Private Sector Leasing
Private Sector Leasing is a council-led scheme for families and individuals who find themselves homeless and so are helped to find immediate, temporary accommodation whilst their claim for permanent housing is being processed.
Local councils work in partnership with housing associations (who are usually Registered Social Landlords with their own management companies) who advertise for properties.
So how does it work?
When private landlords either respond to an advertisement or approach the council themselves, they are sent an application pack containing the following:
- Application form;
- RSL business document;
- Gas/electricity check form;
- Rent banding details;
- Property condition requirements;
- Sample lease;
- Letter of permission and verification form from the lender;
- Insurance and verification form.
A photograph of the property of not more than 12 months also has to be sent along with the application. The RSL will confirm with the council both the size and location of the property is and if it is accepted, it is on a provisional basis. The owner is advised and provided with the name and contact details of whoever they will be dealing with at each stage of the process, along with the leasing standards.
An appointment will then be made for the RSL (or an agent) to inspect the property. A provisional rent figure is given and the owner will be advised if any works are required to bring the property up to standard. If funding is required for such works, the RSL will recommend him to approach his contact at the council to see if they have any grants/loans available and advises the council that they will be contacted by the owner. If the RSL’s agree to carry out the works themselves it will be reflected by a lower rent being paid to offset the cost over a period.
Dates for Utilities Checks and Second Inspection
Dates are then arranged for gas and electricity checks to be completed and a date will also be set for a second inspection to make sure the works have been complied with, a Schedule of Conditions is completed and photographs of the property are taken. The RSL will then give the council of a rough date when the property will become available and ask for 3 nominations to be made.
The RSL also has to confirm that they have secured the following:
- Written evidence of ownership (freehold or length of lease) including title deeds if they are available;
- The permission of the mortgagee to sublet the property (if a mortgage is held);
- Up to date gas and electrical certificates;
- Buildings insurance with written evidence that insurers will cover the property if sublet;
- The permission of the superior lessee to sublet the property has been granted if there is a head lessee.
LANDLORD ENTERS INTO A LEASE WITH THE COUNCIL
The landlord (not the freeholder) then enters into a lease with the council and the council covenants (promises) that under s21 of the Housing Act 1985 throughout the term it will:
- 3.1 Only use the property as temporary residential accommodation so that Schedule 1 Paragraph 6 of the Housing Act 1985 shall apply (short term arrangements)- this means that ‘a tenancy is not a secure tenancy if the dwelling house has been leased to the landlord with vacant possession for use as temporary housing accommodation’.
- 3.6 Use reasonable efforts to make sure that the tenant does not cause nuisance or annoyance to the occupiers or owners of any adjoining property and take steps in accordance with it, procedures as shall be amended from time to time for dealing with complaints or nuisance.
A copy of the lease is sent to the owner along with gas, electrical and appliance check copies. The RSL also informs the following that the property checks are complete and the property is coming into management:
- Technical Service Team;
- Customer Service Team;
- Finance Team;
- Housing Management Team;
- Revenues Team.
Note: If a third inspection is required then the owner will be charged.
FIRST NOMINATION AND SIGN-UP
The RSL contacts the first nomination (tenant) and agrees to meet them at the property to view it. If they accept it then a sign up date is agreed where the Tenancy Agreement is gone through and the new subtenant is advised of their responsibilities. They will be given help in completing a Housing Benefit form and a rental account will be set up with the RSLs Finance Department. On moving in the following departments are advised of a family in temporary accommodation:
- The Council’s Allocation Department;
- The Homeless Department;
- The Housing Benefit Department.
- The Council will give the tenant possession of the premises at the start of the tenancy and will not interrupt or interfere with the tenant’s peaceful occupation;
- The Council will keep in good repair the structure, landlord’s fixtures and exterior of the building;
- The Council will keep in good repair and proper working order all it’s installations for the supply of water, gas and electricity, for sanitation and for space and water heating;
- In the case of flats and maisonettes, the Council will keep in good repair all common areas, entrance halls, halls, stairways, lifts, rubbish chutes and other items for common use;
- The Council will decorate the exterior of the property as and when necessary.
- The Council will make sure that, within reason, your home will be in a good state of interior repair at the start of the tenancy, except when a mutual exchange has occurred;
- The Council will allow the tenant to inspect his/her tenancy file, upon being given at least 7 days notice in writing in accordance with the Data Protection Act 1998;
- The Council will allow the tenant at his/her own expense, to improve, redecorate and extend the premises, provided permission has been given before work commences, and any other necessary consent has been obtained.
- The tenant will pay the rent and other charges regularly and promptly;
- The tenant shall give such information to the Council as to persons living in the property as the Council may reasonably require for management and/or administrative purposes;
- The tenant shall keep the gardens and hedges properly maintained, and shall not without the written consent of the Council, cut down trees on the premises;
- The tenant shall not, without the express written consent of the Council, keep animals fowl and pigeons;
- The tenant shall not cause, or allow other occupiers and visitors to cause a nuisance or annoyance to the neighbours;
- The tenant shall not assign sub-let or part with possession of the property or any part of it;
- The tenant shall not store at the property any petrol or similar material that creates a fire risk. Smoke alarms at the property must be tested once a week. If the smoke alarms need batteries this is the tenant’s responsibility. Any faults in the alarms should be reported immediately;
- The tenant shall not, without the written consent of the Council, erect any garage, shed or building on the premises;
- The tenant shall allow officials or agents of the Council to enter the property to inspect it, carry out repairs or to make sure of compliance with the tenancy conditions. The Council will usually give 24 hours notice. In an emergency the Council’s employees may enter the property using reasonable force if necessary, if in the opinion of the Council there is a risk of personal injury or damage to neighbouring property;
- The tenant shall take all reasonable precautions to prevent damage to the premises by fire, frost or other causes, and will make sure that any chimneys in use are swept as often as required, but at least once a year;
- The tenant shall keep the interior of the premises in reasonable decorative order and replace immediately at his/her cost, any cracked or broken glass in the windows and doors where the breakage has resulted through tenant neglect or damage;
- The tenant shall report as soon as possible any defects on the premises.
- On ending the tenancy the tenant must give the Council vacant possession, leave the property in a clean and tidy condition, clear of all belongings and return the keys to the property within 24 hours;
- At the end of the tenancy, the tenant shall leave the dwelling and the Council’s fixtures and fittings in the same state as they were at the start of the tenancy, fair wear and tear excepted;
- Any notices or consents required under the above terms must be in writing and posted or delivered by the Council to the tenant at the property, and by the tenant to the Council.
OFFER OF PERMANENT ACCOMMODATION
If an offer of permanent accommodation is made then the tenant will be signed up on the usual Assured Shorthold Tenancy Agreement and the landlord moved from being paid a nightly rate (whilst the tenant is on a licence) with housing benefit and rent paid directly to the housing association and then to the landlord, 1 month in arrears. Even though the rent is likely to be up to 20% less than on the open market because the tenants are on either full or part housing benefit, it is guaranteed for the life of the lease (tenancy). It will also be reviewed on every anniversary date of the lease being granted and adjusted up by any percentage change in the Retail Price Index.
If an offer of permanent accommodation is not made to the current tenant and the landlord wishes to lease the property again, if the borough requires properties of that size and in that location, then a new lease with a new rent will be issued to the landlord. The landlord will then, as directed by the association:
- Refurbish and repair;
- Provide new gas and electrical safety certificates,
- Provide proof of ownership;
- Provide proof of insurance;
- Provide proof of a central heating service contract.
Returning Property to the Landlord
If however, the landlord wants the property back at the end of the lease, the managing agent will undertake a full inspection to assess the condition of the property. They will return the property, in accordance with the lease, in the same condition that it was in at the start of the lease but will not include replacing the carpet or other floor coverings or furnishings provided.
Whilst this and other council-led schemes will help with problematic landlord and tenants if a landlord wants to let to people on the council waiting lists, such help will not be available if they let through a high street letting agent.
This is not the only council-led scheme for housing people in the PRS that would previously been housed by the councils and they are very problematic for freeholders and managing parties as we are kept out of the loop! I have also had it first hand that councils place enormous reliance on agents checking out various requirements about the property but neither our managing agent or ourselves have ever been asked if the leaseholders actually have consent to sublet. This was understandable when we didn’t actually have a freeholder but since we took over the freehold some years ago, we’ve yet to be approached by a single council!