Avoid the courts! Mediation service launches to help landlords and tenants resolve arguments

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A tenancy mediation service has been launched today that aims to help landlords, letting agents and tenants sort out problems more cheaply and speedily than going through the courts.

Property Redress Scheme has launched PRS Mediation earlier than planned to support landlords and tenants struggling with the impact of the pandemic.

It says the Government is likely to continue urging them to negotiate and reach an agreement, rather than go to court in the future, as the confidential process allows disputes to be resolved much quicker and with less cost. ]

And there will be an even
greater need for end-of-tenancy mediation when the Section 21 possession
process is removed.

After a landlord calls PRS mediation, an independent mediator contacts the tenant to see whether they’re happy to liaise with the mediator, before discussing the issues raised, with a view to coming to an agreement on either paying a reduced rent, deferred rent or settlement amount, with agreed ending of the tenancy.

Struggling to pay

Sean Hooker, head of redress
for the Property Redress Scheme, says:
“As a landlord, it also enables you to
demonstrate to the court that you have attempted to resolve your issues before
coming to them.”  

Paul Shamplina,
founder of Landlord Action, adds: “Our
recent survey found that 74% of landlords have already been contacted by
tenants who are struggling to pay rent due to reduced or terminated employment
resulting from the pandemic.

“With the reality that life will not return to ‘normal’ for some time,
the most sensible solution is mediation, particularly as landlords will be
unlikely to be able to gain possession of their properties for six to nine
months or more.”

Property Redress
Scheme believes if landlords have problems with future possession claims, using
the mediation service will demonstrate their readiness to engage with tenants
through alternative dispute resolution.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Avoid the courts! Mediation service launches to help landlords and tenants resolve arguments | LandlordZONE.

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Post Covid-19 Property Opportinities – Baker Street 29th April

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Join me, Shaf Rasul from Dragons Den, Simon Zutshi and Ranjan Bhattacharya live for an online Baker Street Property Meet at 7pm on 29th April 2020. 1000+ property investors will be attending, so secure your spot now.

REGISTER HERE IT’S FREE!

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LATEST: Tenants negotiating lower rents with landlords as they stay put

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Latest research from leading lettings agency reveals record number of renters staying put and renegotiating lower rents during March, a trend that is likely to accelerating this month.

Over two thirds of tenants renewed their rental agreements during March and many negotiated lower rents as they stayed put to weather the Coronavirus crisis, a leading lettings index has revealed.

Estate agency Hamptons International says 70% of tenancies that were due to renew last month re-signed their contracts, the second highest proportion to do so since the company’s index began six years ago.

Tenants, aware of the economic problems the Coronavirus crisis was likely to create, have clearly been negotiating with existing and prospective landlords to reduce their outgoings during the year ahead.

Rent renewals

Renewed rents fell across three regions – the South East (-1.4%), the East (-0.4%) and Greater London which recorded the biggest year-on-year fall (-2.2%).

Also, although the average rent of a newly let property increased to £980 pcm in March, up 1.2% year-on-year, the rate of rental growth more than halved since February, when rents rose 3.3% year-on-year.

And as lockdown measures were enforced during
March the number of new applicants registering to rent a home fell by a third compared
with the same period in 2019.

“Once lockdown restrictions ease, we expect activity levels to rise. Renting offers more flexibility than buying a home, so as uncertainty rises, so too does the demand for rental homes,” says Aneisha Beveridge, Head of Research at Hamptons International.

“But although demand for rental accommodation is set to increase, and there are already signs of it picking back up again, the longer-term economic damage to people’s jobs and incomes means that rents on newly let properties are likely to fall between 2% and 5% this year.”

Read advice about tenancy agreements.

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BREAKING: NRLA launches campaign to have abandoned rental properties exempted from council tax

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The National Residential Landlords Association says thousands of landlords face paying the tax through no fault of their own as tenants abandon tenancies or go home to their families during the pandemic.

Private landlords shouldn’t
be forced to pay council tax on properties left empty because of the
coronavirus, according to The National Residential Landlords Association.

It’s calling on the
Government to tell councils they should exempt these houses from
their demands.  

The NRLA says a significant
number of rented homes are empty because tenants were unable to
take up tenancies or have chosen to move out to be closer to family during the
lockdown.

Landlords would then become liable for the council tax on the property and have no realistic prospect of finding new tenants. 

41% worried

Its recent survey found
that 41% of landlords are concerned about having to cover the unexpected costs
of utility bills and council tax.  

Chief executive Ben Beadle
says: “It is manifestly unfair for landlords to be asked to pay council tax on
properties which are empty, and likely to remain so, because of the impact
of the pandemic. 

“Whilst
we remain supportive of the measures taken so far by
the Government, landlords are being asked to absorb more costs at a
time when they are least able.  

“Unlike most small
businesses and the self-employed, there has been
no direct support package announced for landlords. Removing
this unnecessary burden would at least help those landlords who are
struggling to cope with drastically reduced income.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: NRLA launches campaign to have abandoned rental properties exempted from council tax | LandlordZONE.

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LATEST: Government protects commercial tenants from aggressive debt recovery by landlords

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Ministers have moved to protect tenants from aggressive winding up orders and statutory demands, and also give them more breathing space during the pandemic.

New legislation is to be introduced to stop
heavy-handed commercial landlords putting pressure on high street tenants who
can’t pay their rent during the pandemic.

In a move which aims to prevent aggressive
debt recovery and protect high street jobs, landlords won’t be able to send
their tenants statutory demands and winding up petitions until at least 30^th
June – as part of the Corporate Insolvency and Governance Bill.

Tenants will also get more breathing space to
pay rent as landlords now can’t use Commercial Rent Arrears Recovery unless
they are owed 90 days of unpaid rent.

The Government says most landlords and
tenants are working well together to reach agreements on debt obligations, but that
some landlords have been putting tenants under undue pressure by using aggressive
debt recovery tactics.

But the government is also calling on tenants to pay rent where they can, and to recognise the strain felt by commercial landlords.

Kept afloat

Business Secretary Alok Sharma says it’s vital that
businesses are kept afloat so they can continue to provide jobs the economy
needs beyond the coronavirus pandemic.

He says: “Our unprecedented package of support can help
commercial landlords, including through the recent expansion of the Coronavirus
Business Interruption Loans Scheme.”

Adds Sharma: “I know that like all businesses they are
under pressure, but I would urge them to show forbearance to their tenants. I
am also taking steps to ensure the minority of landlords using aggressive
tactics to collect their rents can no longer do so while the COVID-19 emergency
continues.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Government protects commercial tenants from aggressive debt recovery by landlords | LandlordZONE.

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INTERVIEW: ‘Good dialogue with tenants has kept rent payment defaults to just 10% of portfolio’

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Claim is made by boss of Liverpool property management firm who says ‘tidal wave’ of non-payment has so far failed to materialise during pandemic, but he warns this month’s pay day will be next big test.

The expected “tidal wave” of tenants
not paying their rent has failed to materialise, according to one letting
agent.

City Residential in Liverpool reports that proactively engaging with tenants and landlords has resulted in them both understanding each other’s financial position during the lockdown – and only a 10% drop in its rent roll, rather than the expected 30%, MD Alan Bevan tells LandlordZONE.

“Overall, we’ve been delighted by
the response. At this point in time we have
yet to see the ‘tidal wave’ of non-payment by tenants that many industry
commentators had predicated.”

It has made agreements with about
10% of its tenants over paying reduced rent and Bevan says landlords have been
generally receptive, with some proactively offering to help out if needed.

He adds: “During conversations
over the past few weeks with landlords we have reiterated our belief that it’s
better to have an investment property occupied and rented, even if the rent is
lower than what they have achieved in the past.

“Logically, this is particularly relevant during the crisis when it is very difficult to re-rent a vacant property due to the restrictions on movement.”

Pay day

However, Bevan says that the true
extent of the financial hardship on the city’s private rented sector, or how
rents will be impacted, may only become clearer at the end of the month, nearer
pay day.

He predicts a short-term increase
in supply of apartments to let, partly because many overseas students have returned
home, leaving their properties in the middle of their tenancies.

City Residential has also seen a big increase in landlords, both individual and corporate, who had previously offered short-term lets but now want the safety of a more traditional assured shorthold tenancy rental model.

Read more about rent defaults during Coronavirus.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – INTERVIEW: ‘Good dialogue with tenants has kept rent payment defaults to just 10% of portfolio’ | LandlordZONE.

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Landlords call for council tax relief on empty homes

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Landlords are calling on Ministers to tell local authorities that they should not charge council tax on rented homes left empty because of coronavirus.  A significant number of rented homes have been left empty because tenants have been unable to take up tenancies, or have chosen to move out to be closer to family during the lockdown.  During this period landlords will become liable […]

The post Landlords call for council tax relief on empty homes appeared first on RLA Campaigns and News Centre.

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Meet Mark Smith (Barrister-At-Law) online at South Wales Property Meet

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Our Hon. Legal Counsel, Mark Smith, Head of Chambers at Cotswold Barristers will be presenting an overview of several landlords tax strategies at the South Wales Property Meet Thursday 30th April.

The event will be held Online and Attendees can expect first class speakers and great networking opportunities.

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Landlord Hero of the Week #2: Collette Lord

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As the nation claps its NHS and other front line heroes, LandlordZONE highlights the landlords who are going the extra mile for their tenants during this challenging time for everyone involved in the private rental market.

When one of Collette Lord’s tenants came
to her with a proposal to pay less rent during the crisis after her small
business was forced to close, and make it up later in the year, Collette
immediately agreed.

She’s now talking to another struggling tenant who’s only
able to pay half his rent about making a future payment plan.

“At a time
like this we need humanity and to recognise that our tenants might lack funds
through no fault of their own,” she says.

A full-time landlord in Chilcompton,
Somerset, with a substantial portfolio, Collette is proud of her
good relationship with every tenant – the longest-standing has been with her
for 16 years – and their ability to approach her when they’re in trouble; she’s
offered a month free-rent to those struggling to make payments in the past.

“I know all my tenants and get on well with them. I’ve
only had four really awful ones and I’m sad to say they were all benefit tenants
so I don’t take them anymore – it broke my heart.”

She blames the benefit system for the evictions and adds: “I hope at least the coronavirus crisis will put some humanity back into the system as there’s so many homeless people because of Universal Credit.”

Property knowledge

Collette got into property 20 years ago, and confesses
she knew nothing about the business, quickly working to bring herself up to
speed through forums and reading up on the subject.

After buying her mum’s house, she mortgaged it to raise
cash for a deposit on the next one and started looking for likely properties.
“I didn’t understand what I was doing but pressure-tested the numbers and made
sure I didn’t take on more than I could repay.”

Her portfolio is now spread across Wales, Coventry, Milton Keynes, Lancashire and Somerset – half of which are now managed by agents. While she doesn’t intend to expand or sell, she has definite plans. “I don’t have any family to inherit, so my estate will go to charity.”

Read about Landlord Hero of the Week #1

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Alok Sharma will ban Statutory demands and Winding up orders

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The Business Secretary, Alok Sharma, has indicated high street shops and other companies with a commercial lease that are under strain will be protected from what he calls ‘aggressive’ rent collection and asked to pay what they can during the coronavirus pandemic.

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