New landlord? Don't be nervous

We recently published a short video offering advice to new and prospective landlords. Sam Samuel talked about some considerations of importance to new landlords, from considering what property to purchase in the first place, to property maintenance and dealing with tenants.

After going over general points and potential risks, such as nuisance behaviour and rent arrears, Sam concludes that, with or without a managing agent such as Edward Ashdale, being a landlord can be a smooth-running and rewarding experience. 

However, Edward Ashdale are ready to help if an intermediary between landlord and tenant is needed to apply expertise and experience to ensure the letting out goes well and any emergencies are dealt with. In the case of a landlord with multiple tenants, such an arrangement could be even more valuable to ensure that the landlord has peace of mind that, whatever happens, any issues with his or her properties that arise are routinely dealt with effectively and efficiently.

You can view our earlier posts in our Index here.

Topical tips for Landlords 1 – New energy regulation is coming

The Energy Act 2011 gave the government powers to set a minimum energy efficiency standard for the private rented sector to help meet carbon reduction targets and address fuel poverty.

Therefore, a Minimum Energy Performance Standard for the private rented sector is being introduced. The Private Rented Sector Energy Efficiency Regulations (Domestic) sets out:

• Tenant's energy efficiency improvements
• Minimum energy efficiency standards

Minimum energy efficiency  standard regulations will require eligible properties in the sector to be improved to a specified minimum standard. These regulations must be in force by April 2018.

Landlords will face a penalty charge of up to a maximum of £5000 for non-compliance.

Until recently, Lewisham Council, in partnership with Osborne Energy, set up an offer to help improve the energy efficiency of rental properties with up to £7200 grant funding by property. Funding was available to landlords with rental property in Lewisham, Bexley, or Bromley.

Whether or not further offers are made available from these or other sources, landlords clearly need to be investing in this area going forward.

Website: www.osborneenergy.co.uk

You can view our earlier posts in our Index here. 

A Baptism of Fire for my first letting agreement

By Liam Embleton, Negotiator at Edward Ashdale

"I’ve recently started working as a Negotiator for Edward Ashdale. My first role in the lettings industry.

"After an initial period of training I was out conducting viewings, a process of filtering the good applicants from the bad. My first successful let was a three bedroom ground floor flat in Shortlands and it didn’t go as smoothly as I expected it to. Apparently, not even the Lettings Manager had experienced anything like it before. Problems occurred through the process of moving tenants on the planned date.

"On Friday 18^th September, I had organised two very good applicants, Pawel and Lukasz, an early afternoon appointment to show them around the property. They both work for a large company in the local area and were looking to rent a flat in the Bromley area. Pawel and Lukas showed immediate interest as this flat was exactly what they were looking for. The flat was empty at this time as the Landlord had vacated. We had in fact managed the property two years ago, so the Landlord was no stranger to us and the process. The property was available to be moved into as soon as possible, which was ideal for Pawel and Lukasz as they needed to be out of their current property within two weeks. They requested permission from the owner to redecorate in the same colours as they planned to remain long term. 

"Everything was agreed and a reservation deposit was paid by the tenants. I confirmed with the Landlord the property was now let on the terms agreed and proceeded to carry out the referencing process. The landlord confirmed he was happy to take on these tenants and was looking forward to them occupying the property in two weeks. The proposed tenants were excited and the date for occupation was set with a date of Friday 2^nd October which was perfect for all as they needed to be out of their current property that they were renting by that date. 

"During the week coming up to Friday 2^nd, I had no contact with the landlord despite my attempts to make contact. I couldn’t get hold of him: he was not responding to any of my calls or e-mails. I had to apologise to Pawel and Lukasz, explaining that despite having signed contracts returned from the Landlord-client, he had not authorized the references we had obtained, despite them being rendered ‘good’ and ‘acceptable for the tenancy’. They were not able to collect the keys on the Friday 2^nd, as we had no response from the landlord.

"When I finally got contact from the landlord three days after the agreed move in date, he said that his wife had changed her mind on the proposed tenants and that he now no longer agreed with them moving in. Pawel and Lukasz was not happy with this late decision, not to mention the grief they were having from their existing Landlord. They were telling me they were about to be homeless because new tenants were pressing to move in their own property. 

"My manager in the office became involved and tried to learn from the owner what the delay was or if there were any concerns. Luckily, later on that day the landlord phoned again and told us he had had a further discussion with his wife and agreed to the tenants moving in.

The new date for occupation was Saturday 10^th October, which was going to be a definite! I had to politely speak to Pawel and Lukasz and explain to them the reasons why we had to change the date.

"During that week I made sure everything was prepared, including organizing the inventory and gas safety testing. I could not believe it when we received a telephone call from the gas engineer advising there was no seal on the oven door and no chain on the gas cooking appliance, so he had to fail the gas check. I immediately conveyed this to the Landlord, who refused to accept the gas check had failed and assured me there was nothing wrong with the appliance. We obtained quotes for supplying and fitting a new gas cooker and oven appliance, but the Landlord refused. This ran into a few days, with the tenant continuously chasing to find out what was going on and the Landlord reluctant to do anything. He wanted a second opinion and the same result was found. This meant the tenants were not allowed to move in the next day until the landlord had replaced the cooker, which ultimately delayed the move in date once again by another three days. This caused big problems for Pawel and Lukasz and there was nothing I could do but apologise for the inconvenience of being delayed once again. The Landlord finally conceded after reading the gas engineer’s reports, but decided he wanted to arrange the new appliance, which he did through a local store who were offering an installation deal too, ensuring it met current regulations.

"Finally, on Tuesday 13^thOctober, we finally got Pawel and Lukasz happily moved into the property with all the problems solved. Yet the story didn’t finish there. The Landlord contacted my Manager, saying he had been talking to his wife and after everything that had happened, had decided not to let the property to the tenants. They were going to sell the property instead! 

"The Landlord had signed and returned his contracts. 

"All of the associated tenancy obligations were complete.

"The tenants had signed the Tenancy Agreement and here we were with a Landlord saying we needed to tell them to move out. I was quite amazed, but I was assured the Landlord could not get the tenants out. It was a horrible feeling for me, after all my efforts. Fearing having to tell the tenants and a possible legal battle, the Landlord telephoned later in the day and apologized, saying it was his wife and that he himself was quite happy to proceed!

"I’ve been told to expect many more unusual experiences, which I suppose is part of the job when you are dealing with people that have different agendas."

You can view our earlier posts in our Index here.

Sam's Word 8 – Trick or Treat?

Sam's Word

As I write, it is Hallowe'en. Strictly Come Dancing has just aired its annual special and Eastender Jake Wood had an off night, while Frankie and her partner Kevin scored a ten.

We have had two trick or treaters at our (home) door last night, and we were ready with the Quality Street.

So no tricks were needed.

However, there are certainly both tricks and treats in the world of estate agency.

We're one of the treats. Edward Ashdale estate agents is now an established and respected name since two like-minded businesses came together to become Edward Ashdale and work across Lambeth and Bromley. We do good things. Some are exceptional. Such as consistently accompanying people on viewings. The safest thing to do and the best way for people to get all of our expertise, all of the time. Such as consistently using professional photography. We're trying to attract buyers to the homes we sell for people and only the best will do.

There are also the tricks, or tricksters, out there. In our latest newsletter, I said that, “With property prices at strong levels the opportunities for buy-to-let investment are scarce, so if you are thinking about investing in property it’s more important than ever to choose carefully so as to maximise the yield and chance of capital growth. Properties with onerous maintenance and service charges are always likely to impact on yield and capital growth, so fully investigate any planned maintenance a building may have ahead. There are certain property management companies that have to be avoided, given their culture and practices. In an industry that is allowed to operate unregulated a poor leasehold management company or freeholder can make a Landlord’s investment a very unhappy experience.”

An article (here) from 2007 by a disenchanted former estate agent went further. He wrote before the The Property Ombudsman (TPO) came into being, which was a welcome development, though arguably even now one without enough legal teeth.

The list of horrors the agent came up with included:

1. Gazumping. When a deal has been agreed some agents still show people around the property hoping for a better offer.

2. Value a property at a low price - and then sell it to a friend or colleague.

3. Use scare tactics such as pretending to receive offers to get people to make a higher offer.

4. Neglect to pass on all offers to vendor in hope of achieving a higher one later on.

5. Refuse to reduce commission if the price is reduced.

6. Overvalue houses to secure business from sellers.

7. Supply customers with fake documents to help them secure a mortgage.

8. Make up a very low offer. This shocks the seller into accepting a genuine offer which is far lower 
than the original valuation.

9. Fake evidence that other properties in the area have sold for an overly high price.

10. Erect for sale/sold signs at homes the agent had nothing to do with to give a false impression.

Bringing things up to date, this year the Property Ombudsman reported a sharp increase in the number of consumer complaints for the residential lettings sector, ahead of the requirement that came into force on 1st October 2014 for every letting agent to register with an approved redress scheme.

The figures, published in The Property Ombudsman's 2014 Interim Report, show that 1,187 complaints were resolved in total about both sales and lettings issues between 1 January and 30 June 2014, with 721 complaints (61%) made against letting agents – a 37% increase on the same period last year.

The Ombudsman upheld 74% of the complaints made by landlords and tenants against letting agents.

Christopher Hamer, the Property Ombudsman, explained, "Up until now there has been no legal requirement for any letting agent to register with a redress scheme, which has left thousands of tenants and landlords unable to access our free, fair and independent dispute resolution service. That is shown by the fact that around 20% of the initial consumer enquiries we received in this period related to lettings agents that were not signed up to TPO. I am pleased to note that the new legislation will change that and we've already seen nearly 1,000 firms register this year, making us the largest redress scheme with 11,744 lettings offices under my jurisdiction and following our Code of Practice, which sets out what service consumers should receive from member firms.
'The sharp increase in the number of lettings agents registering for redress with TPO, combined with TPO's increased profile and the ever-growing number of households renting goes some way to explain why we've seen such a significant increase in the number of lettings complaints, with more than half of our total enquiries now coming from landlords and tenants that feel they have been treated unfairly. The new legislation will make it an offence for any ‘rogue' agent that has not registered to trade and they will a face of up to £5,000."

Key highlights from TPO's latest Interim Report reveal that:

• Registered agents (p7): more than 4,000 additional agents registered with TPO, with sales and lettings representing the biggest growth areas. A total of 30, 128 agents registered with TPO across all jurisdictions – a 15% increase on the same period last year

• Consumer enquiries (p8): More than 8,474 consumers contacted TPO regarding a property dispute (a 4.6% increase on the same period last year). More than half of all the enquiries received were regarding lettings disputes with 4,759 enquiries logged (56.1% of all enquiries)

• Complaints (p9): Complaints grew by 37% overall with 1,187 cases reviewed, of which 721 were against letting agents (up 37%) and 544 were against sales agents (up 42%). The Ombudsman upheld 74% of all lettings complaints while 61% of all sales complaints were upheld

• Consumer case studies (p10): The Ombudsman hand-picked a selection of case studies to highlight issues varying from death and inventories, owed rent, visas, pets, ex partners, planning permission and fraud to share an insight into the cases reviewed and awards given
  

To view TPO's 2014 Interim Report, please visit http://www.tpos.co.uk/quarterly_report.htm.

What is The Property Ombudsman?

The Property Ombudsman (TPO) scheme offers an independent and impartial dispute resolution service to consumers who have been unable to resolve their disputes with a registered agent. The scheme was established in 1990. The Ombudsman can provide redress to place the consumer back in the position they were before the complaint arose, achieving a full and final settlement of the dispute and all claims made by either party. Where appropriate, the Ombudsman can make compensatory awards in individual cases up to a maximum of £25,000 for actual and quantifiable loss and/or for aggravation, distress and/or inconvenience caused by the actions of a registered agent.

TPO is free to all consumers. Agents pay a single annual subscription covering them for sales, lettings, commercial, international and auction activities. TPO does not charge case fees.
At 1 August 2014 over 13,200 sales offices and 11,600 letting offices were registered with TPO. The TPO estimates that these figures represent 95% of sales agents and 65% of lettings agents operating within the UK.

What does this mean? 

Hopefully, that tenants and landlords will receive better treatment and experience less tricks in future. 

I believe that everything that is done to improve the behaviour, practices and reputation of estate agents can only be a good thing.

Sam Samuel, MNAEA CRLM,  November 2014


You can view our earlier posts in our Index here.

Market Reflections 1: House sale reasons and lettings cowboys

There are interesting figures behind what gets in our window...

A couple of interesting newspaper reports this week, both in the London Evening Standard of 27 February.

The longer report described research by Castle Trust which stated that one in four properties to have changed hands in London since 2007 has been sold at a loss. Journalist Anthony Hilton came up with three lessons: 

"Lesson one is that even in a bouyant market it is possible to lose money." 

"Lesson two, however, is that you have a better chance of doing well here than elsewhere - in the same period in England and Wales as a whole, two out of five houses were sold at a loss."

"Lesson three is that, although in the long term house prices tend to rise in parallel with wage growth, it is clear that there are blips and individual house prices can be really volatile. Home owenership is a lot riskier than most people appreciate."

Anthony also brought up some interesting statistics:

• Of the 12,500 loss making properties sold since 2007, the average shortfall was a little under £50,000. Whereas the 34,000 making a profit made an average profit of a bit over £92,000;
• The highest reason (18%) for selling poorly was to buy another home at a good price; 
• The second highest was, more sadly, divorce or separation;
• Another 18% was made up of a combination of illness, moving into care or death;
• 13% sold owing to a need for a larger house;
• 12% moved due to relocation for work;
• 11% moved owing to not being able to afford their mortgage;
• 9% moved to raise money;
• 8% was due to job loss or redundancy;
• Having to clear other debts accounted for another 5%.

You can read the full article - and Anthony's views on a couple of offers which Castle Trust have for home owners that he describes as "interesting and innovative" here. 

In another article in the same issue of the Evening Standard, a headline appears "Act now to curb cowboy lettings agents". The article says that the independent adjudicator on rental property disputes (the Property Ombudsman, of which we are a member) is demanding the government curbs cowboy agents. The Ombudsman, Philip Hamer, says up to 40% of lettings offices are not regulated in any way, a business worth £40 billion a year. Whether or not the government acts, the Ombudsman refers to there being 15,782 complaint enquiries in 2012, a 12% rise. The biggest award was £13,335 to a buy-to-let London landlord whose agent put an illegal tenant in her property and refused to take action for months when no rent was paid. If the landlord had not been a member of the Ombudsman scheme, no claim could have been made.

On 20th March there is a debate on The Future of London's Property Market in Westminster. Tickets are no longer available, but it should be interesting.  

Landord and letting agents help 1 - Gas safety FAQ

Questions lead to answers on the Health and Safety Executive website here.

 

Who is a landlord?
 
What are my duties as a landlord in relation to gas safety?
 
What are my duties as a letting/ managing agent in relation to gas safety?
 
Do I have to use a CORGI-registered installer to complete gas work?
 
Should I provide my tenants with a carbon monoxide (CO) alarm?
 
What gas appliances do I have responsibilities for?
 
What checks should be done between tenancies?
 
How far do I need to go if the tenant prevents access for a gas safety check?
 
What should I do if my tenant’s heating and hot water has been switched off following a gas safety check or maintenance visit?

Can I keep the Landlord's Gas Safety Certificates electronically?
 
Can a room containing a gas appliance still be used as a bedroom?
 
I have LPG appliances in my properties, do they need to be checked?
 
What if I use a managing agent?
 
What if I have shared ownership of my property with another housing company?
 
What if I break the regulations?
 
How much will a landlord’s gas safety check cost?
 
What should I do if I smell gas or I am concerned about the safety of any gas appliances?
 
What support is available to help me understand my duties under the Gas Safety (Installation and Use) Regulations 1998?