Weekly Property Market Update

Essential legal update for agents: Right to Rent checks

May 23, 2016

On May 12, the Immigration Bill became the Immigration Act 2016.

This is intended to build on the Immigration Act 2014 increasing pressure on those unlawfully in the country.

For the private rented sector it creates a series of criminal offences which sit on top of the already existing civil fines connected to failures to carry out Right to Rent checks.

New powers to evict persons who do not have a Right to Rent have also been created.

The new Act works by adding further sections into the existing Immigration Act 2014 which build on top of the current provisions. These are inserted as sections 33A to 33E in the 2014 Act.

The new landlord offences

The main new offence is one committed by landlords who knowingly let to illegal immigrants. The offence is committed where a landlord:

1. Has let to one or more persons who do not have a right to rent;

2. Knows or should have known that those persons did not have a Right to Rent; and

3. Where there was a time-limited Right to Rent the time limit has now expired.

So the offence is only committed in relation to time-limited occupiers if the landlord has not carried out checks or follow-up checks or made reports.

Where a landlord has justifiably maintained a statutory excuse there is no offence committed.

Where a landlord has been presented with forged documents then, provided that those forgeries were not obvious, then a landlord will be protected because condition 2 above will not have been made out as the landlord would have no reason to know that the occupiers had no Right to Rent.

There is a wrinkle in all this, however.

The changes now permit the Secretary of State to serve a landlord with one or more notices telling him or her that some or all of the occupiers in their property do not in fact have a Right to Rent.

Once such a notice has been served the condition set out in 3 above is removed and the landlord will also no longer be able to rely on condition 2 either as he will be fully aware that the people involved have no Right to Rent as a result of the notice.

As originally drafted this would have left landlords in the unattractive position of being immediately guilty of this offence as soon as a notice was served on them, even while they were trying to evict the tenants.

After a great deal of lobbying by the Residential Landlords Association, a defence has been inserted which states that a landlord is not committing the offence provided that he has taken reasonable steps to terminate the tenancy reasonably promptly on becoming aware of the problem.

The message is clear that once a notice is served a landlord must push forward to evict any illegal occupiers as quickly as he reasonably can.

There is a power for the Secretary of State to issue guidance on what might be seen as reasonable steps to terminate the tenancy but it is not yet clear if this will be done.

There is a second offence that landlords can fall foul of.

This is where they have satisfied themselves that there is a time-limited Right to Rent but have not carried out the necessary follow-up checks or made a report to the Home Office and they are reasonably aware or should have been aware that the person in the property does not have a Right to Rent.

Agent offences

There are new offences for letting agents too. They largely mirror the landlord offences but without the benefit of the defence open to landlords.

Therefore, where an agent is responsible for carrying out the Right to Rent checks and is or should have been aware that the occupiers do not have or have lost the Right to Rent, and has not notified the landlord or made a report to the Home Office of this then the agent will be guilty of an offence.

The penalties

The new penalties exist alongside the existing fine structure in the 2014 Act.

It seems that fines will be used for minor matters with the more serious penalties in the new legislation reserved for repeat offenders. The new penalties are an unlimited fine and/or imprisonment for up to five years.

Therefore there has been a massive jump in the level of penalty from the maximum £3,000 under the 2014 Act.

Credit: http://www.propertyindustryeye.com/

Portal wars

May 18th 2016

A new clash emerged between Zoopla and On the Market.

Zoopla has complained to the Advertising Standards Authority about OnTheMarket over an email sent to a prospective member last September.

The message said OTM was closing the gap on Zoopla.

However, the challenge was not upheld.

A spokesperson for the Advertising Standards Authority said: “OnTheMarket.com provided their written assurance that they would not make similar claims without substantiating them with adequate and up-to-date evidence, and in the case of comparative claims, they would ensure that they included means by which consumers could verify those comparisons.

“Furthermore, they informed us that they were no longer making such claims in their advertising.”

Credit: http://www.propertyindustryeye.com/

Online agents go from 2.5% of market share to over 5% in two years – Rightmove

May 20, 2016

The property and technology worlds collided in the heart of London for the Future Property Tech conference, held yesterday.

EYE’s new Proptech editor (me!) was on hand to report on the day’s proceedings and highlight any interesting technology.

The day was kicked off with a panel discussion about deals within Proptech and the head of steam the industry has been gaining.

Headlining the panel was Charlie Wade of VTS, a US Proptech company which recently launched in the UK thanks to raising a mammoth $55m.

Google were up next with a whirlwind tour of how they are baking technology into our phones.

The example which had the crowd gasping was viewing a restaurant menu through the phone’s camera lens, and seeing the app replace the English words with French.

This technology is related to virtual reality and is called augmented reality, where you can see the world around you and computers can add images into your vision that help.

For the property world, that could be seeing live property listings in your glasses as your walk past homes on your street.

When asked by the audience whether Google will try and build a property portal again, the speaker responded by referencing Google Compare which was designed to ‘disrupt’ comparison sites.

He said Google is “taking a backseat” as it didn’t work out so well and it therefore seems unlikely that Google will enter the property portal space again.

A question on whether Google will be inventing an AI to replace estate agents unfortunately went unanswered.

Other speakers through the day included Eyal Malinger of Countrywide, who said his firm is sometimes known as the “best kept secret in the industry” which elicited laughter.

He spoke about wanting to “work with disruption” and said that “real innovative disruption cannot be stopped”.

Using the investment partnership with Fixflo as an example – which takes the pain of reporting repairs away for both tenants and landlords – he said Countrywide are looking for anything that “improves the productivity of our people and makes our customers happier”.

Credit: http://www.propertyindustryeye.com/