A recent Channel 4 investigation has revealed that despite government assurances to the contrary, deposits placed in deposit protection schemes are not 100% safe. Unfortunately, even when a deposit is placed in a government approved protection scheme, tenants are still not protected from rogue landlords.

Rogue Landlords Strike Again
The Channel 4 investigation centred on a self-styled property guru who made his money letting properties from landlords and then sub-letting them as single rooms. As a landlord, Mr Burton was obliged to place deposits he received into a government approved protection scheme.

Because such schemes are insurance based, the landlord is allowed to keep hold of the cash until the end of the tenancy when he is obliged to return the tenant’s deposit (minus any deductions if applicable).

But what happens when a landlord is expelled from the deposit protection scheme?
The landlord above was expelled from the My Deposits scheme for flouting the rules. All affected tenants were informed that their deposits would only be protected for a further three months. Meanwhile the landlord was left with lots of money in his bank. So if the landlord decides not to pay this money back there is nothing the tenant can do. Their only recourse would be to take the landlord to court. Clearly there is a flaw in the tenancy deposit system that needs addressing and campaigners say the current situation is unacceptable.

As Alex Hilton from Generation Rent comments: “it’s a tenancy deposit protection scheme – they have told people that their deposits are protected: they’ve got to protect the deposit.”

A Darlington MP has joined local fire fighters to raise awareness of the dangers of living in homes without working smoke alarms fitted. Jenny Chapman, MP for Darlington, wants landlords to be forced to fit smoke alarms in their rented properties, so that tenants are protected at all times from the potentially lethal effects of a house fire.

Shocking Smoke Alarm Figures
Recent research has shown that people living in homes without a working smoke alarm are four times more likely to die if a fire breaks out. Sadly not everyone sees the importance of having a smoke alarm installed and analysis of the house fires attended by Darlington and County Durham firemen in the last twelve months showed that 43% of homes didn’t have a functioning smoke alarm.

Save Lives
We all know that smoke alarms can save lives. If a fire breaks out while you and your family are asleep in bed, without the shrill sound of a smoke alarm to wake you up you probably would never wake up at all. Ever.

Fire Service Comment
Dominic Brown from the County Durham and Darlington Fire Service concedes that deaths as a result of fires have fallen in recent years, but he adds:

“…The majority of victims continue to be those who are most vulnerable, often living in private rented accommodation. Making it a legal requirement for all landlords to fit smoke alarms will improve the safety of hundreds of families and stop dozens of people from losing their lives to fire each year.”

Mr Brown believes that the government needs to introduce legislation to force landlords to install smoke alarms and help save lives, which is something Ms. Chapman supports.

Recent changes to the way Housing Benefit is paid to younger claimants means that many young and often vulnerable people are being forced to look for accommodation in shared housing.

Changes to Housing Benefit
The way things currently stand is that a single person aged 35 and under can only claim Housing Benefit for a room in a shared house (the upper limit used to be 25). Unfortunately, because of new planning rules, many landlords are turning away from HMOs, which is causing a squeeze on shared housing in a lot of areas. Also, research undertaken by housing charity, Crisis, has found that in some cases young professionals on a higher income are taking up what rooms are still available.

This is backed up by further research carried out by the RLA. The results of a survey of RLA members revealed that 50 per cent believed that there are not enough shared homes to provide accommodation now that changes have been made to the benefits system. The result of these changes is that many vulnerable young people are being forced into unsuitable accommodation, notably ‘beds in sheds’ operated by unscrupulous landlords.

What is the Solution?
The RLA is calling for a review of Article 4 directions.

“The RLA is calling on ministers to review urgently the impact that Article 4 Directions used by many local authorities are having on the supply of shared homes. Without this, there is a very real danger that many potentially vulnerable tenants could find themselves being driven into the kind of beds in sheds accommodation that is simply unacceptable for anyone to find themselves living in.”

Landlords with HMOs have been forced to pay thousands in licence fees for quite some time, but thanks to a recent ruling in the High Court, many are now in the position whereby they can apply for a refund on fees paid, all thanks to a landmark case.

Definition of an HMO
Bristol City Council v Digs (Bristol) concerns a Bristol maisonette that the council decided was eligible for an HMO licence since the accommodation took up two floors of a four floor property. However, the landlord disagreed, saying that the since the property only consisted of two floors it fell outside the statutory definition of an HMO. The living accommodation was accessed via a separate staircase that led straight up to the second floor of the building.

Since Digs and the Council couldn’t agree, the case ended up in Bristol Magistrates court. The District Judge looked at the facts of the case and ruled in favour of Digs. The council decided to appeal to the High Court. Unfortunately for the council, Justice Burnett agreed with District Judge Zara. It ruled that the decision should be upheld and that the council would not be allowed to appeal.

What Does This Mean for Landlords?
This is an important decision for landlords since it means that any property taking up two floors or less, irrespective of how many floors the entire building has, does not fulfil the definition of a statutory HMO. Therefore landlords with similar properties who have paid licence fees should now look at whether they could be entitled to a refund.

Cannabis farms are a popular theme in the news. Most weeks you will find at least one or two horror stories of landlords who have unwittingly let their properties to unscrupulous criminals and belatedly discovered that those properties were turned into cannabis farms. Unfortunately, the damaged caused can be horrific—floorboards ripped up, walls knocked down, water and electricity supplies illegally diverted. In some cases the repair bills can easily run into tens of thousands of pounds. So who is responsible for paying?

Will Insurers Pay Up?
Most landlords probably assume they are safe should the worst happen and they find out that a tenant has turned one of their properties into a cannabis farm. They think that if they have landlords insurance with ‘malicious damage by tenant’ cover, it’s fine and the insurer will pay out. But this is not necessarily the case and landlords should make sure they check the small print.

Limit on Amounts Claimed for Tenant Damage
Not all insurers cover damage caused by tenants and those that do often place a limit on the amount that can be claimed. Insurers take the view that landlords must carry out checks on tenants before they take up residence and make regular inspections of their properties after a tenancy has begun, which would weed out cannabis farms before they cause significant damage.

Landlord Checks

• Be wary of a tenant who wants to pay a large amount of rent in advance
• Check tenant references with a fine-toothed comb
• Inspect the property regularly and log your checks

HMRC is once again urging landlords to come clean and declare any undisclosed tax they may owe. The Revenue believes that there is at least £550 million owing from landlords and they are determined to claw some of it back.

Property Let Campaign
The Property Let Campaign is currently in full swing and landlords are being encouraged to come forward voluntarily or face steep penalties. HMRC is targeting landlords who have failed to declare rental income from previous years, plus those who may have incorrectly filed their tax returns. Landlords who come forward of their own free will face a penalty of up to 20%, but those who don’t and are subsequently caught out by HMRC will be severely penalised, and could even be prosecuted.

How do HMRC Catch Landlords?
Thanks to the wonders of modern technology, HMRC have all kinds of sources of information at their disposal. Tax officials are able to obtain data from letting agents and local authorities, plus they can track down landlords who advertise their properties on websites or even in newspapers. They are also receptive to anonymous tip-offs from the general public or a disgruntled tenant.

“You’d be amazed at how many people ‘dob’ each other in,” said a HMRC spokesperson.
It was a Mistake, Your Honour!

Everyone makes mistakes from time to time and HMRC will waive a penalty if they feel that a landlord was genuinely not trying to pull a fast one. However, it is likely to be difficult to persuade HMRC that you were truly unaware of your tax obligations.

Some UK housing charities are calling for the government to speed up the eviction process so that landlords can reclaim their properties sooner. As a result, landlords and representatives of a few housing charities have been asked to attend a government working group to discuss the issue and, hopefully, come up with some potential solutions.

The Pain of Evicting a Tenant
Evicting tenants can be a real pain in the neck. In fact it isn’t unheard of for the entire eviction process to take up to 12 months, which when you have no rental income is disastrous for your cash flow. When a landlord has a mortgage to pay, no rent can soon spell disaster, and in the long term can affect a landlord’s credit rating.

Experts in the lettings industry believe that landlords everywhere will welcome a streamlining of the eviction process. Most landlords want to get rid of problem tenants as fast as possible so that they can replace them with good tenants. This would also help good tenants find new accommodation by ensuring a swift removal of bad tenants who invariably clog up properties for a long time.

Encourage New Landlords
New landlords are more likely to enter the rental market if they are able to evict problem tenants swiftly since having a problem tenant when you only have one property is fatal.

The best way to prevent problem tenants in the first place is to conduct a background check, pay for a credit report, and ask for comprehensive references from previous landlords and employers. It isn’t a fool proof method, but it will help minimise the risk.

According to the Telegraph, landlords across the UK feel that local authorities are persecuting them by applying a long list of charges, which makes it harder for small landlords to operate a profitable buy to let business.

Landlords are ‘Cash Cows’
The Residential Landlords Association happens to agree with this point of view. Alan Ward, chairman of the RLA, describes the charges as a ‘creeping plague’. He thinks that increasing costs are making buy to let less viable to new landlords, which in the long term could be disastrous for Britain’s housing situation. The National Landlords Association (NLA) is not happy either. In fact the NLA is considering taking action against several local authorities because they are so concerned about the rising cost of being a private landlord in the UK.

Costs Vary in Different Areas
The problem that landlords have with these so-called ‘stealth taxes’ is that the fees vary enormously between different local authorities. Selective licensing, for example, is becoming increasingly common, but no one local authority charges the same—the cost of applying for a selective license can vary several hundred pounds across different areas. The other criticism from landlords is that the disreputable landlords are not the ones paying the fees, so the argument that many local authorities use for introducing selective licensing (it helps to improve the standard of housing across the private rental sector) doesn’t really hold much weight because rogue landlords slip below the radar.

And to make matters worse, councils now have the authority to charge full council tax for periods when a rental property lies empty, so landlords can’t even enjoy a period of grace if a property needs essential repairs or maintenance.

What do you think? Let us know!

Since the property bubble burst in Spain, there are currently hundreds of thousands of homes lying empty across Madrid. Most are empty because the banks repossessed them when their former owners defaulted on their mortgage payments. Official figures suggest around 15k families were evicted in 2012 alone. But there is a whole sub-culture of people taking advantage of other peoples’ misery by cashing in on the empty dwellings.

Black Market Landlords
Empty homes are targeted by opportunistic landlords and sub-let to desperate tenants seeking a cheap roof over their head. Once a property is empty, someone comes along and breaks in. The property is then advertised ‘to let’ for a few hundred Euros per month and a tenant moves in. It is even possible to ‘buy’ a property if you have around 2k Euros spare, although most people can’t afford to do this.

Lack of Affordable Housing
Affordable housing in Madrid is in very short supply. With so many families facing eviction as a result of the financial crises, there is a massive waiting list for government-subsidised homes. Not surprisingly, immigrants and desperate families are turning to black market landlords to fill the gap.

Because it can take up to two years for the banks to obtain an eviction notice, tenants know they won’t need to move out for quite a while. Neighbourhood associations are holding the banks responsible for the housing crisis—instead of selling at a knockdown price, the banks are holding on to the properties until the market recovers. And in the meantime, local communities are suffering.

The majority of people in private rental accommodation, claiming benefits or otherwise, pay their rent on time and cause no problems whatsoever. But according to the Daily Mail, one Scottish family have managed to rent luxury family homes and abscond without paying the rent three times in a row now.

Three Landlords Out of Pocket
The married couple have seven kids and are currently living on benefits, but since 2011, they have managed to accrue a massive £21k in outstanding rent payments to three separate landlords. In each case, the landlord in question claims that the couple moved out without paying the rent owing, which naturally left the landlords significantly out of pocket.

The couple left the first property allegedly owing the landlord £6k. They moved into a second property and although a deposit was paid, no rent was forthcoming for nine months. The landlord eventually asked the council to make Housing Benefit payments directly to him, but it still left him out of pocket to the tune of £15k. It is also alleged that the couple have recently vacated a third property whilst owning a sum of money.

How to Prevent Tenant Rent Issues
The best way to prevent being taken to the cleaners by a tenant is to scrupulously check references before you let them sign a tenancy agreement. Repeat offenders are unlikely to have glowing references from previous landlords, and if they do, they are probably bogus. So check everything and if your instinct is telling you something is wrong, listen to it!