Thursday, 2 June 2016

Why landlords should pass a fitting person test and criminal record checks

Penny Anderson in The Guardian

Being a landlord is a privilege, and it shouldn’t be available to everybody: with the power they have over their tenants should come a sense of responsibility

‘Owners misunderstand, ignore or forget legal requirement to issue proper notices to quit, or the need for prior warning of inspection visits.’ Photograph: Alamy

There are more private landlords than ever. Many are reasonable. Some are even excellent, but letting property is largely unrestricted.

Sadiq Khan, the mayor of London, has highlighted the failure of his predecessor Boris Johnson to sign up 100,000 landlords to his much vaunted London Rental Standard, which aims to help landlords with things such as having a gas safety check every year, and the laws around deposits and fire safety. After two years in operation, the scheme had attracted fewer than 2,000 landlords in addition to the 13,300 it inherited.

The files reveal that officials warned the mayor at the outset that his target was unattainable and that it would take “more than 50 years to accredit a sufficient number of landlords to meet the target”. Another note read: “We simply don’t have the resources to proactively enforce the London Rental Standard, which leaves us with an unacceptable reputational risk.” Johnson’s betrayal of renters in the capital after all the promises made is embarrassing for him, but a disaster for tenants. There is no doubt that the job needs doing.

Dilettante amateur property investors often know little about basic good practice, the law or simply what’s best for everyone when it comes to running their business in a civilised, humane fashion – and yes, it is a business, with the potential for profit and loss. They might be reluctant or “forced” rentiers (a term I prefer to landlord), with the family home in negative equity, compelled to rent it out if they want to move on. Outside London this is still a reality, and with the predicted house-price crash on Brexit, that practice may become more widespread.

This situation fuels the likelihood that tenants will be turfed out as soon as possible when the building increases in value. Remember that all tenants live under the threat of just two months’ notice when their initial assured shorthold tenancy rolls over. There is no security for renters.

There are recurring issues, such as owners who do not understand the concept of reasonable wear and tear expecting their properties to remain pristine and unmarked, even when the low-quality carpets and sofas they chose were threadbare to begin with. This in turn propagates the now traditional unlawful deposit retention/deduction battle, which can see mundane events – the simple act of using the sofa perhaps – cited as justification for the retention of hundreds of pounds, obliging tenants to fight for, and rarely succeed in getting, the return of hard-earned money paid up-front.

‘There are recurring issues, such as owners not understanding the concept of reasonable wear and tear, even when the low-quality carpets and sofas they chose were threadbare to begin with.’ Photograph: Popperfoto/Getty Images

There are the problems of legal management. Owners misunderstand, ignore or forget the legal requirement to issue proper notices to quit, or the need for prior warning of inspection visits, using the power of thought or suggestion instead. Some owners I have rented from imagine they can let themselves in whenever they see fit.

Let’s be reasonable. We know that property doesn’t manage itself, and can be costly to maintain. The obligation to repair causes tension once owners, even the best-intentioned ones, grow acquainted with the expense of emergency out-of-hours plumbing.

Some owners – through indolence or meanness – would rather let the place rot; a friend’s landlord knowingly allows water from the leaky tiles to be absorbed by cavity wall insulation. Ultimately, his roof will cave in, but he doesn’t seem to care – either about the tenant or the ultimate expense. Other owners issue “revenge” notices – where tenants are forced out for insisting on damage being made good. Tenants who stand up for their rights are frequently viewed as troublemakers.

Tenants are not angelic. Some give as good as they get in the owner-tenant relationship. But the balance of power between the two is clearly in the landlord’s favour. Isn’t it time for power with more responsibility?

A requirement for landlord training would allow neophyte property moguls to escape being bogged down in pointless, petty battles with tenants. They also would learn about both the availability (and wisdom) of landlord insurance and the pros and cons of letting agents, who charge up to 15% of income and often do very little to earn it.

Being a landlord is a profitable privilege, but it isn’t one that should be automatically available to everybody. It should be earned by those who prove themselves knowledgeable and capable, having passed both a “fitting person” test and a criminal records check. Don’t forget: landlords possess keys to their tenants’ homes, and need to understand obligations. Owners would also benefit from better safeguards and more clarity because both would improve their relationships with tenants, and contented tenants stay longer in their properties.

The rentier economy marches on and will continue to do so, because set against the decline in pensions and increasing job insecurity, property is regarded as a solid guarantee against poverty. The fact that people make money from renting isn’t a problem. Nor is the fact that these transactions occur in the private sector. What’s missing and badly needed is the idea of responsibility.

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