Amongst all the fanfare of the publication of the White Paper last week regarding amendments to the private rented sector, the “Property Guardians: headline report” may have been missed.
This will be of interest to any Registered Provider who uses Property Guardian Companies (“PGCs”) to ensure the protection of its longer term void schemes or development schemes.
The team at Devonshires has previously provided Webinars on the Potential Pitfalls of using Property Guardians (click here to view a recording) and this Report picks up on some of those themes. Landlord must be alive to the inherent difficulties involved with the use of this type of tenure, particularly as the report demonstrates concerns regarding the condition of the properties, disputed rights of occupiers, as well as difficulties involved in enforcement of the rights generally enjoyed by tenants relating to Houses in Multiple Occupation (HMO), and safety requirements for rented properties (HHSRS).
Landlords need to be aware of the reputational risks involved in PG schemes as although PGC might be liable in the first instance for enforcement action, freeholders can and have been brought into proceedings – eg the NHS in the Global 100 Ltd, Global Guardians Management Ltd & Theo Kyprianou v LB Hounslow, LON/00AT/HNA/2021/0021 case.
As such landlords wishing to utilise Property Guardian services should conduct thorough due diligence before entering any agreement. Landlords should ensure that their chosen PGC works with Local Authorities and others seeing to enforce minimum standards of accommodation and registers the property as a HMO if the condition for such registration are present. This report highlights that despite assurances from the Property Guardian Providers Association, poor conditions unfortunately are not uncommon in properties let out to Guardians.
Do note further there is the possibility that PG lettings will be brought under the remit of the proposed new Property Ombudsman scheme for private landlords as set out in the recent White Paper “a fairer private rented sector”.
Whilst the report does not make any recommendations regarding how PG’s should be considered for tenancy purposes, it does highlight the need for the sector to be regulated and suggests that Local Authorities should be implementing enforcement policies to deal with complaints that are made by PG’s. Landlords need to be aware of the prospect of tighter regulation of the sector in the future and the implication this may have for them.