Legal case: a question of leaseholders’ rights to manage the full estate

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The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders to acquire the freehold landlord’s management functions by transfer to a company set up by them – the Right To Manage (RTM) company.

The thinking behind the right was to empower leaseholders. The leaseholders generally hold the majority of value in the property. When they are dissatisfied with the way things are bing managed they have the option of collectively taking the responsibility for the management of their own block.

This can be a double edged sword as when leasehold owners take responsibility for managing their own block it can and often does involve a considerable amount of work, time commitment, and it can create difficulties with relationships. The management committee is composed of fellow residents instead of an independent managing agent, so friction between residents can be the result.

Setting-up a right to manage scheme:

The Right to Manage (RTM) scheme lets some leasehold property owners take over management of the building – even without the agreement of the landlord. This means they’ll be responsible for things such as:

• collecting and managing the service charge
• upkeep of communal areas (such as communal hallways and stairs)
• upkeep of the structure of the building (such as the roof)
• dealing with complaints about the building from other leaseholders
• Qualifying leaseholders can use the Right to Manage for any reason – they don’t have to prove the building has been badly managed.

Right to Manage companies

To use the right to manage, leaseholders must set up an RTM company and follow certain procedures. The RTM company can manage the building directly, or pay a managing agent to do it.

All leaseholders have the right to be a member of the RTM company and to vote on decisions. A landlord flat owner for example will get at least 1 vote, and extra votes depending how many flats they own.

Setting-up rules for right to manage:

The building must meet certain conditions and a minimum number of leaseholders are required to take part:

• at least two-thirds of the flats must be let to ‘qualifying tenants’*;
• it can be part-commercial but the non-residential part must not exceed 25% of the total floor area, excluding common parts
• RTM does not apply where the immediate landlord of any qualifying tenant is a local housing authority.
• RTM does not apply where the premises fall within the Resident Landlord Exemption. To fulfil this exemption would require the following:
  • The premises must be other than a purpose-built block (for example a converted house); AND
  • They must comprise not more than four flats; AND
  • One of the flats must be occupied by the freeholder or an adult member of their family as their only or principal home for the last twelve months.

*A ‘qualifying tenant’ is a leaseholder whose lease was originally granted for an original term of more than 21 years. There is no requirement for any past or present residence in the flats, nor any limit on the number of flats which can be owned by one person.

The case – FirstPort Property Services Ltd v Settlers Court RTM Company Ltd

In the case of FirstPort a company incorporated by the leaseholders acquired the right to manage in a block of flats. The question in dispute was, do the leaseholders also enjoy rights over the estate in which the block is situated? Does the company only acquire the right to manage the block itself, or does it also acquire the right to manage the rest of the estate?

The Appellant (“FirstPort”) is a company that manages an estate in East London containing ten blocks of flats. The Second to Fourteenth Respondents are all leaseholders of flats in one of the blocks, “Settlers Court”, with rights to access the estate’s communal areas.

FirstPort provides services on the estate which includes maintaining communal areas, services for which it is entitled to levy a service charge. The First Respondent is the RTM company established by the Settlers Court leaseholders had acquired the right to manage the block and also took on the responsibility of providing services in relation to the block itself.

A dispute arose between the parties as to whether the leaseholders still had an obligation to pay the estate service charge to FirstPort. The Respondents initially took the dispute to the First-Tier Tribunal with the result that the Tribunal decided that as the RTM had acquired the right to manage the estate, then the leaseholders had no obligation to pay the estate service charge.

FirstPort Property Services Ltd (the appellant here) appealed to the Upper Tribunal but the appeal was dismissed, the UT issuing what is know as a “leapfrog” certificate enabling it to apply for permission to appeal to the Supreme Court.

Judge Siobhan McGrath sitting in the Upper Tribunal stated that:

“…The challenges of creating a regime which gives lessees the right to manage the block of flats in which they live but which also seeks to give them rights of management in respect of the estate where the block of flats is located should not be underestimated.”

The Supreme Court case

The Supreme Court had to consider the intended purpose of the RTM regime. The outcome would have significant consequences for all those who have an interest in multi-block estates, in particular managing agents.

The Law Commission had considered the difficulties with the RTM schemes and set out several reform proposals in a July 2020 report. One proposal was that RTM companies should not automatically acquire management functions relating to “non-exclusive estate property.”

The Supreme Court judgment:

I consider that the right to manage scheme in Chapter 1 of Part 2 of the 2002 Act makes no provision within the statutory right to manage for management by the RTM company of shared estate facilities.

In FirstPort Property Services Ltd (Appellant) v Settlers Court RTM Company Ltd and others (Respondents) before Lord Briggs, Lord Sales, Lord Leggatt, Lord Burrows Lady Rose on 12 January 2022, their conclusion was as follows

“I consider that the right to manage scheme in Chapter 1 of Part 2 of the 2002 Act makes no provision within the statutory right to manage for management by the RTM company of shared estate facilities.

“It is concerned only with management of the relevant premises, that is the relevant building or part of a building, together with appurtenant property (if any) which means nearby physical property over which the occupants of the relevant building (or part) have exclusive rights.

“The right to manage is an exclusive right in the RTM company to manage the relevant premises, and no provision is made in Chapter 1 for any shared management of anything, save only where the RTM company chooses to agree otherwise.

“In my view the Gala Unity case* was wrongly decided and should be overruled. In so saying I bear in mind that it has stood as binding authority for several years, and that estate facilities in many estates may at present be being managed under sharing agreements made by RTM companies and others on the assumption that the law was as set out in that case. That is not, however, a sufficient reason to perpetuate an interpretation which is not merely causing practical difficulties but, more fundamentally, is contrary to the purpose of the statute.

I would therefore allow this appeal.

*In Gala Unity the relevant estate consisted of two blocks of flats and two detached coach houses. Each coach house contained a single first floor flat, above parking spaces. There was also further adjacent land including residents’ parking, footpaths, roads, visitor parking and grassed areas, used by the occupants of both blocks and the coach house flats in common.

The respondent RTM company in the case had given separate claim notices to manage each of the two blocks, but not the coach houses. It claimed to be entitled to manage all the parts of the estate in common use (including the parking areas under the coach houses).

Here the RTM company succeeded at all levels, LVT, the Upper Tribunal (Lands Chamber) and Court of Appeal. The objection came not from the tenants of the coach house flats They were perfectly content with the scheme for management of the whole estate by a common RTM company. It came from the freeholder.

The result of this case will come with some relief to managing agents.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Legal case: a question of leaseholders’ rights to manage the full estate | LandlordZONE.

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Legal case: a question of leaseholders’ right to manage the full estate

admin    Uncategorized     agents

The Commonhold and Leasehold Reform Act 2002 provides a right for leaseholders to acquire the freehold landlord’s management functions by transfer to a company set up by them – the Right To Manage (RTM) company.

The thinking behind the right was to empower leaseholders. The leaseholders generally hold the majority of value in the property. When they are dissatisfied with the way things are bing managed they have the option of collectively taking the responsibility for the management of their own block.

This can be a double edged sword as when leasehold owners take responsibility for managing their own block it can and often does involve a considerable amount of work, time commitment, and it can create difficulties with relationships. The management committee is composed of fellow residents instead of an independent managing agent, so friction between residents can be the result.

Setting-up a right to manage scheme:

The Right to Manage (RTM) scheme lets some leasehold property owners take over management of the building – even without the agreement of the landlord. This means they’ll be responsible for things such as:

• collecting and managing the service charge
• upkeep of communal areas (such as communal hallways and stairs)
• upkeep of the structure of the building (such as the roof)
• dealing with complaints about the building from other leaseholders
• Qualifying leaseholders can use the Right to Manage for any reason – they don’t have to prove the building has been badly managed.

Right to Manage companies

To use the right to manage, leaseholders must set up an RTM company and follow certain procedures. The RTM company can manage the building directly, or pay a managing agent to do it.

All leaseholders have the right to be a member of the RTM company and to vote on decisions. A landlord flat owner for example will get at least 1 vote, and extra votes depending how many flats they own.

Setting-up rules for right to manage:

The building must meet certain conditions and a minimum number of leaseholders are required to take part:

• at least two-thirds of the flats must be let to ‘qualifying tenants’*;
• it can be part-commercial but the non-residential part must not exceed 25% of the total floor area, excluding common parts
• RTM does not apply where the immediate landlord of any qualifying tenant is a local housing authority.
• RTM does not apply where the premises fall within the Resident Landlord Exemption. To fulfil this exemption would require the following:
  • The premises must be other than a purpose-built block (for example a converted house); AND
  • They must comprise not more than four flats; AND
  • One of the flats must be occupied by the freeholder or an adult member of their family as their only or principal home for the last twelve months.

*A ‘qualifying tenant’ is a leaseholder whose lease was originally granted for an original term of more than 21 years. There is no requirement for any past or present residence in the flats, nor any limit on the number of flats which can be owned by one person.

The case – FirstPort Property Services Ltd v Settlers Court RTM Company Ltd

In the case of FirstPort a company incorporated by the leaseholders acquired the right to manage in a block of flats. The question in dispute was, do the leaseholders also enjoy rights over the estate in which the block is situated? Does the company only acquire the right to manage the block itself, or does it also acquire the right to manage the rest of the estate?

The Appellant (“FirstPort”) is a company that manages an estate in East London containing ten blocks of flats. The Second to Fourteenth Respondents are all leaseholders of flats in one of the blocks, “Settlers Court”, with rights to access the estate’s communal areas.

FirstPort provides services on the estate which includes maintaining communal areas, services for which it is entitled to levy a service charge. The First Respondent is the RTM company established by the Settlers Court leaseholders had acquired the right to manage the block and also took on the responsibility of providing services in relation to the block itself.

A dispute arose between the parties as to whether the leaseholders still had an obligation to pay the estate service charge to FirstPort. The Respondents initially took the dispute to the First-Tier Tribunal with the result that the Tribunal decided that as the RTM had acquired the right to manage the estate, then the leaseholders had no obligation to pay the estate service charge.

FirstPort Property Services Ltd (the appellant here) appealed to the Upper Tribunal but the appeal was dismissed, the UT issuing what is know as a “leapfrog” certificate enabling it to apply for permission to appeal to the Supreme Court.

Judge Siobhan McGrath sitting in the Upper Tribunal stated that:

“…The challenges of creating a regime which gives lessees the right to manage the block of flats in which they live but which also seeks to give them rights of management in respect of the estate where the block of flats is located should not be underestimated.”

The Supreme Court case

The Supreme Court had to consider the intended purpose of the RTM regime. The outcome would have significant consequences for all those who have an interest in multi-block estates, in particular managing agents.

The Law Commission had considered the difficulties with the RTM schemes and set out several reform proposals in a July 2020 report. One proposal was that RTM companies should not automatically acquire management functions relating to “non-exclusive estate property.”

The Supreme Court judgment:

I consider that the right to manage scheme in Chapter 1 of Part 2 of the 2002 Act makes no provision within the statutory right to manage for management by the RTM company of shared estate facilities.

In FirstPort Property Services Ltd (Appellant) v Settlers Court RTM Company Ltd and others (Respondents) before Lord Briggs, Lord Sales, Lord Leggatt, Lord Burrows Lady Rose on 12 January 2022, their conclusion was as follows

“I consider that the right to manage scheme in Chapter 1 of Part 2 of the 2002 Act makes no provision within the statutory right to manage for management by the RTM company of shared estate facilities.

“It is concerned only with management of the relevant premises, that is the relevant building or part of a building, together with appurtenant property (if any) which means nearby physical property over which the occupants of the relevant building (or part) have exclusive rights.

“The right to manage is an exclusive right in the RTM company to manage the relevant premises, and no provision is made in Chapter 1 for any shared management of anything, save only where the RTM company chooses to agree otherwise.

“In my view the Gala Unity case* was wrongly decided and should be overruled. In so saying I bear in mind that it has stood as binding authority for several years, and that estate facilities in many estates may at present be being managed under sharing agreements made by RTM companies and others on the assumption that the law was as set out in that case. That is not, however, a sufficient reason to perpetuate an interpretation which is not merely causing practical difficulties but, more fundamentally, is contrary to the purpose of the statute.

I would therefore allow this appeal.

*In Gala Unity the relevant estate consisted of two blocks of flats and two detached coach houses. Each coach house contained a single first floor flat, above parking spaces. There was also further adjacent land including residents’ parking, footpaths, roads, visitor parking and grassed areas, used by the occupants of both blocks and the coach house flats in common.

The respondent RTM company in the case had given separate claim notices to manage each of the two blocks, but not the coach houses. It claimed to be entitled to manage all the parts of the estate in common use (including the parking areas under the coach houses).

Here the RTM company succeeded at all levels, LVT, the Upper Tribunal (Lands Chamber) and Court of Appeal. The objection came not from the tenants of the coach house flats They were perfectly content with the scheme for management of the whole estate by a common RTM company. It came from the freeholder.

The result of this case will come with some relief to managing agents.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Legal case: a question of leaseholders’ right to manage the full estate | LandlordZONE.

View Full Article: Legal case: a question of leaseholders’ right to manage the full estate

Trends: what’s the appeal of serviced apartments?

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Wondering whether this kind of property is worth investment in? We offer up some answers.

You may have heard through the grapevine that serviced apartments are rising in popularity among investors.

This is because, increasingly, serviced apartments are winning the battle for bookings against hotels even when they are the same price, largely because they appeal to the public on many levels.

A cosy feel, a ‘home away from home’ for the family, a place to hang their hat in solitude if they wish – unlike a busy hotel.

That’s all well and good, but what are the benefits for you, as the property supplier? Let’s take a look.

The promise of regulars

When you invest in a long-term property, you feel secure knowing your tenants will be around for a long time. Long-term being the key word of course. Serviced apartments offer a similar benefit.

Short-term tenants who frequent a specific locale are far more likely to return to a property, rather than finding a new one every time.

Businesspeople who frequently stay away from home are a prime example. Humans crave familiarity. That homely feel. That cosy value and comfort of familiarity really draws people in. Not only this, but it will also encourage them to return again.

You may end up with a family, or group of families, that return to your property every year. Perhaps someone who travels out of London often for work will frequent your serviced apartment several times a year, even. That recurring income is a great boon.

It’s also easier to form beneficial relationships with short-term tenants. Therefore, it’s easier for them to feel comfortable returning to your property. Regular holidaymakers are also more prone to tipping and / or paying in advance. People on their holidays are happier for one! But knowing you and your property personally will further encourage their generosity. Not necessarily a basis for investing alone, but a positive bonus all the same.

Less risk of damage

Despite a serviced apartment’s homely feel, it isn’t a home. It’s a temporary stay. This encourages people to feel at home, but not necessarily treat your property as their home.

Serviced apartment providers find that their tenants are ordinarily very clean and respectful. Partly because of the ‘happy holidaymakers’ note from earlier.

Also, because many serviced apartment tenants tend to be business professionals, if not on holiday.

Not only this, in a long-term property, the Landlord may not visit often at all. Perhaps once or twice a year at the least. Long-term tenants may see this as an opportunity to take liberties with property upkeep.

Serviced apartment tenants are different. They know that serviced apartment providers cycle tenants through often.

Any issues or damage is monitored and noticed quickly, to make the property as pristine as possible for the next tenant. This awareness urges them to maintain it themselves, in a similar fashion.

Chance for better selling value

If it ever comes to a point where you want to re-sell your serviced apartment, you could fetch a high price for it down the line. We mentioned earlier that serviced apartment tenants are generally tidier and more reliable. This adds up in the long run. As well as being a more immediate benefit.

Years down the line, your property has been well-maintained. By you and your tenants alike. The short duration of their stays (in comparison of usual buy to let tenant stay durations) means that you would be more active in managing the property. This phenomenal upkeep will only boost property value.

It’s also worth updating your serviced apartment. Additions such as hot tubs and gyms really ramp up the renting value.

Tenants who want to stay at your serviced apartment for a few months will appreciate these additions most, as they benefit from them for the longest. They will also pay more for them.

With serviced apartments, location is key. You’ll need to scope out the best location for your property thoroughly before buying.

Nobody wants to holiday in a zone that’s void of activity or natural beauty for example. These factors also boost property value. Therefore, they boost your chance for profit when selling later on.

Worried about missing out on long-term property opportunities?

Some landlords may worry that by focusing on short-lets and serviced apartments, you will miss out on long-term opportunities. The property market is ever shifting, after all. This doesn’t have to be the case though. As serviced apartments rise in popularity, more platforms are accommodating them. Clooper is one such platform.

Clooper is a marketplace of holiday lets, short term rentals, serviced apartments and long-term rentals alike. You can onboard all of your properties in one clear, easy to navigate place.

Clooper also places you in the driver’s seat: you control every aspect of your listing. Pricing, availability, and personal descriptions are all up to you. Clooper simply acts as a guiding hand.

What makes Clooper different?

There are a variety of platforms to join, but Clooper stands out for numerous reasons. Clooper has over 100 years of combined experience in real estate and digital transformation of traditional industries.

On their platform, you’re assured you’re getting top quality assistance from reliable people who have been where you are now. They empathise, understand, and are more than knowledgeable about how to assist.

Additionally, you’re not joining an empty platform. You’re aligning with a network already strong of hundreds of properties, and a happy client base of landlords and property suppliers.

This network benefits from Cloopers quality advertising, machine learning, algorithms and artificial intelligence. All this to match your properties to guests faster.

Clooper’s dedicated marketing team will also assist personally. They market your property to tenants and are always ready to step in to assist you, whatever you may need.

Each provider will even be assigned a dedicated account manager: one that will help monitor and manage their listings from start to finish. So what are you waiting for? Sign up with Clooper for free today and make the most of the serviced apartment popularity boom.

This article does not constitute investment advice and you are urged to speak to your financial advisors before making any investments.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Trends: what’s the appeal of serviced apartments? | LandlordZONE.

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BREAKING: Landlord wins key Court of Appeal eviction and deposits case

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Appeal Court judges have found in favour of the landlord in the landmark case of Northwood Solihull v Fearn & Ors, preventing a potentially huge logistical headache for landlords and letting agents.

The judges ruled that any authorised employee of a landlord or letting agent can sign a section 8 notice (and by extension a section 21 notice) or a tenancy deposit certificate, and that these documents can also be signed in accordance with section 44 of the Companies Act.

They also said that non-compliance would not necessarily invalidate the document.

Back story

The important case surfaced when the Solihull branch of letting and estate agency Northwood tried to evict a couple who had stopped paying their rent in 2019, and served a Section 8 eviction notice.

Tenants Mr Fearn and Ms Cooke argued during an initial County Court hearing that under section 44 of the Companies Act 2006 their eviction notice had not been signed by two authorised signatories or by a company director in the presence of a witness, and that the section 44 requirements also applied to the confirmatory certificate for their original deposit.

High Court judges then ruled that this law did not apply to eviction notices, but they did uphold the couple’s claim that it applied to a confirmatory certificate for a rental deposit.

There were concerns that had the tenants won the appeal, it could have prompted a raft of claims against agents.

Troubling

Property lawyer David Smith of JMW, who acted for the landlord, says: “The tenant’s proposed position, if right, would have been very troubling to landlords and agents as it would mean that every possession notice and certificate would have to be signed by at least one director and a witness.

“Inevitably, this would cause huge practical and logistical challenges to companies who operate multiple office locations, and the issues are even more obvious when one thinks of bigger agents and landlords with national operations who need to authenticate hundreds of these documents every day.”

But following the appeal hearing last week, the tenants have lost on both elements.

Smith (pictured) adds: “The court found that the certificate could be signed by a person acting on behalf of the landlord.

“The section 8 notice was also capable of being served and signed by an agent on behalf of the landlord. This case continues the clear line from the Court of Appeal that technical defences to section 8 and 21 notices are not likely to work.”

Reactions

Paul Shamplina of Landlord Action says: “We have been advising clients to ensure Notices are signed in accordance with the Companies Act provisions but following this welcome judgment we now have authority that a belt and braces approach is no longer necessary.

“So it’s good that clarity has finally been delivered by the courts and well done to David Smith and his team.”

Tim Frome, Legal Associate Director at Hamilton Fraser, parent company of Mydeposits, says: “This decision will come as a relief to millions of landlords and their letting agents and I am pleased that the Lord Justices have taken a common-sense approach to the signing of deposit protection prescribed information and possession notices.

“Having written the mydeposits scheme rules back in 2006 and studied the legislation in great detail it was never the intention of parliament for the deposit protection legislation to create technical reasons to penalise landlords.

“It is a practical impossibility for larger corporate landlords or agents to comply with Companies Act signing requirements on prescribed information.

“Having an authorised person doing it on their behalf means that deposit protection can be administered simply and quickly meaning that tenants can then benefit from the knowledge their deposit is protected and using the scheme’s alternative dispute resolution service if required at the end of the tenancy.

“Mydeposits has now dealt with over 100,000 tenancy deposit disputes since being set up meaning tenants get their money back when they are entitled to it and keeping those disputes out of the courts.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Landlord wins key Court of Appeal eviction and deposits case | LandlordZONE.

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OFFICIAL: How unpopular and damaging landlord tax changes have become

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Losing mortgage interest tax relief has prompted one in three landlords to think about selling up and one in four have raised rents.

New research from The Landlord Works for Nationwide reveals that 37% of landlords have considered selling rental properties as a result of the tax changes.

If found 77% feel the changes unfairly punish them, with the same percentage saying there should be more support for landlords especially post-pandemic.

More than a quarter (26%) of landlords with more than 20 properties have reduced their portfolios to reduce the tax impact, compared to 13% of those with between two and five properties. 

Less generous

Landlords could previously deduct mortgage interest costs from their rental income to help reduce their tax bills. However, this ended in 2020 and landlords now receive a tax credit, based on 20% of their mortgage interest payments, which is less generous for higher-rate taxpayers, who previously received 40% tax relief on mortgage payments.

The changes may also be forcing up costs for tenants, according to the research, with 25% of landlords having raised rents to cover the increased tax burden, jumping to 58% for those with 20 or more properties on their books.

Half of landlords are also struggling to keep up with the pace of regulation, while 38% find the new tax rules difficult and overly complex to understand.

Nationwide recently launched The Landlord Works, a free-to-use platform that helps landlords manage their properties in one place and navigates them through rules and regulations.

The Landlord Works director, Paul Wootton, says: “In recent years there have been numerous changes for landlords to get their heads around. Now with the loss of the mortgage interest tax-relief many are questioning whether to leave the sector all together by selling some or even all of their properties in order to help reduce their tax burden.”

Read more about mortgage interest relief.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – OFFICIAL: How unpopular and damaging landlord tax changes have become | LandlordZONE.

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Profit Margins and expenses – there’s easier ways to earn a crust?

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When looking for a comparison of typical Private Rental Costs v Income I struggled. The Tax return asks for number of properties [SA105 box 1], Income from rent & property [box 20],

They ask for Expenses-
rent

View Full Article: Profit Margins and expenses – there’s easier ways to earn a crust?

OPINION: Cardiff campaign to stop HMO is latest example of NIMBY attitudes

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Late last year I wrote a LandlordZONE piece that highlighted how the fast-expanding HMO sector, often restricted by local planning and licensing requirements, is being pushed into areas where – traditionally – they were rare.

This, I pointed out, has led to the growing phenomenon of HMO NYMBY-ism, which can prompt groups of residents to lobby local councils to reject HMO planning applications and/or bring in licensing schemes.

And a particularly misguided example of this can be found within the Cardiff suburb of Grangetown.

An application by local John Penketh – who is a professional landlord and Airbnb host – to run his own home (pictured) as an HMO briefly turned into an ugly local battle, with the landlord revealing he felt ‘utterly heartbroken’ and that campaigners ‘didn’t understand his plans’.

Although the campaigners involved were ultimately unsuccessful, when Cardiff Council’s planning committee met last week familiar arguments to reject were rolled out within a petition signed by 50 local people.

These were that the HMO would bring rats, rubbish, parking problems and ‘chaos’ to the area and, it was suggested, ruin the area’s neighbourhood feel, stability and cohesion.

Planners rejected these arguments, including supplementary ones that locals had not been consulted (which there is no statutory need to do) and pointed out that Penketh’s proposed HMO was the only one in the vicinity. The committee’s report notes that some areas of Cardiff do have high concentrations, but not Grangetown.

Friends house

The campaigners’ views came despite Penketh claiming he just wanted to live with his friends – a lawyer, midwife and lecturer – in the four-bedroom house and, due to local planning requirements, had to apply for approval.

“When we asked friends if they would like to move in with us, in a home we had made for ourselves in Grangetown, the last thing we expected was that it would become a council matter. We still believed that who we chose to live with was a real non-issue,” he told the South Wales Argus.

It later transpired that some of those who signed the petition apologised to Penketh after his reasons for applying to operate an HMO became clear.

The wider point is that because HMOs have a terrible but largely undeserved reputation, the gut reaction of many people is oppose them at all costs, viewing them as someone else’s problem.

What is very seldom debated is what people on low incomes who cannot afford or who are rejected by the PRS are supposed to do as campaigners seek to prevent more HMO properties being granted planning permission or licences. It’s something we’ve all got to think about.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – OPINION: Cardiff campaign to stop HMO is latest example of NIMBY attitudes | LandlordZONE.

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Council tax exemption on dilapidated purchase?

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A landlord client has bought a probate sale property that is not quite dilapidated but is barely habitable (depending on your definition of ‘habitable’).

There is central heating but no boiler. The place is filthy, and he intends to take the house back to the bare brick and completely remodel it

View Full Article: Council tax exemption on dilapidated purchase?

QUARTER of landlords have lost rental income due to Covid, new poll finds

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A quarter of landlords have lost rental income during the pandemic, a new YouGov poll conducted on behalf of the NRLA has found.

It asked over 1,000 landlords how Covid had affected them between March 2020 and September last year, discovering in addition that these landlords are twice as likely to be selling up their portfolios now, and that 36% of them intend to exit the market or sell parts of their portfolios.

Among the 23% of landlords who have lost rental income, this includes 11% who had negotiated rent reductions or temporary rent suspensions, eight per cent who had major issues with unpaid rents with at least one tenant and four per cent who had experienced an increase in empty properties during this time.

This, the NRLA warns, will further exacerbate the ongoing supply problems within the private rented sector and force up rents as tenants compete for properties.

Rent debts

The trade body also says this is further proof of the need to further help tenants get COVID related rent debts paid off to keep landlords in the market and tenants in their homes.

In October housing minister Eddie Hughes announced a £65 million rent payment support package for private renters facing eviction or homelessness ‘during the winter months’ and thanked landlords for their help supporting struggling tenants during the pandemic.

Ben Beadle, Chief Executive of the NRLA, says: “Today’s figures show the extent to which landlords have been hit by the pandemic as we have been warning over the last two years.

“With confirmation that those most affected are more likely to leave the market, it is vital that the rent debt crisis does not worsen the rental housing supply crisis we now face.

“As a matter of urgency, councils need to make use of the money they now have to help tenants get Covid rent debts cleared. Without this, renters face a bleak future of fewer properties to rent and, ultimately, higher rents.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – QUARTER of landlords have lost rental income due to Covid, new poll finds | LandlordZONE.

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ANOTHER landlord’s good intentions turn to horror – made worse by evictions ban

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Another landlord has told how the evictions ban scuppered her plans to evict a nightmare tenant and left her home uninhabitable.

Jenny Darroch rented the property out through Bournemouth Council’s landlord incentive scheme in 2019 as she wanted to support social housing supply.

It was then let through agents Homes4Let, a business operated by East Boro Housing Trust, until March last year.

The scheme paid landlords up to £2,000 for offering their properties to social tenants. Darroch said Homes4Let failed to take references and damage was caused shortly after the tenants moved into the house in Northbourne, a northern suburb of the Dorset seaside town.

The Bournemouth Daily Echo reports that after spending thousands of pounds in legal costs, Darroch finally got the house back but was shocked to discover it was infested with flies and rats, had widespread water damage, and rubbish had been dumped throughout.

She now needs to spend tens of thousands of pounds to get the property back in a suitable condition and has vowed never to rent it out again.

Proper checks

Darroch told the Echo: “If the council want private landlords to let their properties out they should ensure the proper checks and precautions are done. Landlords are not all bad. I let the property out to try to do a good thing.”

During the tenancy, both she and the agents were unable to gain access to the property for safety reports to be completed and to carry out repairs, while the council’s housing enforcement team had threatened her with action. She finally served notice at the end of 2020 but the legal process was delayed due to Covid.

East Boro Housing Trust sold the Homes4Let agency last year and Whites of Bournemouth took on the role as agent of the property; Darroch said Whites had done all it could to support her. An East Boro Housing Trust spokesman said it was carrying out a review into the issue.

Read about another case of bad referencing that led to nightmare tenants.

Pic Credit: Bournemouth Echo.

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