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Want to know what our MPs got wrong in the second reading of The Tenant Fee Bill?

In preparation for a meeting with MP for Cheltenham I have recently POURED over the parliamentary debates (great bedtime reading....) from the second reading of The Tenant fee bill conducted on the 21st May and thought it important I share (and debunk) some of the inaccuracies made by our country’s decision makers following their two-hour evening discussion.

Unfortunately, the MPs were unanimously in agreement with the bill and therefore it WILL be passed. We are now all about the detail and trying to get MPs to understand the huge impact this will have on the lettings industry. The bill will continue going through parliament where I am hoping it will stay as it is (and not get worse), it is likely to be agreed that no more than a weeks’ refundable holding deposit can be taken, deposits are capped at 6 weeks (although there was much discussion around this) and that default fees can still be taken for items like new keys to be cut, change of tenancy fees and late payment fees.

Anyway, some of the many comments I noted which were incorrect were as follows;

“Tenant fees were abolished in Scotland in 2011, and the evidence suggests that those renting property have more money as a result. Renters themselves were no more likely to report a rent increase than those in other parts of the UK.”

INCORRECT - According to Scottish Government figures, rents rose 4.2% in Scotland in the first year after the ban was introduced in 2012. This is compared to England where rents, according to the English Housing Survey, decreased across the nation by 0.7% in the same period.

And then we have the usual ‘photocopy a piece of paper’ line…

“The truth is that many of these fees are completely arbitrary, they mean nothing. At most, they constitute a few minutes of basic administration using tenancy agreement templates and the ability to cut and paste.” 

INCORRECT - The checks that are conducted include organising viewings, gas certification, electrical checks, emergency lighting and fire safety (within HMO properties), arranging keys and accessing the property which all take significant amount of time and resources within agencies and are all required by law. We also need to conduct Right to Rent checks on all adult occupiers, referencing which can take anything from three to eight hours. Then there is negotiating clauses between the tenant and landlord, giving the tenant time to go through the tenancy documents and answering any questions they may have creates significant cost burdens for agents. Finally, we have testing the smoke alarms, which must be done on the day the tenancy starts which add even greater administrative burdens on agents. And these are just the start! Agents who manage properties have to comply with around 160 laws and mandatory regulations

“Let us think of someone who has lost their job, had a family bereavement or mental health crisis, is off work without sick pay or is fleeing domestic violence; the Bill should grant to tenants in such circumstances more financial protection from any charges from letting agents or landlords.” 

INCORRECT - In circumstances such as these, most agents will show compassion and encourage landlords to accept early release, however it is not the letting agent that makes this decision, it is the landlord as the contract is between them. Furthermore, does anyone consider that the landlord often has a mortgage to pay? And allowing a tenant to leave suddenly with little notice often impacts them financially? I have seen hundreds of landlords where tenants have not paid the rent and they have suffered and have had to sell their property as a result. Why are they not considering the other parties in this during their debates?

“Tenants often want a longer lease, to which they are legally entitled, but are not allowed to contact the landlord to negotiate one, because it is in the letting agents' interest to keep tenants on a rolling six-month tenancy, paying around £150 to £350 every time they renew their lease.” 

INCORRECT - All tenants have their landlords home address on their tenancy agreement under Section 47 of the Landlord and Tenant Act 1987, therefore they are able to contact them if they wish. Furthermore, although letting agents contact both the tenant and landlord regarding renewing onto a fixed term (as there is more security for both parties) it is ultimately the landlords’ decision whether they agree to this and how long the term is.

“Nationally, 1.6 million families with children are renting privately, with their long-term plans depending on the reliability of landlords who can evict them with one month's notice.” 

INCORRECT - Landlords can only serve a Section 21 with 2 months’ notice and this is as long as the tenant is out of a fixed term contract. If a tenant finds they are on a month to month contract (after their fixed term has ended) and requires more security in their home, they can contact their landlord/agent about securing another fixed term.

“Again, that takes me to the point about equality of the sides in this argument. While we still have no fault-evictions, where a landlord can decide to evict a person with notice and there is no charge or fee against the landlord or agent and no reimbursement for the person leaving their house a few months early.”

INCORRECT - All a landlord wants is a good tenant who will pay them rent. Therefore, if the tenant is paying them rent on time, allowing them to do maintenance and inspections when needed and not breaching their tenancy agreement, then a landlord would have no reason to serve a section 21 notice (unless he wants to move back in). Landlords do not want the hassle of dealing with a deposit, having a void period and then finding new tenants either. I have served hundreds of Section 21 notices as a letting agent, and landlords only serve them when they really need to. Also, a landlord could not evict a tenant 'a few months early' they would need to be out of their fixed term contract for a Section 21 notice to be activated.

Fundamentally, when the bill is passed, rents will increase, landlords will be effected and housing standards will drop, it is worryingly short-sighted that our MPs cannot see this.

Thanks for reading, want to read more lettings blogs from me? People who liked this article like this blog too.

Angharad Trueman - CGT Lettings Ltd


Posted on Wednesday, 30 May, 2018