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Quick update of the ARLA conference 1st March 2011

I always love March, it is really when the year starts for me because the nights are starting to get a little lighter, the market is really starting to hot up and a sense of optimism is in the air.  On top of that, the first of March is the ARLA (Association of Residential Letting Agents) Conference at Hammersmith’s Novotel, with a list of fabulous industry speakers, a trade show with some really informative stands, and the chance to meet up with lots of old friends and industry colleagues, hear all of the latest gossip and panic myself with all of the legislation updates about to happen!!

So I thought I would try to list some of the main information in this blog, of course I can’t write a whole day’s worth of information in one article, so these are highlights and what I feel are the important issues and I invite you to respond with any questions you have or anything you would like more information on.

Firstly I would like to say that the association is in it’s 30th year, the actual birthday is 11th June so we really look forward to celebrating with them.

There are now 5919 members of ARLA and 878 members passed their Technical Award in Residential Lettings & Property Management during 2010.  At Sewell & Gardner we have 8 individual members of ARLA, 2 are Fellows and we are exceptionally proud of this membership and what it means to our customers.  Last year our own Julia Pennell passed her Technical Award to join the ranks of myself Jane Gardner, Alex Sewell, Rochelle Latham, Ben Smith & Susie Griffiths.  This year we have 2 more team members studying for their exams – Reagan Bradley & Donna Waldron.

Susan Hughes-Thomas, ARLA president and local agent from The Home Management in Bushey, mentioned that it is our member firm’s duty to inform customers of what ARLA means to them and these are the key points:

  • Qualified staff available to ensure that correct advice is given at all times
  • Separate client bank accounts which are ring-fenced and have Client Money Protection insurance
  • Professional indemnity insurance is in place
  • Fully bonded, for the customer’s peace of mind in an uncertain climate
  • Members of the Tenancy Deposit Scheme or alternative deposit protection solution
Sue stated that without qualifications, training or scruples, unregulated letting agents are fooling an unsuspecting public and they are making fools of the law, which does little so stop them.   Sue stated “Today’s cowboy agents blend seamlessly into the high street, camouflaged by smart offices, slick patter and even by websites bearing logos (some even use the ARLA logo without being members – check the ARLA website to be certain www.arla.co.uk) they are in our territory and after our reputation”.  Sue shared some recent research she had independently undertaken and worryingly the research illustrated that there is still a lack of awareness about ARLA and the security it can provide to tenants and landlords alike.

Next up was Peter Bolton-King, chief executive of NFoPP who, amongst many topics, mentioned the shortage across the UK of rental stock.  The Private Rental Sector accounted for 9% of households in 1997 and is now 16% with a further projected rise to 21% over the next 8 years.  We have an increase of 250,000 households each year and barely more than 120,000 new homes being built, so there is a massive need for more rental properties.  Of course there are financial issues for potential landlords in securing buy to let mortgages, but gradually the mortgage lenders are coming back into the market and offering some great deals.

Check out our mortgage advisors 01442 232272.

Another factor that might cause an issue for Rental Stock over the coming years is that possible future legislation could mean that 750,000 properties in the rental sector, which are currently in the bottom 2 Energy Performance bands (F & G), could be removed from the market unless they are brought up to a higher standard under the government incentive to meet reductions in energy efficiency.  If you have a rented property in the Three Rivers District or Watford Council area with an Energy Efficiency Rating of F or G, please start to consider improvements to your property before it is too late.  For more information on local grants available call 0800 980 6026 (freephone) or visit www.heepgrant.org.

During the lunch break we were able to wander around the trade show and catch up with some of the fabulous industry suppliers we already deal with and hear all about the new products and services they will be offering us in the coming months.  Our favourite has to be the Homelet stand, which had a brilliant magician Etienne performing tricks for our entertainment, including a champagne bottle which disappeared through a wooden table in front of an audience with 100 eager eyes watching (terrible waste of champagne of course) plus a whole pick n mix sweetie display to give us a much needed afternoon sugar rush!

In the afternoon session we heard from Steve Harriott, Chief Executive of the TDS (Tenancy Deposit Scheme) who mirrored the concerns of Susan Hughes-Thomas, that the public need to be educated about how ARLA’s deposit protection requirements mean that member firms will have fully protected client money and will be members of a deposit protection scheme.    “Market forces cannot be relied on to set standards.  Only well informed customers can know what they should buy into and so be able to demand high standards of service and protection and understand the dangers posed by cowboy letting agents” said Mr Harriott.  He stated, with billions of pounds in rents and deposits at stake, it is surprising that tenants still do not know enough to ask if their money is safe.

“Fully informed tenants would want to know about the property and the rent, the quality of the letting agent and how their rent and deposit would be protected.  They would want to see league tables setting out fee levels, service standards and complaint and dispute handling performance.  Uninformed customers lead to market failure.  This allows unqualified rogue agents to continue in business, reduce rates to the bone to win business and drive quality firms to the wall.  Then, when the going gets tough they steal their clients’ money and do further damage to the reputation of regulated agents.”

“Agents are in a position of trust, just like MPs, but rogue letting agents appear to be treated more leniently.  The courts are locking up MPs who steal £13,000 but ignoring agents who steal hundreds of thousands of pounds.”


Last speaker of the day was Marveen Smith, principal of Pain Smith Solicitors and it was fabulous to know that we have Marveen and her team at the end of the telephone line for all of those quirky issues we come up against and need guidance on.  A couple of reminders on best practice:

1. Section 21 Notices must not be served at the outset of the tenancy or before the security deposit has been protected.  The intention of a Section 21 is to notify the tenant that you wish to regain possession of the property and if you give it to the tenant at the beginning of the tenancy, then what happens if you wish to offer a renewal or periodic tenancy?  Even if you are certain that you will want the property back at the end of the fixed term, a lot can change in 6 or 12 months and it often does!  Serve the notice when you are 100% certain that you want possession back, not beforehand.

2. The security deposit cannot be used as rent during the tenancy, and can only be used from the deposit at the end of the tenancy with the written confirmation of both parties to the tenancy agreement.  If you hold any tenant money other than the rent paid in accordance with the tenancy agreement (so if the tenant pays 2 months rent in advance, then the tenancy agreement must state that) then this money is classed as a security deposit and must be protected in accordance with Housing Act legislation.  In short, you cannot take ‘rent in advance’ as a way of trying to get around deposit protection legislation!

3. If your tenant receives a Section 21 or Section 8 notice and does not leave… this is not license to change the locks and put their stuff outside!  You CANNOT gain possession of your property unless the tenant leaves amicably or you have a possession order from the County Court.  Even then, if the tenant does not leave on the date set on the possession order, you have to apply to the court bailiff to attend the property to gain possession in the legal way.  If not, you could end up with a hefty fine or imprisonment so be warned.

TTFN, Letting Angel