Free housing for rogue tenants – it’s okay landlords will pay!

Landlords continue to be attacked by all sides in Parliament as various laws go through their stages in Parliament. This week Teresa Pearce, Labour, tried to get it made even more difficult for landlords to regain possession of our properties in cases of ‘abandonment.’ This is an excerpt from the comments made, followed by a reply from Dr Rosalind Beck, landlord at Property118:

Extract from the comments by Teresa Pearce, Shadow Minister (Communities and Local Government) (Housing)

‘These are probing amendments. Let me put it on record that I think the amendments we just agreed are actually quite good. [Hon. Members: “Hear, hear.”] I still believe, however, that this whole part of the Bill is open to abuse. I hope that it will be reviewed at some point and that if such abuse occurs, regulations will be brought in. Clearly, I am not as optimistic as the Minister about the behaviour of some landlords, particularly the ones in my constituency who I have seen threaten and abuse tenants, and access properties at any time of the day or night. That sort of person will not look at the safeguards in this part of the Bill, but will see it as an opportunity to act in an even more irresponsible way than they already do.

Amendment 108 would extend the minimum period that would need to pass before a landlord is able to recover abandoned premises. Amendment 109 would extend the time period between the two letters—I believe it may now be three—that are needed to evict a tenant suspected of abandoning a premises. I am truly concerned about abuse of the provisions in this part of the Bill. Landlords could use the proposals to evict tenants simply by writing them letters. They could also use the measures to evict someone as an act of revenge. If a tenant moves into a property that is not fit to live in and asks for repairs, the landlord might think, “This tenant isn’t going to be easy, so I’ll use this process to try to get rid of them.”

We appreciate the need for landlords to be able to recover truly abandoned premises and the fact that tenancy agreements are a two-way street. I appreciate the Minister’s argument that if someone does not pay their rent, they have clearly already broken their tenancy agreement. I have seen instances of that: for example, someone in my area who had a property of her own got married and moved in with her husband. Rather than sell her property, she decided to let it out. For an entire year, the tenant paid no rent at all, but she still had to pay the mortgage on that property. I therefore completely understand that there are situations of that sort that need addressing. The measures in the Bill may make the situation easier for landlords in that sort of position, but my fear is they may also make it easier for rogue landlords.

I am pleased that the Minister has added a provision to the Bill that requires a third wave of letters for the process, but it is still important to safeguard against abuse. Extending the minimum amount of time that has to pass before a landlord is able to recover an abandoned premises will mean that those with legitimate reasons for absence will be able to respond. That will help to safeguard against potential abuse.

One concern about the proposals that has been raised with me is the possible pressure they will put on local housing authorities, which may have a duty to house tenants following eviction, even if only in emergency accommodation. Under the current system, when faced with someone who is about to be evicted, those local housing authorities have time to plan their resources, so that they know that if a resident is going to be evicted they will be able to house them adequately in emergency housing. Under the proposals in the Bill, residents could be evicted with haste, putting further pressure on already pressed local housing authorities. The amendments would insert a bit more time into the process for recovering abandoned premises, which would, I hope, ease the pressure on local housing authorities.

Amendment 109 would extend the time period between the letters. Currently it is two weeks and no more than four weeks; we propose extending it to four weeks and no more than eight. That would be advantageous for a number of reasons. It would safeguard against error. A landlord could use the measures to kick out a legitimate tenant who is away on business, in hospital or on holiday; extending the time period between the letters would mean that there was less chance of that happening. It would also safeguard against abuse. It would allow tenants more time to lodge a query with the landlord or seek housing advice. As there is no court involvement in the process, it would give the tenant more time to assess their options.

It is clear that the proposals in the Bill will have the power to affect all tenants in the private rental sector. All landlords will have these powers, open to abuse as they are, even though abandonment accounts for an estimated 1,750 occasions of tenancies ending a year. We hope that the rules will be got right, so that there are safeguards against abuse, and so that we allow landlords to recover abandoned premises where they need to, but do not allow them to evict tenants at their ease. That is the reason behind these probing amendments. I hope that the Minister will be able to give me some reassurance that those who could be abused will be protected by the law.
(Hansard source: Citation: Housing and Planning Bill Deb, 26 November 2015, c326)

My response:

‘Dear Teresa.

As a portfolio landlord I read with dismay your comments this week regarding ‘abandonment,’ or what we know in the business as ‘doing a runner.’ I have had the misfortune to have had many such cases, and the usual pattern is that suddenly the tenant stops paying and does not answer any calls or texts, so we do not know what is going on. In the meantime we obviously have to continue paying the mortgage and we start to worry that we may have a ‘rogue tenant.’

We usually leave it a few weeks, writing then to ask what is happening and again getting no response. Finally, we give notice that we intend to visit the tenant and when we go there we see that they have indeed disappeared. They always take all of their valuables and often leave large old items like sofas and beds and usually lots of rubbish and full cupboards as well as a filthy and sometimes, damaged house. That is the usual pattern of the ‘runners.’

It seems that you are in favour of us then leaving such a house empty for 12 weeks, when we will invariably already be down in terms of rent and also face having to pay to have all the rubbish and furniture removed (this costs hundreds of pounds, in case you don’t know) and to fix anything they have broken – rogue tenants who don’t adhere to their tenancy agreements in terms of paying rent and giving notice don’t tend to look after other people’s property either.

You believe that only after waiting 12 weeks should we be allowed to re-enter our property to clear away all the mess, renovate the house once more and then be able to advertise it and wait for a suitable tenant. Naturally, that completely negates the purpose of tenants giving us a month’s notice so that we can find replacements without experiencing voids. Through no fault of our own, in such cases we face approximately 6 months with no rent coming in; a massive hit which it will take years to recoup as we often have a modest margin between rents and mortgage payments. That is how I experience this.

You seem to think that there is a very different thing going on, however; that in fact abandonment cases are about decent tenants going on holiday, having always paid their rent on time and having looked after the house and then these awful landlords come in, change the locks and re-let the houses while the tenants are on holiday. Why on earth would a landlord do this, risking breaking the law and losing decent tenants? You are very ill-informed, I’m afraid. As a landlord with 20 years experience I hope you can acknowledge I may know more about this than you? You may also acknowledge that if you have heard the odd story about a bad landlord, you should not base national policy on this.

The natural conclusion of the law you are supporting and which you wish to be amended to make it more extreme, is that landlords lose out even more. You say this is helpful to Local Authorities as they have more time – I don’t follow that logic. This is usually argued more in relation to tenants who are being evicted for non-payment of rent and who are in fact refusing to leave, the kind of rogue tenants whom your colleague, Siobhain McDonagh then advises to stay put as long as possible until the bailiffs are commissioned so that the private landlords can continue to be forced to provide them with free housing, thus saving the LAs money. As you say, this is ‘helpful’ to LAs (while being devastating financially to decent, honest landlords who have done nothing wrong).

As you seem intent on promoting even more extreme anti-landlord measures than the Government (and they have effectively declared war on us) why not suggest that we leave the houses empty with no rent coming in for 6 months before we can regain possession? Why the rather arbitrary 12 weeks?

In fact, it is completely over the top to wait 12 weeks to establish if someone has left or not. You can usually see it in an instant. You don’t have to be Columbo. One can, for example, ask neighbours to confirm if they have seen the person’s other possessions being taken away, the tenant may have even told them that they have moved out, the tenant may then not have been seen for weeks. Why can’t this be construed as sufficient evidence? Why is everything to be balanced in the rogue tenants’ favour, ‘just in case’ (with complete disregard to the interests of the landlord who more often than not took out a mortgage to buy the house, renovated it, maintained it, poured their own money and time and effort into it and has considerable ongoing costs attached to it? Why does none of this matter)?

I would add, that if the tenant is still paying the rent, it is a very different matter and would clearly indicate that the tenant has not given up the tenancy; but when they have stopped paying and are nowhere to be seen and cannot be contacted, this is a very different thing. It is the ongoing financial loss from the rent arrears when one has to keep the house available to a non-paying, absent tenant who has clearly and definitively ‘done a runner’ that is so crushing to a landlord’s business.

No doubt you also support Clause 24 of the Finance Bill, whereby we are to pay tax on mortgage interest as though it were ‘profit’ instead of the main cost of the business which has already left our bank account and gone to the mortgage lender. It maybe hasn’t occurred to you that it is rather a feat to have to pay mortgage interest and (bizarrely) tax on mortgage interest, when no rent is coming in for months on end (but I suspect you don’t care).

Maybe, like your colleague, Siobhain McDonagh, you would like the Government to go further on this too and make landlords pay even higher levels of tax? Maybe you think that this makes you a compassionate person. I think the idea is that if you attack landlords en masse (by saying you are targeting ‘rogue’ ones, but introducing blanket measures which attack all of the vast majority of decent landlords) that you are somehow helping tenants? This couldn’t be further from the truth.

If you indeed are compassionate, instead of suggesting landlords bear even more of the brunt and costs of dealing with rogue tenants who disappear owing money (landlords lose billions every year at the hands of rogue tenants), but whom you want us to keep our houses empty for, in case they return, perhaps you would like to donate a large amount of your income to keep some properties empty for these people? Or maybe you would like to make rooms available in your property for free in case they are needed? AS YOU EXPECT US TO DO.

It is always very easy to be generous with other people’s money (in case you don’t understand how it works, when no rent comes in to cover the mortgage, the landlord has to delve into any savings they have to subsidise this housing or may have to take out a loan to cover the loss from what we consider to be a criminal act of theft against us. We are not Housing Association or council staff, who suffer no personal financial loss when they have rogue tenants).

What is currently occurring is the biggest attack on the private rental sector in UK history. It is going to be catastrophically destructive. I have been trying to get your party to see this for what it is instead of behaving like some adjunct to the Conservative party.

Rather than repeat what I have written to your colleagues on this matter, I will paste the links here for you to read. This link contains correspondence with Rob Marris:

http://www.property118.com/why-does-labour-want-to-force-out-tenants-on-benefits-to-make-room-for-tory-owner-occupiers/82058/

This is my letter to Siobhain McDonagh, which she has still not answered:

http://www.property118.com/rob-marris-mp-and-sir-roger-gale-same-party/82156/

You may also be interested in my letter to Campbell Robb here:

http://www.property118.com/campbell-robb-ceo-shelter-open-letter/81625/

Suffice to say that the Labour Party is behaving in a shameful way, completely disregarding the fact that by attacking landlords you are also attacking the tenants of this country, particularly the low-paid and those on benefits who will be ‘phased out’ of their housing as Clause 24 is phased in.

You should be campaigning against these astonishing policies which will have terrible consequences for tenants as rents rise and they are evicted by landlords unable to pay tax on ‘fictitious income,’ instead of wasting your time supporting rogue tenants (not even doing that really – as leaving houses empty for longer periods benefits no-one as these houses could be providing essential housing to others far sooner).

I hope you will take some of this on board and refrain in the future from supporting the current misguided and disgraceful attempt to devastate the private rental sector. Or do you want this wanton destruction of a vibrant and well-run housing tenure, providing accommodation for millions of people to be part of your legacy?

Yours sincerely.

Dr Rosalind Beck

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