Although the 2009 Budget was fairly unexciting from a Landlord and Tenant point of view the Chancellor did make one very important, but quiet, change.
This was to remove a tax efficiency in premium leases which was used by a number of companies. Previously, the lease premium was not treated as part of the employees renumeration package and so the National Insurance and tax liability of both employer and employee was reduced. This loophole has been removed and the premium paid will now be treated as if it were rent for the purposes of taxation and NI contributons in respect of all premium leases of 10 years or less.
This is not retroactive but will apply to all new or extended leases from yesterday, 22 April 2009.
More information is available on the HMRC website.
Undoubtedly this will markedly reduce the number of premium leases in the market.
Filed under: Uncategorized, premium lease, taxation
A recent judgement in Clerkenwell & Shoreditch County Court has clarified another issue relating to Tenancy Deposit Protection. HHJ Cryan has indicated that as far as he is concerned a deposit taken for a tenancy which began prior to the intorduction of TDP on 6 April 2007 does not have to be protected but that when the tenancy is renewed the deposit is, in effect, taken again and must therefore be protected from that point. This was a well accepted interpretation of the position but it is nice to see confirmation. It must of course be noted that this decision is not one of record and is not, therefore binding on other Courts.
Unfortunately, this opens up another possible problem. It is widely believed that a tenancy that becomes periodic under the aegis of s5 Housing Act 1988 does not need its deposit protecting. However, s5 states that the periodic tenancy is arises immediately the fixed term tenancy ends and it therefore seems to be thae case that this is a new tenancy just as much as any renewed tenancy. One wonders when this point will be raised and what the outcome will be. In the meantime the rule must be that if there is any doubt then the deposit should be protected.
With thanks to James Browne, Lamb Chambers
Filed under: Uncategorized
A recent case in Grimsby County Court reported in Legal Action magazine has cast doubt on a method commonly used by private landlords to avoid the tenancy deposit protection regime.
Under section 213(8) of the Housing Act 2004 a deposit is defined as property intended to be held as security for the performance of any obligation of the tenant. Many landlords seek to avoid this by taking money described as ‘rent in advance’ and claiming not to hold a deposit at all.
This was precisely the position in the case of Piggot v Slaven in Grimsby. The Court held that the question of whether or not money has been taken as security must be judged objectively in each case. However in the case before the Court it was held that the money was intended to provide the landlord with security should the tenant fail to pay rent at some future date. The money held was therefore caught by the defintion in s213(8) and should have been prtected in a scheme. The landlord was accordingly ordered to pay the normal ’3 times the deposit’ penalty to the tenant.
While this case is only a decision of a District Judge in a County Court and is therefore not binding on other Courts it is undoubtedly a shot accross the bows of landlord who seek to avoid the tenancy deposit protection provisions by asserting that money they are holding is merely rent in advance and not a deposit.
Filed under: Uncategorized, deposits, Housing Act 2004
As most people will know the UK is in the throes of switching from analogue to digital telelvision signals. For many people this will simply involve a change in equipment, such as a new television set. However, some areas will require that a new aerial is fitted to the property to allow reception of the new signal.
For private landlords there will of course be the question of whether there is an obligation to upgrade the installations in their properties. In the case of O’Connor v Old Etonians Housing Association the Court of Appeal considered whether a landlord was required to upgrade a water installation to deal with a drop in supply pressure. It commented that while it would be unreasonable to expect a landlord to provide an installation which coped with any possible change in supply of services there would be times where a technical advance, which was well flagged in advance, would require a change in installations. In these cases the Court felt that it would be reasonable forr a landlord to be expected to upgrade installations to cope with the change. On this basis one would be forced to the conclusion that landlords will be expected to meet the cost of altering installations to make them compatible with the digital signal.
There are a number of sources of further information on the digital switchover although the majority are targetted at block landlords. There is a Chartered institiute of housing good practice guide as well as a range of resources for property managers.
Filed under: Uncategorized, guidance, Utilities and Services
Boarding my train to London this morning I saw a poster campaign for the new Gas Safe Register. The successor to the old CORGI Landlords Gas Safety Certificate regime. While it is good to see promotion of gas safety, landlords and agents should make sure they are familiar with the new system and ensure that all their contractors are properly registered.
Filed under: Uncategorized, gas safety, regulations