How Valid is this Document?

A recent request for assistance put me in a quandary.  A member contacted me who was quite elderly.  She had tenants who were creating problems and falling into rent arrears, though the rent was only 1 month late, at present.  She had written the tenant a letter and told him to vacate immediately.  Rush of blood to the head and visions of illegal eviction came stampeding into my mind! However, the landlady seems to have been quite fortunate as the tenant not only allowed the landlady to enter the property, but also said he would leave in 4 weeks.

Long experience of tenants made me very sceptical that he would leave on that date, so I immediately suggested that a notice be served.  Not yet in sufficient rent arrears to warrant a section 8 notice, but a section 21 notice, even though it gives 2 months’ notice, at least starts the ball rolling.  The landlady was horrified!  “But then he’ll know he has the right to stay until the end of the notice and I want him out”.  Aargh! That’s because he does have the right and should have had a legal notice!  So what did the landlady want me to do?

What she wanted was for me to prepare a document, stating the tenant was leaving in 4 weeks, which she and he would sign.  I advised that such a document would not have any legal validity.  “Well, he wouldn’t know that and it is a contract of sorts” was the response.

I did draft something out as follows:

Dear……………………

“I refer to our discussion today, in which you accepted that the tenancy of the above-mentioned property should end.

You have advised your intention to vacate in 4 weeks, being 17th December.  I shall attend at the property at 11.00am on that date to receive the keys.

I thank you for your co-operation and wish you well in the future.

Yours sincerely,

                                                                                                                                                          Landlord

I have served the Landlady 4 weeks’ notice that I will vacate the property on 17th December.

Signed: ……………………………………………………………………………..  Date:………………………………………………

I have accepted 4 weeks’ notice served by my tenant, ………………………………… to vacate on 17th December.  I am happy to allow them to vacate before that date, should this assist them.

Signed:

Landlord……………………………………………..

Date:………………………………………………….

If the tenant approached a Citizens’ Advice Bureau, Shelter or a Housing Aid Service, this landlady could have found herself in big trouble.  No valid notice and a letter with no legal status.  I can only do as I am asked and, as in this case, strongly advise that a correct legal notice be served immediately.  My bet would be that the tenant will still be there in 4 weeks, though I hope for the landlady’s sake he is not.  At that stage, the short-cut that the landlady has tried may be revealed and at the very least, she will have to serve legal notice, but it could be very much worse.

By Sharon Betton

 

Retaliatory Eviction

The second reading of M.P. Sarah Teathers’ private members bill on Retaliatory Eviction took place on 28th November. This sought to limit the extent to which  landlords may end a tenancy using a S.21 notice, the Accelerated Possession Procedure.

Whilst the S.21 notice, where no reason has to be given to end a tenancy, is the most straightforward means of gaining possession, it is often used by landlords where there are rent arrears and/or anti-social behaviour. Where arrears exceed 8 weeks, or there is severe anti-social behaviour, there is always the option of a S.8 notice – but this marks the tenant out as a bad tenant. Use of a S.21 does not require the landlord to reveal  that there have been problems in the tenancy. This therefore means the tenant can go on to make a fresh start somewhere else. Now its’ use will be severely restricted.

How many landlords have had tenants who don’t report repairs, but are happy to talk about them to Housing Advice, Shelter or the CAB? They will be unable to use a s.21 as it will be seen as a retaliatory eviction. Many, many landlords behave in a kinder and more generous way than some tenants deserve. They want to provide decent properties – it is their investment that is deteriorating! But they are hampered by tenants who don’t know how to combat condensation (keeping rooms ventilated), by not having sufficient ventilation between cold walls and furniture items, by expecting landlords to be mind readers.  A far more likely scenario is the tenant who is misbehaving and, following a conversation where the possibility of eviction is raised, suddenly discovers that the property is in a poor condition and reports it, so a S.21 cannot be issued.

Are M.P.’s so short-sighted that they cannot believe that these steps, far from protecting tenants and raising standards, will make it harder for some of the most vulnerable to find acceptable properties?  Why should a landlord take a risk on a tenant when he has no certainty that he can recover possession by use of a S.21? Simply on the basis that they are vulnerable, they may live in poor conditions, be unable to keep a property the way it should be and therefore, allow repairs to go unreported – at which point, a helpful visitor will suggest a complaint is needed.

Should it eventually become law, then new tenancies must include provision for a monthly inspection to ensure all is okay in the property, which may stop needless complaints being used and you being unable to issue a S.21.

By Sharon Betton

 

Urgent Response Repairs

Tenants will always feel every repair is urgent, but whilst all repairs require a response, some require a more urgent response than others.

The ones I would advise that most thought and attention are given to them are those that affect heating and hot water and anything that concerns water.

When a tenant says the boiler is not working and they therefore have no heating or hot water, you must take whatever steps you can to bring it back to working order.  You may have a regular plumber you use, but in the middle of Winter, it may be difficult to get him out – if he is good, he will be inundated with work!

Unless you are sure he will get round the same day, a policy with the gas board, utilities company or any of the other organisations which offer this kind of service, with a same day call-out guarantee, would be useful and could save unpleasantness with the tenant and local enforcement officers.

Housing Health and Safety Ratings Standard looks at cold as a serious hazard and so must a landlord. Children and the elderly are particularly vulnerable and if any reside with your tenant, it is vital that heating is maintained.

The other main issue is anything to do with water. Water ingress, leaks, must always be treated seriously because of the deterioration that can be caused to a property, some of which is not always immediately apparent. Water ingress, through poor pointing or displaced flashing can cause mould with its’ health implications. Leaks etc. must be thoroughly investigated as water left standing but unseen could cause rot in floorboards and risk ceilings collapsing.  Though a noticeable bow in the ceiling could indicate a problem, there may be no noticeable signs that long-standing damp has caused rot and the ceiling is at risk.

If the ceiling does collapse, the landlord risks being held responsible for damage to tenant’s property and demands for compensation for shock or injury.

Always remember, that a property perfect at the start of the tenancy can develop problems which are not necessarily down to tenant misuse of the property. Treat complaints seriously and don’t delay in effecting whatever repair you can.

By Sharon Betton

DWP Measures to tackle Rent Arrears

Private landlords have doubted that the DWP understood the tenants who they felt they helped by paying rent to the tenant under Universal Credit.  This seems proved as,  from 26th November, they will deduct 20% of the non-housing related benefit  where tenants fall 8 weeks in rent arrears, with the sum collected being  paid to the landlord to reduce the rent arrears.

A tenant under 25 will lose £50 per month with a couple losing £100 per month; for families with children living them, the sums would be even more.  Considerable reductions which could lead to the horrors of loan sharks, stealing or quitting tenancies.

Empowerment, it seems, works when it comes to paying the rent, but not in re-paying a debt.  In fact, it could be seen as disempowering of those good housing officers and landlords, who previously accepted that anyone can be tempted and fall into arrears, but worked with them to negotiate a payment plan themselves without recourse to penalising them to the extent that a 20% deduction would.

Social landlords have found their rent accounts worsening and their future funding at threat, but even they feel 20% is too much.  The National Housing Federation campaigned on a basis of a 10-20% deduction, conditional on the option that social landlords could ask for lower payments where 20% would lead to hardship, but this was not acceptable to the DWP who went for a 20% deduction.

From 26th November, if a landlord informs the DWP that a tenant is 8 weeks in rent arrears, a 20% deduction will apply.  Will this be the same case for private sector landlords?  Time will tell, but in the spirit of equalising the situation between private and public sector, it should do.  We can look forward to newspapers headlines labelling social landlords as “money-grabbing” and “rogues”, perhaps?

Is this intended as a means of collecting rent arrears or as a dis-incentive to the arrears accruing in the first place?  Private landlords need to be aware of this legislation and make sure tenants know about it too – the sums taken will have a disastrous effect on their finances, stretched to the limit even without deductions.

By Sharon Betton

Do I trust my tenant re? Rent arrears?

A very nice, trusting landlady put a scenario to me.

She was introduced to the tenant by an acquaintance.  He had nowhere to go; had made no provision for taking a private rented property, so had no deposit, no references from a previous landlord nor a Guarantor.  These were all reasons for the landlady to put kindness to one side and allow logic and business sense to come in, but – she was a nice lady.

The tenant moved in, paid his rent for a couple of months then, disaster!  He lost his job, but he was entitled to housing benefit.  Yes, he was – but it didn’t get to the landlady.  8 weeks in rent arrears, she asked housing benefit to pay her direct, which they did – until the tenant started work again.  He paid for another few months with tiny payments off the arrears, but then the payments stopped.  After reminders, he advised he was out of work again.  Back on housing benefit, payments went to him until another 8 weeks arrears had accumulated.  The landlady had to request again that payments be made direct to her.  All continued well – until he gained a third job.  But this time, the payments reduced to a dribble.

In June, the landlady was getting desperate.  There had been no rent for some months, no income to allow her to service her properties properly, something had to be done.  She served him a s.8 notice, but wrote him a courteous letter, pointed out that if the rent was not paid regularly and something done to reduce the outstanding arrears, she would have no alternative but to act on the notice and seek possession through the courts.  She contacted the person who had introduced him to her – he was no longer speaking to him and was not prepared to discuss the matter with him. However, the letter and notice galvanised the tenant into action.  He was prepared to sign an agreement to pay  the arrears.  The landlady was very happy, she didn’t want to have to evict.

It did not last long.  The first payment was made, then nothing.  Texts were responded to with “I’ll pay you by the end of the month” – but no payment was made.  His most recent contacts were “I’m leaving at the end of October”, then “I’m leaving at the end of November”.  She wanted to know, should she believe him? I’ve never met the tenant, but going from his history, my answer was “no – he’s playing you along – evict”.  Eviction is expensive and no landlord can be blamed for trying to avoid it, but there are times when there is no choice.  This tenant is in debt.  He is also trying to stay as long as possible.  Is it likely that he has accumulated a deposit for a new place?  I think not.  Is he likely to find an equally kind landlady a second time?  I sincerely hope not.

When there are substantial rent arrears, don’t make the mistake of holding off eviction because he has told you what you want to hear. Actions speak far louder than words – and the actions where  there are rent arrears need to be payments.

By Sharon Betton

Being fair to tenants!

A recent query on terminating a tenancy on the grounds of rent arrears gave me pause for thought.  No-one can doubt my sympathies with landlords’ who are patient and sympathetic when arrears accrue – perhaps more sympathetic than they should be, accepting excuses far more readily than I would.  The landlord I spoke to seemed to have taken all my advice about being aware of arrears a little too much to heart and was over-anxious about his rent.

The tenant was accepted and had been open that he would require housing benefit; however, he had paid 2 months’ rent in advance when his tenancy started on 1st September.  The rent was paid for September and October and the next rent, due on 1st November, had not been paid.  I do not know what the tenancy agreement said so do not know whether it said the rent was payable 2 months in advance so therefore was already 2 months in rent arrears or whether it was payable monthly, but evicting on a rent arrears ground under the circumstances outlined would be difficult.  Even worse, it plays into the hands of those who feel that landlords are money-grabbing and uncaring.

Of course, landlords should be aware of when rent is due and take steps when arrears start to accrue, but accepting a housing benefit/Universal Credit dependent tenant and not understanding that this will almost inevitably cause delays.  It would also be very difficult to maintain rent payments in advance and jumping on them when the rent payment is a couple of days late does take it to extremes.  By all means, write a short but pleasant letter so they know that you are on top of the situation.  That should prompt the tenant to contact housing benefits/DWP to find out exactly what is happening with the claim.

The situation with this tenant could be worthy of the landlord’s anxiety, but it is really too early to tell.  He could also be the model tenant, who had acted responsibly to get 2 months’ rent in advance at the start of the tenancy.  A little patience could build a really strong landlord and tenant relationship.

By Sharon Betton

Update on Universal Credit

Government data released on 17th September 2014 shows that more than 11,000 households were claiming Universal Credit during August of this year.

This is a considerable increase on July, when 7,460 households were claiming and June, when 6,630 were claiming. As anticipated, the rate at which the programme is rolling out is accelerating.

39 job centres were processing claims for Universal Credit by mid-August and all are now accepting claims from couples, as well as single people. It is anticipated that roll-out to families will follow later this year, though dates for expansion have not been announced, yet.

Between April 2013 and August 2014, 13,260 started to claim Universal Credit; as one of the selling points of Universal Credit was that it would encourage people into work, how successful has this been? In fact, over 2,000 had moved off benefit before 14th August 2014. It is difficult to gauge how successful this is, without looking at comparable figures for a similar period before Universal Credit, it would appear that even in the very early stages, it seems to indicate that for some, at least, it has worked.

A DWP spokesman has said that by the end of 2014, “around one in eight job centres in Britain will be offering Universal Credit” and by the time Universal Credit is fully implemented, eight million people will receive their benefits by Universal Credit.

So far, results are being seen as positive, despite the arrears that social landlords now find they are struggling with.  However, claims so far have been “clean” claims, the single homeless who would not, generally have multiple benefits.  As it implementation progresses, the claims will become more complex.  Be prepared – you may think it can’t happen yet, but you need to be ready for it.  Make sure your tenants have bank accounts, tell them you understand the difficulties when their claims transfer and payment is made monthly in arrears; if your tenants have had difficulties in payment of the rent, make sure you ask them to apply for direct payments to you.  Ignoring it and hoping it won’t happen won’t help; being prepared and ready for it, will.

By Sharon Betton

Housing Factory by Sharon Betton

Procure Plus is a North West consortium with 40 social landlord members. They have hired consultants to look at the feasibility of developing an off-site assembly plant, which it is believed could produce 1000 properties a year for the members and could be up and running by 2016. It would be the first of its’ kind in the social sector and would cost between £2m and £3m to develop.

I am a great fan of pre-fabricated housing, because I saw this at first hand when visiting Japan. Virtually every house there is “new” and my own little house, built in 1936, was considered quite an ancient monument!

Japanese houses are expected to last 25 years, and then start again!  The home-buyer goes to a house “super-store” – a site with examples of every kind of property they build.  The purchaser then chooses the rooms that are needed, the wood finishes, wall decoration, built-in furniture.  Of course, with a 25 year life-span, that means that all the latest innovations are installed at the time of assembly.

Why am I such a fan?  Well, no decorating for a start!  Walls have a vinyl wall covering.  Toilets have warm seats, a built in bidet and blow-dry facility and automatic flush – I would kill for one of those!  No radiators cluttering up walls – heating is via fan heaters at ceiling height.  Built-in cupboards in the lounge but little other furniture – a table and chairs and a small couch;  this was used by the dog, I was told (after I had sat on it!), because others either used the dining chairs or knelt on the floor. Light switches have a small light when they are off, so no scrabbling around for a light-switch in the dark.  Houses have a space on the ground floor which is for storage; in Britain, we would make it into another room, but storage is important in Japan so it is built into the properties.  Bathroom and a toilet are also on the ground floor, with most of the  living accommodation on the upper floors, though in the house I stayed in, there was a room on the ground floor for the grandmother of the family.

We would probably feel the living accommodation was small, with a lounge area with a table and chairs and a small, but very well-planned, kitchen. Another toilet and a washing alcove with a sink were just off the kitchen.  A novelty is the “Special room”, which houses a Shinto shrine and is used only for special occasions.  Upstairs were 3 bedrooms with built in wardrobes.  No bathroom on the top floor!    2 of the bedrooms were quite small, though space maximised by using sliding doors.  Futons Japanese sleep on are not like the European version we see in Ikea – they are thin mattresses which are folded up during the day with no supporting framework.

The one European bed in the house was slept on by the mother – a single bed.  Having slept on both, I preferred the futon.

Most properties had no garage space though bicycles were left at the front.  There was a small garden at the back, but very little used, other than for the dog.  Japanese people prefer to go to the large ornamental parks that seem to abound, picnicking and barbecuing under the cherry blossom.

Properties built in this manner are sensibly planned and give the purchaser exactly what they want; they keep up with innovation and economies of scale are possible.  I am glad that social landlords are considering the advantages of a “housing factory” – it would be nice if an entrepreneur decided to build one for private landlords to access.

A pronouncement from the Lib Dems!

Electioneering is hotting up prior to next years’ general election and the party conferences.  The most recent is the Lib Dems announcement that if returned to power they intend to build 300,000 homes – a year!

This seems ambitious in the extreme and given the amount of money that is being put-in to bring empty properties up to a lettable standard, perhaps unlikely.  It seems whoever is asked to form a Government in 2015, the country will be full of building sites!

We can only hope that some of this comes to fruition, if only for the sake of the jobs created.

An exciting development  is  planned for the 10 local authorities that make-up Greater Manchester to set-up a new organisation, TopCo.  This will negotiate long-term funding schemes with the Government, Europe and agencies, to make up the short-fall between homes currently in construction (4000) and the 9-10,000 which it is believed are required.  Pooling investments between authorities, pension funds and wealth funds could stimulate development.

Chancellor George Osbourne is being urged to raise the level of stamp duty to £500,000 in the Conservative manifesto.

Anne Main, Conservative MP for St. Albans, calls the duty ‘perverse’ which  disproportionately affect London and the South East; Dominic Raab, Conservative MP for Esher and Walton has called for opposition to the Mansion Tax, which will affect anyone with a highly valued property and to overhaul stamp duty.

Many will feel that both these measures would be helpful to home-owners and landlords.  What a pity it is all lumped into  vote-catching.

By Sharon Betton

Sanction problems acknowledged by DWP by Sharon Betton

Finally acknowledging what has been said since the new legislation around jobseekers came into force, the Department of Work and Pensions have been criticised in a report they commissioned, written by former Policy Exchange economist, Matthew Oakley; they have promised they will tackle the issues and put in place some of the recommended 17 improvements.

Sanctions for Jobseekers and Employment and Support Allowance claimants can trigger the stopping of housing benefit.  This is because the claimants have not realised that a sanction is a major change in their financial circumstances and the council should be notified of this.  A new claim can be in-put on the basis of “nil income” so the housing benefit will continue to be paid.  It is also possible that claimants have not realised that there is no automatic notification through the computer system.

The DWP, in responding to the report, have said claimants will be advised that they must keep the authority advised of their situation and that eventually, there will be an IT solution, but that is in the future.  I would advise that you make it part of your new tenant procedures to remind any who are 100% benefit dependent that if they are sanctioned, they must contact their local authorities.