Good landlords should pay lower Rent Repayment Order awards, says judge

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An Upper Tribunal has ruled that Rent Repayment Orders are to be made on a sliding scale of a landlord’s ‘badness of behaviour’.

It has only awarded 80% of the rent to six former tenants who lived in an unlicensed HMO with two category 1 hazards of fire safety and excessive cold, where one of the bedrooms was too small under the licensing scheme.

The court over-ruled a First Tier Tribunal that had awarded the tenants 100% of rent, minus an amount for utilities costs, after the landlord, Amanda Williams, appealed.

Describing herself as a ‘professional landlord’ with a ‘modest portfolio’ of properties, she applied for a licence in February 2020 on the property in Afghan Road, London, shortly before the tenants left in March 2020, but the application was rejected based on the room size and the lack of remedial works. 

The Upper Tribunal judge ruled: “If a landlord has not previously been convicted of a relevant offence, and if their conduct, though serious, is less serious than many other offences of that type, or if the conduct of the tenant is reprehensible in some way, the amount of the RRO may appropriately be less than the maximum amount for an order.” 

Serious cases

Giles Peaker, partner at Anthony Gold Solicitors, tells LandlordZONE that since 2020 the starting point for payments has been 100% of the rent, but that would now only be for the most serious cases. For those whose landlord has just simply not licenced a property it could mean they might only get much less.

“It will mean more uncertainty for tenants until there’s been a few more appeals and you might see a battle about who has behaved worse – landlords or tenants,” he says.

“There will be a lot of variation in FTT decisions, and doubtless a lot of appeals, by landlords trying to argue that although their behaviour was quite bad, it wasn’t all that bad, and tenants arguing that their landlord’s behaviour should properly be regarded as atrocious.”

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Rent Repayment Orders to be made on a sliding scale of landlords ‘badness of behaviour’ tribunal rules

admin    Uncategorized     agents

An Upper Tribunal has ruled that Rent Repayment Orders are to be made on a sliding scale of a landlord’s ‘badness of behaviour’.

It has only awarded 80% of the rent to six former tenants who lived in an unlicensed HMO with two category 1 hazards of fire safety and excessive cold, where one of the bedrooms was too small under the licensing scheme. The court over-ruled a First Tier Tribunal that had awarded the tenants 100% of rent, minus an amount for utilities costs, after the landlord, Amanda Williams, appealed.

Describing herself as a ‘professional landlord’ with a ‘modest portfolio’ of properties, she applied for a licence in February 2020 on the property in Afghan Road, London, shortly before the tenants left in March 2020, but the application was rejected based on the room size and the lack of remedial works. 

The Upper Tribunal judge ruled: “If a landlord has not previously been convicted of a relevant offence, and if their conduct, though serious, is less serious than many other offences of that type, or if the conduct of the tenant is reprehensible in some way, the amount of the RRO may appropriately be less than the maximum amount for an order.” 

Serious cases

Giles Peaker, partner at Anthony Gold Solicitors, tells LandlordZONE that since 2020 the starting point for payments has been 100% of the rent, but that would now only be for the most serious cases. For those whose landlord has just simply not licenced a property it could mean they might only get much less. “It will mean more uncertainty for tenants until there’s been a few more appeals and you might see a battle about who has behaved worse – landlords or tenants,” he says.

“There will be a lot of variation in FTT decisions, and doubtless a lot of appeals, by landlords trying to argue that although their behaviour was quite bad, it wasn’t all that bad, and tenants arguing that their landlord’s behaviour should properly be regarded as atrocious.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rent Repayment Orders to be made on a sliding scale of landlords ‘badness of behaviour’ tribunal rules | LandlordZONE.

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Research reveals impact on private rental sector due to Brexit and Covid related travel bans

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The number of prospective tenants in the capital has now surpassed the number of properties available to rent, according to the latest Propertymark research.

An average of just 126 properties are currently managed per branch in London, significantly lower than the national average of 196, while there has been a continual increase in the number of London-based prospective tenants, growing from 98 per letting agent branch in June 2020 to 148 during August 2021. 

Supply and demand

This increasing gap between rental stock supply and demand is largely due to the knock-on impact of Brexit and Covid-related travel bans, with about 10% of the population leaving London in 2020. Many short-term letting agreements switched to long term rentals in that time, creating extra stock in London as demand was falling. This has resulted in a drop in rental value by as much as 30%.

Greg Tsuman, lettings director of Martyn Gerrard Estate Agents, says Section 24 changes and extra stamp duty on second homes has meant that landlords are paying more tax than ever before, while the pending changes to energy efficiency rules will also bring further costs to landlords. He adds: “As a direct result we expect rents to climb. To stop this trend, and for landlords to return to the London private rented sector, the UK government needs to review its tax policies for landlords and introduce policies that support investment in the sector.”

The capital’s short-term rental sector is continuing to perform very strongly, according to the latest tracking data from STR and the UK Short Term Accommodation Association. Short term rentals averaged 71.2% occupancy for August – an uplift of 4.2% in July and 36.9% up year-on-year. Short-term rentals are also achieving better rates than hotels and serviced apartments at £138.20, down 6.2% in July but up 12.3% year-on-year.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Research reveals impact on private rental sector due to Brexit and Covid related travel bans | LandlordZONE.

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Sell your Property Portfolio before Christmas – All your properties sold in just 9 days!

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With just 10 weeks to go until Christmas, and the property market at a record high, it’s no wonder landlords are choosing this year as the year to sell their property portfolios, cash in and retire. And they’re bang on the money;

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Landlord seeks to recover all money owed after property scheme agent fails to pay £150,000 in rent

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The Property Redress Scheme has expelled a guaranteed rent operator after it failed to pay an eyewatering £150,000 in rent to a former landlord client.

It has been ordered to pay the landlord £25,000, the maximum it can award, and has now been removed from the scheme, while the landlord plans to try and recover the amount owed through the courts.

Financial loss

The case involved rent to rent arrangements for eight properties, which the agent struggled to fill due to the pandemic. The landlord agreed to reduce rent payments during Covid when some of the properties were empty, but the agent failed to revert to full rent when these temporary arrangements expired and the properties were occupied and sub tenants were paying rent. The agent was also found to have used an unregistered handyman following a gas leak, resulting in the landlord reporting the incident to Gas Safe and the HSE. This all amounted to a significant financial loss for the landlord.

Sean Hooker, head of redress at the Property Redress Scheme, says: “Guaranteed rent, or rent to rent, operators are becoming more and more common in the private rented sector, as it offers a lower barrier to entry into the property market. Whilst there are reputable operators who have been providing the service for many years, there is a significant proportion of the market who are less experienced and need to make sure they fully understand their obligations and responsibilities.”

Tread carefully

The Property Redress Scheme has reported a 43% increase in complaints relating to guaranteed rent since 2018 including loss of rent, damage to property and sitting tenants.

Paul Shamplina, founder of eviction specialist Landlord Action, adds: “If the rent to rent arrangement is not carried out diligently the landlord loses control of what is happening at the property and this is where the problems begin. With many years’ experience of dealing with evictions I would advise any landlords entering into such an agreement to tread very carefully.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlord seeks to recover all money owed after property scheme agent fails to pay £150,000 in rent | LandlordZONE.

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Buy to Let Limited company criteria

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When setting up a Special Purpose Vehicle (SPV) for your Buy to Lets it is important to use the appropriate SIC Code. (A SIC code is a five-digit Standard Industrial Classification code. There are more than 600 individual SIC codes in the UK)

The following codes are normally accepted by lenders: 68100

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£57.8 million allocated to councils to develop brownfield land

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The Department for Levelling Up, Housing and Communities (DLUHC) announced almost £57.8 million from the £75 million Brownfield Land Release Fund (BLRF) has been allocated to 53 councils for new homes to be built on underused and derelict land.

The funding will boost local areas by transforming unloved and disused sites into vibrant communities for people to live and work

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