LATEST: Judge gives key ruling on ‘shared property’ rental deposits

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London’s County Court has set a worrying precedent for landlords who operate properties that are rented ‘jointly and severally’ but where, over the years, tenants have been left to sort out their own deposits as tenants come and go.

The judgement by Judge Luba QC concerns landlord Richard Boddy who bought a property in Maida Vale, London (pictured) in 2003 as his home.

He later moved out and rented the three-bedroom flat as a ‘house share’ with the tenants jointly and severally responsible for paying the rent and bills.

This arrangement continued via three ‘churns’ of tenants until Covid struck, whereupon it fell apart after one tenant packed her bags and returned to Australia, requesting that her deposit cover any cleaning charges and unpaid rent.

Damages

At this point the remaining tenants sought damages arising from the non-protection of their deposits, arguing that a new tenancy should have been issued by the landlord at each ‘churn’ and that, therefore, their deposits should have been protected.

At a hearing earlier this year the judge dismissed their claims agreeing with the landlord that they were licencees and not tenants and therefore, because they did not have ASTs, the deposit did not need to be protected.

But the tenants, who still live at the property, took the case to appeal and have now won.

Judge Luba (pictured) agreed with them that each ‘churn’ was in effect a new tenancy and that their deposits should have been updated and protected afresh.

Read the full judgement.

He was also somewhat poetic in his judgement, highlighting how the only evidence of the original tenants was their unclaimed and ‘dog eared’ post festering in the hallway.

Boddy must pay £3,615 which is £1,205 in respect of each of the three churns which produced a new tenancy to which they were in turn either or both parties to.

Luba gave the lightest penalty he could to the Boddy as he felt that the landlord had not purposefully tried to dodge his deposit protection obligations.

The judgement affects other areas of PRS law, in particular evictions; one of the many reasons tenants can avoid eviction is if a deposit has not been properly lodged with an approved scheme, although landlords can return deposits prior to an eviction to avoid this.

Julie Ford of HF Assist (pictured) comments: “This case highlights the importance of both landlords and agents keeping accurate paperwork and taking the time to know who is in their property.

“Compliance is the most important part of renting a property and even the most hands off landlords are not immune to the ever changing minefield of legislation.”

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‘Rock star promoter’ landlord must pay back £11,700 to tenants at unlicenced HMO

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A rock star promoter who was too busy touring with A-list musicians to realise he should have had an HMO licence has been ordered to pay back thousands of pounds to his tenants.

Robert Hallet (pictured, above), who has toured or promoted with The Rolling Stones and Justin Bieber, told a First Tier Property Tribunal he was unaware he needed a licence because he hadn’t been told by managing agent NorthWest6.

The ‘global touring expert’ said he was out on the road with bands for most of the year when he could be responsible for the logistics of a tour involving 120 people.

Hallet explained he was not a professional landlord and had used the same letting agency for the last 15 years. This was the first time it had let the property in Kilburn, North London (pictured) to sharers in this way.

Reported to council

His three tenants, Joseph Landes, Alex Parker and Lauren Rosenberg lived at the HMO in Christchurch Avenue, London, from September 2019 and contacted Brent Council in March 2020 about their landlord’s failure to repair a shower and also reported that the house was unlicensed.

Hallet insisted he had responded to any complaints and concerns about repairs at the property in a timely manner and that he had applied for a licence as soon as he was made aware of this.

But the tribunal ruled that his relationship with the managing agents was ad hoc and that he had assumed the day-to-day management of the property.

Hallet’s absence from the country and lack of experience of property management did not amount to a ‘reasonable excuse’, the Tribunal said. It made a rent repayment order totalling £11,712 with £300 costs.

Pic credits: Google Streetview/Twitter

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Green group urges politicians to support new bill ushering in stricter EPC rules for landlords

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Industry body the Sustainable Energy Association is calling for MPs, Lords and the government to support the Minimum Energy Performance of Buildings Bill when it is introduced in both Houses this week.

The Bill, which would mean all private rented sector homes would need to be EPC band C by 2028, advances the government’s energy efficiency commitments set out in the Energy White Paper and aims to help achieve net zero and lower household fuel bills.

Jade Lewis (pictured), association chief executive, says it hopes the Bill receives the support it deserves.

“It can deliver a lasting impact on the energy efficiency of homes up and down the country whilst addressing key public interest concerns such as unemployment, fuel poverty and climate change,” she says.

“We are proud to have campaigned for this policy certainty over the past few years and I believe that we are closer than ever to the breakthrough we have been working towards.”

Many in the PRS have voiced concerns that the deadline puts too much pressure on landlords, particularly following Covid, and could threaten already strained stock levels. 

Last November, we reported that the Lettings Industry Council had written to the Ministry of Housing, Communities and Local Government, urging a more staggered approach to improving energy standards in the private rented sector than those put forward by the Department for Business, Energy and Industrial Strategy.

Energy Performance Certificates (EPCs) measure the efficiency of a home, rated from A – G; two-thirds of UK homes fall below the average band C.

Read more about the controversy surrounding EPC Band C ratings.

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Exodus from city offices boosts demand for neighbourhood space

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The future for city centre office use remains uncertain until we see how the return-to-work drive pans out, but in all likelihood fewer people will travel into these offices on a daily basis. There could be more working from home, and as companies take space in smaller neighbourhood offices and retail units.

The theory appears to be being borne-out in practice, with the likes of South London property agents Henshall & Partners reporting a 60% surge in demand for suburban leases.

Henshall’s MD, Chris Henshall says their figures show that demand for ‘fringe neighbourhood’ commercial space in London has increased by 60% in the past six months, an office type which fits-into what is likely to be future remote and flexible working very easily.

Small neighbourhood offices allow office workers to avoid public transport, to travel in by car, providing there are parking spaces, greatly reduces travel time, and allows specific teams to meet regularly, maintaining that all-important continuity of work-flow and personal contact – something that’s almost impossible to fully replication on-line.

The move will be a boom to small-scale commercial office landlords, whose office space had largely fallen out of favour, and it’s likely to revitalise some high streets as cafes, restaurants, and supermarkets start to expand out of central London and other major cities.

Henshall reports that already several food and beverage businesses have anticipated the change, acting quickly to relocate as more flexible home workers start visiting local shops.

Over recent months, Henshall & Partners have managed to secure leases on several suitable premises, deals which were typically, until now, in unviable parts of London.

Henshall cites, as an indication of the trend, deals including a German Donor Kebab franchisee on Eltham High Street, letting for 40% more than the previous tenancy, a Turkish grill and lounge bar on Lewisham Road, which has let for £40K per year, and an organic café in Greenwich which let for £30K a year

A retail unit on White Hart Lane Tottenham has sold for £700,000 and is set to open as a supermarket, topping off a string of deals which show the trend is more than just a “flash in the pan”.

Rents in places like Greenwich and Lewisham are markedly cheaper than in the West End or the City – posing something of a threat to some of the mega landlords in the city with high-rise blocks, And also city centre retailers, but Henshall & Partners see this “rebalancing” as a positive for local neighbourhoods, and as an emerging way forward for London businesses without hurting the mega landlords too much.

There are signs that City and West End businesses are now over the worst as workers gradually drift back to their offices, albeit with considerably enhanced Covid precautions and re-structured floor space.

Chris Henshall’s MD says:

“In recent months we have seen an increased demand for commercial property in London’s fringe neighbourhoods, most notably from the food and beverage industry. This uptick in commercial demand highlights flexible working being implemented across the capital. I am however keen to see a more balanced approach from employers as restrictions are eased with time in the office essential for productive business and its importance to younger employees to learn and prosper”.

Henshall & Partners was founded in 2017 by Chris Henshall, who has over ten years of experience in the commercial property industry. Henshall & Partners offer services focused on land, development and investment properties across London and the Southeast.

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BREAKING: Tenant referencing revolution kicks off as Ministers consult on digital identity plans

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A revolution in tenant referencing is around the corner now that the Department of Digital, Culture, Media and Sport has launched its consultation on the much-heralded digital identity programme.

This will see a national framework established that will eventually introduce a system whereby people can prove who they are via their digital identity profile most likely through either a website or a smartphone app.

This would remove many of the barriers landlords and letting agencies face when referencing tenant and, at a stroke, significantly reduce tenant fraud within the housing market.

It would also be used when buying a home, setting up a bank account, proving one’s age in a pub, proving your have a valid driving licence and a myriad other uses.

Moving house

“If someone wants to prove who they are when starting a job, moving house, or transacting online, they ought to have the tools do so quickly and securely in a digital manner, as an option alongside using the physical documents we are most familiar with,” says Matt Warman MP, Minister for Digital Infrastructure a the DCMS (pictured, above).

“Too often, people in the UK have to use a combination of paper documents issued by government, local authorities and the private sector – and a mixture of offline and online routes – when they need to prove something about themselves. And they must repeat the process for each new transaction.”

Warman says the government is committed to realising the benefits of digital identity, without creating the controversial system of ID cards. The consultation on the project, which includes proposals to set up a governing body to administer the digital checking system, and a way for people to seek redress if information is inaccurate, closes on September 13^th.

Read the proposals in full.
Read more about tenant referencing.

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