![]() Changes in Private Rented Sector
![]() James Woodhouse James Woodhouse, a property litigation specialist at solicitors, Charles Lucas & Marshall, Wantage reports on some major imminent changes for private landlords and tenants.
It may soon be incumbent upon private sector landlords to join a national register before they can let properties to tenants. The Department of Communities and Local Government has undertaken a consultation, arising out of concerns expressed in a report on the private rented sector by academics from the University of York (the Rugg Report), which found that many private landlords do not take their role seriously and did not offer a satisfactory level of service.
The intention behind a national landlords' register is to remind landlords of the need to provide a professional service and to 'secure behavioural change' in order to improve standards. John Denham, the Communities Secretary, wants to have legislation in place by this autumn.
He has now completed his legal training at Charles Lucas & Marshall and qualified as a solicitor. After gaining experience across several departments within the firm he has opted to specialise in commercial litigation and employment work, focusing specifically on property and contractual disputes.
Meanwhile, Housing Minister, John Healey, has announced plans to help tenants who are facing eviction as a result of repossession of the property by the landlord's mortgage lender. It is intended that tenants should be given more notice in order to seek alternative accommodation.
National Landlords' Register
Current Problems
The Government estimates there are over three million households in the private rented sector in England. The Rugg Report identified various concerns:
The Government looked at the possibility of introducing a system of licensing to address these issues, before concluding that a national landlords' register was the preferred option.
What will the Register mean for Landlords?
To implement these proposals the government will need to introduce primary legislation, which is unlikely to be in place before 2011. Any homeowner who lets a property will be required to pay a £40 fee to join the register. It is likely this will apply to landlords who rent rooms to lodgers, although confirmation is awaited.
Under the proposals, landlords will need to provide information including their name, address and the property address. If concerns arise as to their level of service - and these complaints are upheld - landlords may be removed from the register and prevented from operating as a landlord. In that event, the property will be managed by either the local authority or properly regulated managing agent.
What are the Objections?
The National Landlords Association is opposed to the register on the basis that the collection of such details is overly intrusive. The Association's Chairman has pointed to the fact that the private rented sector is already heavily regulated.
The Times has reported concerns that if live-in landlords are to be brought within the scope of the proposals, the register will enable tax inspectors to use the register to crack down on tax evasion. Currently, live-in landlords can earn up to £4,250 per annum by letting rooms to lodgers without needing to pay tax. It is reported that many live-in landlords charge lodgers over £81 per week in rent, exceeding the tax threshold. There are concerns the register may discourage people from taking in lodgers at a time when many householders are having to look for other sources of income.
On the other hand Shelter, a charity representing homeless people, feels that the register does not go far enough.
Protection for Tenants facing Eviction
Current Problems
The Department of Communities and Local Government website records that charities and advice centres have reported growing concerns about tenants being evicted from rented accommodation as a result of landlords falling behind on mortgage repayments. If a landlord has let a mortgaged property without obtaining the consent of his mortgage lender, the tenant will have limited rights of occupation. There are reports of tenants being evicted on very short notice and facing homelessness as a result. It is estimated that between 2,000 to 3,000 households could be affected this year.
The Solution?
Housing Minister, John Healey, has opened up a consultation process to look at opportunities to change the law. He has proposed that tenants affected in this way should be given a further two weeks notice before they are required to vacate the property. He states: "This will give them much needed breathing space to find another home. But I also want to see more lenders use alternatives to repossession, such as appointing Receivers of Rent to collect rent."
If you are a landlord or tenant likely to be affected by these proposals, Charles Lucas and Marshall would like to hear from you. Please post your comments to james.woodhouse@clmlaw.co.uk, or contact us via twitter at http://twitter.com/clmlawbits.
For more information contact James Woodhouse on 01635 521212 or james.woodhouse@clmlaw.co.uk
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