Weekly landlord news digest: Issue 40

In our Hamilton Fraser Total Landlord Insurance weekly landlord news digest, we bring you the latest news and important updates within the private rented sector.

This week, we cover the NLA’s official response to the consultation to ban the Section 21 rule. The NLA has highlighted their concerns over the detrimental effects that may arise as a result of abolishing the rule.

We also discuss a recent debate put forth by a Labour think tank, who suggest that changes need to be made to rent control policies. The group argues that policies should be balanced, and equally fair for both landlords and tenants.

In other news, former N-Dubz singer, Tulisa, has been ordered to pay her former landlord over £70,000 in damages to his property. The celebrity singer had allegedly returned the high-end property in extremely poor condition, forcing the landlord to seek compensation.

We also provide some information about the penalties of breaching the Tenant Fees Act 2019, and details surrounding the industry announcement that online letting agency Upad has closed.

 

NLA response to Section 21 ban

The National Landlord Association (NLA) has officially responded to the Ministry of Housing Communities and Local Government (MHCLG) consultation to repeal section 21 of the Housing Act 1998. The response was issued on 11 October, while the consultation itself closed on 12 October.

The response highlights a number of reasons to preserve section 21 and also criticises the government’s formal consultation, they described as being “drafted in a way which assumes agreement with the government’s premise that assured shorthold tenancies should be removed from the Housing Act 1988”.

In the submission, the NLA also emphasise the need for an official reform and review of the section 8 rule, for evicting under particular grounds. The response was accompanied by a report that includes an economic analysis showing the impact that abolishing section 21 will have on the private rented sector.

The report, carried out by Capital Economics, suggests that the new policy is likely to have unintended detrimental effects on both landlords and tenants.

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Landlord claims over £70,000 for property damages caused by popstar Tulisa

Landlord Andrew Charalambous was paid over £70,000 for damages to his luxury property in North London, which had allegedly been ‘trashed’ by his celebrity tenant, Tulisa Contostavlos.

The landlord claimed that the three-bedroom property, which is located in Enfield and costing £3,466 per month to rent, was let in pristine condition, but returned in an ‘appalling’ state.

The reported damage to the property included:

  • A smashed sink
  • Doors torn from their hinges
  • Cigarette burns
  • Stains

Contostavlos’ lawyer argued that the damage was not caused by his client, but was a result of regular wear and tear. However, judge David Saunders ruled the case in Charalambous’ favour, and the former N-Dubz singer was ordered to pay compensation, interest and legal costs in excess on £70,000 to the landlord.

Michael Walters, the owner of the inventory company that provided evidence for the case, had this to say:

“Hopefully the high-profile nature of this case will help to remind landlords and letting agents about the potential financial implications of property damage if they don’t have professional and comprehensive measures in place.”

“This case also shows that it doesn’t matter whether a rental property is at the very top or bottom end of the market, landlords and letting agents need to follow the same procedures when it comes to documenting its condition before, during and after a tenancy if they won’t ensure they are protected against damage.”

Labour think tank suggests stricter rent control

A Labour Party think tank, known as The Fabian Society, has suggested that rent controls are beneficial, but they must be fair to both tenants and landlords. The group published a report in partnership with housing and homeless charity, Shelter, which is intended to provide a framework for implementing a more effective rent control policy. The research was gathered by carrying out six  in-depth focus groups with renters across England. The aim of this was to use the data to reflect the opinion of tenants around the country.

In regards to tenants’ views, the report states: “They prioritise having fair and transparent rules for the level of rent; a chance for greater security in their home; and a system that is fair for both tenants and landlords.” It also said that tenants want “a rent control policy that goes far enough to make a noticeable difference, but are concerned by unintended consequences such as any proposals causing landlords to sell up.”

The political group suggest that enforcing “fair” controls on rising rent prices will make the system fairer for tenants, by providing more access to affordable homes.

Greg Beales, campaigns director of Shelter, commented:

“rent controls are used around the world to give tenants predictable and stable rents, which allow renters to plan for the future and feel secure in their homes.”

While placing control over rent prices could benefit private renters, there are concerns that such a form of rent control would cause some landlords to sell their properties and leave the market.

Though, the group argues that this could benefit the sector by freeing up the market to more financially stable and “responsible” landlords.