£250 million Bitcoin Development!

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Two developers Douglas Barrowman and Baroness Michelle Mone OBE have started a £250 million development in Dubai of two luxury apartment towers and a shopping mall.

The first 150 apartments can be purchased off plan from the developers using the cryptocurrency Bitcoin.

Studio apartments can be purchased from 33 BTC, with additional interior design requests and furniture also available for purchase with Bitcoin.

The development is planned for completion in the summer of 2019 and comprises of 1,133 studio, one and two bedroom apartments. This coincides with Brexit so maybe the developers know something we don’t!

Chairman of the Knox group, Douglas Barrowman, said: “This is a project I have worked very hard on for some time and the Dubai development is the pinnacle of design, architecture and commerciality.

“Bitcoin’s meteoric rise in a few short years means it’s now the world’s leading cryptocurrency. This is exactly why we are the first property development ever to be priced in bitcoin.

“I believe, as it gains mainstream adoption, many will follow our lead on this.”

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Form 17 to split income?

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I have two properties on my sole name and I am a 40% tax payer. However,my wife has no income at all.

I am looking to enter her on the deed by transferring her 50% of the equity on these properties.

She will be hit with a tax bill of £3750 on £125,000 but we are ok with this.

Can I then use Form 17 to split the income 90/10 in her favor ?

Many thanks in advance.

Ridvan

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What Landlords Can’t Do

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A Landlord Guide:

Residential Conveyancing Partner Amanda Sutcliffe of Bray & Bray Solicitors explains a landlord’s responsibilities to their tenants.

In a survey by Homelet, 90% of landlords stated that they were “very happy” (55%) or “quite happy” (35%) with their current tenants, but over 50% also stated that they’ve had problems with at least one tenant in the past.

Landlords’ relationships with tenants can make the difference between a seamless rental experience and a complete nightmare.  I’ve known landlords to sell an investment property after dealing with tenants that have put them off renting to anyone ever again.

The best way to be prepared for both good and bad tenants is to know your rights as a landlord and how to enforce them.  It’s also worthwhile letting your tenants know what rights you have as their landlord, so that they won’t be surprised when you serve them with a notice to evict them, or to inspect or sell the property.

Many things that a landlord cannot do are obvious.  The list below has been compiled to help identify the things that you may not know you can’t do when renting a property to a tenant. The aim is to start the landlord/ tenant relationship off well and avoid any potential disputes in the future.

Things landlords cannot do:

Landlords can’t discriminate

This might seem obvious, but you can’t turn down a tenant on the basis of personal attributes such as age, gender, race etc.  You also can’t charge them more than you would charge other tenants because of any personal attribute e.g. if you think they’re more likely to damage the property based on their age.

Similarly, if someone who is disabled wishes to move into your rental property, you can’t refuse to make reasonable changes to either the tenancy agreement or the property itself, which would allow them to live there comfortably.

Landlords can’t just let themselves into the property

Even if you know that the tenants won’t be at home, you can’t just go into the property without having given the tenants notice and without an agreed time for you to be there.  Similarly, you can’t just arrive when they are home and demand to come inside without giving the tenants any notice.

Landlords can’t make it difficult for a tenant to stay there

If for any reason, you would prefer a tenant to move out after they have been living in the property, you can’t just try to force them to move out.  This includes tactics such as not carrying out repairs that need doing to the property, or making a tenant feel uncomfortable in the property.

Landlords can’t use a security deposit to pay for improvements to the property

This also applies to using a security deposit to pay for any new equipment within the property, or paying for fixes to wear and tear during the tenancy period.  A deposit can only be used at the end of the tenancy and even then, it can only be used to make up for unpaid rent or to pay for repairs caused by damages or cleaning required, due to anything other than reasonable wear and tear to the property and its furnishings.

Security deposits must also be paid back to a tenant within 10 days following agreement of the amount of deposit that will be returned to them.

Landlords can’t raise rent whenever they like

The regularity and notice period for rent reviews should be specified in a tenancy agreement.  If you’ve had a bad month and need money quickly, you can’t just take or demand more money from a tenant.  If you are raising a tenant’s rent, you will need to justify the amount it’s being raised by, in line with market rates and other properties in the area.

Landlords can’t charge excessive late payment fees

Late payment fees can be a great way of encouraging tenants to pay on time every month.  However, if the amount of the late payment fee is excessive, tenants have the right to take you to court to dispute it.  Once this has happened, a judge is likely to side with a tenant, unless your late payment fee reflects true and accurate damages incurred, due to late payments.

Landlords can’t evict a tenant because they’re selling the property

If you’re intending to sell the property that’s being rented out, as long as a tenant has a fixed term tenancy agreement, you can’t just tell them to leave so that you can sell up.  Tenants also have the right to refuse viewings of the property whilst it is for sale, if the viewings are not convenient to them.

Whilst tenants have the right to stay in the property until their tenancy is legally terminated – at the end of their tenancy agreement – landlords do also have the option of coming to a mutually beneficial arrangement to terminate the tenancy agreement early (usually by paying the tenant a severance fee) in order to sell.

Landlords cannot leave longer than 12 months between gas safety checks being carried out at the rented property

This might not seem important, but landlords can actually go to prison for failing to have gas safety checks carried out annually.  Other repercussions of not doing this include fines, invalid insurance and court action from tenants, who can sue for civil damages.

For more information about the legalities surrounding what you can and can’t do as a landlord, speak to a commercial property solicitor who specialises in landlord and tenant matters.  It always pays to check with an expert before acting on a decision you’re unsure about.

See also: Documents needed when letting

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Houses in Multiple Occupation – a legal bombshell in the making

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This is the 13th post in my 2017 Legal Update series.

It’s been my opinion for some time that HMOs are an enforcement bonanza waiting to happen. If I were head of a Local Authority Enforcement Team in any large city I would be rubbing my hands with glee. Bearing in mind the issues discussed in this post.

The trouble is that many HMO landlords have no idea that they are HMO landlords. Viz:

HMO Landlord: I’m not an HMO landlord you know.

LA Officer: Do you rent to three or more tenants who are not family members?

HMO Landlord: Er, yes, I rent out to four friends. But they all signed the same tenancy agreement, we don’t use one of those individual HMO agreements. And they all eat together and live as a family.

LA Officer: Signing the same tenancy agreement does not stop the tenancy being an HMO neither does the fact that your tenants share their meals. If they are not related then they are not treated as being part of the same ‘household’. If there are three or more tenants and two or more households the property is an HMO. See s254 onwards of the Housing Act 2004.

HMO Landlord: Oh. Right. But even if we are technically an HMO – that doesn’t mean anything if we don’t need a license, does it?

LA Officer: Yes, it does. There are the HMO Management Regulations – where’s your notice under section 3? That’s a breach for a start. And who says you don’t need a license? Our borough introduced an additional licensing scheme two years ago.

HMO Landlord: I didn’t know that. How I am supposed to know that?

LA Officer: That’s your problem, mate. It’s your duty to find out.

Etc, etc.

The reason why this sort of thing does not happen more often is because Local Authority Enforcement Depts have been cut to the bone by Austerity and haven’t been able to get out there enforcing. However, with the new income from penalty charges and rent repayment orders, that’s probably going to change.

So, let’s take a step back and consider the law on HMOs. First:

What is an HMO?

There are actually four definitions of HMOs:

1 Where there are three or more tenants in two or more households who share living accommodation.

This is the ‘normal’ HMO type. The one we all think about when we think of HMOs. You can read more about the definition here.

2 Some flat conversions

This is where a building has been converted to flats and the building does not comply with the Building Regulations 1991, and ⅓ or more of the flats are rented on leases of less than 21 years.

The type of HMO is the reason why some freeholders may not give you consent sublet your long lease flat. Read more about this here.

3 The Council Tax HMO definition.

This is set out in Regulation 2 of the Council Tax (Liability for Owners) Regulations 1992. I am not going to look at it in detail but you can find out about it here.

People are often at cross purposes when speaking about Council Tax and HMOs if they don’t realise that both are governed by different definitions.

4 Planning.

Again, I am not going to go into this but you can read more about this here.

Important things to know about HMOs

HMO law and practice is a big topic and I don’t have space to do much here other than hit the highlights. However here are some important points:

Licensing

At the moment, mandatory licensing is only required if an HMO has five or more tenants in two or more households in a property which has three or more storeys.

However, mandatory licensing is not the whole picture. Some Local Authorities have introduced additional licensing schemes where other, smaller HMO properties must be licensed. There are also some areas which have introduced selective licensing where all rented properties need a license whether they are an HMO or not.

If you don’t get a license where a license is required:

• The Local Authority can issue a penalty charge fine of up to £30,000
• You can be prosecuted and fined in the Magistrates Court
• The Local Authority (if tenants are on benefit) or your tenants (if they pay rent themselves) can apply for a Rent Repayment Order
• You cannot serve a valid section 21 notice

So, it’s a good idea to make sure you have a license if you need one.

HMO Management Regulations

This is the other important thing you need to know – even if your HMO doesn’t need a license you still need to comply with these regs. They are basically health and safety regs and you are probably complying with them mostly anyway just by good practice as a landlord.

The one you probably aren’t complying with is the one mentioned in the dialogue above. This says:

3. The manager must ensure that—

(a ) his name, address and any telephone contact number are made available to each household in the HMO; and

(b) such details are clearly displayed in a prominent position in the HMO.

Probably the best way to deal with this is have several A4 pages printed with your details, get them laminated and hang them in the kitchen. Do several copies so you can replace it if it’s lost. It’s important that you do this – failure will be a breach of the regs and potentially a penalty of up to £30,000 (although in practice it would be a lot less than this).

Note that you also need to get an electrical check done every 5 years and get a certificate to prove this – as the Local Authority may ask to see it.

The future

Its best to get your HMO properties up to speed as there are plans afoot to extend the scope of licensing – so that in a couple of years or less all two storey or even all one storey properties may need a license.

It’s not known exactly when this will happen, but it is coming – so watch out.

Further information:

I did a series on HMOs on my Landlord Law Blog in 2014 with David Smith which you will find here.

The 2017 Conference included an update talk on HMOs which is well worth watching. Even if you believe you are not an HMO landlord.

You will find more information about the Conference Course here.  There is a discount voucher for Property118 readers which is pp118cc30 – apply this on the checkout page and it will reduce the payment by 30%.  Note however that the coupon will expire after 16 September.

There is also quite a lot of information on my Landlord Law site plus members can always ask me questions in the members forum.

You can find out more about Landlord Law here

The next post will be on the changes in Wales.

Tessa Shepperson is a specialist landlord & tenant lawyer and runs the popular Landlord Law online information service.

To see all the articles in my series please Click Here

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