According to an article in the Times online late last week there has been a fundamental shift in the power dynamic between landlord and tenant. According to the article in the last half of last year tenants held all the cards but that has rapidly changed with landlords once again in possession of the aces.

They point to the fact that all our reluctant landlord’s are happily selling up and getting out, as the reason for the shift. In addition those who would like to get into renting property are being blocked by the banks current scrooge like attitude.This, of course, reduces the number of rental properties on the market and makes it less of a buyer’s, or in this case renter’s market.

On the whole though I do not think that talk of power actually benefits us landlords in anyway. Tenants may be losing that battle at the moment but they are certainly winning the PR war.

For example the article sees the fact that we may well become a nation of renters if things progress in the fashion they are, slightly differently from those of us in the game. Whereas we tend to talk about the importance of protecting the sector that is likely to provide the housing for the nation, they talk about a country of renters needing far more security for  tenants.

The article writes off the ARLA’s concerns over new legislation and plans to have a Tripadvisor style website to rank landlords, as predictable.

Landlords need to take heed of the fact that they need to be careful with their image. The court of public opinion is a very powerful one, it changes laws and could well hit landlords in the hip pocket if they are not careful.

It is good to see the concern for the environment is starting to reach into all parts of our economy and recent figures show that the property investment market is going to be part of this.

There is a lot of interest at the moment from investors who want to put their cash into energy efficient and environmentally friendly real estate. What is more is, that at the moment at least, the motivation is purely concern for the planet rather than profit. Thomas Beyerle of Aberdeen Property Investors that despite the lack of any evidence that going green will lead to any actual profit increase, many investors are still keen to get involved. 

Apart from selfless concern for the environment another reason investors may be keen to ‘go green’ is fear of future punitive measures being taken by the government as they attempt to reduce carbon emissions.

In other words a green building may not mean extra money in your pocket right now but it is very likely to reduce the amount the government wants to take away from you in the future. A lot of British buildings are old enough that they have totally escaped any legislation to clean up their act. That is likely to change as legislations takes into account buildings retrospectively. Certainly anyone buying a new building ought to choose green.

Investing in green real estate may prove a canny move for the future when legislations starts making inefficient buildings pay up. It could also be a way to get a step ahead of your competitors.

It is great to get recognition and a statement released this week by a spokesperson for National Approved Letting Scheme has me feeling all warm and fuzzy. OK this group may have a vested interest but I believe that what they had to say is very accurate and bears thinking about.

In calling the landlords and letting sector the “white knight’ of housing the spokesperson was referring to the fact that without them many of Britain’s young people would be without any suitable accommodation. With the banks very reluctant to help this group out with affordable mortgage options the buy to let section of housing has been many Britons only option.

One of the many items on the long list of things that landlords must do to secure the safety of their tenants is a regular boiler check. It now seems that failing to make that check can have quite dire consequences.

According to the Health and Safety Executive (HSE), a landlord was fined quite heavily after a boiler they failed to have checked flooded their tenanted property with carbon monoxide. Graham Barnes was ordered to pay nearly £10K in fines and costs for not having the gas appliances of his rental property properly checked.

HSE inspector Dozie Azubike said “the incident was a clear case of a property professional putting people at risk by ignoring his responsibilities. As a result of the boiler not being serviced, carbon monoxide leaked into the kitchen creating a very dangerous environment.”

Under UK law you are required as a landlord to have one gas appliance and boiler check carried out on each of your properties every twelve months. Not doing so can clearly cost you dearly as in the case of Mr Barnes.

I know I have said this before but it is not just the financial risks of ignoring safety legislation we have to worry about. If something did go wrong in one of your properties, causing severe injury or even death, then you would have to live with your conscience. For me, that is the scariest bit of all.

Three years ago, the fire safety laws changed radically but it seems that some landlords, and other businesses, are still not totally aware of how that affects them.

The Regulatory Reform (Fire Safety) Order came into effect in October 2006 and replaced over 70 pieces of fire safety legislation. The Order applies to virtually all buildings, places and structures, so there is little chance it does not apply to you.

The main thrust of this legislation is that the responsibility for fire safety lies with the employer or landlord. Therefore, it makes good business sense as a landlord to have a strong knowledge of the fire safety regulations. London Fire Brigade is saying that in their experience many landlords do not.

If you are an employer or have control over a premise (known as the ‘responsible person’ landlords fit into this category) then you are required by law to carry out a fire risk assessment and act on its findings. Simply to assume that everything is OK will not cut it!

If you are one of those people who think that you will never get caught out then it bears keeping in mind that London Fire Brigade carries out around 14,000 fire inspections of premises each year. If your premises are part of this inspection and they are found wanting then you could face very hefty penalties.

Even with that aside this is the safety of people we are talking about here and none of us want a tragedy on our conscience.

Eric Walker, managing director of Bushells, has come out and stated what many of us have been thinking; there are massive flaws in the tenancy deposit legislation.

Any system that holds one person financially responsible for another’s wrongdoing must be inherently unfair. Most people would agree with this but it does not stop the government holding landlords responsible for tenants’ lost deposits even when it is clearly the letting agency that is at fault.

Mr Walker makes a very good point when he recommends that the letting agents should have to submit to regular auditing. Anything less, potentially, puts the poor landlord in an invidious position.

He said “The real time-bomb is where agents hold the money in their own account and register it with a scheme, then for whatever reason cease to be members of that scheme. This leaves the landlord with a huge liability in the event that the tenancy is extended or renewed, as the deposit is legally no longer registered.”

Clearly this is not a situation that can be allowed to continue. Letting agents are getting away with losing, spending or just vanishing with tenants’ cash and landlords are being left holding the financial baby. It is nonsense and can surely be fixed.

Mr. Paul Shamlina, of Landlord Action, has many years’ experience dealing with the issues of sub letting and overcrowding. They are often part of the same problem and he has some great advice for landlords on the subject…

His first recommendation is to foster a good relationship with neighbors and caretakers around the property. It is these people that will notice if there is anything fishy going on, and they are much more likely to keep you informed if you have a good relationship with them. Vigilant observers are your friend!

As I said in the last post, it is a very bad idea to approach the sub tenants for money directly but Mr. Shamplina has this to say on the matter:

“I would suggest that if they (landlords) are happy for them (sub tenants) to remain, they cut out the middle man by going through the proper procedures to have the tenancy negated, then draw up a new tenancy for each resident. Under no circumstances should they accept payment of rent until the matter is sorted.”

I could see the cutting out of the middleman part of that advice being very satisfying.

The last piece of advice that Mr. Shamplina has to offer concerns avoiding getting into this situation in the first place. Only deal with people with photo ID. This is not foolproof, of course, but a lot of these false tenants are involved in organised crime so they will not be keen for you to know who they really are.

The recession sure has a lot to answer for in the property market. In the last 12 months there has been a fifteen percent rise in the number of overcrowding cases that Landlord Action have had to deal with. London is the worst hit and, not surprisingly, the director of Landlord Action is blaming the economic downturn.

Paul Shamplina says “The most common cases appear to be organised gangs looking for an easy money making scam. They take out a tenancy and then sublet to multiple occupants. The worst case we have dealt with was a three bedroom, one bathroom, semi detached house in North London which was found to have had 53 occupants, all illegal immigrants.

He goes on to describe frankly horrifying conditions including mattresses stretching from wall to wall.

Other terrible cases he talks about are enough to send a shiver down any landlord’s spine, with one woman finding that 18 bunk beds had been put into her lovely property and it was being used as a youth hostel. A website in China was advertising a space in the flat for £20 a night.

Mr. Shamplina highly recommends caution if you are a landlord who finds their property being put to these kinds of uses. Clearly you will be outraged but approaching the sub tenants themselves and asking for payment may open you up to a legal nightmare.

Mr. Shamplina has a lot of good advice for landlords on how to avoid this situation, and I think it is worth spending a little time on so I shall elaborate in my next blog.

CHL Mortgages released its quarterly survey last week to reveal a growing confidence in the property sector that has seen the return of the professional landlord.

The survey is designed to canvass opinion among landlords on a regular basis and allows us to see how they are thinking about the current state of affairs and the future. Of those that responded to this quarter’s questionnaire eighty one percent were keen to express the opinion that the future looks fairly rosy, as far as they are concerned.

The most interesting part of this attitude is the reason that they gave for this change. In the opinion of those surveyed, the credit crunch has lead to the BTL market shedding its ‘get rich quick’ image and returned to being a domain for professionals.

They believe that pressure was put on the market by amateur landlords flooding in to try and make a quick buck but has been relieved by the recession, and many are grateful for that much at least.

The survey revealed that 58% of respondents considered their property portfolio to be a profession rather than a hobby, and it also showed a strong preference for managing their properties themselves rather than allowing a letting agency to do so.

It is a good feeling to know that at a time where the buy to let sector is set to become very important it is in the hands of professionals

In the UK many of us do not always see eye to eye with some of the recommendations of the EU. But when it comes to their recently agreed maximum 5% tax rate for renovation and repair work, landlords are right behind them.

The UK Government needs to implement this as soon as possible. This is a unique opportunity to encourage landlords to get properties up to spec. Given that a lot of the PRS (private rental sector) deals in older properties could do with a little work, this has to be viewed as a very good thing.

Of course, it is not to be ignored that a drop in tax, which will lead to an increase in renovations, will also stimulate the economy by providing work. Tradesmen have had a hard time of it lately with many people shelving any plans that they had for home improvement when the crisis hit. This would get a lot of these businesses back on track. Not to mention the huge boost that will be given to the manufactures of all kinds of building supplies.

The Government needs to stop dragging its feet on falling in line with the EU requirements. There is much to be gained and very little to lose. I am sure they can find a way to recoup any monies lost through the drop in tax.

They usually do!