No-fault Eviction

[UncleEbenezer]

And that is exactly what is happening. The "nice" mom and pop landlords move out and the bastards move in.

As was the case here in the UK, before no-fault eviction was introduced IIRC.

Indeed it was. But that was then, and what came before the 1970s Rent Acts wasn't anything nice, it was the era of Rachmann. In the late 1980s when Section 21 was introduced, reform was much-needed to kick-start the sector. Section 21, for all its faults, was a huge improvement on a situation where there were no tenancies (at least in the open market), only "licences" to live somewhere - what today is called a guardianship.

No-one (so far as I know) is advocating a return to anything like that.

[Mike4]

If no-fault eviction gets taken away as seems likely by the Renters Reform Act currently passing through parliament, I can see BTL lenders all disappearing again and as you say, the nice 'mom and pop' type landlords (e.g. me) backing out of the market totally.

Agree 100%. Yet another example of the utter ineptitude of the current majority party. Banning letting fees was actually a pretty positive step. Removing no-fault eviction is unnecessary and a mistake.

IMO a better change would be to make holding deposits symmetrical, i.e. both tenant AND landlord post a holding deposit -- if the landlord pulls out he loses his deposit, same as tenants do now if they pull out. There are probably other small adjustments that would benefit both parties, abolish EPCs for example.

GS

Point of Order M'Lud.

Tenants no longer routinely lose their deposits AIUI. The deposit protection scheme see to to that.

Or are you asserting the DPS is ineffective?

I don't know myself as I always return them when a tenant leaves.

[Mike4]

As was the case here in the UK, before no-fault eviction was introduced IIRC.

Indeed it was. But that was then, and what came before the 1970s Rent Acts wasn't anything nice, it was the era of Rachmann. In the late 1980s when Section 21 was introduced, reform was much-needed to kick-start the sector. Section 21, for all its faults, was a huge improvement on a situation where there were no tenancies (at least in the open market), only "licences" to live somewhere - what today is called a guardianship.

No-one (so far as I know) is advocating a return to anything like that.

But they are though, surely. How does a tenancy where you can't recover your property encourage landlords to let?

As I understand it, that's exactly what will happen when no-fault evictions are removed. All the rentals will simply disappear from the market and something akin to a cancellable licence will emerge.

Have to say, I've never heard of a guardianship as a form of renting, but a brief google reveals it might be "The Answer". One appears to enter into a contract with someone who might otherwise be renting, for them to 'guard' your empty property. I get the feeling they might decide to temporarily live in it in order to guard it well, for as long as you need it 'guarding'.

I'm having a closer read of this:
https://liveinguardians.com/property-guardians-london

(Edit to remove the tautologies.)

[Lootman]

Indeed it was. But that was then, and what came before the 1970s Rent Acts wasn't anything nice, it was the era of Rachmann. In the late 1980s when Section 21 was introduced, reform was much-needed to kick-start the sector. Section 21, for all its faults, was a huge improvement on a situation where there were no tenancies (at least in the open market), only "licences" to live somewhere - what today is called a guardianship.

No-one (so far as I know) is advocating a return to anything like that.

But they are though, surely. How does a tenancy where you can't recover your property encourage landlords to let?

As I understand it, that's exactly what will happen when no-fault evictions are removed. All the rentals will simply disappear from the market and something akin to a cancellable licence will emerge.

I suspect so. The supply of rental units will decline, demand will stay the same, and so rents will go up.

Then the government will decide that control or capping of rents is the next ball to drop. And that will deter landlords even more. And pretty soon you are in a death spiral.

And all this is caused by people adopting a quasi-socialist view that tenants are somehow "good" and need protecting, whilst landlords are of course nasty villains. And more regulations may turn them into exactly that.

[Lootman]

To illustrate how bad landlord-tenant relationships can be in locations that have very strict controls on rents and evictions, I managed to track down this incident in New York City where a landlord tried to have his tenants murdered to get vacant possession of their rent-stablised apartment.

https://www.nytimes.com/2004/12/08/nyre ... nants.html

Extreme perhaps but a quick google search found a few other cases of landlords attacking or killing their tenants, and vice versa. Force people into a situation they do not want, wait a decade or two, and bad things can happen to them all.

[UnclePhilip]

I am rather late to the Renters Reform Bill, but am a little puzzled.

I understand that Section 21 notices will be abolished, but have read that there will not be rent controls, yet.

However, there must be some mechanism in the bill to stop a landlord by-passing s21 by simply increasing the rent and then using failure to pay rent as a ground?

This isn't meant to be a political point post, I'm genuinely puzzled and would appreciate knowing (rather than immediately trawling through the actual act....)

[Mike4]

I am rather late to the Renters Reform Bill, but am a little puzzled.

I understand that Section 21 notices will be abolished, but have read that there will not be rent controls, yet.

However, there must be some mechanism in the bill to stop a landlord by-passing s21 by simply increasing the rent and then using failure to pay rent as a ground?

This isn't meant to be a political point post, I'm genuinely puzzled and would appreciate knowing (rather than immediately trawling through the actual act....)

I think the mechanism is the rent tribunal. Although there are to be no formal 'rent controls', this is (and had been for years) the mechanism where a tenant can appeal to the "Rent Tribunal" against an unreasonable rent rise. The tribunal has so I understand, the power to impose an enforceable' fair market rent' on tenant and landlord.

So if a landlord tries the trick of raising the rent above local market rents, the tribunal can intervene and stop the abuse.

I might have some details wrong as I've never actually seen the tribunal in action first hand. I've no idea how it goes about deciding the 'fair rent' or what happens a year or two later if the local rental market has risen (or fallen).

[UncleEbenezer]

I am rather late to the Renters Reform Bill, but am a little puzzled.

I understand that Section 21 notices will be abolished, but have read that there will not be rent controls, yet.

However, there must be some mechanism in the bill to stop a landlord by-passing s21 by simply increasing the rent and then using failure to pay rent as a ground?

This isn't meant to be a political point post, I'm genuinely puzzled and would appreciate knowing (rather than immediately trawling through the actual act....)

I think the mechanism is the rent tribunal. Although there are to be no formal 'rent controls', this is (and had been for years) the mechanism where a tenant can appeal to the "Rent Tribunal" against an unreasonable rent rise. The tribunal has so I understand, the power to impose an enforceable' fair market rent' on tenant and landlord.

So if a landlord tries the trick of raising the rent above local market rents, the tribunal can intervene and stop the abuse.

I might have some details wrong as I've never actually seen the tribunal in action first hand. I've no idea how it goes about deciding the 'fair rent' or what happens a year or two later if the local rental market has risen (or fallen).

Are they called Rent Tribunals? The phrase sounds like something from the era of the Rent Acts and paternalistic markets. Not that the name really matters!

Yes, they're something I've long been vaguely aware of but never used. I guess their mere existence could serve to deter many abuses. Though some reports (pinch of salt may apply) tell of huge rent rises that raise a question over whether they have dentures, at least in some areas.

[Lootman]

I think the mechanism is the rent tribunal. Although there are to be no formal 'rent controls', this is (and had been for years) the mechanism where a tenant can appeal to the "Rent Tribunal" against an unreasonable rent rise. The tribunal has so I understand, the power to impose an enforceable' fair market rent' on tenant and landlord.

So if a landlord tries the trick of raising the rent above local market rents, the tribunal can intervene and stop the abuse.

I might have some details wrong as I've never actually seen the tribunal in action first hand. I've no idea how it goes about deciding the 'fair rent' or what happens a year or two later if the local rental market has risen (or fallen).

Are they called Rent Tribunals? The phrase sounds like something from the era of the Rent Acts and paternalistic markets. Not that the name really matters!

Yes, they're something I've long been vaguely aware of but never used. I guess their mere existence could serve to deter many abuses. Though some reports (pinch of salt may apply) tell of huge rent rises that raise a question over whether they have dentures, at least in some areas.

Pre-Thatcher councils had Fair Rent Officers. A tenant could apply to have their rent reviewed and, if the FRO deemed the rent to be too high, then the council had the power to impose a lower rent.

AIUI these days the council may only lower a proposed rent increase and not lower the current rent. A landlord is still free to set the initial rent at whatever he wants. And has a bigger incentive to set it high if he knows that subsequent increases may be harder to do.

I am not sure how many tenants apply. I once put up a tenant's rent by 50% from one year to the next. Two months later, that tenant moved out.

[GoSeigen]

IMO a better change would be to make holding deposits symmetrical, i.e. both tenant AND landlord post a holding deposit -- if the landlord pulls out he loses his deposit, same as tenants do now if they pull out. There are probably other small adjustments that would benefit both parties, abolish EPCs for example.

GS

Point of Order M'Lud.

Tenants no longer routinely lose their deposits AIUI. The deposit protection scheme see to to that.

Or are you asserting the DPS is ineffective?

I don't know myself as I always return them when a tenant leaves.[/quote]

It's a minor problem but I'm referring to "holding deposits", to secure a property while credit checks etc are going on. It's one-sided in favour of landlord at the moment -- the LL can pull out without any penalty while the tenant loses deposit if, for example, the credit check fails for some reason.

GS

[GoSeigen]

IMO a better change would be to make holding deposits symmetrical, i.e. both tenant AND landlord post a holding deposit -- if the landlord pulls out he loses his deposit, same as tenants do now if they pull out. There are probably other small adjustments that would benefit both parties, abolish EPCs for example.

GS

Point of Order M'Lud.

Tenants no longer routinely lose their deposits AIUI. The deposit protection scheme see to to that.

Or are you asserting the DPS is ineffective?

I don't know myself as I always return them when a tenant leaves.

It's a minor problem but I'm referring to "holding deposits", to secure a property while credit checks etc are going on. It's one-sided in favour of landlord at the moment -- the LL can pull out without any penalty while the tenant loses deposit if, for example, the credit check fails for some reason.

GS

[Lootman]

Point of Order M'Lud.

Tenants no longer routinely lose their deposits AIUI. The deposit protection scheme see to to that.

Or are you asserting the DPS is ineffective?

I don't know myself as I always return them when a tenant leaves.

It's a minor problem but I'm referring to "holding deposits", to secure a property while credit checks etc are going on. It's one-sided in favour of landlord at the moment -- the LL can pull out without any penalty while the tenant loses deposit if, for example, the credit check fails for some reason.

I am not familiar with holding deposits. The only upfront money that I used to ask tenant applicants for was an amount to cover the cost of running credit checks, And obviously that is not refundable. Nor does the tenant have any equivalent cost.

I never used DPS but held the security deposits myself. Returning them was never a problem unless there was property damage, which of course is the point of the deposit.

[Mike4]

Point of Order M'Lud.

Tenants no longer routinely lose their deposits AIUI. The deposit protection scheme see to to that.

Or are you asserting the DPS is ineffective?

I don't know myself as I always return them when a tenant leaves.

It's a minor problem but I'm referring to "holding deposits", to secure a property while credit checks etc are going on. It's one-sided in favour of landlord at the moment -- the LL can pull out without any penalty while the tenant loses deposit if, for example, the credit check fails for some reason.

GS

I've never charged a holding deposit personally so this is beyond my experience but my impression is they are illegal now; tenant applicants are not allowed to be charged anything to apply to rent a property. I could be wrong.

[UncleEbenezer]

It's a minor problem but I'm referring to "holding deposits", to secure a property while credit checks etc are going on. It's one-sided in favour of landlord at the moment -- the LL can pull out without any penalty while the tenant loses deposit if, for example, the credit check fails for some reason.

GS

I've never charged a holding deposit personally so this is beyond my experience but my impression is they are illegal now; tenant applicants are not allowed to be charged anything to apply to rent a property. I could be wrong.

Holding deposits limited to one week's rent, and the circumstances under which the landlord gets to keep them are listed - though the meanings may be open to interpretation. https://blog.openrent.co.uk/tenant-fees ... d-to-know/

From my experience it's more Agents than Landlords who tended to charge abusive fees. Often the landlord wasn't even aware of all that was going on!

[Mike4]

I've never charged a holding deposit personally so this is beyond my experience but my impression is they are illegal now; tenant applicants are not allowed to be charged anything to apply to rent a property. I could be wrong.

Holding deposits limited to one week's rent, and the circumstances under which the landlord gets to keep them are listed - though the meanings may be open to interpretation. https://blog.openrent.co.uk/tenant-fees ... d-to-know/

From my experience it's more Agents than Landlords who tended to charge abusive fees. Often the landlord wasn't even aware of all that was going on!

Ok so from your link, it appears holding deposits are always either refunded or contribute towards the rent or deposit.

I'm finding it hard to understand how that can be abused.

Maybe they are refunded after excessive delay?

[GoSeigen]

I've never charged a holding deposit personally so this is beyond my experience but my impression is they are illegal now; tenant applicants are not allowed to be charged anything to apply to rent a property. I could be wrong.

Holding deposits limited to one week's rent, and the circumstances under which the landlord gets to keep them are listed - though the meanings may be open to interpretation. https://blog.openrent.co.uk/tenant-fees ... d-to-know/

From my experience it's more Agents than Landlords who tended to charge abusive fees. Often the landlord wasn't even aware of all that was going on!

Hands up, I didn't know this law had been passed in relation to holding deposits and am rather annoyed that the letting agent didn't draw attention to it for the house I have just rented -- but used the matter of a holding deposit to put pressure on us.

As this seems to be a fairly reasonable set of protections I withdraw my earlier comment that holding deposits should be reformed.


GS

[UncleEbenezer]

Holding deposits limited to one week's rent, and the circumstances under which the landlord gets to keep them are listed - though the meanings may be open to interpretation. https://blog.openrent.co.uk/tenant-fees ... d-to-know/

From my experience it's more Agents than Landlords who tended to charge abusive fees. Often the landlord wasn't even aware of all that was going on!

Hands up, I didn't know this law had been passed in relation to holding deposits and am rather annoyed that the letting agent didn't draw attention to it for the house I have just rented -- but used the matter of a holding deposit to put pressure on us.

As this seems to be a fairly reasonable set of protections I withdraw my earlier comment that holding deposits should be reformed.


GS

I think your comment still stands. Landlords should have skin in the game, too.

A tenant who goes as far as to put down a deposit has a reasonable expectation of having found their next home. They may have spent money elsewhere (e.g for removals) and taken steps that are problematic to reverse. A landlord's deposit would be an incentive not to mess them about.

I think the law about tenant fees and holding deposits is very much focussed on abuses by agents. Given that the landlord appoints the agent, an agent in a race to the bottom may seek to present a friendly and reasonable face to the landlord, but ruthlessly screw over tenants. They also know that many tenants are in a pretty vulnerable position with the fear of potential homelessness, or the life-draining search for yet another place, so will rarely put up much of a fight no matter how badly they get abused.

[Lootman]

Hands up, I didn't know this law had been passed in relation to holding deposits and am rather annoyed that the letting agent didn't draw attention to it for the house I have just rented -- but used the matter of a holding deposit to put pressure on us.

As this seems to be a fairly reasonable set of protections I withdraw my earlier comment that holding deposits should be reformed.

I think your comment still stands. Landlords should have skin in the game, too.

A tenant who goes as far as to put down a deposit has a reasonable expectation of having found their next home. They may have spent money elsewhere (e.g for removals) and taken steps that are problematic to reverse. A landlord's deposit would be an incentive not to mess them about.

If a landlord has got to the point of you filling out an application form, asking for references, and taking the details for a credit check, then you can be reasonably assured that he/she has chosen you and is not proceeding with any other applicants. Because that is a fair amount of work.

And the only way you don't get the place is if the due diligence does not check out, which is on you anyway.

So I do not see a need for a tenant to be given any kind of deposit. It is the same when buying a house - it is the buyer who puts up a deposit, not the seller. Same with ordering a new car for that matter.

[UncleEbenezer]

I think your comment still stands. Landlords should have skin in the game, too.

A tenant who goes as far as to put down a deposit has a reasonable expectation of having found their next home. They may have spent money elsewhere (e.g for removals) and taken steps that are problematic to reverse. A landlord's deposit would be an incentive not to mess them about.

If a landlord has got to the point of you filling out an application form, asking for references, and taking the details for a credit check, then you can be reasonably assured that he/she has chosen you and is not proceeding with any other applicants. Because that is a fair amount of work.

In your mind, but not always in the real world. In any case, I said (elsewhere) it's agents that were the primary offenders and targets of the legislation on fees and holding deposits.

One kind of abuse I heard of was analogous to double-booking in the travel biz. Landlords or their agents would promise a place to more than one prospective tenant. By the time they let someone down, the tenant would be committed to the move, and in a difficult situation.

And the only way you don't get the place is if the due diligence does not check out, which is on you anyway.

So I do not see a need for a tenant to be given any kind of deposit. It is the same when buying a house - it is the buyer who puts up a deposit, not the seller. Same with ordering a new car for that matter.

When I bought this house, there were at least two crucial differences compared to that, offering me protection:

• I paid a deposit at the same time as I entered in to a binding contract. If the vendor had pulled out, I'd have had a claim against her for breach of contract.
• My deposit was paid to and held by my solicitor, and released to the vendor only when the purchase completed and I got the keys.

In summary, a highly regulated and protected transaction. Could it perhaps be your prejudices claiming an equivalence between those deposits?

[Lootman]

Could it perhaps be your prejudices claiming an equivalence between those deposits?

And could it be your bias claiming the opposite?

You seem to want to give tenants more power at the expense of those who take risks and commit capital to provide housing to others. And yet you never consider the impact of such ideas on the motivation of owners.

I chose to make my housing units available for longer-term rental. I do not have to do that at all. You seem to actually want owners to be less motivated - how does a shortage of supply keep rents low and availability of units for rental high?