The National Landlords Association (NLA) has highlighted an issue which could affect the Government’s proposed new law, The Tenants’ Fees Bill, in the Queen’s Speech, which may effectively ban tenants with pets, or at the very least discourage landlords from accepting tenants with pets.
The NLA has pointed out this anomaly which may have a bearing on the outcome of the new Tenants’ Fees Bill, an undesirable side-effect which would be problematic both for landlords and those tenants with pets who struggle to get accommodation as it is.
It has become accepted practice, and this is advice from the Dogs Trust’s Lets with Pets scheme, that landlords take a higher deposit and include a “professional cleaning on move-out” clause in their tenancy agreements to protect themselves against losses when they accept tenants with pets.
Landlords are under no obligation to accept pets, but the former Office of Fair Trading (OFT) issued “Guidance on the Unfair Terms in Consumer Contract Regulations 1999” See Page 64. The guidance does not have the status of law, but a term against its advice can also be challenged by a tenant in court proceedings. On the matter of pets the guide states:
“Our objection is to blanket exclusions of pets without consideration of all the circumstances. Such a term has been considered unfair under comparable legislation in another EU member state because it could prevent a tenant keeping a goldfish. We are unlikely to object to a term prohibiting the keeping of pets that could harm the property, affect subsequent tenants or be a nuisance to other residents.”
So landlords should consider requests from tenants with pets, or existing tenants with requests to bring in pets, on a case by case basis, a request not to be unreasonably refused.
However, up until now the advice has been to have tenant sign a supplementary pet agreement which not only involves a supplementary deposit but also things like how the pet must be housed and supervised, inoculated and covered by insurance, depending on the type of pet. See: https://www.landlordzone.co.uk/documents
The proposed new law proposes a ban on landlords and agents from requiring tenants to make any payments as a condition of their tenancy, excepting rent, a security deposit, a holding deposit and tenant default fees.
One week’s rent seems perfectly reasonable for a holding deposit as a tenant defaulting on their tenancy commitment, unilaterally backing out after the landlords has spent time screening and checking is a roughly appropriate compensation amount if the landlord retains this.
On the other hand, if the landlord rejects the tenant for any reason, including failing a credit check and referencing, the landlord is not entitled to retain the hold deposit.
In the case of a security deposit, landlords may have more of an issue with this. Six week’s rent has become the norm for many landlords as a deposit, for the simple reason that tenants have a habit of failing to pay the final month’s rent, telling the landlord to use their deposit as rent. This is despite the fact that most deposits are held in the custodial scheme, not by the landlord or agent. Therefore, by limiting the security deposit to one month’s rent it makes it even more likely that landlords will meet with this problem.
On the pet issue, the NLA says the one month limit will reduce landlords’ willingness to accept pets because they can’t take a bigger deposit to protect against pet damage. Research carried out by the NLA in the past has shown that around 47 per cent of their member landlords were not willing to accept pets, with 41 per cent of those respondents citing the reason as potential property damage.
As currently worded, the new legislation has no flexibility to allow additional pet cover, so the NLA believe the end result is likely to be fewer landlords willing to accept pets.