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Compulsory Redress Schemes For Lettings And Property Managing Agents New Government Measures Intend

To Regulate Private Rented Sector

The Government has announced that there are to be new regulations introduced in 2014 to provide private rented sector landlords, tenants and leaseholders with additional protection when working with lettings agents or property managing agents.

The Department for Communities and Local Government (CLG) want the introduction of compulsory redress schemes for lettings and property managing agents will ensure that they can be fully investigated where information is not made clear on additional charges, administration fees or any other property or tenant related issue. The proposed measures are intended to provide a cheaper, easier way for landlords, tenants and leaseholders to pursue compensation from lettings and property managing agents if they have a complaint.

The conditions that have to be met by lettings and property managing agents to be a part of a redress scheme have now been published by the Government.

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Help-To-Buy scheme Is The Deal Of The Century For The Government Government Say Help-To-Buy Scheme Is Creating

 75 New Homeowners A Day

The Prime Minister, David Cameron has been defending the controversial Help-To-Buy scheme, stating publicly that the scheme is creating up to 75 new homeowners a day.

Over 2,000 first-time buyers have made offers on properties using the scheme and the Prime Minister is rubbing his hands with glee because there is a dark secret behind the incentive.

More than £369 Million (GBP) has been lent to new home owners, making the loan figures average £155,000 (GBP) per person. Wages will likely rise with inflation and so will mortgage rates, doing little for the financial security of working homeowners who will be trying hard to pay off the percentage stake in their property that is owed to the Government.

Mr Cameron insisted that the state-backed loans are helping hard working responsible people purchase residential property to live in, and he also dismissed fears over a new housing bubble and taxpayers helping the wealthy middle-classes as nonsense.

What he did not say was what the prospects are likely to be, for people buying property now using the Help-To-Buy scheme, in a few years time.

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Help-To-Buy Scheme not bad news for property investors

Help-To-Buy Scheme not bad news for property investors

Why The Help-To-Buy Scheme
Is Not Bad News For Property Investors!

The Help-To-Buy scheme may not be open to property investors for rental property purchases, but the scheme does have some good points.

From 7th October 2013, first-time buyers and existing property owners are now eligible to buy property with a 5% deposit as part of the new Mortgage Guarantee Help-To-Buy scheme.

The scheme was originally launched for new build properties at the start of 2013, with the resale portion set to launch in January 2014, however lenders can begin writing loans through the Help-To-Buy scheme from October 7th 2013, but they will not be able to purchase the Government guarantee that underpins these mortgage loans until January 2014.

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30 Day Tenant Deposit Registration Deadline

New Rules Mean All UK Tenant Deposits Must be Registered Within 30 Days Of Reciept

New Deposit Protection rules are now in force and the deadline for landlords and letting agents for the registration of a tenant’s

deposit, for every single tenancy, must be completed within 30 days of 6th April 2012, therefore, the deadline will be the 5th May 2012

This Affects All PRS Landlords If They Have Never Previously Taken Action To Protect Tenant’s Deposits

Following the introduction of the Localism Bill on the 6th April 2012, the over-complicated Deposit Protection rules have changed.

These changes will impact heavily on all UK landlords, property management and letting agents, however, many landlords are still unaware that rule changes regarding mandatory tenant deposit protection have occurred.

The new rule changes could result in landlords being left with sitting tenants in their rental properties, that they are unable to gain possession from or they could face being liable to pay THREE times the amount of the original deposit back to the tenant, regardless of any damage to the landlords rental property!

Legal 4 Landlords are aware that the new rules regarding mandatory deposit protection could prove to be a big surprise for unaware landlords and have listed the main changes that came into effect on 6th April 2012 below:-

  1. 1. Deadline for Registration

Under the current rules landlords/agents must register a deposit within 14 days from the commencement date of the tenancy.

THE NEW LAW The Localism Bill has proposed that this time limit be amended to 30 days giving the landlord or property managing agents more time to fulfil the registration requirements.

However, it means that Landlords can’t claim an administrative oversight for any delay in registering the deposit for protection.

Prescribed Information

THE NEW LAW Landlords or their appointed property managing agents must complete and supply to the tenant(s) a Prescribed Information Form within 30 days of receipt of the deposit.

This may require tenant signature and asks for contact information and details of the Landlord and the amount of deposit paid.

  1. 2. Late Registration

If a Landlord or their managing agent does not register the deposit within the prescribed 30 day deadline, then the loophole supplied in Universal Estates v Tiensia will no longer be available. The Landlord/Agent will not therefore be able to register the deposit after the 30 day deadline.

THE NEW LAWThis change has serious implications for landlords and property managing agents:-

a) The tenant will be able to bring a claim against the Landlord and /or their managing agent for failure to register the deposit and under the new rules the court may fine a landlord/agent up to three times the amount of the deposit.

b) Without the deposit being registered a valid Section 21 notice for possession cannot be issued on a tenant and a landlord cannot therefore take back possession of their property.
This basically leaves a Landlord with a sitting tenant and with very limited circumstances in which they can get them out.

The rule changes therefore affect any new tenancy in the UK private rented sector and also any current tenancy where the deposit has not previously been registered (such as tenancies which started before the introduction of the 3 Government backed Tenancy Deposit Schemes) and will mean that the deposit will need to be registered for every single tenancy within 30 days of 6th April 2012

There are still some landlords who have forgotten to register the tenant’s deposit or thought they could register the deposit only if requested to do so by the tenant.

These landlords will be massively affected by the change in law and could end up severely financially penalised. Ignorance is no defence.

Failure To Act Will Cost Landlords Money And Cause Problems Getting Tenants Out!

#deposit protection

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