Agent admits illegally subletting THREE houses but dodges £136k fine

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A sub-letting HMO managing agent has had a whopping £136,000 fine reduced to £31,500 after a judge ruled Epping Forest District Council had come down on him too harshly.

The First Tier Property Tribunal agreed that Darius Endriukaitis was guilty of failure to licence, failure to comply with HMO management regulations and failure to provide information on fire safety measures to tenants.

But it said the council hadn’t taken any personal factors into account and had calculated each penalty in excess of the statutory maximum.

It heard that Endriukaitis worked with fellow Lithuanian Ceslovas Sasnauskas, the sole director of property management company New Property Move.

In September 2019, Endriukaitis signed an assured shorthold tenancy agreement for 7 Hainault Road, Chigwell, that contained a rule against sub-letting.

A month later he started renting rooms out, with rent paid to New Property Move, and up to nine people later lived in the three-bedroom property.

He did the same at 105 Queens Road, where the four-bedroom property was sublet to about nine people and at 17 Palmerston Road, both in Buckhurst Hill, where the six-bedroom house was sublet to a number of people shortly after the tenancy was signed.

‘Not liable’

Although Endriukaitis admitted he rented out all three properties, intending to use them as HMOs, he said that as an employee of New Property Move he could not be liable for the penalties.

The council argued that the arrangement was a joint business venture between Endriukaitis and his friend Sasnauskas.

The tribunal ruled that Endriukaitis could easily have done some research about HMO regulation and should have known that sub-letting the properties without notifying the agent or owner was dubious conduct.

It was satisfied that his involvement with the tenants was on the basis of a joint business enterprise, however, it challenged the council’s penalty of £136,232, and added that it should also have served notice on Sasnauskas personally rather than just the company, which is being dissolved.

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Home Office Right to Rent update

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The way in which Biometric Residence Card (BRC), Biometric Residence Permit (BRP) and Frontier Worker Permit (FWP) holders evidence their right to rent is changing. From 6 April 2022, BRC, BRP and FWP holders will evidence their right to rent using the Home Office online service only

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BREAKING: Welsh landlords must give six months’ eviction notice until 24th March

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The Welsh government has taken the unexpected decision to extend the period during which landlords must give tenants six months’ notice prior to an eviction until 24^th March 2022.

The current period had been due to run out on 31^st December but, with time running out, housing and climate minister Julie James has now moved to use her powers under the country’s Covid legislation to extend the eviction regulations.

She has extended the extended-notice eviction rules on several occasions during the pandemic, and the only good news for landlords is that this is the last time the Welsh government can do this without new Covid legislation being passed.

“The purpose of this alteration is to ensure that, at a time when there remains a serious threat to public health, both as a result of Covid-19 case rates remaining high overall and concern regarding the emergence of the new Omicron variant, landlords will continue to be required to provide an increased notice period to tenants before they can issue proceedings for possession,” James told the Welsh Senedd today.

Another blow

Ben Beadle, Chief Executive of the National Residential Landlords Association, says: “The Welsh Government’s decision today to further extend notice periods will come as yet another blow to landlords in the sector.

“It will cause hardship to landlords suffering at the hands of deliberate rent dodgers, as well as those with tenants causing nuisance to neighbours and house mates through anti-social behaviour.

“The decision to ask landlords to carry the Covid can once again, reinforces the need for the Welsh Government to work harder at distributing the tenancy hardship grant to those in greatest need, so that rent debt can be paid down and tenancies sustained in the interest of both parties.”

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Contractor sentenced after mishandling asbestos…

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One contractor received a criminal record, being handed out a 100 hours community service sentence, with a further ten days Rehabilitation Activity after he employed untrained labourers to work on a building. They inadvertently disturbed asbestos and were seen by a member of the public working dangerously at height and spreading asbestos debris around the site.

Builder, Fahadh Rasheed was sentenced at Southwark Crown Court after he was employed by the council to convert a toilet block in Valentines Park, Ilford, into a community meeting centre. Unfortunately for Rasheed the building contained asbestos and his unskilled and untrained workers disturbed a significant amount of the dangerous asbestos insulation board present in the structure.

A member of the public reported this to the Health & Safety Executive (HSE) after observing the workers on the roof, without scaffolding or any other safety measures, and asbestos fragments visible across the site.

What should have happened was the builder would have carried out a refurbishment and demolition asbestos survey before he began work and when the asbestos was found, before it was disturbed, a licensed asbestos removal company should have removed it.

Furthermore the workers should have been trained to spot the hazards. The building should have been scaffolded and when he engaged the workers the builder should have made sure they had the necessary skills, knowledge and experience, including working at heights and had asbestos awareness training.

After the court hearing HSE inspector David King said:

“This was a case of a contractor completely failing to grasp the importance of planning, managing and monitoring construction work to ensure the health and safety of construction workers.

Companies and their Directors should be aware that HSE will not hesitate to take appropriate enforcement action against those that fall below the required standards.”

Duty to manage asbestos

Builders and contractors have a statutory duty to manage asbestos, included in the Control of Asbestos Regulations 2012. The duty requires them to manage the risk from asbestos by:

– finding out if there is asbestos in the premises (or assessing if asbestos containing materials (ACMs) are liable to be present and making a presumption that materials contain asbestos,

unless there is strong evidence that they do not), its location and what condition it is in;

– making and keeping an up-to-date record of the location and condition of the ACMs or presumed ACMs in the premises;

– assessing the risk from the material;

– preparing a plan that sets out in detail how it is going to be managed as a risk from this material;

– taking the steps needed to put the plan into action;

– reviewing and monitoring the plan and the arrangements made to put it in place; and

– setting up a system for providing information on the location and condition of the material to anyone who is liable to work on or disturb it.

The dutyholder

All non-domestic buildings, whatever the type of business, are affected by the regulations on asbestos. They also include the common areas of domestic buildings, eg HMO’s halls, stairwells, lift shafts, roof spaces, All other domestic properties are not affected by the duty to manage.

Anyone who has information on the whereabouts of asbestos in premises is required to make this available to the dutyholder, but those undertaking work will need to assess its reliability. Those who are not dutyholders, but control access to the premises, have to co-operate with contractors in managing the asbestos.

You are a ‘dutyholder’ if you own the building; you are responsible through a contract or tenancy agreement; you have control of the building but no formal contract or agreement; or in a multi-occupancy building, you are the owner and have taken responsibility for maintenance and repairs for the whole building.

A refurbishment/demolition survey – HSE

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DEAR LANDLORD: Minister publishes letter urging you to help stop Covid surge

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Landlords have been tasked with urging tenants to keep their homes well ventilated this winter to combat the spread of Covid.

Housing Minister Christopher Pincher (pictured) has issued advice to both private and social landlords which they should pass on to tenants, including the importance of letting fresh air into indoor spaces, part of the COVID-19 Response: Autumn and Winter Plan 2021 which was published in the autumn.

It says this will not only help reduce transmission of the virus but will also reduce condensation, damp and mould.

“If you have responsibility as a landlord, whether in the social rented sector or private rental sector, we ask that you help us in our efforts to encourage behaviours to help combat the virus and cascade the message of the importance of good ventilation to your residents,” Pincher says in a letter sent to all landlords.

Rising costs

However, Pincher acknowledges: “We are aware that some residents will be reticent to ventilate their homes in the winter temperatures, especially in the current climate of rising fuel costs.”

For anyone having difficulty heating their homes, it asks landlords to share details about the Simple Energy Advice website and helpline, the Warm Home Discount, Cold Weather Payments and Winter Fuel Payment, and also suggests tenants could talk to their energy supplier.

Window of opportunity

The letter includes key messages for tenants and a toolkit of materials, advising landlords that they need to make sure all rooms have functioning openable windows or functioning extractors.

The government suggests they should consider installing positive pressure or constant run ventilation systems to reduce the likelihood of condensation and to make sure tenants know how to operate ventilation and heating systems to achieve a “healthy and economic balance of heating, ventilation and moisture production within the home”.

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New build standards will require a 30% reduction in CO2 emissions

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New homes and buildings in England will have to produce significantly less CO2 under new rules announced by the government to help the country move towards net-zero.

Under the new regulations, CO2 emissions from new build homes must be around 30% lower than current standards and emissions from other new buildings

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DPS Statutory Declaration to rub salt into the wound?

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Hi guys. I’ve been a landlord for around 15 years, managing my own small portfolio, for the first time I’ve had to go back to DPS to claim a deposit in full (£650). The tenant who left around 4 weeks ago

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Can you afford for your buildings to fall behind on environmental standards?

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The commercial property industry is at a crossroads.

Industry experts are reporting sluggish growth and technology along with Covid-19 is having a huge impact on the way business is being done.

The Covid pandemic is just the latest in a long list of changes impacting on the industry, from the death of the high street, and extreme weather events, to the way tenant’s needs for physical space are changing due to the increased use of technology, and greater environment consciousness.

Extreme weather events have been occurring on an increasingly regular basis and many thousands of commercial buildings are built in floor areas. The Covid-19 pandemic is still an ongoing and serious concern for public health in the spaces where people live, work, and play.

Adapting and transforming

Transforming how buildings are constructed, configured internally and operated is going to be a key theme needed to address these crises. Owners are looking for opportunities to create better buildings, whether that means adapting operational practices or deciding how and where to invest in systems upgrades.

There is a growing commitment to measuring environmental, social, and governance (ESG) impacts. That is transitioning to resilient, low-carbon practices, improving public health, and better support for business, customers and communities in the UK commercial real estate sector.

A new report “A sustainable future for commercial real estate” has just been launched by Deepki, a leading European ESG data intelligence and consulting firm. The report shows that one-third of UK institutional commercial real estate investors and property professionals think that the ESG credentials of property assets will be an important factor in the investment decision-making process. 57% regard this as quite important, just 5% said they were neutral and 5% only said they weren’t important.

Growing importance of ESG

The majority of respondents in the Deepki study think that ESG building credentials will only grow in importance for to investors in UK commercial property over the next 12 months with 81% stating that it will become even more important in three years’ time. It underlines how critical is the commitment to addressing climate change and tackling the necessary steps to adapt buildings both for Covid-19 and to achieve Net Zero within the projected timescales.

Impact of the Covid-19 pandemic on ESG

Covid-19 has only served to accelerate the need for property owners and industry professionals to focus on ESG in commercial real estate. But many see the increased incidence of vacant commercial buildings as an opportunity to address ESG performance in them. It’s an ideal opportunity to do something about it, to carry our refurbishments that will not only address the new requirements needed for Covid, but also the environmental issues as well.

Key responses:

Deepki is a consultancy recently launched in the UK and offers a fully populated ESG data intelligence platform to help commercial real estate investors, owners and managers improve the ESG performance of their real estate assets, and in the process enhance their value.

Katie Whipp, Head of Deepki UK, says:

“Commercial real estate investors need to future-proof their investments, and strong ESG indicators are a key part of this, representing a trend which is set to continue. The Covid pandemic has also changed the focus on ESG in the sector in different ways, from owners having more time to review empty buildings, to a greater demand from tenants for higher standards.”

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Much-publicised case of law student who sued landlord is a ‘warning to sector’

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A first-year law student who sued his landlord for breach of contract after claiming the halls he was due to move into weren’t fit to live in does not set a new precedent, a leading property lawyer has said, but is a wake-up call.

Jack Simm, 19, an undergraduate at the University of East Anglia, labelled the Norwich flat a ‘construction site’ and spent a year fighting the case, referring to statutes and case law that he’d learnt in his studies to build a 10-page legal claim.

He argued that his landlord was in breach of contract as there was no heating or wi-fi, dust everywhere and builders were still working in the accommodation when he moved in, in September 2020.

The undergraduate, from Newcastle, told Mail Online: “We gave the landlord a week to sort everything out and at the end, nothing had been resolved so I moved out and handed my keys in.”

Velocity Student accommodation was developed by the Freedman Project LLP and managed by Estateducation, which is also a landlord. The site is near to the campus developed on the site of a defunct pub.

Newcastle County Court ruled in Simm’s favour and ordered Freedman to pay £859 to cover his deposit and first month’s rent as well as £140 costs.

David Smith (pictured), property solicitor at JMW, tells LandlordZONE that this case is an exception rather than the rule and doesn’t expect it to prompt similar cases.

A lack of money, time or inclination are usually the reasons why tenants don’t sue their landlords, but Smith adds that this should serve as a warning for landlords that they need to fulfil their obligations and make sure a property is ready when a tenant moves in.

He adds: “The university housing service usually deals with cases like these and will come to a monetary agreement. Tenants are within their rights to walk away from a tenancy – but some don’t have that luxury.”

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LATEST: Landlord leader voted ‘boss of the year’ at national awards

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Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA), has been voted Executive Director of the Year at an annual awards bash held online.

The award, which is one of nine gongs handed out yesterday to different trade organisations, is run by the UK Association, a trade body for the nation’s trade associations ranging across every sector of business activity from parking to sugar refining.

Beadle was up against two other candidates, John Newcomb of the Builders Merchant Federation, and Raisa McNab of the Association of Translation Companies.

The NRLA was also up for ‘Association of the Year’ but came second to the Incorporated Society of Musicians. It as also a finalist for the best podcast of the year.

The 16 judges praised Ben, who became the NRLA’s Chief Executive in September 2019, saying: “He clearly demonstrates engaged and active leadership of the NRLA staff and its members. He has made a great impact on the association as a whole”.

Beadle tells LandlordZONE: “I am grateful for the award and for the recognition of the work that the NRLA is doing.

“We have made significant strides since its creation, and it is heartening to see the organisation growing at all levels, giving members the support they need at such a critical time.”

In April last year, just before Covid struck in earnest,  the NRLA was created by two former trade groups – the RLA and the NLA – joining forces.

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