Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

30 May, 2012 • 09:34 1

Fire Safety revisited

We have had a few queries regarding the Fire Safety (Protection of Tenants) Bill on which we have previously blogged, and so here is our update: the Bill failed to complete its passage through Parliament before the end of the session. This means the Bill will make no further progress and will not become law.

To recap, this was “a bill to require landlords to provide smoke alarms in rented accommodation; and connected purposes”. All landlords were to be required to install a mains operated battery backed smoke alarm before the tenancy agreement is signed.

The tenant would have been required to test the smoke alarm at least once a month and notify the landlord of any defects, who would then be required to carry out the repairs. There was to be a criminal penalty of up to 2 years in prison and/or a fine of up to £5000.00.

Filed under: England & Wales, , , ,

28 May, 2012 • 13:30 0

Pay as you go…….

A solicitor is entitled to refuse to do further work for a client until outstanding bills are settled and funds placed on account ( for anticipated costs not yet incurred) the Court of Appeal recently ruled . By doing so, the solicitor was merely suspending, not terminating the retainer and the client was liable to pay for the work done. The client in this case was unhappy with the size of the bill as it had exceeded initial estimates. The reason for the higher bill was that the matter had got more complicated, there being protracted possession proceedings.

All solicitors will have written terms of business which should set out on what basis the parties can terminate the agreement.

Inevitably there will be instances where costs are more than initially anticipated, and litigation ( in particular possession proceedings) are a minefield full of potential unwelcome developments that push your costs up. But if you are not happy with the costs and handling of the case there are channels available to resolve the matter ( for example the firm’s internal complaints procedure, the Legal Ombudsman and the Solicitors Regulation Authority amongst others).
But if your solicitors say no more work until you pay up ignore the message at your peril or you could find yourself liable for fees on the basis that you terminated the agreement.

Filed under: England & Wales

24 May, 2012 • 09:58 1

Beginners guide to Long Residential Leases

For many people the first property they buy is a long leasehold flat. This is, of course, the most complicated form of home ownership yet many people get little or no explanation of the realities of what is involved.

As a long leaseholder you are a type of tenant. Fundamentally you are bound by the terms of that tenancy which are are set out in the lease subject to the various statutory rules and regulations. Whilst very few leases are identical in form (even within the same development often) they will have various common elements and it is these that we intend to cover. There is however no substitute to obtaining proper comprehensive advice on your lease terms when you purchase and a good lawyer will do this.

The basics are how long is left on the lease and the rent. The first element is important since this can have a bearing on the cost of obtaining an extension ( see our blog post on this topic) and also how saleable the lease is. Generally in our experience a lease with less than 80 years remaining can now be difficult to sell. It is then important to know the rent. You should also check if there are any rent review provisions and make sure you understand these. It is important to bear in mind that the amount of ground rent will have a significant effect on the price of any extension.

The next important sections to understand relate to repairs: who is responsible for repairing in leases. Often you will be responsible for all internal repairs and redecorations and the landlord for all external. It is important to make sure these clauses are comprehensive and clear to prevent dispute later. Elements that are often worth checking are things such as who is responsible for repair and replacement of windows particularly if you are on a raised floor of a block.

Insurance: this will usually be the landlords responsibility subject to you repaying the costs. Again best to check although if you are getting a mortgage your lawyer should have checked this.

Service charges: often in practice for people living in a flat cause the most problems. It is important that you fully understand the clauses relating to these. Normally there will be a mechanism for determining the total service charge and then how this will be divided up and when you will be notified. Often theses clauses are detailed and require the landlord to jump through various hoops before the service charge is payable. Understanding these and what sums may be charged such as reserve funds will help you better understand one of the major liabilities of living in a flat and one which many leaseholders have no control over. Remember it is often for the freeholder to plan the schedule of works with little regard for the leaseholders personal circumstances.

Can I sublet and alter the flat? Again most leases will have specific provisions as to what is required. Many leases require you to obtain the consent of the freeholder in advance and you are likely to have to pay the freeholders costs. Again if this is an issue make sure you check and make enquiries of your freeholders.

The other thing that people often make assumptions about is what they are buying and rights they have over communal areas and grounds. Again it is best to check to make sure you are getting what you thought such as parking spaces and garages. Just because there is for example a garden does not automatically mean you will have right of access. Things like this should be explained to the lawyer who can check. Remember if you do not ask you may not get an answer!

This article provides an overview of what practically can be the important points for someone buying. Leases are often complex even for lawyers and so do not be afraid to ask. It is vital that you do understand this document since even in blocks where leaseholders own a share of the freehold you are required to comply with your lease.

Filed under: England & Wales, ,

23 May, 2012 • 08:56 0

Come and work for us

PainSmith solicitors seeks a 2-3 years qualified Landlord and Tenant solicitor to run own caseload and supervise up to 3 members of staff.

You will need to have strong civil litigation experience and be familiar with the principles of landlord and tenant law. A willingness to expand on landlord and tenant law is essential as well as a willingness to write articles and provide training in this area. The firm has a strong ethos for training young lawyers therefore you will need to be patient, confident and willing to help and assist when necessary.

Please send CV and covering letter to marveen@painsmith.co.uk

Filed under: England & Wales

18 May, 2012 • 11:17 0

Phone problems

For those of you who use our telephone helpline we apologise but we are experiencing technical problems with our lines. We are doing our best to get the problem fixed. Meanwhile we ask you to bear with us.

Filed under: England & Wales

16 May, 2012 • 12:08 0

Attention all Landlords!

We draw your attention to this recent decision of the Upper Tribunal which has caused a stir amongst leasehold lawyers in relation to service charges.

Section 47 of the Landlord and Tenant Act 1987 (LTA1987) provides that where any written demand is given to a tenant of residential leasehold property, then that demand must contain:

a) the name and address of the landlord and
b) if that address is not in England and Wales, an address for service.

Section 47 goes on to provide in subsection 2 that any part of the amount demanded that consists of a service charge will not be treated as being due until such information is furnished by notice given by the landlord to the tenant.

In Beitov Properties Ltd v Elliston Martin it has been decided that the wording of section 47 LTA 1987 means that where any written demand is given to the tenant the Landlord must put his or her actual address on the demand, not a care of address or agent’s address. A demand for service charges will be invalid without.

According to the Tribunal “The purpose of the requirement in section 47 to include in any demand the name and address of the landlord, in my judgment, is to enable a tenant to know who his landlord is, and a name alone may not be sufficient for this purpose. To provide an address at which the landlord can be found assists in the process of identification”.

It is noted however that the sanction for failing to give the actual landlords address in section 47 of the LTA 1987 is that service charges are due. Nothing is said about rent and as such we are of the opinion that where you have an AST landlords and agents can continue to use care of addresses. If the position changes we will of course let you know.

Most people are aware also aware of section 48 LTA 1987. Therefore to complete this article we should mention subsection (1) which requires a landlord to furnish the tenant with an address for service, which can be a care of address or agent’s address but must be an address in England and Wales. Unless and until the landlord gives an address for service in England and Wales then rent will not be treated as falling due.

Filed under: England & Wales, FLW Article, ,

15 May, 2012 • 16:03 0

Why do I need a tenancy agreement?

The simple answer to this question is that for most circumstances you do not strictly need a written agreement however if you don’t this can have unintended consequences!

As regular followers of the blog will know the starting point for determining the terms and what you should do in a particular instance is the tenancy agreement. If no written agreement exists it will be a question of trying to recollect what was discussed and possibly looking at any letters or emails about the negotiations to determine the parties intentions. This can result in the terms being unclear particularly if a dispute has arisen.

Assuming we are discussing Assured shorthold tenancies, which are the majority of private letting agreements, as many of you will know this is now the default tenancy in most cases ( for exactly what is an assured shorthold tenancy see the Housing Act 1988 as amended). If you are taking a deposit you are now required to register such a deposit with an approved scheme of which there are three. As part of this process you are required to give certain prescribed information. If you do not do you will not have complied with the rules. Most standard agreements which can be purchased ( such as those we produce and are for sale in our shop on our website) incorporate this information. For this reason giving an agreement, practically, can be easier to ensure the information is given and nothing is missed.

If then you have a written agreement you can specify the exact terms. Whilst you cannot contract out of rules laid down by Parliament, such as the landlords responsibility to keep the property in repair, you can make sure everything is clear. This can be things as diverse as the length of term and break clauses through to restrictions on smoking or loud music (although you might want to have a look at the Office of Fair Trading (OFT) guidelines to check the likely enforceability of your clause). Such comprehensive agreements allow you to effectively manage your investment and to make sure that both sides are clear as to what to expect from the other. Having an effective list of rules of occupation can assist in helping any potential disputes being seen off as having a clear reference to point to.

Whilst sorting out the paperwork can sometimes appear to be a chore if and when you are faced with a dispute it is vital. As we have repeatedly blogged the courts will take the agreement as the starting point. If you have no agreement in writing often the courts will find it difficult to impose onerous terms on one or other party unless it can be shown unequivocally that this was agreed. Whilst relying on terms other than rent or operation of a break clause to evict can be difficult in our experience without a rewritten agreement it is almost impossible.

So take 5 minutes and make sure you have an agreement which is up to date and covers what you want and require.

Filed under: England & Wales, , , , , , ,

14 May, 2012 • 08:35 5

Wheel Clamping: Protection of Freedoms Act 2012

The 1st May 2012 saw the Protection of Freedoms Act being given Royal Assent. Whilst covering many areas this also introduced further regulation of wheel clamping and has, in effect, outlawed wheel clamping of vehicles on private land. The actual offence is set out in section 54 of the Act and provides that anyone found guilty of an offence under this Act would be liable for a fine.

For many Private Estates wheel clamping has been used as an effective tool to prevent unauthorized third parties parking without authority. Clearly they will need to look again at what steps are taken. The Act does make clear that the use of a fixed barrier would not be a an offence if the barrier was in place when the vehicle was parked whether in use or not. For many estates this is not a desirable option but other options are limited.

Clearly for any estates currently using wheel clamping they will need to liaise with their provider and see what if any alternative services they may offer such as imposition of fines etc. Sadly it seems that the actions of “cowboy” clampers have meant that this method of protecting rights has now been removed.

Filed under: England & Wales,

9 May, 2012 • 13:49 2

Strikes!

Any readers currently dealing with the courts ( e.g. possession hearings, bailiff appointments etc), be aware of proposed industrial action by court staff. A “work to rule” may be in operation and you may find the courts are slower than usual in dealing with matters between tomorrow and August with urgent cases being prioritised. You can read about it in the Law Gazette here and on the BBC news here. The land registry also anticipates that tomorrow ( 10th May 2012) “Waiting times may be longer than normal; however, we will of course endeavour to ensure that any disruption is kept to a minimum”.

Filed under: England & Wales

8 May, 2012 • 13:01 1

Recovery of Leaseholder’s Legal Costs

Most commercial and long residential leases contain provisions which enable the landlord to recover any legal costs that may be incurred, however due to the vast amount of case law surrounding this issue there is considerable uncertainty as to whether or not the landlord can recover these costs if they proceed through the Leasehold Valuation Tribunal (LVT).

In the case of Freeholders of 69 Marina v Oram & Ghoorun the freeholders of a block of flats undertook work on the common parts and sought to recover the service charges from the tenants. However two tenants disputed the amount and the freeholder applied to the LVT to recover the service charges and the costs of taking the matter before the LVT. No monies were received from the two tenants despite the LVT decision so the freeholders served notice under section 146 of the Law Property Act 1925 demanding payment and issued a claim at the county court. The tenants then made payment. The issue to then be decided was whether the tenants should be equally liable for the costs of enforcement of the legal costs or whether the costs should be applied to all the tenants collectively. The Court of Appeal interpreted the terms of the lease and it was held that the costs were to be recovered from the two tenants only.

The above decision of the Court of Appeal is one that courts will have to consider in future cases. It should be noted that this decision was made because the costs clause in the lease was unambiguous. The decision clearly indicates that each particular lease needs to be carefully considered and whilst many leases contain covenants with the wider wording such as Freeholders of 69 Marina, many other leases contain the narrower wording.

Filed under: England & Wales, FLW Article, , , ,

4 May, 2012 • 11:34 0

Insurance: how to challenge

Most long leases require the Freeholder to insure and then to recover the premiums from the Leaseholders. In respect of residential leases Leaseholders have various rights.

The starting point as always are the terms of the lease and what these allow the Freeholder to do and recover. It is important to consider but usually the lease terms will be drawn allowing the Freeholder to insure with whom ever they wish and for what risks they consider appropriate. Often this results in a premium which the Leaseholders feel is unreasonably high.

As with all such matters we would in the first instance suggest that the concerns are bought to the attention of the Managing Agent or Freeholder. They ought to be prepared to engage with you to show how the premium was achieved and that it is reasonable. Sadly not all do so. If not the Leaseholder is entitled under the Landlord and Tenant Act 1985 to request a right to inspect the policy and take copies. This means not only the premium receipt but copies of the policy and all the relevant schedules which should include details of claims history etc.

Armed with details of the policy it is then possible to obtain alternative quotes. We pause at this moment to remind Leaseholders that they need to obtain alternative quotes which are on similar terms unless there are good reasons to depart from the terms of the existing policy. Before departing from those terms we would always suggest that you obtain advice from an experienced insurance broker so you can support any argument that the terms on which the Freeholder had been insuring were unreasonable.

Once you have an alternative quote, if lower, we would again suggest you submit it to the Freeholder for comment. Remember the Freeholder does not have to go with the cheapest quote but he needs to be able to show the quote he has obtained is reasonable in all the circumstances ( see section 19 of the Landlord and Tenant Act 1985). Assuming still you get nowhere then you can look to make an application to the Leasehold Valuation Tribunal (LVT) under section 27A of the Landlord and Tenant Act 1985. The application should attach a copy of the Freeholders demands and your evidence. This should include your quote, the proposal form and any other information such as letters etc with your broker and or the Freehold. Remember you will need to show to the LVT that your quote is on similar terms to those originally obtained by the Freeholder (or other reasonable terms) and is at a significantly lower price.

Often these disputes are dealt with on the papers. This means it is vital your case is clear. The Freeholder will be invited to comment upon your case and to explain why the premium which they claim is reasonable. Usually then the Leaseholder will have an application to respond. Remember this will be your last chance to have a say and it is worth commenting on what the Landlord says. Landlords will often say they used an independent broker who tested the market. If there is no proof as to how the market was tested you should point this out. If the Freeholder does not comment on whether they have received a commission this is a point worth raising as more often than not they will!

Remember just because the Premium seems high will not necessarily make it unreasonable. It is important to consider the terms. Things such as the claims history and if many of the properties are sublet with the lease not allowing the Freeholder control over this can affect the terms companies quote on. We have also seen Leaseholders obtaining quotes where the cover is split between 2 or more insurance companies with each having a percentage share of the cover. In the writers opinion it would be reasonable for a Freeholder to refuse such a quote. Dealing with 2 or more insurers could be difficult.

It is important to do your homework but if having done this the premium still seems high and the Freeholder will not budge the LVT can assist.

If you need help on this or any other long residential lease issue please do contact us.

Filed under: England & Wales

4 May, 2012 • 11:20 0

Insurance: how to challenge

Most long leases require the Freeholder to insure and then to recover the premiums from the Leaseholders. In respect of residential leases Leaseholders have various rights.

The starting point as always are the terms of the lease and what these allow the Freeholder to do and recover. It is important to consider but usually the lease terms will be drawn allowing the Freeholder to insure with whom ever they wish and for what risks they consider appropriate. Often this results in a premium which the Leaseholders feel is unreasonably high.

As with all such matters we would in the first instance suggest that the concerns are bought to the attention of the Managing Agent or Freeholder. They ought to be prepared to engage with you to show how the premium was achieved and that it is reasonable. Sadly not all do so. If not the Leaseholder is entitled under the Landlord and Tenant Act 1985 to request a right to inspect the policy and take copies. This means not only the premium receipt but copies of the policy and all the relevant schedules which should include details of claims history etc.

Armed with details of the policy it is then possible to obtain alternative quotes. We pause at this moment to remind Leaseholders that they need to obtain alternative quotes which are on similar terms unless there are good reasons to depart from the terms of the existing policy. Before departing from those terms we would always suggest that you obtain advice from an experienced insurance broker so you can support any argument that the terms on which the Freeholder had been insuring were unreasonable.

Once you have an alternative quote, if lower, we would again suggest you submit it to the Freeholder for comment. Remember the Freeholder does not have to go with the cheapest quote but he needs to be able to show the quote he has obtained is reasonable in all the circumstances ( see section 19 of the Landlord and Tenant Act 1985). Assuming still you get nowhere then you can look to make an application to the Leasehold Valuation Tribunal (LVT) under section 27A of the Landlord and Tenant Act 1985. The application should attach a copy of the Freeholders demands and your evidence. This should include your quote, the proposal form and any other information such as letters etc with your broker and or the Freehold. Remember you will need to show to the LVT that your quote is on similar terms to those originally obtained by the Freeholder (or other reasonable terms) and is at a significantly lower price.

Often these disputes are dealt with on the papers. This means it is vital your case is clear. The Freeholder will be invited to comment upon your case and to explain why the premium which they claim is reasonable. Usually then the Leaseholder will have an application to respond. Remember this will be your last chance to have a say and it is worth commenting on what the Landlord says. Landlords will often say they used an independent broker who tested the market. If there is no proof as to how the market was tested you should point this out. If the Freeholder does not comment on whether they have received a commission this is a point worth raising as more often than not they will!

Remember just because the Premium seems high will not necessarily make it unreasonable. It is important to consider the terms. Things such as the claims history and if many of the properties are sublet with the lease not allowing the Freeholder control over this can affect the terms companies quote on. We have also seen Leaseholders obtaining quotes where the cover is split between 2 or more insurance companies with each having a percentage share of the cover. In the writers opinion it would be reasonable for a Freeholder to refuse such a quote. Dealing with 2 or more insurers could be difficult.

It is important to do your homework but if having done this the premium still seems high and the Freeholder will not budge the LVT can assist.

If you need help on this or any other long residential lease issue please do contact us.

Filed under: England & Wales

1 May, 2012 • 09:50 0

First Picture of the PROPERTYdrum conference.

Hope to see you there!

Filed under: England & Wales, FLW Article,

30 April, 2012 • 10:59 1

Legionnaire’s disease

Legionnaire’s Disease is contracted by inhaling droplets of water which contain the Legionella bacteria and those with weaker immune systems are particularly at risk. Although the Legionella bacteria can be found in most water systems, the main areas of risk are where the bacteria can multiply and increase to dangerous levels. This is where water of between 20 and 45 degrees can become stagnant and there is rust, sludge, scale or organic matter for the bacteria to feed upon and multiply. This means that most modern water systems will not require any action further than the carrying out of a risk assessment but old water systems and dirty or poorly maintained air conditioning systems may require further work to be carried out.

The HSE has recently changed its Code of Practice for Legionnaire’s Disease and water systems of a volume of less than 300 litres are now included. This means that landlords now need to carry out appropriate risk assessments otherwise they may risk prosecution. The risk assessment may be carried out by a third party or the landlord if he is competent to do so but the ultimate responsibility is the landlords.

A risk assessment should ask the following questions:

 Is the water stored between 20 and 45 degrees?
 Is there stagnant water in any areas of the water system, for example redundant pipework?
 Is there rust, sludge, scale or organic matter in the system?
 Do the thermostatic valves on outlets release water within the above temperature range?
 Are there any outlets which are not frequently used, for example showers or taps in second bathrooms?

You should also consider whether your tenants are particularly at risk due to age, illness or weakened immunity.

Where a risk is identified then steps should be taken to deal with it, such as flushing out the system, avoiding debris getting into the system, maintaining the correct temperature and advising tenants of the risks and how to avoid them (for example, flushing out system after periods of lack of use). If any redundant pipework is identified then this could also be removed. The risk assessment should be reviewed regularly and whenever any element of it changes, ie. Vulnerable tenants move in, and written records should be kept of risk assessments and when they are carried out.

Filed under: England & Wales, FLW Article, , , ,

27 April, 2012 • 10:52 0

Neighbour disputes: please do try and avoid!

As a firm we often are asked to assist people who find themselves involved in a neighbour dispute. Often by the time someone approaches us relations are to say the least strained and what appeared a small issue has now escalated.

We tell everyone from the outset that they should do everything to resolve the matter. The Courts are loath to deal with such disputes and in our experience whilst a huge amount of money (six figure sums on costs are not unheard of), time and emotional energy will be spent on dealing with the matter almost inevitably the outcome is not one which either party is 100% happy with. Often the Court will appear to almost exercise a judgement of Solomon in determining the issues.

So if you find yourself in a position where you think there may be a dispute or potential for one what should you do?

The first thing is think about talking. We find that often parties may have misunderstood the others intentions. It is always worth trying to talk and if that has become difficult you could see whether you have a mutual friend who is prepared to try and act as a go between. Remember if you find yourself in dispute as and when you come to sell your property if you are an owner occupier you will have to disclose this.

If sadly you cannot resolve things between yourselves it is worth sometimes seeing if your local authority runs or can point you to a local voluntary mediation service. Certainly today we would always recommend that parties explore the possibility of mediation or the various other forms of alternative dispute resolution (ADR). If you cannot find a voluntary scheme you may find it useful to take some advice from a solicitor who then ought to be able to find a suitable mediator and or point both parties towards one. With regards to disputes purely relating to boundary issues the Royal Institute of Chartered Surveyors (RICS) runs a scheme which has certain fixed fee options.

If we are approached whilst we may advice you on the merits or otherwise of your case and a way forward we may still recommend that you try and correspond with your neighbour. We advise this in some situations as we have found that the involvement of lawyers can act to entrench parties positions. This is what should be avoided at all costs.

Ultimately if you cannot agree Courts can but as we say above the outcome is uncertain and often not what either party wants. You will find you are still neighbours and it can affect your ability to sell your property. Early mediation and resolution is best and all parties should be prepared to compromise as Court actions over principles are never sensible!

If you have a problem we are always happen to discuss in confidence and explore options. As a firm we have qualified mediators available and are experienced in assisting with these cases.

Filed under: England & Wales

24 April, 2012 • 09:10 4

Daejan v. Benson: where are we at?

We have made various posts about service charges etc on long leaseholds but still have questions asked about the infamous case of Daejan v. Benson.

To recap this started life as an LVT claim as to whether service charges were recoverable or if they were capped due to a failure by Daejan to comply with Service Charges (Consultation Requirements) (England) Regulations 2003 and subsequently on application to dispense with the need to consult under the Landlord and Tenant Act 1985. In both instances the LVT found against Daejan who appealed to the Upper Tribunal (Lands Chamber) who in November 2009 upheld the LVT decisions. So off went Daejan to the Court of Appeal.

The Court of Appeal gave its judgment in late January 2011 (Daejan Investments Ltd v Benson & Ors). The Court of Appeal upheld the previous decisions and therefore found against Daejan. Not put off Daejan sort leave to appeal to the Supreme Court and was granted the same at the end of June 2011. Currently we understand that the matter is likely to be heard by the Supreme Court and judgment given towards the end of this year.

So where does this leave the law? If you are a Landlord (whether arms length or residents) you must ensure that you comply with the Section 20 Consultation requirements to the letter! To do otherwise leaves you open to significant risk that costs will not be recoverable. As the law stands the financial consequences to the freeholder are not a matter for the LVT to take account of when considering prejudice. What needs to be shown is that a failure to comply must not cause any genuine prejudice to the Leaseholders. Whilst LVT’s may have substantial sympathy with residents management companies under the regulations no differentiation is made. LVT’s currently are likely to take a strict view given the fact that the current statement of the law was supported by both the Upper Tribunal (Lands Chamber) and the Court of Appeal.

Landlords and those advising them do have options. Given the serious ramifications of a decision going against a Landlord after works have been completed it is worth bearing in mind that they can apply for a prior determination. When there is opposition to a scheme and it is clear from the conduct of some leaseholders that they will challenge the works this may mean despite there being a delay that an application should be made to the LVT. Given most LVT panels can hear cases with fairly short timescales ( assuming no appeals) then this can be factored in to the process and quotes etc can be obtained which perhaps have a longer “shelf life” than normal to allow for an application. It seems to us that given the various rules and regulations specifically allowing prior determinations this must be the prudent step given that it provides Landlords with a safety net to check compliance if any doubt in the Landlords or their agents mind.

We will of course have to see what view the Supreme Court takes and we will be sure to blog on this when we know more!

Filed under: England & Wales, FLW Article, , , , ,

23 April, 2012 • 10:14 0

Break Clause requirements go both ways.

As I am sure many of you who subscribe to the helpline will be aware, the advice for a Landlord or an agent invoking a break clause to bring about an end to the tenancy agreement is to follow the provisions of the break clause exactly. If this means serving the notice by hand whilst balancing a bowl of water on your head then that is what needs to be done.

The Avocet Industrial Estates case makes clear that this is not just the case for the Landlord and Agent but also the Tenant.

In this case the requirements of the break clause in a 10 year commercial lease, were that the break would be ineffective if “any payment” due under the lease remained unpaid and if a sum equivalent to 6 months rent was due. The day before the break date the tenant handed a cheque for 6 months rent which was due to the Landlord and handed back the keys. The Landlord challenged this claiming that simply handing a cheque does not constitute the amount being paid. This would mean that there were still monies owed at the break date and the break invoked by the Tenant should be ineffective.

The court agreed deeming that a cheque was not legal currency and therefore there was default interest amounting to £130 still owed. This meant that both requirements of the break clause were not satisfied and the Tenant could not rely on the break clause. The court accepted that the result was rather harsh but the decision was based on the legal principle of certainty.

This case simply demonstrates that parties continue to do things without reading the tenancy agreement. On the helpline we often have people that serve section 21s by hand and assume that its deemed served the same day if posted before 4.30pm. However the tenancy agreement states something different, which is that it is deemed served the next day. The section 21 is therefore invalid. This is common and should not be if people just took 10 minutes to read the agreement, assuming you are familiar with it is simply not good enough.

Filed under: England & Wales, FLW Article, , , ,

20 April, 2012 • 09:32 0

Charges for underletting: what is reasonable?

In February the President of the Upper Tribunal (Lands Chamber) gave Judgement in respect of various charges for underlettings in a number of joined cases, the lead case being Holding and Management (Solitaire) Limited v. Norton [2012] UKUT 1 (LC).

Suffice to say the President substantially reduced the fees payable both for advance and retrospective consent determining the fee payable should be £40+VAT.

Obviously, as we have repeatedly blogged upon, the starting point is the lease terms and what they provide. Many leases however do provide that either some form of advance consent is required or notice must subsequently be given. Generally if such provisions exist there will be an express or implied right for the Freeholder/Managing Agent to charge a reasonable fee. In making such a charge they must ensure that the same is reasonable and also serve the appropriate Summary of Rights.

In this case the Agent asserted that a large amount of specific work was required including review by qualified legal staff. No specific hourly rate was given but it was suggested that in total the process took about 3 hours. There were no details as to what work had been done in each of the cases in question and the President took the view that the list of work was a list of everything that conceivably could be done and was not evidence of what was done.

Certainly many Leaseholders complain that the costs they are charged for underlettings are too high for the work undertaken whereas Landlords conversely argue they have very real duties to all Leaseholders (and sometimes the block Insurers) to exercise appropriate due diligence. What is clear is that the President accepted that a Landlord may need to carry out appropriate checks but in calculating the fee they need to be able to demonstrate, generally, and with regards to the specific case how the fee is justified. It seems that Landlords and their Agents should ensure that they consider whether they wish to maintain time records in case of challenge.

Whilst many people simply pay (even if begrudgingly) there is a route open for challenge of Administration fees and it may only be a question of time before some Landlords make their own advance applications to determine that the charges they make are reasonable.

Filed under: England & Wales, FLW Article, ,

18 April, 2012 • 14:13 0

Unsigned terms of business

In Fladgate LLP v Harrison a solicitor sent out an engagement letter to a company director. The director was sent invoices as and when work was undertaken by the solicitor however the director then denied liability for the invoices on the basis that there was no written or oral agreement.

However Mrs Justice Lang stated that “the giving of instructions by a client to a solicitor constitutes the solicitors retainer by that client. It is not essential that the retainer is in writing. It may be oral. It may be implied by the conduct of the parties in particular cases.”

In this case the court determined that the general principles of contract law apply. Previous case law was considered and in particular the contention that, “whether there is a binding contract between the parties, and if so on what terms, depends upon what they have agreed…upon a consideration of what was communicated between them by words or conduct and whether…they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations.”

Generally where there is a dispute over an oral retainer the clients version will prevail however this is not the case where the court finds that the clients case is contradicted by other documentary and witness evidence.

Therefore the moral of the story for agents is try to ensure that you have signed terms of business with your landlords. But where you do not you need to ensure that someone has the full details of the conversations with the landlord noted so that you can support the contention that you have an oral agreement!

Filed under: England & Wales, FLW Article, , ,

16 April, 2012 • 12:13 0

It’s (not) a gas

A Landlord has been prosecuted, found guilty, fined £2,000.00 and ordered to complete 150 hours’ community service for breaching the gas safety regulations including using unregistered gas engineers for gas safety checks. The HSE report can be read here.

Landlords and agents are reminded that there is no defence to non compliance with the regulations. There may be instances where the HSE decides not to prosecute ( e.g where tenants have refused access) but without mitigating circumstances a landlord must comply. To find or check a Gas Safe Registered engineer in your area click here.

Filed under: England & Wales, FLW Article, , ,

13 April, 2012 • 15:16 1

Valuation in Lease Extensions and Enfranchisement: What is involved?

We are often asked to explain what is involved in the valuation issues relating to lease extensions and collective enfranchisements under the Leasehold Reform Housing and Urban Development Act 1993 (“the Act”). Whilst our first instincts are always to advise people that they need expert professional help from a Valuer experienced in these matters such as Valuer members of ALEP we thought it might be useful to explain the process. This article is simply an overview and a professional valuation should always be obtained.

The principles for what is required are set out in Schedule 6 for collective enfranchisements and Schedule 13 of the Act for lease extensions. The principles for each are similar and both are based on “market value”. The reality is that this idea of “market value” is somewhat false often involving various assumptions or discounts.

The valuation date for both types of claim are the date of actual service of the Notice. This fixes the date and the valuation is calculated having regard to the facts at that point in time. This can be very important particularly when some claims do not have the price actually determined until sometime (even years) later.

The price payable for a collective enfranchisement is the total of:
• The value of the freeholders interest if sold on the open market
• The freeholders share of the marriage value
• Any compensation.

For lease extensions it is:
• The reduction in the value of the freeholders interest
• The freeholders share of the marriage value
• Any compensation

So what does this all mean in practice? Taking the elements in turn:

Marriage value is the extra value which is gained when the freehold and leasehold interests come together. In collective enfranchisement claims it is only payable in respect of those flats actually taking part and for both following amendments made to the Act the amount payable is fixed at 50% of any marriage value unless the unexpired term exceeds 80 years in which case no addition is made for marriage value. It is this amendment which has meant that it is vital that Leaseholders and their advisers give careful regard to lease terms getting shorter.

Given marriage value only applies directly to those participating on occasion when you have a block with differing lease terms it may not be beneficial to have all leaseholders participating and it is worth highlighting that individual leaseholders cannot demand to be part of the process if others will not allow them to join. An amendment was made under the Commonhold and Leasehold Reform Act 2002 which would have forced all leaseholders to be given an opportunity to join using what was known as Right to Enfranchise Companies (RTE) however these amendments were never given force and in fact are due to be repealed. That being said it is not unknown for notices to be served by only some leaseholders on the understanding that once they have the freehold others will then join in or be given an extension but if freeholders become aware of this (and they are entitled to have notice of any agreements made which may affect value) they can pursue recovery of any value they may have lost.

Compensation is then to compensate the freeholder for any direct loss of value, or reduction in the value of the interest as a result of the process. Often in the various cases this relates to what is known as “Hope Value”. Generally this tends to come into play with collective enfranchisement claims more so than lease extensions.

For the purposes of this article there are two main types. Firstly on enfranchisement claims it will be an amount assessed having regard to the marriage value that is likely at some point in the future to be paid by non-participating flats. A percentage is assessed as to what sums at a later date would be paid by these leaseholders for a lease extension. The second is for loss of any redevelopment potential. The most common scenario is when a freeholder asserts that they could or would be able to build some additional units at the property. It will be a question of looking at all the evidence such as any planning history and assessments which have been undertaken to see whether this is real or imagined to then calculate what value should be attached to this.

Finally there is the value of the Freeholders interest. There are two main parts to this. The capitalised value of the ground rent and the value of the freehold with vacant possession deferred until the end of the unexpired term.

For the ground rent it is a question of working out what the total value of the ground rent is worth at the valuation date. This is a formula calculating the current annual ground rent income, assessing the type of percentage return an investor would want and then calculating the value given the number of years the landlord would be entitled to this income under the current lease(s).

As for the freehold this is a question of calculating the unimproved vacant possession value in what is referred to as a “No Act” world. Generally this will be less than the actual value of the Unit. The idea is to calculate the amount an investor would pay now on the basis that at the end of the lease term they would recover vacant possession. Again once the vacant possession value is calculated then a percentage of this is calculated for what would be paid at the valuation date of that possibility occurring.

These amounts are then added up to give the premium which can be payable.

The process is complicated and does require a thorough understanding of all the valuation principles not least since many of the percentages and rates applied to the actual valuation numbers are calculated having regard to various tables and graphs. The whole area of valuation has given rise to a substantial body of case law as to what percentages should be applied in what situations and almost every aspect of the valuation formula has at one time or another led to cases in the House of Lords (as it then was) or the Supreme Court.

With good advice these issues can be readily tackled and a valuation produced. Given that valuation is an art rather than a science usually you will be advised as to a best, worst and likely figure since as with all valuations there is always room for negotiation!

If you need help or further guidance we would be happy to help.

Filed under: England & Wales, FLW Article, ,

10 April, 2012 • 07:39 2

Subletting

It does appear to be quite common now that the person that signs the tenancy agreement as the tenant is not in fact the person that is actually residing at the property. Sometimes agents carrying out periodic viewings attend properties expecting to see a family and are faced with as many as 15 complete strangers.

So what can the law do to help? In Rose Chimuka’s case, she was convicted of fraud and sentenced to 4 years and 3 months imprisonment.

The scam involved Chimuka, often using a false name, approaching estate agents saying that she was looking for a large family home to rent. She would discuss school catchment areas and often confirm that her husband worked away.

However, rather than moving in with family, Chimuka would advertise locally for tenants so that she could sub-let the property to other tenants without the property owners consent or knowledge. She would then sub-divide the houses she had rented and put locks on internal doors and permit up to 15 people in some cases to reside in the properties.

Chimuka would collect rent money in cash from her ‘tenants’ and fail to pay her own rent for the properties she was renting.

Landlords often point the finger at agents accusing them of not carrying out the right checks etc. However, when you are faced with prospective tenants giving false information it can be difficult to detect the lies until it is too late. PainSmith Solicitors has obtained possession proceedings in these circumstances and whilst the proceedings can be slow (due to court backlogs) we have obtained possession at the first hearing. So there is hope and the courts are sympathetic to landlords in these situations.

Filed under: England & Wales, FLW Article, , , ,

3 April, 2012 • 16:26 3

EPC- newspaper adverts and window cards

At the last ARLA regional meeting in London, Marveen Smith noted that many of those attending were not happy with the changes to the EPC regulations.

Therefore having called some people and then some more people we were referred to:

Do newspaper adverts or window cards for property lets meet the definition of written particulars? No. The requirement to attach a copy of the front page of the Energy Performance Certificate to written particulars is where an agent proposes to provide written particulars to a person (i.e. a specific individual) who may be interested in buying or renting the building. This implies that a copy of the front page of the Energy Performance Certificate does not need to be attached to ‘advertising material’ – ie – a newspaper or window card.

Can the Energy Performance Certificate be re-sized if the written particulars are produced in A5 format?
The Energy Performance Certificate can be reproduced in a smaller size provided it is still legible and meet any other legal obligations, such as the Equality Act 2010.

Want to read more then click here.

We understand that the guidance will be adhered to therefore we strongly recommend that you keep a copy in the office just in case the enforcement team comes knocking…..

One thing we would like to make clear is that this guidance does conflict with the legislation. Therefore despite the existence of the guidance, agents could still be pursued by trading standards and as such it will be a commercial decision on what to do and what not to do with the EPC and the marketing material they use.

Filed under: England & Wales, FLW Article, , , ,

2 April, 2012 • 16:24 0

New Documents on our shop

Our new tenancy agreements, terms of business and clauses which take into account the changes taking effect on 6th April 2012 are now available in on our Shop. However the changes are not huge and each scheme has its changes freely available on its own website and we leave it entirely up to you whether you wish to purchase the integrated documents from us or not.

Filed under: England & Wales, FLW Article

2 April, 2012 • 16:15 0

Missing Landlord: an alternative solution

Many of you will be aware that when a long residential Leaseholder of a flat has a missing Landlord the Leasehold Reform Housing and Urban Development Act 1993 provides a remedy. The process involved requires a Court application and then a determination of the price by the Leasehold Valuation Tribunal using the valuation principles under the 1993 Act, as amended. This means that if the Leaseholders hold leases with less than 80 years remaining then they will have to pay an element of marriage value.

Under the Landlord and Tenant Act 1987 Part III there is an alternative method which may be used. This may be a better route due to the valuation formula used which is believed to be more favourable to Leaseholders in that generally they will not have to pay marriage value.

Under the 1987 Act if there is a building consisting of 2 or more flats held by qualifying Leaseholders (i.e. long leases) and they amount to more than 2/3rds of the total number of flats then the Act may apply (section 25). The commercial parts of the building must not exceed 50% of the total internal floor space ( so further reason why this method can be used rather than the 1993 Act). Subject to these then the 1987 Act will apply.

The starting point is then to look at Sections 27, 28 and 29 of the 1987 Act. Under Section 27(3) when the Landlord is missing an application to the Court can be made to dispense with the service of a Notice. The application can then be made for an Acquisition Order and under Section 29 if the Landlord is not carrying out their management function, which includes repair, maintenance and insurance of the property, as required by the lease (and almost by definition if there is a missing landlord and no intermediate Management Company they will not be) then the Court may make an Acquisition Order. The Order may be on such terms as the Court thinks fit but they will refer the question of price to the Leasehold Valuation Tribunal.

Under S. 33 where the Landlord is missing then the Senior President of the Tribunal shall select a surveyor to determine the price payable. This will be on terms that the interest may realise if sold on the open market and that the assumption that none of the Leaseholders were seeking to buy. Generally it is believed that in instances where marriage value would be payable under the 1993 Act this may be a more favourable valuation method.

The LVT will then make appropriate directions as to the price and other terms. The court may then execute the transfer and subject to paying the monies into Court the acquisition can be created.

Whilst all routes involving missing Landlords are perhaps cumbersome it is worth thinking which route is best. Discussion with the professional advisers is best at an early stage to consider fully the best valuation method. From a time perspective given the actual processes are similar then little can be gained. It is also worth bearing in mind that in instances where a Manager has been appointed under the 1987 Act then provided the Manager has been appointed for not less than 2 years then this method can also be available.

If you have such a situation then we would be happy to advise.

Filed under: England & Wales, , ,

27 March, 2012 • 10:49 0

Disrepair…..

We often get asked by Landlords whether the council can inspect their houses and force them to carry out works. Therefore the answer is below:

The Building Act 1984 ss77 and ss78 allows local councils to take action where they believe a property is dangerous. Under s77 they can apply to the Magistrates Court for an order that the owner of the building repair and under s78 the council can do the work itself and claim the money back from the owner of the property, but only if it is not reasonable to proceed under s77.

Swindon BC v Forefront Estates Ltd concerned a Grade II listed building called the Institute which had originally been designed to provide recreation and education for railway employees but at the time planning permission had been granted to turn it into flats and Forefront owned it. It came to the attention of Swindon Council that the Institute, and particularly its roof, may be dangerous. It carried out various inspections to the property and deemed that this was indeed the case and the roof was in imminent danger of collapse. It carried out the work needed to make it safe and sought to claim the sums expended back from Forefront. When Forefront did not pay, the Council issued a claim against it and Forefront put in a defence that the works might reasonably have been carried out under s77.

The High Court found that the Council could not reasonably have proceeded under s77, largely based on two grounds. The first was that the roof of the property had been found to contain asbestos and lead paint and there was a real danger that this could be dispersed into the air in a busy area used by members of the public and some 450 people would have to be advised to keep doors and windows closed and stay inside their houses. The second point was that there was a real risk that falling masonry could land on a passer by or someone seeking shelter in the building. The Council was awarded the sum of £331,242.69 and costs of over £60,000.

In short, yes the council can even where the property is not Let!

Filed under: England & Wales, FLW Article, ,

23 March, 2012 • 10:53 0

LEASEHOLDERS RIGHT OF FIRST REFUSAL

As many of you will no doubt be aware in relation to long leasehold property there is generally a right of first refusal to the freehold title when it comes to be sold. The purpose of this blog post is to give a brief overview of the framework.

Part 1 of the Landlord and Tenant Act 1987 contains the statutory provisions governing when Leaseholders have this right, the process to be adopted and the penalties for non-compliance. Certainly any freeholder and their advisers before dealing with the freehold title need to consider whether the provisions will apply.

So what is required?

For the Act to apply the premises must contain 2 or more qualifying flats ( ie residential flats with lease terms originally of more than 21 years) and the number of such flats must be more than 50% of the total number of flats and there is not more than 50% of the floor area of the building occupied by commercial parts.

Next consideration needs to be given as to whether the disposal is “relevant”. Generally an outright transfer of the freehold title would be covered as would any other estate/disposal save for certain specific exceptions. The most relevant examples of exceptions are: any lease of an individual flat, disposal by a liquidator or trustee in bankruptcy, disposal to an associated company or disposal under the Leasehold Reform Housing and Urban Development Act 1993. Full details of relevant disposals are set out in section 4 of the 1987 Act.

If the Landlord is intending to make a disposal he then needs to serve a Notice. Often these are simply referred to as Section 5 Notices being the section of the 1987 Act detailing the requirements. The Act lists various types of Notice which need to be served dependant upon the circumstances of the disposal e.g by auction or private treaty. In general terms the Notice tells the Leaseholders what the Landlord intends to do. If then the Leaseholders want to purchase, not less than 50% of the Leaseholders collectively, must serve a response notice by a date given in the Landlords original Notice. They can then force the Landlord to sell the interest to them on the same terms as the intended disposal. The time limits are strict and if no notice is served by the Leaseholders the Landlord can proceed with their intended disposal provided they do so within 12 months of the date by which the tenants should have replied.

As can be seen Landlords have been known to serve a section 5 Notice even when they have no intention of selling to try and draw out of Leaseholders whether they can be persuaded to buy and often to pay a higher price than perhaps a collective enfranchisement would achieve. For this reason Leaseholders are certainly advised to take professional advice on any Notice served to consider whether a purchase is the best way to proceed for them.

If a Leaseholder does become aware that a disposal has taken place without Notice being served then there are various courses of action open. Firstly this may be a matter which could be reported to the local Tenancy Relations Officer as the Landlord will have committed an offence for which they could be prosecuted and if found guilty fined. Secondly the Leaseholders can (assuming there is the requisite majority) in effect require the Purchaser to dispose of the interest they acquired to the Leaseholders on the same terms as per their contract with the Landlord. Once again there are strict time limits and so as soon as the Leaseholders become aware of a disposal they should urgently take advice as generally they will only have 6 months to enforce their rights under the 1987 Act.

As with many aspects of long residential Leasehold Law the process is relatively complicated and full of pitfalls for the unwary. Both Landlords and Leaseholders should look to take advice at the earliest opportunity to ensure that their respective positions are properly protected.

Filed under: England & Wales, FLW Article, ,

20 March, 2012 • 10:46 0

Data Protection

A letting agent has been found guilty under section 55 of the Data Protection Act and the Criminal Attempts Act.

The agent was fined £200 and ordered to pay a £15 victim surcharge and £728.60 prosecution costs by Highbury Magistrates Court.

The offence was uncovered in June 2011 when the Department for Works and Pensions (DWP) received a call from the agent who was fraudulently trying to access the account of a tenant on benefits. The DWP investigated before reporting the matter to the Information Commissioners Office (ICO).

The agent had no authority to access the tenants’ information held by the DWP and it was only when the agent could not recall the tenant’s middle name that the DWP became suspicion.

Unlawfully obtaining or accessing personal data is a criminal offence under section 55 of the Data Protection Act 1998. The offence is punishable by way of a financial penalty of up to £5,000 in a Magistrates Court or an unlimited fine in a Crown Court.

So what should you do if you want to check the details given to you by a tenant or potential tenant?

A signed letter of authority should be obtained from the tenant and then the DWP contacted to obtain the information you need. The DWP will want sight of the letter of authority which could be faxed before any telephone call.

Whilst the fine was small the agent and the company are no doubt having to deal with the publicity that this case has attracted. It simply is not worth it in such a competitive market and guidance can be sought on the ICO website.

Finally the Data Protection Act is likely to be replaced by the new General Date Protection Regulation which is likely to be introduced next year. Agents should take this seriously and should consider implementing changes if they are aware that staff is not adhering to the law as ‘strictly as they should’.

Filed under: England & Wales, FLW Article, , , , ,

16 March, 2012 • 10:28 2

The Property I let / manage is an HMO.

What do I need to do?

1. Comply with the Regulations (see below)
2. Check whether your HMO needs planning permission (see next blog)
3. Check the council tax requirements (see next blog)
4. Check whether needs licensing (see blog on licensing)

1. Comply with the Regulations
ALL HMOs need to comply with the HMO management regulations [SI 2006/372 in England and SI 2006/1713 Wales] , which apply regardless of licensing status.

The person managing* [ i.e normally the agent] and the person having control [normally the landlord] for the property must:

• Ensure that the name, address and contact number of the person managing are made available to each household, and the same must be displayed clearly in a prominent position in the HMO (Reg 3)

• Take the following general safety measures:
o Keep fire escapes free from obstruction and in good order and repair
o Ensure that any fire fighting equipment are maintained in good working order (Note: no stated requirement as yet to have alarms installed, but these are usually demanded on the basis that it is a reasonable measure to keep an occupier safe from injury).
o Take all reasonable measures to keep the occupiers safe from injury, having regard to the design, structural conditions and number of occupiers (Note that this means that even where under normal L&T principals the Landlord is not required to remedy a design defect, the Landlord/agent may have to attend to the same in HMO).
o Make safe, or prevent access to unsafe roofs or balconies
o Make sure low level windows are barred, or made safe from “accidents which may be caused in connection with such windows”, which we interpret to include falling out of them.

• Keep water supply and drainage in good, clean and working condition, including preventing frost damage and must not unreasonably cause or permit interruption to the supply (Reg 5)

• Provide a gas safety certificate to the local authority within 7 days of them requesting it (Reg6)

• Obtain an electrical fixed wiring certificate every 5 years ( at least), and supply to the local authority within 7 days of them requesting it (also reg 6)

• Not unreasonable cause or permit interruption to the supply of gas or electricity ( also reg6)

• Ensure the common parts are in good decorative repair, clean and free from obstruction, and in safe working condition including:
o All handrails and banisters in good repair
o Provision of handrails and banisters as are necessary for the safety of the occupiers
o Stair coverings ( i.e. carpets) safely fixed and in good repair
o Windows in common parts in good repair
o Light fittings in common parts to be available for use at all times to occupiers
o Shared Fixtures, fittings and appliances ( i.e. used by two or more households) to be in good and safe repair and working order, except where the occupier is entitled to remove it and/or beyond the control of the manager
o Shared outbuildings ( i.e. used by two or more households) in repair, clean condition and good order
o Garden to be kept in safe and tidy condition

• With regards to the entire HMO, to keep the internal structure in good repair, fixtures and fittings and appliances in good repair and clean working order, and all windows in good repair –unless repair is required as a result of the occupier failing to treat the property as she should do under the terms of the lease/licence ( i.e. fails to act in a tenant-like manner)

• Provide bins or arrange for the local authority to provide bins.

NB where the property is an HMO because it is a conversion ( an HMO under s257) , the manager is not expected to go into individual flats, but the above will apply to the common areas.

What if I don’t comply?

Failure to comply with the HMO management regulations is an offence. The maximum fine is £5,000.00 for each offence, although the average fine is considerably less, unless the landlord has refused to cooperate with the local authority. An example of the latter can be seen here.

To be continued…….

Filed under: England & Wales, FLW Article, , ,

14 March, 2012 • 14:09 16

Update on EPCs.

The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2011 will come into force on the 6th April 2012 and amend the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.

A lettings agent will now need to be satisfied that an EPC has been commissioned prior to marketing a property for rental. Obviously this will not pose a problem where the agent obtains it him or herself. The previous regulations required a seller to obtain a EPC upon marketing but where this was not possible then the seller or a person acting for him had up to 28 days from the date the property was placed on the market to use reasonable efforts to obtain it. The amended regulations have now reduced the 28 days to 7 and apply not only to sales but also to rental properties. There is also however an additional allowance of up to 21 days immediately upon the expiry of the 7 days during which the EPC must be obtained. It may see a bit odd to reduce the requirement from 28 to 7 days and then immediately add back on 21 days to get back to 28 days. However, the spare 21 days being given back is only available if an EPC has not been obtained “despite using all reasonable efforts” so a failure to obtain an EPC in 7 days will lead to hard questions being asked. From a lettings point of view, though this does represent a liberalisation as previously the requirement was to have the EPC prior to the offering of the property with any written particulars.

All of you will have seen the asset chart of the EPC on marketing material when properties are advertised to let. Unfortunately the placing of the asset chart will no longer be permitted on its own. Any ‘written particulars’ will now need to include the first page of the EPC. That is the asset chart and the various calculations that underpin it. Page 2, which contains recommendations for improvements, can be handed to the tenant at a later stage but before signature of the relevant tenancy agreement.

‘Written particulars’ include electronic communications (emails) and are defined in the new regulations as containing at least two of the following:
• a photograph of the building or any room in the building,
• a floor plan of the building,
• the size of the rooms in the building,
• the measured area of the building, or,
• in relation to a building being rented out, the proposed rent.

Any advertisement (whether print or electronic) or window display, which includes at least 2 of the above conditions, should therefore include the first page of the EPC. As almost all adverts include a photo and the price or a size and price it will be hard to avoid this. Theoretically, one could bypass this by giving a description without specific sizing along with a price or an artist’s impression plus price.

The penalty for failing to adhere to the regulations remains the same. This is £200 for dwellings and will still be enforced by trading standard officers.

There is no doubt that the reason for these amendments was to clear up what the obligations are and when they apply and this appears to have been achieved. However the requirement to use ‘reasonable efforts’ will no doubt cause problems when people attempt to circumvent what is in essence an effort to achieve a greener attitude to housing.

Filed under: England & Wales, FLW Article, , ,

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