Raising some awkward questions…

Last week’s report on BBC News did not do anything to improve the opinion of letting agents held by the vast majority of the British public.  It focused on House(s) in Multiple Occupation (HMO) and the agents that oversee their being occupied.  HMO’s fill an essential role in the housing system and are a classic example of a good deal benefitting all parties.  Those who cannot afford an individual property have somewhere to live and those who provide such properties are rewarded well.  That is the theory.  As evidenced by last week’s report, some of the accommodation for which people, (who did not have any other choice) were paying were truly appalling.  The letting agent that the news team accompanied to an HMO that was beyond disgusting was confronted by a neighbour of the property.  The agent immediately apportioned the blame to the tenants but was countered by the neighbour saying that he was complaining about the poor state of the outside of the property, (the agent’s responsibility) that was a blight on the whole street.   I understand that HMO provide accommodation for those at the bottom end of the housing market, who cannot afford to rent a place on their own, but let us at least begin with treating them as human beings.  Their not being able to afford more than the rental for one room does not automatically mean that they will choose (and deserve) to live in filth.  I appreciate that some tenants can be complete £$%*&” who treat the landlord and the property with utter contempt and trust me, this can be seen in the higher bracket, professional end of the market too.  One property that Cheshire & Co managed comes to mind, that was rented by two doctors.  All I can say is that no wonder the NHS has the problems that it does with MRSA.  But how is an agent allowed to rent out a property that would keep Environmental Health and various other agencies going for a year in paperwork alone if it were anything other than an HMO?

All agents have recently been required to join a redress scheme; what form of punishment or penalties are in place for agents such as the one featured in the report?  This is a problem that goes beyond political parties and I am fed up of attempts to control ‘Tory scum landlords’.  I am sure that all landlords are not all cut from the same political cloth.   The hypocrisy of it all was never better exemplified than by the late Michael Meacher MP.  A far left politician who once described home ownership as a curse on our nation.  It turned out that he was a property millionaire with 8 houses.  Mmmm.

Three is a magic number…

A report this week stated that sex is good for you three times a week; no more.  Sorry ladies, perhaps if you would like to enter the monthly prize draw?  I did wonder whether one’s allocation would have to be used on a scheduled weekly basis or could be stockpiled until the end of the month/financial quarter.  The latter could of course be extremely dangerous (just ask Lamar Odom of Kardashian infamy), but what a way to go.  It reminded me of the ever present three word theme that is used in advertising, the ubiquitous posters imploring you to change your life in some way; the nursery rhyme that features visually impaired rodents and the chatlines for “Blonde Swedish Housewives”, (other nationalities are available and anyway, they all live in Croydon and the closest that they have ever got to Stockholm is the local Ikea).

At Cheshire and Co we are always looking to market properties in innovative ways, so I am considering a new approach to listing houses.  For example, if we want to sell any house in Llanyravon and Croesyceiliog, all we have to say, is, “off road parking” and it will be gone before Rightmove can produce a weekly report on its data.  Similarly, “flat rear garden” for a property in Henllys and Ty Canol will result in “too late jockey” for anyone who thinks that they will wait until the weekend to book a viewing.  There is of course much opportunity for artistic interpretation, not least the quintessential, “requires some upgrading” that can mean anything from replacing the perfectly serviceable but a little tired 1970’s kitchen, to the more realistic, “it’s falling down”.  As I write this poolside in Marbs, whilst the current Mrs Chesh puts some hard training into the athletic discipline of “serious sun bathing”, I am making a pledge on my return that when writing up new property details, I will make a conscious effort to wean myself off my old favourite, “further benefits from”;  a classic of its time, rather like my vinyl Slade collection and sheepskin coat.

Just in case you think that my time in the foothills of the Sierra Blanca is spent doing nothing but admiring the view (human and geographical), may I enlighten you to a piece of trivia. The number 3 is the largest number still written with as many lines as the number represents, i.e. III.  The Ancient Romans did write the number 4 as IIII, until it was replaced by the subtractive notation IV in the Middle Ages.  Bet you didn’t expect to read that in a property blog.



Putting the right foot forward…

Well, that’s it all over then.  The Rugby World Cup that is.  There will of course be 3 further games of what could be some of the most exhilarating play ever seen, but for the Home Nations it is acknowledgement that yet again, no one was good enough.  Be it 1 point or a yawning margin of defeat it reads the same; close, but no cigar, not even a cheroot.  There is an irony that a nation with a population that does not even reach double figures is most likely going to walk off-deservedly so-with the hardware.  The irony of the situation was not lost on me when I drew the comparison with world of estate agency.  I know, even when watching the Mother Country twice lose the lead to SA, I am thinking of work.  Dedication is my middle name.  Cynics may say that the weekly Rightmove figures were a welcome distraction from watching my countrymen commit hari kari in front of a global audience.  What was evidenced over the weekend was that size and location can be massively overrated ( stop the tittering at the back, you with smutty minds).  At Cheshire and Co I regularly find myself being told by potential clients having told them what we as agents can do to ensure that their property is sold, “yes, but you aren’t in the town centre and you aren’t part of  a big corporate chain are you?”  Correct on both counts, (which, incidentally you knew before walking through our non town centre based, independent office-that you were able to park outside).  But they still came and on receipt into their bank account of the monies from a successful sale, they really did appreciate that skill, professionalism, commitment and hard work trump a shiny corporate issue uniform and the corporate mentality that goes with it (and I can speak with authority on this as I was part of the machine), every time.

Sartorial differnces aside, the other thing that got my attention was that Lloyds-the bank owned by you and me-had commissioned a report into ‘second steppers’, those who are taking the next step on the property ladder.  My first reaction was, ‘what has this got to do with increasing my share price?’  My second reaction having read the report’s findings, was that some people have too much time on their hands and need to get a proper job.  The report cited research that involved asking homeowners (it did not say how many), where they intended to get the deposit to buy their next home. Apparently, 14% would “consider” asking a family member for help and half of this unspecified number could not move for the second time without the assistance of a family member.  And?  I would reckon that 7% of those who decide to move would not have been able to without the ultimate ‘help’; someone popping their clogs.  As we all know, where there is a will, there is a relative… What was the point of that report and how much did it cost to collate such seismic information?  The report’s findings have nothing to do with Jeremy’s housing crisis, because second steppers are also benefitting from surging house prices, as they have a house to sell.  There will always be a proportion of people who fall outside the norm-whatever that may be-and it is the norm that people need help for, for any number of reasons;  it is called life.


A whole new experience…

In a week that saw Wales undertaking victory celebrations as a result of losing… and Anton falling foul of not having to choreograph a novelty show for a naff dancer with all the grace of a galumphing hippo… I also found myself facing a new one that will feature in my forthcoming bestseller, ‘The life and times of a (devilishly good-looking) estate agent in South Wales’.  I have already written to George to confirm that he is going to play me in the mini series…  After the deja vu scenario of seeing a property for which we had received a proceedable offer-that the vendor had rejected with disgust as being far too low and then had said that he was taking the property of the market-being listed with another agent with an asking price the same as the offer that had been denounced, I was visited in the office by another potential vendor. Having informed me that the acquisition of the listing was between us and another agent (6 other agents had been discarded), he wanted to ask some further questions before making his decision.  The first one was the timeless classic, of  “How much will you reduce your fee?” (no prizes for originality there), but the second question was a bit of a googly; “What percentage of stock do you sell?” 47.5% I replied.  The follow-up really did have some top spin; “What are you going to do to improve those numbers?”  I have to admit that my initial reaction was, “What the “£$% has it got to do with you?”, but then my inner Andy ‘I love you Jezza’ Burnham kicked in and I responded with, “What is important to us is what we will do to sell your house and by the way, of the sales that we agree, 97.5% actually complete, a figure of which we are very proud”.

After our Watchdog wannabee had departed, I did reflect on how statistics can be used to say pretty much anything.  It is a rare specimen of the estate agency breed that doesn’t look at their percentages in comparison to their competitors.  I cannot speak for the females of the species but from a male perspective it is rather akin to waving certain parts of one’s anatomy at one another. Grown up and professional doesn’t cover it  (well, certainly not in my case…)

Is it now easier to remove a tenant?

Well, possibly. That should not be interpreted as agents wanting to chuck out respectable tenants who meet and frequently surpass all the criteria in the ‘Ideal Tenant’ list being given far greater liberty to do just that.

Section 21 of the Housing Act 1988 lies at the very heart of modern tenancy law in England and Wales.  A notice validly served under section 21 will force a court of law to grant a possession order without the landlord having to establish a “ground” for possession.  Under the Rent Acts (applying to tenancies granted before 1989) tenants enjoyed strong security of tenure and could only be removed on limited grounds.
New provisions enshrined in the Deregulation Act 2015 (am I the only one to spot the irony in the title?), will impose restrictions on a landlord’s ability to give a section 21 notice to end a tenancy.  Before looking at the detail, it is important to make the point that (with one exception referred to below) the new rules will only apply to new assured shorthold tenancies (ASTs) entered into on or after 1st October 2015.
The changes may be summarised as follows:

Timing restrictions

For tenancies which first begin on or after 1st October 2015 it will not be possible to give a section 21 notice in the first four months of the tenancy.  In the case of replacement tenancies (new tenancy with same parties and same premises as previous tenancy), the relevant period is four months from the day on which the original tenancy began.

The new provisions also stipulate that, once a section 21 notice has been given, possession proceedings must be commenced (where appropriate) within six months of the service of the section 21 notice.  In other words, “use it or lose it”.  For notices given under section 21(4)(a) – relevant in the case of statutory periodic tenancies – the relevant period is four months from the date of expiry of the notice.

Relaxation of date requirement in section 21(4) notice

This is a somewhat technical change but it may come as a relief to those landlords and letting agents who struggle to count days correctly.  Don’t laugh, there are more than you think.  Under the new rules, the need for a landlord to specify the last day of a period of the tenancy as the date on which the tenancy comes to an end will be removed.  However, while this certainly removes an element of precision from the wording of the notice, landlords and letting agents should still be aware that the date specified in the notice must still be (a) not earlier than 2 months from the date on which the notice is given and (b) not earlier than the earliest date on which the tenancy could be brought to an end under the traditional common law rules (by means of a notice to quit).

Retaliatory eviction

This is the area of new law likely to cause the greatest amount of  gritting of teeth and imprecations to inflict damage upon one’s fellow man.  For tenancies which first commence after 1st October 2015, the service of any improvement notice under the housing health and safety rating system by the relevant local authority or the carrying out by them of any emergency remedial action will mean that a landlord will not be permitted to give a section 21 notice for six months.  That deals with the situation after an improvement notice has been served.  But what about the situation where, before any involvement by the local authority, the tenant has made a complaint to the landlord or his letting agent?

Where a tenant makes a complaint about the condition of a property in writing, the landlord will have to respond within 14 days in writing setting out what he intends to do about it and what the timeline for doing this is.  If the landlord (a) fails to reply or (b) replies by serving a section 21 notice or (c) gives a reply that is inadequate, then the tenant may complain to the local authority who must inspect the property.  If the local authority then serves an improvement notice or carries out emergency remedial action, any section 21 notice already served will be rendered ineffective and no further notice can then be served for six months.  This lacks clarity in a number of respects and it remains to be seen how it will work in practice.

The following potential problems are immediately obvious:

Local authorities are likely to be faced with a substantial increase in demands to carry out inspections and one can imagine that they might not be able to cope, at least not within a reasonable timeframe.

The courts are likely to have to deal with more defences to section 21 claims and this could substantially impact on the accelerated possession process.  The pressure on courts to deal with extra hearings could, it is thought, cause the possession process to become untenable.

Landlords are likely to find themselves facing many more complaints about condition.  This is not in itself a criticism of the new regime but it seems inevitable that some complaints will be more tactical than genuine.  Put less politely, the ‘professional’ chancers will hold their form and run up to their handicap mark.  If the simple method of ending a tenancy by giving a section 21 notice becomes problematic because of a complaint made by the tenant, landlords in future faced with a tenant who is not paying rent might be forced down the route of using a section 8 notice and establishing a statutory ground for possession.  At Cheshire & Co we are well schooled in preparing the paperwork for section 8 notices and include this in the service that we provide to our landlords.  Many agents though would not touch it with the proverbial barge pole covered in something altogether unpleasant, thus for the landlord who has a property let through such agents, what previously could be a simple and cheap process instigated without the help of a lawyer now potentially becomes a much longer and more costly exercise.

This is a not insubstantial body of new regulations to get to grips with.  In the interests of public service broadcasting, may I offer some advice for serving a section 21 notice:

  • Get the right date-on everything-too many notices have found themselves in the bin because of a cock-up with the calendar.  The two months’ notice is from the date the tenant receives the notice, so always give an extra few days.
  • Do not send recorded delivery as they may refuse to sign for it and when they do sign for it, the date of the signature may render the notice invalid.
  • You will have to show the court proof of service.  Always get the proof of posting as the courts will accept this.
  • If there are two tenants or joint tenants, send one joint notice in both names and one for each individual tenant.  A judge will need some convening that the dog ate all of them.
  • If you are hand delivering the notice, put the means of the delivery in the actual letter and ensure that you get a picture of you pushing it through the letter box, together with a signed witness statement from the person watching/photographing you doing it.

If a tenancy has been conducted correctly by all parties, then the end of the tenancy will have been discussed and nothing will come as a surprise.  If there have been ‘challenges’ throughout the tenancy, the notices and the legislation surrounding them are there to protect all parties.  As a letting agent, you will get the property back…eventually…