The first quarter of 2019 has seen a raft of changes from the government that are designed to crack down on rogue landlords. These include a £2.4m fund to help councils tackle the problem and plans to simplify current bureaucracy by creating a single ‘Housing Complaints Service’. Meanwhile media commentators and the Local Government Association (LGA) are calling for more powers to help councils tackle poor property practices. But, while the focus has been on residential landlords, I believe these issues are also increasingly relevant to commercial landlords.
Joined up thinking
As part of a comprehensive risk assessment, commercial landlords must consider the possibility that the measures against rogue residential landlords could lead to similar steps being taken for the commercial rental market, especially if there is increased funding available to authorities.
We’ve already seen The Royal Institute of Chartered Surveyors (RICS) announce new requirements for members to ensure their service charges are “transparent, upfront and fair”, and it’s entirely possible that central or local government may move to tighten their rules too. Maintaining good relations with tenants by ensuring all communication is clear, prompt and by the letter should help commercial landlords avoid getting caught up in any clampdown.
I suspect that the rise in commercial-to-residential conversions, sparked by relaxed planning rules, could also increase pressure on legislators to crack down on commercial landlords. The trend has already caused concern among commentators including journalists at The Guardian and the Financial Times, who suggest many of the conversions do not meet the necessary standards for residential property.
Existing advice from the Department for Communities and Local Government warns that local authorities have “discovered that vacant commercial premises, often in poor repair, are being used as living accommodation”. So, if they are to avoid greater scrutiny, it's crucial that landlords considering converting commercial properties to residential or mixed use developments be thorough in ensuring the buildings meet required standards.
The arrival of a Housing Complaints Service may also lead to similar developments in the commercial sector, as councils and legislators seek to ensure high standards across the board. While high standards should be celebrated, it's worth bearing in mind that the changes themselves and the accompanying media coverage could encourage more complainants, such that contending with disputes becomes a real risk.
For most law-abiding commercial landlords, this is unlikely to cause problems, but one troublesome tenant can lead to serious legal disputes. That’s why it’s so crucial that landlords maintain a good relationship with tenants and ensure an open, constructive dialogue at all times. It’s also important to have experienced partners like solicitors, maintenance contractors and Enforcement Agents who have a thorough understanding of the current legal landscape, and can handle any issues in a sensitive, efficient manner.
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