Mortgage broker makes unusual plea for landlords to buy his terminal friend’s self-help book

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A leading UK buy-to-let broker is asking landlords to buy a financial self-help book written by a friend of his who last year was given a terminal cancer diagnosis.

But this is no ‘Just Giving shout out’. Paul Maloney, MD of Nova Financial, says his friend Michael Romeo (pictured) has committed to using a variety of investment and debt management strategies to clear his family’s mortgage during the expected two years he has to live.

His book about his race to re-align his life and financial healthy is called Terminal Velocity and has made Romeo a minor celebrity in Australia following its publication.

Maloney also says he also wants his friend’s extraordinarily determined and selfless approach to life planning to be known about in the UK.

Proceeds from the sale of the book will go towards a fund to support his family.

“A lot of people under-utilise what they’ve got and I am hoping Michael’s story will persuade to get off the fence and start thinking about their own financial position,” says Maloney.

Speaking from Australia, Romeo says he is taking each day as it comes but that he’s hoping to have another two years to executive his plan for financial independence for his family, and that he’s made good progress so far.

Initially given six to 12 months to live, Romeo then realised that he would be leaving nothing but debt behind for his wife, which he said hurt more than the diagnosis itself.

Order a copy of his book here, for £12.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Mortgage broker makes unusual plea for landlords to buy his terminal friend’s self-help book | LandlordZONE.

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Isle of Man consults on compulsory landlord registration after voluntary scheme flounders

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Hundreds more landlords on the Isle of Man could soon be forced to register themselves and their properties if a new bill gets the green light.

The Landlord Registration Bill aims to establish minimum management and property standards in the private rented sector – five years after the Landlord and Tenant Private Housing Bill was dropped by the House of Keys after a committee recommended the proposals should be completely redrafted when landlords branded them confusing, unbalanced and favouring tenants.

As well as a compulsory register, the new proposals also include a rent deposit protection scheme.

The island’s current legislation has been based on voluntary registration since 2013, but only 100 landlords have signed up, representing just 300 properties out of a total of at least 5,000. The government has now launched a public consultation which closes on 27^th July.

Infrastructure Minister Tim Baker says: “While I have no doubt that the vast majority of landlord and tenant relationships are very amenable, there are unfortunately a number of properties which are in a substandard condition. These are often let to the most vulnerable in our island society, in circumstances where individuals feel they have no legitimate avenue for complaint, let alone action.

“The purpose of this Bill is to eradicate this totally unacceptable position and I encourage as many people as possible to participate in the consultation process and submit their views.”

Landlord registration was recommended by the island’s Safeguarding Board as part of a serious case management review into the death of a vulnerable man who had been living in poor private rented accommodation following eviction from his local authority flat eight months earlier.

Read more about property and landlord registration schemes.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Isle of Man consults on compulsory landlord registration after voluntary scheme flounders | LandlordZONE.

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Student landlords facing the most hostile environment in generations

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Covid-19 has presented UK landlords with some severe challenges right across the rental market, residential and commercial, but it’s left student landlords facing a unique set of difficulties.

There has been a plethora of regulatory change for lettings in the private rented sector (PRS) in recent years, with lots more on the way.

It seems that public opinion, driven-on by anti-landlord media sentiment, and the political fall-out from this, is bringing back socially motivated “tenant friendly” legislation from the dim and distant past.

From the proposed ban on Section 21, the so-called ‘no-fault’ eviction, a ban on tenant fees (Tenant Fees Act of 2019) to a re-definition of what constitutes an HMO involving student housing in particular, Right to Rent Checks and Article 4 Directions, which restrict otherwise permitted developments meaning conversions require a planning application, with lots more changes in-between.

Many landlords who see themselves as responsible – those trying hard to meet their legal requirements, at the same time as providing a good tenant experience – are concerned that many of the measures being taken to tackle the rogues are hurting them more. Many of the changes, they argue, simply are not appropriate for the student letting market and will slowly drive them out of business.

Of the 20 per cent of housing in the private rented sector (PRS), a good percentage of them are student lets on assured horthold tenancies (ASTs). A ban on Section 21 is seen within the industry as the biggest single threat to landlords’ livelihoods, potentially leading to horrendous problems if things go wrong with their tenancies. When 5 or 6 young people who have never lived away from home share one property, things do go wrong.

Former chair of the National Landlords Association and a student landlord herslef, Carolyn Uphill owns and runs three multi-occupied student houses in Manchester plus three private family lets. She has said that she is “gravely concerned” about the impact of changes to ASTs on student landlords:

“What that actually means is an end to the AST as we know it, where we can give a fixed-term tenancy for a fixed period. Currently, we can issue Section 21s to say it ends on a specific day, so you know you get the property back for the next students to come in.

“Students have specific academic years when they know where they want to live. The change could mean that you have to wait for the students to give notice of one month and then do all these handovers.

“In a university city like Manchester, easily 10,000 students can be on the move at the same time.

“It also doesn’t fit in with how students like to live their lives – they want to get their accommodation sorted before exam time. They look for their next-year accommodation over the winter period, then in April, May, June, during their exams period, they don’t need to worry about it.”

“I totally get that there is an argument that people with families want more security, but their needs are quite different to students and also to younger professionals who want flexibility,” Uphill says.

On top of all the regulatory upheavals uncertainty as to the affects of Brexit and the Coronavirus on the student letting market is causing even more anxiety for landlords.

Fewer students from within and outside Europe are likely to apply to study at UK universities in the wake of Brexit leading figures in the sector had warned, but so far this has not borne out in the statistics. Ucas applications from EU students to British universities rose by around 1 per cent since last year and the number of international applicants was up 8 per cent, some theorising that a weaker pound since the EU referendum could make Britain a more attractive place to study.

However, this last week teenagers around Britain had to decide whether to accept their university place through the UCAS admissions service when the Coronavirus crisis has made undergraduate courses much less appealing. The outcome is not yet clear.

Social distancing, “virtual freshers’ weeks”, “bubbles” of students who will live and study with the people on the same course, online lectures for the 2020-21 all make for a university experience that will be sub-optimal if not downright anti-social.

At the same time there will be no discounts to the typically £9,000 per year degree fees being charged by the universities. Foreign students, a cohort that most many universities have come to rely on heavily for their incomes, have been voicing their concerns about the new measures.

In one report, 53 per cent (out of 30,000 potential students) said they would be deferring their university course for a year – this figure is up from 46 per cent in April. Forty per cent said they would not be interested in university at all if courses move online. Seventy seven per cent said they wanted a discount.

All of this will be of desperate concern to the universities and landlords alike, not least because of the British universities’ reliance (or over-reliance) on foreign students. Foreign students pay an economic rate which is much higher than their domestic counterparts, and it has been calculated that if just one-third of Asian students should fail to arrive, it would result in a loss of nearly half a billion pounds.

While the final outcome is uncertain, The University and College Union has estimated that the pandemic had reduced the likelihood of attendance by approximately 17 per cent. This would mean a £150 million loss of income for institutions and a worst case scenario of a universities’ £2.5bn ‘black hole’ costing the UK economy around £6bn and 60,000 lost jobs.

However, on a more optimistic note the Department of Education says its data from UCAS shows, and the Student Loans Company data suggests, deferrals are likely to be similar to previous years, so there may be nothing to worry about?

Young people may be banking on the Covid measures being only be temporary, and they will be weighing the alternatives. Foreign gap years are out and with jobs likely to be very hard to find, even temporary ones, study may be the best use of their time.

And if all this were not enough for the small-scale student landlord to cope with, there’s the march of the institutional landlord. As student housing has matured as an asset class, large scale investors have seen the steady income potential of developing purpose built university accommodation at scale.

But the types of businesses investing in the sector have also changed according to Savills Research. At first, pioneer developers held and operated their own rental stock but now sovereign wealth funds and private investors have begun buying more and more rental accommodation as their confidence has grown and their appetite for this alternative asset class continues.

Now, a growing variety of pension funds, institutions, and insurers are actively investing in student housing, bringing increasing competition into the market for the traditional small-scale student landlord. These institutions, many of which invest internationally, accounted for around half of all student housing investment by volume between 2011 and 2018.

Whatever the outcome of the next few months and years ahead, things are going to be tough for the traditional student landlord.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Student landlords facing the most hostile environment in generations | LandlordZONE.

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Private landlords urged to embrace ‘life-time tenancies’ by leading London council

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Brent Council hopes to inspire private landlords to follow its lead by giving tenants more security by introducing life-time tenancies.

The London borough has overhauled its tenancy strategy and will be working closely with all private and social housing landlords to encourage them to review the way they manage their own tenancies.

Brent has replaced its fixed-term tenancies with life-time tenancies and has also introduced ‘demoted’ tenancies to tackle anti-social behaviour (a form of tenancy that reduces a tenant’s security of tenure and rights).

It says that while the majority work well, when things break down and a council tenant has been involved in antisocial behaviour or uses their home unlawfully, officers can now serve a four-week notice of intention to demote the tenancy for 12 months.

The council’s updated tenancy management policy pledges to support residents so they can stay in their homes “for as long as is suitable for them” and it has promised to work actively to prevent homelessness. Brent is now offering joint tenancies to cohabiting couples so that both people are protected.

Secure home

Councillor Eleanor Southwood, cabinet member for housing and welfare reform, says the Covid-19 pandemic is a reminder of how important it is to have a safe and secure place to call home.

She adds: “I want everyone who moves into a council home to feel settled and part of their local community so that they can start building happy memories, without worrying.

“A secure tenancy for as long as someone needs – and providing accessible and clear information about what to expect – are a core part of our promise. I very much hope that all landlords across the borough will adopt these changes”.

“Tenancies without an end date will become the norm once Section 21 notice evictions are banned, as is already the case in Scotland,” says Tim Frome, Legal Director of Landlord Action.

Read more about Brent council.

Picture credit: Steve Cadman.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Private landlords urged to embrace ‘life-time tenancies’ by leading London council | LandlordZONE.

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Newspapers savage investment ‘guru’ after he tells followers to use Covid loans to buy property

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Self-professed millionaire landlord and YouTube property investment guru Paul Smith has been savaged by two national newspapers over the weekend after he suggested to his 12,000+ subscribers that they use the government’s bounce back loans to invest in property.

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

Describing the scheme as ‘free money’ because the loans are backed by government guarantees, his video published on 8^th May urges followers to follow his example.

“If you’ve got multiple companies like us, or even one company, and access to that cash, there is no caveat or limits with what you can do with that; I’m not saying you should go and turn it into Lamborghinis, well, unless you want to — it would be quite fun, wouldn’t it?,” he says.

‘Irresponsible’

The Sunday Times, which has claimed Smith says the loans don’t have to be paid back – which he denies – the thrust of his video has been described as ‘disgraceful and irresponsible’ by leading industry figures and that he ‘gives decent and ethical landlords a bad name’.

Smith, who revels in criticism of his ‘alternative investment’ methods as proof the establishment is hiding something form landlords, posted on Facebook yesterday, celebrating the ‘no publicity is bad publicity maxim’.

“The message is working – I am in the Sunday Times money section today because of my critics,” he said. He has also subsequently published a video in which he calls several of his detractors ‘online trolls’.

The Sunday Telegraph also published an expose of Smith and other business people who have suggested the loans are an opportunity to ‘make money’.

While most professional are unlikely to take Smith seriously, many of his followers are super-fans of his ‘stick it to them’ style, including Mustafa Abelhawa, who in comments below Smith’s video about Bounce Back Loans, says: “Since I saw your last video on bounce back, I helped over 25 clients receive the 50k loan and encouraged them to invest in property.

“These clients will stay with me forever! They are so grateful and nothing feels better than helping a human achieve a dream. You are FANTASTIC Paul, you are changing my life in an incredible way, my journey is still at it’s infancy, but I know it’s going to be successful.”

Smith is one of a growing trend in property investor video experts who attract first-time wannabe landlords often targeting those who are already in financial trouble with headlines such as ‘Get wealthy – follow these easy rules’ and ‘CCJ to property investor’.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Newspapers savage investment ‘guru’ after he tells followers to use Covid loans to buy property | LandlordZONE.

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Struggling to find lodgers during lockdown?

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I rent out rooms to lodgers in my 3 bed flat in greater London. In the beginning of March, sadly my lodger who had been living with me for 5 years, moved out as she feared catching coronavirus in a shared place.

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Extension of eviction ban for commercial leases

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The Government has extended measures to prevent struggling companies from being evicted over until the end of September.

A new code of practice has been developed with leaders from the retail, hospitality and property sectors to provide clarity for businesses when discussing rental payments and to encourage best practice so that all parties are supported.

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Debt now equal to bond? Action required

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I have a client who so I believe has left the property that I am letting. The rent owing has now just passed the bond money. Firstly can I start legal proceedings to remove the letter?

I have not had any notice that she has left the property and I have not called at the property due to the Coronavirus restrictions during these times.

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LATEST: Legal team in landmark gas safety eviction case say appeal to Supreme Court will follow

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Yesterday we reported on the contentious Trecarrell House Limited v Patricia Rouncefield judgement in the Court of Appeal, which much to the delight of our readers found in favour of the landlord.

After months of legal wrangling, the three judges agreed that Trecarrell House was within its rights to serve a Section 21 notice on Ms Rouncefield because the property had a gas safety certificate – even though she hadn’t been given a copy at the beginning of her tenancy.

The battle is not over. The legal team at Oliver Fisher representing Ms Rouncefield have told LandlordZONE that they intend to seek permission to appeal to the Supreme Court.

But what to do the two legal teams on either side of the bench think of the judgement, and is its as clear cut as landlords would like to think?

Landmark Chambers – Trecarrell House

Landmark Chambers says it’s good news for landlords and that, given the huge number of gas safety inspections missed as a result of the current crisis, it’s a relief that there is now clarity on whether a Section 21 claim is valid as long as the certificate has been provided beforehand.

This is regardless of whether an annual inspection has taken place each year, and just as long as it has been done before notice is served.

However, practice manager Justin Bates asks: “What is the position if the landlord has not done a gas safety check – and so does not have a gas safety certificate – for the period before the tenant went into occupation. How, if at all, can that be remedied?”

He adds: “There is recognition in the judgment that the duty to do an annual safety inspection is not a prescribed requirement for the purposes of [a Section 21].

“There is, however, something rather unattractive about a landlord seeking possession in circumstances where he has unlawfully failed to do a check (and thus provide a certificate) and whether that amounts to (impermissibly) relying on your own wrongdoing.”

Bates tells LandlordZONE: “The earlier county court decision in Caridon Property v Monty Schooltz was made by one of the most respected landlord and tenant lawyers of his generation, HHJ Luba QC, so the argument for the tenant is clearly one that has some support.

“It’s also important enough for the Supreme Court to want to look at it, after all, it does potentially affect several million people.”

Oliver Fisher – Rouncefield

The legal team representing Ms Rouncefield has some unanswered questions, according to Billy Clerkin, paralegal at Oliver Fisher, who says the position is still unclear as to whether a gas safety check that has been done out of time is valid.

He adds: “If the case is that only the [gas safety certificate] needing to be given is the one prior to occupation and the most recent check carried out during occupation, then in a lengthy AST this could leave a number of years in the middle whereby a check does not need to be done for the purpose of a Section 21. 

“This seems wrong to me when considering the very low risk of an HSE prosecution, which appear to be in the tens per year with regard to the Gas Safety Regulations as a whole.”  

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Legal team in landmark gas safety eviction case say appeal to Supreme Court will follow | LandlordZONE.

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Can important documents like tenancy contracts be signed electronically?

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In these days of lock-down it would be very convenient and timely to accept documents relating to tenancies and other business contracts that have been signed electronically and transmitted electronically, rather than using the usual face-to-face signing and exchange using pen and ink.

But just how legal are these e-signatures on a document, and more importantly how would electronic signatures stand-up in court? Would you be prepared to accept a tenancy agreement attached to an email with an electronic (typed) signature on it?

This article applies primarily to English law. Although tenancy laws are similar in other jurisdictions, there may be significant differences. Always seek professional advice before making or not making important decisions.

Yes, says the law, electronic signatures are perfectly legal because today we have something called the Electronic Communications Act 2000 (and eIDAS in the European Union, NIST-DSS in the USA or ZertES in Switzerland)., all of which clarify the situation somewhat. Even so, many people would still be quite apprehensive about accepting documents signed in this way, especially if they are from the older generation – the younger generations of course are far more accepting of new technology and instant communications via email and text.

To quote directly from the EC Act: Electronic signatures and related certificates.

(1) In any legal proceedings—

(a) an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and

(b) the certification by any person of such a signature, shall each be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data.

(2) For the purposes of this section an electronic signature is so much of anything in electronic form as—

(a) is incorporated into or otherwise logically associated with any electronic communication or electronic data; and

(b) purports to be used by the individual creating it to sign.

(3) For the purposes of this section an electronic signature incorporated into or associated with a particular electronic communication or particular electronic data is certified by any person if that person (whether before or after the making of the communication) has made a statement confirming that—

(a) the signature,

(b) a means of producing, communicating or verifying the signature, or

(c) a procedure applied to the signature, is (either alone or in combination with other factors) a valid means of signing.

Quite clearly the electronic signature has legal standing providing certain other requirements are met, most particularly that a confirmation statement is made, the parties are identified and the document is date-stamped, which it would be in any case if accompanied by an e-mail audit trail as evidence of receipt.

Ironically, the accommodating audit trail could give more certainty to the signature and the intentions of the parties than would a traditional pen and ink signature. That’s because a tenants can and sometimes do deny they have signed a document, and faced with this, unless other supporting evidence is available, such as a witness statement, any judge would err on the side of caution and take the tenant’s word.

Although there are third party signature services such as those offered by Adobe, which act as a sort of independent escrow service, this is not necessary for one offs, and it would be usual for landlords to send documents attached to an email on which the tenant/s can either upload a facsimile signature, or simply type one.

The key to this is that common sense is required. So long as the process used generates a clear audit trail showing the intentions of the parties, based on the electronic communications between them leading up to the agreement signing, and that dates are clearly stated – it’s advisable to type out a date in full so that, even thought the email is electronically dated, the date on the documents cannot be doctored. For example, instead of 19/06/20 write The 19^th of June, 2020

The exception to all this is where a document needs a witness. For example, tenancies of more than three years and guarantor agreements must be prepared and signed as a deed with a witness statement and signature. Witness statements therefore cannot be signed electronically.

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