Smart Company Structures For Your Property Business

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If you are investing in property you will want to do this through a Limited (Ltd) company.

However, there are limited companies and there are SMART limited companies for your property investments.

In this video (please click below)

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BREAKING: Ministers give concessions to landlords as they publish details of six-month notice period extension

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The government has amended its Covid legislation to bring in six-month notice periods for Section 21 evictions but has given several concessions to landlords following heavy NRLA lobbying.

The new measure for England will run from Saturday 29^th August until 31^st March and cover Section 21 notices but will include several exemptions.

Landlords can give those involved in anti-social behaviour four weeks’ notice, domestic violence (two weeks’ notice), rent arrears over six months (four weeks) and rent-to-rent issues (three months).

Also, where the grounds for eviction relate to the tenant’s immigration status or the tenancy is an assured tenancy and possession is sought following the death of the former tenant, it will be three months’ notice.

Finally, the window that a Section 21 notice can be used within is being increased from six months to ten months.

This is to rectify a problem caused by the six-month notice period extension which, many had warned, was on course to make Section 21 evictions impossible.

This is because the notice period would end on the same day the eviction itself expired. Landlords now have an additional four months to get a court hearing date and proceed their action.

Exemptions

“It is going to be interesting to see how the exemptions work in practice,” says Tim Frome, Head of Legal of Landlord Action.

He also says that at the moment, evidence from a possession claim his company made online today the courts are preparing for an evictions re-start at the end of September.But landlords have been here before; last Friday, the government executed a U-turn and extended the ban despite courts being told to prepare for a August 24th possession claim re-start.

Evictions expert Paul Shamplina says he’d noticed more landlords giving tenants notice in recent days as many realised that the government was likely to bring in the longer notice periods ‘within days rather than weeks’.

Not retrospective

ARLA Propertymark says it understands the legislation is not retrospective; “Section 21 notices served prior to tomorrow (Saturday 29^th) should retain a three month notice period, however any notices issued from tomorrow onwards must be served on the basis of a six month notice period,” it says.

Ben Beadle, Chief Executive of the National Residential Landlords Association (right), says: “Today’s announcement provides welcome clarity about how possession cases will be handled.

“But it will mean nothing without a complete guarantee that the courts will hear cases from 20^th September.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Ministers give concessions to landlords as they publish details of six-month notice period extension | LandlordZONE.

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EXCLUSIVE: Report to shine excoriating light on illegal evictions within ‘shadow PRS’

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A new report due out next week promises to blow the lid off illegal evictions in the private rented sector.

‘A Journey through the Shadow PRS’ identifies common scams used by criminal landlords and letting agents to exploit the unwary, but says it’s difficult to gauge the exact scale of the problem because so many suffering tenants aren’t always on the radar.

The report says the Ministry of Justice doesn’t record the number of landlords prosecuted for illegal evictions while the police don’t record call-outs to them.

Safer Renting at Cambridge House says its team has dealt with 154 illegal evictions in 15 months in just five London boroughs, which suggests that across the capital there may have been about 985 illegal evictions in that time.

Harassment and trespass

The housing charity believes that harassment, trespass to goods, disconnecting a renter’s utilities, and refusing to give tenancy agreements or receipts for rent are usually connected to the eviction and often go on at the same time.

Victims of criminal landlords rarely experience just one type of breach to their rights, says Ben Reeve-Lewis, strategic case manager at Cambridge House.

“Criminal landlord activity is often deliberate, systematic, organized and calculated from the outset,” he says.

“People hiding their income from HMRC have no compunction about also charging rent inclusive of bills while using stolen electricity meters or cramming four people into one bedroom with no fire precautions.

“For them, the rental business is a simple equation of how much cash income you can squeeze out of one property with minimal outlay and how to get rid of people and evidence if anyone from officialdom comes knocking.”

The report, to be launched on 2^nd September, makes recommendations for urgent changes to the law, policy, and practice.  

As LandlordZONE reported earlier this week, a leading landlord revealed that he believes desperate landlords are turning to illegal evictions in greater numbers following the evictions ban.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – EXCLUSIVE: Report to shine excoriating light on illegal evictions within ‘shadow PRS’ | LandlordZONE.

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Demand for properties with sitting tenants rises as Covid drives hunt for reliable rent payers

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Letting agents report that properties with reliable sitting tenants are in demand as larger portfolio landlords seek out the safety of regularly-paying and hopefully Covid-proof tenants, says property expert and trainer Julie Ford.

Ford, who runs the HSPN landlord group based in Hemel Hempstead, says there has been a noticeable increase in demand among buy-to-let investors for tenant properties.

As well as Covid, she says the increase is linked to more pre-pandemic drivers including that tenants are renting for the longer term and regarding properties as their home rather than a stop gap.

Sitting tenant hotspots

Research by online letting agency Howsy shows that Leeds and Bristol have the highest proportion of stock sold with tenants in situ (at 55%), followed by Nottingham (51%), Cambridge (47%) and Southampton (40%).

Ford says landlords buying their first tenanted property should remember that the tenant will be entitled to continue to live in the property and the change of ownership does not override the tenancy agreement and the tenant’s rights.

“You will not be able to evict or increase rents until a fixed term tenancy ends and depending on when the tenant took up occupation, you may find you have a Protected tenancy which brings its own problems,” she says.

“An incoming landlord will also need to ensure the seller has been compliant and how this will impact you as the buyer, checking the original deposit has been registered and after the sale transferring it to your name, you will need to protect it again, and reissue the prescribed information.

Read Julie’s guide to sitting tenants.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Demand for properties with sitting tenants rises as Covid drives hunt for reliable rent payers | LandlordZONE.

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Why landlords are seeking out sitting tenants amid the Covid confusion

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In recent months there has been a noticeable increased demand in the BTL investment market for tenanted properties, this could be linked to the fact that tenants are renting for the longer term now and regarding properties as their home rather than a stop gap.

Leeds and Bristol showed the highest increase in demand with 55%, closely followed by Nottingham 51%, Cambridge 47% and Southampton with a 40% increase in demand.

However, the market is slow to catch up with demand, with Leeds only having 2.9% of properties on the market which are tenanted, Bristol 0.7%, Cambridge 1.8% and Southampton 1.6%.

In contrast Cardiff has the highest number of tenanted properties on the market for sale at 3.7% with a demand increase of only 38%.

Buying a property with a tenant in situ also referred to as a sitting tenant, can bring a number of benefits to the BTL investor.

Void free?

Firstly, there will be no void period after the sale when you would normally be advertising for a tenant, this in turn will mean a saving on agency fees.

You inherit a reliable, trustworthy tenant which is extremely valuable to any landlord and you are guaranteed rental income from day one, you will be able to budget with confidence, knowing the rent you will receive until at least the end of the existing tenancy agreement in addition you will have access to the tenants full rental history something you may not get when using a referencing firm with a new tenant.

With a contract in place, tenants need not be affected at all by a change in the ownership of a rental property, ensuring their happiness and willingness to remain in their home is undiminished.

But it isn’t as simple as it sounds, nothing in property ever is.

It is important to remember when buying with a tenant in situ, the tenant will be entitled to continue to live in the property and the change of ownership does not override the tenancy agreement and the tenant’s rights.

You will not be able to evict or increase rents until a fixed term tenancy ends and depending on when the tenant took up occupation, you may find you have a Protected tenancy which brings its own problems

Buying a property with tenants in situ is different to the normal sales process and will need a conveyancer with commercial experience.

Extra care is needed as in addition to the standard enquiries that need to be made in all conveyancing transactions, it is critical to make enquiries about the tenants.

It is important the seller provides all the details relating to the tenant, including the Tenancy Agreement this is key to establish when the tenancy was created, the status of the tenants and how they may be regulated by legislation, as different forms of security apply to different tenancies.

You will also need to ensure the seller has been compliant and how this will impact you as the buyer, checking the original deposit has been registered and after the sale transferring it to your name, you will need to protect it again, and reissue the prescribed information.

Making sure the property meets safety regulations and all the necessary certificates are in place, such as energy performance, gas and electrical.

(if furnished) that the furniture is in an acceptable condition and meets safety standards.

In an industry where there is a notice for just about everything, it is important to familiarise yourself with the notices and their timelines that will need to be served on the tenants once the property is purchased.

Section 3 of the Landlord and Tenant Act 1985

Section 3 places a mandatory duty on a new landlord to tell the tenant that they are in fact the new owner, having taken over from the old one, this is still the case even if the seller has already informed the tenant.

The new owner must give this notice no later than next rent due date or 2 months from the date of sale, it must inform the tenant that they are the new landlord and must provide their name and address (this must be the landlord’s actual address, not just an address for service of documents).

Important caveats

If the new landlord has not served a S3 notice on the tenant then the previous owner remains liable for any breaches of the tenancy agreement, such as disrepair, until the notice is given, in addition  both the old and the new landlord can be held jointly and severally liable for any breach.

More importantly S3(3) states A person who is the new landlord under a tenancy falling within subsection (1) and who fails, without reasonable excuse to give the notice required by that subsection, commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale.

In short this means being prosecuted in the Magistrates court and the scale 4 fine is currently £2,500.

Section 47 of the Landlord and Tenant Act 1987

S47 requires that any written demand for rent by the landlord to the tenant, must include the landlord’s name and residential address and if that address is not in England and Wales, an address within England and Wales is required, so notices can be served. The purpose of the requirement under Section 47 is not to give the tenant information as to where the notices can be served, but to confirm the identity of the landlord. Using a managing agent’s address does not confirm the landlord’s identity, as it is not the landlord’s actual address.

Section 48 of the Landlord and Tenant Act 1987

Section 48 of the Act prevents landlords being able to seek possession of the property on grounds of rent arrears until the tenant has been provided with an address at which notices in proceedings can be served and the tenant will not be liable to pay rent until the landlord complies.

Interestingly S48 does not state that the landlord’s personal address is required for the amounts to become due. So a landlord can seek possession of a property on rent arrears grounds or the arrears themselves if he has provided an address at which notices and proceedings can be served. This address can be the landlord’s own address, that of the landlord’s letting agent, solicitor or friend. The address can also be a business address, preferably a registered office.

Finally, if a tenant has already paid rent on a defective rent demand, he or she may well be able to claw back up to six years’ payments on the basis that they were paid under an invalid demand.

Visit the HSPN website.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Why landlords are seeking out sitting tenants amid the Covid confusion | LandlordZONE.

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COMMERCIAL: Why the big four property giants read the runes wrong

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The big four property landlords came a cropper because they mis-read the way the market would go; this to the benefit of the private equity giants, but to the misery of the shareholders. This however, was not at great cost to themselves, in fact they are well rewarded for their failures.

British Land, Land Securities, Hammerson and the now defunct Intu got it badly wrong but their CEOs didn’t feel the pain. In fact, the rewards for the main players were eyewatering gains when their cumulative earnings have topped £100 million.

This detachment of earnings to company performance of course is not unique to property companies, but their astonishingly poor performance in the face of massive structural change in the industry ,and now Covid, belies their bloated rewards.

It’s easy with hindsight to say that some of these executives were asleep at the wheel, but with that hindsight its easy to see how they missed some pretty obvious trends; the rise and rise of online shopping, and the steady demise of the high street, given a massive boost by Covid, and now a major hit to the office market given the same cause.

Some big bets were made buying up some of the country’s biggest shopping centres, whose values have since been decimated. John Whittaker’s Capital Shopping Centres took over the now in administration Intu, owner of Manchester’s Trafford Centre, while fending off what would, with hindsight, have been a lifesaving £3bn takeover bid from an American property group.

A spending spree by Intu buying up Westfield sites and Midsummer Place in Milton Keynes left the company loaded down with so much debt, when the final straw of Covid hit there was no way it could survive. This despite frantic efforts to pull off a rescue deal, through refinancing and an attempted rights issue.

Wrong horse

Hammerson backed the wrong horse too when it switched from offices to retail, selling lucrative office space at a knock down price to a Canadian investor that promptly made a £1bn profit on the deal. Hammerson then continued to invest in failing retail sites such as the Grand Central in Birmingham. Unsurprisingly perhaps Hammerson’s CEO earned £19m over 10 years while the shareholders have lost around £2.2bn at today’s market price.

Similarly, British Land sold valuable real estate in the city to a private equity group at what turned out to be a steal, and then British Land proceeded to plough the proceeds into retail shopping centres, including Drakes Cross in Plymounth. Not that the CEO suffered with the demise in these centre’s values, he earned £36m while shareholders lost £702m

Land Securities managed to sell off some of it’s smaller regional retail shopping centres, but bought into the Bluewater Kent for £700m at the very top of the market.

These CEOs’ abilities to read the runes and see the signs of massive structural change coming, even before Covid-19, that’s just been an accelerant, has enriched the private equity giants while destroying the value of the companies for their shareholders, but not at the expense of the CEOs.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – COMMERCIAL: Why the big four property giants read the runes wrong | LandlordZONE.

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BREAKING: Landlords, agents and charities unite to demand £230m from Ministers for struggling tenants

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Private sector tenants who are ‘falling through the gaps’ of the current benefits system and building up rent arrears must be given financial help to pay off this debt, six of the private rental sector’s leading landlord, agent, housing and poverty organisations have said today.

The National Association of Residential Landlords, Shelter, ARLA Propertymark, Crisis, Generation Rent and Citizens Advice have released a joint statement to Ministers proposing £270 million of help for renters who have lost out on income or been furloughed as a result of the pandemic.

This highly unusually alliance says the cash should only be used to support tenants who have run up arrears since Covid began in March, and that the money should include grants for those in most financial need and zero-interest loans for those who are able to repay them. It also says that, despite recent government efforts to increase housing benefit rates to cover the bottom third of private rents, for many tenants this is not enough.

Chris Norris (right), Policy Director for the National Residential Landlords Association, says: “Whilst the vast majority of landlords and tenants have been able to reach agreements where rent arrears have built, in some cases this has proved difficult.

“A financial package, such as that we propose today, would greatly assist tenants and landlords to achieve what we all want, namely to sustain tenancies.”

Timothy Douglas, Policy & Campaigns Manager ARLA Propertymark, says: “It is vital that the UK Government introduce emergency measures to support those in rent arrears brought about because of Covid-19 to ensure that tenancies are maintained, and we keep the rent flowing.”

Polly Neate, chief executive of Shelter, adds: “Ever since this pandemic gripped hold of the country, causing chaos for hundreds of thousands of renters, our services have been deluged with calls from worried families and workers plunged unexpectedly into debt.

“When the ban lifts, their ability to clear Covid-arrears will be critical if they are to stay safe in their homes.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Landlords, agents and charities unite to demand £230m from Ministers for struggling tenants | LandlordZONE.

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LATEST: Oxford reveals crackdown on landlords within plans for first selective licensing scheme

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Landlords in Oxford face tough new rules that could force them to have a licence for every privately rented property.

The city council is determined to shake up the sector – which makes up almost half the housing stock – by proposing to renew its existing HMO additional licensing scheme and introduce a new selective licensing scheme to cover all other rented homes – not just HMOs.

Oxford was the first council in England to introduce a citywide scheme that required every HMO to be licensed, back in 2011, and is not afraid to flex its regulatory muscles; last week it won a lengthy planning battle against a landlord letting out his property for short term lets after he appealed to the Planning Inspectorate.

It’s now urging other landlords to apply for proper permission before they let out their homes as short term lets.

Other council proposals include developing a new intelligence-led enforcement model using an algorithm to identify unlicensed properties and taking over powers to fine rogue landlords for not meeting legal minimum energy efficiency standards.

The National Residential Landlords Association believes its current scheme has led to rents increasing, and to those on lower incomes in the city being driven out of it, as the council seeks to rehouse people in Birmingham and elsewhere.

Gavin Dick, local authority policy officer, tells LandlordZONE: “This will be the third incarnation of additional licencing in Oxford. It comes after the council re-introduced the scheme in 2015 as it did not deliver its objectives in the first five years. The NRLA fails to see what the local authority hopes to achieve with the scheme that it has not already done over the past 10 years.”

If approved by the council, a 12-week public consultation on the new licensing schemes will be launched on 10^th September.

Read more about Oxford’s private rental market regulations.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Oxford reveals crackdown on landlords within plans for first selective licensing scheme | LandlordZONE.

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Tenant eviction ban is bad news for All

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In this video below, I share my view on why the Government’s extension of the tenant eviction ban is bad news for both landlords and tenants.

I also share with you the Australian model for tenancy law and why it’s better.

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Government must U-turn again to help landlords

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The Government’s plans to extend the evictions ban could leave private landlords without any rent for up to two years.

In a letter to the Prime Minister, the National Residential Landlords Association (NRLA) has said that the Government is asking landlords to subsidise struggling renters and rewarding those who are wilfully refusing to pay their rent.

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