PR activity report for Feb/Mar 15 May 2012
Press releases/feature articles and comment written and distributed this month
Warning All Landlords – Retaliation Eviction Bill will come in (BLOG) “15 year repossession high down to tenants being told to stay put” says Landlord Action Landlord Action against MORE court fee rises (BLOG) “Allowing sub-letting will be catastrophic for the rental industry” says Landlord Action
Journalist Request for Comment Landlord & Buy to Let Magazine – Political outcome The Sunday Times – What to do when tenant is in arrears and how to get rid of a bad tenant JungleDrum – Paul comment on charity boxing The Sunday Times – Looking for a case study of an accidental landlord – deadline too tight on this occasion.
Press cuttings Press Cuttings from December 2014 Date Publication nd 2 February Property Industry Eye 2nd February
Letting Agent Today
February
The Negotiator
February
The Negotiator
February
PropertyDrum
February
7th February
Landlord & Buy to Let Magazine Maidenhead Advertiser The Telegraph
March
PropertyDrum
March
The Negotiator
3rd March
Property Industry Eye
2nd March 2nd March 2nd March
Rent Man Property Reporter Property 118
14th March
The Times
14th March
The Times
18th March 19th March
JungleDrum LandlordZone
20th March
Property Reporter
5th February
Title BBC programme to highlight issues with tenants on benefits 'Buy To Let Pitfalls' on BBC TV this evening County delays ‘cost landlord £1000s’ Movers & Shakers
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How perils await the new breed of buy-to-let investors Rental dream that turned into a nightmare Agents Prepare for a Knock-Out Allowing sub-letting will be catastrophic Sub-letting clause could spell trouble for landlords
Circulation:390765 AVE: £778.26 Circulation:390765 AVE: £1046.48 N/A
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Circulation: 10000 AVE: £ 335.75 Circulation: 10000 AVE: £ 420.75 Stress in the PRS Circulation: 12000 AVE: £1817.00 Rumble with the Agents’ charity Circulation: 25000 boxing event lined up AVE: £1246.10 Are you fit to ‘Rumble with the Circulation: 17835 Agents’ AVE: £49.58 How to be a lovely Landlord Circulation: 485513 AVE: £4919.43 Landlord Action hosts Rumble with Circulation: 12000 the Agents AVE: £714.95 Landlord Action to host knockout Circulation: 10000 event AVE: £420.75 More landlords go down the ‘no N/A fault’ route to get possession Section 21 'notices hit 15-year high' N/A Section 21 'notices hit 15-year high' N/A Section 21 'notices hit 15-year high' N/A
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20th March
Landlord Today
20th March
Letting Agent Today
22nd March
The Sunday Times
23rd March
Property Industry Eye
23rd March
Rentman
24th March
Love Money
26th March
Mortgage Solutions
26th March
Evening News (Norwich) Hexham Courant
26th March
Landlord Action: “Sub-letting will be catastrophic for the rental industry” Still no detail on government's subletting threat The BTL survival guide Worries mount over ‘catastrophic’ plans to allow sub-letting Sub-letting plans 'will be catastrophic for PRS' Sub-letting: Budget small print spells nightmare for landlords Budget clause on subletting worries landlords New changes to retaliatory eviction
Sub-letting sparks buy-to-let concerns Total Number of Cuttings Total AVE
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N/A Circulation:787256 AVE: £2732.43 N/A
N/A N/A Circulation:18931 AVE: £2804.40 Circulation:13356 AVE: £536.64 27 £17822.52
Total of cuttings: 27 Total AVE (advertising equivalent) £17822.52 Please note that we cannot provide the advertising equivalent for online coverage, or circulations figures. This is just for print coverage.
A BBC Inside Out programme this evening will highlight buy-to-let pitfalls. The show will feature a landlord whose portfolio of housing benefit tenants is causing him to scale back his investments following the need to instruct evictions firm Landlord Action to handle two of the cases shown in the programme. Brian Nixon, a builder from south-east London, has a portfolio of properties largely rented to tenants receiving housing benefit. One of his tenants is in £6,000 arrears because she failed to fill out the necessary housing benefit forms, but never informed the landlord. Despite numerous warnings of eviction, the bailiff – who had 14 other cases that day – is shown as having to wait around while the tenant collected what belongings she requires, leaving the rest to be dealt with by the landlord. In addition to the rent arrears, viewers will be left shocked at the state of the property on departure of the tenant who, after being evicted, went straight to the council to be rehoused. The aggrieved landlord uses some colourful language to vent his frustration. Paul Shamplina, founder of Landlord Action, who is present at the evictions and can be seen on tonight’s programme, said: “I have said it many times before, a system where landlords do not receive housing benefit directly from the council is simply not working. “Years ago, renting to social housing tenants gave landlords a steady guaranteed flow of income, in return for supporting this sector by propping up the limited accommodation the council could offer. Everyone benefited. “Now, we are seeing fewer landlords wanting to rent to housing benefit tenants because of cuts being made, the uncertainty with regards to Universal Credit and non-direct payment, particularly in the south-east where landlords could achieve far higher rent if they let to the private sector.” He said Brian Nixon is now selling properties from his portfolio, meaning there are three fewer properties in the private rented sector being used for housing benefit tenants. * Inside Out can be seen this evening at 7.30pm on BBC1 London, Sky channel 954 or Freeview channel 721.
'Buy To Let Pitfalls' on BBC TV this evening Letting agents, landlords and property investors of all kinds will probably want to clear their diaries for the edition of Inside Out on BBC One in the London and south east this evening at 7.30pm. Called Buy To Let Pitfalls, the show will focus on landlords who entered the sector to provide a pension for themselves, but then ran into difficulties. The show will feature a landlord, Brian Nixon, whose portfolio of housing benefit tenants is causing him to scale back his investments following the need to instruct Landlord Action to handle two of the cases. One of Nixon’s tenants is in £6,000 arrears because she failed to fill out the necessary housing benefit forms and did not inform the landlord. Despite numerous warnings of eviction, the tenant makes the bailiff - who had 14 other cases that day - wait while she collected some of her belongings, leaving the rest to be dealt with by the landlord. The programme also shows the state of the property on departure of the tenant who, after being evicted, went to the council to be re-housed. Paul Shamplina, founder of Landlord Action, says: “A system where landlords do not receive housing benefit directly from the council is simply not working. Years ago, renting to social housing tenants gave landlords a steady guaranteed flow of income, in return for supporting this sector by propping up the limited accommodation the council could offer. Everyone benefitted. “Now, we are seeing fewer landlords wanting to rent to housing benefit tenants because of cuts being made, the uncertainty with regards to Universal Credit and non-direct payment, particularly in the South-East where landlords could achieve far higher rent if they let to the private sector.”
More landlords go down the ‘no fault’ route to get possession
Written by: ROSALIND RENSHAW
| March 3, 2015
Section 21 possession cases were at a 15-year high in 2014, the Ministry of Justice has reported – despite an overall 5% fall in possession claims. Social landlord possession claims fell by 10,500 in the last year, whilst private landlords seeking hearings before judges fell by 629. However, accelerated cases rose by nearly 2,000 to 36,026, suggesting that an increasing number of landlords are choosing to go down the “no fault” route. Paul Shamplina, founder of Landlord Action which specialises in dealing with problem tenants, said: “I’m surprised by the figures for the social housing sector, given the introduction of ‘bedroom tax’, cuts in housing benefit and welfare reforms. “Perhaps the directive to the social housing sector was to be not as aggressive during this period of transition.” He said accelerated claims have risen consistently for the last five years, in line with growth in the private rented sector and the drastic housing shortage. Consistent with Ministry of Justice data, Landlord Action has seen a significant shift in the number of landlords choosing to take the Section 21 accelerated possession route (for a quicker eviction) instead of using Section 8 for possession only. Shamplina, pictured, said: “Our research suggests the two most common motives are an increase of landlords wishing to exit the PRS, both to cash in on capital appreciation and because they feel that letting property has become too shrouded in red tape. “Secondly, landlords are being forced down this route by tenants remaining in properties on instruction by local authorities, who will not rehouse tenants who have ‘voluntarily’ made themselves homeless.”
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Section 21 'notices hit 15-year high' by Gary Whittaker The use of section 21 eviction notices by landlords has reached a 15-year high, new figures have revealed. According to statistics released by the Ministry of Justice, the total number of both social and private landlords making possession claims have actually fallen by 10,500 and 629 respectively in the past 12 months. However, accelerated cases have increased by nearly 2,000 to 36,026 and are at the highest level recorded since 1999. Paul Shamplina, founder of Landlord Action, said this is due to more landlords using section 21 notices instead of section 8 in order to regain possession of their properties faster. She added the ratio of these notices is normally weighted around 30/70 in favour of the latter, but the figure is now more like 40/60. The use of section 21 notices is one of the main points of discussion in the debate surrounding revenge evictions and the proposed Deregulation Bill will limit landlords' ability to take this action in a number of circumstances. However, Ms Shamplina claimed Landlord Action has seen very few cases of tenants being evicted in retaliation for asking for repairs or making a complaint - a comment that is in stark contrast to Shelter's claim that 213,000 renters have been the victim of a revenge eviction.
"Our research suggests the two most common motives [for section 21 notices] are an increase of landlords wishing to exit the PRS, both to cash in on capital appreciation and because they feel that letting property has become too shrouded in red tape," Ms Shamplina stated. With a decision on the Deregulation Bill still to be announced, this is unlikely to be the last time section 21 notices make the headlines.
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Although social landlord possession claims (those made by councils and housing associations, mainly for rent arrears and anti-social behaviour) have fallen by 10,500 in the last year and private landlords seeking hearings before judges have fallen marginally by 629, accelerated cases have actually risen by nearly 2000 to 36026. Paul Shamplina, founder of Landlord Action, comments: “I’m surprised by these figures for the social housing sector, given the recent introduction of the bedroom tax, cuts in housing benefit and welfare reforms. Perhaps the directive to the social housing sector was to not be as aggressive during this period of transition.” Accelerated claims have risen consistently for the last 5 years, in line with growth in the PRS and the drastic housing shortage, but 2014 also saw the highest annual figure of cases since the accelerated possession claims process started in the court system. Consistent with figures releases by the MoJ, Landlord Action has seen a significant shift in the number of landlords choosing to take the Section 21 accelerated possession route (for a quicker eviction) instead of using a Section 8 for possession only.
15 year high for Section 21 possession cases
Paul Shamplina - Published on 02/03/2015 View Member Profile
Statistics released by the Ministry of Justice (MoJ) show that despite an overall 5% fall in possession claims issued at county courts in 2014 versus 2013, the figures are skewed by a more lenient approach taken by social landlords, and that the continued rise in accelerated possession cases which are at a 15 year high, indicate the severity of the UKs housing shortage. Social landlord possession claims (those made by councils and housing associations, mainly for rent arrears and anti-social behaviour) have fallen by 10,500 in the last year, whilst private landlords seeking hearings before judges have only fallen marginally by 629, but accelerated cases have risen by nearly 2000 to 36026. I’m surprised by these figures for the social housing sector, given the recent introduction of the bedroom tax, cuts in housing benefit and welfare reforms. Perhaps the directive to the social housing sector was to not be as aggressive during this period of transition. Accelerated claims have risen consistently for the last 5 years, in line with growth in the PRS and the drastic housing shortage, but 2014 also saw the highest annual figure of cases since the accelerated possession claims process started in the court system. Consistent with figures releases by the MoJ, Landlord Action has seen a significant shift in the number of landlords choosing to take the Section 21 accelerated possession route (for a quicker eviction) instead of using a Section 8 for possession only. This used to be weighted 30/70 in favour of Section 8, but is now closer to 40/60. However, we have had very few cases relating to “Retaliation Eviction”, a total contradiction to the figures shelter quoted of 213,000 tenants being evicted by landlords because they complained about disrepairs. There is an amalgamation of reasons for this, but our research suggests the two most common motives are an increase of landlords wishing to exit the PRS, both to cash in on capital appreciation and because they feel that letting property has become too shrouded in red tape. Secondly, landlords are being forced down this route by tenants remaining in properties on instruction by local authorities, who will not rehouse tenants who have “voluntary” made themselves homeless. Cases like this are at the highest level since we started in 1999 and this obviously shows the severity of the housing crisis we have. According to English Heritage figures, last year 120,000 fewer houses were built than the estimated 245,000 needed.
JUNGLEdrum News Agents prepare for a knockout event The
estate and letting agents taking part in a charity white collar charity boxing event – Rumble with the Agents – met each other last week for their first group training session. The sporting event, which took place at the world famous Peacock Gym and was filmed by Channel 5 as part of a wider documentary, offers the agents the opportunity to try their hand at a boxing whilst raising money for The Rainbow Children’s Trust, a leading organisation providing emotional and practical support to families who have a child with a life threatening or terminal illness. Being billed as the biggest white collar boxing event ever brought to the property industry, ‘Rumble with the Agents’, which is due to take place at The Holiday Inn in Finchley Central, north London, on Thursday 21st May 2015, has so far signed up 10 fighters. The confirmed agent boxers taking part in the event are: Simon Welch- Savills Simon Hills- Life Residential Dave Ronson- The Heron Group Simon Peters- Panther Securities Kevin Pearcey- Winkworths- Willesden Nick Vent- Winkworths- East Dulwich Scott Hume- Infiniti Properties Paul Shamplina- Landlord Action Kendall Fleming- Life Residential Ahmad Baghbani- Fraser and Co Paul Shamplina (fourth from left, above), Founder of Landlord Action, which is hosting the event, is inviting two more letting and estate agents to take part.
With no previous experience required, Landlord Action
are looking for a total of 12 willing participants that want to get fit, learn to box and be a hero for six minutes. Punch London Boxing Gym is partnering the event to provide a fully structured and supervised boxing training programme, from a novice to ring ready by May, as well as arranging the fight matchups for the night. The evening itself will consist of six fights – if two more fighters can be found - a sit down threecourse meal with unlimited drinks, an auction, raffle, celebrity table and a disco afterwards. “The response to this event has been fantastic, with over 200 tickets sold already,” said Shamplina. “John Conteh, a British former boxer who was world light-heavyweight boxing champion, is running our live auction and Channel 5 is filming the event to conclude a series they have been filming which follows the work of Landlord Action. It will be a great night, for an even greater cause.” David Ronson, of The Heron Group, who will be one of the agents fighting on the night, added: “I have known Paul for years and when he gave me a call to explain about this event, I jumped at the chance to raise money for a great cause and also get fit. Training is going well and I’m looking forward to a great night.” As the event’s official media partner, the whole team at The Negotiator Magazine would like to wish everybody taking part in Rumble with the Agents the very best of luck. Contact rita@rumblewiththeagents.co.uk for more info and tickets.
Allowing sub-letting will be catastrophic 19 March, 2015 Following the Chancellor’s budget, leading tenant eviction company, Landlord Action, has expressed grave concern over Government plans to allow private tenants to sub-let from their tenancies by preventing landlords from using clauses in residential tenancy agreements that expressly rule out subletting. Paul Shamplina, Founder of Landlord Action, says: “This appears to have slipped in under the radar which, if it goes ahead, will throw up a magnitude of problems in the buy-to-let industry. “Allowing sub-letting will be catastrophic for the rental industry” says Landlord Action “We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented. We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible. They draw up separate agreements and trick sub-tenants into thinking they are the landlord. By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is no-where to be found. The detail is yet to be revealed but, in my opinion, there should have been a period of consultation with the industry before this was announced. This is not the way to fix the housing shortage, and... in fact will have quite the opposite effect if more and more landlords are exposed to the risk of nightmare sub-tenants. Giving landlords even less control over their own property by preventing them from instilling clauses which prevent sub-letting could drive more good landlords out of the marketplace.” Landlord Action is currently exposing the level of the sub-letting problem in a Channel 5 documentary due to air in a few months. www.landlordaction.co.uk
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“Allowing sub-letting will be catastrophic for the rental industry” says Landlord Action. Following the Chancellor’s budget, tenant eviction company, Landlord Action, has expressed grave concern over Government plans to allow private tenants to sub-let from their tenancies by preventing landlords from using clauses in residential tenancy agreements that expressly rule out sub-letting. Paul Shamplina, Founder of Landlord Action, says “This appears to have slipped in under the radar which, if it goes ahead, will throw up a magnitude of problems in the buy-to-let industry. We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented. We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible. They draw up separate agreements and trick sub-tenants into thinking they are the landlord. By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is no-where to be found
Landlord Action: “Sub-letting will be catastrophic for the rental industry” Friday 20th March 2015
Tenant eviction experts Landlord Action has expressed grave concerns over Government plans to allow private tenants to sub-let. As Landlord Today reported earlier this week, Budget small print included a clause about subletting under the title “support for the sharing economy”.
It said the government will: “make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.” Paul Shamplina, founder of Landlord Action, said: “This appears to have slipped in under the radar which, if it goes ahead, will throw up a magnitude of problems in the buy-to-let industry. “We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented. “We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible. They draw up separate agreements and trick sub-tenants into thinking they are the landlord. By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is nowhere to be found. “The detail is yet to be revealed but, in my opinion, there should have been a period of consultation with the industry before this was announced. This is not the way to fix the housing shortage, and in fact will have quite the opposite effect if more and more landlords are exposed to the risk of nightmare subtenants. Giving landlords even less control over their own property by preventing them from instilling clauses which prevent sub-letting could drive more good landlords out of the marketplace.” Landlord Action is currently exposing the level of the sub-letting problem in a Channel 5 documentary due to air in a few months.
The government is still not giving any detail on its in-principle proposal, set out in the small print of this week’s Budget, to allow private tenants the right to sublet their properties. The Department of Communities and Local Government told Letting Agent Today that it was not yet in a position to give details on the proposal, which was on page 51 of the Budget Red Book - the document which is released after the Chancellor makes his Budget speech. It reads: “The government wants to ensure that Britain is the global centre for the sharing economy, enabling individuals and businesses to make the most of their assets, resources, time and skills through a range of online platforms. This Budget therefore announces a comprehensive package of measures that will break down barriers, create opportunities for sharing, and unlock the potential of this dynamic and growing area. "Building on the recommendations of the independent review of the sharing economy, the government will: make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.” Some analysts on social media have interpreted this to mean that the short-let tenancy relaxation introduced by DCLG in London - to allow individual home owners as well as amateur and professional landlords to emulate the likes of AirBNB - will be extended across the country. Others, like the Residential Landlords Association and tenancy eviction company Landlord Action, have taken this to mean that private tenants will themselves be able to sublet their own accommodation. Paul Shamplina, founder of Landlord Action, says if this policy goes ahead it will thrown up a magnitude of problems in the buy-to-let industry. “We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented. We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible” says Shamplina. “They draw up separate agreements and trick sub-tenants into thinking they are the landlord. By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is no-where to be found” he says. Landlord Action is currently involved in the making of a Channel 5 documentary on subletting, which will air over the summer.
Worries mount over ‘catastrophic’ plans to allow sub-letting
Written by: ROSALIND RENSHAW
| March 23, 2015
Concern is continuing to mount over plans buried away in the Budget’s small print which will mean that private landlords can no longer ban sub-letting. Sub-letting is commonly banned in letting agreements, but such clauses would become illegal. The Government, which wants to encourage the “sharing economy”, says it intends to introduce legislation. If this goes ahead, it would mean that landlords cannot legally stop their tenants from letting out rooms, or from advertising their rented homes on sites such as Airbnb or HomeAway at a higher price. This would allow the tenant to make a profit, while increasing the risk of wear and tear. It could also concern specialist insurers and buy-to-let lenders, who routinely ban sub-letting. Allowing tenants to sub-let could also drive a coach and horses through the requirement to conduct immigration checks on prospective tenants, say critics. There are other implications for landlords in areas of selective licensing, for deposit protection, for homes being turned into Houses in Multiple Occupation without the landlord’s knowledge, and for existing HMOs to breach requirements as to numbers of occupants allowed. Paul Shamplina, founder of eviction firm Landlord Action, said there are already far too many problems with tenants trying to sub-let for a profit. He called the new move “catastrophic” for the industry. He said: “We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented. “We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible. “They draw up separate agreements and trick sub-tenants into thinking they are the landlord. “By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is nowhere to be found.” He was also critical that the Government had made the announcement without any consultation with the industry. He said: “This is not the way to fix the housing shortage, and in fact will have quite the opposite effect if more and more landlords are exposed to the risk of nightmare sub-tenants. “Giving landlords even less control over their own property by preventing them from instilling clauses which prevent subletting could drive more good landlords out of the marketplace.” This is how Eye reported the story, hidden in the Budget, last week.
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Sub-letting plans 'will be catastrophic for PRS' by Gary Whittaker Government plans to change the law regarding sub-letting could have a significant negative impact on the private rented sector (PRS). This is according to Landlord Action, which has warned that the proposal to prevent tenancy agreements from containing clauses that forbid sub-letting could have a "catastrophic" effect. Founder of the organisation Paul Shamplina stated: "This appears to have slipped in under the radar which, if it goes ahead, will throw up a magnitude of problems in the buy-to-let industry. We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented." The plans to allow tenants to sub-let were included in the small print of the recent Budget announcement and while they have not been finalised, Landlord Action is worried that such a move is even being considered. Mr Shamplina said sub-letting often leads to overcrowding and causes damage to properties. He claimed a consultation with the rental industry should have been carried out before the government's plans were announced. He argued that allowing sub-letting will not "fix the housing shortage" and could actually make the problem worse, as giving landlords less control of their properties and exposing the to potential "nightmare" sub-tenants may drive many out of the rented sector. Landlord Action revealed it is currently working on a programme for Channel 5, which aims to expose the full extent of the sub-letting problem in the UK. The show is due to air in a few months' time. Last year, Michael Portman, the managing director of LetRisks, told Property Reporter the growing cost of rental accommodation was causing more people to sub-let.
Sub-letting: Budget small print spells nightmare for landlords Mortgages and Home|
Emma Lunn
Buried away in the 'Red Book', a document published after the Budget speech, is a policy that has sent a shiver down landlords’ spines.
Under a section entitled “support for the sharing economy”, the Government says it will: “make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.” In short, whereas now a standard assured shorthold tenancy (AST) agreement will ban sub-letting, landlords will not be able to include this clause in future. What can possibly go wrong? The rise of rent-to-rent The past few years have seen an increased number of so-called “rent-to-rent” companies ripping off both landlords and tenants. It works like this: a middleman rents a property posing as a normal tenant. Once in, he or she turns the living room and/or dining room into extra bedrooms, then lets each room individually to sub-tenants for a combined higher rent than the “tenant” is paying the landlord. And that’s if the rent-to-rent agent is paying the landlord at all. According to eviction firm Landlord Action the number of rent-to-rent scams is on the rise. Scammers re-let a property, taking rent and deposits from subtenants, then disappear. Admittedly some rent-to-rent or “guaranteed rent” companies are upfront with the landlord about their intentions. But even then, the whole arrangement is a legal minefield. Clearly, common sense suggests the Government should be making sub-letting scams more difficult to carry out, not easier. Compare mortgages with lovemoney.com
Budget clause on subletting worries landlords Mortgage Solutions | 26 Mar 2015 | 13:32 Emma Lunn Landlords are up in arms about Budget small print which will allow private rented sector tenants greater freedom to sublet. The clause said the government will: “Make it easier for individuals to sublet a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out subletting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.” The government hasn’t given any further details about the proposal which could mean anything from letting spare rooms in rental property via websites such as Airbnb to giving tenants the power to sublet entire properties to third parties. Residential Landlords Association (RLA) chairman Alan Ward described the move as a “nightmare in the making” and said it smacked of “back of the fag packet” policy making. “Key questions remained unanswered such as who will be responsible for a property if the tenant subletting leaves the house but the tenant they are subletting to stays?” he said. “Similarly, given the
government wants landlords to check the immigration status of their tenants, who would be responsible for checking the status where subletting occurs?” Eviction specialist firm Landlord Action said the move would be “catastrophic for the rental industry”. Founder Paul Shamplina has repeatedly warned about the increase in subletting scams in the private rented sector, especially in London. “We have never seen so many subletting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented,” he said. “We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and subletting to as many people as possible. They draw up separate agreements and trick sub-tenants into thinking they are the landlord. By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is nowhere to be found.” Subletting also throws up problems from an insurance point of view. Pricing for landlord insurance policies is based on the tenant type, among other factors, with insurers attributing higher risk for certain types of tenant. “It will be difficult for a landlord to disclose the details of their tenants, and answer the risk question accurately if they no longer have the final say on who occupies their property” said Steve Jones, director of Rentguard Insurance. “The real problem would come if underwriters decide to charge the higher rate to everyone to factor in the likelihood of damage cause by tenant’s subletting the property.” Problems may also arise as tenants are unlikely to professionally reference those they sublet to and may as a result know very little about them, their lifestyle, background and ability to regularly pay the rent. “It remains to be seen if the government will rethink this move after the backlash it has faced from the private rented sector, as at the moment it is hard to see who this new ruling benefits – other than tenants looking to rip off hard working landlords,” said Jones.