Shelter has contacted every local authority in England to “build a picture of…the scale of the problem with rogue landlords and what is being done to tackle it – the results showed

1. Local Authorities admit there are 1,477 known landlords who are giving them continued cause for concern and repeatedly making tenants’ lives a misery
2. Complaints about serious and potentially life threatening hazards, including dangerous gas and electrics, have risen by 25 per cent over the past two years
3. Overall complaints about landlords have increased, taking them to 86,628 in the last year
4. Despite the sharp increase in problems, just 270 successful prosecutions have been made by local authorities against landlords during the same period.

It had been generally thought by the profession, that most deposit issues had been resolved by the Judgments in Universal Estates and Gladehurst cases – but the question of whether tenants can claim three times the deposit penalty after the tenancy had ended, rumbles on.

In a new appeal case heard in the High Court (and therefore binding on County Courts) a new interpretation has emerged and a landlord has fallen foul of the deposit penalty legislation.

Briefly, the landlords let a property in Guildford commencing 6 January 2009 for a fixed 6 month term - as the tenancy was an Assured Shorthold, there was no question that the deposit should have been protected.  The tenancy ran poorly, there were complaints from other residents in the block.  The tenant also complained the landlords were harassing her.

The landlords served two notices to quit, both of which were invalid for not being correctly completed.

The landlords did not protect the deposit until a letter was received from the local Citizens Advice Bureau.  The landlords then put the deposit in the custodial scheme (on 20 July) and on the 21 July the scheme wrote to the tenant confirming that this had been done and providing information about the scheme.

The tenant commenced legal proceedings on 10 August 2009 – and the Judge, following the judgment in Draycott v Hannells, held that as the deposit had been protected, there was no penalty to pay.

However, following the allegation of harassment, the tenant vacated on the 14 August and at the trial hearing was awarded £1,000 damages for harassment, but failed in a claim for unlawful conviction.

As the deposit was protected, the claim hinged on the landlord’s failure (or Agent acting on his behalf) to give the Prescribed Information – a considerable amount of information was included in the tenancy and by the scheme, but at no point was clear, specific Prescribed Information given.   As the deposit had been returned in full on 1 September of that year, the claim was not about meeting the 14 day deadline, but about it not being done at all, or in the correct manner.

 A number of important issues are raised:

1.  Penalty for not providing the prescribed information continued, even though the deposit had been returned in full

2.  The Court held that the information to the tenant provided by the scheme was not satisfactory to comply with the prescribed information requirements – the legislation was specific that the obligation to provide this information was personal to the landlord, therefore excluding the scheme doing it.

3. Not all of the information listed in the Prescribed Information Legislation had been provided – partial provision was not sufficient to comply with the legal requirements and

4.  Providing a link to the web-site was not sufficient to comply with the information requirements.  The landlord has no control over the content and the legislation very clearly requires the landlord to certify that the information provided is true to the best of the landlord’s knowledge and belief.  With a web site that could change outside of the control of the landlord, it was impossible for the landlord to confirm the veracity of the information on the web-site.  The Judge also said that this solution was not acceptable as some tenants would not have internet access.

Being a High Court case, County Courts are bound by the Judgment and it has made compliance with the prescribed information much more difficult and more important to follow correctly.  Failure cause this landlord to have to pay the penalty of three times the deposit – and possibly considerable costs.

Grant Shapps Response to FT Article on Homelessness

Housing Minister Grant Shapps has responded to an article in the Financial Times which claimed that a recent rise in homelessness is linked to Government policy.  Saying that it is “misleading” to attribute the increase in homelessness to changes to Housing Benefit introduced in April.  Shapps states that “households already claiming Housing Benefit have been given 9 months additional protection before the changes take place”.

Chairman of the National Landlords Association, David Salusbury, called on the Government to consider that private landlords are vulnerable to rent arrears under the new universal credit welfare system.  Lord Freud confirmed that the system would allow housing benefit to be paid directly to the tenant, but would revert to the housing provider should a tenant begin to fall into arrears, confirming that “We call upon the Government to remember that private landlords are vulnerable to the effects of rent arrears.  Thirty five per cent of landlords let properties to recipients of housing benefit, representing an estimated 420,000 landlords, so it is important that they are considered within this proposal.  It is clear that tenants favour choice; nine out of ten social housing tenants would like he security of knowing their housing benefit is paid directly to their landlord.  It is vital that private landlords receive direct payments in order to encourage the adequate supply of affordable accommodation”.

RICS has added its support to the Cut the VAT campaign, signing a joint statement alongside a number of other organisations, stating that:

The Government must prepare for the Green Deal by stimulating further demand in the energy saving market.  Without additional incentives few households are likely to take action to improve the energy efficiency of their home, even if the upfront costs are replaced by Green Deal finance.  Therefore, we urge MP’s from all parties to ask the Government to reduce the rate of VAT to 5% for all Green Deal approved measures”.  The National Approved Landlord’s research has shown that 2/3 of private landlords would consider taking advantage of the Green Deal.

Although Housing Minister Grant Shapps has ruled out compulsory Clients’ Money Protection for letting agents in the foreseeable future, the Tenancy Deposit Scheme, TDS, today welcomed government support for its members.

A huge 98% of the Scheme’s members are letting agents who have separate clients’ money accounts that are safeguarded through their membership of the industry organisations, the Association of Residential Lettings Agents, the National Association of Estate Agents, Royal Institution of Chartered Surveyors, the National Approved Letting Scheme and the Law Society.

The self-regulation imposed on members of these organisations has been praised by the Government in a letter to the Chief Executive of ARLA and the NAEA it was revealed this week. The letter points out that Government “Always suggests that anyone considering using a letting agent checks to see that they belong to a trade body or accreditation scheme.”

Steve Harriott, Chief Executive of the Tenancy Deposit Scheme, said, “Tenants and landlords must check the agent has client money protection insurance. This provides the assurance that they will be giving their deposits and rents to a properly regulated agent. At TDS, we now refuse letting agents as members of our scheme unless we are sure that they belong to the industry organisations that insist on clients’ money protection.

“We have taken the view that unregulated agents are too risky for us to work with because of our bad experiences where a small but significant number have gone bust taking all their clients’ money with them,” he added.

Steve Harriott welcomed the government’s vote of confidence in the industry’s self- regulation but stressed the importance of all regulated letting agents promoting the benefits of membership of their own regulatory body and of the Tenancy Deposit Scheme.

“Some unregulated letting agents are going out of business and simply stealing landlords’ and tenants’ money when they go down. In the absence of government regulation, landlords and tenants are well advised to shop around and make sure that their agent is a member of one of the recognised schemes that offer client money protection insurance.”

Property professionals are risking legal action by failing to register under the Data Protection Act.  The Information Commissioner’s Office (ICO)  confirmed last Autumn that only 3,734 estate agents and 1,416 letting agents appear on its public register – a particularly small proportion of the industry.   Members of the NAEA and ARLA have been strongly encouraged by their Association to register as a matter of urgency to avoid the possibility of prosecution.  

At the recent meeting of ARLA members in Cornwall, Linda reminded members  that it remains an offence under the Data Protection Act to respond to a reference request on a tenant without the applicant’s written consent– a financial penalty may be imposed against the particular member of staff, in addition to the company.  With most requests now being received on-line, this can cause a delay in giving a speedy response, particularly frustrating for a good tenant. Including consents for such requests in either the original application form, or in the Tenancy Agreement would ensure compliance.