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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RICS says tenant passports are solution to rental woes
Letting agents and landlords could soon be able to review tenants’ rent payment histories if proposals from the Royal Institute of Chartered Surveyors (RICS) for a national system of tenant passports becomes a reality, a direction of travel that industry leaders say the government has already embarked on. The RICS Rented Sector Policy Paper published today outlines a national passport system using a database of all the UK’s ten million social and private sector tenants, along with a similar database of landlords. RICS says this would help more vulnerable tenants because, by offering more details on a person’s payment track record, landlords and agents would have a greater understanding of them than currently offered by referencing checks. The idea is a more ambitious version of several local tenant passport systems already being trailed including in Kettering, Northamptonshire where the local borough council offers a voluntary tenant passport scheme for those moving from social to private rented sector housing. RICS says this enables potential landlords to see that they have been good tenants, even though they may have a bad credit history. “An ever-increasing proportion of the population is looking to rent. By 2025, we know that there will be a 1.8 million shortfall…
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Don’t let landlords rely on old EPCs
Residential landlords would be well advised to take the 10-year anniversary of the introduction of the Energy Performance Certificate (EPC)...
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RICS calls for ‘balance’ in letting agent fees ban
The Royal Institute of Chartered Surveyors has made an impassioned plea to the government to allow agents to recoup the ‘reasonable costs’ of putting prospective tenants through referencing and credit checks when the letting agent fees ban comes in during 2018. The comments have been made by Jeremy Blackburn, RICS’s Head of UK Policy who yesterday published a blog warning the government that there may be unintended consequences of the ban. He says these include rising rents as landlords pass on the extra costs to tenants and reduced rental stock as smaller and more vulnerable landlords decide to exit the market. Blackburn also says that Build to Rent’s capacity to take up the slack of a shrinking private rented sector is doubtful, but says agents will have at least a year to prepare for the changes. He says the Department of Communities and Local Government has told RICS that they re planning to take the longer route to legislation rather than rushing a ban through, and that this will give the industry until 2018 to prepare. But Blackburn also says he is surprised that agents were caught off-guard by the Chancellor’s announcement last week. “For the industry, early warning signals of…
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From today Agents face prison for Right to Rent breaches
A letting agent who knowingly rents a property to an illegal migrant will from today be committing a criminal offence and may face jail. The new offences under the Immigrant Act 2016 were announced in November and were created to help prosecute rogue agents ‘intent’ on flouting the law. Agents who face the lesser charge of omitting or forgetting to carry out Right to Rent checks already face civil penalties since the scheme went national in February. These penalties covers both new tenancies and those being renewed. The new penalties are in addition to several other criminal laws that apply to agents such as measures for those who flout Consumer Protection regulations, and under the 1979 Estate Agents’ Act against agents who do not stop trading after a prohibition order. The new criminal penalties will pile the pressure on agents to complete their Right to Rent checks and paperwork meticulously in what is a fast-moving market, particularly in the UK’s larger cities. And the penalties under either legal regime are severe. Under the civil laws the fines are £3,000 per tenant although agents can object to the penalty in writing up to 28 days of the date of the licence. The…
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Barwell’s Tweet shows consistency on fees ban
This week Housing Minister Gavin Barwell was caught off-message on Twitter when a reply he gave to magazine Inside Housing about the rumoured fees ban was unearthed. Barwell said (see right) ‘Bad idea – landlords would pass costs ton to tenants via rent. We’re looking at other ways to cut upfront costs & raise standards’. It is no doubt this sort of mood music from the Tory government that persuaded NALS that a Fair Fees Forum was a good idea. But they, like Barwell, were caught by surprise when Hammond announced that he would bring forward a total ban on fees charged to tenants. At least Barwell is consistent, though. He is one of the few people Tory MPs who who haven’t undergone an astonishing conversion to banning tenant fees since 2014. Those with longer memories will recall that both the 2014 Labour amendment to the Consumer Rights Bill and a 2013 Private Members Bill both failed to gain support from the Tory benches. Chancellor Philip Hammond and Prime Minister Theresa May both voted against the Labour amendment, which was defeated by 291 to 228 votes. But while Barwell has stuck to his guns – his Tweet reflected his ‘no’…
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Land Registry privatisation is dropped
The Land Registry is not going to be privatised and will instead become a ‘digital data-driven registration’ business within public ownership. It has its headquarters in Croydon (pictured) and employs 4,480 staff, generates revenues of £254 million and looks after 24.5 million property titles. News of the organisations’ reprieve from a proposed £1 billion privatisation was buried in the detail of the Chancellor’s Autumn Statement last week and follows the quiet shelving of plans in September after it was dropped from legislation originally announced by the Queen in May. That month the government closed a consultation on the privatisation but the response from key consumer and business groups was highly critical. Those warning of a need for impartial and open property registration included the Competition and Mergers Authority, the Law Society and even several usually pro-privatisation Tory MPs. Bernard Jenkin (pictured), Chair of Public Administration and Constitutional Affairs Committee and MP for Harwich & North Essex, said earlier this year that “while I am not opposed to the general principle of privatisation, the Land Registry must remain an essential arm of the state, the data must remain in state ownership, and the quality of service provided to the public by Land…
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Record deposits fine for Northern Ireland agent
A letting agent in Northern Ireland has been fined £15,000 for failing to protect tenant deposits in five different cases all heard this week at a Magistrate’s Court. The Tenancy Deposit Scheme (TDS) Northern Ireland says the agent had been served fixed penalty notices for all five breaches of the law, each one three times the original deposit and totalling £9,435. But, when these were not paid by the agent enforcement action was then taken through the courts. The Magistrate then increased the fines to £15,000 while the agent will also now have to return the deposits to the five tenants, which totalled £3,145 and pay costs of £1,244. “These are severe penalties and show that local authorities are taking the matter of unprotected deposits seriously,” says Ben Beadle, Managing Director of TDS Northern Ireland. “Under the Tenancy Deposit Scheme Regulations, where a fixed penalty notice has not been paid, fines can be issued by a court of up to £20,000 and it is clear to see that the Court was not afraid to exercise its powers. “The law requires that landlords, or their agent, protect a deposit with a government approved tenancy deposit scheme within 14 days of its…
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NALS reframes Fair Fees Forum after ban bombshell
This afternoon the National Approved Letting Scheme (NALS) announced how its recently-launched Fair Fees Forum will adapt to the ‘surprise’ announcement of a total ban on tenants fees by Philip Hammond last week. The Fair Fees Forum had only just began its work a week before Hammond’s announcement and had set up a working group due to meet the day after the Autumn Statement. But the news that the government intends to go for an outright ban changed everything. NALS revealed that the Fair Fees Forum working group will instead ‘inform the scope of the Government’s consultation prior to a ban’. The forum’s meeting on Friday was attended by officials from the Department of Communities and Local Government who ‘welcomed’ its work so NALS hopes this will give the forum’s advice greater weight at ministerial level. While the working group agreed unanimously to help frame the consultation around the fees ban, some members reserved the right to propose an alternative. But NALS says its key objectives will be to define what ‘fee’ and ‘charges’ are, review how the ban has performed in Scotland, and explore what the implications of the ban in England will be, and how it will be…
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Will Wales now copy England’s fees ban?
High-profile Labour Welsh Assembly Member (AM) Jenny Rathbone has called for a tenant fees ban in Wales, despite voting against a similar proposal by Plaid Cymru last year. Her comments follow a 2012 ban in Scotland against tenant fees as well as last week’s announcement by the Chancellor that they are to be banned in England next year, following a consultation. Rathbone (pictured) has been active in Wales campaigning against fees. In a Senedd debate earlier this year she said “it should be the landlord paying the letting agency, not the tenant” and that “letting agencies are getting away with simply not providing a service in exchange for a fee”, in particular highlighting fees for taking properties off the market while contracts are drawn up. And Rathbone is worried that Wales is now seen as protecting tenants “less than in England and Scotland”, she told the BBC. But in Wales, unlike in England and Scotland, Rathbone is one of a relatively small group of politicians to campaign for a fees ban. Welsh ministers have taken the view recently that rents would rise if landlords are asked to pay for the cost of post-tenancy property cleaning, inventories, credit checks and references.…
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Autumn Statement: Hammond confirms letting fees ban
As expected Chancellor of the Exchequer Philip Hammond has announced this lunchtime in his Autumn Statement that letting fees for tenants are to be banned outright “to improve competition in the private rental market and give renters greater clarity and control over what they will pay,” he said. David Cox, MD of ARLA, disagrees: “A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market. It will be the fourth assault on the sector in just over a year, and do little to help cash-poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account. A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market.’ “Most letting agents do not profit from fees. Our research shows that the average fee charged by ARLA licenced agents is £202 per tenant, which we think is fair, reasonable and far from exploitative for the service tenants receive.” The ban that been on the cards for months and according to Isobel…
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