Subsidence and the impact on your landlord insurance policy

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Landlords’ Insurance:

Subsidence is often somewhat over looked as a property issue,
but its impact should not be underestimated. Increases in temperature during
the summer months pose a significant problem for some properties, resulting in
costly damage as a result of subsidence. Claims related to subsidence are
increasing, so now more than ever it is important that, as a landlord, you
understand and are adequately prepared for problems related to subsidence in
your property.

What is subsidence?

Subsidence is a form of ground movement that impacts and
undermines the structural integrity of your property. It is caused when earth
beneath a building moves downwards, which in turn reduces the strength of the
property’s foundations. As a result the property becomes unstable and can begin
to crack and sink.

What are the causes
of subsidence?

A number of different factors can all contribute to
subsidence. The main causes of subsidence include:

• Hot and dry weather causing soil shrinkage
• Vegetation growing too close to the property –
  roots can disrupt the foundations and also draw water out from the soil
• Defective drainage can soften the ground under
  your property and cause soil to be washed away
• Natural decomposition of the soil reducing its
  volume

How to identify
subsidence in your property

Most people worry about cracks being a sign of subsidence,
and whilst they are, cracks on their own can also be as a result of settlement,
whereby a building moves under its own weight in its first few years and are often
no real cause for concern. However, there a few key tell-tale signs you should
look for that point towards subsidence and should be addressed quickly.

Warning signs
include:

• Diagonal cracks that increase in width the
  further away they are from the ground
• Cracking that is visible on the outside as well
  as inside of the property, that are at least 3mm wide and can be as thick as a
  10p coin
• Cracks in brick and plasterwork surrounding
  windows, doorframes and adjoining parts of the property, such as extensions
• Wrinkled wall paper at wall and ceiling joins
• Windows and doors that no longer open and close
  properly due to misshapen frames

It is really important that landlords contact their landlord insurance provider in the event that subsidence is discovered, or suspected, at the property. A comprehensive insurance policy will help to provide adequate support and guidance on how to manage this issue. Subsidence is a costly issue to fix and so early identification and treatment is important to mitigate issues for the landlord. In the first instance insurers will dispatch a surveyor to your property to identify the extent of the issue and to identify the cause of subsidence.

Subsidence requires careful monitoring over long periods of
time and often relies on specialist support to resolve.  Landlords should
note that, as a result of this, insurance claims related to subsidence can take
longer to resolve depending on the severity of damage and so early
identification and prevention are key for getting the issue resolved as quickly
as possible with minimal disruption for the landlord and their tenants.

Is subsidence really
becoming more common?

Recent research conducted by Hamilton Fraser Total Landlord Insurance, has analysed around 5,000 claims over a 10-year period to assess recurring patterns and statistics surrounding property claims, including subsidence. This useful information can help to advise landlords on how to best protect their property.

For example, Hamilton Fraser found that subsidence claims
have been increasing since 2014, resulting in a 24 per cent increase year on
year. In addition, unsurprisingly seasonality plays a significant role in the
number of subsidence claims, with steady claims throughout the year that begin
to dovetail in December. Heading into this year subsidence is on an upward
trajectory, after dipping around 2015-17.

Read the full 10 years of property claims report for more detailed analysis.

Can you prevent
subsidence?

Depending on the property’s circumstances, it may not always
be possible to completely prevent subsidence occurring. However, there are a
number of factors you can control which can help to reduce the risks of
subsidence.

For example:

• Avoid planting vegetation close to your property or any surrounding buildings
• Seek the advice of a surveyor or tree specialist about the impact any mature trees close to your property have, or potentially will have, on your property. Having these large trees lopped can help to minimise the risk of subsidence, however you will need to seek permission from your neighbours, or the council, to undertake this work if the tree is not on your personal property
• Make sure that you prune trees and shrubs to stop large scale water absorption Always check and maintain drains and pipework; this includes checking for blocked or leaking pipework and guttering which may have become clogged with dirt and leaves over time
• Make sure you always carry out property inspections to quickly identify any issues in the property, including subsidence. Prevention is always better than cure so spotting any issues associated with subsidence early can really make all the difference.
• Hamilton Fraser understands that issues with your property can leave you financially out of pocket as well as causing turmoil for you and your tenants. With this in mind Hamilton Fraser’s Total Landlord Insurance Premier Policy includes subsidence cover as standard, meaning should the worst happen your property is protected.

Find out more about Hamilton Fraser Total Landlord Insurance and subsidence.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Subsidence and the impact on your landlord insurance policy | LandlordZONE.

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Stock-on-Trent escapes for now

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All councils that wish to introduce Selective Licensing schemes that cover more than 20% of the area or 20% of the privately rented homes must first seek permission from the Ministry of Housing, Communities & Local Government (MHCLG). Stoke-on-Trent have recently had their application refused by MHCLG for a scheme that would cover 3000 properties in 154 street in 14 zones costing £500 for a five year licence per property.

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Form 6A now corrected

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MHCLG have finally as of yesterday updated and corrected the wording of the Section 21 official document 6A seeking possession. This is after articles written by Giles Peaker  in Nearly legal along with behind the scenes communication. Click here to view his article.

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Provision of housing

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According to Richard Bilton in the Panorama Programme there are ten million tenants of Private Sector Landlords. I take that figure with a Pinch of Salt! However, for the purposes of this article I will leave it like that.

Shelter’s Chief Executive

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Developers are exempt Money Laundering Regulations, estate agents are not

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Aniti-money
Laundering:

Developers selling homes through their own on-site sales
offices are exempt Money Laundering Regulations (AML), whereas if an agent is
selling, then they would not be.

Property Industry Eye
reports that this situation would seem anomalous, but HMRC has confirmed to the
Eye that this is indeed the case.

It seems that developers, as far as HMRC is concerned, are classed
as private sellers of peer to peer sellers, and like them, they are not
expected to be compliant, they are not caught by the AML regulations.   

A query about this emerged after a buying agent, purchasing
a property from a developer on behalf of a client, was told that AML applied to
him, whereas not to the developer.

HMRC told the Eye:

“If an individual or company sells property they own to an
individual that they find themselves, this is a private sale and does not
involve an estate agency.

“If it is a different company that introduces the parties
for sale/purchase, then this business is classed as an estate agency and must
be registered for AML supervision.�

The full response from HMRC was this:

The Money Laundering
Regulations are about supervising certain specific businesses conducting
relevant activity. This includes estate agencies.

The definitions of
estate agency businesses and what is relevant activity are defined in the
Estate Agents Act 1979. This legislation is owned by NTSELAT (the National
Trading Standards Estate and Letting Agency Team). Owners of property and peer
to peer sales of said property are not covered in this definition.

If an individual or
company sells property they own to an individual they find themselves, this is
a private sale and does not involve an estate agency. If it is a different
company that introduces the parties for sale/purchase, then this business is
classed as an estate agency and must be registered for AML supervision.

A new EU directive from June 2017, cited by the Eye, states that agents entering into a
business relationship with both sellers and buyers requires agents to scrutinise
buyers’ finances. This would include auctioneers who are required to check out
all potential purchasers before giving them a paddle so that they can bid for a
property – but developers, it seems, are exempt when they use their own sales
teams.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Developers are exempt Money Laundering Regulations, estate agents are not | LandlordZONE.

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Errors in English Private Landlords Survey and English Housing Survey

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I have sent the following email to the ehs@communities.gov.uk and also my MP along with the current Housing Secretary and Housing Minister

Please can anyone who is able please also send this, or something like it to their MP and generally try to highlight the problem with the survey questionnaires.

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Liverpool landlord harassment – Shocking and horrific!

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Some time back the Alliance was contacted by one of our members based in London. This landlord has a substantial portfolio in Liverpool.
Mr Mxxxx was very distressed and angry and informed us that Liverpool city council were engaged in a campaign of harassment against him and his tenants.

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Cooking a meal now a problem?

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I am the landlord of a 3 story block of 12 flats. Today it was brought to my attention that the fire alarm has become an issue as a result of someone simply cooking a meal, the flat is let as a holiday rental.

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Gas Safety Certificate appeal set for January 2020

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Serving Notices:

Following recent
cases of judges refusing possession claims when landlords failed to serve a gas
safety certificate prior to the start of a tenancy, landlords will be relieved
to learn that an appeal to these rulings has been allowed and is scheduled for
January 2020.

As it stands,
landlords failing to serve a gas safety certificate at the start of an AST are
barred from using the Section 21 no-fault evict process indefinitely. This may
or may not be important long-term as the government has committed to abolishing
s21, but given all that’s going on with the political situation, Parliament may
not be in a position to do much about this in the short term.

A recent county court decision in Caridon Property Ltd v Monty Schooltz, circuit judge HHJ Luba QC held that a landlord’s failure to provide the gas safety certificate before the tenant occupied the property was a breach that could not be rectified later.  As a result, the landlord was prevented from using the section 21 procedure to regain possession. This decision was later verified by HHJ Carr in the Trecarrell House Limited v Rouncefield county court appeal.

The decisions’ reasoning revolved around the interpretation of the legislation set out in s21A of the Housing Act 1988 and the Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 under the Deregulation Act 2015. This linked Section 21 to a landlord’s gas safety obligations under the Gas Safety (Installation and Use) Regulations 1998 (the “Gas Safety Regulationsâ€�).

However, a grant of permission to appeal has been given in the case of Trecarrell House Limited v Rouncefield and has been set for January 2020.

The appeal will be based on a landlord’s right to peaceful
enjoyment of his property contrary to Article 1 of the First Protocol of the
European Convention of Human Rights.

Solicitors Anthony Gold say:

“We understand this is the first case where a senior court
will consider the human rights implications of the regulations and how they
have been interpreted. The decision is therefore likely to have significant
consequences for landlords, tenants and judges who have been grappling with
these issues in the county courts.�

Specialist property solicitors, Anthony Gold are acting for
the landlord who is being assisted by the Residential Landlords’ Association
(RLA). Justin Bates and Brooke Lyne of Landmark Chambers will be representing
the landlord before the Court of Appeal.

Government to stand by Gas Safety Certificate ruling

RLA campaign to challenge gas safety notice ‘breach’

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Gas Safety Certificate appeal set for January 2020 | LandlordZONE.

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Rent to Rent Tips, Advice and Case Study

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We first published this article back in 2013. It has been resurrected because the information provided within it is just as relevant today as it was back then and the Rent to Rent strategy continues to be a hot topic of discussion at many of the UK’s property networking Events.

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