Rogue landlord’s violent harassment of tenants revealed by Tribunal

admin    Uncategorized     agents

A rogue landlord who repeatedly abused and intimidated tenants in his unlicenced HMO has been handed a £2,817 rent repayment order.

Nasir Ahmed threatened tenants Ebenezer Hagan and Farhan Bashir, even turning up in the middle of the night to demand that one of them leave while making racist comments, a First Tier Property Tribunal heard.

The pair rented a room in the property at 52 Thurgarton Street, Nottingham (pictured), believing there were two other tenants, but found five people when they moved in, in January 2022, creating congestion and overcrowding of the only bathroom.

Ahmed then persistently turned up at the property without good cause, sometimes late at night or early in the morning, unconnected with maintenance or repairs.

On one occasion, two men let themselves in and demanded the pair leave within 24 hours, and only left when the police were called. They returned with Ahmed the next day and sat in the living room until midnight, creating an intimidating atmosphere.

Assault

One night, a man who described himself as the landlord’s son assaulted Mr Bashir in the living room. He was arrested and charged with assault and possession of a knife – only to return to the property once again.

Nottingham City Council environmental health officers served a Suspended Prohibition Order limiting occupancy to four people in May, after they found 10 people living there. They also served a Prohibition Order citing excess cold as a category one hazard and category 2 hazards of fire and entry by intruders. The property also had no HMO licence.

Ahmed told the court it was not an HMO and denied allegations of harassment and attendance at unsocial hours. However, it ruled: “The tribunal is satisfied the respondent was guilty of behaviour calculated to cause the applicants to leave the property.”

Ahmed was given 28 days to appeal the ruling. Read the Tribunal report in full.

Read more about RROs.

View Full Article: Rogue landlord’s violent harassment of tenants revealed by Tribunal

What’s stopping you in 2023?

admin    Uncategorized     agents

This might seem like a weird question, but what’s stopping you from owning 3, 4, or even 10 properties, to give you enough monthly cash flow to replace your income?

If you’re like most people, the answer might be

View Full Article: What’s stopping you in 2023?

75% of PBSA beds snapped up for the autumn term

admin    Uncategorized     agents

The struggles for students to find somewhere to live while at university look set to continue with news that 75% of purpose-built student accommodation (PBSA) has already been snapped up for the next academic year.

The findings from Stripe Property Group highlight how tight the supply of PBSA beds is in the top 50 university towns and cities in the UK.

View Full Article: 75% of PBSA beds snapped up for the autumn term

Malicious damage – not insured?

admin    Uncategorized     agents

Hello, I recently had a tenant who stopped paying rent and we did eventually manage to get her to leave on her own accord. She did however decide to smash the house (and contents) up prior to her and her young children’s departure and in the process cause over £10,000 worth of damage.

View Full Article: Malicious damage – not insured?

Legal: UK Supreme Court ruling favours landlord in service charge dispute

admin    Uncategorized     agents

The case involved Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd and revolved around a service charge certificate (SCC) issued by the landlord (SHAH), and the question of whether this was considered to be “conclusive” (meaning final) for the amount due.

Service charge disputes in both residential flats and commercial leases are not uncommon. They usually occur when tenants dispute the amount of the bill when the landlord is charging for works carried out, such as repairs to the building structure, services provided, such as grounds maintenance, and common parts cleaning, or charges for buildings insurance.

Tenants sometimes resent paying for repairs to items that don’t directly affect them, for example repairs other units in the block, while landlords often have no real incentive to keep costs down. But in any multi-occupied block, repairs must be dealt with centrally otherwise they simply would not get done, and in some instances and the property as a whole would soon start to deteriorate.

What are service charges?

These are amounts charged (usually annually) by a landlord to a tenant under their lease. The charges are in addition to the rent. Following the principles of a full repairing and insuring lease (FRI) they pass on the landlord’s costs to a tenant in order to recoup, usually all of the landlord’s costs in respect of managing a property. The landlord therefore gets a clear return on its investment.

A small single occupied property occupying one site may have very limited need for services to be provided by the landlord, apart from occasional repairs and insurance costs. But a major retail, office or mixed-use complex with grounds may have multiple shared facilities and significant associated costs of maintenance.

RICS standards and guidance to Service Charges in Commercial Property

Sinking fund

As part of the service charge arrangement within a commercial lease, the tenant usually agrees to pay either into a sinking fund (to build up reserves for major works) or simply pay the actual costs annually.

Disputes often arise over what’s being charge for, the amount of the charges and questions over insurance costs. To minimise a tenants’ ability to dispute the amounts claimed, and drag out the arrears each year, leases will often include a clause stating that a “service charge certificate” provided by the landlord is “conclusive and binding” on the tenant, unless there’s an obvious error or fraud is involved.

The effectiveness of the these service charge certificate clauses was tested recently in this case, the Court of Appeal decision in Sara and Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2020], and subsequently at the Supreme Court appears to bring something of a resolution.

Background to this case

Blacks is a retail outlet selling outdoor clothing and equipment. It held two leases of a shop in Liverpool granted by its landlord Sara and Hossein Holdings Ltd. Both these leases contained the same service charge clauses which said the landlord would provide a certificate as to the amount of the total cost and the sum payable by the tenant. In the absence of “manifest or mathematical error or fraud” such certificate shall be “conclusive”. It also stated that the tenant had no right “to withhold rent or any right or claim legal or equitable set-off or counterclaim (save as required by law)”.

Set-off and counter claim

In 2019 the landlord brought a claim against the tenant for substantial arrears of service charges, to which the tenant responded with a detailed set-off and counterclaim.

When it came to the High Court it held that the service charge certificate was “conclusive” with regard to the costs incurred by the landlord, but that it was not conclusive as to whether the particular works fell within the scope of the service charge. Therefore there was a question as to whether the tenant was obliged to pay the charge.

The landlord then appealed to the Court of Appeal arguing there that the High Court was wrong in its findings, and that in fact the service charge certificate was conclusive to the works which it claimed, and was fully within the scope of the service charge.

The landlord claimed that the tenant could only dispute if works fell within scope by way of a counterclaim. However, the no set-off provision within the leases meant that a counterclaim could not be used by the tenant in defence of the landlord’s claim.

The Court of Appeal

The Court of Appeal then overturned the High Court’s decision and held that the landlord’s service charge certificate was conclusive in respect of both the total cost incurred, and the itemised sums listed by the landlord and payable in full by the tenant.

The conclusion the Court of Appeal came to was that it was not possible to separate these two elements: the total cost and the itemised sums, and the certificate could not be a conclusive one. If these two elements were to be separated, the Court thought, then the lease should have made it clear that this was to be the case.

So, without the tenant being able to prove “manifest or mathematical error or fraud” the certificate was binding on the tenant who was liable to pay the full amount claimed.

The Supreme Court

The next stage was the appeal to the Supreme Court. The court considered the case of Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd as to whether the tenant Sara & Hossein had the right to challenge the service charge sum where, as in this case, the landlord’s service charge certificate (SCC) was deemed to be “conclusive”.

On 18 January 2023 the Supreme Court released its judgment with a majority ruling in favour of the landlord. It dismissing the tenant’s appeal against the Court of Appeal’s grant of summary judgment.

The Supreme Court held that neither party’s interpretation of the service charge certificate had been correct and came up with an alternative interpretation. It said that the service charge certificate was conclusive as to what was required to be paid by the tenant following certification. The landlord, it said, was assured of payment of the service charge “without protracted delay or dispute” in order to protect its cash flow.

However, the Supreme Court judgement went further: to clarify the issue for landlord. The judgment was made to strike a balance between landlord and the tenant by confirming that by paying the full service charge certificate sum, the tenant was not precluded from at a later date disputing liability for that payment. This interpretation the Court referred to as a “pay now, argue later” regime.

Commercial landlords are likely to welcome the judgement, relieved that when they issue a service charge certificate claim, subject to the provisions of the lease, the amount is conclusive and due on demand.

Tenants can also take comfort from the ruling that though landlords can self-certify the sums payable, landlords may still need to justify this and “argue later” about whether or not their tenants are liable for all of those costs.

The lessons

This case highlights the importance of careful lease drafting ensuring that rather than relying on standard lease clauses, these should be tailored to the specific circumstances. For any substantial letting, landlords should always use the services of an experienced property lease drafting solicitor. Prospective tenants would also be well advised to scrutinise these clauses before taking on a lease.

View Full Article: Legal: UK Supreme Court ruling favours landlord in service charge dispute

Planners force landlord to return £42,637 in rent after ‘illegal gains’

admin    Uncategorized     agents

A rogue landlord who created three tiny flats in the basement of one of his properties has been ordered to pay back more than £42,000 in illegal gains.

Mawan Musa, 63, of Maude Road, Camberwell, admitted breaching planning rules at two properties in the same road at the Inner London Crown Court. He was sentenced to pay £42,637 in illegal gains and a further £10,000 in fines and costs.

Southwark Council discovered Musa had created flats in the basement of his property (pictured) to collect rent from three households, instead of one. He had also added a haphazard and sub-standard rear window extension on the roof of another property – neither of which had planning permission.

Prosecution

When the developments weren’t removed, Southwark’s planning enforcement team launched the prosecution.

After reviewing financial investigations carried out by the council’s trading standards team, the court agreed that Musa had illegally gained £42,637 in rent. It heard that both property developments now have planning permission.

Councillor James McAsh (pictured), cabinet member for climate emergency and sustainable development, says this was a shameless attempt to shoehorn three tiny flats into one basement, along with an illegal roof extension.

“This outcome serves as a warning that we will not tolerate planning breaches. It also supports us in cracking down on those who try to benefit from renting illegal and sub-standard properties in Southwark,” says McAsh.

“Everyone deserves a good quality place to live. Planning rules and space standards make sure that new developments are good quality and a decent size.”

Pic credit: Google Streetview

View Full Article: Planners force landlord to return £42,637 in rent after ‘illegal gains’

BREAKING: Evidence heard in final day of landmark rent-to-rent court case

admin    Uncategorized     agents

The Supreme Court is debating a key legal case around rent-to-rent operators today to decide if the superior landlord, or any landlord in the chain, should be responsible for a rent repayment order.

Judges are hearing interventions in the Rakusen v Jepsen case including from the NRLA, represented by property lawyer David Smith (pictured), concerning landlord Martin Rakusen who agreed to let his flat on Finchley Road, London, to a rent-to-rent company in May 2016.

However, by November 2018, the flat had become an HMO but a licence wasn’t applied for, and the former tenants sought a RRO against him – as the superior landlord – instead of the rent-to-rent company.

The Upper Tribunal ruled that the order could be applied for against the superior landlord, however the Court of Appeal subsequently found in the landlord’s favour.

As the final day of hearings draw to a close, David Smith adds that he won’t get to speak to the court and will have to wait several months for a decision. “It is frustrating to watch and wait with nothing more that can be done,” he told BBC News.

“But it is also an important case which will affect landlords and tenants and illustrates the importance of Parliament getting this stuff right first time around.”

Going wrong

NRLA chief executive Ben Beadle (pictured) says both tenant and landlord are the victims when it comes to dodgy rent to rent operators going wrong.

“We want to see absolute clarity,” he says. “You’ve got arrangements where the landlord has made an agreement with a provider who collects the rent and executes the repairs, and then situations which the landlord might not be aware of – in this case they get clobbered through no fault of their own.”

If the Supreme Court was to change the position adopted by the Court of Appeal, then authorised rent-to-rent arrangements will likely become less common, leading to a lower availability of budget accommodation to rent on a room-by-room basis, says the NRLA.

But critics of the rent-to-rent model of letting point out that for too long both landlords and many tenants have been ripped off by dodgy operators within this market, as the many articles LandlordZONE has published on this topic highlight. Also, last year Beadle told an audience at a landlord show that the ‘bad eggs’ in the rent-to-rent sector urgently needed kicking out.

View Full Article: BREAKING: Evidence heard in final day of landmark rent-to-rent court case

Scottish government urged to declare a ‘national housing crisis’

admin    Uncategorized     agents

A Conservative MSP is calling on the Scottish Government to declare a ‘national housing crisis’ after it was revealed that 47,000 people are homeless in the country.

The data from the Scottish government also reveals that 30,000 people are stuck on social housing waiting lists.

View Full Article: Scottish government urged to declare a ‘national housing crisis’

Barclays to stop telling tenants credit card debt ‘helps them pass referencing’

admin    Uncategorized     agents

Barclays has been rapped on the knuckles for a radio advert that urged tenants to rack up credit card debt and increase their credit score to help them rent a flat.

The advert’s voiceover explained: “Using my Barclaycard Forward credit card to pay for the stuff I need now could help build up my credit score for the day I need something bigger. So buying a set of headphones…could help in the future when I want to rent my first flat share.”

Responding to complaints, Barclays said the ad was intended to show that you could improve your credit score by using a credit card responsibly, purchasing goods and paying it off in time.

It explained that many third parties and credit reference agencies recommend using a credit card in that way to build a credit score, which was important for letting agents when letting a property.

Credit score

It added that landlords used many factors when considering a credit score, including salary, but it was down to the individual landlord to decide which factors to pick.

It explained that private landlords and letting agents with more than 100 properties were able to use credit data when making credit and affordability decisions. However, Barclays could not confirm that every landlord would use credit reference agency checks, or if they did, that the credit data they could access was suitably detailed. It agreed to withdraw the advert.

The ASA ruled: “We considered that a significant section of the rental market was made up of private landlords with less than 100 properties. Because there was no guarantee that these individuals would carry out or would have access to detailed credit reference checks, we concluded that the ad exaggerated the impact of retail purchases on a person’s credit score, in relation to renting a property, and therefore the ad was misleading.”

Read more: Credit scores explained.

View Full Article: Barclays to stop telling tenants credit card debt ‘helps them pass referencing’

Accelerated Process – solicitor says no!?

admin    Uncategorized     agents

Hello, a S21 was issued to a tenant with expiry in mid Dec. I then contacted my insurance to progress the accelerated process. They contacted the legal company that I have cover with as part of my policy.

They have come back to me stating S21 is deemed invalid and that they will not progress for the following reasons:

1. The tenancy deduction clause has not been included in the prescribed information
2. I cannot see that a hard copy of the DPS T&C’s has been provided to the tenant
3. The most recent How to Rent Guide was not served on the tenant at the point when the tenancy went periodic.

View Full Article: Accelerated Process – solicitor says no!?