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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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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Welsh agents not displaying fees despite TPO enforcement letters
As the deadline for agents to get licensed with Rentsmart Wales passes, Welsh agents will be aware it is not the only organisation trying to police them. The Property Ombudsman late last month said Swansea was one of the Consumer Rights Act non-compliance hotspots after it discovered that agents in the city, along with those in Dorset, had the worst track record for displaying their fees both on their websites and in-branch, as the law now requires. Letters were sent out in a joint campaign with The Chartered Trading Standards Institutes to agents late last month warning them that non-compliant agents would be reported to local Trading Standards officers. But despite this, The Negotiator can reveal, five of the 18 letting agents with properties to let in the city still do not publish details of their fees on their websites. Earlier this month The Property Ombudsman Katrine Sporle (pictured) said up to 50% of agents in Swansea were not compliant and that they had until this Monday to remedy this. The letter has at least prompted some Swansea agents to get on board. Some 27% of them are non-compliant, an improvement on 50% and a sign that most agents across the UK…
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Welsh agents race to get licensed by mandatory RentSmart scheme
The deadline for registration with Rentsmart Wales has now passed and the hundreds of unlicensed agents who manage properties on behalf of landlords are now in breach of the Housing (Wales) Act 2014 but, we can reveal, won’t be prosecuted straight away. Rentsmart Wales, which is the Licensing Authority operating the scheme on behalf of the country’s 22 local authorities and run by Cardiff City Council, would appear to be creaking under the strain of late applications from landlords and agents. Its main contact number has been constantly engaged since the beginning of the week. As the deadline passed last night Rentsmart Wales says it had licensed 405 agents with 1,147 pending approval, and 3,945 landlords licensed with 9,133 pending approval. This is a significant improvement on the position at the end of October when 303 agents had been licensed and 576 were pending approval. Rentsmart also says 126,154 properties are now within the scheme or about 62% of the rental stock. But there is still a long way to go and the vast majority of agents and landlords are waiting for to be licensed. In light of these figures, Welsh Assembly Communities Secretary Carl Sargeant said last night that agents and…
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Bill banning tenant fees gives Minister room to exempt
The National Approved Letting Scheme (NALS) says that the proposed total ban on fees charged by letting agents to tenants may be subject to exemptions following an amendment to the Renters’ Rights Bill currently passing through the Lords. The amendment, which was published on Friday by the legislation’s sponsor, Baroness Grender (pictured, left), said that although a total ban on fees was being sought, she had introduced an amendment to to replace the previous prescriptive list that she says would have led to “new names for charges to get round it” and enable the Secretary of State to allow certain kinds of fees. “If evidence emerges of services in respect of which there is value to the tenant in charging a particular fee, this can be done”, she said. “I do not anticipate any such fees but my new amendment allows for the possibility, if concrete evidence was indeed found that a fee for a specific service would be in the best interest of the tenant in some way”. NALS believes this is significant development because it appears to recognise the legitimate charging of reasonable fees by letting agents setting up tenancies. “This amendment is a welcome one. NALS has long campaigned…
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