EXCLUSIVE: What’s in the next episode of Nightmare Tenants, Slum Landlords

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Eviction expert Paul Shamplina helps a landlord couple confront their evasive letting agent on the latest edition of Evicted! Nightmare Tenants, Slum Landlords.

The Channel 5 programme features landlords Suketu and Minesha Patel who signed a guaranteed rent agreement with an agent to manage their three-bedroom East London property.

But after receiving only one month’s full rent, payments became sporadic, before stopping altogether. They are now owed more than £7,000 and the agent is avoiding them.

“I would call the agent to follow up on where the rent was and suddenly he would transfer a nominal amount, sometimes £300, sometimes £100, but never the full £1,800 owed,” says Suketu.

“He claimed he was paying us from his own pocket as the tenants had not paid rent. However, the agreement we had was supposed to guarantee our rental income regardless of whether or not the property was occupied, or the tenants had fallen into arrears.”

The Patels call in Shamplina for help, who decides to confront the agent in his office (see below) to try and get their property and money back.

The agent claims he’s the victim and the tenants haven’t been paying any rent, but when the Patels meet the tenant, they hear a different story. With rent arrears still escalating, the couple have no alternative but to start the eviction process.

Shamplina says the prospect of guaranteed rent can seem attractive to landlords, saving them the trouble of dealing with voids, rent arrears, and eviction. 

He adds: “However, across each series of the show, I always make sure I expose the problem of guaranteed rent rent-to-rent, and try to educate landlords about this sector of the industry, because significant pitfalls remain for landlords if they choose the wrong company. At present, it is still like the Wild West with far too many landlords being duped.”

Evicted! Nightmare Tenants, Slum Landlords is on Thursday at 10pm.

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Court refuses to alter terms of a commercial lease on renewal

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When terms of a renewal lease cannot be agreed between the parties, according to the provisions of the Landlord and Tenant Act 1954, which governs the statutory requirements of a commercial lease, a court can have oversight and decide.

Section 35 of the Act provides that a Court shall have powers to vary the terms of the current tenancy, taking into account all relevant circumstances.

Poundland, in Poundland Ltd v Toplain Ltd, argued that its lease on renewal should include a clause stipulating that rent should be reduced by half during any “use prevention measure”. This was taken to include government legislation due to subsequent waves of Covid, changes which Poundland said would “modernise” the lease.

The high street discount goods retailer argued that such a provision inserted into the lease would be in both parties’ best interests – it would allow the tenant to continue to trade and meet its ongoing obligations to the landlord, they claimed.

However, the judge in the case did not agree. The decision went against Poundland to the relief of the commercial landlord community. The County Court refused the tenant’s request to include a clause in its business renewal lease which would reduce the rent by half should the government impose further lockdowns.

As authority for its decision in relation to Section 35 of the Landlord and Tenant Act 1954, the court referred to the test case of O’May v City of London Real Property Co Ltd (1983) which established the principle that a court should not sanction a departure from the terms of the current lease “unless the burden of changing the terms of the current tenancy falls on the party proposing the change” and the change proposed is fair and reasonable.

The landlord Toplain Ltd had argued that there was no market precedent for such a change, an inserted clause that would “fundamentally change the relationship between the parties.” It argued that any future lockdown would be controlled by government legislation and that “the proper course for the tenant would be to take advantage of any benefits or grants offered by the Government.”

In his Judgment District Judge Jenkins, presiding at Brentford County Court on 2 July 2021, followed the principles laid down in O’May and refused to sanction the change. The judge said that it would not be fair and reasonable to expect the landlord to share the risk (with the tenant) in circumstances over which the landlord would have no control and where the tenant could avail itself of reliefs or schemes offered by the Government.

District Judge Jenkins said that the case was different from the recent decision in WH Smith Retail Holdings Ltd v Commerz Real Investmentgesellschaft mbH (March 2021) as the parties in the WH Smith case had already previously agreed that a pandemic rent suspension clause should be included in the renewal lease – here the court was simply required to determine the mechanics of how that provision would operate.

The landlord was successfully represented by Ms Cecily Crampin at Falcon Chambers, a barrister regularly instructed by PDT Solicitors.

Lessons to be learned from the case:

The Poundland case is a County Court decision without binding effect on future cases, though it does give a guide as to how judges may apply current guidance to pandemic-related decisions.

PDT Solcitors relayed Ms Crampin’s comments:

“This case shows judicial thinking on the inclusion of Covid-clauses, and how the guidance in O’May may be applied in the specific context of lease terms sought as a result of the Covid-19 lockdowns.”

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Another council brings in huge fines for landlords who ignore electrical safety standards

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Bury Council in Manchester has adopted new measures to fine landlords up to £30,000 if their properties don’t meet the recently-introduced electrical safety standards.

Although the standards came into force in June 2020, they had not been adopted and implemented by the council which has now agreed to introduce the civil penalties after a report to the council’s cabinet said unsafe electrical installations in rented homes ‘will not be tolerated’.

Regulations now apply to all tenancies in England and require landlords to have the electrical installations in their properties inspected and tested by a qualified and competent person, at least every five years, and to give a copy of the electrical safety report to their tenants, and local authority if requested.

Councils can decide the level of penalty for landlords who don’t comply – up to £30,000 – and can spend the proceeds on enforcement purposes.

Civil penalties

It’s not known how many councils have adopted the civil penalties or how many landlords have been fined so far, says the Local Government Association.

Last December, LandlordZONE reported that East Riding Council had signed off civil penalties of up to £30,000 as an alternative to taking landlords to court.

Bury councillor Clare Cummins says: “The additional provision to impose a fine up to £30,000 sends a strong message to any rogue landlord that substandard property conditions and unsafe electrical installations will not be tolerated. We as a council want to send out a clear message that we expect all homes to be safe and of a decent standard within the PRS.”

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