EXCLUSIVE: Government gives ground to landlords over eviction proposals

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Landlords can heave a significant sign of relief today after the government resisted pressure from tenant groups to make the grounds for eviction under Section 21 and Section 8, Ground 8 discretionary rather than mandatory.

This may have opened the floodgates for thousands of possession claims to be rejected by the Courts once hearings restart on August 24th. The proposals adopted are similar to those recommended by the NRLA.

Such a change would have also led to significant extra costs and time delays for landlords and made evictions much harder for landlords.

Today, housing minister Chris Pincher made a statement on the latest changes to the possession hearing regulations laid before parliament on Friday, which – as we have reported – require new rules to be followed

Normalise proceedings

“We are moving through a transition phase and it is right that we normalise proceedings and procedures,” Pincher said.

“To that effect I have had conversations with the Master of the Rolls and with Sir Rob Knowles, who have been quite clear that they want to ensure that the courts act properly to hear landlords’ and tenants’ concerns.

“I want to be very clear that should a landlord not provide the requisite information to the courts about the effect of Covid on a tenant when a landlord is bringing forward an application then the courts will have powers to adjourn the case which will hit the landlord in the pocket.. and focus their minds.”

But the respite may only be temporary – the government has also today re-stated that it is committed to bringing forward both reforms designed to increase the security that tenants need and measures to strengthen the rights of landlords to regain their property when they need to do so. Legislation will be brought forward in due course.

Ben Beadle, Chief Executive of the NRLA says: “We welcome the balance that the Government has struck between protecting both tenants and landlords by focusing on hearing priority possession cases in the courts from 24th August.

“For tenants and neighbours whose lives are blighted by anti-social tenants, for victims of domestic violence in rented housing and for landlords who may not have had any rental income for months due to severe rent arrears built up before the pandemic, the news that landlords will be able to apply to regain possession of these properties again will be a relief.

“That said, the changes to the Court process will inevitably add delay to an already slow process. Trying to reach a resolution away from the Courts, where possible, is essential and guidance to help tenants and landlords agree rent repayment plans is available.

“Eviction is not, and should not be seen as the inevitable outcome of getting behind with rent payments.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Government gives ground to landlords over eviction proposals | LandlordZONE.

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Landlords – Don’t complain!

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Landlords: don’t complain when you pay more tax than everyone else; you are, in fact, receiving a gift from Government.

There has been some controversy since the announcement of a Stamp Duty Land Tax (SDLT) ‘holiday’ a fortnight ago.

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Shelter challenged over ‘wrong’ assumption that landlords discriminate against DSS tenants

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A possession company boss has challenged Shelter for judging landlords following the recent no-DSS court ruling that prevents them from renting to housing benefit claimants.

Following the appearance of its chief executive Polly Neate on Radio 4’s Woman’s Hour earlier this week, Chris Daniel, director of possession company Possession Friend, says the homeless charity is wrong to suggest landlords are reluctant to rent due to stigma around claimants.

On the programme, Neate told listeners: “Landlords might think that people on housing benefit are much less likely to pay their rent – they think it’s going to damage their pockets, but it’s not. I don’t think the image of people on benefits, the stigma, helps – that’s why we feel passionate.”

However, Daniel says there are a number of reasons why many landlords have actively diverted away from considering tenants on benefits.

“The point the programme host made about direct payment to landlords being deliberately removed under Universal Credit plays a massively important role,” he says.

“If payments have been going direct to a landlord, and it’s discovered that the claimant was for a period not entitled to state benefit (perhaps working while not disclosing – something the landlord would be unaware of) Universal Credit will immediately demand repayment by the landlord.”

Daniel tells LandlordZONE: “Lots of rented properties are inherited by landlords who themselves are on the minimum wage or are key workers. Such people cannot afford to sustain a year’s worth of rent claimed back in the form of benefit or Universal Credit. Neither can they afford to wait for the best part of a year it takes to evict a rent-defaulting or otherwise bad tenant.”

Adds Daniel: “There are people scamming landlords – it would be an idea to create a rogue tenants’ database so the courts know who keeps being evicted.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Shelter challenged over ‘wrong’ assumption that landlords discriminate against DSS tenants | LandlordZONE.

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LATEST: Slick virtual reality smartphone game for property investors launches with a million players

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A virtual reality property investment game called Landlord Go has officially launched today in the UK following four years of development and is so addictive that a million people have already signed up to play during its pre-launch phase, it is claimed.

Available on both Android and Apple smartphones, the game is being launched via a slick marketing campaign, and enables property investors and landlords to have a go at building a virtual property portfolio of both real commercial and residential properties without having to risk their real-world cash.

The game can be played globally, but its UK representative tells LandlordZONE it will have local interest for players because many landmarks in their area from corner shops to apartment towers have already been mapped and therefore can be ‘bought and sold’.

The game has been developed by London-based Reality Games, and enables players to buy, sell, and collect rent on local famous buildings and landmarks.

Property empire

Players start small but with skill can quickly amass a real estate empire through investing, it is claimed, by engaging in bidding wars with other players, recreating the experience of competing in the high-stakes real estate market, all via their smartphone.

The game also enables players to stand in real places and then use their phone’s GPS position to see a ‘gaming version’ of the buildings around them including values and who owns them, as well as the personal wealth of other players nearby.

Landlord Go has used NASA data to divide the world up into 10 billion plots and its developer says that once it has enough players and property valuation data, it will eventually linked to the real world of newbuild development.

“The level of realism is what sets Landlord Go apart,” the promotional material for the game says. “For the Buildings in the game have the correct simulated height that correspond with the real world versions, with image recognition and location data available through the AI camera feed.”

Watch the YouTube trailer.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Slick virtual reality smartphone game for property investors launches with a million players | LandlordZONE.

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Dilemma – Rent to Rent/Company Lease contract basics?

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I am looking to possibly move to another Agent in regard to a Rent to Rent/Company Lease arrangement for one of my properties.

I’m not happy with the current company at all – dire call back response, never reply to emails etc among other things.

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Is guarantor still liable for arrears if I allocate UC against current rent?

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I have a tenant who has not paid any rent since late 2019. I obtained a possession order just before lockdown and was in the process of instructing county court bailiffs when Covid-19 caused everything to grind to a halt.

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More commercial landlords moving towards turnover rents

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Covid-19, is just the latest crisis to hit retailers battling on against reduced foot-fall in many regional towns. The effects of Covid have hit the sector hard, particularly with many high streets and shopping centres turning into ghost towns.

While some of the more adaptable retailers are making ends meet using online channels, the majority are still burdened by crippling rents and overhead costs on closed shops and empty outlets.

It’s a perfect storm of one problem after another to hit the retail sector which has raised the prospect of a major change in the way the commercial landlord / tenant relationship works in the UK. One issue that has been discussed many times and now comes to the fore is the idea of turnover rents.

Turnover rents would mean that commercial landlords are asked to share some of the burden, take on some of the risk associated with running a retail operation. Traditionally, once the lease is signed, commercial landlords share none of the tenant’s business risk, and with a full repairing and insuring lease they have a guaranteed clear return on their investment, come what may.

The idea of a turnover rent therefore introduces a whole new dimension to investing in commercial property, and remember, many of the big investors in field are insurance and pension companies who very much rely on the security of their investment return.

Will turnover rents become the ‘the new normal’ for both the high street and shopping centres alike after Covid? If so landlords will need to learn to grapple with the added complexity and risk of such an arrangement. New leases along these lines may be helpful to retailers but they are not without their problems for both landlords and tenants.

Having both parties share in the good and bad times means dividing the payment into a fixed term base rent, determined by current market conditions, and a turnover element, determined by the tenant’s sales performance. Typically, a base rent will be around 75-80 percent of the total.

There inevitably ensues a tough negotiation as to these proportions of base rent to turnover element, and then further issues ensure: access to accounts and fraud prevention, what about sales returns, often quite high especially with online clothes sales, are online sales even included, staff sales at cost, what about unpaid accounts and bad debts on credit sales, length of the agreement, the list goes on.

Disputes on turnover figures become time consuming and expensive. Landlords will want more access inside the business if trust is to be maintained. Full audits may need to be undertaken periodically, inspecting and querying all business records which needs up-to-date and organised accounting systems, cash receipts, online sales data, VAT returns etc. All this ads costs and accountants will love it!

One Bolton-based landlord, Millfield Estates, as reported by thebusinessdesk.com, is “biting the bullet” on turnover-rents, announcing plans to offer a new ‘turnover rent’ policy at two of the largest properties in its portfolio

The company is “applying a more flexible approach to its property lettings post-lockdown.” Its new ‘turnover rent’ offer will come into force at its Nottingham and London retail properties with immediate effect.

“With the COVID-19 pandemic exacerbating a situation in which there is now an imbalance in risk between landlord and tenant, leaving many locations no longer viable from a trading perspective, Millfield Estates’ fresh approach to rent at two of its largest properties is one that will give prospective tenants more confidence in an uncertain future,” the company says.

Millfield says its new policy offers rent as a percentage of the turnover of the occupying tenant, and is aimed at bringing life back to the high street, with a real emphasis on flexibility for its tenants, and “with no fixed parameters put in place when entering into negotiations.”

Paul Dobson, property director for Millfield Estates, had said:

“We are living in unprecedented times and it is crucial that, as a company, we remain fleet of foot to evolve and implement initiatives that will instil confidence in our properties and show tenants, both new and existing, that we have their best interests at heart in this fast-changing world.

“Our flexible and bespoke approach to our letting offers at Lister Gate (Nottingham) and South Molton Street (London) demonstrates our commitment to a closer landlord and tenant relationship, which in times of crisis such as now, can only help both sides.

“We believe our rent policies go some way in mitigating risk for our retail tenants, promotes a fairer way of doing things, and provides a welcome boost to the sector during this difficult trading period.”

Located in one of London’s most fashionable and well-established retail districts, 49 and 50 South Molton Street in Mayfair comprises two late-19th century period buildings of 4,954 sq ft in total, offering an A1 retail unit on the ground floor and three upper floors dedicated to B1 office space.

Enjoying a prime location just 500-yards away from the Intu Broadmarsh Shopping Centre, 28-30 Lister Gate offers 4,871 sq ft of A1 retail and ancillary accommodation, with the property benefiting from a catchment population in excess of one million.

Millfield Estates is represented by letting agents GCW (Lister Gate) and JLL (South Molton Street) who played an active role in setting up this new rent policy.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – More commercial landlords moving towards turnover rents | LandlordZONE.

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144 days to sell a house in 2020

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The latest research by GetAgent.co.uk, has revealed that so far this year, the time it takes to sell a property has increased by 14% when compared to last year. With an average time of 144 days or nearly five months

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Electrical Safety Certificate Costs?

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I have properties in and around London and the Electrical Safety Certificate costs vary wildly.

None of the London properties has needed a certificate until now. I have had a quote for £340 for a 2-bed flat in London.

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My email to Woman’s Hour regarding Shelter response to no DSS

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I have recently sent my email below responding to Shelter’s Polly Neate’s response as to why she thought landlords do not want to rent to tenants in receipt of benefits.

To: womanshour.yourviews@bbc.co.uk

Re – 

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