Change of landlord and new deposit information

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Test Case – Deposits:

Does a change of landlord require the service of new tenancy
deposit prescribed information?

Or is it sufficient to rely on the section 215B, Housing Act
2004 amendment in the Deregulation Act 2015, regarding no requirement to serve
prescribed information on each replacement tenancy?

No, it seems not. It would seem from a new appeal case that it
does require re-service when landlord ownership changes. This was the issue in a
county court appeal (Sebastiampillai v
Parr, Central London County Court, 11 April 2019) regarding the service of a valid
Section 21 possession order.

Ordinarily, following the above amendment, the prescribed
information need not be sent afresh when a replacement or statutory periodic
tenancy, which replaces a previous AST, where the landlord complied with the
initial requirements, and continues to hold the deposit in the same deposit
scheme.

In the Sebastiampillai v Parr case the landlord
had complied with the initial requirements at the outset and the tenant had
occupied a flat since 2007 under a series of ASTs.

The landlord sold the property to another landlord in July 2014, part-way through a twelve month AST., the deposit being transferred to an account in the name of the new landlord in September 2014. After the 12 month tenancy expired it had been allowed to become a periodic tenancy.

A section 21 notice was served in March 2018 to terminate the tenancy and later possession proceedings were issued, possession being granted by the court, but the tenant appealed.

The tenant argued
that as the deposit had been received anew by the new landlord, under section
213 of the Housing Act, new prescribed information should have been served.

The new landlord argued that the deposit had been ‘received’
by them as a result of their purchase but admitted that it had been paid over at
the point when the statutory periodic tenancy arose.

The decision stated that the receipt by the new landlord triggered
the section 213 obligations, which the new landlord had not complied with. The
language of section 215B, the judge said, indicated that it is only the
specific landlord who had given the prescribed information should be treated,
in future, as having complied with the statutory requirements.

The tenants appeal was allowed, therefore the new landlord’s Section 21 notice was not a valid one and the possession order was recinded.

Given all the new requirements regarding compliance before a valid Section 21 notice can be served, it behoves landlords and agents to pay particular attention to these details – get it wrong and you lose the ability to use the “no faultâ€� Section 21 procedures. In fact on change of ownership, with an existing tenant in place, it’s probably a wise precaution to re-serve the whole bundle of prescribed documents, Deposit details, the How-to-Rent guide, EPC, Gas Safety Certificate etc.

Sebastiampillai v Parr, Central London County Court, 11
April 2019.

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Selective Licensing review shows unwillingness to listen to Landlords

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The Selective Licensing Review report demonstrates the Government’s unwillingness to listen to landlords, the National Landlords Association (NLA) says.

The report, which was released today, ignores the NLA’s suggestion of requiring local authorities to conduct an annual assessment to demonstrate the effectiveness of the schemes against the rationale for their introduction.

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Selective Licensing review recommends National register of Landlords

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The Government’s Selective Licensing review, updated today, recommends a proposed National register of Landlords. Click here to download the document: ‘An independent review of the use and effectiveness of selective licensing.’

Point 6 of the recommendations summary states: “Government should consider introducing a national registration scheme for landlords to support and complement selective licensing.”

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Cities where rentals are less than 30% of average income

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Studies suggest that you should only be spending 30% or less of your monthly income on rent in order to maintain a good standard of living. Those spending more than this amount are said to be ‘cost burdened’. Comparethemarket.com have looked into the cost of rent across The UK.

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Over-50s now account for 15% of renters

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Older Renters:

According to research carried out by Hamptons International, for its Monthly Letting Index, the over-50s now account for around 15 per cent of rented households. The figures were taken from letting records so far this year. This figure is up from 11 per cent of lettings in 2012.

Approximately one-third of this older group were pensioners. Hamptons estimates that in the current year, the over-50s have rented 791,580 homes in Great Britain, which represents an 8.2 percent increase over last year, and 61 per cent more than in 2012, when the comparable figure was 490,450.  As a result, Hamptons estimates, the over-50s will pay around £9.2bn in rent this year alone, up from just £5.1bn in 2012 and £8.5bn in 2018.

Aneisha Beveridge, head of research at Hamptons
International, says:

“The number of over-50s renting in Great Britain has reached
a record high.

“With younger generations much less likely to be homeowners,
tenants are getting older, and an ever more diverse group of people are calling
the rented sector home.

“Rising rents in the South drove rental growth in Great
Britain in May. The South West recorded the strongest rental growth, with rents
rising 4.0% year-on-year. Wales and the East were the only regions to record
small rent falls.�

Mortgage Introducer
reports that around £1 in every £7 paid by tenants in Great Britain, given Hamptons
International’s estimates, now comes from tenants aged over-50, compared to £1
in every £9 in 2012.

Hamptons reports that the average cost of a new letting in Britain
reached £977 pcm in 2019, representing a 2.6 per cent year-on-year increase, driven
mainly by rising rents in the South. The South West accounted for the strongest
annual rental growth of 4.0 per cent.

Further figures produced by the report include The South
East, with the highest proportion of older renters, where nearly one in five
(19 per cent) of tenants are over-50. The South West (16 per cent), North West
(16 per cent) and Wales (15 per cent).

The East of England, London and Yorkshire and Humber at 11
per cent showed the lowest proportion of tenants over-50.

Hamptons International

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A ‘sorry’ state of affairs – tenant apologises to landlord

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It’s
a topic I have spoken about many times before, but sadly it doesn’t appear to
be improving.  Councils are still being
forced to respond to Britain’s housing crisis by telling tenants who have been
asked to leave by their landlords, to stay put until they are evicted.  In many cases, landlords are left with thousands
of pounds of rent arrears and legal costs, as will be shown on this week’s
episode of ‘Nightmare Tenants Slum Landlords’ (Monday 24 June, 9pm, Channel 5,).

Landlord
Action was recently appointed by IT sales consultant, Dale Prime-Holder. He
came to Landlord Action desperately seeking help on behalf of his elderly mother,
whose tenant had stopped paying rent for over a year but was refusing to leave
the property. They had also discovered that the tenant had moved her daughter, her
daughter’s partner and their child into the property.

The
rent arrears had reached in excess of £10,000 and Dale’s Mother could no longer
afford to wait. I felt particularly saddened when she told me that she felt extremely
guilty for having to go down the eviction route and really didn’t want to go resort
to court proceedings, but felt like she had no choice as she had been using her
own pension money to pay for various bills at the property.

On
the flip side of this story is the tenant. Dale’s mother had used a reputable
letting agent who had carried out all the necessary referencing checks.  Unfortunately, referencing cannot predict someone
falling into unforeseen financial difficulties. Dale’s mother found 62 letters
addressed to the tenant, nearly all of which were chasing money.

As
the population has swelled due to people living longer and immigration, the
country’s housing stock has failed to grow at the same pace.  The resulting imbalance – and the exorbitant rise
in house prices, particularly in the south – has pushed rents higher.

It
has become very difficult for those on lower incomes to find suitable
properties when they try to move, and many are turning to local authorities for
help.

But those who approach the council
are being told they cannot get local authority assistance unless they are
homeless, and so should stay in privately rented properties until they are
forced out by bailiffs.

On
the day of the eviction, the tenant had already left the property before the
bailiffs arrived.  Then, suddenly she appeared
after realising she needed a letter from the bailiffs to prove to the council
that she had been evicted. At this point, the tenant apologised to Dale’s mother.
You couldn’t help but feel sorry for her.

The
councils say they will work with households to avoid eviction yet contradict this
by advising that if tenants walk away from the property, they have a legal
right to stay in, then the council has no obligation to find them housing. Local
authorities only have a duty to rehouse them in emergency circumstances – and
that is only when the bailiffs are at the door.

Both landlords and tenants are trapped by this system and something needs to change. What’s more, many landlords use a ‘non-fault’ Section 21 notice to evict tenants and forfeit reclaiming rent arrears, which in many ways is to the benefit of the tenant. If the government abolishes Section 21, tenants who fall into rent arrears and are served a Section 8 notice, may found it more difficult to be re-housed.

Watch
Nightmare Tenants Slum Landlords on Channel 5, Mondays at 9pm

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If I move into my rental property will I pay future CGT?

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I have now sold my main residence home and have given my son the cash from the sale.

I will now be moving into one of my rental properties which I have never lived in previously.

Once I have lived there it then becomes my main residence and as my principal residence for 12 months or more will I have to pay Capital Gains Tax (CGT) on any future sale?

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It’s a numbers game

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The latest experience if of a 22 year old couple with a young baby seeking a house, but there is non available. Left Wing journalists and organisations such as Shelter, no matter how well intended, need to understand and assimilate the information before rushing into print and allocating blame!

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A sorry state of affairs – Tenant apologises to landlord

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It’s a topic I have spoken about many times before, but sadly it doesn’t appear to be improving. Councils are still being forced to respond to Britain’s housing crisis by telling tenants who have been asked to leave by their landlords

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Falling inflation defers interest rate rise…

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Inflation Report:

The Monetary Policy Committee (MPC) last week (20 June 2019)
voted unanimously to maintain Bank Rate at 0.75%. The committee also voted
unanimously to maintain the stock of corporate bond purchases and UK government
bond purchases.

The latest amiable inflation figures from the Office for
National Statistics (ONS) show that the consumer prices index (CPI) was bang-on
the Bank of England’s target at 2% in May, trending down from 2.1% in April, in
line with previous forecasts.

Lower transport costs had helped to bring down inflation in
May, which eased the pressure on the Bank of England’s monetary policy committee
(MPC) to increase interest rates above the current 0.75%.

With a backdrop of a tightening labour market, with wages
rising, a flat lining economy ahead of any Brexit progress, and a potential
rise in fuel prices following the rising tension in the Middle East, the
committee have seen fit to leave well alone for the time being.

In April inflation had just topped the 2% target, the first
time for several months, due to the removal of Ofgem’s energy price freeze,
which prompted calls for a rise this time, but the downward trend since has
abated that, providing some breathing space for the policy makers.

A spokesperson for the British Chambers of Commerce, told The Times newspaper:

“With inflation relatively subdued and against a backdrop of
heightened political and economic uncertainty, the case for raising interest
rates any time soon remains weak, despite recent warnings by some monetary
policy committee members�

Some of the MPC members had been expressing their intentions
to vote to implement monetary tightening this time, until the recent trend
became apparent.

Andy Haldane, the Bank’s chief economist, had said
previously:

“The time is nearing when a small rise in rates would
be prudent to nip any inflationary risks in the bud,� while Ben Broadbent, the deputy
governor, had said that rates might have to rise further than expected if the
economy continued on its present trajectory.

The Committee said that it expects the economy to develop
broadly in line with its May Inflation Report projections based on an
assumption of a smooth Brexit, and that an ongoing tightening of monetary
policy over the forecast period would be appropriate to “return inflation
sustainably to the 2% target at a conventional horizon.�

The MPC also said that “the economic outlook will continue to depend significantly on the nature and timing of EU withdrawal, in particular: the new trading arrangements between the European Union and the United Kingdom; whether the transition to them is abrupt or smooth; and how households, businesses and financial markets respond…The Committee will always act to achieve the 2% inflation target,� it said.

Bank Rate maintained at 0.75% – June 2019

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