Budget 2015 – Government intend to make it easier to sublet!

This is a lot of debate about the possible details of a general idea that may not be going anywhere.

Currently we have a statement that is effectively "I think we should be doing something about the accommodation shortage; removing blanket ban on tenants sub-letting seems like one way forward". The next step will be to get a team to look in more detail put forward specific proposals on how to achieve this (or decide that it is unworkable).

The parliamentary process then gives a lot of consideration to proposals (except when they are introduced as late amendments as in the Deregulation Bill), so many of the perceived problems and implications of existing legislation will be considered and reasonable approaches taken (e.g. the Deregulation Bill on revenge evictions requires that the LA has issued a notice, wheras the Teather Bill proposed just a complaint from the tenant)

I suggest that we wait intil a Bill is produced and then we can argue about specific proposals and talk to our MPs about the problems they might create. In the mean time we should put our efforts into making money.

Reply to the comment left by "Joe Bloggs" at "23/03/2015 - 11:04":

https://www.gov.uk/rent-room-in-your-home already makes interesting reading for those with an interest in fag-packet legislation. It describes the process and the tax implications of the rent-a room scheme but does not consider the implications of offering a rental agreement to a lodger if you are a tenant except to say that you need to check that your lease may forbid it. The lodger's rights are determined by the agreement which may range from a week's verbal notice of eviction for a verbal weekly-paid agreement to whatever the tenant and the lodger agree in writing. It makes no comment on the validity of a room-rental agreement that infringes the terms of the owner's lease, mortgage terms or insurance cover.

I have used the "The rent a room scheme" for my own private residence and as far as I can make out the lodger effectively becomes part of the house hold during the period that they are lodging, I have also investigated the legal process of getting rid of them early and what to do about a deposit and this type of agreement does fall outside the realms of most "tenant" situations, there is not a lot of legal guidance for this.

I agree that there needs to be a lot more information and description on this as there is no legal term as lodger as far as I am aware.

Reply to the comment left by "Steve Masters" at "20/03/2015 - 07:52":

"Surely a better policy to solve the housing problem is to help BUILD MORE HOUSES".

Or have fewer people. 😉

Supply and demand are both factors.

So the whole country is supposedly concerned that existing tenancies can be terminated with just 2 months notice for no reason, and the great imbalance and up-heavel that this creates for the tenant.

And they're proposing to increase the number of Sub Tenants who presumably (I hope) will have even less notice period.

Would these sub tenants not also experience the same imbalance and suffer the same up-heavel when their sub landlord (not sure of correct term) ask them to leave? What are Shelter going to say about that?

Reply to the comment left by "Jay Jay" at "19/03/2015 - 13:34":

I whole-heartedly agree with this comment. I have been a private BTL landlord for many years. My latest nightmare reflects this exactly - I let to three apparently professional gentlemen, with good references. They were perfect tenants until I gave them their notice as they wanted to leave at the end of their tenancy. They then invited in many of their friends in the last two months and wrecked the place. And can one get redress from the courts? CCJ's maybe but I have never had any luck in enforcing the CCJ's - will the council's assist us - I am sure they will not.

So not only will this act create havoc in the private rented sector, it will also go against the terms of my mortgages which state cannot let to more than one household.

This is nonsense.

I wrote to my (Conservative) MP, Sam Gyimah, about 3 weeks ago expressing my concerns about the impracticality of the subletting proposal in the budget for the kinds of reasons discussed so far. This was his reply received today:-
"Dear Mr Lucke,

Thank you for contacting me about the announcement made in the Budget about sub-letting.

I appreciate your concerns on this matter. The private rented sector plays a vital role in the housing market, providing a flexible option for millions of people and I fully recognise the investment and hard work that many landlords put into their properties and the service they provide for their tenants.

As you are aware, the package of measures set out in the Budget are designed to strengthen tenants' ability to requests permission from their landlord to sub-let or share space and make it clear that landlords' must respond to these request reasonably. Rest assured, however, landlords will retain the right to deny permission should there be reasonable grounds for doing so - this is part and parcel of being a responsible landlord. There is no question of there being an automatic right for tenants to sub-let.

Tenants should be able to ask for permission to sub-let their home without expecting a blanket refusal in every case, but landlords should also have the right to know who is living in their property. These proposals would mean a tenant could ask for this permission under the model tenancy agreement, with landlords having the right of refusal offering reasons for that decision and within a reasonable timeframe.

It will be important that landlords have an opportunity to formally give their views on how the measures will be implemented. The Government will consult fully on all measures in this package that require legislative changes. This means that all interested parties will have the opportunity to express their views and have these taken into account before changes are brought in".

Reassuring, but of course,the political complexion of the next government will have more to do with what actually happens in due course. Perhaps in the end the common sense of the civil service will protect us from the worst excesses contemplated so far!

That's a reasonable response Paul. If that is all it is, then it really is situation unchanged as any tenant can ask to sub let right now I would have thought. They are only asking after all.

The importance of the sector to the housing market is our best protection.

Reply to the comment left by "Paul Lucke" at "08/04/2015 - 23:37":

HI PAUL,

WHAT YOUR MP HAS SAID WAS OBVIOUS ALL ALONG! NO GREAT EUREKA MOMENT HERE. ON PAGE ONE I SAID:

'i think/hope you are misreading the proposal:
‘..prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting’

the words ‘rule out’ need to be emphasised. i therefore think its a ban on total prohibition, but landlords will still be able to veto sub tenants if they are unsuitable.'

SIMPLES

Reply to the comment left by "Paul Lucke" at "08/04/2015 - 23:37":

"These proposals would mean a tenant could ask for this permission under the model tenancy agreement, with landlords having the right of refusal offering reasons for that decision and within a reasonable timeframe."
This sounds innocuous but is not. All will depend on how the legislation is drafted but if the Landlord and Tenant Act 1988 applies the landlord will be under a legal duty to act reasonably, to give reasons for a refusal and to give his decision within a reasonable time. If he fails to do so the tenant can claim as for a breach of statutory duty. In a worst case the tenant can claim damages equal to the rent, council tax and other bills on the grounds that if the subletting had gone through the tenant would not have had to pay those sums. He may even be able to claim for loss of a profit on the subletting rent.

The process will be rendered worthless if mortgagees are allowed to insist that no subletting at all takes place. So either Parliament will have to prevent lenders from including such a restriction or landlords will be faced with being sued by the tenant on the one hand and being in breach of their loan agreements on the other. (I would not put it past our politicians thoughtlessly to dump landlords in that horrible situation!)

As mentioned earlier, I fail to see what problem this is designed to solve: http://www.property118.com/budget-2015-government-intend-make-easier-sub-let/73202/comment-page-5/#comments