Tag Archives: renters rights

Private renting virtually impossible for benefit claimants

House to rent no dss

Increasing numbers of Housing Benefit claimants are being excluded from the private rental sector as the number of properties listed as ‘No DSS’ grows according to a House of Commons Briefing Paper. ‘No DSS’  (standing for “Department of Social Security” which was replaced by the Department for Work and Pensions 16 years ago) means the landlord or agent won’t rent a property to someone on housing benefit or local housing allowance.

The House of Commons reports corroborates anecdotal evidence from the Hackney-based private renter information and campaign group Digs which found only one studio flat on the market available to Housing Benefit claimants in a survey of 50 local estate agents between December 2015 and February 2016.

Despite calls from  renters rights groups to outlaw the proscription of renters receiving state benefits on discrimination grounds, the House of Commons briefing paper stated that such restrictions on Housing Benefit claimants is “unlikely to amount to direct discrimination as income and employment status are not protected characteristics under the Equality Act 2010.”

The paper also highlighted other factors which may be exacerbating landlords’ reluctance to let to Housing Benefit claimants which include:

  • uncertainly around the roll-out and implications of Universal Credit
  • the payment of Housing Benefit in arrears
  • restrictions in mortgage agreements and insurance requirements
  • impending tax changes resulting in landlords focusing on “less risky” tenants.

The House of Commons report was soon followed by significant coverage of the publication of a list of banned tenant types from Britain’s biggest landlord, Fergus Wilson, which included tenants receiving benefits. Mr Wilson also included workers on zero-hour contracts, single parents, battered wives and plumbers on his list of undesirable tenant types.

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In addition the the reluctance of many landlords to rent to people on benefits, mortgage lenders may also be exacerbating this situation. In 2012 for example, the buy-to-let lender, The Mortgage Works, stated that no new mortgages would be advanced to landlords whose tenants received benefits. This condition was later withdrawn after significant negative press coverage. Other property letting websites also include a search filter to screen out properties which do not allow tenants on benefits.

This situation is of such importance to large numbers of renters that the housing charity Shelter has published a guide for benefit claimants to  convince a landlord to rent to them.

 

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Renters in shared housing to gain from increased protection

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Around a million renters living in HMOs (Houses in Multiple Occupation) will soon benefit from extra protection from rogue landlords being planned by the government.

HMOs, familiar to many students and flat sharers, are defined as properties shared by more than one unrelated persons. Typically these may be groups of friends such as is common for student accommodation or by strangers.  Typically the house sharers will have their own bedrooms but will share communal areas such as bathrooms or kitchens.

Under the government’s proposals, tenants living in a HMO may soon benefit from:

  • minimum room size standards (6.52m2 for one person rooms and 10.32m2 for double rooms)
  • improved waste disposal facilities
  • tackling rogue landlords through the introduction of a fit and proper person test for HMO landlords

Most significant is the proposed extension of the HMO licensing regime to include small HMOs which are currently exempt from mandatory licensing.

To date only large HMOs (3 stories or more) require mandatory licensing. The government seeks to extend HMO licensing to all properties irrespective of size and will push all HMOs with five occupants or more from two different households into the mandatory HMO licensing regime (with the exception of purpose built flats).

Due to the higher risk of poor quality housing in HMOs complex licensing regimes exist which may vary significantly across the UK. The move to license all HMOs will also help reduce such  regional variation in licensing regimes and housing standards. These extra renter protections will enhance currently existing license checks for properties which currently include minimum building quality standards (gas/fire safety) and the payment of a license fee.

Currently landlords operating an unlicensed HMO which requires licensing are liable for criminal prosecution and may be subject to an unlimited fine. Under such circumstances tenants may apply for a Rent Repayment Order to receive  refund of up to 12 months’ rent on the property.

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Renters may face higher lettings fees under right to rent rules

Right to Rent

Last week the government tightened its Right to Rent rules, making it a criminal offence for a landlord to let to anyone they know, or have reasonable cause to believe, is an illegal immigrant. Previously breaches of this law were sanctioned by civil penalties. However as of 1st December the penalty for failing to check a tenant’s right to rent is a criminal offense which may risk a prison sentence. 

Under the Rent to Right policy, landlords must check that their tenants can legally rent a property. Tenants must produce a document, such as a passport or a certificate of naturalisation, to prove their Right to Rent.Under the new rules, landlords could also receive government notices to terminate tenancies for people disqualified from renting. In such circumstances renters may face eviction without a court order.

This policy has serious ramifications for renters. According to a survey conducted by the housing charity Shelter, 44% of landlords said the policy would make them less likely to rent to people who appear to be immigrants, with similar numbers saying the same about people without a British passport.

In addition to potential discrimination , reports exist of letting agents charging prospective tenants additional agency fees to conduct Right to Rent checks.

In 2015 a Home Office evaluation of the Right to Rent scheme  found that some landlords were charging a fee which ranged from £10 to £120 to carry out immigration checks which the government estimates would take around five minutes to complete.  The Right to Rent policy must be applied to all tenants and by law, landlords must check that every tenant has the right to rent in the UK which could lead to increased lettings fees for tenants.

Although the Chancellor Philip Hammond’s Autumn Statement announced plans to ban lettings agent fees, there is an important window where landlords and letting agents can pass on the enhanced Right to Rent checks to tenants.  Renters should therefore be vigilant that they check the amount charged by landlords for administration fees before the letting fee ban officially comes into force.

 

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170 tenants evicted per day as evictions rise 53% in five years

Eviction Notice
Evictions up 53% in 5 years

More than 170 tenants are being evicted every day according to 2015 Ministry of Justice figures.  

More than half of the 42,728 evictions recorded in England and Wales last year were attributable to private landlords with rent arrears being cited as one of the most common factors.  Retaliatory evictions of tenants who complain about poor property standards was also a factor in a significant number of the eviction cases.  Many such evictions may have been brought forward in anticipation of laws against revenge evictions which entered into force on 1st October 2015.

It is believed that a significant fraction of the rise in evictions originated from the private rather than the social rental sector.  Ministry of Justice figures show that the majority of evictions in 2015 resulted from a section 21 accelerated procedure which are usually a feature of private landlord evictions.

This situation is set to deteriorate as increasing numbers of people are forced into the rental sector due to the housing affordability crisis.  According to information from the Association of Residential Letting Agents (ARLA), home ownership is expected to be permanently out of reach of around a fifth of people in the UK.  Property unaffordability is exacerbated by rising rents with an average renter in the North East and London estimated to spend around £31,300 and £68,300 respectively on rent over a decade.  To compound this situation further, rents are forecast to climb at a faster rate than house prices in future.

 

 

 

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Landlords Still Issuing Licenses to Occupy to Evade Deposit Protection Rules

Deposit Protection

Since the entry into force of the Tenancy Deposit Scheme many landlords and letting agents have devised ways of evading and ignoring deposit protection rules.

One common tactic which renters should be aware of is issuing tenants with a “licence to occupy” in place of an “Assured Shorthold Tenancy”.

A licence gives the right to occupy and is typically used for bed and breakfasts, hotels, holiday lets and some HMOs.  Often tenants only discover that a license has been issued when attempting to recover their deposit at the end of their occupation. However, despite being called a license, you may still have an Assured Shorthold Tenancy (AST) in the eyes of the law. In this event it may be possible to use typical AST measures to recoup moneys owed.

Do I have a License or a Tenancy?

A tenancy is created automatically if someone moves in and starts paying rent. Some landlords incorrectly issue licenses, either through inexperience or design to give tenants less rights than they would usually expect with an AST. A tenancy cannot be turned into a license merely by both parties signing a piece of paper headed ‘license agreement.’  A landmark case which defined the requirements for a tenancy as opposed to a license was Street v. Mountford in 1985. This stated that one has a tenancy if one:

  • pays a rent
  • occupies the property for a term
  • enjoys exclusive possession of land / property

These conditions do not apply if one does not pay rent  or if the occupier does not enjoy exclusive possession such as in a shared room or if cleaning and meals are provided as in a hotel.

The clearest way to identify the difference between the two [license and Assured Shorthold Tenancy] is exclusivity. If a tenant has exclusive use of at least one room in the property, and that room(s) is specified, this will usually be classed as a Tenancy Agreement. If the property is shared with more than one individual, this is more likely to be a Licence.

I believe I have been incorrectly issued with a license and my landlord has not protected my deposit, what should I do?

It may therefore be possible to claim damages from your landlord if they incorrectly issued you with a licence and failed to protect your deposit. According to current deposit protection rules, your landlord must register your deposit in one of the three government-approved deposit protection schemes within 30 days of the start of your tenancy.  The penalty for non-compliance is a fine of between one and three times the deposit amount.

 

 

 

 

 

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Letting Agent Foxtons Facing £80m “Class Action” Lawsuit

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Letting agent Foxtons is facing an £80m “class action” over letting agent fees which could see the company forced to pay back hundreds of pounds to current and former tenants.

The case, launched by the social entrepreneurial firm CaseHub, claims that Foxtons’ fees could be illegal under the Unfair Terms in Consumer Contracts Regulations 1999, and its successor the 2015 Consumer Rights Act.  CaseHub’s founder, Michael Green,  claims that “service charges” such as £420 for administration, £300 for name changes and £165 for checking out a property are vastly inflated. Green states that fees for such services should instead range between £10-£55.

The Foxtons’ case comes at a time when the issue of letting agent fees and regulation has attracted increasing Parliamentary attention. In May the Conservative MP for Lewes, Maria Caulfield, secured an Adjournment Debate in the House of Commons to discuss the Government’s actions in relation to letting agent fee capping.

Miss Caulfield reported research from Seaford and Lewes Citizen’s Advice Bureau which found that letting agent fees can range from £175 to £922. This is in addition to an average of a six-week rent deposit. During the debate Conservative MP Kevin Hollinrake, co-founder of Hunters Estate Agents, argued against fee capping.  Hollinrake claimed that agents may choose to decline tenancies to prospective tenants with inferior credit histories or increase rents should fees were scrapped.

Green states that the proposed class action against Foxtons is about extravagant, gratuitous and hidden fees. These include overcharging, double charging landlords and tenants and introducing fees at the last minute.

Foxtons dismisses the claim, saying its fees are “open and transparent” and that tenants have full visibility of charges before renting a property.

 

 

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Tech Startup allows Landlords to Stalk Renters Social Media

landlords-to-use-app-to-stalk-tenant-profile

Landlords in the UK may soon find it easier to track renters’s private social media content using software developed by a UK startup.  The company, Score Assured, uses a program to scan prospective tenants’ social media profiles and private posts to record information such as relationship and family status.  Also recorded are key words such as “no money,” “poor” and “staying in” which the company claims may indicate how reliable a tenant may be in maintaining rent payments.

The company’s co-founder, Steve Thornhill, has rejected claims that the program breaches privacy laws saying that the software is more innocent than it appears.  “It’s about giving the tenant more opportunity to get the property they want,” he says. “A lot of people now, millennials, for example, don’t have credit scores — so how they can get a property when the answer from the traditional credit score is going to be no?”

Supporters of the program claim that a tenant must consent to a landlord running the program on their social media profiles before it can be used.  Thornhill claims that such consent means that the program, Tenant Assured, is no different from a traditional credit check.

Others say that often tenants have no other option than to accept the download of their social media information to secure a property and hence tenants will be forced to accept an invasion of their privacy.  Also consumer protection laws regulate credit checks because of their potentially large impact on consumers.  Regulators also have recognized that although such checks may technically be “opt in,” they’re effectively not optional for those who don’t have the luxury of only choosing landlords, jobs or loans that don’t require them, or who work in industries or live in areas where such checks are standard practice.

 

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Renters Rights Bill Debated In Lords

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A Renters’ Rights Bill was given a second reading in the House of Lords Yesterday.  Under the proposals presented as a Private Member’s Bill by the Liberal Democrat Baroness Grender, local authorities would be required to give tenants access to a database of rogue landlords and property agents. Also included are proposed amendments to the Landlord and Tenants Act 1985 which would abolish a large number of letting agency fees currently paid by a large number of renters in England such as: These include:

  1.  registration fees
  2. administration fees
  3. inventory check fees
  4. reference check fees
  5. tenancy extension or renewal fee
  6. exit fees

The Baroness also proposes that persons deemed suitable for inclusion on a database of rogue landlords would preclude one the right of obtaining a HMO (House of Multiple Occupation) license.

Baroness Grender claims that the short-term nature of many modern tenancy agreements, with around one in four renters moving home in 2013-14 makes the abolition of agency fees significant.  The Baroness claims that in London, the median anount that a renter must pay before moving is £1,500 with some renters forced to use loans or cut down on food and heating to cover up-front moving costs.

Contributing to the debate was the Conservative Viscount of Younger who commended Baroness Grender for introducing the Bill but expressed the Government’s reservations about the bill.  The Viscount claimed that the banning of letting agent fees would not make renting any cheaper for tenants and Tenants would still end up paying  through higher rents.

Aside for reservations however due to the the definitions of rogue landlords and letting agents and the best manner of regulating letting agent fees, the Bill enjoyed broad support and is scheduled to be considered by a House of Lords committee later in the year.

 

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Majority of London renters forced to live in unacceptable conditions

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60% of renters in London live in unacceptable conditions according to a survey carried out by YouGov and the housing charity Shelter.

The survey of 739 private renters in London between 13th June and 22nd July 2015 found that  around 60%, equivalent to around 1.5 million Londoners, have experienced problems in the past year. According to the survey with vermin and damp commonly reported problems were found to be:

  • Damp or mould (39% of renters)
  • Poor insulation or excess cold (26%)
  • Animal infestations such as mice and cockroaches (25%)
  • Problems with a leaking roof or windows (18%).

In addition to poor disrepair, a significant fraction of renters had experienced unsafe conditions with 14% reporting electrical problems and 15% living in homes which are poorly secured. Most worrying were the 3% of renters who reported gas leaks. According to the English Housing Survey 2013/14, 16.5 per cent of private rented homes fail the Government’s minimum standard under the Housing Health and Safety Rating System.

The poor state of rental housing stock in the capital stands in stark contrast the the cost of rented accommodation with the average London renter paying just under 60% of their income on rent.

The seriousness of the rental crisis in the capital and across the country as a whole has led renters rights groups to campaign for the introduction of greater council powers to address disrepair in the private rental sector.

Other proposed initiatives include the establishment of landlord licensing to better protect renters from rogue landlords and letting agents.  Landlord and property licencing is currently mandatory for large HMOs (homes in multiple occupation) although there are calls to extend this regime to all HMOs irrespective of size and to other private rented accommodation.

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