Tenant Fees Bill

Written evidence submitted by Hayley Brinn (TFB57)

I write in regards to the current proposal to introduce through legislation The Tenant Fee Ban Bill and wish to register my concerns in regards to the long term impact this will have on the industry  I have been working within for over 26 years and have during this time seen many changes , some for the improvement of the industry for Landlords and Tenants but unfortunately more recently it would appear the Residential Letting Industry has become completely demonised due to the unscrupulous behaviour of a minority of Rogue Landlords and Letting Agents.

I completed the Consultation Paper to confirm my views on what is happening to my industry , I wish to make one final attempt to ask for Parliament to reconsider some of the proposed legislation .

After 26 years within an industry that I firmly believe provides an invaluable service to the Private Rental Sector , I completely agree legislation needs to be implemented to curb the bad practice which unfortunately brings the whole industry  under scrutiny , this in itself is required however some of the areas being considered under the Tenant Fee Ban Bill could potentially put Tenants in a worse position for example :-

· If A Tenant applies for a property and no longer has any financial commitment to the Landlord / letting Agent then as I believe occurred in Scotland when the fees were banned , the number of tenants who were taking 2 or 3 different properties through Agents and then waiting until just before the tenancy was due to begin to inform the Agent they had decided on another property , in short this has resulted in rents having to rise to cover the fees incurred by the Agent in preparing the property for the tenant plus could leave another 3 potential tenants without an property

· Potential solution –

Tenants do pay a holding fee of a minimum of 1 weeks rent , as already discussed which will be non refundable should the Tenancy not commence as agreed , all negotiations at the moment are "subject to Contract" and as a company we do not take "holding Fees" as the reference / administration fee is the commitment from the Tenant , so the proposal to replace reference / admin fees with a holding fee will have some impact on hopefully prevent multiple properties being "held" for one tenant.

As per the ARLA /Propertymark survey I firmly agree with their findings the outcome will be Landlords will have no alternative but to raise rents to cover the additional costs the landlord is now going to incur  which in turn will also result in Tenants who are not 100% credit worthy etc. will probably be at a disadvantage as Landlords will not wish to risk the cost of referencing on any potential tenant who may fail due to poor credit.  At the present time , The Tenant with poor credit or maybe a new person entering employment for the first time are considered as the reference fee is paid by themselves and if the report comes back as guarantor required then most Landlords will consider a Guarantor to enable the potential tenant to proceed with the let , with the new proposal Landlords may not wish to take the risk or incur the additional cost of referencing a Guarantor together with the additional legal paperwork which is required when a Guarantor is in place.

The additional amendments being considered

· reducing the deposit to 3 weeks rent , I would strongly disagree as this will be yet another reason for Landlords to consider leaving the Private Rental Sector , in reality the majority of Tenants have their deposits returned in full at the end of a tenancy , the only reason deposits can sometimes be withheld is when the Tenant has not paid the last months’ rent or have not left the property in a condition similar to when they moved in. If All Agents / landlords had to be Regulated this would potentially protect the Tenants as the professional body would be able to investigate any complaints and if necessary Bann the Landlord / Agent from trading .

I think a severe penalty like this would help bring our Industry where the majority of Landlords/ Agents provide a good service with quality properties to Tenants.

Shelter and Citizens Advice Centres only have experience of the Deposits where there have been problems which is not a true reflection on the majority of Deposit , the schemes can provide you with all the data to back up my statement. I believe it is in the region of 98% of deposits are returned to Tenants

The Deposit Regulations were in theory a good idea to protect Tenants deposits however it has not addressed the real problem , as  the unscrupulous landlords / agents can still withhold deposits if not  registered with the schemes due to the fact at the present time there is not to my knowledge any data base which can be checked to ensure all tenancy agreements have deposits registered in line with The Tenancy Deposit Regulations ; as a result I still have potential tenants registering with my offices who do not know where their deposits are or even if they have been lodged correctly. 

May I suggest it would be an area which can be investigated , again I appreciate resources at the present time are limited.

Removing Default Fees

This could potentially again place Tenants at a disadvantage , if their circumstances change and they need to break a fixed term legally binding Contract and the Landlord / Agent are unable to charge fees for the additional costs of ending the tenancy , finding a new tenant ( who will not be paying any fees) plus all the legal paperwork etc involved ( on average 17 hours to prepare one property for a  residential let) why would any Landlord consent to the tenants request to end a legally binding contract early.

It is my understanding The Government wish to protect Tenants from unscrupulous Landlords /Agents and I completely agree with this , I just fear the unforeseen consequences of the proposed Bill on an Industry which I firmly believe in which is why I set up my own Letting Agency 15 years ago to provide my local area with a dedicated Regulated Independent Agent who can provide Landlords with a good service and Tenants with a good quality home and service .

May I suggest to try and resolve the real issue of stopping the unregulated / unprofessional Agents and Landlords it would be sensible to follow the example set by Wales by making it a legal requirement for any person ( Landlord or Agent) who is providing a residential property for rental to be regulated by a professional organisation which would require training and qualifications , failure to comply with this should result in all rental income being forfeited to the Government .

My suggestion to find the  Rogue Landlords would be to use The land Registry data base which will provide all the information of people who own more than one property then cross reference this with the HM Customs and Revenues Self Assessments which are completed annually , this would potentially help to general additional taxes from the landlords who do not declare their rental income . I firmly believe until the Bad landlords / Agents have severe financial penalties , they will continue to ignore all legislation .

As a small local independent Family owned and run regulated Agent dedicated 100% to property letting and management I share the Governments frustration at the lack of professionalism within the industry but the proposed amendments to the Tenant Fee Ban , could in my opinion have the unexpected result of more Landlords selling their rental properties and as a result Tenants will then have less choice and this in turn will potentially leave them vulnerable to the Rogue Agent and Bad Landlords.

I would welcome the opportunity to discuss the above in further details , as a small business owner trying to provide a good quality service to the Private Rental Sector , I applaud the Governments good intentions but despair at the lack of practical implantation .

I look forward to receiving your comments to the above ,

Yours sincerely,

Hayley Brinn ,MARLA, MAPIP

June 2018

 

Prepared 13th June 2018