13th July 2009
OFT Welcomes High Court Ruling Against Foxtons
The OFT has welcomed a landmark High Court ruling that certain terms and conditions used by Foxtons Ltd in its lettings agreements with landlords are unfair.
As a result of this ruling, made in proceedings brought by the OFT under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs), the OFT will now ask the High Court to go on to grant injunctions preventing the continued use of the terms by Foxtons.
In his judgment Mr Justice Mann accepted that all the terms the OFT brought before the court were unfair, including Foxtons' use of terms:

The ruling, following a three-day hearing in April 2009, found that the charging of repeat renewal commission by Foxtons represented a 'trap' or a 'timebomb' for consumers. The judge held that such important terms must be flagged prominently not just in the contract, but also in any sales literature and processes. He said a typical consumer would be unlikely to read standard terms with a great degree of attention and would not expect important obligations to be tucked away in the small print and not specifically brought to their attention. He also found that Foxtons had used language in its contracts which is not 'plain and intelligible'.

On the use of a term providing for sales commission to be payable on the sale of a property to a tenant, the judge said consumers would not merely be surprised but 'astonished' by the potentially large financial liability to Foxtons in relation to a transaction in which Foxtons played no material part.

The OFT expects the letting industry to comply with this ruling, and will take the necessary steps to ensure this where appropriate. It is estimated that there are at least 15,000 letting agency businesses in the UK, including a number of national and multi-national companies in addition to many smaller businesses.

OFT Chief Executive, John Fingleton, said:

'This ruling sends out a clear and unambiguous message that businesses offering services need to ensure unexpected or surprising terms are not hidden away in small print. Contracts need to be written in clear and straightforward language with important provisions, particularly those which may disadvantage consumers as in this case, given prominence and actively brought to people's attention.”

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6th May 2009
NAME CHANGE MARKS BOOST TO CONSUMER PROTECTION IN PROPERTY SECTOR

The broader scope of the Ombudsman for Estate Agents scheme sees it changing to The Property Ombudsman Service (TPOS) on May 1.

The OEA was founded as the Ombudsman for Corporate Estate Agents and is now in its 20th year but has come a long way since its launch in 1990.

There will be a new logo for window displays, in blue with the OFT Approved Codes symbol alongside for sales offices and green without the OFT logo for lettings. Commercial property sales members will have a black logo when the scheme expands soon to cover some of their activities

“Membership has increased dramatically in the past few years and at the same time OEA has also expanded to take in lettings as well as its original remit to cover agents selling residential property,” explains Bill McClintock, chief operating officer for TPOS. “In the near future, we will also be embracing some commercial property activities as well as the UK end of foreign residential property transactions.

“As the principal means of redress for consumers in the property sector, reflected by 95 per cent of UK estate agency offices being covered by our scheme, and our widening fields of activity which will also extend to including HIPs and property search providers, we consider the old name no longer reflected all that we do.

“We have submitted our lettings Code of Practice to the OFT for endorsement under its Consumer Codes Approval Scheme, which we see as vital in current market conditions where lettings are dominating activity.

“As the principal means of redress for consumers in the property sector we will continue to drive up industry standards and the OFT approved Codes help achieve this.

“There is already great awareness of the OEA symbol and we want that to apply to the new identity as well so the old and new are closely related.

“Consumers have come to recognise the value of the OEA being available to them and we want them to be aware of and understand this change.”

Lord Best, newly-appointed chairman of the governing Council of the OEA in succession to former director general of fair trading Lord Borrie, assured consumers that none of the Ombudsman’s procedures will change and the public can expect the same high standards of service.

“Consumers should remember that the Property Ombudsman Service will continue to be offered to them free of charge and that estate agents undertake to adhere to the Ombudsman’s findings,” added Lord Best.

In his latest annual report, the Ombudsman, Christopher Hamer, revealed that he found wholly or partially in favour of consumers in 66 per cent of the cases he investigated and made awards totalling more than £380,000 to compensate them. He also disclosed that he had made the scheme’s highest ever award of £23,880.

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24th October 2008
Rugg Review

Susie Crolla, Chief Executive of the Guild of Letting & Management welcomes Rugg Report which not only calls for independent regulation of lettings and management agents but also greater emphasis on the responsibilities of the private landlord working within the private rented and social sectors. Susie Crolla believes that the private rented sector is an important part of the housing industry and in order for the sector to continue growing in a positive way the recommendations made by Julie Rugg and David Rhodes must be taken seriously.

The recommendations form part of a report commissioned by the government in January 2008 to look at the problems facing tenants and landlords in the private sector. Among the other main proposals in the Rugg report are:-

• Mandatory regulation for letting agencies;
• A new independent complaints and redress procedure for consumers;
• Tax changes to ‘encourage good landlords to grow’, and changes to stamp duty to ‘encourage them to buy more properties’;
• Exploring ways in which the private sector can accommodate households on lower incomes.

On the new proposed national licensing scheme, the report says: 'The existing regulatory framework does not offer sufficient sanction where landlords openly contravene regulations. Light-touch licensing and effective redress can encourage local authorities to target the very worst landlords, by ensuring that effective sanctions are in place.

‘A permit or license would be required by all landlords, but would be available without any hurdle criteria on payment of a small fee. Nationally administered, the licence would be revoked if the landlord did not meet statutory requirements on housing management and quality.'

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23rd September 2008
Energy Performance Certificate Key Points

From 1st October 2008, an EPC will be required whenever a building in the social or private rented sectors is let to a new tenant

• A building can be: the whole of a building; or part of a building where the part is designed or altered to be used separately. For residential purposes, ‘designed or altered to be used separately’ describes a unit that is self-contained, meaning that it does not share essential facilities such as a bathroom/shower room, wc or kitchen with any other unit, and that it has its own entrance, either from outside or through common parts, that is not through another dwelling
• Landlords must provide an EPC free of charge to prospective tenants at the earliest opportunity and must provide a copy of the EPC to the person who takes up the tenancy.
• The purpose of the EPC is to show prospective tenants the energy performance of the dwelling they are considering renting
• EPCs are valid for 10 years and can be reused as many times as required within that period. It is not necessary to commission a new EPC each time there is a change of tenant. However, once a more recent EPC has been produced for a dwelling, it will always supersede an existing one. Thus, where a number of EPCs are obtained for a property within the ten year period only the most recent one is valid
• An EPC is not required for any property that was occupied prior to 1 October 2008 and which continues to be occupied after that date by the same tenant. However, landlords may commission EPCs for these dwellings if they wish
• The EPC shows two things – the Energy Efficiency Rating (relating to running costs) and the Environmental Impact Rating (relating to the carbon dioxide emissions) of a dwelling. Each rating is shown on an A–G rating scale similar to those used for fridges and other electrical appliances
• The rating is accompanied by a recommendation report that shows how to improve the dwelling’s energy efficiency. These two elements together form the EPC and the complete document must be provided to the new tenant. There is no statutory requirement to carry out any of the recommended energy efficiency measures stated in the recommendation report
• EPCs must be produced by an accredited assessor, but landlords are free to seek accreditation for themselves and their employees and so become competent to certify their own properties

For further information log on to www.communities.gov.uk

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23rd September 2008
HSE signs contract with Capita to run the new gas installer registration scheme

On 8 September 2008, HSE awarded a 10 year contract to the Capita Group Plc to provide a new registration scheme for gas installers from 1 April 2009.

The current scheme has been in place for more than 17 years. During this time the number of domestic gas related fatalities has fallen significantly. However, a review in 2006 involving gas industry stakeholders (including gas installers and their representatives) and consumer groups identified no room for complacency and a strong case for change. We have listened to these views in developing a modernised scheme which is set to deliver improvements to gas safety and added value for consumers and gas installers. There is a commitment to improve gas safety through:

• Raising of awareness of domestic gas safety risks. Capita is committed to substantially improving current levels of awareness during the term of the contract. There will be significant investment in a new gas safety brand aimed at becoming the ‘hallmark’ of gas safety and a new gas safety charity to specifically promote gas safety. Evidence suggests that less than 50% of consumers understand the risks associated with gas and how to manage them properly. This needs to be improved.
• Measures to improve public assurance about the competence of registered gas installers and the safety of gas work. There will be a new risk based inspection approach aimed at finding and reducing unsafe gas work. Capita’s success in delivering this will be measured on an annual basis.

Gas consumers are key customers for the Register and Capita will provide modern and efficient customer services. It is committed to improving levels of consumer satisfaction with the services they will be providing. Their success will be independently verified annually. These commitments are set out in a formal 10 year contract with HSE which will deliver strengthened management arrangements and the opportunity for greater longer term investment for the benefit of gas consumers and installers. There are contractual and financial implications should there be failure to deliver.

For further information log on to http://www.hse.gov.uk

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28th July 2008
Pets and the City – Dogs Trust launches online survey for Letting Agents and Landlords.

Dogs Trust knows that finding privately rented accommodation that allows pets can be very difficult. In a recent survey commissioned by the charity 78% of pet owners had experienced difficulties finding privately rented accommodation that would accepts pets. With a worrying 54% not finding anywhere suitable to live with their pets.

This means many pet owners are being forced to give up their pets, rent with their pets without consent from their landlord or rent unsuitable accommodation.

We have recently surveyed pet owners on this issue and we are now launching an on-line survey to find out what letting agents and landlords think.

If you are a landlord or a letting agent, we would be grateful if you could fill in this confidential survey online today – your experiences and ideas will help us target our ‘Lets with Pets’ campaign.

CLICK HERE TO TAKE PART IN OUR SURVEY

Dog Trust will be launching their ‘Lets with Pets’ campaign next year to provide advice, support and help to landlords, letting agents and pet owners.

If you would like to support our campaign further, then please email clare.kivlehan@dogstrust.org.uk.

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25th July 2008
IMPORTANT NEWS - CARSBERG REVEIW

The former director-general of the Office of Fair Trading Sir Bryan Carsberg carried a major new housing report which has called for tougher regulation of agents to protect both residential landlords and tenants.

The Carsberg Review of Residential Property published last month sates that under the current Estate Agents Act 1979 there was currently only fragmented regulation of property agents . Estate agents and letting agents in the UK do not need to be licensed or qualified and Sir Bryan Carsberg recommends that the legislation should be updated to require an entry-level qualification of agents and that letting agents should be included under the definition of estate agency.

Sir Carsberg said there was ‘widespread confusion’ about the role of property agents with many consumers not fully aware of how the property buying process works and many unaware that agents are not licensed.

The review also found that the market is not effective in finding better ways of completing transactions because the processes are complex and most consumers do not understand the processes or the alternatives that are available.

The new regulatory regime would apply to those offering agency services in the property sector. This would include estate agents, landlords as well as letting and managing agents.

The review argues that although the current legislation needs reform and changes could bring improvements, regulation is seen as a better option. Regulation will allow for the establishment of a standards board that would be the best kind of organisation to maintain a coherent body of standards, ensure that they are consistent with a set of clear principles and keep them up to date.

See below for a very abridged version of the recommendations:-

• A regulatory body should be set up with “a light touch approach”, lettings should be included in this.
• If the government does not quickly make membership of a regulatory body mandatory, the professional associations should establish their own single regulatory body.
• All those who give substantive advice to clients, including management and letting agents, must have a basic qualification.
• Improve transparency, particularly where there are potential conflicts of interest.
• One redress scheme (Ombudsman) only, as opposed to several.
• Developers and builders selling directly to the public should be subject to a similar regulatory scheme.
• The proposed regulatory regime should require agents to give more advice to clients on how to improve the selling/letting process.
• Consider ways that standard draft contracts, lock-out agreements, deposits etc can help expedite sales.
• Land Registry to increase amount of information made available quickly.
• Local authorities to be compelled to make searches available online cheaply and quickly.
• HIPs to be made voluntary.
• Home condition reports, surveys or valuations compulsory should not be made compulsory.

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30th April 2008
A Landlord Action Essential Seminar - June 8th 2008, London

Landlord Action has gathered together leading industry experts to guide us through this current market downturn. The essential one-day seminar has sessions covering many areas. For more information click here

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IMPORTANT
17th April 2008
TENANCY DEPOSIT CASE - STANKOVA v. GLASSONBURY

TENANCY DEPOSIT CASE (S213 HA 2004)Stankova v. Glassonbury 10th March 2008, Gloucester County CourtThe claimant Ms Stankova is from Bulgaria and took a private tenancy with Mr Glassonbury on 1.8.07. She was a joint tenant with her daughter and another tenant (unknown to her before start of tenancy).

The tenants jointly paid a deposit of £600 in order to move in. The landlord did not notify any of the tenants that he had deposited the money in any of the statutory Schemes at any time.There were various problems with the landlord and he served notice on 2.10.07. The notice was defective.

The third tenant moved out of property shortly afterwards and the three tenants made arrangements about how the deposit would be dealt with on its return.On 28.10.07 the landlord entered the property and removed a carpet and the fireplace from the lounge making it unusable and also pulled the extractor fan out of kitchen leaving a hole in roof. The Council dealt with the harassment.

The landlord promptly served a further notice November 2007 under s21 which was on the face of it a valid notice.Ms Stankova moved out in Feb 2008. She made a claim under the Housing Act 2004 against the landlord for his failure to notify her within 14 days of how he would deal with the deposit and which scheme he was using.

The landlord submitted various arguments against the claim; that the tenant owed some rent arrears, that he had now placed the deposit in a scheme and that there was damage at the property for which he would wish to withhold some or all of the deposit.

At the hearing of the matter District Judge Singleton ordered the landlord to pay £1800 +£75 costs in respect of three times the deposit plus the court fee.In awarding the monies, the judge accepted the tenant’s argument that the award was a strict liability penalty, and that consequently there was no provision for counterclaim for outstanding rent arrears or other arguments about the return or retention of the deposit on the basis that a statutory scheme included arbitration for disputed about returning or retaining deposit monies.

Comment: In giving his decision the judge expressed concern that ‘it goes against the grain’ and advised the landlord to take legal advice as to whether he could delay the 14 days in which he must pay the claimant.

The case doesn't make it clear if the tenant moved out because of the Section 21 served in November which may actually not have been valid if the landlord hadn't protected the deposit before service.

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28th February 2008
OFT seeks court order against letting agent Foxtons

The OFT has issued High Court proceedings against Foxtons Limited seeking a declaration on the application of the Unfair Terms in Consumer Contract Regulations 1999 (UTCCRs) to certain terms in Foxtons' lettings agreements with landlords. The OFT is also seeking an injunction against Foxtons preventing it from using the terms.

The action taken by the OFT is in response to consumer complaints. If successful in this case the OFT intends to enforce compliance with the law, as declared by the Court, throughout the letting industry wherever similar terms are being used.

The terms to which the OFT objects in Foxtons' letting agreements can potentially require landlords to pay Foxtons substantial sums in commission, where a tenant continues to occupy the landlord's property after the initial fixed period of the tenancy has expired - even if Foxtons plays no part in persuading the tenant to stay, and no longer collects the rent or manages the property. Foxtons' terms can also require the landlord to pay these sums after the landlord has sold the property. The terms also demand commission where the landlord sells the property to the tenant, even where Foxtons has played no part in negotiating that sale.

Foxtons contends that its agreements with landlords are not unfair and continues to use these terms, and accordingly, the OFT has issued proceedings so the courts can decide the matter.

NOTES
1. The OFT is seeking an enforcement order against Foxtons Limited under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs).
2. The UTCCRs apply to standard contract terms with consumers. The UTCCRs protect consumers against unfair standard terms in contracts they make with traders. The OFT, and certain other qualifying bodies (such as local authority trading standards, national regulatory bodies, and Which?) can take legal action to prevent the use of potentially unfair terms. A term is likely to be considered unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers. The regulations say that a consumer is not bound by a standard term in a contract with a trader if that term is unfair. Ultimately, only a court can decide whether a term is unfair.
3. It is estimated in the lettings industry that there are at least 15,000 letting agency businesses in the UK, including a number of national and multi-national companies in addition to many smaller businesses.

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28th January 2008
(CLG) Private rented sector to be focus of independent review

A major review to improve the private rented sector was today announced by Housing and Planning Minister Yvette Cooper. With almost 2.6 million homes in England being rented from over half a million private landlords, Yvette Cooper has commissioned an independent review to look at what problems tenants and landlords face and what works well in the sector.

A Citizens Advice Bureau report last year found 1 in 5 tenants were dissatisfied with the quality of repairs carried out by their landlord and feared retaliatory action if they complained to authorities. On the other hand, landlords can face problems with poor tenants not paying rent and anti-social behaviour.

The review will look how the increasing number of buy to let accommodation and student tenants has impacted on the private rented sector, the quality of homes and who the users of the sector are. It will also examine the impact of demographic and social change on the future demand and supply in the sector.

The Government has already introduced positive legislation such as Tenancy Deposit Protection and action on houses of multiple occupation. The Government will consider the reviews recommendations to see what else can be done to improve the sector for both landlords and tenants.

Julie Rugg and David Rhodes from the Centre for Housing Policy at York University will head the review. Yvette Cooper said:
"Most of us have rented a flat or house at some stage in our lives and the private rented sector is, at its best, a vital provider of good
housing. But too few people are aware of their rights and responsibilities, either as tenants or landlords. We have seen a big
increase in the private rented sector and particularly in buy to let. It is important we review the impact of this.

"I would like to take this opportunity to thank Julie Rugg and David Rhodes for taking on this important role and look forward to their final report towards the end of the year."

Julie Rugg said: "Many people experience renting privately at some point in their lives, but private renting as a sector isn't well understood. This is a good time for a review."

Julie Rugg and David Rhodes start work immediately and will deliver their final report by the end of October.

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21st January 2008
Nation urged to "Pull your finger out!" and stay safe from fire

A new campaign launched on  15 January 2008 by Communities and Local Government is delivering the stark message to 'Pull Your Finger Out' and check your smoke alarm. Although 80 per cent of homes in England have a smoke alarm, new survey results from the Fire Kills campaign and TNS show that an alarming four in five of those polled don't follow advice to test their alarm every week. Not checking smoke alarms regularly puts loved ones and homes at unnecessary risk.

Checking a smoke alarm only takes minutes but the reasons given for failing to take this simple precaution are disturbing, with general apathy stopping many people from being fire safe. Reasons given for not testing smoke alarms enough include: 'not remembering' (23 per cent), 'don't think about it' (14 per cent), 'too busy' (8 per cent) and 'can't be bothered' (7 per cent). This is despite the fact that if you don't have a working smoke alarm you are more than twice as likely to die in a fire. 

The 'Pull Your Finger Out' national advertising campaign, fronted by Julie Walters, highlights the devastating and potentially fatal consequences of not testing your alarm often enough. Running in England from 15 January 2008 to early March, the advert shows the horrific aftermath of a fire in the home with a burnt out kitchen providing the backdrop to the scene. 

Fire Minister Parmjit Dhanda said: "The harsh truth is that unless a smoke alarm is regularly maintained it could be rendered useless in the event of a fire. Clearly it is not enough to simply own a smoke alarm and hope that loved ones and homes will be protected. Maintaining a smoke alarm takes moments and this simple precaution can save lives.

"The impact of fire can be devastating and potentially fatal, so I would urge people to take immediate action by obtaining a smoke alarm and checking it weekly - these simple steps could save lives".

Make your home fire safe and keep it that way with the Fire Kills campaign 5 step plan:

Step 1 - Fit a smoke alarm on each level of the property. When a fire starts, you only have a few minutes to escape so an early warning is vital. Make sure you replace battery operated smoke alarm units after 10 years. Alternatively consider installing a 10-year battery smoke alarm or mains powered alarm.

Step 2 - Test it weekly. A working smoke alarm can buy you valuable time to get out, stay out and dial 999.

Step 3 - Plan your escape route. Make sure you and your family knows the quickest way out in the event of fire. Consider an alternative route in case your usual one is blocked.

Step 4 - Stay safe in the kitchen. This is the area where most house fires start. It only takes a minute to check electrical appliances are switched off. Also, never leave cooking unattended.

Step 5 - Ask the experts. Fire and Rescue Services in England offer free home fire risk checks to identify potential fire risks and advise what to do to reduce or prevent them. Find out more at www.fire.gov.uk

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13th December 2007
Local Housing Allowance:important changes

From 7 April 2008 Housing Benefit for people who rent properties from private landlords is changing. The new benefit is called Local Housing Allowance (LHA).LHA is the new way to calculate Housing Benefit.. These changes are:

1. The Local Housing Allowance rates will be based only on the number of bedrooms a family needs, not bedrooms and living rooms. This is to reflect the way property for rent is advertised
2. The way the Rent Service works out the Local Housing Allowance rates will change. The calculation of the Local Housing Allowance rates will be based on a wider range of local rents than they are at the moment
3. If the Local Housing Allowance rate that applies to a tenant is more than their rent, the maximum amount of benefit they can get is their rent plus £15. This is to ensure that Local Housing Allowance does not become a disincentive for people moving into work.

Existing claimants will not be affected by LHA unless they change address or have a break in their claim after 7 April 2008.

LHA is not applicable if:

1. A person is a council or housing association tenant
2. A person has a tenancy that started before 1989
3. A person lives in a caravan, hostel or houseboat
4. A person lives in board and lodgings.

The amount of LHA a person gets depends on:

1. Who they live with and the number of bedrooms your family needs
2. The area in which they live
3. The amount of money you have coming in
4. The amount of savings you have

The LHA rates vary depending on the size of the property. These rates are set by an independent rent officer, based on local rents. 
LHA will be paid directly to the tenant, who then pays the landlord. As a tenant will know their entitled before searching for property, letting agents and landlord Knowing the amount of LHA will allow a tenant to search for a property they can afford.  Tenants cannot choose to have LHA paid direct to the landlord. 
Some tenants may struggle with the responsibility of paying their rent and so safeguards have been put in place to make direct payments to landlords in certain circumstances for vulnerable tenants.
The Council has discretion in identifying tenants where LHA will be paid direct to the landlord. Examples include:

1. The tenant is likely to have difficulty managing their own affairs. This could include tenants with learning disabilities, in severe debt or with drug or alcohol problems that would mean they may have difficulty managing a budget.
2. The tenant is unlikely to use their LHA to pay their rent.
3. The tenant has built up rent arrears of 8 weeks or more.
4. The tenant is having deductions from their Income Support or Jobseeker’s Allowance to pay off rent arrears.

Further Information
Department of Work & Pensions website at http://www.dwp.gov.uk/housingbenefit/lha/