March 11, 2014
Property gossip August 2016

The Department of Communities and Local Government (CLG) have responded to the Select Committee investigation into the private rental sector and indicated some of their plans and how they plan to respond to the report. The plans will affect both private landlords and the letting and managing agent market.

The Select Committee listened to many different complaints about the functioning of the market. Most of them are familiar favourites and include hidden fees and access to redress. Also included are some surprising suggestions like a right for tenants to have longer term tenancies if they want.

With more than a million people living in private rented property, the proposals include a draft ‘Tenants’ Charter’. It has been drafted to help tenants know what to expect in their relationship with a landlord or agent and what actions they can take if they consider there to be a problem.

Questions tenants should ask

One of the criticisms of tenants is that most tenants pay more attention to buying a car than a rented property. The guide starts by suggesting a list of questions tenants should ask before renting a property. Suggestions include checking the Gas Safety Record, the Energy Performance Certificate, what the landlord will do with the deposit and whether the property has an inspection record for the electrical system. They also recommend checking for smoke alarms in any property.

They point out that fee information should be transparent, that agents will soon have to join a redress scheme and the benefits of using a SAFE agent (Client Money Protections insurance).

They also recommend using a landlord associated with an accreditation scheme, specifically mentioning the new London Rental Standard if the property is located in London.

There is guidance about tenancy length, helpfully warning that if the tenant signs up to a longer term tenancy they will be bound to stay for that term unless the tenancy contains a break clause.

Helpfully the charter explains the tenants’ responsibilities too, stressing they should pay the rent on time, look after the property, not cause a nuisance.

Interestingly the charter says the tenancy should explain what notice will be required if the tenant wishes to leave. Other helpful advice includes returning all keys, removing all property at the end of the tenancy and making sure that all rent is paid.

The Charter seems fairly balanced, expressing tenants’ rights and responsibilities. There seems little doubt that if tenants know the contents of the guide, they will be better informed.

The Select Committee made 44 specific recommendations. The Government’s response to these recommendations has now been released. Some of the recommendations will be welcome, like simplifying regulations. Other may not be seen as so attractive to the landlord and agent market. For example there is a recommendation for local authorities to be able to charge landlords for minor breaches of legislation without the need to even go to court, or the ability for local authorities to recoup the amount of money equal to the rent paid if landlords are found to be letting properties below legal standards. This would be the same idea as the Rent Repayment Orders for unlicensed Houses in Multiple Occupation.

Licencing landlords

Importantly the Select Committee came down against a national scheme of licensing all landlords. They believe that the problems are different in different areas of the country and so local solutions are more appropriate. This may see an increase in selective and additional licensing schemes on a local or regional basis. They propose changing the criteria for choosing to run such a scheme, almost certainly leading to more licensing schemes.

One suggestion is the idea of giving local authorities a power to make joining an accreditation scheme (such as the National Landlord Accreditation Scheme, www.landlordaccreditation.org,uk). This would be licensing by another name and the Government say they do not have any plans to follow this through.

What is clear is that there are some significant changes to the private rented sector being proposed for the coming years.

TFP Property Matters Quarterly Newsletter – © TFP


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