The Evolution of the Rental Market - RealWire

The Evolution of the Rental Market - RealWire

The Evolution of the Rental Market The evolution of ‘tenants’ and ‘landlords’ into equal participants, as ‘renter’ and ‘owner’ in a renting chain has ...

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The Evolution of the Rental Market The evolution of ‘tenants’ and ‘landlords’ into equal participants, as ‘renter’ and ‘owner’ in a renting chain has taken a few hundred years to complete but we’re almost there. There could not be renters without owners, or owners without renters, as both need the other to exist in the working relationship. Using technology we are finally arriving at a place where renters and owners can build relationships and trust between each other to cut out the middleman. Here is a short timeline of how the terms ‘tenant’ and ‘landlord’ came about and the evolution of the rental market to the one developing right now.

1066 BC

1792 BC

Waaaay back in the day there was manorialism and feudalism The Dark Ages in England that followed the collapse of the Roman Empire required a new way of organisation, seeing as the central government (which had been Roman) was now gone. After the Norman conquest of England in 1066, the feudal and manorial systems were born. The manorial system was an economic and social system involving the exploitation of the peasants. This is a ‘Lord of the Manor’ type scenario, whereby peasants were allowed to live within their Lord’s land if they worked on his land for free or offered a share of their crops, labour or occasionally money. The life of a peasant was based around their Manor, which usually had a church, a court (the Lord had legal power over his tenants) a village, farmland and a mill.

The Code of Hammurabi The Code of Hammurabi is the longest surviving text from the Old Babylonian period, and is the earliest reference to landlord-tenant relationships. This dates as far back as 1792 to 1750 BC. This code has been found on baked clay tablets that have survived this long.

Manorialism was a smaller part of Feudalism... Feudalism was a system whereby land was given to nobles in exchange for military service. The premise was that everyone owed allegiance to the King of England as a King was thought of as being a divine ruler, chosen by God.

However the common law of landlords and tenant was evolved in England, through the Middle Ages.

1348

The Black Death The end of feudalism was partly brought about by the devastation of the Black Death plague that descended on Europe in the middle ages. Within a year of the onset of plague, during 1349, a law was passed to prevent labourers from obtaining higher wages. Landlords gained at first from payments on the deaths of their tenants but rents dwindled, hamlets were deserted and lands left to ruin as there was not enough people to cultivate them.

1166 1290

King John of England was forced to sign the Magna Carta (1166-1216). This document marginally curbed the powers of the King and gave citizens their first real rights. The rights of the citizen were to be decided by the law of the land and not by individuals or private courts, thus freeing peasants and serfs from the complete control of their Lord. This paved the way for the first parliament in England.

And we bet you haven’t heard of Quia Emptores This statute encompassed the spirit of the monetisation of England, where money was increasingly being used in exchange for ‘things’. Quia Emptores formally allowed the sale and purchase of land. This meant that land could be sold from Lord to peasant and between peasants.

By the end of the Plague, almost a fifth of the European population had been wiped out, killing an estimated 75-200 million people!

Magna Carta (no, it’s not an ice cream)

Eventually peasants were able to be choosier about where they lived and worked, as there were not enough of them to go around.

“Fast-forward a little bit…”

Facts > 1709

Landlord and Tenant Acts The versions of Landlord and Tenant Acts date as far back as 1709 in the UK. This Act, or variations of it across USA and Hong Kong aim to legislate the rights and responsibilities of both landlords and tenants.

Common Law England exported English Common law and English Statute law to most parts of the British Empire. This is why many of the rental systems are derived from England, even after Independence.

Real estate broker

1988

“Don’t fall asleep, it’s just getting interesting!”

1988 UK Assured Short Hold Tenancy agreement In the UK, The Housing Act introduced the Assured Shorthold Tenancy Agreement enabling shortterm tenancy agreements between landlords and tenants. It was understood that the rights of the tenant needed to be protected, and this went some way to doing this.

The obligatory online letting agents Property portals 2000s As the popularity of the Internet has grown, so has the (into new property dimensions!) prevalence of online letting agents. More and more websites offering online services have popped up in recent years. Varying models and hybrids of the original letting agent are still used, with online agents managing as a go-between for landlords and tenants. Fees can still be high.

2013

?

Property portals are now commonplace, as a vast majority of property searches now begin online across the world. These are websites that allow letting agents and brokers to list properties available to rent for a fee. Portals can therefore show a large range of properties available from various people, companies or agents, to anyone who is visiting the website. These services have made it easier for tenants and landlords (especially tenants looking to move overseas) to browse properties available on the market.

In the USA, if you’re looking to lease a property you usually deal with a real estate broker or pay a subscription to a listing company. Traditionally the broker or listing site represents the seller, marketing their client’s property and helping to rent it for the best price, under the best possible terms. In the United States, the relationship was originally established by reference to the English common law of agency.

Estate agents Estate agents are commonplace in the UK, and manage transactions between ‘tenant’ and ‘landlord’ as an in-between party. Agents charge both tenant and landlord varying fees for their services.

Some world differences In the US some apartment dwellers can own their properties via several common forms of property ownership. These include co-ops and condominiums. In a co-op residents own shares in the corporation that owns the building whereas in condominiums residents own their apartment but share public spaces such as hallways, heating systems, elevators and exterior areas. In the UK however, it is generally the case that an individual owns the apartment but has shares in the freehold company, which in turn leases from the Crown for a specific period of time, usually 99 years. This form of land ownership is renowned in all the Commonwealth Nations. Owners can decide to rent out the properties to tenants, via more shortterm tenancy agreements.

Completing the evolutionary circuit are (drum roll) new rental platforms! Trusted community marketplaces are the next big thing in the rental world, being part of the new ‘collaborative sharing economy’. This is also referred to as peer-to-peer rental. These websites enable renters, owners and traders to easily collaborate, list and advertise properties, search and arrange viewings, sign agreements online and simply maintain the property from anywhere in the world. This model is set to revolutionize the rental market as it cuts out expensive agency fees. The driving force in this change in the rental market is brought about by a frustration with current models and the vast costs paid. They enable quick and easy resolution of problems, offer all the security of current models via watertight lease agreements, simple management of maintenance issues and reduce the costs incurred by all.

They make moving easy.