A Shaggy Dog Story
In 1959, American academic William Foster-Harris postulated that there are three plots for a novel or movie. ‘Happy Ending’, ‘Unhappy Ending’ and ‘Tragedy’. In 1977 Meatloaf reached number 32 in the UK charts with ‘Two out of three ain’t bad’. Which, in the private rental sector is what Governments have achieved so far. I look forward to three out of three, but I am not optimistic.
The latest piece of well-meaning legislation is the Tenant Fees Act 2019. When this was announced, it was greeted with howls of joy and social media frenzy. “Agents will no longer be allowed to charge us fees” was the cry.
Landlords have costs to bear. Managing agents have staffs, leases, vehicles and business expenses to bear. Managing agents’ choices are limited. Reduce service levels or ask the landlord for a higher fee which will invariably put up the rent. No prizes for guessing which option will be favourite with landlords. So, the tenant pays, one way or the other.
Then enter stage left, a hero who will save the day. The tenant might hope for Uma Thurman out of Kill Bill, or Mary Poppins. Nanny McPhee would do. But no. Step forward Insurance Companies. With a lovely plan to sidestep regulation in place to protect tenants. It is called the Zero Deposit Scheme.
The tenant pays the insurance company a fee to cover the deposit. So that is a ‘zero deposit’ agreement. The tenant signs the agreement. All is well until the tenant gets offered a new job somewhere else and asks to be out of their agreement. In the past, this would be fine. The tenant would pay a sensible fee of, say, £100 for landlord costs to assign their agreement and stroll on to the sunlit wonder of their new job. This fee will be made unlawful by the new Act. So, the landlord says ‘no’ and the tenant is stuck with paying rent until the end of their rental agreement.
This is not just an issue for tenants. If a zero-deposit plan is in place and the tenant vanishes in the night, how much time and effort will the insurance company devote to tracking the tenant down? Might it not be easier for the company to email “Can’t find tenant. Not paying you. Rgrds”?
Then there is the issue of pets. Our furry companions. Who come at a price. Cats scratch soft furnishings and shed fur. Wet dogs lie on the carpet and smell. This will have to be dealt with at the end of a tenancy. Nobody wants to move into a property where the sofa is shredded and the carpet stinks of wet dog.
In the past a landlord might say, “I am fine with Tiddles and Satan but there will be an additional £200 deposit”. Not any more thanks to Tenant Fees Act 2019. Which means, if you are a pet lover, buy a tent.
I understand our Government is trying to do the right thing by tenants. I shall leave the last word to Confucius who said “When it is obvious that goals cannot be reached, don’t adjust the goals, adjust the action steps.