Benefit changes are coming

From April 2021, the Government is due to remove the enhanced benefit payments it issued to assist people during Covid-19

We always knew this was a temporary measure and the additional income was a lifeline for many on benefits who were struggling to make ends meet.

Many landlords look advantage of this temporary increase, by rising rents, which was coupled with the lift on the benefit freeze, saw an increase in the Local Housing Allowance rate across the UK

However, these landlords may fall foul of this forward thinking when rates are due to return to original levels in April.

There is a little light at the end of the tunnel, the Government has announced that there will be an increase in benefit levels from April, but only against the original figures, which is some cases could see tenants losing over £100 pm in benefits.

This could see an unpredicted rise in rent arrears when benefit rates are reduced, landlords are advised to check what their tenants benefit levels will be come April 2021

The new rates are here, note the figures in brackets are the original payments not the Covid enhanced rates.

Universal Credit (Monthly rates shown)

Standard allowance

Single

• Single under 25: £257.33 (from £256.05)

• Single 25 or over: £324.84 (from £323.22)

Couple

• Joint claimants both under 25: £403.90 (from £401.92)

• Joint claimants, one or both 25 or over: £509.91 (from £507.37)

  
  

  Housing Benefit

  • Under 25: £59.20 (from £58.90)

  • 25 or over: £74.70 (from £74.35)

  • Entitled to main phase ESA: £74.70 (from £74.35 )

Residential tenants liable to pay SDLT

Stamp Duty Land Tax (SDLT) is normally directly associated with purchasing a property or land rather than with our renting tenants, but it may come as a surprise to know that certain long term renters have had to pay 1% SDLT.

Since December 2003 residential tenancies have the potential to be liable for Stamp Duty Land Tax (SDLT) and with more and more people finding it harder and harder to get their first step on the property ladder, and the average tenancy length being 4.5years, it is highly likely that more and more tenants will find themselves liable to pay this surprising Stamp Duty.

SDLT is levied on the rent paid and calculated on the amount of gross rent for the term of the tenancy. This computation produces an amount known as the Net Present Value (NPV).

NPV is calculated by taking into account the highest 12 monthly rents in the first 5 years of the tenancy. It is done via a complicated formula which maybe the HMRC is only capable of understanding.  If anyone is interested in test it, their online calculator is available here: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro .

SDLT is calculated across the total time a Tenant takes a tenancy for, up to a maximum of seven years. If a tenant takes a one year tenancy (AST) and then renews for a further year, this will be considered by the Inland Revenue as a linked transaction and the NPV calculation will be based on the gross rent paid for both years, up until 7 years of a linked tenancy for the tenant.

This cycle can be broken if a new AST is signed BUT it MUST have different terms, if a copy AST is signed this does not break the linked transaction of the tenancy, it may be difficult to sign a new AST which does in fact break the linked transaction cycle.

It is worth noting that when calculating the term of the tenancy, it is likely to include both fixed term tenancy and periodic tenancy (where the tenancy continues after a fixed term).

This SDLT is paid by the Tenant.

From 17 March 2006 if the Rent paid by a tenant (NPV) is less than £125,000, no Stamp Duty Land Tax is payable.  If the rent paid (NPV) is more than £125,000, Stamp Duty Land Tax is due

When SDLT is due the Tenant must complete and submit a declaration form SDLT1 to the Inland Revenue within 30 Days of the date the tenancy commences or the date the tenancy was executed, whichever is the earlier.

If the tenant fails to pay in what HMRC describe as a ‘timely fashion’, which actually means within three months of the filing date, the renter could incur a £100 fine.

Where no payment is made after three months passes that penalty will rise to £200, and could continue to rise to the full amount of the tax due if the return is 12 months overdue.

Covid and the stamp duty holiday.

Although the Stamp Duty holiday is currently being taken advantage by many, it does not apply to these renting arrangements. The reason for this is because the scope of the SDLT holiday relates to tax being lifted for buyers rather than renters, which will offer no comfort to those who do not own their homes.

Possessed by Possession notices

On Friday 28th August 2020, the Government continued their usual fun and games of updating important legislation and releasing guidance after the fact.

Only when they confidently believe the majority of housing solicitors, judges and barristers would have opened the second bottle of Merlot do they feel safe to make these Breaking News stories and Friday was no exception and we welcomed to the world the freshly born The Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction) (Amendment) (England) Regulations 2020

The Coronavirus Act 2020 had already increased notice periods and plunged many landlords into an abyss of financial worry with some tenants believing a global pandemic is the perfect reason not to pay rent.

This was quickly followed by a number of Practice Directions which saw the court system closed in relation to possession proceedings.

 Unsurprisingly this blanket ruling had a detrimental effect on property owners whose tenants had built up rent arrears prior to the lockdown or had committed an offence such as anti social behaviour (ASB)

And this is what brought Fridays announcement, now landlords could serve shorter notice periods on those tenants whose breaches are not Covid-19 related, but like everything the Government has done throughout lockdown, these kneejerk announcements come with little or no guidance, but i have done my best to simplify the new notice periods and hopefully make it easier to understand, given that this amendment actually takes in 5 separate pieces of legislation and has incited a collective loss of will amongst property professionals.

I am sure I am not the only one reaching for a cross and some sage when i hear the word "Possession" mentioned in the news updates.  

The most important element for landlords to understand is that the new notice periods are all different and range from 2weeks to 6 months, you will need to ensure you have the correct ground for eviction and dates on your application form.

Section 21, the no fault notice, has its timeframe increased again from 3months to 6 months, in addition its shelf life of 6 months has also been extended to10, meaning landlords will have just 4 months in which to apply to court once the notice period expires.

The common grounds used for rent arrears Ground 8, 10 and 11 now have two sets of notice periods depending on whether the tenant is in 6 months rent arrears or not.

It is also important to make sure that if you are using more than one ground for the reason for eviction, that those grounds all have the same notice period, as you cannot have 2 or 3 different grounds if one is only 2 weeks notice but the other is 3months. 

Here is where it gets confusing.......

Where a landlord is relying on an Anti-Social Behaviour ground which will be 7A or 14, it is worth remembering that Ground 7A is a mandatory ground  but generally requires the tenant (or some other person residing in or visiting the property) to have been convicted of an anti-social behaviour offence or some other relatively serious disorder offence

Whereas Ground 14 although discretionary, only requires the tenant or an occupier to have caused a nuisance or annoyance to their neighbours, the landlord or the landlords agent. 

It is important to note that where ground 14 can be used it actually shortens the notice period for any other grounds that you are relying on for the same notice.

So if a landlord was also seeking possession under ground 1 ( now increased to six months) and also could show that there was anti-social behaviour under ground 14 they could give a notice which required no notice period and apply to court immediately  

If you do not have any evidence to support a Ground 14 claim, then you can't throw it in with the hope of  shortening notice periods overall,  but it can be used where there is evidence, even if the court is not ultimately persuaded to make a possession order under ground 14.

These new notice periods will remain in force until 31st March 2021 and not the previously announced 30th September 2020.

It is also now important to familiarise yourself with the new Pre-action process that will come into force on 20th September, when courts re-open, this will include the need for reactivation notices to be sent to both the court and the tenant along with supporting evidence of how Covid-19 has effected the tenant.

The courts WILL NOT automatically process possession claims which have been submitted prior to 3rd August 2020 so you will need to be proactive when seeking possession. 

Finally and a welcomed surprise, is both Form3and Form 6a have been updated to accommodate the change in notice periods. 

This link below will take you to a simple document explaining each ground for possession under Section 8 and its new notice period term.  

Updated Notice periods

Credit:https://www.jmw.co.uk/services-for-business/commercial-litigation-dispute-resolution/blog/ever-moving-target-changes-notice-periods-private-residential-tenancies

Buy a property and get a tenant for FREE

 In recent months there has been a noticeable increased demand in the BTL investment market for tenanted properties, this could be linked to the fact that tenants are renting for the longer term now and regarding properties as their home rather than a stop gap.

Leeds and Bristol showed the highest increase in demand with 55%, closely followed by Nottingham 51%, Cambridge 47% and Southampton with a 40% increase in demand.

However, the market is slow to catch up with demand, with Leeds only having 2.9% of properties on the market which are tenanted, Bristol 0.7%, Cambridge 1.8% and Southampton 1.6%.

In contrast Cardiff has the highest number of tenanted properties on the market for sale at 3.7% with a demand increase of only 38%.

Buying a property with a tenant in situ also referred to as a sitting tenant, can bring a number of benefits to the BTL investor.

Firstly, there will be no void period after the sale when you would normally be advertising for a tenant, this in turn will mean a saving on agency fees.

You inherit a reliable, trustworthy tenant which is extremely valuable to any landlord and you are guaranteed rental income from day one, you will be able to budget with confidence, knowing the rent you will receive until at least the end of the existing tenancy agreement in addition you will have access to the tenants full rental history something you may not get when using a referencing firm with a new tenant.

With a contract in place, tenants need not be affected at all by a change in the ownership of a rental property, ensuring their happiness and willingness to remain in their home is undiminished.

But it isn’t as simple as it sounds, nothing in property ever is.

It is important to remember when buying with a tenant in situ, the tenant will be entitled to continue to live in the property and the change of ownership does not override the tenancy agreement and the tenant’s rights.

You will not be able to evict or increase rents until a fixed term tenancy ends and depending on when the tenant took up occupation, you may find you have a Protected tenancy which brings its own problems

Buying a property with tenants in situ is different to the normal sales process and will need a conveyancer with commercial experience.

Extra care is needed as in addition to the standard enquiries that need to be made in all conveyancing transactions, it is critical to make enquiries about the tenants.

It is important the seller provides all the details relating to the tenant, including the Tenancy Agreement this is key to establish when the tenancy was created, the status of the tenants and how they may be regulated by legislation, as different forms of security apply to different tenancies.

You will also need to ensure the seller has been compliant and how this will impact you as the buyer, checking the original deposit has been registered and after the sale transferring it to your name, you will need to protect it again, and reissue the prescribed information.

Making sure the property meets safety regulations and all the necessary certificates are in place, such as energy performance, gas and electrical.

(if furnished) that the furniture is in an acceptable condition and meets safety standards.

In an industry where there is a notice for just about everything, it is important to familiarise yourself with the notices and their timelines that will need to be served on the tenants once the property is purchased.

Section 3 of the Landlord and Tenant Act 1985

Section 3 places a mandatory duty on a new landlord to tell the tenant that they are in fact the new owner, having taken over from the old one, this is still the case even if the seller has already informed the tenant.

The new owner must give this notice no later than next rent due date or 2 months from the date of sale, it must inform the tenant that they are the new landlord and must provide their name and address (this must be the landlord’s actual address, not just an address for service of documents).

Important caveats

If the new landlord has not served a S3 notice on the tenant then the previous owner remains liable for any breaches of the tenancy agreement, such as disrepair, until the notice is given, in addition  both the old and the new landlord can be held jointly and severally liable for any breach.

More importantly S3(3) states A person who is the new landlord under a tenancy falling within subsection (1) and who fails, without reasonable excuse to give the notice required by that subsection, commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale.

In short this means being prosecuted in the Magistrates court and the scale 4 fine is currently £2,500.

Section 47 of the Landlord and Tenant Act 1987

S47 requires that any written demand for rent by the landlord to the tenant, must include the landlord’s name and residential address and if that address is not in England and Wales, an address within England and Wales is required, so notices can be served. The purpose of the requirement under Section 47 is not to give the tenant information as to where the notices can be served, but to confirm the identity of the landlord. Using a managing agent’s address does not confirm the landlord’s identity, as it is not the landlord’s actual address.

Section 48 of the Landlord and Tenant Act 1987

Section 48 of the Act prevents landlords being able to seek possession of the property on grounds of rent arrears until the tenant has been provided with an address at which notices in proceedings can be served and the tenant will not be liable to pay rent until the landlord complies.

Interestingly S48 does not state that the landlord’s personal address is required for the amounts to become due. So a landlord can seek possession of a property on rent arrears grounds or the arrears themselves if he has provided an address at which notices and proceedings can be served. This address can be the landlord’s own address, that of the landlord’s letting agent, solicitor or friend. The address can also be a business address, preferably a registered office.

Finally, if a tenant has already paid rent on a defective rent demand, he or she may well be able to claw back up to six years’ payments on the basis that they were paid under an invalid demand.

What is a tenancy agreement

I see so many keen people entering the property industry as Rent 2 Rent operators believing it to be a risk free money making  option.

Yes it can be a great step on the property ladder but it certainly isn’t risk free.

The most common mistake I see time and time again is R2R operator signing Assured shorthold tenancies (AST) with property owners and then renting the property to tenants who are also issued with an AST.

This equates to subletting, which until specific permission has been sort from the owner, their mortgage company and related insurers is classed as illegal.

So why is an AST not right for R2R?

An AST is an interest in land for a set period of time and for a set rent, the term tenancy is usually used to refer to a short term interests where lease is used for long term interests 

When a landlord and tenant sign an AST the landlord is giving the exclusive possession of the property to the tenant meaning they have control of the property, for this to be legally possible the tenant MUST be in occupation and use the property as they only or main home.

If a tenant never takes up occupation then the AST legally doesn’t come into force.

With this in mind R2R operators who sign ASTs with owners have no agreement in place for the job they will be doing and could find themselves in hot water should the landlord wish to regain possession of his property.

Without the correct agreement in place a R2R operator will have no rights and no power to stop the landlord dealing direct with the tenants and removing the R2R operator with immediate effect.

An AST is a Housing Act tenancies which is also covered by Protection from eviction act 1977, the occupying tenant will also have rights with regards to repairs to the property as well as quiet enjoyment.

If a tenant never takes up occupation none of these can apply, the R2R operator is known as a 'mesne' tenant (pronounced 'mean') and the ladder of interest is below.

Head landlord (owner) > Mesne Tenant (R2R operator) > Subtenant (occupier)

Generally, when a mesne tenancy ends, the subtenancy also ends and the head landlord is entitled to get the accommodation back with no-one living it.

If the mesne tenancy ends, the head landlord can evict the subtenant quite easily. 

In these circumstances they will be regarded as a trespasser and the head landlord doesn't need a possession order to evict.

Green Homes Voucher Not full cost and NOT your choice

 On 8^th July Chancellor Rishi Sunak announced the £2 billion Green Homes Grant Voucher Scheme (GHGVS) which allows eligible households in England to receive vouchers worth up to £5,000 to spend on various green initiatives in the home, landlords can apply for a voucher from the government that will pay for at least two-thirds of the costs of hiring tradespeople to improve the energy efficiency of their home.

Only tradesmen who are registered with either TrustMark and Microgeneration Certification Scheme (MCS) will be eligible to carry out the works.

Landlords will not be provided the voucher directly, instead the voucher will be offset against the final bill from the tradesmen.

The grant aims to cover the costs of 66% (two-thirds) of any work completed that meets the requirements. For instance, for the installation of Cavity wall insulation costing £2,000, you could potentially expect to receive a £1,333 voucher to help towards the costs, leaving the landlord to pay £667.

The home improvements are split into two categories, Primary and Secondary.

Primary Measures

·         Insulation:  Solid wall, Cavity wall, under-floor, loft, flat roof, room in roof, park home.

·         Low carbon heat: Air source heat pump, ground source heat pump, solar thermal

Secondary Measures

·         Draught proofing

·         Windows and doors: Double/triple glazing (where replacing single glazing), secondary

       glazing (in addition to single glazing), upgrading to energy efficient doors (where

                replacing doors installed prior to 2002).

·         Heating controls and insulation: appliance thermostats, hot water tank thermostats,

hot water tank insulation, smart heating controls, zone controls, delayed start

thermostat, thermostatic radiator valves

 

In order to be eligible for a secondary measure at least one of the qualifying Primary measures must have been installed, the secondary measure will also receive a voucher but only to the equal value of the Primary measure installed.

For example: Primary measure is £2000 loft insulation, then the secondary measure can cost up to £2000 and not the full £5000.

Top up of existing measures are also allowed (e.g. additional loft insulation up to the recommended level, solid wall insulation for other walls where a wall has been previously insulated), but replacements are not included.

To be eligible to apply for a voucher you must meet one of the following criteria

• ·         All owner-occupied homes (including long-leaseholders, shared ownership)
• ·         Landlords of private rented sector domestic properties
• ·         Landlords of social sector domestic properties (including LA owned homes)
• ·         Park home owners (for residential sites including Gypsy and Traveller sites)

In addition to this, the government have extended the scheme to allow a £10,00 voucher which will fully fund improvement measures for those on low-income, however this low-income scheme is only available to owner-occupiers on a qualifying benefit.

How can you apply?

Later on this month (August), homeowners and landlords will be able to go the Simple Energy Advice (SEA) website and get advice about which energy saving measure would suit them best.

Landlords cannot decide which measure to use, this will be decided by SEA and the application will be done via SEAs website ONLY

You'll then be sent a list of TrustMark or (MCS) registered tradespeople (schemes which list approved construction workers by the government) in your local area to carry out the work, the Government will hand out vouchers from the end of September.

SCAMS

Be wary, a number of website have been set up already stating that you can claim your Voucher through them, this is not the case voucher application is ONLY available via Simple Energy Advice (SEA) website, also if you've been called saying you're eligible for a Green Homes Grant this is fake. Fraud prevention scheme Cifas says it's received reports of scammers trying to con people out of money by pretending to be part of the scheme.

Link to Government guidance 

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/906544/ghg-additional-information.pdf?fbclid=IwAR1SIQ78Y6nbytoywhUTG-PSGGk15hzNm5uQhmXHqLt8EDRL4yl2jHOYA84

 

It was acceptable in the 80s - But why do we still not understand S21?

S21 not a real eviction

 In 1988 a new Housing Act gave us what we know today as an Assured Shorthold tenancy or AST and created the provision of Section 21 notices, this provides the opportunity for landlords to evict  tenants from the property even if the tenant has not breached the terms of the tenancy agreement.

 

Commonly referred to as The No Fault Notice, S21 became the go-to notice of choice for landlords and provided a much simpler way to remove a tenant from a property, requiring a notice of 2 months and then a court order.

Prior to January 1989, landlords could serve a Notice to Quit under the Rent Act 1977 but would be required to prove one of the 20 Cases ( we would now refer to as grounds) had been breached in order for the court to award the possession.

 

The S21 did not require the landlord to wait for the tenant to make a mistake or default on rent payments.

In addition  Section 21 of the Housing Act guaranteed the landlord would get the eviction by making the no fault notice a mandatory ground, meaning a judge had no option but to award the requested eviction.

 

At the time, this was a revelation for landlords who had previously only had  protected and statutory tenancies to issue to tenants who in turn had the right to stay in a property they were renting, almost indefinitely and could even pass it on to relatives in the event of their death.

The Tory Government at the time saw that this system was disincentivising homeowners to let out their properties, contributing to a housing shortage.

The private rental sector, at this time, accounted for only 8% of homes, stark contrast to 1918 where 78% of housing was privately rented.

 

But over 30 years on from this landmark change in legislation, how many landlords and letting agents alike truly understand the meaning and use of Section 21?

 

The most common misconception is that a S21 notice is in fact an eviction warrant and tenants are expected to vacate once the notice expires.

Many landlords will gamble the completion date for the sale of a house on the expiration of a section 21, more often than not losing the sale when the tenant stays put.

 

As will any business, it is as important to understand how to end a contract as it is to enter one.

 

Key Points of a Section 21

 

It is NOT an eviction warrant – A S21 is merely an informative letter set out in a prescribed format, advising the tenant that once from the end date of the letter a landlord may apply to court for a possession order.

Tenants do no have any legal reason to leave when a S21 expires – A tenancy can only be ended by the tenant ( Notice to quit) or a Court. When the S21 expires, that is simply the next step date for when a landlord can apply to court for possession.

Tenants do not have to leave.

Possession order if NOT an eviction – Once a court has granted the possession order for the property, this commonly gives a tenant 14 days to vacate the property, HOWEVER, from a legal stand point the tenant still does not have to leave the property.

Only an eviction warrant – Tenants only have to legally vacate a property once a bailiff attends and carries out the eviction, at this point changing the locks and handing the keys, the possession, back to the landlord.

 

It is important to remember that although a S21 carries less admin to issue than a S8, its process can actually take longer and be more costly, as rent arrears cannot be claimed when using a S21 because this is a NO FAULT eviction, meaning a separate claim for arrears will need to be submitted at additional costs.

 

With so much additional regulation surrounding how and when a S21 is served and its validity so easily forfeited

It is extremely important that landlords and agents understand the basic laws of renting privately and look at the practical more cost effective and swifter options available other than S21.

They are Evictions Jim, but not as we know them

At 21:15 last night, a rather fundamental piece of legislation was released under the cover of darkness, this Statutory instrument is know as THE CIVIL PROCEDURE (AMENDMENT NO. 4) (CORONAVIRUS) RULES 2020

Coming into force on 23^rd August amendment No4 sets out a number of new steps landlords will have to take once the courts reopen on 24^th August.

The important thing to remember is this is temporary legislation with an end date of 28^th March 2021but like all of the Covid related temporary legislation, does  have a review clause meaning this can be withdrawn or altered before that date.

The first item to note is that this amendment suspends the standard time frame from Claim form to hearing, which current sits at 8 weeks, this means landlords can expect to wait much longer in some situations than this standard time frame.

The second point is that these new measures will effect ALL claims currently suspended under the Covid-19 regs, regardless of whether the claim was submitted before, during or after 23^rd March 2020.

The key point to remember is this amendment DOES NOT effect how a S21or S8 is issued nor its function as a mandatory notice seeking possession.

What amendment No4 does do however, is bring in a number of requirements on the landlord to enable a claim to progress.

What landlord will need to do

• ·        In order for any claim currently suspended in the court process to continue after the courts reopen on 24^th August, Landlords (the claimant) will have to write to both the tenant ( the defendant) and the court informing them that they wish to proceed with the claim, this MUST be in writing and will be known as a ‘Reactivation Notice’  as yet we do not know if this will need to be in any type of prescribed form.

• ·         Without a Reactivation notice claims WILL NOT be processed – There is no charge for submitting the Reactivation notice.

• ·         Landlords will need to provide the court with as much information as possible in relation to the tenants (and their dependants)  circumstances regarding Covid-19, such as vulnerability, Shielding and financial status, eg: claiming UC or furloughed etc.

Ø  Ideally this should be provided with the Reactivation notice, but can be submitted prior to the hearing.

• ·         The landlord MUST provide a FULL rent arrears history up to the date this document is submitted to the court

Full guidance supporting this amendment is yet to be released, but as soon as it is I will bring a more detailed update

Property management... Still not Important for agents

Since the tenant fee ban came into force in 2019 there has been a knee-jerk reaction from letting agents to increase their fees to Landlord to help cover the loss that they were going to see from not being able to charge tenants.

But with the increase in fees sadly we did not see an increase in service.

Statistics released by The Property Ombudsman in their last annual report showed that communication and property management were the highest source of the complaints.

Why is it with all of the technology available at our fingertips, the majority of letting agent still fail to communicate and still fail to manage our properties to a good standard, surely as the professionals in the industry  letting agents should have the upper hand of both knowledge and skill when it comes to managing a landlords property.

It would seem that many agency owners do not put as much value in the role of a property manager as they do their negotiators, even though property Managment is the bread and butter of many agents who would undoubtedly fold without it.

Qualifications and training of property managers are not high on many Directors to do lists.

Yet, property managers rarely have the knowledge or skill set to effectively manage 1 property let alone the agency average of 250 and find that in many situations the landlord is actually more knowledgable than the agent they are paying to be the expert.

Nothing more than glorified PAs to the landlords property managers still only seem able to take a maintenance report from a tenant and pass this on to the landlords and wait to be told what to do next. is that really worth 15% of your monthly rental income?

Surely the reason many landlords opt for a fully managed service is to be hands off and not be bothered by the tenant calling about the silliest of things, instead the landlords simply swaps that scenario to have the agent bother them with every little thing.

Agents and especially property managers need to understand they are presenting themselves as the industry experts and start to take pride in the fundamental service that a Landord relies on.

I have worked with a number of letting agents and seen the poor quality of property Managment, many don’t know the very basics of the landlords responsibility let alone have an understanding of the legislation.

Most reported illegal Evictions are actually carried out by letting agents and not, as the media would have you believe, rogue landlords.

But the crux of the issue here is, no matter how inexperienced or how monumental the mistake an agent makes, the law states the responsibility lies with the Landord, so when your property manager doesn’t serve your Gas certificate on the correct date or fails to register a deposit and you find you can’t evict your tenant, ultimately the buck stops with the landlord, it is the Landord who gets the hefty fine it is the Landord who is stuck with thousands of pounds of court fees.

So what is the answer? 

Communication isn’t difficult in this day and age and with some good basic knowledge and an ability to use a diary, property managing isn’t rocket science.

But until the industry starts to take this area of its own business more seriously, sadly we will continue to see complaints rise and more landlords fall foul of a glossy sales pitch and be left out of pocket and tenants will suffer poor housing standards through lack of remedy.

Some letting agents misinterpreting landlords responsibilities regarding legionella risks to their tenants

There is a legal duty for landlords to assess and control the risk of exposure to legionella bacteria, but Health and Safety law does not require landlords to produce or obtain, nor does HSE recognise, a ‘Legionnaires testing certificate'.

• Legionella testing (or sampling) is generally not required in domestic hot and cold water systems and then only in exceptional circumstances.

• Misinterpretation of the legal requirements by some consultants and letting agents about landlords’ responsibilities to manage and control legionella in domestic premises may result in unnecessary financial burdens being placed on landlords and tenants.
• - Portable Document Form- Portable Document Format

Some letting agents are using the revised L8 ACOP to suggest that new legislation has been imposed on landlords of domestic rented properties for managing and controlling the risks of exposure to Legionella bacteria of their tenants. This is wrong, the legislation has not changed and misinformation/misinterpretation can impose unnecessary financial burdens on landlords where they are being charged for legionella testing and certificates they don’t actually need.

The law is clear that if you are a landlord and rent out your property (or even a room within your own home) then you have legal responsibilities to ensure the health and safety of your tenant by keeping the property safe and free from health hazards.

Section 3(2) of the Health and Safety at Work Act 1974 (HSWA) makes provision for relevant health and safety legislation to apply to landlords to ensure a duty of care is shown to their tenants’ with regard to their health and safety.

HSE has published guidance for landlords.

Possession for Rent Arrears to get a whole lot harder. Landlords will need to be more hands on than ever.

Unless otherwise announced, Courts are due to reopen on 25th June and the media predict a flood of Evictions to sweep England. 
Realistically, we already know that courts, when they reopen will priorities certain applications over others, for example, variation orders and requests to set aside existing possession claims.
After that we expect the courts to deal with the most serious possession claims first, such as Anti-social behaviour, then rent arrears claims and final S21 claims as these need no fault to be proved.

It is possible that prior to 25th June the court system or the notice period of 3 months could be extended.
But what we do know is that Robert Jenrick has announce a Rent arrears Pre-Action Protocol will be issued before the courts reopen.
So, what does a pre-action protocol mean for landlords,  at present we have not seen a draft of this new measure, nor do we know if this will be legally binding or just a “good practice guide”

So let’s look at the possibilities the protocol could bring.
The social housing sector has had a Pre-action protocol since 2015 and forms part of the Civil Procedure Rules and sets out the Court’s expectation of the parties’ conduct before a claim is issued
It is expected that the protocol that will be issued for Private landlords will follow a similar set up and will set out the process a Landord will need to follow before a court will entertain an application for possession.

The Social Landlords protocol is separated into 3 parts:
• Action before notice is served
• Action before court application 
• Action before court hearing

In all of these sections the responsibility is on the landlord to prove that have met and abused by the protocol before executing an action.
For example, before a landlord can issue a S8 notice for rent arrears, they must demonstrate that they have engaged with the tenant at the earliest opportunity, provided a rent statement every quarter, discussed the tenants financial circumstances, explored their eligibility to claim benefits or grants and discussed repayment options.
Only after all this has been satisfied can the landlord confidently serve a S8 notice.
After notice has been served this is not the end of the landlords duties, they must now prove ongoing communication with the tenant and evidence that they have supported the tenant to make any benefit claims and signposted them to independent advice organisations such as Citizens advice.

The courts also in the case of social landlords expect both parties to engage in Alternative Dispute Resolution (ADR) before a Landlord submits an application for possession to the courts.

For social landlords, failure to meet these requirements will lead to the court issuing them with a claim to pay all costs, the possession hearing can be adjourned and in some cases the judge will just strike out the claim, leaving the landlords to have to start the process from scratch.

We do not know how detailed the Private Sector Protocol will be and it is very unlikely to be retrospective. 
But I would recommend landlords start to follow some of the process of the Social Landord pre-Action protocol as general good practice, to ensure that when the protocol is published in the next few weeks, you are already ahead of the game.

View a copy of the Social Landord Pre-Action protocol here.
https://www.justice.gov.uk/courts/procedure-rules/civil/protocol/pre-action-protocol-for-possession-claims-by-social-landlords

Another blown for Universal Credit tenants struggling to pay their rent

This one slipped under even MY radar.

The Department for Work and Pensions (DWP) announced on 10th April that Universal Credit rent arrears deductions have been suspended amid the coronavirus pandemic.

Third-party deductions, which typically see claimants have money they owe taken from their monthly benefit allowances, will be scrapped until 10 May.

Universal Credit claims have increased sharply as Covid-19 batters the economy. 

More than 1.4 million have applied for the benefit in recent weeks, according to the government, which recently took the decision to suspend evictions until June. 

A spokesperson for the DWP said: “We have received an unprecedented number of new benefit claims and have streamlined our operations to make sure people get the support they need during this time.

“As part of this, we have temporarily paused third-party deductions from [Universal Credit] – these will recommence on 10 May.

“We are in the process of explaining the changes to claimants via their online journal and to third parties, including housing providers who collect arrears via this method.”

The question is, How will this effect tenants who have been granted suspended possession orders on terms they pay the arrears and were having these deducted directly from their benefits.

Although this is only suspended for 1 month, this could have a huge impact on the tenants who have yet to be informed ( as DWP have said they are still in the process of informing both claimants and landlords) that the direct arrears payments have been stopped and are not aware they need to pay the deducted amount themselves 

With courts suspended until at least the end of June, will this impact on the number of eviction applications that are submitted to court?

Sadly the DWP have not thought this action through and risk jeopardising tenants security of tenure in their homes through no fault of their own

Source LandlordToday.