CPS Homes Statement – 01/05/2020
We acknowledge there has been some recent bad sentiment towards CPS Homes from students whose tenancies ended in the summer of 2019, particularly concerning deposit returns. Social media assertion resulted in a comedy show featuring us in a segment that aired on TV.
We were not faultless last summer. An unforeseen staffing problem meant our communication was not up to the standard both we and tenants expect. This is a reason, but not an excuse. We accept we should have done better and, had we done so, things would not have escalated.
Communication aside, the other sentiment of bad feeling concerned that of fairness in respect of fair wear and tear versus tenant damage; the opinion being that we typically favour the landlord. Whilst a definition for fair wear and tear exists, it can be hugely subjective and experience tells us one person’s wear and tear is another person’s damage. It’s a grey area and sometimes there’s not a straight forward answer, but we have assessed our procedures, employed additional staff and introduced new failsafes as an extra precaution in order to ensure each and every item is adjudged as fairly as possible. In our role as agent, we always want to be fair, but it does sometimes require negotiation between landlord and tenant to find the ‘happy medium’.
Whilst admittedly presented in a funny way, it’s our opinion that the content aired was weak, harshly-edited and based on a pre-positioned narrative, which we will go into below.
Cardiff Council
The show stated that Cardiff Council had been in touch with them and confirmed CPS Homes were issued an "action needed" warning.
To provide the required context, as part of their compliance monitoring process to measure capability and performance against legislative requirements and standards, Rent Smart Wales – the nationwide landlord/agent licencing scheme operated by Cardiff Council – must routinely audit agents to whom they have granted a licence.
15 months before the show aired – thus in no way prompted by the show – Rent Smart Wales approached us for our routine audit. They concluded that "in terms of compliance with licence conditions, CPS Homes has all the necessary safeguards and documentation in place", but highlighted a few areas where practices could be improved, hence "action needed". These improvements have long since been implemented.
Crucial to the show's content, which focused on the end of tenancy process, Rent Smart Wales concluded that "ending a tenancy documentation and evidence indicated compliance with legal requirements and achieved best practice grading".
Trading Standards
The show stated they had passed their findings to Trading Standards, who confirmed they will investigate.
Trading Standards have not approached CPS Homes to this effect.
Claiming for compensation vs. the cost of a replacement item
The show suggested that CPS Homes claims for deductions from tenants' deposits and then doesn't arrange to get the work complete, meaning the tenants should not be held liable.
Wear and tear is damage that naturally and inevitably occurs as a result of normal wear or ageing. The show aired photographs of five issues that were not fair wear and tear;
- A stained mattress.
- A dent in a patio door.
- A wall that was chipped and had a blue tac mark.
- A shower needing resealing.
- A stained carpet.
The show doesn't consider that the costs claimed were compensatory amounts, rather than costs to provide brand-new replacement items. A new mattress, for example, would cost significantly more than £50; more like £150. Likewise, a new patio door would cost more than £50; more like £650 to supply and fit.
The Deposit Protection Service states that "where an item has had its value reduced or its lifespan shortened, for example by damage, a landlord may claim compensation", rather than the cost of a brand-new replacement.
The Tenant Deposit Scheme goes on to confirm that, where compensation has been claimed, "it is the landlord's choice as to whether they use any awarded money to fix/replace the item."
They go on to state that "a tenant may complain that they were charged for redecoration, or the replacement of something (carpet, or curtains for example) yet when they revisited the property with new tenants there, they realised the landlord had not replaced the item they were charged for! Despite tenants perhaps feeling this is unfair, it is the landlord's choice as to whether they use any awarded money to fix/replace the item."
There are many reasons why, after being awarded compensation, a landlord may not choose to immediately replace the item in question;
- Often, it isn't warranted. You wouldn't necessarily rip up and lay a brand-new carpet if the stain on the existing one is small or in a not-so-noticeable area of the room.
- If new tenants move in very soon afterwards, it may not be possible to arrange the work in the short period of time between. Or, it may not be convenient for the new tenants if the work is intrusive.
- They may not be able to afford the additional sum of money required towards the new replacement at that moment in time.
Crucially, none of the above reasons affect the landlord's right to claim for compensation.
The show had no bearing on the deposit return
At the end of the segment, the show stated that, in the case highlighted, the outgoing tenants "have actually now been awarded hundreds of pounds of their deposit back".
The show's involvement in no way altered the outcome of the deposit return because, at the time of approaching us, the dispute was already being decided on by a legally-qualified, independent adjudicator appointed by the deposit scheme protecting the funds, who had already collected evidence from both parties.
The show omitted to include that the evidence we provided resulted in the adjudicator awarding nearly £500 of the deposit to the landlord due to dilapidations noted over and beyond fair wear and tear. This amount included, but was not limited to, the staining on the mattress shown; deemed by the adjudicator to be beyond fair wear and tear.
Further awards were made in relation to cleaning, a carpet stain and marks/chips on walls.
It was always highly likely that the tenants would be "awarded hundreds of pounds of their deposit back" because, as the show stated, the total deposit was £2,380.
Evidencing deposit claims
The onus is indeed on the landlord to prove that tenants are liable for issues over and beyond fair wear and tear. We're well aware of that, but we realise the filming that took place would suggest different.
Those who have been tenants of ours will know that we always invite them to accompany us during our end-of-tenancy inspection, which is when we visit to document the condition of the property and take photos as evidence. We compare the condition of the property at the end to the inventory signed by the tenants at the beginning. The presence of the tenants is preferred so we can have an open and honest discussion with them about our findings. Most agents don't do this and instead send a list of deductions to the tenants with no real explanation, but we prefer the transparent, face-to-face approach. We won't always find agreement, we accept that, but most of the time we do and deposits are returned swiftly and amicably. Those where we can't agree on things take longer because they're referred to the deposit scheme's Alternative Dispute Resolution (ADR) procedure, where an independent adjudicator collects evidence from both sides and makes a legally-binding decision.
The 'undercover' footage shown was the tail-end of what was a long conversation with the former tenants; during which it had earlier been established that we had evidence to support our deposit claim. What we were attempting to explain was that if the tenants had their own evidence from the commencement of the tenancy that would contradict the claim we proposed to make based on our own supporting evidence, they should provide it to us so that we can consider it.
We feel it's important to point out that it's not uncommon for there to be a dispute at the end of a tenancy. Quite rightly, tenants are keen to receive as much of their deposit back as possible, whereas landlords would like to be compensated for any dilapidation they believe is not a result of wear and tear. So, by virtue of their own standpoints, deposit claims are a contentious matter.
Up and down the country, most deposit disputes arise because the condition of the property was not recorded accurately upon arrival. There is a duty upon the landlord/letting agent to issue the incoming tenant with a detailed inventory/schedule of condition when moving in, which should clearly include any marks, stains, chips or knocks. Equally, there is a duty on the tenant to annotate the document with anything that might have been missed. After all, two pairs of eyes are better than one.
We issue a plethora of written and e-mailed advice to our tenants on how to review and annotate their inventory before signing it off because we know how important a document it is. We make it clear that it's the inventory that will be referred back to when we conduct our check-out inspection, so it's absolutely essential it gets given its due care and attention. We go a step further and conduct accompanied check-in inspections with our tenants, where we offer face-to-face advice on signing off the inventory.
Contrary to what outside sources would like to have tenants believe, landlords and letting agents would much rather not have to make a claim from a deposit. We don't profit in any way from said deductions, and it's far quicker and easier to return a deposit in full. However, when conducting a check-out inspection, we can only go by what's in front of us, so if there was no stain on the mattress noted within the inventory at the commencement of the tenancy and there is one at the end, it will result in a tenant charge unless they can prove – by way of a photo or a video – that it was present upon arrival. This is why, in addition to annotating the inventory, we always ask our tenants to take dated photographic evidence.
Alleged conflict of interest
The show suggested a conflict of interest exists if CPS Homes lets properties owned by its Directors or relatives and/or instructs required work to contractors who are related to its Directors. It goes on to suggest that one of the cleaning firms CPS Homes uses doesn't exist.
Many letting agents are family-run businesses where issuing work to relatives or known acquaintances is commonplace. There is no law or guidance that prevents this. Providing the persons or companies instructed meet the landlord/letting agent's standards, are capable of completing the job asked of them and charge fairly for their time, there is no reason why such work should not be passed their way.
In the same respect, some private landlords are builders, plumbers, carpenters etc by trade, so will carry out their own work on properties they own at the end of a tenancy. It is ultimately a landlord's choice as to who carries out the work and we do not believe they should be hamstrung because of their choice of profession.
As with any deposit return, if a tenant feels a landlord's claim is not justified and a mutual agreement cannot be reached, the deposit scheme that protects the deposit can appoint an unbiased, impartial adjudicator to consider all evidence and make a ruling. We're pleased to say that the vast majority of deposits CPS Homes returns are done so with mutual agreement between landlord and tenant, meaning only a small minority require independent adjudication.
The cleaning company highlighted in the show does exist and is in fact one of very few local cleaning companies capable of managing the number of cleans CPS Homes requires year-on-year; particularly during the busy summer period when thousands of students vacate their properties. They are one of several local trades we have been using for over 20 years to carry out work in properties we manage, so we know and trust them. They price fairly and accurately for their time. Many letting agents opt to instruct national companies to manage their cleans, who typically charge more due to increased overheads and travel time, meaning a higher cost to tenants and landlords alike. As a company born-and-bred in Cardiff, we prefer to issue our work to local people.
In terms of the ownership of the properties we manage, like a lot of letting agents, a small number of the properties we let are owned by Directors of the company or associates of them. This applies to approximately 1% of our properties and, by our own admission, there have been times where that information hasn't been passed on to prospective tenants. No law exists that requires us to do so, but it is an expectation of The Property Ombudsman redress scheme, of which we are members. Crucially, who owns the property does not alter the way in which we manage it.
There is a possibility that this information would cause potential tenants to re-think their decision and choose not to proceed with a tenancy. Although we think that is unlikely, we do accept that it's information that should be relayed to tenants in advance so they can make an informed decision, which is why we have a now-robust procedure in place for this.
Filming at our offices
Prior to arriving at our offices unannounced, the producers of the show made no attempt to contact CPS Homes for comment or input on the cases they were investigating. Had they done so, we would have happily provided the required information and evidence.
The conversation aired between Joe Lycett and our Managing Director, Barrie James, was the second of the day; the first having taken place within our Albany Road premises. During the initial 10 minute exchange (not aired), Joe was asked if he'd like to sit down and allow us to look into the queries he had, which he refused; presumably because running up to somebody on their way to pick up their children and filming them driving away made better television.
Conclusion
On occasion, there have been times we have fallen short of the high standards we set and expect, particularly in regards to timely communication with our tenants during the summer of 2019. We've already put this right moving forward.
We let over 2,000 properties every year, manage more than 1,200 of them and find properties for 7,000+ individuals each year, so there will times when things don't quite go according to plan. We said as much in our recent statement, but what we do not do – and never have done – is set out to profit from tenants at the end of their tenancy.
The show and subsequent reaction to it represent a tiny minority of the student and professional tenants we have rented to over the last two decades, so we stand by the short statement the show allowed us to make, which was to say the actions of the producers were disproportionate to the nature and small number of complaints.
Managing director, Barrie James said:
"The issue of deposits, and the subsequent deductions and charges for damage caused by tenants, is a perennial issue, and one that we have been managing successfully for more than two decades. Each summer, we process around 600 tenancies that have come to an end in the same 4-6 week period. The vast majority of that work is carried without any problems and to the mutual satisfaction of landlords and tenants but there will always be a few disputes. We have established processes to resolve those issues and, ultimately, a tenant can opt to use the deposit scheme's Alternative Dispute Resolution (ADR) or refer their complaint to The Property Ombudsman.
"We understand that deposits put pressure on student finances, especially when people are moving between properties. While legitimate repairs will still need to be paid for by the tenants, we have moved to a position where more than 80% of student tenancies we manage do not involve a deposit. This is working well for both landlords and their tenants.
"It is fair to say that the summer of 2019 was a difficult one for us, and one from which we have learned a great deal. Communication and our response times should have been much better. A system we put in place to handle hundreds of tenancy emails and maintenance enquiries did not work as planned, and we therefore did not respond as quickly as we had hoped. For that, we have apologised.
"That system has now been changed, and we have brought forward the process of working with departing tenants to better manage the hand-back process, specifically giving them a greater opportunity to put right themselves any damage that goes beyond 'reasonable wear and tear'.
"Obviously, the Covid-19 pandemic will present its own challenges but we are already communicating with landlords and tenants to ensure a smooth process. We are also reminding tenants of the condition report and inventory that they signed when they took over the tenancy on the property.
"We always try to use feedback, criticism and good ideas from our tenants to improve our services. We will use the findings from the show in the same way, including taking some tips on how to run what was actually a pretty good street rave."
