Sunday, 28 March 2010

Renting In LA

Recently, a deceptively simple comment from a friend living in Los Angeles revealed all that is wrong with renting in the UK. She replied to a rentergirl posting with the words: “So after all this time, I finally realize you don't have rent control. Don't kill me. Here, renters have rights that would be a paradise compared to everything you describe. You can't even throw someone out for not paying. You have to be very careful when renting out here.”

That’s right, to my totally dumbfounded, jaw-gapes-to-breaking-point astonishment, tenants in the USA (at least in California) have more rights than over here. How the hell did that happen?

W is about to let a room in her home, and as a prospective landlady is concerned that renting there has shifted too far in favour of the (admittedly rare) but more devious sort of tenant. A keen fan of Judge Judy, she watches cases bought to arbitration where even toxic lodgers haunt the property forevermore. Even repossession due to non payment of rent is fraught with legal constraints, to the extent that occasionally landlords pay bad tenants to leave and write them a glowing reference, just to see the back of them.

How different from the UK, where all that’s needed is a coy whisper accompanied with a nuanced shrug, and renters are out – end of. Over here tenants must be demonstrably wealthy and then outline their ancient lineage in blood on parchment, before paying massive deposits in advance. Friends in New York say they always use the upfront deposit as the last week of rent, which means the time between tenancies is simpler, and deposits less likely to be withheld. If only....

Which brings me to rent control, enshrined by law in LA, but the stuff of legend over here. This mythical protection against overcharging used to exist way back in the olden days when knights were bold, but was legislated away by an evil dragon (aka Margaret Thatcher.) Landlords were prevented from charging over the odds for property, under a system where Rent Officers could be invited by tenants to assess a property’s rental worth.

Imagine if we still had fair rents, and all those amateur buy-to-let chancers had known that the only profit to be made comes from the slow increasing value of the property, and not from ramping up prices to ludicrous (ie Inside Track ‘Get Rich Quick You Deluded Fool’ Seminar) levels of stupid greed.

Oh, and as for repairs, if landlords don’t do them, then City Hall gets very angry indeed - not the feeble tut-tutting and finger wagging you meet over here - but massive fines for persistent non repairs.

So in LA, a place we imagine to be populated by silicon-based life-forms and loopy, macrobiotic rich people has created a system where it’s accepted that tenants stay for years, not weeks, and renters rights are both respected and enforced, whereas over here, I am treated like a termite. For tenants, renting is better in Lalaland. I also hear that it’s pleasantly sunny all the time.

12 comments:

Obsidian said...

There's a price for that level of protection though - California is in an utter economic mess. I know a teacher over there, and she despairs - there was a point where they were getting IOUs in lieu of wages, meanwhile they're underfunded when it comes to providing things like textbooks.

The reason they're in such a state is due to the attitude that leads to the rules you describe. Ownership - property, business, etc - has been debased. Which is why there is something of a population drift into Oregon.

While more needs to be done to protect renters in the UK, you can go too much in the other direction.

Anonymous said...

Obsidian has his/her head up his/her butt. Rent control was a hard fought victory in which tenants organized to win their rights in 1978. And, have been fighting to protect and strengthen those rights ever since.

One can find out everything they want to know about rent control and tenants' rights in L.A. by going to the website of the Coalition for Economic Survival, the group that led the effort to win rent control at http://www.cesinaction.org/

Dazzla said...

Just found this blog.

I've been renting for about 15 years now and in that time, it's become more and more dispiriting to do so. In 2008, I rented a flat in Leeds, paid a fee for the landlord to pry into my finances (as is compulsory in our free and democratic society). As I'd been travelling around Asia for the last 13 months and as such was considered a bad credit risk, I had to pay six months in advance -plus deposit - which I did. I didn't really mind: it gave me some peace of mind, as it meant that I didn't have to worry about shifting money around so I could pay the rent every month. None of my bank accounts have paid interest since early 2007, so I wasn't too worried about losing interest.

I am self-employed and spend a lot of time doing this.

Four months after doing this, we found out, but not via the letting agent, that our landlord wasn't making his mortgage payments and so was about to undergo repossession. We discovered that, as tenants of a repossessed flat, we had absolutely no rights and were facing homelessness. The agents, to their credit, withheld the last two months' rent so we wouldn't lose it to the repossessors. As we hadn't been allowed to carry out a credit check on the landlord we couldn't have foreseen this situation.

Unfortunately, this is the last time letting agents emerge with any kind of glory at all.

The new place that we moved into was much nicer and slightly cheaper than the old one, so we were quite happy with this. At the end of the contract, despite having left the flat in a better condition than we found it, we were charged for professional cleaning. The Tenants' Deposit Scheme did nothing to help us. We took the hit.

Sorry if I'm going on a little, but this is where it gets interesting.

We found a flat in central Manchester with a major Manchester letting agent, whose name will forever stand as a synonym for vapid, exploitative greed in my mind. After having lived here for over a year and considered it the closest thing to home that I've ever had, the flat was rented from under my feet when we were late reconfirming the extension. This was on the same Saturday afternoon when one of the agents from this place turned up unannounced for a viewing on my only day off that week and proceeded to show strangers around my home. I told her on the spot that she should never enter my home again without my permission and that it was unacceptable and illegal to do so.

Later that afternoon the agency called me to tell me that they had let my home to someone else. I explained that this is legally and morally my home and that they had acted unacceptably in their conduct, breaching contract in respect to rights of quiet enjoyment. This is exactly and precisely what they said to me:

"We work for the landlord. We've got him some extra money every month."

They'd basically given up any pretence that they were an intermediary and told me straight what I already knew anyway.

So screw the 'free market' alluded to by other commenters. There is nothing natural or inevitable about it and it's basically an excuse for government interventions on the supply-side, and it's about time that more people said it. Tenants are, indeed, third-class citizens and are basically punished for refusing to allow the lending banks to stick their hands in their pockets every single month for most of the rest of their lives.

Before other commenters assume that I'm bitter because I don't 'own' my 'own' home, let me tell you that I could easily afford to do so, but have chosen not to for reasons that should be obvious if you've read the rest of this post.

Regulation of landlords and letting agents has been obviously required since long before van Hoogstraten started plying his tawdry and vicious trade.

Shoe said...

Good points, Rentergirl, except that the flipside is the case in San Francisco. There is poor protection for tenants there, and people I met on my travels there told me the litany of woe they face in finding somewhere affordable and decent to share, never mind rent alone.

As a result a lot of tenants (like owner occupiers) have spilt out up to 40 miles away into the Bay Area causing an enormous sprawl. Fortunately for them the BART is a good ransport system which enables long distance commuting, and in any case much of the employment is out on the edges anyway.

Agree on LA though. I met a load of people in Palm Springs who live in LA and a lot of them had sold out a few years ago in fear of falling house prices in the wake of the subprime crisis and were glad to have done so. I was quite shocked to discover that a purpose built 1 bedroom apartment in places like Long Beach are no more expensive than similar units in the UK or Ireland. Of course you'd still need a reasonable well paid job to pay that.

I still feel that much of the problem in the UK and Ireland isn't just the lack of regulation, but a lack of reliable and quick enforcement, the fact that any petty criminal or moneylender thug who wouldn't be let drive a taxi can become a landlord, and the still persistent myopia that the renting population are a filthy rich idle bunch with nothing better to do than pour their cash into somebody elses pockets. Add to this the current policy of shifting welfare recipients into the private rented sector, complete with market distorting subsidies, and you've a real problem.

RenterGirl said...

Ownership comes with responsibilities, but renting should be seen as a form of temporary ownership, as seems - and rightly - to be the case in LA.
I'd like to know more about others parts of the USA. Having said that, as I mentioned in a previous post, a renting rights campaigner in Texas has a special form covering the situation where shots have been fired at a house...

Dazzla - it's a nightmare, and I wish I could say I was surprised, but I hope you're happy and settled soon. I keep hearing about government plans cage these letting agent lizards. It has yet to happen. I am not holding my breathe, as I do not want to suffocate...

Neil80 said...

Wonder why there is more protection in the States? My first guess would be that it's because the state in the US has never been a major player in terms of providing housing as was the case in post-war Europe. Social housing is therefore probably provided by state subsidy by way of cash benefits so the state has a cost-cutting interest in keeping prices down.

The UK has gone about it by imposing caps not on the amounts landlords charge but on the amounts paid to tenants (very similar to the maximum funding levels in Residential Care for the elderly) providing a de-facto cap on the amount landlords operating in the bottom end of the sector can charge.

RenterGirl said...

Neil - you're right. But I wish landlords would grasp this salient fact (and I'm sick of saying this) life is better - ie income more consistent if tenants stay, and feel secure in their home. The lack of protection here undermines everything about life for a renter. Thanks for reading.

Obsidian said...

Thanks for wonderful rebuttal Anonymous.

Meanwhile LA's controller yesterday announced the city will run out funds by the end of next month.

As I said, there's a price to pay for that level of protection.

RenterGirl said...

Obsidian: I don't LA's fiscal deficit was caused be regulating renting and securing tenure. Do you? Regulation is a good idea, especially when it encourages longevity of occupation and stops people being turfed out on to the street on a whim.

Kate said...

Hmmm, i suspect that if Rent Officers were to assess rents, their conclusions would be that rents are broadly correct - at least outside of London. I rent out a house I used to live in and the rent is considerably less than an equivalent mortgage on the market value of the house - and the tenant has no responsibility for maintenance etc.

Whilst I totally agree with your point of view on most things, the problem with rents is the overall housing market and the cost of buying property isn't it, not evil landlords gratuitously putting up prices?

RenterGirl said...

No Kate. That's not true. Recent new fangled notions - such as accruing wealth through a cranked up rental income instead of profit on property accrued by the slow rise in house values, (as stoked up by things like Inside Track Property Seminar) alongside downright naive investors who think they can charge whatever they want (and recently have been known to end with a vacant money pit for their naivety) have created a rise in rents. Also - when interest rates are static, and
there is no reason at all for rents to rise - why do they still rise. That'll be greedy landlords. Also - maintenance is already factored into to what landlords charge. And there are landlords out there who after a repair try and hike up rents because...they've just done a repair.

Filthypillows said...

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