despite the error being pointed out by the officer, the fee remained unexplained at the branch for several months and a penalty charge of £2,500 was accepted by Foxtons. “The Newham initiative was introduced to ensure that all of the 200 or so residential letting agents in the borough are complying with legislation designed to stop tenants being exploited,” the council says. “This includes ensuring that fees are transparent, that deposits are protected and that agents have fair terms and conditions.”…
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Wales debates what to do with own Stamp Duty in April 2018
The Welsh government is consulting on what to do when it takes control of Stamp Duty with a local version called Welsh Land Transaction Tax, in April next year. Landlord groups including the Welsh arm of the Residential Landlords Association director Douglas Haig (pictured, left) are calling for the 3% levy on buy-to-let and second homes to be scrapped because it will ‘limit supply and push up rents’, it is claimed. The RLA says landlords in Wales have seen the average Stamp Duty bill rise from several hundred pounds to £4,850 since the new rate was introduced across the UK. But the RLA is unlikely to get its way in Wales. A Welsh government spokesman told the BBC that the additional revenue of £58m created by the 3% additional tax will be “essential to the delivery of public services across Wales”. Agents have been represented at the enquiry into the devolved LTT by the NAEA whose MD Mark Hayward (pictured, right) spoke to officials in October last year. He recommended a gradual changeover to allow for a “full discussion and full awareness as to not skew the market”. Welsh Cabinet finance and communities Secretary Mark Drakeford said he wanted to…
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Property Ombudsman launches new portal for agents to monitor complaints
Salisbury-based The Property Ombudsman (TPO) has promoted its Casework Director Jane Erskine to the role of Deputy Ombudsman and launched a new online portal to enable agents and consumers to review cases as they proceed. Jane’s promotion is part of a reorganisation at TPO that Katrine Sporle, the Property Ombudsman, says are part of efforts to provide a “streamlined service that puts the consumer at the heart of the process”. Durham University education Jane (pictured, left) joined TPO as a case officer in 2007 after a nine-year stint working in private practice specialising in wills, conveyancing and probate, and has risen through the TPO ranks. In 2010 she was promoted to Senior Case Officer at the property dispute resolution organisation before rising to Casework Director two years later. She is a regular fixture on the property speaking circuit including at several regional NAEA conferences and masterclasses. Key to the TPO’s reorganisation is a new online portal that Katrine says will “transform the way the scheme reviews complaints by allowing agents and consumers to review live case updates, with additional functions for agents who will soon be able to renew their membership and update their contact systems at the click of a…
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Sheffield is eighth city to see anti To Let boards campaign
Moves to restrict To Let boards in predominantly student areas of Sheffield are under, adding to existing measures already underway or being considered in seven other cities. These include Brighton, Liverpool, Durham, Belfast, Leicester, Newcastle and London. In Sheffield a local campaigner, retired 57-year-old Tony Flatley, has raised a petition to persuade the city council to ask the Secretary of State for powers to control To Let boards in the city’s mainly student areas including Walkely (pictured), Crookes, Broomhill and Sharrow. “With the number of ‘to let’ boards that are up, it’s the visual impact, but it’s also the fact that actually it’s a burglar’s paradise,” he told local newspaper The Star. “It highlights areas where burglars can go in and steal while the houses are empty.” Flatly says he believes most student and many other tenants now find their properties online and that new restrictions “would not affect agents too much”. “For the people that live in these areas, it has quite a large impact,” he said. “My petition will go in front of Sheffield Council on February 1. The point for me is just to get discussion started.” Meanwhile, in Durham – the latest city to embark on…
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MP predicts letting fees ban will cut agent turnover by up to 20%
The letting fees ban will cut agent turnover by up to 20%, says Mike Freer, the Conservative MP for Finchley and Golders Green in North London (pictured). Freer, who is a buy-to-let landlord himself, says he has talked to letting agents in his constituency about the ban including Martyn Gerrard, which he describes as an ‘industry leader’ in his area. The company is unusual within the lettings sector because it does not charge tenants administration or contract fees. The MP says his research reveals that agent turnover is likely to reduce by between 10% and 20% among “agents who have been charging these spurious fees to tenants” if a ban is introduced and that this will weed out the “cut price unregulated agents” within the industry. He says agents in his area believe that such a dramatic drop in turnover will encourage agents to increase their charges to landlords, who in turn will raise rents to cover the increased costs. “In Scotland, where all but rent and refundable deposits were banned in 2012, the evidence shows that rents have risen as a direct consequence of the ban,” the MP says in his blog on website conservativehome.com. Freer then goes on…
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Court hears of model’s £1.2m property fraud case
The dangers of property fraud for home buyers, vendors, agents and conveyancers have been highlighted vividly by a case currently going through the courts in London. Model Laylah De Cruz (pictured) and her mother Dianne Moorcroft are standing trial after several professionals were duped into enabling the fraudulent application for a £1.2 million bridging loan on a four-bedroom terraced house on Eagle Place in Kensington, London (pictured). De Cruz denies persuading her mother to change her name by Deed Poll and, by later impersonating the real owner of the property, persuading both a local high-profile estate agent and a conveyancer that she had the right to sell the £3.15m property, and later gain a bridging loan for it. The money was transferred to a Dubai bank account and withdrawn as cash before suspicious Land Registry personnel could do anything to stop the fraud. Whatever the outcome of the trial, the legal and property industries face a huge problem when faced with persistent and sophisticated property fraud and identify theft attempts, as this case highlights. Julian Blake of law firm Wiseman Lee, which carries out conveyancing work and undertakes property fraud cases, says there is little either solicitors or agents can do…
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Five property firms rapped by Advertising Standards Authority
An unprecedented five property companies including three agents and two developers had their adverts referred to the Advertising Standards Authority (ASA) during the run-up to the New Year. TV – Birch’s Group London-based park homes developer used photographs of an old site in a TV ad to promote a new development, which the ASA considered ‘misleading’. Birch’s Group, which has built and owns sites across the UK including in Hampshire, Cambridgeshire, Lincolnshire and Somerset, used images and footage from one of its Cambridgeshire sites to illustrate its Little London Park development in the TV ad. The company told the ASA that it ‘believed that the images and footage shown in the ad were an accurate representation of properties customers could purchase at their Little London Park site’. The ASA disagreed, saying it considered TV viewers would interpret the ad to mean that the featured properties were available to purchase at the Little London Park site and that they were ready for viewing at the advertised open weekend event promoted within the ad. The ASA also noted that one of the properties featured in the ad was ‘vastly different’ to the property available at the open weekend event. Online – Whitegates…
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New VAT charge on local authority searches to cause home move delays, says Law Society
Property buyers must now pay VAT on local authority searches, The Law Society has warned, and some home moves may face delays in the coming weeks as a result. Rumours have been circulating among conveyancers during the run up to the New Year that from 1st January VAT will be added to fees charged for local authority searches, but so far HMRC has refused to confirm or deny these rumours. This, The Law Society says, may cause delays as conveyancers attempt to find out whether or not VAT should be added to bills. “Despite requests for clarification, we have yet to receive a formal response from HMRC about the proposed introduction of VAT on local authority conveyancing searches,” says Law Society president Robert Bourns (pictured). “A lack of clarity around conveyancing processes and costs helps no one and we are asking HMRC urgently to explain if, and if so, how and when these changes will come into effect. Even small delays in the home buying process can have big consequences, including the possibility of a sale falling through, causing enormous stress for consumers. “Property buyers and their solicitors need certainty, so they can focus on completing the transaction quickly and with minimum fuss.…
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NALS calls for impartial report into lettings market
National Approved Letting Scheme (NALS) CEO ex Isobel Thomson (pictured) has criticised the government’s proposed ban on tenant lettings fees and called for an impartial report by the Competition and Market Authority (CMA) into the lettings market. Her comments follow the CMA’s recent recommendations for the legal services sector, which after a year-long investigation found that lawyers need to be more transparent about pricing and join a redress scheme, legal requirements that agents must already meet. “Despite the findings of the report, which calls for more transparency, the legal industry has been allowed to continue without the same level of government intervention the lettings industry will face with a ban on fees,” she says. “The proposed ban is based on limited research and anecdotal evidence, as well as a lack of understanding of the likely consumer detriment that will be caused by removing payment for the services the agent provides. “We believe more impartial information is crucial in advance of taking such a drastic measure as a ban. “Given the government’s focus on improving the experience for the consumer across a number of sectors, and the importance of the private rented sector, NALS believe the CMA is best placed to…
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Controversial rental property licensing scheme is ‘raising standards’, it is claimed
Liverpool’s citywide rental property licensing scheme is helping improve standards within the city just seven months after it began, Liverpool City Council has claimed. It says anti-social behaviour in ‘targeted’ streets has dropped following the introduction of the scheme, which requires landlords or their agents to manage anti-social behaviour within the properties. Errants tenants have to be given warnings about their conduct and, where necessary, licence holders must start legal proceedings against them or end their tenancies. The scheme has attracted several critics, who claim that the licence application form is in breach of the Data Protection Act and that landlords who join the scheme can be prosecuted for non-compliance in relatively grey areas of responsibility, particularly when dealing with anti-social behaviour, and that it requires landlords agents to ‘spy’ on tenants. The most vocal of these is Larry Sweeney who, in conjunction with website Property118.com, has attacked the ‘sham scheme’ for its failings including its rules on evictions. Sweeney claims the scheme’s rules contravene Section 33 of the Deregulation Act 2015 concerning the period after which a Section 21 notice can be served. “The scheme has drawn a lot of comment and challenges but taking the wider view of different stakeholders, early evidence…
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