Deregulation Bill

Tenancy Deposits (Clause 31)

A new clause was inserted which would amend the tenancy deposit provisions in the Housing Act 2004. Oliver Heald explained that the 2004 Act was not intended to affect deposits paid to landlords prior to 2007 (when the relevant part of the 2004 Act came into force) and that “it was never the intention that landlords who had protected deposits and who had given their tenants information about that protection should then have to reissue the same information about the deposit protection each and every time the tenancy was renewed, although the same deposit would continue to be protected in the same scheme from one tenancy to the next”.20 However, in the case of Superstrike v Rodrigues [2013] EWCA Civ 669, the Court of Appeal had held that “the deposit must be treated as having been paid by the tenant afresh at the start of the statutory periodic tenancy”.

Mr Heald said this case put a large number of landlords “at risk of court action and open to a financial penalty, despite having done what the sector and successive Governments considered to be the right thing”.

Clause 31 would therefore ensure that if a landlord had complied with the tenancy deposit protections requirements for a tenancy, s/he would not need to comply with them again for a replacement tenancy with the same tenant.

Where the requirements were not complied with for the original tenancy (for example if it began prior to 2007) and a replacement statutory tenancy was in place, clause 31 would give the landlord extra time to comply with the requirements.

The link is

http://www.parliament.uk/briefing-papers/LLN-2014-024/deregulation-bill-hl-bill-33-of-201415

By Margaret Collier

 

 

Meeting with DWP, Salford 3rd July 2014 by Sharon Betton

I have been to several of these meetings now and am pleased to say that I am managing to make the voice of the private landlord heard.

The main content of this meeting was Salford going “live” with Universal Credit on 21st July, in Eccles and Worsley Jobcentres for selected postcodes. As clients will be told where they must make their applications, I have concerns for how they are meant to get to their designated Jobcentre Plus; certainly where I live, it would be 2 buses to get to Worsley, one to get to Eccles but this is a service that runs twice an hour.  Cost and time implications should be considered.

There were a few points made which may be of interest.

-          Credit union accounts can be used, it appears, but how soon particular credit unions will be able to do this is dependent on individual credit unions;

-          Although it is being looked into, there is no provision currently to save an application half way through.  Tenants need advising of the documents they need to provide before they start the application process so they can go through it in one go – estimates for completing a claim were about 45 minutes, with appointments to use the IT being given for 1 hour;

-          For people in temporary accommodation, the housing costs can be taken out of universal credit and the housing element paid direct to the landlord;

-          Change-of-circumstances can be done over the telephone, but change of bank details must be done face-to-face;

-          Although a tenant on housing benefit may have his rent paid direct to the landlord, there will be no automatic transfer when they go onto universal credit – the tenant will have to make another case on grounds of vulnerability for an alternative payment arrangement.

Updates from the other partners were interesting, as were some of the statistics given by those who had contacts with housing associations.  One partner is aware of an association with 57 tenants on Universal Credit, with 55 of them needing alternative payment arrangements.  Another knows of an association with 7 on universal credit, 5 of whom owed over £500!  This was a great contrast to a previous meeting where it had been stated 78% had no worries about budgeting.

A question was asked about sanctions – it was answered that where a client is sanctioned, it is the personal allowance that is cut, not housing costs; however, this would be checked to ensure this is the case.  A representative of Citizens Advice stated that private landlords need the same access to the DWP as social landlords and they are working on this.

Few of our landlords are in Salford, but the steps they are going through should be mirrored by other authorities as Universal Credit is rolled out over the NorthWest.

 

MANCHESTER MEMBERS MEETING – MAY 2014

NEW VENUE ATTRACTS INCREASING NUMBERS

Members attending the Manchester members meeting in May at the Irish World Heritage Centre received a class-act presentation entitled Housing Disrepair and Avoiding Claims from solicitor Matthew Wilson of Whiteheads Solicitors.

Matthew has the benefit of having worked on the other side of the tracks, as a representative of tenants who make claims of disrepair, so he has a broad view of the situations that landlords may find themselves in regarding disrepair, some of which has been triggered by tenant behaviour.

The presentation covered the landlord’s repairing obligations, both contractual and statutory, the essentials of the case which a tenant can rely on to make a valid claim and the defences which a landlord can use.

It is a pleasure to find a solicitor who has a proper grasp of landlord and tenant issues and we look forward to further liaison with Matthew in the future.

Sharon Betton, our Business Development Manager was her usual competent self in bringing the group up to date with current reports and developments in the world of renting, ranging from the imminent introduction of Universal Credit in the North West to the current delays in processing benefit claims.

Typically, Sharon is a mine of information on how to manage property effectively and avoid pitfalls which can cost landlords dear.  Proper record-keeping was again identified as a key component of success.

Sharon also drew the attention of the audience to the increased publicity she is generating for the NWLA, both in her numerous contributions to Inside Housing and in her provision of new material for our updated NWLA website.

Finally, Margaret Collier gave a personal insight into the historic effects of rent controls, a topic dealt with more fully elsewhere in this newsletter.

ALERT

Please note that the July meeting is one not to miss.  Not only will it feature Phil Gibbs on investment in property and a representative from Safe Agent, it will also be the occasion of our summer buffet.  Book the date now – 1st July at the Irish World Heritage Centre.  The venue has extensive free parking and is easily accessible.

By Margaret Collier

 

Invitation to Julie Hilling, M.P.’s, listening event

A few weeks ago, I wrote to Ed Miliband, following his announcement that if Labour were returned to power, they would introduce 3 year tenancies and what is described as a “rent cap” but is in fact just a move to regulate the frequency of rent rises by having this specified in the tenancy agreement.  The response I got answered none of my points and merely repeated the party line regarding 3 year tenancies, but made the (incorrect) point that landlords could still evict for rent arrears, giving 2 months notice!

I felt that Julie Hilling, M.P., had seemed to understand the landlord position when she spoke at our meeting in 2012, so I wrote to her, sending copies of my letter and the response.  I got a somewhat better response, because within days I was invited to attend a “Listening Event” for businesses in Bolton.

I was placed on a table with small businesses, which I did not quibble with because most of our members (with one or two notable exceptions) are small businesses.  There was a healthy discussion and some of the businesses were very open that they felt they could not expand because of the VAT system.  It appears that someone earning £80,000 from the business is exempt from VAT, whilst someone earning £85,000 is liable for tax on the full sum.  A suggestion was made that the VAT should only be payable on the sum above £80,000, which would be a considerable saving and could encourage some to allow for some business expansion.

Julie ended the event by asking for suggestions from each table that she could take back to Government, with a promise that what was said was listened to and that there would be more events.

It was an interesting morning and I was glad I went, not least because I managed to put the landlord’s point of view on several occasions.  To make sure the message had been heard, I stayed and had a short conversation with Julie on the specific points that caused me concern.  She was clearly not aware of certain aspects of private renting which hopefully I was able to enlighten her on.

I left feeling that in Julie, we had someone who really did want to listen and carry opinions forward – not a feeling I had from the response from Mr. Miliband’s secretary.

By Sharon Betton

 

Tenants hit by bedroom tax cutting back on food

An item in the 30th May issue of Inside Housing showed the devastating impact of the bedroom tax.  Research was conducted by Ipsos Mori on behalf of the National Housing Federation and interviewed 1,002 housing association tenants.

Findings were that:

  • 32% have cut back on food;
  • 26% have cut back on heating;
  • 46% needed to borrow money to pay their rent.

The physical effects of not being able to feed themselves and not keeping warm are well known.  Having to borrow to pay rent has emotional and psychological effects.  Don’t be surprised if you have tenants approaching you looking for smaller accommodation which will allow them adequate food, decent heating and a degree of self-respect, which seems sadly lacking with social landlords.

By Sharon Betton

 

Doubts from the Work and Pensions select committee on housing benefit fraud

MP’s are questioning whether the government can tackle housing benefit fraud when Universal Credit is introduced nationally, beginning in July 2014.

A Department of Work and Pensions spokesperson said the level of fraud in the benefit system has dropped since 2010 and they are committed to reduce the level even further, but are their systems robust enough to withstand the impact of Universal Credit?  A Work and Pensions select committee report doubts that the current system could transfer successfully to Universal Credit.  There will be much firmer measures to deal with fraudsters, but this depends on them being caught!

Having been committed to Universal Credit and publicising it for several years, it is surprising that this is another instance of failure to be ready when the time comes.  Universal Credit is a radical change, but more radical means more complex and as equal a target for benefit fraud as the old system. Perhaps ensuring security procedures were in place from the start would have  been a sensible option.

Sharon Betton

 

3 year tenancies ‘won’t stick’

“Inside Housing”, 16th May,   reported that the  Labour chair of the communities and local government committee, Clive Betts, has said Ed Miliband’s plans to introduce minimum 3 year tenancies to the private sector  will fail to ‘stick’.

Whilst he agreed with the need for better security of tenure for tenants, he also saw the need for a quicker eviction process, to deal with those tenants who accrue rent arrears and behave in an anti-social manner.

It is encouraging for landlords, reeling from Mr. Miliband’s recent announcement, to see that Senior Labour people are disagreeing with their leader. They were right then and even more right now.crowded, those  forced to move because of the spare room subsidy (bedroom tax).

Take every opportunity to put your case as a caring, responsible landlord.

Labour’s plan re. letting agents fees defeated

Plans by Labour to scrap letting agent fees have been defeated.  A 53-strong majority in the House of Commons voted against the move which would have meant amending the Consumer Rights Bill.

Instead, letting agents will have to publish their charges in detail, to ensure both sides know exactly what services they are paying for.

The coalition’s proposed amendment will be added to the bill at a later date, according to The Communities and Local Government department.

Letting Agents fees have caused a furore from both landlord and tenant’s point of view and there have been calls for some additional regulation, but it is questionable whether these new measures will address the issues.

By Sharon Betton

New Fraud Prevention Powers for Local Authorities

 

Fraud

Councils have been given new powers to force banks and building societies to share data with them for the purposes of social housing fraud investigations.  £16.6 million has been pledged by Government to help councils tackle social housing cheats.

It is estimated that 98,000 social homes are being unlawfully occupied, at a time when councils are struggling to meet the housing needs of those on waiting registers.  270 extra investigators will be provided by the funding and those discovered will lose their homes ; in addition,  since new rules were put into place in October 2013, sub-letting of social housing is now a criminal offence and perpetrators therefore also risk a jail term.

We will keep putting the case that the private sector needs some similar assistance as too many private landlords find themselves with illegal occupiers (squatters) that have been moved in by tenants who then move on, leaving the landlord with an occupier there without his permission, without any of the credit referencing that is his standard practice and also in a quandary about what to do to get him out.  As things get easier for the social sector, perhaps it will filter down to the private sector and put both sectors on a much more equal footing.

Sharon Betton

 

Evictions to cost more!

The cost of getting rid of a bad tenant has always been considered expensive, particularly when often allied to rent arrears and there is little likelihood of recovering either arrears or costs from the tenant.  Where is the logic?   The accelerated possession procedure, following issue of a s.21, is the most straightforward method and therefore surely the procedure that would lend itself better to on-line proceedings – but this must be done at Court, at a cost of £175.  The s.8, requiring grounds, explanations, Particulars of Claim, can be done at Court at the same cost, or, for government preference,  on-line, by completion of a quite complex form,  at a reduced cost of £100.

These costs pale into insignificance when on 22nd April, the charges rise substantially.  The cost of Court possessions  rises by 60% to £280.  The cost increase for possession claim on-line (PCOL) rises even more extraordinarily by 150%, to £250.

The Government stance is  “the benefits brought by a simplified approach with a fee which reflects the average cost of issuing such proceedings justifies the change”.

A  discount on PCOL was understandable – there would be less staff needed, the data required  in-put by the landlord,  with less time taken as procedures were part of one smooth process; but if this was already the case,  why this rise has been so high?  Landlords were encouraged to apply for possession on-line, but a £30 discount provides little incentive to landlords using this method.

The only good news (!) is that the Bailiff’s warrant for possession stays at £110.

There has been little publicity about the increased charges, possibly in the hope of avoiding a stampede of landlords evicting tenants before the price rise; but is it fair?  It is easy to believe that landlords, unaware of the changes, will turn up at Court and be in for  a shock, when asked for the money!

Sharon Betton