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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Tenancy Deposit drama makes EastEnders episode
EastEnders continued its tradition of tackling social issues head-on when it made a deposit dispute a key storyline. The recent depiction has been praised by the TDS (Tenancy Deposit Scheme), with the organisation saying it has brought to light important issues in the private rental sector. The plot centered on a landlord who returns to Albert Square with money problems. He decides to terminate a tenancy and uses the check out as an opportunity to make some money for himself. Although the property had been left in good condition, the landlord pours coffee over the carpet and blames the tenant, stating he’ll have to keep the deposit to until he knows how much it will cost to rectify the damage. “The vast majority of landlords look after their tenants and abide by the law, but there’s a small minority who don’t and that can be a problem if tenants are unaware of their rights.” While maybe not as thrilling as shady dealings, shootings and secret love children, the deposit storyline has brought into focus a number of issues that many landlords and tenants can relate to. As well as questioning whether the TV landlord had protected the tenant’s deposit, the…
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Compulsory Client Money Protection moves a step closer
Switch to mandatory Client Money Protection (CMP) could come in a matter of weeks, with Government expected to finalise and release its regulations imminently.
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No-fault eviction numbers declined by 5,000 last year, official figures show
The government’s recent efforts to end unfair ‘no-fault evictions’ appears to be working after the most recent figures from the Ministry of Justice (MoJ) revealed a sharp decline in their use. There were 29,611 accelerated possession cases or Section 21 ‘no-fault evictions’ last year, the MoJ figures show, nearly 5,000 fewer than the year before. Evictions expert Paul Shamplina of Landlord Action says the slump in no-fault evictions is largely due to the Deregulation Act 2015, which came into force in October that year. It has made no-fault evictions much more difficult and protected tenants against unfair retaliatory evictions when they report legitimate complaints about a property. Correct paperwork The act requires that tenants are served the correct paperwork when they start a tenancy including providing a copy of a property’s EPC, Gas Safety certificate, proof that the deposit has been legally protected and the government’s ‘How to Rent’ booklet. If this paperwork is not served correctly, evictions are much more difficult. Paul Shamplina says this has stopped a lot of landlords using accelerated evictions, often because they aren’t aware of the legislative requirements and then, when a tenant stops paying the rent – which make up 73% of evictions…
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Emoov investigated by advertising watchdog for third time since 2015
Hybrid estate agent emoov has been investigated for a third time by the Advertising Standards Authority (ASA) this time over claims made on its website about how much vendors can save by using its service when compared to traditional agents. An agent in Lincolnshire complained to the ASA about the claim on an www.emoov.co.uk webpage that said “our activity around Scunthorpe…£2,672 Average Customer Saving” and “our sellers saved an average of £4,378 in fees with emoov”. The complainant also highlighted that emoov had published two different fixed fees on the page without explaining the difference, one for £795 and the other for £679. The person who contacted the ASA challenged whether the savings claims could be substantiated, and whether the different fixed fees were misleading. Promises After being contacted by the ASA, emoov agreed to take the comparative claims down and has promised not to repeat them, and now makes it clear on the page that it has only one fixed fee of £795. Emoov has been investigated by the ASA twice before for being misleading, in 2015 and 2016, both of which included complaints made to the advertising watchdog about ‘fees saved’ as well as other issues including competitor…
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Be careful what you discuss with competitors down the pub, warns CMA
The Competition and Markets Authority (CMA) has warned agents who attend informal and formal industry gatherings how careful they need to be when chatting with competitors. The hundreds, if not thousands of informal and formal property industry gatherings in pubs, hotels, golf courses and cafes up and down the country every year can lead agents to “fall foul of competition law”, the CMA warns in its latest guidance. It also highlights within the guidance somewhat ominously the combined £750,000 fine it slapped on a local trade association, three estate agents and a newspaper publisher for cartel activity in 2015. Even the most mundane conversation can cross the line and members of trade associations “must be mindful of their conduct in relation to other members of their trade association who are likely to be actual or potential competitors of theirs,” it says. “Trade associations and their members need to be alive to evolving risks of breaking competition law when discussing issues facing their industry. “Topics such as salary benchmarking or perhaps an industry ‘commercial response’ to economic or structural changes in the market may fall into this category.” Other types of conversation agents should be wary of include future pricing, discounts,…
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Labour’s pet policy is “bizarre choice” says National Landlords Association
Labour’s recent proposals to give tenants greater rights to live with their pets has been questioned by the National Landlords Association. In a podcast covering a wide range of subjects published today, its Head of Policy Chris Norris (pictured above, right) says he thought Labour’s decision to back the right to keep pets for tenants a “bizarre choice”. “I’ve got to say I despair with this sort of announcement from the Labour party,” he says. “The NLA is completely neutral when it comes to party politics but of all the things in housing that really demand attention, whether private tenants have the default right to a pet is a bizarre choice.” Chris went on to say that the policy is puzzling because current legislation and case law means consumers are protected, because landlords cannot refuse a tenant with a pet unless they can give a good reason. “You can’t put a ‘no pets’ clause into a tenancy agreement and if a tenant asks a landlord about pets and the landlord says no, they must put forward a valid argument why not,” says Chris. Deposits He also says the government’s proposals to cap deposits at four weeks will make it more…
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Buyers should be forced to take out property fraud insurance, says lawyer involved in landmark case
As the conveyancing industry prepares to hear the outcome of the appeal in a landmark property fraud liability case, the legal firm representing one of the vendors in involved has called for all property buyers to be forced to take out fraud insurance. “I do think [it] would be sensible to look at the possibility of making it compulsory for buyers to take out fraud insurance on every transaction,” says Steven Porter, Partner at JPC Law (pictured, below). “The cost, as matters stand, is relatively small and with compulsory insurance the premiums may even become cheaper due to the economy of scale.” The appeal concerns two key test cases. Conveyancing solicitors Mishcon De Reya and Owen White & Catlin were sued by their buyer clients after fake vendors fraudulently sold properties and received the funds before the problem was spotted. Mishcon De Reya and Owen White & Catline lost the initial property fraud case and went to appeal, which was heard last week. A decision is expected any day. Steven says that if the two buyers involved in the appeal – Dreamvar and his client P&P Properties – had taken out fraud insurance “it would have meant that both would…
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Purplebricks Australia fined £11,200 after regulator receives complaints about its fixed fees
Purplebricks Australia has been fined AU$20,000 (£11,200) by the Queensland Office of Fair Trading (OFT) following complaints that it had misled customers about its fixed-fee offering, and not followed accounting and other business rules. OFT says it received “several complaints” about misleading claims both on Purplebricks’ website and within advertising. In a similar way that some consumers and agents complain about Purplebricks in the UK, it was claimed that Purplebricks was not clear that its fees were charged whether a property is sold or not. “Between November 2016 and June 2017, Purplebricks Australia Pty Ltd, entered into agreements with consumers who were not made aware of the terms of the fees charged,” a statement from the Queensland Office of Fair Trading says. “Consumers were also misled about additional services offered by Purplebricks, despite the agency advertising ‘low, fixed fees’ for their services when selling property. “Purplebricks [also] failed to fulfil some of its regulatory obligations about use of appropriate accounts software, use of a non-Queensland bank account and notification of substitute licensees and other places of business.” In a statement to Australian website Financial Review, Purplebricks’ CEO in Australia, Ryan Dinsdale (pictured, above), said his company had worked with the…
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Prime Minister to force councils and developers to build more affordable homes
The Prime Minister Theresa May has delivered her long-promised keynote speech on how she’s going to achieve her government’s ambitious house building targets. As well as a promised reform of the national system of planning, she also included a strong challenge to builders that her government would only continue to support them via schemes such as Help to Buy if they started building more affordable homes. She also called for developers to “do their duty” and stop using the viability assessment process to “dodge their obligations”. These are reviews that builders can request that councils undertake to work out how profitable a development is likely to be, and if necessary reduce the number of affordable homes within a site. A report by Shelter in November last year revealed that at sites where viability assessment were undertaken, 7% of homes were affordable. Some 28% of property developments are supposed to be affordable, on average. While speaking against a backdrop of bricks at the Royal Town Planning Institute in London – which some commentators on Twitter were less than kind about (see below) – May revealed a major reform of the National Planning Policy Framework. This is designed to release more land…
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Faster home purchases promised as Land Registry begins putting councils’ local search data online
The Land Registry is to begin digitising the UK’s hundreds of Local Land Charges or ‘local searches’ registers in a bid to speed up the house buying process, a move it claims will help up to 125,000 house purchases over the next two years. Waiting for local searches to be completed by councils can be both frustratingly slow and, the Land Registry says, varies widely across the UK in speed and cost. This has created a ‘local search lottery’, it claims. Costs vary from £3 to £76 to complete searches which in some areas can take up to 30 days to complete, unnecessarily holding up thousands of home purchases every year. Local Land Charges information, which include checks on restrictions such as tree preservation orders, listed status and conservation areas, will soon be available within an updated central online database that solicitors will be able to access as either searchable PDFs or Excel spreadsheets. “This is a significant step forward in the Government’s ambition to make the house-buying process simpler, faster and cheaper,” says Land Registry Chief Executive Graham Farrant (pictured). The digitisation project has begun at 26 local authorities and the first to offer the service will include Blackpool,…
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