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Newsletter - July 2016

27/07/2016
Emily

Ten Top Tips For Tenants Who Rent 

  1. Make payment of your rent your first priority. It is your home and you can be evicted if you fail to pay. Payment by standing order is best as you are then less likely to forget. If you pay cash, always get a receipt.
  2. If you are looking to be re-housed by your local authority, they may refuse to do this on the basis that you are ‘voluntarily homeless’ if they consider that you are responsible for being evicted for rent arrears, for example if you have used money such as housing benefit which was available to pay your rent, for paying off other debts.
  3. If you decide to withhold your rent, for example if your landlord is not carrying out proper repairs to your property, do not spend this money on other things. Keep it safe, preferably in a separate savings account. Then if your landlord tries to evict you for rent arrears, you will be in a position to pay off the arrears quickly.
  4. If your landlord is failing to keep your property in proper repair, in some circumstances you are entitled to withhold rent and get the works done yourself. However the proper procedure should always be followed and it may be a good idea to get legal advice first.
  5. If you are in the first six months of a new assured shorthold tenancy, and you think your rent is too high, you can refer this to the Rent Assessment Panel for review. However if you want to stay in the property as a long term tenant, be aware that this will not improve your landlord/tenant relationship!
  6. If your landlord tries to increase your rent, note that (for most tenancies) there are only three ways he can do this - (1) by a valid rent review clause in the tenancy agreement (and many tenancy agreements do not have these), (2) by agreement with you (e.g. by you signing a new tenancy agreement at the new rent) and (3) by service upon you of the proper notice to increase rent. For protected tenants under the Rent Act 1977 who have a fair rent registered, this can only be increased by the landlord every two years upon application to the Rent Officer.
  7. If your landlord does not follow one of these three methodsand simply sends you a letter saying that next month your rent will be increased, you can ignore this. However you should write to your landlord saying that he has not increased the rent properly, and that you will not be paying the increased amount (keep a copy of the letter).
  8. If your landlord tries to increase your rent by notice, note that this can only be done after the fixed term of your tenancy has expired. If you think the new rent is too high, you can refer it to your local Rent Assessment Panel for review. However this MUST be done during the months’ notice period or you will be too late.
  9. If you find you are unable to pay all or part of your rent, you should speak to your landlord about it immediately. He may be willing to reach some agreement with you, for example to pay part of the rent later when you are able to afford it.
  10. If your rent is being paid by Housing Benefit, make sure you comply with all their requirements and complete all forms and send them to the benefit office promptly together with any documentation they may require. If there are arrears because of Housing Benefit delays, this is not a valid ground to defend a claim for possession based on rent arrears, and you could be evicted.

  

Nearly A Quarter Of Landlords And Tenants Do Not Have Money Protection

New research shows that more than a fifth of all landlords and tenants who deal with lettings agents, do not have their monies covered in light of problems that could arise.

The research estimates that between tenants and landlords they have hundreds of thousands pounds held by letting agents, who have not enrolled into a CMP scheme.

It is estimated that the UK’s Managing and Letting agents ‘look after’ over £2.7billion of landlord and tenants’ rent and tenancy deposits. At least 20 per cent of tenants and landlords will be unable recover their money, that is being held on their behalf, if their agents act fraudulently and have not enrolled into a CMP scheme.

The research also highlights that 61% of tenants polled mistakenly believe that their deposits are protected under law.

The government is now acknowledging the importance of CMP and are discussing a mandatory client money protection scheme to be imposed across the sector. It will be discussed in Parliament and changes should be made to the Housing and Planning Act.

The chair of the CMP scheme that undertook the research, John Midgley, said: “If an agent were to steal landlord or tenant money without a CMP in place, there’s little chance of getting their money back.

“Would you use a travel agency who isn’t ABTA protected? Consumers who use agents without CMP in place are taking a massive risk.

“While we are finally getting closer to mandatory CMP, we aren’t there yet.”

EasyRoomLets.com totally agrees with the importance of a client money protection scheme, and if a landlord is going to appoint a managing agent, then they should ask them which scheme they are involved with.

 

How much does it cost to be a landlord?

When you become a landlord and let out a property, there are lots of responsibilities you must undertake and landlord costs you will incur – some obvious, and others less expected.

With an estimated 30% of UK landlords ‘accidental landlords’ – landlords by circumstance, who may have inherited a property, become landlords as a result of a separation from their partner or found that selling their property wasn’t in their best interests for whatever reason – here is a breakdown of the expected costs you will need to pay as a landlord.

All landlords are required to have an Energy Performance Certificate (EPC) for each property (between £60 and £120) as well as a Gas Safety Certificate (from £75). Other administrative fees include paying for tenancy agreements, registering with a deposit protection scheme, utilities fees and setting up a limited company (optional, but it will help you save on tax bills).

If you use a letting agent to let out your property (they will handle advertising, interviewing and credit checks) for a tenant finder service, that will start at around 10% of the rental price (post an advert on EasyRoomLets.com to find tenants for free).

If you choose a full management service, where the agents help manage the property for you (collect rent, pay bills, deal with the tenants on a day-to-day basis), that is likely to cost 15% of the monthly rent, on average.

‘Hidden costs for landlords include everything from agency fees to any appliances in the property (i.e. washing machine, dishwasher, tumble dryer),’ explains Karen Hattersley, a landlord with properties around London.

‘If it’s let as a furnished property with electrical appliances, you have to replace them if they break down. You also have to pay for gas and energy certificates, and maintenance, especially for multiple occupancy houses (which tend to suffer more from blocked drains, etc. since there are more people using them). We’ve found leaky roofs and blocked gutters (anything from £500 upwards to fix) are a particular nuisance.’

The unpredictability of the market can mean that your flat or house is vacant for a period; an empty property without rent coming in can mean a loss of significant funds over time.

Landlords also need to invest in specialist insurance cover for their properties (buildings cover, content insurance, damage caused by tenants, etc), and the landlord is obliged to shell out for the cost of yearly safety checks on gas and electrical appliances. The landlord also needs to make sure the property is fitted with fire alarms and smoke detectors.

Other unforeseen costs? Professional cleaning and some redecoration is usually required between tenants.

And don’t forget potential legal fees if the tenant needs to be evicted or takes you to court.

You will also be taxed on any profit you make from your property (the costs of maintaining and managing your property are considered expenses and you won’t be taxed on those).

 
Bill Likely To Abolish Tenants’ Letting Fees

A Private Members Bill is gathering major support in Parliament that will outlaw agents charging tenants fees when moving into new properties; it also contains plans to heavily penalise and get rid of rogue landlords.

The Liberal Democrats peer Baroness Olly Grender, is responsible for the introduction of the Bill as private renters are having to pay ever increasing fees when moving ‘homes’. It has benn predicted that in four to five years time, 20% of households will be renting their residences.

Baroness Grender said: “Agents often levy letting fees on tenants for things which should be paid by the landlord.

“They can be charged registration fees, credit check fees, reference check fees, renewal fees, name change fees, exit fees… the list goes on. Almost all of them are arbitrary and disproportionate. Yet tenants are powerless to do much about it.

She added: “Consumers of private sector housing lack protections. They are often at the mercy of landlords and lettings agents and have little recourse in the case of poor quality or rip-off housing.”

Scotland has already stopped allowing agents to charge tenants letting fees.

The Renters’ Rights Bill will legislate that rented homes are made safer, outlaw unnecessary charges and make public an open register of rogue landlords. More than one in four people under the age of 34 are still at home and sleep in their original bedrooms as leaving their parent’s homes is deemed as too expensive, of which fees are just part of the high costs.

The Bill is supported by Vicky Spratt of the Make Renting Fair Campaign, who said: “We are in the midst of a housing crisis. Frankly I’m surprised it’s not yet called a housing disaster. We simply don’t have enough homes and a buy-to-let boom has trapped more people than ever in the private rental market.”

The Second Reading of the bill is due to go ahead in the middle of the month, accompanied by a demonstration outside Westminster being held by Generation Rent.

The Director of Generation Rent, Betsy Dillner, said: “With a captive market of desperate renters, there’s nothing stopping letting agents from charging grossly inflated fees at the start, middle and end of tenancies. If landlords had to pay all the fees instead, agents would have to start lowering their prices, and tenants would find it easier to move, leading to a much more efficient rental market.”

David Cox, managing director of a lettings agents’ association, said: “Letting agent fees cover the cost of essential items during the lettings agreement such as reference checks, the drafting of the tenancy agreement, and the management of tenancy extension or renewal. “As a result, if letting agents fees are removed or reduced, these costs will most likely be passed on to the tenant through rent rises.

“There are however some rogue landlords and agents that take advantage of the cost of tenant fees. This is where better regulation is needed in the private rental sector to ensure consumers are not taken advantage of.”

 
My landlord has increased the rent, do I have to pay it?

Your landlord should be charging you a ‘market rent'. Market rents are the going rate and are affected by the availability and cost of other similar accommodation in the area.

If you think that your rent is excessive compared to rents on similar properties in your area, then you have the right to apply to the Rent Assessment Committee (RAC) once, within six months of the beginning of the original tenancy.

Complaint about excessive rent
An application can't be made to the RAC if the original tenancy has ended and been replaced, and its more than six months since the start date of the original tenancy. But you should bear in mind that assured shorthold tenants don’t have much protection from eviction. Your landlord may prefer to just ‘evict’ you legally at the end of your fixed-term rather than reduce the amount of rent that he wants to charge you.

You need to give careful consideration and obtain advice before taking any action.

Also, you need to bear in mind that the Rent Assessment Committee may decide to put the rent up if they think it is lower than comparable properties in the area.

Tenancy renewal

Many landlords increase the rent when they renew a tenant’s agreement. And in reality, you don't have much power to stop your landlord from doing this.

As assured shorthold tenants can be evicted without a legal reason, the landlord may decide to find a new tenant if you won’t agree to pay the increased rent.

If you can't afford the rent increase and you can't get the landlord to agree to cheaper rent, then you'll have to look for somewhere else to live.

Fixed-term vs periodic contract

The rules on how and when tenants’ rent can be increased often depend on whether your agreement is for a fixed term (ie for a fixed period of time such as six months) or periodic (ie rolling from week to week or month to month).

If you have a fixed-term tenancy, then your landlord can't normally increase the rent until the fixed-term ends.

The only exceptions to this are if you agree to the increase, or if there's a clause if your tenancy agreement saying your rent can be increased.

Once the fixed-term has ended and the tenancy becomes a periodic tenancy, then most private tenants will find it difficult to argue against rent increases.

The landlord may simply choose to evict you using the appropriate procedure, rather than forego the rent increase.

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