Rogue letting agent David Walters given £3,000 fine after Trading Standards probe

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Rogue letting agent and property developer David Walters has been reprimanded for illegally running his business after being kicked off the Property Redress Scheme (PRS).

He’s been handed penalty notices worth £3,000 by Oldham Council’s Trading Standards which launched an investigation into 4Property UK Ltd when landlords complained it was not a member of one of the redress schemes.

Earlier this year, LandlordZONE reported a number of shared horror stories about Walters after a county court ordered him to pay more than £20,000 to Amy Trumpeter for pocketing her rent and leaving her house in Oldham with furniture missing and its roof fallen in when he failed to carry out repairs.

Her victim support group contains stories dating back to 2015 but she believes more than 100 landlords have been affected – usually by not being paid rent by Walters.

Poor service

4PropertyUK – which was based at Salmon Fields, Royton, before moving to Lordship Lane, London – was a Property Redress Scheme member from January 2015 until July 2016 but was expelled for issues including poor service, failure to provide receipts/guarantees for work on a property, not passing on rents that had been paid by tenants and failing to maintain a property.

Walters then set up a number of phoenix companies to try and gain membership again, which were quickly spotted and he was kicked out.

Oldham Council served Notices of Intent in July 2020 and April 2021 but he did not respond to either, so final notices were served in September 2020 and June 2021 giving him the option of either paying the penalties or appealing to the First-Tier Tribunal. Walters has still not responded.

Deputy leader, councillor Amanda Chadderton (picture), says: “This case shows the council will act when letting and property management agents fail to register with an approved redress scheme. We will always try to work with agents and help them, but legal action will be taken where they fail to adhere to legal requirements.”

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The Rent Recovery Bill could add to commercial landlords’ woes

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The Commercial Rent (Coronavirus) Bill received its first reading in the House of Commons earlier this month. It covers protected rent, that is those arrears incurred by tenants mandated to close during the lock-down periods of pandemic.

When enacted the Act will prohibit commercial landlords from using any recovery method, including a court judgment, to recover protected rent arrears, other than through negotiation and arbitration.

This restriction will apply in addition to the existing moratorium on forfeiture, commercial rent arrears recovery (CRAR) and winding up petitions, due to come to an end next year on the 25th of March 2022.

Which exactly is protected?

According to information provided by David Asker a director at the High Court Enforcement specialist, The Sheriff’s Office, The new legislation relates to protected rent arrears, the criteria being:

– A business tenancy, as defined by Part II of the Landlord and Tenant Act 1954

– Where the business and/or premises were required to fully or partially close under Coronavirus regulations. It is immaterial if some limited activities were permitted despite the obligation to close

– The arrears related to the “relevant period” which is beginning at or after 2pm on 21st March 2020 and ending at or before 11:55pm on 18th July 2021 (in England) or 6am on 7th August 2021 (in Wales)

– In the Bill, the protected arrears relate to rent, service charges, including repairs, maintenance, management costs and insurance, as well as interest on the unpaid amount.

Which recovery methods are prevented?

The Bill prevents a landlord who is owed a protected rent debt from using the following remedies to recover this debt during the moratorium period (which begins the day the Act is passed and ends either when arbitration has concluded or when the six months arbitration application period has passed):

– Making a debt claim in civil proceedings

– Using the commercial rent arrears recovery power (CRAR) and the protected debt is to be disregarded when calculating the net unpaid rent for CRAR

– Giving notice of enforcement in relation to the protected debt

– Enforcing a right of re-entry or forfeiture

– Using a tenant’s deposit

– If payment had been lawfully taken out of the tenant’s deposit before the moratorium period, and the rent owing is deemed to be protected, the debt will be deemed to be unpaid protected rent and the tenant is not obliged to top up the deposit during the period.

It further means that any debt claims for protected rent arrears, including court judgments or a bankruptcy petition based on a statutory demand, issued between 10th November and when the Act comes into force will be stayed.

Commercial landlords will not be able to issue debt claims for these arrears until either the end of the arbitration application period or the arbitration process.

Arbitration

This is the only option available to the landlord and tenant should direct discussions between the parties break-down and fail to produce an agreement. The arbitration body used must be approved by the Secretary of State.

Either the tenant or the landlord may start the arbitration process, provided they do so within six months of the date when the Act is passed (the application period).

The arbitrator’s guiding principles will focus on landlords being lenient and preserving the viability of the tenant’s business as well as taking into consideration the landlord’s solvency.

Relief from payment can mean one or more of:

– Writing off the whole or part of the debt

– Giving time to pay, including via instalments

– Reducing the interest on all or part of the debt

– Arbitration is, however, not an option should the tenant be subject to:

– A company voluntary arrangement which relates to any protected rent debt that has been approved under section 4 of the Insolvency Act 1986

– An individual voluntary arrangement which relates to any protected rent debt that has been approved under section 258 of that Act

– A compromise or arrangement which relates to any protected rent debt that has been sanctioned under section 899 or 901F of the Companies Act 2006

What if the tenant defaults after arbitration?

If the tenant defaults on the payments required by the award, the arbitration award can be used as the basis for enforcement. The Bill has been drafted with the aim of enabling the landlord to enforce any default under the award by the tenant in the same way as a default on rent under the lease.

It will be for the landlord to decide what method of enforcement to use in respect of the default. However, one option would be to seek the leave of the court to enforce the award in the same manner as a judgment or order of the court (under section 66 of the Arbitration Act 1996).

Finally, the Bill gives the Government powers to extend the timescales under a statutory instrument, should this prove necessary.

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LATEST: House prices 15% higher than before Covid, says Nationwide

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House prices are now almost 15% higher than when the pandemic struck, with only a slight slowing expected into the new year.

Annual house price growth increased slightly to 10% in November, pushing prices up by 0.9% to an average of £252,687, according to Nationwide’s latest House Price Index.

Despite some inevitable cooling off in October following the stamp duty holiday – with the number of housing transactions down almost 30% year-on-year – activity has been extremely buoyant in 2021, says chief economist Robert Gardner (pictured).

The number of housing transactions so far this year is actually tracking close to the number seen at the same stage in 2007, before the global financial crisis struck, he adds.

Buoyant market

Robust labour conditions suggest a fairly buoyant market in the coming months, says Gardner, but the outlook remains uncertain. “While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living. Moreover, inflation is set to rise further, probably towards 5% in the coming quarters.”

Many estate agents and financial experts believe that house prices are likely to continue to rise in 2022 due to demand, but at a slower rate.

Rate rise

With an expected 0.25% rise in interest rates next month, mortgage lenders have already factored a rise into their own pricing, with mortgage interest rates increasing slightly ahead of this. Some report that their re-mortgage business is particularly brisk as homeowners make the most of very low interest rates.

Andrew Simmonds, director at Bristol-based Parker’s Estate Agents, believes that although it won’t scupper the market, a rise in rates will marginally impact sentiment. He adds: “It’s certainly likely to cool the enthusiasm and excitement of many buyers to pay top dollar for their next home, but that might not be a bad thing. If I am being frank, we could do with something that takes a bit of fizz out of the housing market.”

Read the index data in full.

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If I put my houses in my tenants name would I be exempt from onerous retrospective legislation?

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Yes, I know this may be the most ridiculous question. But I ain’t Einstein even though I have 27,000 times more common sense than the Govt and Nottingham City Council.

You only know the answer if someone tells you.

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Annual house price growth back into double digits but outlook still uncertain

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The Nationwide House Price Index for November is indicating that annual growth has recovered back to 10.0% and up 0.9% month-on-month with the average house price now standing at £252,687.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist

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Time to cut and run?

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Like many we were attracted to the idea of property ownership, ‘another way of hedging’ was our MO, we could keep the property for 10 years and then sell make a few bob, pay some tax and all’s well that ends well.

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