12 month contracts to be mandatory in Wales

BREAKING: Twelve-month contracts are set to become mandatory in Wales under a new law announced today https://t.co/6jgapLqASG

— RLA Landlord News (@RLA_News) February 10, 2020

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Government will not help landlords with assured / assured shorthold tenancy 'mix-ups

Government confirms it will not address the Monty Shooltz ruling

The Ministry of Housing, Communities and Local Government (MHCLG) will not act to help the thousands of landlords who may have inadvertently granted assured tenancies instead of the assured shorthold tenancies they meant to.

The Ministry has confirmed to the National Landlords Association (NLA) that it does not intend to legislate to address the ruling inCaridon Property Ltd v Monty Shooltz.

The judge in this case ruled that the requirements of the Deregulation Act 2015 mean failure to issue a gas safety certificate before a tenancy begins invalidates any subsequent Section 21 notice for repossession. According to the ruling, which applies a strict interpretation to the wording of the original Gas Safety Regulations, issuing a gas safety certificate after the tenancy has begun would not be sufficient for the landlord to meet the requirements of the Act, which applies in England only.

Instead, MHCLG say they will update the guidance available to landlords on the Gov.uk website, to ensure landlords are certain of their legal responsibilities.

NLA Chief Executive Officer Richard Lambert said:

“Having pressed the Government to respond to this judgement for nearly a year, their answer seems to be, ’We’re not that bothered’.

The Ministry clearly doesn’t understand the impact it is having. The NLA Advice Line is taking more and more calls from landlords who thought they had complied with the law and now find themselves facing a disproportionate penalty for an administrative error. We cannot believe this is what Parliament actually intended.

The NLA recognises the vital importance of ensuring landlords arrange an annual gas safety check with a Gas Safe engineer. But we do not support the de facto introduction of assured tenancies because landlords cannot rectify an unwitting error made before a tenancy begins.

We have no intention of letting this rest and will continue to lobby for change.”
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Letting agents double charging

Landlords and tenants are being ripped off according to latest research by Direct Line for Business.
This is because both landlords and tenants are being both charged for the same service.  This so called 'double dipping' is something that Ed Milliband has vowed to tackle if he gains power by outlawing letting agents from charging.

A classic case of where letting agents seek to gain money for nothing is where they charge a landlord and letting agent for needlessly creating a new 6 month Assured Shorthold Tenancy rather than allowing it to run on and become a periodic tenancy.

A recent report in the FT talked about one unamed South London letting agent charging £670 for a basic contract extension involving a change to the date on the Assured Shorthold Tenancy contract.  The tenant was also charged £90 for the same service.

Personally,  I'm not so annoyed at the double charging principle but the fact that landlords and tenants are charged needlessly for services such as tenancy renewals and contract extensions that aren't needed.  This often comes about because landlords do not understand the legislation surrounding letting property.

Letting essentials - helping landlord to understand their rights

5 Reasons for a written tenancy agreement

Many landlords don't realise it is perfectly possible to have a legally binding tenancy agreement that is created verbally between the landlord and tenant.  There is no legal requirement for the tenancy to be in writing at all.  However, we would never advise a landlord to rely on a just a verbal agreement.  Here are five reasons why a landlord should ensure that they have a tenancy agreement in writing before letting their buy-to-let property out:

1. It is actually a criminal offence not to provide your tenant with a written summary of the key terms of the tenancy within 6 months of the start of the tenancy or within 28 days of a request by the tenant for the info.  Given this a landlord may as well go the 'whole hog' and provide a full written tenancy agreement.
2. The advantage of a written tenancy agreement is that if the tenant disputes an aspect of the agreement at a later date the terms are clearly stated in the written agreement.
3. To use one of the statutory tenancy deposit schemes you will need to provide a written tenancy agreement.
4. The accelerated possession procedure is only available to landlords with a wrtitten tenancy agreement.
5. Banks and benefit offices often require a copy of the written tenancy agreement as do utility companies where a dispute arises between the landlord and tenant over when the the property was vacated.

Property Hawk strongly advises landlords to ensure they have a properly worded tenancy agreement from the outset.  Free tenancy agreements are available to download from the website.

Is it possible to sign a tenancy agreement digitally?

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Rent thresholds changed

Residential landlords are being urged to check their position, following a change in law that has seen the maximum rent level for assured shorthold tenancies quadruple to £100,000.
 
Previously, only tenants with annual rents of up to £25,000 had security of tenure.  The change came in this month and applies to existing tenancies as well as to new ones, giving some tenants security of tenure for the first time.  Tenants will be granted assured shorthold tenancy security if their agreement dates from March 1997 and here the landlord can recover possession once the fixed period of the tenancy has expired by giving the tenant at least two months’ notice.


More controversially, a tenancy that was granted before 1st March 1997 at a rent between £25000 and £100,000 will now become an assured tenancy, which may hit some landlords as they can only recover possession if they can establish that certain grounds apply. 

The changes, which apply only in England, came in on 1st October, and any new residential tenancy of premises in England granted to an individual at a rent of up to £99,999 will be an assured shorthold tenancy by default. 

Rebecca Brough of Fidler and Pepper Solicitors says:  “The original threshold of £25,000 was set in 1990 so if this figure had been raised in line with inflation, the threshold would now be around £52,000. The £100,000 threshold shows how keen the government is to bring all residential tenancies under the umbrella of security of tenure, especially in London.”

She added: “The retrospective effect will be detrimental for landlords who have been letting their property to the same tenant for many years, but it seems to be seen as minor collateral damage”.
   
New tenancies and tenancy renewals will also be subject to the statutory deposit protection scheme.  Whilst this only applies to deposits paid after 1st October 2010, or on tenancies renewed after that date, landlords are being recommended to adopt the scheme as good practice for all deposits held.  


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How long to grant an AST?

Landlords looking to grant an Assured Shorthold Tenancy for should consider how long they want to let their property for?

There are a number of issues including whether a landlord is letting their property in a rising rental market or where a landlord expects rents to be stable or even fall.

Frequently tenants push for a longer term than the standard minimum 6 month Assured Shorthold Tenancy so they have greater security of tenure. However, a landlord may want to consider giving a new tenant an initial 6 month tenancy to first assess the tenants suitability.

If they are happy with the tenant then grant the tenant a longer term fixed term Assured Shorthold Tenancy.

For more details about how long a landlord should grant an Assured Shorthold Tenancy for have a look at the Landlords Bible.

Parliament urged to 'hurry up' and increase rent threshold

An Early Day Motion tabled by MP Greg Mulholland is calling for the Government to hurry up and get on with its plans to raise the rent threshold for ASTs to £100,000 on October 1, and to introduce a legislative timetable.

Mulholland is Liberal Democrat MP for Leeds North West.

The motion says: “That this House welcomes the Government’s announcement recommending that the threshold for the Tenancy Deposit Scheme be raised from £25,000 to £100,000 which will ensure that many more people, including thousands of students, will be protected from rogue landlords wrongly withholding deposits; celebrates the success of the campaign for such a change, which was supported by the National Union of Students, Unipol and The Sun newspaper; notes that the Use Class Order consultation calls on the Government to ensure that the results of this consultation become law as quickly as possible; expresses concern that the Government has not set a date or a timescale for introducing this important change; and, with the general election imminent, urges the Government to do so before Parliament is dissolved.”

It's amazing how many words an MP needs to say "get on with it"!

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Assured Shorthold Tenancies to Cover Rents up to £100k

The National Landlord Association have just reported that the Assured Shorthold Tenancies will now cover properties renting for up to £100,000 per annum.

This will take effect from Oct 2010 and will be retrospective for existing tenancies.

More information on this as we get it.

Read the reaction of the NLA

Free assured shorthold tenancy agreements

How an AST saved me £7000

In the words of B A Baracus: You Crazy Fool!

Yes I am an A-Team fan and I was wondering how I would pull off bringing them into this Blog but I done it.

Back to the topic at hand - How an AST saved me £7000 - this doesn't involve any dodgy tenants, trips to court or solicitors. Just me, my builder and a valuer.

Check it out on: How an AST saved me £7000! It's a useful tip that might just save you some money the next time the opportunity presents itself.

I was going to end off this post with Hannibals famous one liner but I will spare you...