Consumer interests safeguarded by letting agent licensing.

ARLA launches new licensing scheme to protect consumer interests

Hundreds of thousands of pounds of consumers’ money is lost each year to unprotected, unprofessional and unethical letting agents. In a survey by the Association of Residential Lettings Agents (ARLA), 95% of consumers revealed that they believe letting agents should be licensed and it is a shock for many to learn that there is currently no scheme in place at all. A growing number of tenants and landlords are losing out to cowboy agents in the following ways:

• Loss of funds through a lack of client money protection
• No professional indemnity insurance in place to protect a consumer from a serious error;
• Loss of monies due to the unlicensed agency holding the funds going into administration;
• Poor advice to landlords, for example about their legally-required deposit protection responsibilities, which can result in loss of the deposit for tenants and/or a fine for landlords;
• No commitment to best practice or any form of independent redress scheme for when things go wrong.

To prevent the practices listed above, and offer assurance to consumers, ARLA is today launching a Licensing Scheme for its members, thereby establishing the highest standards for letting agents in the UK. As of today, all ARLA members will need to be licensed as part of their membership, which includes the following implications:

• Each individual member will hold a gold standard professional qualification relating to lettings;
• All members must undertake Continuing Professional Development
• Agents must ensure they have client money protection schemes in place to protect all tenant and landlord funds held by their office;
• All clients funds require to have an annual independent audit
• Agents must have professional indemnity insurance in place;
• Agents must sign up to an independent redress scheme;
• Agents must abide by a strict code of practice.

None of the above is compulsory for letting agents as standard at the moment. ARLA’s sister organisation, the National Association of Estate Agents (NAEA) will follow suit with the launch of its own licensing scheme later this year.

* Rob Wellstead of Lenwell Property Services commented, “We are absolutely delighted that ARLA have taken the initiative and set up a comprehensive code of practise for Letting Agents. Anything that can be done to raise standards in Lettings is a step in the right direction towards formal Government Legislation. This is something reputable agents have been looking towards for many years. Let’s hope that the Government finally sit up and listen, and understand the vital role that a Regulated Lettings Industry could play in the recovery of an ‘on-its-knees’ Property Market.”

*Source: ARLA (Association of Residential Letting Agents) Website 5th May 2009

To be seen pottering along the highways and byways of Luton in her Mini Clubman, her trusted Scottie Malcolm at her side, our super sleuthing property rental expert Ms Lucinda Newell is on the case on your behalf!

To Insure or Not Insure – That is The Question!

A couple of my tenancies were up for renewal last week, so I took the opportunity to review the general profitability of the houses concerned.  Being a Wiley old gal, I was looking at how to reduce my costs and decided to put a call in to my old pal Rob Wellstead, Managing Director of Lenwell Property Services. I was particularly keen to know whether the Rent and Legal Guarantee Insurance I had through Homelet was worth the monthly premium!

Where a property is managed by Lenwell landlords can take advantage of a rent and legal protection insurance policy. This insurance pays rent and legal expenses in the event of default by the tenant and currently costs 3.5 % of the monthly rent.  Yes, and before you say it, I know that there are a number of policies offered by less reputable firms, claiming to be rent and legal expense policies, that are free, but, if you check the small print they invariably have huge excesses and do not cover the full term only the first tenancy period (for example you may have a tenant who stays in a property for 18 months but only the first 6 months would be covered).  As with all these things small print matters!

So, in an attempt to illustrate the reasons why Homelet’s Rent and Legal Protection Insurance is such a good idea, Rob provided me with ‘a day in the life’ snapshot of the calls they get on non-payment of rent!

Monday 10.00am Miss W arrives to pay her rent. As with last month she embarks on an account of why she does not have the correct money.  Sometimes she is £5.00 out sometimes £100.00.  She is a young single mum and while her life is tough, the Landlord has a mortgage to pay.

Monday 12.00pm Call received from Mrs X.  She informs Lenwell that she will not be paying the full amount of rent this month as her property is shrinking.  She knows this for a fact as the tiles in the bathroom are falling off.

Monday 2.00pm Mr & Mrs Y are called as they are late with their rent.  Lenwell explain the importance of timely rent payments.  They express their surprise! ‘We’ve been getting much better they say – we’ve been in much worse arrears than this before’.

Monday 4.00pm Mr Z is called about his outstanding rent.  He explains that he is not paying his rent as the property is haunted.  He has spoken to the ghost and asked him to leave but this (to date) hasn’t worked.  By now, the Credit Controller at Lenwell is losing her sense of humour.  She explains to Mr Z that sub letting is not allowed under the tenancy agreement and unless he wishes Lenwell to notify the Landlord, he should pay the rent immediately!

The day concludes with 2 further calls from tenants who have recently lost their jobs.

OK, OK you’ve rumbled me – these didn’t all happen on the same day (but a writer needs a certain amount of artistic license) and obviously the rigorous referencing procedures in place at Lenwell make such happenings unlikely!

What Rob and I are trying to illustrate (in an obviously slightly tongue in cheek way) is that the unforeseen does happen – frequently!  When you have the number of properties that Lenwell have under management you will get to see the whole gamut of society and this will include the unfortunate, the trying it on, the oblivious and the slightly peculiar.  The bottom line is that your Rental property is a business and tea and sympathy won’t pay the bills.

So in answer to the question – Insure and do it now!

Come on Malcolm - Walkies!! 

If you have and questions, subject matter suggestions, or would like copies of any of the archive articles, email me at editor@lenwell.com  

If you have a property managed by Lenwell and would like your rent payments insured please click here to contact our customer services manager.

At the forefront of many Landlords minds in these difficult economic times must be issues with rent arrears and tenant defaults.

Although many landlords wish to avoid the part of the lettings market which deals with Housing Benefit tenants, sometimes they don’t have a choice, the unexpected happens and a tenant that has been made redundant or loses a large part of their income may have no option but to consider a claim for Housing Benefit.

Despite the problems, Housing Benefit can be a life saver for both landlord and tenant. There will inevitably be delays when you embark on the process but patience and a little expertise will often pay off, and a successful claim can prove a very satisfactory outcome.

When claims are rejected, and with Councils now facing a 25% increase in such claims this may be tempting to them, it’s not the end of the road.  In fact, very often, there’s a good chance of overturning this on appeal if you know how to go about it.

Housing Benefit claims now come under the new regime of the Local Housing Allowance (LHA)
This is a new way of calculating Housing Benefit for tenants renting accommodation from private landlords. It was introduced nationally on 7 April 2008.

The main change for landlords is that the payment of LHA will be made directly to the tenants who will be responsible for paying the rent themselves.

What most landlords object to is the seemingly inequitable and downright unfair way the government has imposed this on privates landlords, whilst exempting local authority and Housing Association social landlords—the latter on the government accepted principle that it could seriously affect their cash-flow.

At a time when landlords are likely to find themselves with tenants who need to rely on Housing Benefit payments, often through no fault of their own, these rule changes present something of a challenge to any landlord looking to remain solvent themselves.

In fact there’s probably more you can do than you thought to increase your chances of success with Housing Benefit.

Local authorities will consider paying the landlord directly where there is evidence to suggest that the tenant is unlikely to pay their rent and “making direct payments would be in the interests of the tenant.”

Where arrears of benefit have reached 8 weeks, the local authority will arrange to make payments direct to the landlord “unless it is not in the tenant’s overriding interests to do so.” However, landlords should not wait for the 8 week period to be reached before contacting the local authority.  If your property is managed by Lenwell Property Services, your Property Manager will be in touch as soon as rent is defaulted on for the first time to discuss the appropriate action for the Landlord.

editor@lenwell.com

Chancellor “wastes opportunity” to improve conditions in the private rented sector

The Association of Residential Letting Agents (ARLA) have  blasted the Chancellor’s 2009 Budget, calling it “wholly unsatisfactory” for having failed to improve rental housing stock for a growing number of tenants.

Ian Potter, operations manager of ARLA said: “Alistair Darling had a clear opportunity to improve the bottom end of the rental market and chose to maintain the status quo for Britain’s worse off tenants.

“Yet again Gordon Brown’s administration has wasted an opportunity to improve the quality of stock of lettings property by failing to incentivise landlords through tax relief on labour and materials. Not only would this have helped to stimulate the market, particularly in the construction sector, but it would also have provided the greater standards of rented accommodation that this country desperately needs.” 

A recent ARLA survey showed that 61% of landlords indicated that if they were to receive tax relief they would upgrade their property portfolio.

Ian Potter continued: “Landlords should be recognised for what they bring not only to the housing market but to the wider economy and treated as any other responsible business.”

In its Budget submission, ARLA also called on the Government to introduce capital allowances for landlords improving housing stock over a certain age.

sincerely,
The Editor