consultations « Painsmith Landlord and Tenant Blog

18 January, 2012 • 21:30 9

All very frustrating, but what are the options?!

Painsmith has recently encountered the Kafkaesque world of the tenancy deposit protection schemes, specifically the DPS and its new rules relating to the release of the deposit following a court hearing.

DPS is currently refusing to release deposits where the courts have not specifically ordered it and they have changed their rules to reflect the same. Under rule 29 (a) DPS will only release the Deposit if the Court Order specifically refers to the Deposit and how much to be paid out to the tenant.

Several of our landlord clients have obtained a possession order on the grounds of rental arrears and are finding it impossible (or very nearly impossible….or just very expensive) to get the deposit released, even where the contract specifically allows for the deposit to be applied against rental arrears.

Of course it is always open for the tenant to agree the release of the deposit to the landlord, but once possession is obtained many tenants lose interest in co-operating with their former landlord.

In the absence of an agreement from the former tenant the landlord is left to apply to the scheme to ask for the release of the deposit. We believe this should simply be a matter of drawing the scheme’s attention to the court order for possession and rent arrears and the clause in the contract, which allows the deposit to be used against rental arrears, where applicable.

However on more than one occasion recently a landlord’s application to the DPS for the release of the deposit has been refused and the applicant referred to clause 29 of the terms and condition ( see above) and informed that if they want DPS to release the deposit to them they must either arrange for the Court Order to be amended or a Third Party Debt Order to be obtained.

Concurrently, courts are refusing to make orders that would satisfy the DPS rules with many judges refusing to address the issue of the deposit on the grounds that it is a matter for the scheme and they do not want to usurp the jurisdiction of the Adjudicator.

You will recall that part of the point of these schemes was to take the matter of deposit handling away from the courts and instead use an alternative dispute resolution, that is the Adjudicator. However landlords find themselves facing courts that refuse to deal with the deposit because it is a matter for the scheme, and the scheme refusing to release the deposit without a court order so the whole thing becomes farcical.

Painsmith has historically been involved in deposit protection reform and we would suggest that between the schemes and the courts there needs to be some clarification.

Filed under: England & Wales, FLW Article, comment, consultations, deposits, Housing Act 2004, litigation, possession

21 December, 2011 • 15:42 2

Energy Act 2011

Many of our readers have heard about the Energy Bill in some form or other.

The Bill was given the force of law on the 18 October 2011.

The basic issue for our readers is that:

• The Act includes provisions to ensure that from April 2016, private residential landlords will be unable to refuse a tenant’s reasonable request for consent to energy efficiency improvements where a finance package, such as the Green Deal and/or the Energy Company Obligation (ECO), is available.

• Provisions in the Act also provide for powers to ensure that from April 2018, it will be unlawful to rent out a residential or business premise that does not reach a minimum energy efficiency standard (the intention according to the Department of Energy and & Climate Change is for this to be set at EPC rating ‘E’).

Before the deadline of April 2018, the Secretary of State will need to pass regulations so that a landlord can not let a property until the above has been complied with. There does not appear to be any indication of when this might be however, the current Energy and Climate Change Secretary Chris Huhne has made his intentions clear about introducing the regulations.

The Act only applies at present to tenancies governed by the Housing Act 1988 or the Rent Act 1977 and so does not apply to Common Law or Company Let agreements but this could change and if it does we shall update. The other issue to note is that the Act does not apply where the EPC has been obtained prior to the Regulations coming into force.

Whether or not landlords believe that this:

“The Green Deal is a win-win opportunity for landlords by removing the upfront cost of work to upgrade the property making it cheaper to run, more environmentally friendly and ultimately more attractive to rent.” (Chris Huhne, Secretary of State)

The fact is that the legislation is coming into force and agents should warn landlords of it so they have more than enough time to carry out the energy improvements.

Filed under: England & Wales, comment, consultations, energy efficiency, EPCs, guidance, Housing Act 1988

10 October, 2011 • 13:39 3

Ground 14

Most of you will have heard about the coalition governments crack down on anti social behaviour especially in light of the recent rioting and looting. However, the coalition government is taking it that one step too far, in our humble opinion, and suggesting that those that are convicted of anti social behaviour should be evicted from rented accommodation even where the anti social behaviour has nothing to do with the rented property.

In August 2011 the Department for Communities and Local Government released its consultation on “A new mandatory power of possession for anti-social behaviour.” The consultation is aimed at making Ground 14 of Schedule II of the Housing Act 1988 a mandatory ground for possession.

Looking at the consultation itself statements that should be noted are:

“It is clearly right that eviction for anti-social behaviour should remain exceptional: the loss of one’s home is a serious sanction and eviction may simply displace the problem elsewhere rather than providing a long term solution.”

“But where landlords turn to possession as a last resort in order to provide respite to communities and as a serious sanction against perpetrators that process can take too long”.

“Most importantly though lengthy possession proceedings mean that the suffering of victims is further extended”.

“….serious anti-social behaviour and criminality beyond the immediate neighbourhood of the property can clearly be taken into account”.

The consultation then asks those that wish to respond to consider the following questions:

1. Do you agree that we should extend the scope of the current discretionary ground for possession for anti-social behaviour and criminality in this way?
2. Do you agree that we should construct a new mandatory power of possession in this way?
3. Are these the right principles which should underpin a mandatory power of possession for anti-social behaviour?
4. Have we defined the basis for the new mandatory power correctly? If not, how could we improve the definition?
5. As a landlord would you anticipate seeking possession using the mandatory power in some or all of the instances where this would be available?
6. Are there other issues related the introduction of a mandatory power for possession for anti-social behaviour that we should consider?

So how to respond in a rational and clearly though out manner, difficult, but here goes.

If Ground 14 is made mandatory both social and private landlords will be allowed to issue possession proceedings not only where the tenant is convicted for anti-social or criminal behaviour but also if the occupier or a visitor of the tenant has such a conviction. So will this lead to problems with the convicted father visiting his children? Does this contradict one of the coalition government’s aims, to promote family life, I think so.

Its quite clear that this consultation is in response to the riots in August and that there was as much though put behind it as Teresa May’s statement about the Right to Family Life and the cat. But whilst the consultation appears to recognise that the court process is too long it makes no reference to why that is and no reference to how that should be improved. Even where landlords have mandatory grounds for rent arrears the process can take too long with agents and landlords taking their frustrations out on us poor, overworked lawyers (its true!).

One has to wonder however with the current housing shortage and the problems that were recognised with the younger generation following the rioting whether moving people on is really the best we can do. We live by the principle that “if you do the crime you must serve the time” but after that time people are entitled to get on with their lives because this justice system promotes the right to rehabilitation. It is obviously very difficult for some to accept this especially where they have been victims of a serious crime but this consultation is not promoting re-habilitation it is promoting ostracising certain sections of the community which can lead to an increase in crime and looting.

This cycle must end and housing, communities and the court system needs investing. Under Ground 14 it is possible to get possession where the tenants are a nuisance in our experience and this is simply going too far.

Filed under: England & Wales, FLW Article, comment, consultations, Housing Act 1988, possession, procedure

21 July, 2011 • 09:10 0

OFT evaluates Foxtons!

Not the company but the infamous outcome of the case.

On the 19th July the Office of Fair trading released a press release on its evaluation of its consumer enforcement case against Foxtons for breaching the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). In February 2010, the OFT secured an enforcement order from the High Court when it ruled that Foxtons’ renewal commission terms were not transparent, this led to Foxtons amending some of the terms. The evaluation has now found that the OFT intervention has resulted in positive benefits for consumer landlords that use Foxtons with an estimated annual benefit of at least £4.4 million.

The enforcement order relating to Foxtons declared that the terms listed below are unfair, not binding, and may not be used or relied upon in contracts with consumer landlords:

a. Terms which require landlords to pay renewal commission to Foxtons after the sale of their property to a third party because the original tenant remains in occupation.

b. Terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant.

c. Terms relating to renewal commission, where the tenant remains in occupation, and in some cases an occupant introduced by the tenant, after the initial fixed term where the agent is not asked to provide any additional service.

In this press release the OFT has stated that they are concerned about the number of agents that are unaware of the Foxtons case and have contacted these agents to advise them to ensure that the terms of business are transparent.

If you need help with the terms of business you may be interested to note that we do provide a drafting a service.

Filed under: England & Wales, FLW Article, comment, consultations, OFT

4 July, 2011 • 14:41 1

Localism Bill, AGAIN!

You are probably tired of the posts on this Bill but we thought that some of our readers would be interested to note that Lord Shipley has recommended the following addition:

“Standards for private sector lettings and management agents:

The Secretary of State may by regulations set the standards that private sector lettings agents and management agents must adhere to.”

We would like to hear from anyone on whether they think this is a good thing or not and if so why. If its any consolation to those not wanting what we suspect is an attempt to register agents, we do not think that this will survive the committee stage.

Filed under: England & Wales, FLW Article, comment, consultations, legislation

28 June, 2011 • 21:20 0

Consultation process…

The Leasehold Valuation Tribunal (the LVT) in Southall Court v Tiwari reduced a landlord’s claim for service charge contributions from 48 leaseholders from £2,053.42 to £482.50 per flat. The Landlord was granted permission to appeal to the Upper Tribunal.

The landlord had fulfilled its obligations under Section 20 of the Landlord and Tenant Act 1985, the leaseholders’ however failed to comment in response to the consultation process for substantial works to the roof. The leaseholders’ claimed that the reason for failing to reply was because it was obvious that the matter would be referred to the LVT. The reason for this we assume is because in the report it is stated that “Southall Court has probably been the subject of more applications to the Tribunal than any other property in the country”. On appeal the Upper Tribunal held that where the leaseholders have failed to comment then the landlord is entitled to assume that there are no objections to the works. This is the case even where it is obvious that the matter would be referred to the LVT. The Upper Tribunal held that it was the duty of the leaseholders’ to respond during the consultation process and that in this case where no comments were made the landlord had acted reasonably throughout.

At the LVT the landlord’s expert gave evidence and confirmed that there were no current leaks in the roof and that it could have staggered on for a few more years. The LVT inspected the property and agreed with the expert’s oral evidence. However the Upper Tribunal held that the landlord had a wide discretion as to the programme of works it adopted and applying that principal to this case came to the conclusion that the LVT was not entitled to find that the landlord’s works were unreasonable. This was especially so given the expert findings that the roof had only a further 12-18 months useful life.

The leaseholders’ attempted to argue that the existence of a sinking fund was irrelevant in this matter. However, the Upper Tribunal disagreed with this and dismissed the leaseholders’ attempt to argue that given the small sinking fund it was unreasonable to carry out the works. The Upper Tribunal found instead that the fund made very little difference between the reasonableness of a decision to re-cover the roof now or in 12-18 months time.

The landlords appeal was accordingly allowed and the leaseholders’ were ordered to pay £2,053.42 each.

We have had many agents undertaking block management contact us about the consultation process and we hope that this blog emphasises how important it is for agents to advise leaseholders’ to take part and comment in time.

Filed under: England & Wales, England only, consultations, Landlord & Tenant Act 1985, long lease

24 June, 2011 • 09:28 0

Back Again….

Some of you will note that we have blogged on the Localism Bill previously and the expected changes to the Housing Act 2004 specifically the sections on the registration of deposit. The amendments were not supported by the Commons and it was assumed that alternatives would be proposed. However, no such alternatives have been proposed and Lord Best has therefore introduced the original amendments into the Lords.

The Bill started its committee stage on 20 June and given that in the House of Lords committees are always ‘committees of the whole House’, i.e. every peer is able to contribute a huge number of amendments are expected.

Filed under: England & Wales, England only, comment, consultations, deposits, Housing Act 2004

22 June, 2011 • 09:21 0

Landlords Register………

On the 14th June a Bill was introduced under the 10 Minute Rule. The Bill makes provision for a register of private landlords; to require private landlords to take certain actions in the event of anti-social behaviour by their tenants; to give additional powers to private landlords and local authorities in cases of anti-social behaviour by tenants; to establish a community fund to which private landlords must contribute; and for connected purposes

The 10 Minute Rule allows an MP to make his or her case for a new bill in a speech lasting up to ten minutes. An opposing speech may also be made before the House decides whether or not the bill should be introduced. If the MP is successful the bill is taken to have had its First reading.

The second reading is scheduled on the 18 November 2011. You will as always be kept up to date.

Filed under: England & Wales, FLW Article, comment, consultations, licensing

9 June, 2011 • 07:34 1

Small Claims or what?

Ministers are consulting on increasing the value of disputes that will be allocated to the small claims court from £5,000 to £15,000, or even £25,000, as part of radical shake of the court system as we know it.

The small claims track, which is not a court but a procedure within the county court is designed to serve as a low-cost, user-friendly, informal forum for resolving disputes without the need for a lawyer. A key feature of the track is that in the vast majority of cases legal costs are not recoverable from the losing party which reduces the risks for both sides and encourages economic settlement.

There have been many different opinions on this change ranging from welcoming the news because it will make it easier for consumers to take cases without the risk of exposure to costs, to the concern that a lack of legal representation will lead to inequality between the parties when one party can afford a solicitor and the opposing party can not.

The agents reading this blog will obviously have concerns about their ability to recover small debts. When they call us for advise they are told that in most cases it is not economical to instruct us to pursue the matter on their behalf. There is also the risk that by increasing the threshold of the small claims track parties will have no incentive to settle sooner rather than later. The financial incentive to save costs rather than pursue a expensive litigation matter will no doubt be eroded.

However mediation assessment meetings will be made compulsory in small claims, so to a large extent mediation will become almost impossible to avoid. Agents are therefore advised to familiarise themselves with the mediation process in order to ensure the swift and cost effective resolution of future disputes.

Filed under: England & Wales, FLW Article, comment, consultations, costs

6 May, 2011 • 11:13 2

Squatters

No doubt most of you will have heard about squatters taking over Colonel Gaddafi’s son’s £11 million mansion in London. Apparently the group calling themselves Topple The Tyrants claim they took over the house because they “didn’t trust the British government to properly seize Gaddafi’s corrupt assets”.

Whatever your opinion on the above is and on squatters in general most clients that we assist with these matters continue to be taken aback when we inform them that squatting is not a criminal offence. It really isn’t….

However the UK Coalition Government is now proposing to make squatting a criminal offence and have in the meantime published some guidance to assist those with squatters.

Section 7 of the Criminal Law Act 1977 states that it is an arrestable offence for a squatter to fail to leave a residential property when asked to do so by a residential home-owner who wishes to occupy the property. There is therefore a criminal element which allows the police to assist and to enter and arrest anyone suspected of criminal damage and theft.

We have all heard the myth of “squatter’s rights” which is in fact no such thing. Section 6 of the Criminal Law Act 1977 makes it an offence to use violence or threats of violence to gain access to premises when there is someone in the premises who is opposed to such entry. However, this does not apply to an occupier who does not have a right to be there and was introduced to protect for example, tenants from unscrupulous landlords.

Whilst the legislation will be welcome there does not seem to be any indication of when it will be introduced. Whether you believe that this is something that should be legislated on when we are in the middle of a financial crisis or whether people should take responsibility for their own properties is of course a debate for another day.

Filed under: England & Wales, FLW Article, comment, consultations, legislation

5 May, 2011 • 07:39 0

Changes to Court Procedures

The UK coalition government has published proposals to reform the way cases are handled in the county courts. In respect of housing litigation, the proposals include retaining the £1000 small claims limit to housing disrepair cases and the provisions of the protocol mandatory for rent arrears and mortgage possession cases.

The deadline for responses to the consultation is the 30 June 2011.

The protocol for rent arrears applies to social landlords, such as local authorities and housing associations, not to private landlords.

The protocol reflects the guidance on good practice given to social landlords and private registered providers in the collection of rent arrears. It recognises that it is in the interests of both landlords and tenants to ensure that rent is paid promptly and to ensure that difficulties are resolved wherever possible without court proceedings.

Its aim is to encourage more pre-action contact between landlords and tenants and to enable court time to be used more effectively. The protocol requires specifically for the landlords to contact a tenant as soon as possible after the tenant’s rent arrears accrue, to discuss the arrears, the tenant’s financial position and his or her entitlement to benefits.

The protocol no doubt leads to suspended possession orders in order to allow the tenant the opportunity to repay the arrears however, given the current problems we have with court backlogs this is a welcome consultation as it is hoped that it will assist with reducing the number of claims issued.

Filed under: England & Wales, FLW Article, comment, consultations, litigation, possession, rent

14 April, 2011 • 17:22 3

Fire Safety in Wales

On the 7 April the Domestic Fire Safety (Wales) Measure 2011 became law.

The legislation requires the installation of a fire suppression system (sprinkler system to you and I) in all new or converted residential properties. Landlords will be required to ensure that the system is operating effectively prior to the start of the tenancy.

With any new or converted build when applying for building consent this legislation will also need to be complied with. This means that along with the standard drawings for the build there must be paperwork about the fire suppression system. If these details are incomplete or insufficient this will delay the building works altogether.

Failure to comply with the legislation will result in a maximum fine of £5,000 and will be enforced by the local council.

Filed under: England & Wales, England only, comment, consultations

4 April, 2011 • 10:15 0

Fire Safety Update.

Many of our readers will recall that we previously blogged on the Fire Safety (Protection of Tenants) Bill 2010-11. Although we stated in this article that the Bill was unlikely to be made law, we thought it may interest some to note that the second reading of the Bill is now scheduled for some time in October this year.

Filed under: England & Wales, England only, comment, consultations, guidance, legislation

25 March, 2011 • 14:43 3

Making better use of Energy Performance Certificates and data.

On 2nd March 2011 the Department for Communities and Local Government released a publication detailing consultations on the effectiveness of EPCs in a number of areas.

The Climate Change Act 2008 commits the UK to a statutory target to reduce its carbon emissions. With the UK dedicated to reducing its emissions by 80% in 2050 any strategy that assists with this target is going to be welcome. The EPC provides vital information on the energy efficiency of buildings which allows the government to assess whether we are on the way to the target reduction.

Therefore the consultation is aimed at improving the effectiveness of the EPC with a view to making better use of the energy performance data.

The consultation while wanting to improve and enhance the use of the EPC it is also looking to extend the scope of the requirement to include:

Houses in Multiple Occupation (HMO)
At present the law does not require EPCs to be produced when rooms are rented out in a HMO property however, the recommendation is for EPCs of the whole property to be made available to prospective tenants. This will ensure that from the outset when the first room is let the Tenant will have access to a valid EPC of the whole building. As a valid EPC lasts 10 years the obligation on the Landlord is unlikely to be considered onerous.

Short Term Holiday Lets
At present EPCs are not required for short term holiday lets as people renting a holiday home for a short period of time would be unlikely to consider energy efficiency when selecting a property. However the DCLG proposes that EPCs should be required if holiday lets are rented out for a combined total of four months or more in one year. This ensures that properties rented for less than four months are still immune from the requirement.

Extension of Display Energy Certificates to a Commercial Building
A Display Energy Certificate is like an EPC except it records the actual energy consumption of that building up to a period of three years. The recorded energy consumption must then be displayed as a certificate in a similar format to an EPC. Currently they are only required for public buildings larger than 1,000m2 and are required to show how efficiently the building is operated. The Certificate is accompanied by an Advisory Report which sets out three levels of cost-effective improvements which can improve the building’s efficiency.

Given that commercial property is responsible for 18% of carbon emissions in the UK the proposal to extend DECs to commercial properties is an attractive one. Current government plans aim to reduce the floor area in public buildings to 250m2 and it is hoped that the DCLG proposals to initially pilot the scheme voluntarily to commercial buildings will be taken up.

Finally the DCLG is also looking to clarifiy when an EPC is required on the sale or letting of building. The DCLG has put forward a proposal to amend Regulation 5(2) of the 2007 Regulations making it clear that the Regulations require Landlords to make an EPC available to a prospective tenant as soon as they request either information about or to view a building, and they further seek to remove the opportunity for Landlords to defer making an EPC available until contracts are exchanged on sales. The amendment is not a complete rewording of the regulation but clarification that Landlords must make an EPC available at the earliest opportunity.

Whether you like or dislike the introduction of the EPC, buildings account for 50% of the UKs carbon emissions and a reduction is needed.

Filed under: England & Wales, FLW Article, comment, consultations, EPCs

14 March, 2011 • 10:41 2

Localism bill

As some of you will recall we mentioned some possible changes to the Tenancy Deposit Protection legislation. These TDP changes do not however, appear to have survived the committee stage of the bill. This is not to say that they will not get back in later but it is of some concern that what we considered to be improvements has been overlooked.

Filed under: England & Wales, FLW Article, comment, consultations, deposits, Housing Act 2004, review

2 March, 2011 • 09:36 1

Deposits, set for change?

The Localism Bill rather surprisingly (or not, depending on which side you are on) includes new sections which are designed to make amendments to the Housing Act 2004 and specifically to the tenancy deposit protection provisions.

The changes are intended to clarify the concept of ‘initial requirements’ and remove the late protection loopholes as discussed in Draycott v Hannells and Tiensia v Universal Estates. The Bill also hopes to remove the loophole of returning the deposit to the tenant in full prior to any proceedings and then asserting that s214(4) does not apply because in the absence of a deposit they can not be subject to the three times penalty.

If the changes are implemented tenants should find it far easier to pursue landlords or agents who have failed to protect their deposits and landlords will not be able to register the deposit and escape liability after the initial 14 day period.

From the landlords point of view the changes are an improvement because it is hoped that the law will be a little more certain with less grey areas and loopholes! The Bill will also be introducing a variable penalty rather than a fixed 3 times the deposit penalty. The tenant will be entitled to their deposit back or have it paid into the custodial scheme and then will also receive a further sum of money equivalent to not less than the deposit and not more than three times the deposit.

The benefit of this regime for the landlord is that when making an order the Court will consider why the landlord did not protect the deposit, what the landlord knew or should have known about his obligations, and how quickly he resolved the situation. This means that landlords that are still ignorant of the legislation may still be penalised but they may be subject to a more manageable penalty.

It is not certain or clear whether the amendments will make it into the legislation but given the case law surrounding this issue it is likely that the amendments will become law.

Filed under: England & Wales, FLW Article, consultations, deposits, legislation

24 February, 2011 • 23:47 0

Oxford, again….

We have been provided with a copy of a letter that Oxford City Council is distributing to relevant parties in the lettings industry.

As regular readers will know, the Labour government amended the planning use classes in April 2010 to limit the C3 use class and created a C4 use class for HMOs’. We reported on this here.

After the election the new coalition government amended the General Permitted Development Order to allow movement between the C3 and C4 classes. This was reported here.

Local Authorities can opt out of the GPDO by making an Article 4 Direction and requiring planning permission to switch from C3 to C4 use. Oxford is stating that they have a shortage of housing and a high demand for HMO accommodation. This might appear to be inconsistent with a policy of increased planning control but Oxford justify the policy by stating that there is a shortage in all types of accommodation and that wholesale conversion to HMOs in all areas means that other areas are not satisfied. However, Planning Policy Statement 3 requires local authorities to adopt planning policies that provide sufficient living accommodation for all types of use. It will be for Oxford to show that their new restrictions on HMO accommodation do not violate this policy statement.

Finally, there is some doubt as to whether Oxford’s article 4 Direction will actually matter. As we explained in this post the fact that a property use moves from one use class to another does not automatically mean it is a material change of use, which requires planning permission.

It should also be noted that Oxford is not permitted to charge a planning application fee for applications made as a result of an Article 4 Direction and one possible way of frustrating the proposals is simply for a large number of landlords to make applications thereby tying up resources.

Thank you to Mark at College and County

Filed under: England & Wales, FLW Article, consultations, HMOs, Housing Act 2004, legislation, licensing, planning, procedure

20 April, 2010 • 15:30 1

HMO Changes in Northern Ireland

Some key changes in the way HMOs are operated are forthcoming in Northern Ireland.

Currently the legislation governing HMOs is part IV of the The Housing (Northern Ireland) Order 1992. This is being amended by some new and proposed legislation.

The first change is being made by the Housing (Amendment) Act (Northern Ireland) 2010 which was passed on 13 April 2010, although it has yet to come into force. The new Act makes a small amendment to the 1992 Order in order to clarify the definition of HMO. Currently the definition of an HMO in article 75(1) states that:

house in multiple occupation” means a house occupied by more than 2 qualifying persons, being persons who are not all members of the same family.

The change amends article 75(1) to make clear that the definition of family is to include “uncle, aunt, nephew and niece”. Apparently this is to recognise that members of an extended family increasingly live under the same roof while still forming one household.

The second change is proposed as part of the consultation on the Draft Regeneration and Housing Bill. Much of the bill is of little interest to the PRS. However, the key alteration is to who deals with the setting of HMO standards and creation of schemes. Currently the Housing Executive is required to prepare and submit a scheme to the DSDNI for its approval. This power is now to be devolved to individual councils. This will allow for HMO schemes to be tailored by each council to their individual needs but has the downside, which has been evident in England & Wales of massive differences between individual local authorities. This may be reduced by the fact that the DSDNI has to approve each scheme but there is the danger that disputes over the contents of different Council schemes will lead to a raft of wasteful litigation. These issues do not appear to have been addressed at all in the consultation document.
This consultation is available for responses until 26 April 2010.

Filed under: Northern Ireland, consultations, HMOs, Northern Ireland

13 April, 2010 • 19:18 0

Long Leases in Scotland

Those who know about Scottish law will be aware that it is not now practically possible to create a lease in excess of 20 years in Scotland. Additionally, feus were prohibited in 2000 and most were converted into an ownership for the vassal. A similar arrangement is now being proposed for certain long leases which have survived previous reforms.

The Land Tenure (Reform) Act 1974 acted to prevent longer leases occurring because it allowed landlords to terminate the lease at any point after 20 years. This meant that no tenant would normally be prepared to enter into any such arrangement and longer leases accordingly dropped away. However, some leases, created prior to that Act, are still in existence and were not removed by the various legislation in 2000 and 2003 which aimed at removing feudal tenures. Some of these leases are ludicrously long (one million years in the case of several in Paisley). In 2006 the Scottish Law Commission produced a report suggesting a further ‘clean up’ of these anomalous leases by converting what it called ‘ultra-long’ leases into a right of ownership.

The Scottish Executive has responded to this report by producing a consultation supplemented by a draft bill in which it proposes converting any lease for more than 175 years which has more than 100 years left to run into a right of ownership for the tenant.

The proposed bill contains mechanisms for sporting rights to be preserved for landlords. This is unsurprising as one of the reasons for the creation of such leases was to preserve these rights for landlords whose primary interest in the land was for its leisure facilities. They are also of substantial value in some cases and there would be difficulty in compensating landlords for their loss. The bill also proposes to compensate landlords for the loss of their title in the land to be based on the rent level and calculated in a similar manner as was carried out during the abolition of feus. There are also provisions for higher levels of compensation to be payable in certain limited circumstances if the landlord serves an appropriate notice on the tenant. It is intended that higher levels of compensation will be payable by way of instalments.

The consultation continues until 30 June 2010.

Filed under: Scotland, consultations, long lease

9 April, 2010 • 06:42 0

Welsh Consultation

The Welsh Assembly is currently consulting on a series of changes to Landlord and Tenant law in Wales. Housing is now a fully devolved competency for the Assembly and they appear determined not to simply follow blindly in the footsteps of England.

The consultation, entitled the Private Rented Sector in Wales looks at a number of changes to the structure of the sector, many of which have been discussed or brought into force already in relation to England.

The proposals that the assembly are considering are:

A national landlords register
Independent regulation of letting and managing agents
A review of why tenancies end with the aim of encouraging landlords to offer longer term tenancies
An increase in the Housing Act 1988 rent threshold from £25,000 as has already been carried out in England
Improving the data collected on the sector

These are all things which have been considered in England or actually implemented in England or Scotland. However, in England there is unlikely to be much further action due to the intervention of the election and the changing priorities of any new Government. Wales may well find itself leading the way, therefore, as they have the time (and energy) to enact some of these measures.

This may well represent the beginning of a sea change in Landlord and Tenant law with the growth of a new type of lawyer, one who specialises in Welsh matters.

The consultation closes on 14 May.

Filed under: Wales only, consultations

14 February, 2010 • 15:18 3

Landlords Warranties and Agents

We have been pondering the new proposals from the Government in response to the Rugg review. Many of them are as expected.

What is deeply concerning about the proposals is one specific aspect of agent regulation. One of the key requirements of any regulation regime is “Enforceable undertakings around the quality of stock let and managed by agents (including energy efficiency)”. This represents a potentially radical change in the legal position.

It has long been the case that landlords make no warranty as to the fitness for habitation or the suitability of the properties they let. To use the words of the House of Lords, “Caveat Lessee”. Additionally, it has generally not been the case that agents have a liability for their landlord’s actions. These proposals seem to wish to change that position.

If it is the case that agents have to give undertakings on stock quality they will then be forced to impose those undertakings on their clients. However, a landlord who is not using an agent will not have the same requirements and will not have to warrant the quality of their stock. This is plainly iniquitous. The position could be even more unfair where an agent is not managing the stock and is employed solely on a let-only or tenant-find basis. If the sole role of the agent is to find a suitable tenant and set u a tenancy then they should not have to give any undertaking as to the quality of the stock after the expiry of their instruction.

Additionally, this will mean that agents increasingly will be fixed with liability for the actions of their principals. Of course, this already occurs to some extent. Agents have liability for Gas Safety Certificates, some liability in relation to improvement notices under the HHSRS where they are collecting the rent, and a degree of liability for failure by landlords to register tenancy deposits. However, it is debatable whether this liability should be extended further, particularly where individual landlords do not themselves have such a liability.

Any situation where landlords using agents are held to a stricter standard than those not using agents is plainly ludicrous. Agents already do much to improve the quality of management and standards in the properties they are involved with simply be promulgation of good advice and best practice. To add a formal requirement that agented properties should have a standard of fitness that does not currently exist is simply wrong. If the Government wishes to address this issue then the answer is to bring forward legislation that alters the Common Law position on landlord’s warranties.

If this is the sort of proposal that the current Government believes is appropriate for the industry then lettings agents could be forgiven for hoping that it is not returned to office later this year.

Filed under: England & Wales, comment, consultations, legislation

29 January, 2010 • 11:30 7

New Announcements on HMOs

The Department for Communities and Local Government has today published its response to comments made on a previous consultation on the planning status of HMOs and has also launched a new consultation in relation to additional and selective licensing powers.

In July 2009, the CLG launched a consultation on possible ways to deal with the creation of ‘HMO ghettoes’, where large numbers of HMO properties cluster together in a small area. We reported on this here. This issue is particularly prevalent in areas with high student populations. There were several proposals to deal with this but the most highly advocated, and the one most supported by the consultation was to create a new planning use class specifically for HMOs. Currently, dwelling-houses make up the C3 use class and are defined as properties comprising one household with up to 6 occupants. The definition of household is unclear but is not the same as that used by the Housing Act 2004. HMOs falling outside this class were uncategorised and required planning permission to be sought but a large number of smaller HMOs fell within the class and had no involvement from planning officers. The proposed changes will mean that a new use class is created which will be for HMOs specifically and will replicate the definition in s254 of the Housing Act 2004. That is properties rented to three or more occupiers where those occupiers do not form one household. The change will be implemented by an amendment to the Town and Country Planning (Use Classes) Order 1987 which will come into effect on 6 April 2010. In short, properties to be rented to three or more sharers after that date will require planning consent. This change has enormous potential effects. A large number of properties are let to small groups of sharers and are therefore HMOs without ever becoming licensable. Properties that are to be let in this manner after 6 April will require planning permission to be sought in advance. As the government accepts, this will lead to a significant rise in planning applications. What it appears not to have realised is just how large that rise could be and, in addition, that there will be a concomitant rise in planning appeals. It is not yet clear whether an application for the new use class will be met by an addition of that class to the current one or whether the use class will be changed. If it is the latter then landlords will, of course, need to make another application to change the use back again if they wish to let to a family. Landlords will therefore need to choose between letting to families or as an HMO or resign themselves to making regular applications for a change of use.

In addition the the response the CLG has published a ‘short’ consultation for a change in the process by which local authorities gain permission for additional and selective licensing schemes under the Housing Act 2004. Additional licensing allows for a local authority to license HMOs that fall outside the mandatory licensing set by Government. Selective licensing allows for the licensing on non-HMO landlords in areas of low-housing demand where there is a problem with anti-social behaviour. Currently in order to be permitted to carry through such licensing a local authority must carry out a consultation exercise and then seek the permission of the Secretary of State to go forward. The intent is to give a blanket permission to all local authorities so that they need merely carry out the consultation exercise. On the face of it this seems perfectly reasonable. However, when we consider that a number of authorities have been refused permission for additional or selective licensing or have been asked to provide more information then there must be doubt as to whether it is appropriate for this control to be removed. There is certainly a danger of a number of costly and time-consuming judicial review applications in order to challenge the local authority consultation process. For a landlord facing a prosecution such action, while unattractive, may be preferable to a substantial fine.

Although the Government, in announcing these measures reiterated their commitment to a landlord registration scheme this is something that will require primary legislation and, unsurprisingly, will not make it into this Parliament and, unless Labour wins the election, presumably not into any Parliament. One is therefore left to wonder if the latter measure is an effort to introduce partial landlord registration by the back door.

We do not usually comment on political matters, but it is disturbing to see these measures, along with others, being introduced in very short order in April. It immediately gives rise to concerns as to the level of consideration that has been given to the measures and their likely effects. It also gives the appearance of measures being forced through prior to an election in order to score points with the electorate or simply on the basis that the Conservative party, should they win an election, will be too busy to reverse them. One hopes that is not what is going on but if it is then it is sad to see cheap political point-scoring at the expense of the private rented sector which houses a significant percentage of the population and makes a substantial contribution to, an already weakened, economy.

Filed under: England & Wales, consultations, Housing Act 2004, planning

23 December, 2009 • 12:20 0

Building Regulation Consultation

The Department of Communities and Local Government has today (just in time for Christmas!) published a new consultation regarding the authorisation of self-certification schemes under the Building Regulations. Essentially as the Regulations have become more complex they have become difficult to police effectively. This was recognised back in 2002 and was dealt with by licensing certain organisations (such as CORGI, FENSA and OFTEC) to ensure that their members carried out work to the appropriate standard. Therefore where work had been carried out by a member of an approved organisation it could be assumed that it complied with the Regulations and it would not need to be inspected by the relevant local authority’s building inspectors.

Over time this system has got a bit mixed up due to slightly differing standards applied to and adopted by various licensing organisations. This has led to suggestions that work done by one organisations tradesmen is of a lower standard than another which also causes an unfair competition model.

In an effort to resolve these issues the Government has already suspended the certification of new bodies and now plans to provide new criteria for certifying approved bodies. Existing bodies will have to be recertified under the new criteria.

The consultation itself is on the nature of these criteria, the new application process and the consumer protection aspects. The consultation closes on 19 March 2010.

Filed under: England & Wales, Building Regulations, consultations, consumer protection

23 December, 2009 • 11:37 0

Mobile Homes Act Changes

On 16 December the Department of Communities and Local Government published its response to its supplementary consultation relating to changes to the Mobile Homes Act 1983. The supplemental consultation relates to the proposal to shift the fact-finding role in the making of possession orders form the Courts to the Residential Property Tribunal.

This is an interesting idea as it has previously been put forward by the Law Commission in their report Housing: Proportionate Dispute Resolution who suggested that some or all residential tenancy possession matters be moved from the Courts into a tribunal system. This was heavily opposed by District Judges themselves who seemed determined to guard this power. The Government appears to be trying to cover both bases in this consultation by leaving the power to make possession orders with the Courts but reducing their workload by moving the actual consideration of facts to a tribunal. Leaving aside the patent silliness of separating these functions and the concomitant duplication of effort this causes this might also be an indication of an attempt to adopt the Law Commissions proposals by the backdoor by shifting functions progressively into the tribunal system.

The consultation has been a bit of a blow for the transfer policy. 18 groups responded and there was an overwhelming rejection of the idea of separating the jurisdictions, largely for reasons, which have been outlined above. The Government has accepted this and will not transfer any part of the termination process at this time.

The consultation also asked about transfer of repairing cases to the RPT. Although the responses were again substantially against such a decision the Government has rejected the consultees views this and will now look to transfer repairing cases to the RPT. This is a surprising decision to say the least. The Government has justified it by making a clear split between the two roles. The RPT will consider on the facts whether the lack of repair of a mobile home is detrimental to the site to such a degree that termination of the agreement is appropriate. If it considers that this is the case then an application will be possible to the Court who will consider whether it is reasonable to terminate the agreement. No application will be possible to the Courts without an RPT decision. The Government seems closed to the fact that legal aid is unavailable for tribunal cases, to the probable increase in costs for all sides, to the potential for satellite litigation, and to the fact that the RPT is not fully integrated into the tribunal arrangements created by the Tribunals, Courts and Enforcement Act 2007 and therefore has an appeals system that does not function particularly effectively.

It is proposed that these changes will go forward on 6 April 2010, presumably by way of a Statutory Instrument making changes to the Mobile Homes Act. It is disappointing to see that the Government will be making changes that have not received much support in a manner which will allow for the minimum of Parliamentary debate.

Filed under: England & Wales, consultations, Mobile Homes

9 August, 2009 • 23:39 0

EPC Directive Changes

The European Commission, the primary legislative body of the EU, has put forward proposals to make changes to the Energy Performance of Buildings Directive (EPBD). CLG has published a consultation on the proposals to allow it to reflect the views of UK stakeholders back to the commission.

The proposals are in two categories. The first stage, which UK government supports seeks to clarify and simplify the directive. The other part seeks to expand and strengthen the directive. The UK government is largely opposed to this, in common with its general policy on Europe, and takes the view that many of the issues should remain with member states under the general principle of subsidiarity.

Looking at the key proposals they are as follows:

buildings occupied by public authorities or where the public visit regularly are to have a Display Energy Certificate on display where the building is larger than 250 sq m as oppose to the current size of 1000 sq m;
any commercial or domestic building which is renovated will also have to have its energy performance upgraded at the same time for which targets will be set;
there will be minimum requirements for technical building systems such as boilers in commercial property.

Naturally this will cause increased costs for many older properties. However, given the impact of empty building rates on commercial property and the consequent knocking down of some of these properties the impact may well be small. In residential properties properties being renovated will have to have their performance improved but this would probably be done in the majority of renovations anyway.

The consultation is open for responses until 2 October 2009.

Filed under: Uncategorized, consultations, energy efficiency, Europe

9 August, 2009 • 21:14 0

RTM Company Articles

The government is consulting on new default articles for Right To Manage (RTM) companies formed under the Commonhold and Leasehold Reform Act 2002.

It is debateable whether such changes are really necessary. All companies can choose to set up their own articles when they are created. However, many RTM companies are created on the fly by inexperienced individuals and so the creation of some form of pre-defined articles for these companies might be advantageous. It is also worth pointing out the low take-up of the powers offered by the Act and the arguable pointlessness of legislating where the advantage is so limited.

The model articles aim to provide a degree of balance between the rights of tenants and the needs of landlords who have a greater investment in the structure of the property and the common parts. How well that balance is struck probably depends on the side from which you approach the issue. It is difficult though to see how a pre-defined set of articles can properly take account of the large number of different RTM situations and whether there should be a greater emphasis on each RTM company choosing articles to fit its own situation.

The consultation is open until 16 August.

Filed under: Uncategorized, consultations, long lease, right to manage

6 August, 2009 • 23:22 0

Mortgage Possession and Tenants

We have previously discussed the problems experienced by tenants when a mortgagee seeks to repossess the property to exercise its power of sale. In a recent alteration to the Civil Procedure Rules some of the issues were addressed by forcing mortgagees to give more notice to occupiers of properties. We reported on this here.

However, providing more notice does nothing to protect tenants whose landlord has not bothered to seek the consent of their mortgagee to the letting. Where the landlord has sought consent the mortgagee is obliged to see out the term of the letting. Non-authorised tenants are not so protected and get short shrift from mortgagees and the Courts. Of course, tenants should always insist on seeing consent to their letting from the mortgagee but this will not help those who find themselves under threat of eviction today.

The government has now produced a consultation on further changes to the process of mortgage eviction in order to help protect unauthorised tenants.

Apparently the government are working with lenders to remind them that they are obliged to see out tenancies which they have consented to and to encourage them to accept unauthorised tenants where possible. We have not seen a great deal of evidence that this engagement is actually working with the worst offenders being Northern Rock and other lenders taken into government control!

The other intended improvement is to make notification to tenants of problems more effective by requiring the letter that is currently addressed to “The Occupiers’ to make specific mention of tenants on its face. This is to come into force in October 2009.

Turning back to unauthorised tenants the consultation intends to achieve a balance between reasonable notice to the tenant and the right of the mortgagee to sell the property with vacant possession. The aim is to allow the tenant two months notice to vacate.

There are a series of different proposals for how this might be achieved ranging from no change through to radical legislative amendment.

There are some real problems with this consultation. For on the government appears to have absolutely no idea how many tenants are affected. They estimate that there are approximately 360,000 properties with unauthorised tenancies but this figure is plus or minus 120,000 which shows the level of uncertainty.

In fact, it is not clear precisely how the government will deal with the situation as a change to assist unauthorised tenants would, in practice, have to be applied in all circumstances where mortgage possession is considered, adding considerably to the cost of mortgage repossession for lenders at a time when they can ill-afford it.

Probably the most practical option is to imporve notification and allow the tenants to attend Court to seek a stay of possession before the judge. Obviously this has the same disadvantage as the current system in that many tenants do not have the knowledge or the desire to attend a Court hearing. Therefore any change is going to have to make the process as painless as possible for those who are, after all, innocent parties. The best option is probably a form sent to the tenant by the lender which permits them to make written representation to the Court.

The consultation is open for responses until 14 October 2009.

Filed under: Uncategorized, consultations, mortgages

20 July, 2009 • 09:30 0

Planning and HMOs

Not sure how we missed this really but the Department of Communities and Local Government has launched a consultation on possible changes in planning systems to deal with HMOs.

This consultation is in response to an increase in HMOs in parts of the country and the tendency for these to be grouped together in small areas. This is sometimes referred to as “studentification”.

The current method of control of HMOs involves the licensing of larger properties. However, there is no power to refuse a licence on the basis that there are a large number of other HMOs in the same area. The problem is made worse by the fact that student naturally wish to cluster and the type of property suitable for conversion naturally tends to be built in blocks.

There is an aspect in which this is a bit ironic in that many of the issues with concentrations of HMOs are caused by the growth of educational institutions and the need to house the resulting large numbers of students. The government encouraged this but made no effort to ensure that the growing establishments provided suitable accommodation for there students. Therefore the private sector has tended to take up the slack. For the government and local authorities to complain about this now is a little unfair and is largely illustration of a failure to properly consider all the consequences of unchecked growth in higher education establishments.

In any event, the consultation ends on 7 August 2009.

Filed under: Uncategorized, consultations, HMOs, Housing Act 2004

	PainSmith on TDS
	PainSmith on To take Possession or not to t…
	Rob Hirons on TDS
	P Rosemond on To take Possession or not to t…
	Susan Smith on All very frustrating, but what…

Tags

Categories

Email Subscription

Have you tried the PainSmith toolbar?

Pages

Recent Comments

Admin

Follow “Painsmith Landlord and Tenant Blog”