Section 8 notice prescribed form
The Govt has made The Assured Tenancies and Agricultural Occupancies (Forms) (England) (Amendment No. 2) Regulations 2016. The Schedule contains a new ‘form 3’ – the prescribed form of Section 8 Notice Seeking Possession. This must be used for s.8 notices served on or after 1 December 2016.
The change is to incorporate reference to the new ground 7B introduced by Immigration Act 2016, also taking effect from 1 December 2016.
In the Autumn Statement, the Chancellor, Philip Hammond announced that:
We believe that a market economy is the best way of delivering sustained prosperity for the British people. We will always support a market led approach; but we will not be afraid to intervene where there is evidence of market failure.(…). In the private rental market, letting agents are currently able to charge unregulated fees to tenants. We have seen these fees spiral, often to hundreds of pounds. This is wrong. Landlords appoint letting agents and landlords should meet their fees. So I can announce today that we will ban fees to tenants as soon as possible.
This was a surprise (at least until the evening before) as both the Housing Minister and the Prime Minister have previously opposed an outright ban on Agents charging tenants in England (Scotland having already banned it).
As ever, the devil will be in the detail (and the timing).
But one hopes that the message to letting agent (and indeed landlord organisations) is that a PR approach based wholly on ‘if you do that we will pass the costs on to tenants directly and so rents will go up’ has failed and is unlikely to have much traction in the future. After all, the rents keep going up anyway. (2.5% in the last year in England according to the ONS). Do, please, come up with a better PR line for future (and indeed ongoing) issues.
But Agents have really, really not helped themselves. Every survey indicates that at least half, if not the majority, have failed to comply with the requirements to make public their fees to both tenants and landlords on their website and in their office, despite these legal requirements now being almost two years old. Fees for a ‘replacement tenancy agreement’ – usually a simple re-date of the previous agreement – are charged at a rate that would even make any solicitor’s eyes water.
And, of course, there is the problem of the concept of agency. Even ARLA never grasped this. As one agent put it to me on twitter
“In practice an agent a person who acts on behalf of the landlord. The customer is still the tenant”.
Well… No. If you are the landlord’s agent, you are the landlord’s proxy. You are entitled to charge the landlord for that service, but technically, legally, you should then account to the landlord for any profit that you, as agent, make from charging the landlord’s tenant.
You as agent don’t have both parties, landlord and tenant, as clients. (This is a simple observation that any lawyer understands, but it is one that has escaped the entire letting agent industry and their trade bodies like ARLA). If you as agent are drawing up a new tenancy agreement, this is on behalf of the landlord. You don’t also (or solely) get to charge the tenant for doing so – or not, at least, without having to take the client’s instructions on the agreement and being answerable to them for any defects, (which of course is not really part of the deal), or without accounting to the landlord for the profit you have made from the tenant on the fee for the agreement.
Oh, and the agents’ wails of ‘having to pass costs on to landlords, who will pass them on to tenants in rent increases’? Well, letting agents may be the only bit of the housing world where there is actually a semi-functioning competitive market. So have fun trying that for long, because your competitors won’t.