| Landlords are finding it tough and the last few | | | | The problem is, there are no regulations for letting |
| months have seen 50 per cent more struggling | | | | agents. Members of ARLA do have to follow their |
| with mortgages. Many people cannot buy at | | | | codes of conduct but this does not include |
| present and renting is popular again but anyone | | | | ensuring that a landlord has informed his lender |
| renting must be sure that their landlord is not | | | | that he is renting the property and produce proof |
| having problems. | | | | that they have, it simply says that they must |
| One couple, Chris and Siobhan Taylor, agreed to | | | | inform them. Therein, is a loop hole that prevents |
| rent and paid 48,000 pounds, up- front, for a | | | | the letting agent from being deemed negligent. |
| five-bedroom house in Loughton, Essex. By doing | | | | Sue Anderson, from the Council of Mortgage |
| this they got a 6,000 pound discount but a few | | | | Lenders, advises, 'A bank or building society will |
| months down the line they learn that their landlord | | | | eventually send a letter to "the occupier" of a |
| is behind on his mortgage repayments by tens of | | | | property. We advise tenants to open any letter |
| thousands of pounds. | | | | addressed this way. The letter will give them a |
| Siobhan said, 'We are feeling very vulnerable. We | | | | minimum of 14 days' notice of any court hearing |
| had no idea when we rented the property that | | | | to repossess the house. |
| this could happen. We just assumed that | | | | 'If the court does repossess, they will have a |
| everything was OK. We face losing all our money | | | | further minimum 28 days before the lender takes |
| and our deposit, or having to go to court, should | | | | possession. As soon as a tenant realises there is a |
| the lender want to repossess during our one-year | | | | problem, they should get advice from Citizens' |
| tenancy.' | | | | Advice or a solicitor, and make contact with their |
| Unfortunately, the Taylors' have found the huge | | | | landlord's lender.' |
| hole in the legislation protecting tenants. When you | | | | If a property is to be let, the lender, once they |
| pay rent above 25,000 pounds you have to sign | | | | know, will usually switch the existing loan to a |
| a standard tenancy contract, not an assured | | | | 'buy-to-let' mortgage. |
| shorthold tenancy contract; this would have | | | | 'If you have paid all the rent up front, then if the |
| protected them more in this case. | | | | house is repossessed you need to put in a claim |
| The deposit they paid of 7,850 pounds will have | | | | against the landlord for the outstanding rent and |
| been given to the landlord directly and not to a | | | | deposit. This would be paid out of any surplus |
| third party as is recommended under the | | | | once the property is sold.' says Mario Economides, |
| Tenancy Deposit Protection Scheme, so is gone | | | | at solicitors Lorrells Georgiou Nicholas LLP. |
| and the same applies to anyone sharing a house | | | | 'Tenants falling outside the assured shorthold |
| or a flat and paying over 2,083 pounds monthly, if | | | | tenancy rules should insist that the landlord has his |
| the lease is in joint names. | | | | lender's consent and that any deposit is paid into |
| Head of operations at the Association of | | | | an escrow account held by a solicitor or the |
| Residential Lettings Agents (ARLA), Ian Potter, | | | | letting agent. |
| says, 'The whole subject of the private rented | | | | 'I would not advise clients to pay rent up front as |
| sector is under review in a Housing Green Paper. | | | | a year is a long time and you don't know what will |
| It is acknowledged that the current system is not | | | | happen. |
| satisfactory.' | | | | |