Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

13 June, 2013 • 09:11 0

Lettings Fees in the news

Shelter has stepped up its campaign to make it unlawful for lettings agents to charge any fees at all to tenants. You can read their report here. The average compulsory lettings fee that renters pay to a landlord’s agent in setting up a tenancy is £355.00. The charity would like to see tenants’ costs limited to the protected deposit and rent in advance as it is in Scotland.

Painsmith receives frequent queries about agents’ fees, and what can and cannnot be charged. The position currently is that agencies must be transparent about their fees, which should be an accurate reflection of their actual reasonable costs rather than an unsubstantiated sum. We have blogged on this before .

The Advertising Standards Authority recently ruled that agents must publicise their fees and charges in their quoted prices, or at least provided enough information for potential renters to calculate what they will be charged.

There is already a great deal of consumer protection legislation, e.g CPR Consumer Protection from Unfair Trading Regulations 2008, UTCCR, as well as regulatory bodies such as the Property Ombudsman. Regulation 6 of the Consumer Protection Regulations prohibits misleading omissions, which includes the providing of material information in a manner that is unclear, unintelligible, ambiguous or untimely. To charge extortionate fees is already either unlawful or unenforceable.

If it becomes unlawful to charge tenants any fees at all it has been argued that the cost will have to be picked up by tenants later on down the line through higher rents ( although in its report Shelter says that since Scottish law was clarified there has been no significant rise in rents). That said, if Shelter succeeds in effecting a ban on lettings fees, agencies will no doubt adapt. It may even cause a demise in the number of rogue agencies that are currently operating.

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

10 May, 2013 • 17:09 1

Rent Review: RPI, CPI and RPIJ

Commonly over the past few years longer term agreements or those with rent review clauses have tended to review the rent in line with the Retail Prices Index (RPI).
RPI was previously a National Statistic prepared by the Office of National Statistics (ONS) and used by Government as a measure of price changes. However earlier this year it was downgraded so that it was no longer a national statistic. ONS has confirmed that they will continue to produce RPI figures for the time being. This means that for agreements which refer to this as the measure to be used for calculating any rent review there is no need to worry. The statistic is still produced and ascertainable so the clause can still be operated. Remember all parties are bound by the terms of the lease and the court will give all words a common-sense interpretation. This means that simply because RPI is no longer a national statistic there is no reason why it cannot still be used.

So what about the future? You can still use RPI. It still exists and can be readily determined (even if a little harder to find on the ONS website than previously). The issue is that some parties are uneasy about using a statistic which is not a nationally excepted measure of price increases. RPI does however include housing and mortgage costs. For this reason alone it may be said to be a more accurate prediction on how inflation has affected rents although some economists suggest such figures alone help to perpetuate inflation.
Certain other figures are referred to. In particular the Consumer Prices Index (CPI) which is also calculated having regard to a specified “basket” of items save it does not include housing and mortgage payments. Hence this has tended to be considerably lower. If you are acting for Landlords CPI is less likely to appeal as the percentages have historically been substantially lower than RPI.

We are due to get two new indices produced by ONS. Both are meant to give a “truer” reduced level of inflation which again a landlord may disagree with although both supposedly will include some reference to housing costs. The two are RPIJ and CPIH. The ‘J’ in RPIJ stands for Jevons, which is the formula that replaces the one that was found to not meet international standards. It is likely to be lower than RPI. CPIH is similar to CPI but includes owner-occupier housing costs. It seems clear one of these will become the preferred option for including in rent review clauses but time will tell. There will always be a pull between landlord and tenant to adopt whichever either side sees as the most advantageous to them.
It should be remembered that a rent review clause can contain whatever mechanism the parties agree. This could include agreed increases by fixed amounts or determination by an external party. The later whilst common in commercial leases has tended not to find favour with residential tenancies given the short time nature means parties want a formula which will not put them to expense.

The bottom line is as ever to remember whatever terms are placed in the tenancy are binding upon both parties unless they mutually agree to the contrary.

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

24 January, 2013 • 15:34 2

Wood burning stoves and what agents need to know.

Over the past few years wood burners and open fires have come back into vogue. Most people agree that sitting in front of a fire on a cold winter evening is something they like to do. Open fires and wood burning stoves bring there own complications.

As part of the structure of the building landlords have an obligation to keep the stove and the chimney in good repair. Landlords should also check what the requirements are of any building insurer with regards to the same.

We have recently received questions asking whether landlords need some form of certificate; and can tenants be required to clean the chimney?

With regards to any fuel burning appliance installed after October 2010 it must comply with appropriate Building Regulations. This means that any such appliance must either have been installed by a HETAS approved engineer, who can then self certificate, or specific Building Regulation consent should have been obtained. A homeowner should ensure that such certification is kept in a safe place as this may be required. Under these regulations a carbon monoxide detector will also have to be installed which the landlord will have to check is in good order. The landlord will then be responsible for the ongoing maintenance and repair of such a stove whilst it is in the property. For appliances installed before this there is no specific requirement for certification save that landlords should be satisfied that they are safe and as part of this they would be well advised to ensure that a carbon monoxide detector is present.

We would always recommend that landlords carry out regular inspections to check what, if any, repair or maintenance issues may exist. There is however currently no statutory requirement to obtain some form of annual certification.

Generally such stoves require for general safety that the chimneys are swept at least once in every twelve month period. Many tenancy agreements contain a term that the tenant should ensure that this takes place. Some commentators seem to indicate that this is an unfair contract term relying on the guidance issued by the OFT in 2005. We disagree.

In our opinion provided a landlord can show that the chimney was swept before the start of a tenancy it is not unreasonable to place an obligation upon a tenant to ensure that the chimney is swept at regular intervals provided there is no obligation for them to return the property with the chimney in a better state than it was given to them. This can only apply to having the chimney swept and any maintenance which may be required from time to time would be the landlord’s responsibility. We are not aware of any specific challenges made by tenants to such terms and if anyone is would welcome hearing from them.

To summarise our view is that a well advised landlord will check if the installation was after October 2010 that they have a copy of the certificate. They will prior to any tenancy have the chimney swept (or make sure they have evidence that this happened) and also make sure that in any pre-tenancy inspection they check no repair or maintenance issues arise. We would always suggest that if in doubt a reputable professional is employed to undertake a check and the prudent landlord will ensure that their property has smoke and carbon monoxide detectors fitted.

Filed under: England & Wales, , , , ,

30 April, 2012 • 10:59 2

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, , , ,

17 February, 2012 • 10:45 0

Security for landlords

From the 1st of this month the Land Registry launched Form LL which allows landlords to register a restriction for free against the title of their home when they do not live at the property. The restriction is designed to help prevent forgery by requiring a solicitor or conveyancer to certify they are satisfied that the person selling or mortgaging the property is the true owner.

Property is usually the most valuable asset people own. It can be sold and mortgaged to raise money and is therefore an attractive target for fraudsters. The properties most vulnerable to fraud are usually empty, tenanted or mortgage-free. To help prevent forgery, absent owners can ask the Land Registry to enter a Form LL restriction on the title.

This is something that landlords that are abroad or far from the tenanted property should consider and agents are asked to consider mentioning this to their clients.

The cynics out there are probably thinking that there is another reason why the Land Registry has released this practise note and it is to do with the compensation they have to pay out when something like this happens however it’s easier to register a restriction than seek compensation when you are abroad.

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

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, , , , , ,

4 December, 2011 • 16:01 4

Back to Basics 4: Section 21

A section 21 notice is not a notice to quit. Many people that call the helpline refer to a section 21 as a notice to quit even today and it’s not, so stop it!

A section 21 notice is used by the landlord when he wishes to gain back possession of the property at the end of an assured shorthold tenancy, pursuant to a break clause or even where the tenant is in the periodic period of the tenancy. There are two types of section 21 notices that a landlord can serve on a tenant. The section 21(1)(b) notice and the section 21(4)(a) notice.

Although both notices refer to section 21 they should not be confused with each other especially given that have very different notice requirements. If the wrong notice is served and relied upon then it can delay or hinder possession proceedings.

Depending on whether the tenancy is either of a fixed term or a statutory periodic will depend on which notice a landlord will need to serve.

The Section 21(1)(b) Notice – Fixed Term:

A section 21(1)(b) is served during the fixed term of a tenancy. A landlord serving this notice must give not less than two months notice stating that he requires possession. The notice should specify a date “on” which the landlord requires possession. The notice cannot expire before the end of the fixed term unless the landlord is relying on a break clause in the tenancy agreement. Therefore a notice should not be dated to expire before the last day of the tenancy as this would make the notice invalid and whilst it could be dated to expire on the last day of the fixed term there are many out there that believe that dating the notice to expire on the last day makes the notice invalid. We at PainSmith do not.

Other issues that need to be noted are that tenants have 6 months security of tenure and so a landlord can not issue court proceedings on a section 21 until the tenant has been in residence for 6 months. The other issue is that any notice served pursuant to a break clause should comply with the provisions of that break clause and then finally if the notice is served in the fixed term to expire in the periodic period it’s still a section 21 (1) (b) that needs to be served.

The Section 21(4)(a) Notice – Periodic Tenancies:

A section 21(4)(a) is served after the fixed term has expired when the tenancy is a statutory periodic tenancy. A landlord serving this notice must give two clear months notice stating that he requires possession and the day on which the notice expires must be at the end of a period of the tenancy. The section 21(4)(a) notice often causes the most confusion amongst landlords due to the fact that if the wrong date is specified on the notice then it becomes invalid. To avoid this pitfall it is vital that a landlord looks at the tenancy agreement to assess what the tenancy period is.

Some of you are aware that unlike a section 21(1)(b) a date need not be specified on the notice and instead the ‘saving provision’ can be used following the decision of Lower Street Properties Ltd v Jones however, rather oddly we still find some of you are dating the notice. Why complicate things?

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

25 November, 2011 • 10:19 0

Enfranchisement: can you bring multiple claims?

Recently the High Court has ruled on the case of Westbrook Dolphin Square Limited v. Friends Provident Life and Pensions Limited.

The Leasehold Reform Housing and Urban Development Act 1993 expressly considers the position which may arise when a Notice (whether for enfranchisement or a lease extension) has been validly served but is not proceeded with whether by way of an express withdrawal or a deemed withdrawal when a party does not comply with the time limits under the Act. In those circumstances the Leaseholders are then barred from issuing a fresh Notice for a period of 12 months from the date of withdrawal. The participants will also be liable to pay the Freeholders costs. Thus the Act envisages that multiple Notices may be served.

In The Westbrook case a Notice was originally served and a negative counter notice was served and proceedings issued which had reached the stage of being a couple of weeks form the date fixed for hearing when Westbrook withdrew the Notice and the claim supposedly due to the fall in property values. Westbrook made clear when serving Notice that they would take further steps to acquire the freehold on what they felt would be more advantageous terms. Friends Provident indicated at this stage that they felt if Westbrook did this under the Civil Procedure Rules they would need the Courts permission. Westbrook duly paid Friends Provident the costs of the Court proceedings.

A new Notice was duly served (after the 12 month moratorium period had expired). This Notice contained a different purchase price, date and manner of signature of the participating tenants. Friends Prov served a counter notice and proceedings were issued by Westbrook without permission of the Court being sought in advance. Five out of the six grounds raised by Friends were the same as the earlier proceedings. Friends submitted that the second claim was an abuse of process in that there was a public interest in the finality of litigation and that no party should be vexed by the same cause of action twice. Westbrook submitted that it did not require permission and if they did they should be granted permission as the possibility of successive claims was a feature of the Act.

Mr. Justice Arnold struck out the claim. He decided that the principle of finality of litigation and that a person should not be vexed twice should inform the courts approach. The claim amounted to an abuse of process. The facts were substantially the same. Whilst withdrawing the Notice was acceptable they should not have discontinued the claim and then looked to in effect bring a second claim on substantially the same facts. They should have pursued the Court claim and had that adjudicated upon and at that stage, if they had been successful, they could have withdrawn the Notice.

It seems that if you receive a negative Counter Notice before issuing proceedings you need to consider whether you wish to go through with them. Once proceedings are started if you then withdraw serving a Notice again on the same basis will be difficult without permission of the Court which it seems may not be given. If therefore you have a block where there may be issues over the right to enfranchise tenants need to be committed to going all the way through with proceedings and if in doubt need to be prepared to withdraw the Notice at an early stage. In practice this probably applies to a minority of claims and seems to be the Court expressing annoyance at corporate participating tenants looking to exploit the system as the judge saw it. Yet more case law deriving form LRHUDA 1993!

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

17 October, 2011 • 11:44 0

How long do I need to own my lease for to get an extension?

For a leaseholder to seek an extension under the Leasehold Reform Housing and Urban Development Act 1993 (“The 1993 Act”) it is still necessary to have owned the lease for a period of two years.

Whilst various amendments have been made to the 1993 Act (under the Commonhold and Leasehold Reform Act 2002) the requirement to have owned the lease for a continuous period of two years still remains. This is important particularly for people buying a lease where the term is getting close to only having 80 years remaining. You should remember that if the term falls to 80 years or less then the freeholder will be entitled to receive 50% of any marriage value which exists. In respect of many leases this means that the premium payable will be significantly higher than if a lease extension was obtained before the term fell to less than 80 years.

So the Leaseholder must have been a qualifying tenant for at least two years under section 39(2) of the 1993 Act. The period of ownership is calculated going backwards form the date of service of the Notice of Claim under section 42 of the 1993 Act. The period must be continuous but you can rely upon periods where the leaseholder has been a joint owner for calculating the 2 year period. Also it seems that provided you have owned the same flat it does not matter that you have been granted a new lease of that flat. It is the period of ownership of the premises which is crucial. This does mean that if a Leaseholder has acquired a new lease under the Act they would not need to wait a further 2 years before applying again for an extension (if you wanted to!).

It is however the case that the 2 year period will only start from the date of registration at the Land Registry as under section 22(1) of the Land Registration Act 1925 (and subsequent amendments) and various authorities it is believed that the Leaseholder only becomes the legal owner of the lease upon registration. Leaseholders and their conveyancers need to be aware of this point as sometimes registration can take some time and certainly should not be overlooked. In an unreported case in Central London County Court (Wellcome Trust Limited v. Baulackey 2009) the Court determined that the purchaser of a lease was not entitled to serve a Notice under section 42 of the 1993 Act until they had been registered as proprietor for at least 2 years.

As a result if you are looking at buying a lease with say only 83 years remaining consideration should be given to having the outgoing Leaseholder serve a Notice (assuming they have a 2 year qualification) which can then be assigned. Whilst incurring further costs at the time of purchase (which many Buyers wish to avoid) in the long run it can save substantial costs. It is also worth noting that some Freeholders will grant voluntary terms or agree an extension even if the criteria for qualification are not made out although often at a price!

Yet a further point which advisers serving Notices of Claim and those advising on receipt of the same need to be alive to. Yet a further example of the pitfalls within the 1993 Act!

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

18 September, 2011 • 17:53 4

Homelessness and what this means to Landlords…..

We are often faced with questions from Landlords and Agents about information they have received from Tenants about homelessness and the advice given by local authorities.

Often a Landlord/Agent will have had a good relationship with a tenant but for whatever reason the Landlord requires back the property. Assuming therefore that the Tenant occupies under an assured short hold tenancy generally (subject to the appropriate rules) the Landlord can obtain back possession by serving a valid Section 21 Notice upon the Tenant. This is a non fault ground and the Tenant should vacate at the expiry of the Notice.

Many tenants, particularly those in receipt of state benefits, will approach the Local Authority to see if they can access any form of social housing. Generally local authorities owe duties to people such as those with children or who suffer from some form of disability or illness. All too often these people will receive advice that they should simply remain in the property until such time as the Landlord has applied to the Court, obtained a Possession Order and then looked to enforce the same. The Tenant then finds themselves in the invidious position of having to explain this to the Landlord/Agent and explaining that if they do not comply with this advise then the Local Authority is likely to owe them no (or at best a limited ) duty to rehouse.

This of itself can lead to what previously was a good relationship breaking down but the Tenant often has little choice. Whilst arguably Local Authorities do not have to wait until an Order is made or a bailiffs appointment fixed for most this is the policy they have adopted. The duty potentially arises to rehouse if they believe that the Landlord does have a genuine intention to obtain back possession but most in our experience will not enter into dialogue with the Tenant or the Landlord/Agent until the Court progress is underway. Sadly this policy is difficult for a Tenant to challenge.

With the changes to Housing Benefit it is likely that Agents and Landlords will come across this far more frequently. It is perhaps worth trying to understand the position Tenants find themselves in. If they remain in the property the Local Authority may rehouse them (although some do not even properly assess the Tenants rights and claim until the proceedings are underway) but if they simply leave then the Tenant will receive no support. For Landlords and Agents the way forward is perhaps to engage with local authorities and Councilors to get them to look again at the policy although sadly given the shortage of accommodation most Local Authorities are unlikely to change their policies.

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

10 August, 2011 • 13:13 3

Association of British Insurers

I was reluctant to blog this but I have been persuaded that it might help some readers. The ABI has released some factsheets on what to do if you have been affected by the current unrest. The good news is that most domestic and commercial insurance policies will cover you for fire and looting.

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

11 April, 2011 • 09:46 7

To take Possession or not to take Possession

Landlords are commonly faced with a tenant’s disappearing act, most often as a result of the tenant being in financial difficulties. Although landlords instantly feel relieved by not facing an expensive and lengthy court procedure what beckons is the likelihood of entering into the unknown world of abandonment.

Some assistance is given under the provision of section 5 of the Housing Act 1988, which in summary confirms a tenancy only ends when a tenant voluntarily gives up possession or a Court Bailiff executes a possession order. For a surrender to be effective it must be unequivocal between the landlord and tenant. Surrender does not just take place because the tenant hands the keys back, there must also be some agreement by the landlord. Nor does the granting of a possession order in it self permit the landlord to take back possession. It is the execution of the possession order by a Court Bailiff that lawfully entitles the landlord to possession.

But this has little use when a tenant has absconded, unknown to the landlord whether the tenant will return or not. A wrong move may result in a landlord and their agent being faced with civil and/or criminal proceedings for unlawful eviction.

So what may constitute abandonment

This is not exhaustive and will depend on each individual case but some consideration should at least be given to the following before possession is taken:

• Are there rent arrears, in particularly most recently?
• Has the tenant removed his possessions?
• Has the tenant left food in the fridge that may have gone off?
• Has the tenant left post at the property?
• Ask the neighbours if they have seen the tenant or seen anything unusual?
• Has the tenant left all the keys in the property?

In addition to the above, a landlord will be strongly advised to serve what is often referred to as an Abandonment Notice. This provides a 14 day notice warning the tenant that if they fail to contact the landlord, possession will be taken. However, it must be noted that abandonment is not a legal procedure but a process of proving to the court in the event of a claim for unlawful eviction that all reasonable steps were taken before possession was taken back. This may prove to be a persuasive defence. If there are any doubts then a possession order should be sought.

Given the potential repercussions of abandonment, considerations must be given when dealing with these situations. In particular, agents should ensure a process is in place and landlords are fully advised before possession is taken back.

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

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, , , ,

11 February, 2011 • 21:05 0

A rise in dangerous homes?

A BBC report over the weekend cast a gloomy and critical eye over the private rental sector, based on a report from the Chartered Institute of Environmental Health (CIEH). The report says that “One million rented homes in England ‘are dangerous’”, further adding that the number will rise because of changes in housing benefit and legal aid.

However, the government has abandoned any plans for a national landlord register, and has believed that too much red tape will be worse, not better for tenants. (See Grant Shapps’ comments).

Legislative protection of the health and safety of tenants exists in plenty. In addition to the landlords repairing obligations under the LTA 1985, any agent will be aware of the powers of local authorities to enforce standards under the HHSRS: for example there is no legal obligation on a landlord to take away polystyrene tiles or to put a banister on stairs – but an environmental health officer and local authority has the power to insist this is done. Such powers exist in respect of owner-occupiers too.

Further we have had agents report to us that despite the fact that it is compulsory for EPC ratings to be included in written information given to prospective tenants, some local authorities have advised that they are not acting where this is not done.

To predict a future of rogue landlords rampaging over the rights of tenants living in derelict properties is to ignore the hard work and the substantial self-regulation that landlord groups, bodies like NFOPP and NALS and many landlords and agents themselves, as well as local authorities, put in to make sure that people get decent affordable housing. The CIEH itself reports on how local authority initiatives are helping to raise standards in housing.

The large number of the queries we get to our helpline service regarding health and safety and repairing obligations is testimony to the fact that agents and landlords do want to know their obligations and seek to uphold them.

Painsmith has blogged extensively on disrepair, the HHSRS, EPCs and the private rental sector.

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

9 February, 2011 • 17:38 2

Potts –v- Densley & Pays Update

As advised on the 4th February 2011, PainSmith attended the hearing at the High Court today.

There were 3 issues considered by the court, 2 of which were subsidiary and therefore not relevant for the purposes of this blog.

The main issue before the court was, can the tenant sue for the usual penalties where the landlord has protected the deposit after the end of the tenancy, albeit before the court hearing.

The judgment has been reserved but we hope that the court will hand it down in late March and obviously we will publish the decision as soon as we receive it on this blog.

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

7 February, 2011 • 11:11 2

Releasing the deposit after an order for possession

We sometimes get asked about the apparent arbitrariness of judges when it comes to ordering the release of the deposit when making an order for possession based on rental arrears. Some judges make orders along the lines of “All or any deposit monies paid by the Defendant to the Claimant be credited to and set off against judgment debt together with any costs outstanding”. Others refuse to deal with the deposit at all and say that it is a matter for the relevant deposit protection scheme despite the landlord/landlord’s representatives making submissions requesting an order such as the above.

The fact that the judge does not make reference to the deposit in the order does not stop the landlord from claiming the deposit as payment towards any judgment for arrears, interest and legal costs obtained, however you will have to follow the prescribed process that is required under the rules for each scheme. For example, the DPS requires landlords to make a single claim and obtain a statutory declaration before they agree to the release of the money to the landlord. It is therefore important for agents to familiarise themselves with the rules of the scheme that they are registered with when advising landlords on how to proceed.

You can view all our posts on deposits by following this link.

Filed under: England & Wales, FLW Article, ,

13 December, 2010 • 10:51 0

Drying Flooded Buildings

The DCLG has published an interesting summary of guidance on dealing with flooded properties which may well prove valuable in the face of global warming and the uncertain climate!

This is not formal advice in itself so much as a signpost to the various pieces of advice out there and the areas which still need work. However there are some useful flowcharts and an overview of different methods of drying and moisture testing. It is not a publication for the faint-hearted though and assumes a fair degree of technical knowledge.

Filed under: England & Wales, FLW Article, Northern Ireland, Scotland, ,

23 April, 2010 • 10:52 3

CLG View on Tenancy Deposits After 1 October

As we have previously reported the maximum rent threshold for Housing Act 1988 tenancies is to be altered on 1 October from £25,000 to £100,000.

One of the key questions has been what the position will be for tenancy deposits taken in respect of tenancies which start prior to 1 October and are not ASTs but which will become ASTs on 1 October. There has been some uncertainty as to whether these tenancy deposits will need registration with an authorised scheme or not. If they do need registration then there is some doubt as to when that will need to occur.

It seems that DCLG thinks they will need registration. They have been advising stakeholders that:

Our intention is that these new assured shorthold tenants should have the same protection as existing tenants, so if the tenancy started after 6 April 2007, the landlord will have to protect the deposit.

It is debatable whether they can, in fact, achieve this as the trigger for the protection of a deposit is receipt in connection with an AST. These deposits were received prior to the change and were not received in accordance with an AST and so did not require protection as at the time they were received. Clearly, however, the DCLG thinks different and will seek to encourage the Courts to rule on this basis.
The DCLG recognises that landlords will not have been able to register deposits within 14 days of receipt but states that

we would expect them to protect the deposit as soon as possible.

Apparently they will ask the Courts to give landlords leeway on this issue although after the ruling in Draycott v Hannells the Courts should not be acting on late registration anyway so it is hard to see what useful guidance can be provided.

While we have some doubts about the validity of the DCLG position the message is clear. Protect all tenancy deposits as soon as possible and definitely promptly after 1 October. We hope the deposit protection schemes are prepared for the rush.

Filed under: England & Wales, , , ,

21 May, 2009 • 14:49 0

LACORS on Cancellation of Contracts

On my weekly NFOPP email I was directed to this article on their website which mentions LACORS guidance on the Cancellation of Contracts Made in a Consumer’s Home or Place of Work Etc Regulations 2008.
Unsurprisingly LACORS takes the view that the Regulations apply to Estate (and presumably also Lettings) Agents.
What is more interesting is one of the scenarios in the guidance which we have reproduced here:

2.3.3 – During an estate agent’s visit to the consumer’s home, if the consumer has been able to review the information required by the Estate Agents Act 1979 and the Estate Agents ( Provision of Information) Regulations 1991 and then agrees to the quotation provided by the estate agent and says “Yes” to contracting with the estate agent for his services. The estate agent says “I’ll go back to the office and finalise the contract and send it through” – the Regulations are likely to apply as the contract is made following the offer made by the consumer. The estate agent needs to be careful to give the written notice of the right to cancel at the point the offer is made by the consumer.

This is an interesting view. LACORS is essentially saying that if a verbal agreement is made for business to commence then the notice must be handed over at that stage and cannot wait until the written contract is signed.
This is, of course, quite logical as a verbal agreement concluded on agreed terms is enforceable immediately and does not need to be reduced to writing. However, agents should take care and consider at what stage they are at with a landlord if they are talking to him face-to-face in his own home or place of work. If they are taking away from the meeting that they can immediately start marketing a property and can get th terms signed along the way then they should have handed over a cancellation notice and could potentially be liable to prosecution.

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15 April, 2009 • 16:15 0

Digital Switchover

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.

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13 January, 2009 • 00:44 0

Spotting Drug Production

Tessa Shepperson’s blog has a very useful post on telltale signs of drug production in rental properties along with a link to a new booklet on the subject produced by Suffolk Police. More information here.

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20 October, 2008 • 20:30 0

New Fire Safety Guidance

LACORS has created new guidance on appropriate standards of fire safety in residential rented accommodation.

Previously there was a requirement for properties to be fire safe under the HHSRS or when applying for an HMO licence but there was little information on what fire safe meant which led to a wide disparity of standards between different local authorities.  LACORS has taken best practice and ideas from around the country and combined it into one document.

The standard required depends on the size of the property and its anticipated occupancy. HMOs and larger properties will need to meet a higher standard. For most landlords the main issue that will cause concern is the requirement that all properties should have a mains-powered, battery-backed, smoke detection system.

It should be remembered that the guidance is just that, guidance. Therefore there is no legal requirement for a property to fulfil the standard before it is rented. However, if the property is inspected by the local authority for the purposes of the HHSRS or HMO licensing these are the type of standards they will expect.

More information on the guidance can be found here.

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