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Will landlords be counting the cost of new laws?

The New Year has brought with it a raft of new lettings legislation – all of which could hit landlords in the pocket.

Lettings expert Ajay Jagota of deposit replacement insurance firm Dlighted is urging landlords to ask themselves if they could afford the cost of a court case brought by their tenant under proposed new laws, and to consider taking out insurance covering their legal costs.

The Government last week agreed to support a Private Members Bill from Labour MP Karen Buck allowing tenants to sue their landlords if they fail to ensure their homes are fit for human habitation.

Buck’s bill proposes amending the 1985 Landlord and Tenant Act to require residential rented accommodation to be provided and maintained in a state of fitness for human habitation

It will enable tenants to take their landlords to court if they fail in their duties and will apply to all tenancies under seven years old.

Communities Secretary Sajid Javid, recently given overall control of housing policy as part of the Cabinet reshuffle, has announced that the bill has the government’s backing.

He said:

“Public safety is paramount and I am determined to do everything possible to protect tenants.

“That is why government will support new legislation that requires all landlords to ensure properties are safe and give tenants the right to take legal action if landlords fail in their duties.”

Labour MP Phil Wilson also last week introduced a Private Members Bill requiring all private landlords in England be registered, in an attempt to make it easier for the authorities to track down the owners of properties in a dangerous condition or associated with anti-social behavior.

In his speech outlining the bill, Mr Wilson announced that the registration scheme would be “administered by local authorities and funded by private landlords”.

The Bill passed its first reading and will come before Parliament again this April. Ajay Jagota is founder of zero deposit renting firm Dlighted.

Dlighted uses deposit replacement insurance to eliminate the need for traditional tenancy deposits, allowing tenants to rent deposit free while offering landlords and letting agents over £600,000 of protection against legal costs, property damage and unpaid rent. He said:

“With government support Karen Buck’s bill could be law by this time next year, and with legislation like this in the offing all landlords and letting agents should be insuring themselves against this additional litigation risk 

“It’s another example of the false sense of security offered by tenancy deposits. A single month’s rent is supposed to protect landlords from unpaid rent, property damage and legal costs. But it never can – so given that they make it harder to find and keep good tenants, why bother with them at all?

“I am personally not convinced that either of these bill is the answer. Councils already have wide-ranging powers under the 2004 Housing Act to take action against privately rented properties in an unacceptable condition.

“But research from Dlighted has revealed that just one rogue landlord has been convicted in the last three years as a result of a case brought by a Tyne and Wear local authority, despite tenants making close to 6500 complaints.

“The powers are there, councils they just aren’t using them – why would additional powers make them start?”

Over 85% of tenants surveyed named “deposit free renting” as their reason for choosing a particular letting agency. Dlighted’s deposit replacement insurance can cut the cost of moving house by 88%

Dlighted’s Trusted Tenant System also offers landlords and letting agents a much greater insight into a prospective tenant’s credit history than standard tenant vetting – which does not include their rental record or insurance claim history.

This was posted in Bdaily's Members' News section by John Hart .