LATEST: New ruling to see ‘good’ landlords given lower rent repayment orders

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Forgetful landlords who don’t licence their property and those with good records may be let off more lightly in future following an Upper Tribunal ruling.

Judges usually look at the conduct of the landlord and tenant, the landlord’s financial circumstances and any relevant convictions when awarding a Rent Repayment Order. However, tenants are often awarded 100% of the rent – regardless of the type of offence and where it sits on the seriousness scale.

A judge has now given First Tier Property Tribunals new guidance for dealing with future cases, ruling that they should not take the whole rent (less any payment for utilities) as the starting point.

Offence seriousness

Instead, they’ve been instructed to ascertain the whole of the rent for the relevant period, subtract utilities, consider the offence’s seriousness compared to similar offences and then ask what proportion of the rent would be a fair reflection of this.

The figure is then the starting point, with possible deductions or additions made, based on bad conduct by the tenant or other bad conduct by the landlord such as not protecting a tenant’s deposit.

“It is an examination of the conduct of the landlord within the context of the actual offence and involves looking at all the circumstances of the offence: how serious is it, how culpable is the landlord, what harm has been caused?” says senior associate at Anthony Gold, Sarah Cummins (pictured).

She adds that while the comments are helpful, whether it will lead to more consistent RRO awards is another matter.

“The tribunal will need to evaluate the factors in the individual case and reach a conclusion on where on the scale of seriousness the offence lies. No doubt there will be differing views on this, and future appeals may revolve around whether the tribunal has carried out that assessment correctly.

Read more about RRO rulings.

View Full Article: LATEST: New ruling to see ‘good’ landlords given lower rent repayment orders

Landlords face £1,085 bill to join enlarged Midlands HMO licensing scheme

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More of Walsall’s HMO landlords face forking out for a licence when the town’s additional scheme is extended next July. 

Those in the Willenhall South, Birchills Leamore, Blakenall, Bentley and Darlaston North, and Darlaston South wards will have to pay £850 if they are accredited landlords or £1,065 if unaccredited, after councillors gave it the go-ahead.

Walsall’s current scheme, introduced in 2021, already covers St Matthews, Pleck, Palfrey and Paddock wards.

A council meeting heard that its consultation had produced 83 responses, with 8 out of 10 people wanting more controls on the sector. But the majority (64%) thought the proposed fees weren’t high enough and 53% didn’t even think accredited landlords should benefit from a reduced fee.

Numerous

Councillors told of HMOs becoming more numerous in Walsall, with a rise in sub-standard properties.

Council leader Mike Bird (pictured) told the council meeting: “It is a historical fact that, where certain people had obtained licences for HMOs which they shouldn’t have had as a result, tenants have been left with sub-standard accommodation.

“The HMOs we are seeing coming forward which are now becoming more numerous will receive vigilant investigation from our officers and will have to seek the required planning permission.”

He added: “More and more people are saying enough is enough and we have to look at a cumulative impact policy for the amount of HMOs coming forward. I’m proud our licensing officers are very professional in their approach to make sure nobody falls down a hole and gets a licence when they are not eligible for one.”

Read more about HMO licensing rules.

View Full Article: Landlords face £1,085 bill to join enlarged Midlands HMO licensing scheme

GUEST BLOG: What we know about commercial rent arbitrations so far

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As the coronavirus pandemic ravaged the financial health of businesses and stifled footfall, the dip in income left businesses unable to make commercial rent payments.

Consumer demand plummeted which pushed many businesses into decline, and therefore at odds with their landlords.

National working from home guidelines were also enforced which prohibited the opening of non-essential workplaces and therefore deemed commercial property temporarily out of use.  

To ease the financial pressure on commercial tenants, a host of Covid-19 support measures were introduced, including the moratorium on the forfeiture of commercial leases and a protocol for commercial rent arbitrations was established.

What is the commercial rent arbitration scheme?

The coronavirus pandemic led to the unveiling of a legally binding commercial rent arbitration scheme which was announced by the then Business Minister, Paul Scully, on 24 March 2022 and sits under the Commercial Rent (Coronavirus) Act 2022.

It sets out a formal procedure under which an independent arbitrator can negotiate and write-off Covid-19 related commercial rent arrears, also known as protected rent debts.

If commercial landlords and tenants are unable to resolve commercial debts using the Code of Practice, the arbitration scheme presents a hopeful beacon. The scheme covers commercial rent debts accrued during the pandemic, from March 2020 to the date the restrictions ended in that sector. This includes businesses that were mandated to close during the pandemic. 

What is a protected rent debt?

According to the Commercial Rent (Coronavirus) Act 2022, ‘a protected rent debt is a debt under a business tenancy consisting of unpaid protected rent if the tenancy was adversely affected by coronavirus’.

Commercial rent debts accrued by tenants during the pandemic are recognised as protected rent debts. As such, a degree of flexibility must be exercised when negotiating repayments, such as more time to pay or write off the debt in part or full. The burden must be shared between the landlord and tenant as a result of the exceptional circumstance.  

Restarting the commercial property sector

The commercial rent arbitration scheme aims to reinvigorate landlords and tenants and help the market return to pre-Covid-19 conditions.

While businesses were temporarily protected from the threat of insolvency during the pandemic, the arbitration scheme gives them a fighting chance at bringing their business back on track, including overdue rent payments.

Commenting on the announcement, former business minister, Paul Scully (pictured), said: “This new law will give commercial tenants and landlords the ability to draw a line under the uncertainty caused by the pandemic so they can plan ahead and return to normality.

“Landlords and tenants should keep working together to reach their own agreements where possible using our Code of Practice to help them, and we’ve made arbitration available as a last resort. 

“Tenants who can repay their rent debts in full, should do so, and when they cannot, landlords should try to share the burden, so we can all move on.”

Author bio

Keith Tully is a partner at Insolvency Practice and consultancy Real Business Rescue.

View Full Article: GUEST BLOG: What we know about commercial rent arbitrations so far

‘Responsible’ rent rises pledged by the UK’s biggest landlord

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Britain’s largest private landlord has pledged to take a ‘responsible approach’ to rent rises for its tenants to help them during the cost-of-living crisis.

Newcastle-based Grainger has 10,000 homes in its portfolio and in a trading update, the firm’s rent growth over the past year has risen by 4.5%

View Full Article: ‘Responsible’ rent rises pledged by the UK’s biggest landlord

‘Enough is enough’ – Another council crackdown on HMOs revealed

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Another council has revealed that it is going to clamp down on substandard HMOs in its area with the council leader telling the meeting, ‘Enough is enough’.

The plan for bringing in a second Additional Licensing Scheme has been agreed for landlords whose properties are occupied by three or more unrelated people and they will now have to pay for a licence that will set out the conditions that have to be met.

View Full Article: ‘Enough is enough’ – Another council crackdown on HMOs revealed

Submit your rental data to help update LHA levels, Government urges landlords

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Landlords are being urged to share rental data to help set Local Housing Allowance (LHA) levels and the housing element of Universal Credit from next April.

The Valuation Office Agency (VOA) wants to boost private landlord rental data on its database in the period immediately before the cut-off date for producing the ‘list of rents’ on 30th September.

This list is used to calculate the 30th percentile figures – meaning that in each area, 30% of homes available for market rent should be cheaper than this level and 70% are more expensive.

Frozen

LHA helps tenants on benefits pay the rent but was frozen in cash terms in April 2021. Housing campaigners are looking for the government to provide some flexibility; the NRLA points out that more than half of tenants in the PRS who rely on Universal Credit to pay their rent have a shortfall between the amount they receive and what they pay for their housing.

Read more about the LHA freeze.

The VOA has put a shout-out on social media telling landlords that by sharing rental data, they can contribute to the bigger picture and help the government provide housing benefits to around two million tenants, calculate official rental statistics and measure inflation. It adds that the information will also help support and maintain tenancies in their local area.

To compile the list, it needs basic rental details for new tenancies and renewals including the full property address, type of property, number of bedrooms and living rooms, tenancy start date and rent paid.

HMO landlords – particularly in Portsmouth – are currently being referred to the VOA to have their council tax bands reassessed, a move which is substantially putting up many tenants’ bills. Read our report on the developments within the city.

To submit your rental data to the VOA, use the form and contact information available on this page.

View Full Article: Submit your rental data to help update LHA levels, Government urges landlords

Rent Control Is Bad News

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Rent controls are bad news for UK tenants and Buy To Let Landlords.

Listen up government, it’s time to learn how the private rented sector actually works.

With the cost of living crisis continuing to go up

View Full Article: Rent Control Is Bad News