New Legislation
November 2009
As we are about to enter the second decade of the 21st Century, and with the prospect of a new government half way through next year, perhaps now is a good time to take stock of the planned and likely new legislation which will affect landlords.
Since the current government came to power we are told that well over 3500 new criminal offences have been created—that is astounding!
Parliamentary legislative activity, it seems, has been frenetic, with regulation after regulation, much of it rushed through, affecting almost every walk of life.
Whilst one must accept that more rules are an inevitable consequence of an advanced information society, does anyone in government ever stop to consider the costs against the benefits of all this legislative burden on businesses generally, and in our case landlords in particular?
With an army of bureaucrats in Westminster and Brussels making all these rules, resulting in many thousands more jobs and costs needed for compliance, can the net benefit / cost to our society ever be accurately calculated or justified?
In any case, do all these rules actually work in practice? How effective was that bureaucratic colossus, the FSA, in preventing mortgage fraud or curbing the impact of the Credit Crunch?
Finally, are these rules being enforced? Very often it seems that existing legislation is not adequately applied, and overstretched authorities, it would appear, are struggling to interpret all of this new legislation – let alone enforce it.
Since much of the rental property related legislation currently in the pipeline is unlikely to see the light of day during this current parliament, will it survive and be implemented by the next government, even if there is a change of government? Watch this space!
Tom Entwistle, Editor
Legislative Changes
Gone are the days, it would seem, when the occasional landlord or even the professional landlord could let a property on a whim, with the minimum of paperwork and legal knowledge.
Anyone letting a property today, including the reluctant or travelling landlord letting his own home, must have a good grasp of the letting laws, and this requirement is likely to grow as new laws are introduced.
No doubt this will please the letting agents, as more landlords will rely on their expertise to steer them clear of trouble, and the best agents do a good job in this.
Whilst it might seem a logical and perhaps desirable next step to bring in regulation of letting agents, given the trust that landlords and tenants must place in them, and the monies they hold as bankers, is it a step too far to require licensing of every landlord and their properties, in the country?
Today we are faced with several pieces of legislation which could take the process of letting property to the next level—a situation which may increasingly discourage particularly occasional landlords from offering their much needed housing accommodation.
In this issue of the LandlordZONE Newsletter we explore the breadth of the proposed changes and their likely impact over the coming months.
Just one example is the possibility of landlords being held responsible for water bills: the cost would inevitably go on rents, but metered water bills would increase considerably as there’s then no accountability or incentive for tenants to save water.
This newsletter was written by David Lawrenson of www.LettingFocus.com – home of Independent Unbiased Property Investment Information and “Successful Property Letting – How to Make Money in Buy to Let” – consistently the UK’s top selling property book for the last three years.
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I have been a landlord for twelve years, and manage 20 prosperities in Scotland. The registration process has been active here for about three years and has many advantages.
I fail to understand how there can be “horror stories” about the Scottish registration system, perhaps they are from people who do not want to be accountable, do not want their extra income to be revealed to the Inland Revenue, do not want to promote best practice as a landlord and generally would rather not do the job properly. There are many horror stories about bad landlords, and the registration process is there to rout them out!
I am of the opinion that being a landlord should not be on a “whim” as David Lawrenson seems to endorse, and “reluctant” landlords should indeed pass the serious business of providing a home to someone, or some family, over to an experienced Letting Agent.
Landlord Registration ensures that only “fit and proper persons” are eligible to be landlords – that means that a search is done to ensure that the prospective landlord has no criminal convictions. It is similar to a teacher’s disclosure, and ensures that vulnerable people are not renting from a sex offender, drug dealer, or perpetrator of crime generally.
Rent collected is taxable, and many landlords would prefer this income to be kept secret – perhaps collected in cash, with no receipt being given to the tenant.
Many deposits are unlawfully withheld, and a registered landlord can be disciplined or struck off the register if a complaint of this nature is upheld. In order to be registered, certain standards are required, of both the landlord and the property. The property must meet certain safety and tenable requirements, and if it doesn’t, the landlord may face disciplinary action, or lose his licence.
People not willing to undergo these measures will not welcome registration.
The registration process is not expensive – it comes as part of the HMO licence, and is £9 per property after that, or about £55 if one doesn’t let an HMO, then about £9 per property, and renewed every three years.
I have found the Landlord Register to be an extremely useful tool in uncovering prospective tenants who have not been able to obtain a good reference from their previous landlord. On more than one occasion, a person has produced a fake landlord reference, but this can easily be checked out on the landlord registration website, which is in the public domain.
Checking that the previous address and/or landlord is on the register is a good starting point for vetting a potential new tenant.
For landlords, being on the register is of great value in both securing the right person as a tenant, and accessing other property owners. I have also used the register to get in touch with another owner with regard to repairs.
Additionally, the Local Authority keeps its landlords informed of new legislation.
From the prospective tenants’ view point, it is reassuring for them to know that their prospective landlord is registered: They can then be more sure that this landlord is a fit and proper person, is going to act within the law, not unreasonably withhold a deposit, not unlawfully harass or evict; and that the landlord will most likely keep the property in a safe and tenable condition, and will be held accountable to a higher monitoring body.
I often let properties to oversees persons who book a room or flat from me over the internet. They have only my property description, and the fact that I am registered, for their assurance, and I make a point of highlighting the council’s register so that they may check me out.
Providing a home to a young person, vulnerable person or family is a serious business and it is right that it should be monitored and regulated, and only undertaken by people with a professional attitude towards it.
Best Regards,
Deborah Sneddon.
Comment by site admin — 30/11/2009 #
Sir, You may well have some naive reason or are perhaps protected by your Scottish residence but you have obviously not been sworn at or threatened when trying to receive the 2 month overdue rent having witnessed 2 angry dogs in your property and then having them destroy the property by the day the court bailiff evicts them never to be seen again. (3 times). Or by apparently decent people turning your home into squalor after long delays in receiving rent then leaving your property in a pig sty and refusing to leave on the agreed date without my giving them the whole deposit. (9 times). The list goes on. WAKE UP.
Comment by Anderew Webb — 8/12/2009 #