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Tessa Shepperson Newsround #184 – The Landlord Law Blog

More news for you on a Friday morning.

Council ‘teaching tenants how to reclaim rent’

The need for landlords to ensure that they are fully compliant with licensing is made clear by this article about Tower Hamlets.

The Council is helping tenants to bring claims for Rent Repayment Orders where the landlords are in breach of licensing rules and apparently ‘over £200,000 has been reclaimed’ in their ‘Rent Repayment Order project’.

This is great for the tenants as they can effectively live rent-free for up to a year and also great for the Councils as the tenants are then less likely to be evicted meaning that they will have less ‘rehousing’ work to do.

Not so good for the landlord of course.  But landlords have an easy way to avoid this – ensure that you are properly licensed!

As licensing requirements vary across the country its best to speak to your Council direct and ask them what their licensing requirements are – or check the situation out on their website (you can find your Council website via this service).  Landlord Law members can use our Local Authority Directory.  Do this BEFORE you rent the property out to tenants.

NB Find out more about  Rent Repayment Orders in the webinar here with Robin Stewart of Anthony Gold.

Property MOTs?

Mind you, Industry Expert Kate Faulkner, speaking during the opening debate of the online National Landlord Investment show, said that residential licensing is the wrong approach and that we should be moving towards Property MOTs.

The problem with licensing is that, in most cases, you don’t find out about the problems until after a property has been let out to tenants.  Whereas with a proper property MOT system it will be difficult for the landlord to rent out the property at all as it will not be able to advertise it on the portals until the MOT is obtained.

It would also be a cheaper system

A property should only reach a potential tenant once it has got an MOT, rather than councils having to chase properties for compliance long after they have been rented out, so by introducing them they will save landlords and councils money.

Note that Kate discussed all this in some detail in our podcast here.

Agents – have you signed up to Client Money Protection (CMP)?

This is mandatory for all letting agents but it seems that many are still not compliant.  If you are in London – watch out!  London Trading Standards, which is a partnership between the capital’s 33 boroughs and the National Trading Standards Estate and Letting Agency Team, is on a London-wide crackdown.

Almost 100 agents in London have already been served with a formal ‘Notice of Intent’ by their local council, after which they have just 28 days to provide evidence or mitigation in their defence after which councils will make a final decision on issuing a financial penalty.

Which as this can be up to £30,000 for failure to belong to a CMP, or up to £5,000 for other breaches of the law – is not inconsiderable.

Nishi Patel, chair of London Trading Standards, said:

London letting agents are handling billions of pounds of tenants’ and landlords’ money every year, so it’s vital that this money is protected in the event of business failure.

London borough trading standards teams have been increasingly active in tackling rogue lettings agents in recent years, and this London-wide operation has enabled us to step-up our efforts to a new level. I warn any London agents out there who think they can get away with failing to comply with the law that they need to think again and get their affairs in order without delay.

Green incentives

Sadly it looks as if, due to what can only be described as massive incompetence, the Green Grants scheme is going to close with only a small percentage of homes benefitting (surely the problems could not be due to it being run by an outsourced American company??).  Analysis has shown it will help just 8% of its target 600,000 households switch to renewable energy by the end of March.

However, with over 32 per cent of properties in the private rented sector built before 1919, it is going to be a huge challenge to make these homes energy efficient.

The NRLA is calling on the Chancellor to help by ensuring that the tax system actively supports landlords who want to make energy improvements.  Proposing that energy efficiency measures carried out by a landlord should be offset against tax at purchase, as repair and maintenance, rather than as an improvement at sale against Capital Gains Tax.

This would address anomalies – for example, whilst replacing a broken boiler is tax-deductible, replacing an energy-inefficient model for a more efficient boiler or heating system is not.  Which is crazy.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

The rental market stands ready to play its part in securing a green recovery. However, to achieve this we need a tax system that properly supports and encourages the work needed to ensure rented homes as are energy efficient as possible on a long-term basis. The Green Homes Grant scheme proves that short term measures do not work.

The Chancellor needs to use tax more positively to encourage investment in energy improvements. This would play a crucial role in cutting bills for renters, reducing carbon emissions and improving the nation’s housing stock.

A local pot for letting agents?

Incidentally, if you are a letting agent you may want to enquire of your Council to see if there are any grants available.

For example, if you are based in Berkshire, Bedfordshire, Milton Keynes, or Northamptonshire you may be eligible for a grant to help reduce energy consumption and the carbon emissions of your commercial premises. Businesses in the property and real estate sectors can apply for grants of between £1,000 and £5,000.

The grant funding pot of £850,000, has been made available by the Low Carbon Workspaces programme, which aims to help SMEs fund up to a third of the cost of eligible projects which cover energy-saving measures including lighting systems, heating and cooling upgrades, renewable energy systems, equipment upgrades and building fabric improvements.  So why not go for it?

Snippets

Newsround will be back next week.

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