Member Article

A court ruling you couldn?t make up

A Court of Appeal ruling fining a landlord for not providing a tenant they were trying to evict with a leaflet has been described by a leading North East Estate Agent as sounding “like something out of an urban myth” - but has “huge implications” for landlords.

The recent case of Ayannuga v Swindells saw the Court of Appeal impose the maximum possible penalty on a landlord who failed to provide a tenant with the right information about their deposit.

The 2004 Housing Actrequires landlords to protect the deposit of a new tenant and to provide them with information about the scheme.

In this case the deposit had been properly protected and almost all of the necessary informationsupplied – with the exception of the tenant being given information contained in a single leaflet.

As a result, not only was the landlord unable to evict the tenant when they allegedly failed to pay their rent – they even ended up having to pay them compensation.

Ajay Jagota of KIS Lettings, who manage properties for some 700 landlords across the North East from branches in Sunderland, North Tyneside and South Tyneside thinks the case has “huge implications” for local landlords.

Ajay said:

“The landlord who couldn’t evict a tenant who allegedly wasn’t paying their rent because they hadn’t given them a leaflet sounds like something out of an urban myth. You genuinely couldn’t make it up.

“As staggeringly and silly as the case sounds, it nonetheless has huge implications for landlords - they really have to raise their game. A tiny and apparently insignificant oversight ended up costing this landlord thousands of pounds in fines, legal fees and lost rent.

“The days where amateur buy-to-let landlords could just get a template tenancy agreement off the internet and go are over. The residential lettings industry is complicated and fast-changing and if you don’t know it inside out you could seriously get your fingers burnt. It’s times like this where a good lettings agent is worth their weight in gold.

“At KIS Lettings we don’t bother with deposits. It’s a small amount of money in the greater scheme of things – especially compared to the cost of a barrister – and it makes it easier to find tenants who might not have a few hundred pounds to hand.

“A good landlord-tenant relationship is one based on trust. By asking for a deposit you’re effectively telling someone ‘I don’t trust you not to do a runner or smash the place up’ which isn’t a great start. We find our innovative insurance pact and rent guarantor schemes are a lot more effective at building productive, long-term landlord-tenant partnerships.”

This was posted in Bdaily's Members' News section by Ajay Jagota .