Foursome want to split tax efficiently

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Nine years ago my wife, myself and two friends did two Joint developments. Land registry and mortgages in all 4 names, but our tax lives are massively different now. Whilst we have a good amicable relationship I would like to figure out how we “de-link”

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PPR scenarios for Non-UK Residents?

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Hello. I was wondering if anyone knew whether PPR Relief still applies against CGT even after you have become non-UK Tax Resident, where the PPR Relief relates to the period when you were still UK Tax resident? Can you use PPR Relief in conjunction with the rule that allows non-UK tax residents to only be subject to CGT in respect of property from 6 April 2015?

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Rules HMO licence to be strengthened from April

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HMO Licensing changes:

Landlords renting out ALL multi-occupied properties in England, those occupied by five or more people, from two or more separate households, whether they are 1, 2 or 3 storeys, will need to hold a house in multiple occupation (HMO) licence.  The previous Housing Minister Alok Sharma had announced that this will apply from April 2018.

The new measure, which will affect about 160,000 landlord houses not previously caught by the mandatory licensing regime, follows a consultation and is yet subject to parliamentary approval.

Under the current regime a property has to comprise three or more storeys to be caught, so bringing the requirement for ALL those properties with 5 or more tenants from two or more separate households represents a major change for thousands of landlords.

Minimum room size requirements for bedrooms in HMOs to help prevent overcrowding are also due to be brought into force.

The Department for Communities and Local Government, now renamed the “Ministry for Housing, Communities and Local Government” (MHCLG) under the new Housing Minister, Dominic Raab said:

“As part of the licencing requirements, local councils will be able to make sure only rooms meeting the standard are used for sleeping”.

All bedrooms used by one adult will have to be no smaller than 6.51 square metres, and double bedrooms for two adults will have to be no smaller than 10.22 square metres. Childrens’ bedrooms for up to 10 years will have to be no smaller than 4.64 square metres.

The HMO licence will have to specify the maximum number of persons who may occupy any room in the house, and the total number across the different bedrooms must be equal to the number of persons for whom the property is suitable to live in.

The MHCLG has also set out details of criminal offences which will automatically bar someone from being a landlord or agent. As from April, anyone convicted of offences such as burglary and stalking can be added to the database of rogue landlords or agents and be barred from renting properties.

Landlords will also be held responsible for making sure the council’s rules on refuse storage, collection and recycling are followed by tenants in their properties.

Alok Sharma had previously said:

“Every tenant has a right to a safe, secure and decent home. But far too many are being exploited by unscrupulous landlords who profit from providing overcrowded, squalid and sometimes dangerous homes.

“Enough is enough and so I’m putting these rogue landlords on notice – shape up or ship out of the rental business.

“Through a raft of new powers we are giving councils the further tools they need to crack down these rogue landlords and kick them out of the business for good.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rules HMO licence to be strengthened from April | LandlordZONE.

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Self Management via a Limited Company

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Is it OK to do the self management of a property (its only one initially) via a separate company I own (100%)? Rent would be paid to the company, then the company pays me say 90% of the rent as the landlord and retains the 10% as a management fee.

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Consumer Protection – implications for Landlords & Agents

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Tenant are Consumers:

The UK Consumer Protection law applies to letting agents and landlords alike when they advertise a property to let or create a new tenancy.  It also applies to most private landlords when they deal with letting agents, unless they operate as a company. The provisions in consumer protection law under the Competition and Markets Authority (CMA) also include business practices when managing a property, or when renewing or terminating a tenancy.

New Guidance from the CMA for landlords and agents sets out their obligations under the law.  Agents should make sure that the property is available at a time and at the rent and deposit level agreed with the tenant, that any promised work has been carried out and any contents such as furniture or appliances agreed with the tenant, are present.

The tenants must be supplied with all relevant information including (and this is also a tenancy law legal requirement) copies of a gas safety certificate, EPC, and the government’s How to Rent Guide, as well as a tenancy agreement, and when appropriate a guarantor agreement and rent book (rent paid weekly). Tenants should also have information explaining who to contact for serving notices, or in case of any problems with the tenancy.

The guidance also stresses the importance of giving a tenant sufficient opportunity to review the inventory and challenge any points of disagreement.  Failing to do this or to provide the tenant with an incorrect inventory could be a misleading action and a breach of consumer protection law.

Agents and landlords must ensure that the services they provide to tenants are carried out with reasonable care and skill and within a reasonable time.  This is particularly relevant where agents are carrying out repairs on behalf of the landlord. Again, this is also a legal point under the tenancy laws relating to the requirement to respond to written requests for repairs with a plan of action within 14 days.

The CMA guidance states that requests for repairs “should be prioritised according to urgency, risk, seriousness and completed to a satisfactory standard and within a reasonable time”.  The unavailability of an agents’ or landlord’s usual tradesperson is not a valid excuse for delay and the guidance clearly states that a different tradesperson should be sourced.

The CMA takes a dim view of attempts to introduce new charges for the renewal of a tenancy agreement, or where fees were not set out in the original information brought to a potential tenant’s attention.

Consumer protection law for lettings professionals: CMA31

Tessa Shepperson of Landlord Law says:

“There is a lot of misunderstanding about the consumer legislation and its applicability in the private rented sector.”

She is making available David Smiths’ Consumer Law talk video from the Landlord Law Conference given on 19 May 2017, shortly before the 2017 general election.

It is recommended that all landlords and letting agents watch this short video on Consumer Law as it applied to them.

If anyone would like more information on this and other landlord and tenant legal issues, there is the upcoming Landlord Law (Easy law Training) Consumer Law Legal Workshop on 7^th June 2018 given by David Smith in Norwich.

Get a 20% discount off the workshop cost with the voucher code Jan2018ConLaw if booked before 1st February (only available for online payments).

Other Landlord Law (Easy Law Training) workshops include:

8^th March 2018 in London, Ending Tenancies by Tessa Shepperson – Tessa takes a look at all the different ways that tenancies can end, the notices that need to be served and gives an introduction to tenant eviction.

30^th October 2018 in Cambridge, Leaseholder Landlord by Robert Brown – Barrister Robert Brown looks at the laws which apply when a landlord is also a long leaseholder.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Consumer Protection – implications for Landlords & Agents | LandlordZONE.

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MEES and boiler safety – some landlords are breaking the law

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Boiler Servicing:

Updated research* from Cover4LetProperty.co.uk – the landlord insurance specialists – suggests that some private landlords may be unwittingly breaking the law and potentially comprising the health and safety of their tenants.

The study reveals:

6% of tenants say their boiler was serviced over a year ago;

• one in five (20%) private tenants are unaware when their boiler was last serviced. This is an improvement on the last study (December 2016) which showed that 31% of private tenants did not know when their boiler was last serviced;
• 86% of private tenants are unaware of their rights regarding the energy efficiency of their rented property.

Richard Burgess, Director at Cover4LetProperty, commented: “While it is the responsibility of a landlord to ensure that the boiler is serviced annually – and an obligation under their landlord insurance policy – our research highlighted that 6% of tenants said the last time their boiler was serviced was over a year ago”.

Mr. Burgess added:

“Our study also showed that just 14% of tenants were aware of the new legislation relating to energy performance ratings which come in to force April this year.

“Landlords whose properties do not meet minimum requirements for energy performance standards by April 2018 may face very stiff penalties.

“While we specialise in helping landlords with protecting their property portfolios, we urge them to understand their legal obligations relating to health and safety and energy efficiency.”

* Independent survey of 100 tenants carried out January 2018 via Usurv.

** Independent survey of 100 tenants carried out December 2016 via Usurv.

About Cover4LetProperty

With roots going back to 1946, our clients can benefit from many years’ experience in the landlord insurance marketplace. We are independent intermediaries and act on behalf of our clients in arranging their buy to let and unoccupied property insurances. Our service includes advising clients on their insurance needs, arranging insurance cover with insurers to meet those requirements and help with any ongoing changes that have to be made to their landlords’ insurance policies.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – MEES and boiler safety – some landlords are breaking the law | LandlordZONE.

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Proposed Mandatory Bill for Landlord Registration

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You may be aware that a North East MP Phil Wilson has proposed to Parliament a new mandatory bill insisting that all private Landlords are registered, and so easily identified by the Police etc. You can hear the local Radio interview here with residents

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Rental price inflation rises in December

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Average rents across the UK rose by 1.7% in December 2017 when compared to the same month a year previously; the average monthly rent is now £907

Rents in the South-East of England were 1.0% lower in December 2017 than in the same month of 2016;

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Section 21 Notices

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Obtaining Possession Using Section 21 Notices

Updated October 2016

This article explains how to gain possession of your residential rental property in the most efficient way possible. You may just want your property back for your own use, or to sell, or you may be having problems with the tenant, such as rent arrears.

These guidelines apply primarily to England. Other regions and jurisdictions are similar but there may be important differences and this is becoming more so in the UK with the devolution of laws. This is not a definitive interpretation of the law, every case is different and only a court can decide. If in doubt seek expert advice.

Section 21 of the Housing Act 1988 specifies the procedure you need to follow to legally obtain possession of a residential property let under an Assured Shorthold Tenancy (AST).

The AST is the default residential tenancy which means that if you let any residential property in England to a tenant you will automatically create an AST unless you specify otherwise. This is the case even if you did not have a written agreement.

Using the section 21 procedure to gain possession of your property should always be the preferred method because, providing all your paperwork is in order, you are guaranteed (it is mandatory) to get a possession order. You do not need to give a reason for requiring possession, it is no-fault, no blame.

Section 8 – An Alternative Method

The alternative method, the section 8 procedure, although quicker to court, in most cases, does not give you certainty of a possession order. It can also result in expensive defences and counter claims.

However, when serving notice, for example in the case of rent arrears, it is recommended you serve BOTH a section 21 notice and a section 8 notice. This gives you the option later of using either route to court, and most importantly it means with the notice periods the “clock starts ticking” immediately signs of trouble arise.

Mandatory Right to Possession with AST – tenancies commencing BEFORE 1^st October 2015

The AST gives landlords the mandatory right to bring a tenancy to an end, and if necessary evict the tenant/s, without the need to give a reason for doing so, providing:

• The tenancy has run for a minimum of 6 months, and
• The initial agreement term (contract) has ended, and
• You protected any deposit taken, within 30 days and served the correct notices.

• Where the property is licensed by the local authority, you have available documents showing how you have complied.
• You have served a valid Section 21 Notice Fixed-Term s21(1)(b) or Section 21 Notice Periodic s21(4)(a).
• You have obtained a court possession order using the correct forms and s21 procedure.

Note: whenever you serve notices (s21, s8, Deposit s213, Gas Certificate, EPC and How to Rent Guide) it is vital that you get proof of service. If you cannot prove service and your tenant denies receipt, your case may be thrown out.

To download the correct notice go to: www.landlordzone.co.uk/documents

Mandatory Right to Possession with AST – tenancies commencing AFTER 1st October 2015

Since these legal changes introduced on 1 October 2015 the Section 21 possession process has become more complicated and needs a lot more care and pre-planning to get it right.

The AST gives landlords the mandatory right to bring a tenancy to an end, and if necessary evict the tenant/s, without the need to give a reason for doing so, providing:

• The tenancy has run for a minimum of 6 months, and
• The initial agreement term (contract) has ended, and
• You protected any deposit taken, within 30 days and served the correct notices.
• You have served on / given the tenants a current Gas Safety Certificate
• You have served on / given the tenant a current EPC
• You have served on / given the tenants the version of the government’s How to Rent guide current at the time of the commencement of the tenancy – www.gov.uk/government/publications/how-to-rent
• Where the property is licensed by the local authority, you have available documents showing how you have complied.
• You have served a valid New Form S21 Notice (Form 6A), tenancies started after 1-Oct-15
• You have obtained a court possession order using the correct forms and s21 procedure.

Note: whenever you serve notices (s21, s8, Deposit s213, Gas Certificate, EPC and How to Rent Guide) it is vital that you get proof of service. If you cannot prove service and your tenant denies receipt, your case may be thrown out.

To download the correct notice go to: www.landlordzone.co.uk/documents

When you serve an s21 notice on your tenant you are requesting possession of the property and this act alone may be sufficient to persuade your tenant to leave on the required date. However, if your tenant has requested to be re-housed, the local authority will always advise them to stay put until you have served a correct notice, and sometimes until evicted.

If your tenant does not leave at the end of the tenancy, after a notice has been served, then once the s21 notice expires (minimum of 2 months) you will need to apply to your local court (the one nearest to the property) for a possession order, but only once the points above have been satisfied.

It is also possible to do this online at Possession Claim Online (PCOL): https://www.possessionclaim.gov.uk/pcol/

When a possession order has been obtained your tenant should leave, but failing that you will need to apply again to the local court again to have the court bailiffs evict your tenant. You should not try to force your tenant out yourself, even with a possession order.

This whole process is not quick – it can take several weeks or even months.

As a landlord you have to decide how to deal with problem tenants: (1) do it yourself (quite feasible if you are prepared to become familiar with the procedures), (2) use an eviction specialist, such as one of those advertising on LandlordZONE®, or (3) use a solicitor – see “Solicitors & Legal” Services on our Classified Directory – www.landlordzone.co.uk/directory/suppliers-directory/solicitors-legal

Serving a Valid Notice – tenancies commencing BEFORE 1st October 2015

It is very important that you serve the notice correctly, that you comply with the strict notice dates and that you have proof of service. The Chairman of the London Association of District Judges has said 7 out of 10 of these notices are being thrown out of court because they are wrong.

There are two different section 21 notices and it’s important you use the correct one:

• Notice under Section 21(1)b is used when the tenancy is within the fixed term contracted period.
• Notice under Section 21(4)a is used where the tenancy agreement has not been renewed and the tenancy is now a periodic one – for example a monthly periodic tenancy when the rent is paid monthly.

Note: Since the Spencer v Taylor appeal simplifying the process it is usually possible to use s21(1)b in all cases.

All the notices with full instructions and a guide to serving them are available from LandlordZONE® and are free to download here: www.landlordzone.co.uk/agreements.htm

Serving a Valid Notice – tenancies commencing AFTER 1st October 2015

It is very important that you serve the notice correctly, that you comply with the strict notice dates and that you have proof of service. The Chairman of the London Association of District Judges has said 7 out of 10 of these notices are being thrown out of court because they are wrong.

There is just one notice for section 21 notices since 1 October 2015:

• New Form S21 Notice (Form 6A), with prescribed information, now issued free by the government.
• A valid s21 (Form 6A) notice requires that the criteria above for tenancy commencing on or after 1 October 2015 has been satisfied.
• Unlike the old s21 notices, the new one cannot be served within the 1^st four months of an assured shorthold tenancy.
• Unlike the old s21 notice which once served lasts indefinitely, the new notice last for a maximum of 6 months.

All the notices with full instructions and a guide to serving them are available from LandlordZONE® and are free to download here: www.landlordzone.co.uk/agreements.htm

Serving the Notices:

Serving in Person – is the preferred method and useful when time is pressing so there’s no doubt about the date of service, but you must have a witness unless the tenant is willing to sign a copy or give you a written receipt. A solicitor / professional Process Server will do this for you but obviously there is a charge for this service.

Service at the Property – This may be necessary if you cannot contact the tenant/s i.e. by dropping your notice through the letter box of the rental property, but you must have a reliable witness – not a relative to yours, but someone willing to appear in court if necessary.

Service by Post – is an acceptable method must should be specified as a method of service in your tenancy agreement (first class post – next day delivery) but allow at least 3 working days to be on the safe side. Get a receipt of postage (proof of postage) from the post office, which will indicate the date and time of postage and the address to which it is sent.

Do not use Recorded Delivery as this must be signed for. If the tenant is not there, or refuses to sign, the notice will be returned to sender, wasting valuable time.

Two Letters – some experts recommend that two such notice letters be sent from different post offices. If the tenant claims defective service it can be claimed with some justification that it is very unlikely that two letters would fail to be delivered.

By e‐mail, text or Fax: Now Acceptable legal practice but proof of receipt is essential here and any alternative electronic means of communication must have been agreed by both parties with a clause in the letting agreement.

Service by the Landlord’s Agent – it is acceptable for the agent to deal with the compiling and serving of an s21 notice and they can sign on the landlord’s behalf providing it is made clear on the notice.

If landlords or their agents are to effectively serve valid notices, care is needed to get the dates right and to satisfy all of the criteria above. If you are not confident it will pay you to use an eviction specialist or a solicitor to do this job for you.

The date on which the notice requires possession must be at least 2 months after it was served. The old Fixed Term Notice (Section 21(1)b) can be served at any time during the fixed term (from just after the agreement is signed, up to and including the last day of the fixed term) but must not require possession during the fixed term.

Note: when a deposit is taken the old notice served will NOT be valid if this is done BEFORE the deposit is protected and the deposit notice served on the tenant/s. Always get a receipt of service of the deposit notice (section 213 Housing Act 2004).

In the case of the old Periodic Notice (Section 21(4)a) the notice given must be a minimum of 2 months, ending on the last day of a tenancy period (one day before the date the tenancy agreement was signed) specifying that possession is required AFTER that day. As noted above, since the Spencer v Taylor appeal simplifying the process it is usually possible to use s21(1)b in all cases, but some experts recommend sticking to the original system as some judges may not be aware fo the changes.

Note: If the tenancy agreement provides for specific actions to end it, then any notice serviced must comply with these procedures, including methods of service etc.

Notice Dates:

For example, if the rent for a 6 month AST is paid on a calendar month basis (most are) commencing 4th June 2013, the tenancy period is 4th June to 3rd December 2013.

After 6 months the tenancy becomes periodic, without any further action from the parties, the first periodic period being 4th December 2013 to the 3rd January 2014. These periods could in theory run on indefinitely.

If today is 11th January 2014 and we wish to serve notice on this tenant we use a Periodic Notice (Section 21(4)a) with a notice date of 3rd April 2014. The notice should specify that possession is required AFTER this date.

Therefore, in order to give 2 clear months (tenancy periods’) notice on this periodic tenant we need to actually give more than 2 months’ notice.

To be valid the notice must make it clear to the tenant that possession is required AFTER the last day of the period – the 3rd of April.

As a “catch all” safety net in case you do get the dates wrong our notices include the following phrase:

“…the landlord requires possession after the date stated in this notice or at the end of the period of your tenancy which will end next after the expiration of 2 months from the service upon you of this notice”

This phrase has been held to be effective on appeal (Lower Street Properties v Jones (1966) but many judges are not aware of this, so do not rely on it but be prepared to point it out to the judge.
Possession Proceedings: Before you can start possession proceedings you must wait until the notice has expired – the date you have given in the notice. You will need to obtain the appropriate forms from your local county court, or the website: www.justice.gov.uk

Note: The date you serve the notice is not important; it is the end date (notice date) which is crucial. However, your notice must include the date the notice is served so that the court can see that the full notice period has elapsed.

Fortunately, following the simplification since Spencer v Turner, and the new section 21 notice (Form 6A) it is not necessary to end the notice on the last day of a tenancy period, merely the notice must be for a minimum of 2 months.

For full instructions download our s21 notices and Notes on Serving a Valid section 21 Notice – LandlordZONE® Documents

References:

• New s21 Rules – www.landlordzone.co.uk/information/new-section-21-rules
• Download a FREE Section 21 Notice (Fixed Term or Periodic) here:
  www.landlordzone.co.uk/agreements.htm
• Housing Act 1988 as amended 1996 – see:
  www.legislation.gov.uk/ukpga/1988/50/contents
• Civil Procedure Rules (CPR) Part 55 – Possession Claims https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part55
• Practice Direction 55A – Possession Claims
  www.justice.gov.uk/courts/procedure‐rules/civil/rules/pd_part55a
• Claim form for possession of property (accelerated procedure) (assured shorthold tenancy)
  http://hmctscourtfinder.justice.gov.uk/HMCTS/GetForm.do?court_forms_id=618
• Tenancy deposit Documentation – www.landlordzone.co.uk/information/tenancy-deposit-documentation
• Repair Reporting Issues – s21 – www.landlordzone.co.uk/information/repair-reporting-issues-and-section-21

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Section 21 Notices | LandlordZONE.

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How To Corporatise Your Property Business

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Our first ‘How To Corporatise Your Property Business’ workshop of 2018 will be held on Sat 17th Feb.

The workshop takes you through the process of incorporating your personally held property portfolio into a limited company without capital gains tax or stamp duty

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