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Tenant Trashed Rental Property

Being in the inventory business means we see some pretty shocking sights that problem tenants leave their landlord’s property in, but this one we visited yesterday takes some beating! Our client, the managing agent, had inherited the tenant when they took over the management of the property, for an overseas landlord. They wanted us to film the property so that they could show the landlord what can happen when tenancies aren’t managed properly.

Apparently one of the tenants received very regular ‘gentlemen callers’, although I can’t imagine where she entertained them! As well as the vast piles of junk in every room (I was very careful not to touch anything), someone had removed several floorboards so that they could steal the pipework, which led to our client ending up in hospital after falling down one of the holes.

When I asked if there was any power in the dark & gloomy property, the agent and I looked for the nearest lightswitch, only to find that they had been removed as well, along with most of the wiring. The agent has now been tasked with organising a complete renovation of the property, and has asked me to return to re-film it when it’s complete, so that they can show the landlord how things should be done. Hopefully it will look a lot better by then, in the meantime, be careful out there…

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Landlord Survey Shows Quality Of Service Is Of Paramount Importance In Choosing A Letting Agent

In a recent survey released by the Property Academy that involved a 22 question survey completed by 1500 landlords who used a letting agent, the following results were revealed.

The two biggest concerns landlords had were:

A)     void periods (35%) and
B)     protection from property damage (33%)

The survey also showed that Landlords looked for agents who offered a range of services and support (cited by 79%).

Questioned as to what most influenced them in their final choice of agent to let and/or manage their property, the landlords cited ‘trust’ of the agent as the most important (52%). That compared with just 26% choosing the agent with the most competitive fee, and 6% who went with the agent suggesting the highest rent.  Pushed further on the fee question, 47% of landlords said that while they wanted to pay as little as possible the lettings fee was not the primary factor for their choice of agents.

In fact only 3% actually chose the agent with the cheapest fee.

For 31%, fees were not an issue at all and 19% chose an agent who was more expensive but who was liked for other reasons such as quality of service.

The survey paints an interesting picture of the typical landlord and for whom issues of customer service and trust are of paramount importance.

With that in mind – could using video inventories give you an edge and allow you to win clients who expect a better quality service?

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78% of Deposits Are Withheld Due To Cleaning Issues

Recent data from The Deposit Protection Service (DPS) has thrown up some interesting statistics in relation to deposit disputes.

According to their stats, 40% of disputes were a result of cleaning, 60% of deposit disputes resulted from actual damage to property, and 31% were due to redecoration over the period from June to August 2011.

Other statistics recently released by My Deposits showed that out of Landlords that did retain part of the deposit, 78% did so to pay for cleaning after the tenant had left. Damage to property, furniture and carpets were other key reasons why tenants didn’t receive all of their money back.

Historically, landlords have performed badly at adjudication, winning only 8% of cases outright. The stats indicate that landlords need to be much better prepared to be able to handle disputes involving damage and redecoration, to have any chance of winning in front of the adjudicators.

These stats could be improved hugely if landlords took a few simple precautions to ensure they have sufficient evidence as to the state of the property at the start of the tenancy and a record of the condition at the end so the differences are clearly discernible.

At The Video inventory Agency, we believe there is no better way of recording the state of your property than with a professionally written inventory supported by comprehensive high definition video evidence.  If landlords used a service like ours we could see them reversing the current stats and winning 92% of cases instead of losing 92%. In fact, with over 5000 inventories under our belt we have not had a single case go to adjudication, because as soon as the parties refer to the video evidence it decides the matter categorically there and then.

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Average Deposit Rises

According to My Deposits the average tenancy deposit has increased from £985 to £1,110 in the past year;  a rise of £125.

Eddie Hooker, My Deposits CEO, stated, “With rents continuing to rise, landlords and agents are understandably taking larger deposits to help protect their investments. The increase in the assured shorthold tenancy threshold, with tenancies up to £100,000 per annum now requiring deposit protection, has also increased the number of tenancies requiring deposit protection.”

Average deposit sizes across England and Wales are as follows:-

East Midlands: £916
East of England: £961
London: £1494
North-East: £665
North-West: £693
South-East: £1069
South-West: £702
West Midlands: £781
Yorkshire and Humber: £568
Wales: £747

All in all it means with more money at stake it is in both parties interests to make sure proper evidence obtained to ensure any dispute can be solved quickly and fairly.

There is no better way than with a video inventory.

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Landlord Warning: Distressing Footage

The apartment in the video below was newly refurbished in mid 2010 and a video inventory was produced by ourselves. In just 12 months the tenants have trashed the place leaving it in such a state (damaged, filthy, rats running around, excrement on the walls, etc.) that our inventory clerk (understandably) didn’t want to spend a minute more than they had to in there. Our client is extremely distressed about the state of her property, but at least she has all the evidence on video at both the start and end of the tenancy so she can seek damages from the tenants.

Here’s an example of just one of the rooms:

You may not be able to stop things like this happening and it can be very upsetting to the landlord when it does, but it makes sense to make sure the owner is protected by having a proper inventory and check out done.

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Landlords Seek To Increase Their Portfolios

According to the latest research from ARLA and the Residential Landlords Association, landlords are in the market to buy up more properties as rental demand continues to grow.

One-third of landlords with properties in central London plan to add more properties to their portfolio there over the next year.  The survey of 1,519 UK landlords  illustrated that the regions with the landlords buying the highest number of properties in the last year are the Midlands, Greater London and the North-East.

The research shows that landlords in the North also have larger portfolios, with an average of 13 rental properties for each landlord. In comparison, landlords in central London and the South-East own an average of 6 buy to let properties.

While 33% of landlords in central London and 30% in the rest of London said they were planning to increase their portfolio in the next year, 30% of landlords in the Midlands also stated they intended to buy in the twelve months.

ARLA representative, Ian Potter said:  “Traditionally, London has led the way with buy-to-let, but we are seeing signs that investors elsewhere in the country believe now is the time to buy. If you can arrange finance, it could be prudent to take advantage of lower property prices.”

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Who Should Pay For An Inventory?

One thing we have learned from working with clients all over the country is that letting agents operate in many different ways. Not just between different companies, but even between different branches of the same company. Here, in the leafy suburbs of South Manchester, for example, the general modus operandi is very different from agents just 10 miles away in the city centre. Although this is an affluent area, it is highly competitive. Agents aren’t able to charge an additional fee to the landlord for an inventory, whereas in the city centre, the majority of agents charge landlords £100-£120, in addition to the standard letting fees (although this charge is usually waived if the property is being fully managed).

Running an inventory company we (naturally) believe that a letting agency owes a duty of care to its landlords to get a proper inventory done – one that will actually stand up in court – and not simply provide a basic checklist which, frankly, isn’t worth the paper its written on. However, we appreciate it’s sometimes not commercially viable to charge the landlord an extra £100 or even as little as £60 in some areas.

Clearly the whole point of an inventory is to be an impartial record of the state of the property and its contents and, although in 80% of cases, we are instructed by the landlord or agent, our service is of equal value to tenants, many of whom see the worth in obtaining a fair and accurate inventory. After all, they do not want to see their deposit tied up for months at a time  whilst a dispute is settled. And, as many tenants have been subject to what they regard as deposits being unfairly retained, most are amenable to the idea of paying for a good quality inventory.

It, therefore, seems fair to us that the costs of an inventory and checkout should be borne by both the landlord and tenant and, at our suggestion, that’s what some of our clients have now started to implement successfully. Sometimes the fees are split 50/50 or, sometimes, the tenant pays for the inventory and the landlord for the checkout.  Either way, in our experience, both parties normally recognise it is equitable for the costs to be shared.

If cost is currently a barrier to you protecting your (or your client’s) property with a proper inventory, perhaps this solution would work for you.

 

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Snakes And Ladders: Possession Hearings

Landlords are often ignorant of how poorly possession claims are drafted, and how it ruins their chances at court, says Tim Briggs from www.legalmentor.co.uk

Recently there have been a few articles in landlord magazines written by non-lawyers from companies that help landlords evict tenants. These articles have concentrated on everything but the difficult part: what happens when landlords get to court.

Companies such as ours help landlords issue claims for possession at fixed fees in what can be a complicated area of law. Any landlord who has ever looked at Section 21 of the Housing Act 1988 will see why they might consider getting professional help. Companies like ours do the paperwork with the consent of the landlord, then arrange for an advocate from outside the company to go to court with the landlord on the day of the hearing.

The advocate at court is trained as a barrister (though not fully qualified), and some are solicitors or legal executives. I did this kind of work at court before setting up LegalMentor Landlords, still do. The advocates have to be skilled of course, and ready to carefully put the landlord’s case to the Judge. But the reality is this: that when problems occur at court, they occur as a result of mistakes in the way the claim has been drafted. So by the day of the court hearing, if the paperwork has been done badly, the lawyer’s hands are tied.

The truth is that for more than 90% of the time there are mistakes in the paperwork (from the last ten hearings representing both landlord and tenant, I estimated that there were mistakes in all but one claim). The reality is that if mistakes are spotted at court by the Judge or a duty solicitor acting for the Defendant, the mistakes can defeat or delay the claim. Getting tripped up by ‘snakes’ in the paperwork can send you back to square one.

Of course, if there is no legal representative for the tenant, the landlord has a massively increased chance of getting possession. It really helps the landlord’s chances if the tenant does not come to court. So companies that charge large amounts of money to help landlords evict tenants are often only successful as a result of the tenant not getting legal advice. In other words, many companies that help draft claims are dependent on one thing more than anything else: luck.

It does not matter if the tenant has not paid rent for months. If there are problems with the paperwork, the Judge will either adjourn the hearing, or strike out the claim. Either way, the landlord ends up paying by losing more rent, or having to start again and issue a new claim.All that effort in climbing metaphorical ladders to get your tenant out will have come to nothing.

It is common practice that when mistakes are made in the paperwork by companies issuing claims on behalf of landlords, the company fails to tell the landlord that it was their mistake which caused the Judge to act as they did. Instead it is left to the landlord to assume that the Judge has made a strange decision, that courts are random and unpredictable places, and that the law bends over backwards to help tenants over landlords, none of which is true.

Contrary to popular belief, Judges are perfectly happy to give possession to landlords so long as the paperwork has been done correctly, and the law observed. Judges are strict about the legal requirements for a landlord to get possession because they have to be. The law strikes a good balance between the right of someone to stay in their home and the right of the owner of the property to do what they want with their own property. Judges simply follow the law. But the evidence has to be correctly served, pleaded and presented. If there is not enough evidence, or there are procedural defenses as a result of mistakes in the paperwork, the Judge will not make an order removing someone from their home.

Employees of companies helping draft claims that do not go to court as advocates, however hard working, cannot understand how law and procedure combine in practice at court, or at least they cannot do so to a standard that enables them to help draft claims with a breadth and depth of understanding to avoids mistakes in what is a complex area of law.

Whether or not the property is part of a portfolio, or a single one bedroom flat that is a future pension or a nest-egg for the landlord, it is the landlord’s baby, and the landlord needs help in getting it back. But professional help should mean that the proceedings and notices are issued correctly, and are not flawed from the outset. Avoid the snakes.

Ten typical horror stories

  1. The company fails to instruct a lawyer to attend the hearing.

Quite common, and of course the landlord pays for the lost rent until the next hearing. I have heard stories of a company that charges twice the amount of its competitors (on the basis that it can not do a good job for less) asking for another £800 to send a lawyer to the next hearing, after it forgot to do so first time around.
2. The tenants’ names are not spelt correctly on the particulars of the claim.

Common with one particular company that wins awards. No fun for the landlord if he goes through court proceedings and a lawyer or local authority gets involved near the time of the eviction. At that point the bailiff suddenly gets told the eviction order or the particulars are not actually made out against the tenants. Back to square one.

3. The advocate is not sent all the papers.

Exactly what it says on the tin. Exhibits missing on witness statements, information about deposits, or previous hearings, or letters about previous agreements. Very difficult for the Judge to listen to what the advocate for the landlord says if the Judge sees that the advocate does not have all the facts.

4. The evidence of service is insufficient.

Poorly drafted and incomplete witness statements, wrongly filled out forms, incomplete forms, undated forms, unsigned forms, inconsistencies between evidence and pleadings, you name it. All of this can be corrected easily before the hearing, but is not.

5. The Section 21 Notice has the wrong expiry date on it.

Even some duty solicitors do not seem to know the difference between a Section 21(4)(a) Notice and Section 21(1)(b) Notice.

6. Reliance on Section 21 is not set out properly in the claim.

Extremely common, and easy to avoid.

7. The date of expiry on the Section 8 Notice is incorrect.

Fortunately many District Judges and duty solicitors miss this one.

8. The Particulars of Claim is not CPR 55 compliant.

The requirements set out the Civil Procedure Rules are like a foreign language to many companies. If in doubt about what information to give, give more information than is necessary.

9. The dates of service are wrong.

The lettings agent or company helping evict do not understand the rules for dates for service under Part 6 of the Civil Procedure Rules. Unfortunately, Judges do.

10. Arrears statements are wrong or confusing.

The company should be asking the letting agent or landlord to ensure that the statement is clear and correct. Many claims will get adjourned by Judges because credits, debits and arrears totals seem incorrect.

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Landlords Are Doing it For Themselves

Whilst the housing market may be stagnant with regard to property sales, it would appear that the lettings market is still booming.  Almost 40% of landlords reported that income from their property portfolio had increased in the third quarter of the year, and demand is expected to increase significantly over the next 12 months.

With the rise of websites such as Upad, as many as 80% of landlords are now  adopting a “Do It Yourself” attitude to lettings and also taking full advantage of social media sites such as facebook and twitter to find tenants for their properties. But if you do go down the DIY route you must still follow the processes that a letting agent would normally do.

These include credit checks and references and perhaps organising a guarantor especially if it is a tenant from overseas or a DSS applicant.

EPCs and gas and electrical safety certificates must be ordered if you don’t have them already.

Without a proper inventory of course you have less than 1 in 10 chance of winning a deposit dispute. Landlords without proper inventories lost  £12 million in deposit disputes last year. Make sure you never become one of them.  Our video inventory service provides you with the best possible evidence to ensure you can claim against the tenant for any cleaning or damage.  We are the UK’s market leading inventory company and the official inventory partner of the Residential Landlord’s Association. With 5000 inventories under our belt not one has needed to go to adjudication and if one should our unique guarantee will pay for a solicitor to represent you free of charge.

The security deposit also needs to be registered with an appropriate authorised company. Personally I use My Deposits Tenancy Deposit Scheme so that I can keep the deposit myself in an allocated deposit account.

You will need a formal AST (assured shorthold tenancy agreement).  The Residential Landlords Association can provide you with forms and suppliers for each of these products. Visit rla.org.uk.

There is also of course the question of managing the property once it’s let.  You can use an agency to do this, though they will only handle a percentage of the issues that crop up.  If you live a long way from the property this may be advisable.  But if the property/properties is close to you, you may wish to look after the management yourself, in which case having an on call handy man is always advisable!  In this case you may wish to consider landlord insurance to cover emergencies such as major electrical failures and boiler breakdowns.  This will cost you a very small amount, and the tenants can liaise directly with the insurance company, freeing up your time. Try homeserve.com or simplelandlordsinsurance.com.

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Increased Use Of Video In Deposit Disputes

It has recently been reported that an increasing number of landlords and property professionals are using video evidence in tenancy deposit dispute cases.  According to mydeposits.co.uk, those involved in the private rented sector are increasingly beginning to see that “clear evidence” is needed if they want to withhold all or part of their deposits. Video is seen by many as the best way of supplying that evidence. Commenting on the increase in video evidence, chief executive of mydeposits.co.uk Eddie Hooker said: “It is no bad thing that landlords are trying to provide the most detailed evidence they can.”

Our award winning video inventory service acts on several different levels to give landlords the protection they need and complete peace of mind.

Firstly when the tenant receives a proper professionally produced written document supported by DVD evidence clearly showing the state of the property they are immediately put on notice that they will be held to account if they do not look after the property. Anecdotal evidence has shown that tenants look after a property better when they have a video inventory.

When they move out they have a DVD to refer to so they can see exactly where the furniture needs to be returned to.

Our Unique Dispute Resolution Guarantee

If there is any dispute – both parties can refer to the inventory and DVD to settle any disagreement. Quite simply video doesn’t lie and in every single case that has arisen the matter has been resolved instantly.

We have conducted over 5000 inventories since starting and not one case involving our inventories has been taken to an adjudicator. However if it was it would be covered by our dispute resolution guarantee and we will pay for our specialist solicitor to handle the case giving landlords complete peace of mind that they will not incur expensive legal bills.

Contact us on 0845 230 51907 for further information, or email us.

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