BREAKING: Don’t expect an extension to the electrical safety standards deadline, says ministry

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Landlords have been warned not to expect a grace period or extension to the deadline for properties to confirm to the new electrical safety standards.

Originally, an Electrical Installation Certificate (EIC) was only required for new tenancies starting on or after 1st July 2020, but after 1^st April this year all existing tenancies must also confirm to the new standards. Further inspections must then be carried out every 5 years.

But given the challenges of accessing properties and finding approved electricians to do the work during the pandemic, landlords and letting agents have been calling for an extension to this 1^st April deadline.

But property lawyer David Smith has said this is unlikely to happen.

“I’ve been pressing the housing ministry at various meetings to grant an extension for ages and they’ve fobbed us off at every turn,” he told a webinar hosted by repair reporting platform Fixflo.

“They’ve now turned round and said there is no parliamentary time available to put through an regulations to extend the ‘time to compliance’.”

Smith (pictured) said part of the housing ministry’s position is that, if landlords can’t get access or reasonably get the work done due to Covid that will be a defence under the EIC regulations.

But he says that is not true and only applies if a local authority has served a remediation notice to a landlord.

“The housing ministry has told local authorities they should be reasonable when issuing penalties, but whether that message has got through is another matter,” he says.

“I would urge landlords to do everything they can to meet the deadline.”

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Do I need a separate EICR?

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Hi all, I had a very comprehensive Domestic Electrical Installation Certificate for the work I had completed in August 2019 for me. I had 2 new fuse boards, socket switch plates changed and light fittings changed.

Does this mean that I do not require the Electrical Installation Condition Report (EICR)?

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LATEST: Rental data pinpoints UK-wide tenant ‘space race’ to the burbs

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Growing demand for more indoor and outdoor space has created a ‘halo effect’ in the UK’s largest cities as renters join the ‘space race’ to the suburbs.

Zoopla research reveals that changing patterns in working and commuting, leisure and tourism means rents are falling across key cities including Edinburgh (-1.8%), Greater Manchester (-0.9%) and Greater Birmingham (-0.8%).

While rents in central Birmingham fell by -3.4% in the year to December, in the surrounding boroughs of Bromsgrove, Sandwell and Wolverhampton, they increased by an average of 5%.

Rents in well-connected towns are also seeing strong growth, including Rochdale (+8.2%), Hastings (+8.0%) and Southend (+5.8%), with demand buoyed by renters freed from the daily commute.

This growing space race means houses for rent are letting out 30% faster than a year ago, while the time to let out flats remains largely unchanged, at just 2% faster.

Rising rents

Excluding London, the average UK-wide rent is now £920 per calendar month, with rents up +2.3% annually.

But overall, demand from renters went up by 21% during January, whereas the supply of rental properties fell -11%.

The picture is least rosy in Greater London, where rents have registered the steepest annual fall (-8.3%) since the global financial crisis. Overall demand in London is down 10% year-on-year, according to Zoopla, where new supply rose 30%, mainly driven by more short-lets being turned into long-lets.

Zoopla’s Head of research, Grainne Gilmore, explains that the desire for space is unlikely to diminish any time soon, which will continue to support the family homes rental market.

She adds: “Changing working, commuting and tourism patterns were felt very quickly in the central London rental market. Now we are seeing the impact in other city centres, although on a more modest scale.”

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Landlords will NOT have to allow tenants with pets, leading property lawyer claims

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Leading property lawyer David Smith has re-assured landlords that they will not be forced to take tenants as pets, despite two recent initiatives.

During a webinar hosted by property repairs platform Fixflo, Smith said neither the government’s recommended new pet-friendly model tenancy or MP Andrew Rosindell’s Dogs and Domestic Animals (Accommodation and Protection) Bill would change much.

Smith, who works for London legal firm JMW and is often seen in parliament advising MPs on rental law and policy, says the MP’s pets bill is ‘unlikely’ to see the light of day and that the new model tenancy is not mandatory, despite frequent claims to the contrary.

“The Dogs and Domestic Animals (Accommodation and Protection) Bill is a ten-minute rule bill and won’t go anywhere in parliament – it won’t happen,” he says.

He has a point – although it got through it’s first reading, the bill was supposed to get its second reading on the 29^th January but this has yet to materialise.

“Also, I’ve seen loads of local press articles claiming that landlords have to accept pets now either based on Rosindell’s proposed bill or the recent change to the government’s model tenancy agreement.

“But that is not the case – and neither do I think it will ever be the case.”

He told landlords and letting agents attending the webinar ‘not to worry about having to accept tenants with pets’.

Rosindell (pictured) believes otherwise. He is hosting an online event in partnership with the Society for Companion Animal Studies on 26^th February, which is calling for a ‘pet in every home’ and is therefore supporting his bill, along with Battersea Dogs & Cats Home and campaigning group PAAWS.

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Auction buyer landlords lose out because of misrepresentation in the legal pack

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According to property investment specialists, The Mistoria Group, increasing numbers of investor landlords have been facing expensive legal battles when they try to recover losses from property auction purchases, due to the vendors misrepresenting the legal pack.

Auction houses don’t usually get involved in disputes between vendors and purchasers once contracts are exchanged, citing them as legal matters. So, any misrepresentation of the true facts or non-disclosures in the legal pack leaves buyers having to resort to time consuming and expensive litigation.

With the Coronavirus Act 2020 regulations in place residential landlords must currently give tenants a full six months’ notice of their intention to seek possession of a property. Also, with the added complications of much additional documentary evidence needed for the courts following recent regulations changes, it doesn’t take much to be wrong with the paperwork, or a single missing document, for a possession claim to be stymied.

To enable a new owner to serve the notice correctly, the tenancy information must ALL be correct; the deposit protected with an authorised scheme; the prescribed information served on the tenant(s), and any other ‘relevant person’ (i.e. any person who, in accordance with arrangements made with the tenant, who paid the deposit on behalf of the tenant).

The gas certificate and EPC must have been served prior to the letting, and electrical certificates and any licencing fees paid.

If an investor buys a property with tenants in situ without this evidence, further down the line there could be trouble. If sitting tenants provide evidence that they have paid a deposit prior to moving in and it has not been registered in a government approved scheme, or no gas certificate was served, for example, the new landlord could be forced to pay up to three times the amount of deposit, or there could be a long delay in gaining possession.

Mish Liyanage, Managing Director of The Mistoria Group says:

“Increasingly, we are hearing of investors that have lost significant amounts of money at auctions. After going through the purchase process, investors are finding that the development or conversion plans they have proposed to carry out are no longer possible as there are sitting tenants, with no evidence that the deposits have been protected with an approved scheme.

“We are aware of a situation, where an investor stands to lose £28,000, comprising the 10% deposit, auctioneer fees, conveyancing, legal and planning application costs. The intention was to convert the properties to HMOs, but the legal pack/AST failed to disclose the actual position on the rent and deposit. Essentially the vendor misrepresented the legal pack and is in breach of contract.

“Not surprisingly, the auctioneer or the selling agent did not want to get involved, citing it as a legal matter. Despite the investor following the legal advice and the law of the country, he stands to lose a significant amount of money, as it was impossible for him to complete on the property without resolving the issues on the legal pack and tenancy.

“This case highlights how costly this game can be if things go wrong, due to major issues with pre ownership. We are urging investors to be ultra-careful when purchasing property at auction. While vendors and auctioneers gain, buyers stand to lose hard-earned cash.

“My advice to investors who are considering purchasing property with tenants in situ via an auction is to do your homework on the legal pack especially the AST well in advance. Also seek legal advice from the outset and if there is a dispute after the exchange. Ensure from your side as the buyer, you perform all your contractual obligations so that you are not in breach and also keep a log of all correspondence.”

The answer is to allow yourself plenty of time to investigate and do your due diligence thoroughly, especially if you intend to gain possession after purchase to do refurbishment work etc.

www.mistoriagroup.com

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Changing a CT band – before, during or after?

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Am in the middle of converting a three-story flat (above a shop) into separate three flats – one on each floor.

Am currently paying Council tax (CT) on the whole flat, but clearly, this needs to be amended

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Private landlords on tenterhooks bracing for yet another attack?

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Private landlords are on tenterhooks once more prior to the Budget, bracing ourselves for yet another attack. The rumour is that we are to be slammed with a massive increase in Capital Gains Tax. I have explained why this is so wrong on many levels and made some alternative suggestions in an article I was asked to write for a political website here.

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Preventable death of tenant is proof England needs national landlord register, says Shelter

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Shelter has called on the government to reform the private rented sector after a tenant died in his illegally converted, windowless flat.

Shop worker Philip Sheridan, 32, paid £75 a week for the flat in the cellar of a terraced house in Harehills, Leeds, where landlords hadn’t fitted a smoke alarm.

When a fire broke out in June 2019, Philip managed to escape but was delayed as the only one exit door had no handle.

The coroner concluded that the property was unsuitable for human habitation and that the conversion didn’t have planning consent or building regulation approval.

A council inspection would have resulted in an emergency prohibition order, he reported, because of all the hazards.

Police interviewed the landlords on suspicion of manslaughter by gross negligence, but they were freed without charge.

Shelter says the tragedy highlights existing health and safety laws that are unfit for purpose and allow some landlords to let out dangerously unsafe homes.

National register

Chief executive Polly Neate (pictured) adds: “To prevent future tragedies, we need a national register to hold all landlords properly to account. Councils must have the funds to inspect homes and ensure they are safe.

“Crucially, we must abolish ‘no fault’ evictions, so renters can have the power to challenge poor conditions without the fear of losing their homes.”

Landlords can be fined if they don’t have a working smoke alarm on each storey, but a government survey reveals 11% of privately rented properties have no working alarms.

It is currently proposing to amend the Smoke and Carbon Monoxide Alarm regulations and wants landlords to ensure that each prescribed alarm is in proper working order on the first day of every new tenancy and to repair or replace alarms if they are reported as faulty during the tenancy.

Read our latest stories about smoke and C02 alarms.

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LATEST: Councils call for evictions ban to be extended ‘until the summer’

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Councils around England are joining calls for the government to impose yet another extension to the evictions ban.

Greater Manchester, the Isle of Wight, Brighton & Hove and Oxford are among those warning of a potential wave of homelessness; under current rules, bailiffs can enforce section 21 notices again on 22nd February while evictions are expected to take place from 8th March.

Greater Manchester leaders want the government to ban evictions until the summer and to provide direct financial support for tenants and landlords.

They point to an estimated 16,800 households in the city-region already affected by Covid-related arrears and mayor Andy Burnham (main pic) says the homelessness system can’t take much more.

He adds: “A sudden surge in evictions will create a huge amount of pressure and I urge government to reimpose the eviction ban to protect people who are in these circumstances through no fault of their own.”

Seaside support

Brighton & Hove Council also believes new grants for Covid-related debt will help the city’s struggling residents.

It’s urging the government to remove an exemption allowing landlords to evict tenants who had fallen behind with their rent over the past six months.

Councillor Gill Williams (pictured) says if the ban ends in two weeks’ time, the homeless prevention team will be overwhelmed.

Adds Williams: “Brighton and Hove Citizens Advice Bureau reports that the ending of private rental sector tenancies is the leading cause of homelessness in this sector and rent arrears have become one of the highest debt issues.”

Oxford Council saw a 55% fall in the number of homeless households it needed to help from April to September 2020, largely thanks to the eviction ban, says Mike Rowley, cabinet member for affordable housing and housing the homeless.

He adds: “The eviction ban has helped prevent homelessness throughout the pandemic, and it needs to be extended again – and not just until lockdown ends.”

Read more about evictions ban extension calls.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Councils call for evictions ban to be extended ‘until the summer’ | LandlordZONE.

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Councils criticised for dabbling in investment property speculation

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Councils’ priority needs to fund local services in times of austerity after the great recession, in the case of some councils, prompted them to over-ride the inherent risks involved in taking out 100% taxpayer funded loans in order to generate income from commercial rents.

That money came from a section of the government’s Debt Management Office known as the Public Works Loan Board, originally set-up in 1793 to fund councils when building local amenities such as parks, leisure centres, and roads.

What the investing councils could not perhaps have foreseen when they became landlords was the double whammy of a rent drought brought on by a year of Covid, added to an already declining retail sector.

Online shopping and lock-downs have devastated many retail businesses with two of the latest high profile examples, both leading high street brands, Debenhams and Arcadia, folding completely. They are now selling off their brand names, but not their retail shop leases, to online retailers Bohoo and Asos.

With an avalanche of CVAs, liquidations and shop closures, many of the councils that went down the road of borrowing taxpayer’s money at ultra-low interest rates, expecting handsome returns by arbitraging their loan payments against the usually lucrative commercial rental income, on long-term leases, have been bitterly disappointed.

When their premises become vacant, not only does the council lose the rental income, they lose the business rate income as well, and they are then obliged to insure the empty premises at premium rates because of the increased empty property risk. They may also need to provide security measures, which all comes at considerable cost to local ratepayers and an inevitable reduction in local service provision.

The government’s public accounts committee has estimated that between 2016 and last summer around 179 councils invested over £7.5 billion into commercial property, a figure which the committee has warned that in some cases is exposed to “extreme levels of risk”.

The Treasury has recently moved to rein-in what it sees as some councils’ irresponsible borrowing, using taxpayers money on what may turn out to be failed projects. Initially, the government had no direct control over the way the Public Works Loan Board, as an independent committee, handed out loans, but this has now changed.

The government can now intervene directly to stop lending on speculative property deals whereas before the board was run by an independent board of commissioners. An inquiry started in 2016, when a consultation was launched, running until last February, has resulted in the board being abolished and its powers handed to the Treasury.

So, what may have been seen by some council leaders as a “no-brainer”, as the property gurus might term it, becoming commercial landlords with debt funded 100 per cent by taxpayers is turning out to be a nightmare scenario for some local authorities.

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