Property experts are calling on the government to give more clarity to landlords who let out homes to rent-to-rent firms.
Tough new laws on the way to protect tenants mean landlords must join a redress scheme.
The scheme will allow tenants in dispute with their landlords to take the grievances to an independent adjudicator.
But the wording of the new laws throws doubt on if rent-to-rent firms should sign up to a redress scheme.
The way the rent-to-rent market works, a firm takes a property from a landlord for a fixed term and pays a guaranteed rent.
The firm then finds tenants and makes a profit from charging them rent.
Effectively, says the Property Redress Scheme, this makes the rent-to-rent firm a tenant and their renters sub-tenants.
The scheme’s Sean Hooker explained this arrangement creates confusion over who is responsible for repairs and who pays for damage to the property.
“Rent-to-rent companies market themselves as taking away the hassle of being a landlord. However, these are complex legal arrangements,” said Hooker.
“Landlords are attracted by a guaranteed rental income but often do not realise they have to pay for an insurance policy to cover this. They also do not understand whose responsibility it is to maintain the property and think they will always get the property back in the same condition as they let it.
“From the occupier’s viewpoint, they do not know they have no relationship with the property owner so when they have problems with repairs they can be left high and dry.
“The current redress client does not cover tenant and landlord disputes, which is essentially the relationship of the rent-to-rent company and their sub tenant.”
Hooker’s call for the new property laws to cover rent-to-rent companies is backed by the Shared Accommodation Providers Association, the trade body for the firms.
“Shared accommodation is here to stay and therefore the government should acknowledge this and act pro-actively,” said a spokesman.
