The rise of online rental property advertising has led to a surge in property scams. Criminals are fraudulently offering properties to prospective tenants and then stealing deposits. In a recent case, a scammer rented a property via popular short-term letting website Airbnb and then advertised it on Gumtree.
Fraudulent Property Listing
It wasn’t long before a fish took the bait. The victim in question contacted the fake landlord and arranged a viewing of the property. He was shown around and seemingly happy with the place, arranged for an advanced payment to be transferred to the landlord. Shortly after the money transfer went through, the landlord stopped responding to calls and text messages, so the victim went to the police.
It soon became apparent that the fake landlord did not own the property and therefore had no authorisation to let it out. The money paid as a deposit was sent to a stolen bank account and withdrawn almost immediately. An investigation was launched by the Met’s Operation Falcon department, set up to deal with online fraud and linked crime.
The tenant had managed to take a photo of the fake landlord, which the police are now circulating in the media, in the hope that somebody is able to identify the perpetrator.
Unfortunately, this type of fraud is all too common. Most scammers advertise their fake properties on websites like Gumtree, so it is always worth keeping a check online to see if your properties every pop up for rent, especially if you use Airbnb.
A tenant has complained his rental home’s kitchen was so poorly designed that it gave his wife a bad back. The property, a £1,040 per month flat in North London, had a very small kitchen with a sink cunningly positioned in the corner, between two units. This meant that anyone washing up had to lean forward for an extended period because the sink was so inaccessible.
Very Little Choice in the London Rental Sector
The couple were forced to live in the flat for two years and when asked, they said it wasn’t worth complaining to the landlord because they felt it would be a waste of time. They claimed landlords have all the advantages because of the lack of availability of affordable rental property in London. Although the couple spotted the sink problem when they went for a viewing, they feared losing the centrally located property to another party and went ahead with the tenancy anyway. It wasn’t until they started washing up every day that they realised just how badly designed the kitchen was.
A “Silly” Design
When the letting agent responsible for the flat was contacted by the press, they admitted that the design of the kitchen was problematic and there was nowhere else for the sink to sit. However, the agent did acknowledge that placing the sink in the corner was “a bit silly”.
The rental sector hinges on supply and demand. In London, there are too many prospective tenants and not enough affordable properties. As a result, landlords know they will always find a tenant, no matter how unappealing their property is.
Landlords with buy to let mortgages are finding it hard to offer tenants long-term tenancies because many lenders refuse to support tenancies longer than one year.
CML Refutes Claims
The underlying problem is the Council of Mortgage Lenders and Insurers, which says tenancies lasting more than one year are not permissible. Their reasoning is that if a landlord defaults, the lender would not be able to sell the property to recover the debt with a tenant in situ.
However, the CML refuted such claims, saying that more than half of lenders did not place restrictions on the length of tenancies. It says a study carried out by Shelter found that half of all buy to let lenders were happy for landlords to offer longer tenancy agreements.
“As Shelter has said, any landlord wanting to offer a longer tenancy should be able to find a suitable lender. And anyone renting should be able to ask their landlord for a longer term, confident that lending conditions aren’t going to be a barrier.”
NLA Says Lenders Could Do More
Chris Norris from the National Landlords Association says lenders could still do more to help. He points out that many landlords are still on historic legacy mortgages, which do not have such flexible terms. A number of mortgage products are set to a maximum tenancy of two years, which may not suit tenants looking for a long-term tenancy.
Some landlords complain that restrictive lending conditions are a real barrier, so the advice here is shop around for a suitable product and always check the key facts before you sign.
According to research carried out by the Council of Mortgage Lenders, mortgage arrears amongst buy to let landlords are on the rise. The number of people in arrears rose by 6% in the third quarter of last year, which is the first time this has happened since the CML started monitoring the situation two years ago.
Stamp Duty Tax
The government has introduced several key changes in the last year, one of the largest being an introduction of a 3% stamp duty levy on anyone owning a second property. This came into effect in April 2016, which caused a large spike in sales completions in the buy to let sector. Many landlords considering investing in buy to let property rushed into buying in order to beat the 3% charge. Experts believe that at least some of these people made an investment they really couldn’t afford, which is what has caused the rise in mortgage arrears.
Mortgage Interest Tax Relief
The concern is that more landlords will fall into mortgage arrears when new tax rules come into effect next April. From April 2017, mortgage interest tax relief is being phased out, so landlords will pay more tax on their income from rental property. It has been estimated that around 440k landlords will be pushed into the 40% income tax bracket, many of whom will have no choice but to pass their extra costs on to their tenants.
Are you one of these landlords? If so, let us know in the comments section.
The press is always full of tales of rogue landlords and feckless tenants causing havoc in rental homes. Do a search on any given day and you will find at least one story where a disgruntled landlord complains about clearing up the mess left behind by a tenant or a fed-up tenant complains about their landlord refusing to lift a finger. What you won’t see very often is a tenant complaining that his landlord has installed a coin-operated toilet.
A thread first appeared on popular discussion site Reddit, where the poster asked for advice on whether his new coin-operated toilet was actually legal. The tenant claimed his Melbourne landlord has equipped the bathroom with a pay-to-use toilet, which required the tenant (and his guests) to pay one dollar to use the facilities. Not surprisingly, the tenant was unhappy with the arrangement.
“I understand in our laundry having to pay for the communal washing machine. But I pay the water bill that goes into my apartment,” the tenant wrote.
“[The landlord] said it was a government incentive to save water. But then why does he get to collect the money?”
Some people offered replies to the poster’s problem, but the majority thought it was an elaborate hoax. To dispel the naysayers, the OP posted a photo of the coin operated toilet, but most people were still unconvinced the toilet was real. The poster was advised to go to the press with his story, but once press got wind of it and contacted him, the trail went cold and the ‘tenant’ disappeared.
The government is getting tough in its approach to the problem of rogue landlords and letting agents. An official consultation has been launched, which will run until February 10, 2017. Views are being sought on which offences should be considered serious enough to cause a landlord or property agent to be banned from letting or managing rental properties. If a landlord or agent is banned, their name will appear in a national database of offenders.
Consultation on Possible Offences
Possible offences up for inclusion are threatening tenants, illegal evictions, and failing to carry out essential health and safety work, all of which are considered serious. The government’s housing minister hopes the introduction of a banning order will stamp out the problem of rogue landlords and make sure tenants are protected from exploitation.
However, David Cox, managing director of ARLA, is not convinced the proposed banning orders will work in the way the government intends them to do.
“It seems completely illogical that the database of rogue landlords and letting agents will only be accessible to local authorities and DCLG; surely this ultimately defeats the purpose of the legislation? If there is no public access to the database how will landlords or tenants understand if they are using a banned agent and how do agents see if those applying for employment are blacklisted or banned?”
A Holistic Approach
He rightly points out that lists would need to be combined to prevent a people jumping from one profession to another.
Kylie Jenner is famous for many things, not least her lipstick range, glamorous Instagram feed and famous siblings. She may only be 20 years old, but Ms Jenner has a range of business interests. She also owns several properties, but instead of leaving them empty, she has decided to rent one of them out, which makes her a celebrity landlord.
Kylie’s brother, Rob Kardashian, and his girlfriend, Blac Chyna, recently became parents to a baby girl. According to the press, rather than live in Blac’s home, they have decided to rent one of Kylie’s homes in Hidden Hills. The seven bedroom mansion is closer to Rob’s family, so they will have more support while they raise their daughter.
Kylie’s Property Empire
The young Ms Jenner is rapidly turning into something of a property tycoon. She recently bought a second property next to her existing home in an exclusive gated community in Los Angeles, which means she now owns a joint compound. This is fairly unusual, but if she ever wants to extend one of the properties, it will make life a lot easier. Her most recent property acquisition has eight bedrooms, eleven bathrooms, and a massage room.
Kylie isn’t the only celebrity to recognise the value in letting out exclusive property in desirable areas. American actress, Brooke Shields, rents out her home in the Pacific Palisades and if you fancy living there, it will set you back $35k a month. Richard Gere also lets out his apartment in New York’s NoHo neighbourhood. This will cost you $20k a month.
UK landlords are used to tenants moving cats and dogs into their properties, even when the tenancy agreement says “no pets”. It’s a common problem. Tenants like to share their homes with pets, which is fine until they start to cause damage. Stories of homes where dogs have defecated everywhere and cats have scratched carpets abound, but a Canadian landlord has had a much worse time.
Nightmare Tenants Move In
The landlord formed a good first impression of his new tenants when he leased a three-bedroom rental property in Ontario. Unfortunately, shortly after the tenants moved in, they started introducing livestock into the house. This might have been tolerable, except they failed to clean up the mess. There were reports of a goat, chickens, rabbits, dogs and cats living inside the house, which nobody bothered cleaning up after. They also didn’t bother paying any rent on the property.
Long Eviction Process
It took the landlord seven months to obtain an eviction order to get the couple and their son out of the property. By the time they did move out, the damage was horrendous. Timber floors were soaked in urine and there was mess everywhere. The landlord hired professional cleaners, filled two large skips with rubbish and animal carcasses, and ripped up the floors in an attempt to rectify the damage.
He now says he will only let his rental property out on short-term lets, as this will make it easier to evict problem tenants.
Reddit is a great site for general discussions on random topics. People share their thoughts and experiences on a whole range of things, which often makes for entertaining reading. How it works is simple: one user asks a question and then waits for other users to post their answer in the thread. In this example, a user asked for ‘tenants from hell’ stories. There were more than 500 responses, but some of the best were as follows:
One landlord complained that a tenant removed a kitchen island and took it outside to act as an outdoor serving area next to the pool.
Another tenant shoved marbles down a drain because his sink was clogged and he figured the marbles would push the blockage out. It worked in the sense that it pushed the blockage into the drainage system servicing an entire block of flats.
On a similar theme, a different tenant pushed plumber’s putty into the sink and bath drains, and then left the water running. The resultant flood was epic.
Other horror stories included the guy who cut out holes in the drywall and left fish inside to rot; it took the landlord several weeks to figure out where the stench was coming from. Then there were the tenants who introduced bed bugs into their property.
And finally, the worst ever story (from my perspective) was the tenant who called the landlord out to kill a spider. He refused, but agreed to go to unblock her sink. The spider turned out to be as large as a man’s hand…
Let us know your tenant horror stories in the comments!
Failing to check up on a tenant’s immigration status has become a criminal offence. The new measures will be triggered under the Immigration Act 2016 and are an attempt by the government to crack down on rogue landlords providing accommodation for illegal immigrants.
“We are clear that illegal immigrants should not be able to access or remain in private rented accommodation, preventing lawful residents from finding a home,” says the Immigration Minister, James Brokenshire.
“We know the vast majority of landlords are diligent in their responsibilities when it comes to their tenants and we want to help them to be able to evict illegal immigrants more easily”.
Right to Rent Rolled Out Nationwide
The Right to Rent scheme was first rolled out in 2014 and has since been extended to the rest of England. By the end of next year, the government hopes to implement the Right to Rent scheme in Scotland, Wales and Northern Ireland.
Civil Penalties and Criminal Prosecutions for Rogue Landlords
Landlords and letting agents who flaunt the scheme will be liable for a civil penalty of up to £3,000. Landlords who repeatedly ignore the requirements of the scheme face being prosecuted and sent to prison for up to five years. They could also have their accounts frozen under the Proceeds of Crime Act.
On the plus side, landlords who discover they are housing illegal immigrants will have greater powers to evict their tenants quickly once they report them to the Home Office.