Tenants pocket £16,000 after landlord and agent’s regulatory mistakes

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A landlord has failed to convince a court that stress and financial difficulties excused her from paying a rent repayment order.

Instead, Jaya Sanah’s four tenants will share £16,191 after a First Tier Property Tribunal ruled that there was no reason not to licence her four-bedroom HMO which was covered by Hackney Council’s additional licensing scheme.

Sanah didn’t provide a statement or attend the hearing and tried to adjourn it due to her ill health. This was rejected on the basis that she was only suffering from stress-related issues.

The tenants told the tribunal that neither Sanah nor her agent had given them a Right to Rent Guide, electrical and gas safety certificates, or an EPC. They believed she was a professional landlord as she had boasted to them about looking after several properties. However, despite telling the court she had financial difficulties, Sanah said this information was confidential.

Voluntarily

They had paid £2,842 a month rent in full for the two years they lived at the property in Victorian Grove, London, which they voluntarily left in August last year.

The court deducted universal credit payments to one of the tenants, leaving a £26,986 sum from their £34,104 rent repayment order application for the 12-month period.

It ruled: “The tribunal finds the respondent is or holds herself out to be a professional landlord. As such, the tribunal finds she should be or should have made herself aware of the local authority’s licensing requirements as well as the legislative requirements for landlords in the private sector.”

As the offence wasn’t the most serious and was not accompanied by allegations of harassment or attempts at retaliatory eviction, it awarded them 60% of the maximum rent prepayable.

Read the ruling in full.

View Full Article: Tenants pocket £16,000 after landlord and agent’s regulatory mistakes

Rental market reaching crisis point as ‘perfect storm’ hits landlords and tenants

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Landlord Action’s Paul Shamplina (main picture) has explained to Radio 4 listeners how an almost broken court system and higher interest rates are driving a rush in Section 21 evictions before rent reform laws kick in.

Speaking on the You and Yours programme, Shamplina said Section 21 evictions had already gone through the roof.

“I’ve been in the industry for 32 years and I’ve never known such a rental crisis. We’ve seen a 91% increase in Section 21 accelerated possession claims issued at court between April 2022 and April 2023.”

The programme featured interviews with two tenants in the same Manchester block who had been served with eviction notices before they could accept a rent rise and were now struggling to find new flats.

Biggest losers

“The biggest losers will be tenants,” Shamplina told listeners. “You will have decent tenants paying rent on time, and either landlords are putting rent up because of interest rates or they want to sell – it adds to the crisis because of a stock shortage.

“One agent had 80 applicants fighting over one property in Islington, which then becomes a bidding war.”

He added that he had never seen so many landlords selling properties as well as anti-landlord feeling in the press.

“Historically, a lot of landlords haven’t put rents up but they are panicking. A lot will be whacking in Section 21s as they feel they can’t get their properties back because the court system is on the brink of being broken.”

GUIDE: What to do if your tenant gets into arrears.

View Full Article: Rental market reaching crisis point as ‘perfect storm’ hits landlords and tenants

Sadiq Khan repeats calls for an ‘immediate two-year rent freeze’ AND S21 ban

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London’s Mayor Sadiq Khan has called for an immediate two-year rent freeze AND a ban on section 21 ‘no-fault’ evictions in London to help 160,000 Londoners who are behind on their rent.

His call comes as a survey from City Hall reveals that 30% of private renters in the capital are struggling financially –

View Full Article: Sadiq Khan repeats calls for an ‘immediate two-year rent freeze’ AND S21 ban

Landlord pays £40,000 fine after large HMO found ‘shoddy and unsafe’

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A landlord in Norfolk has payed fines totalling £40,000 after he was found to have housed tenants in a shoddy and unsafe property.

Issues were reported at the Watton property (pictured) to Breckland Council last year, which prompted an inspection by officers who found a blocked fire escape, damaged fire doors, dangerous electrics and broken and rotten windows, causing them to flag the property as unsafe.

The landlord of the property, which was home to multiple tenants, was given time to carry out repairs. However, a follow-up inspection found insufficient progress had been made so the council issued a £20,000 fine to the landlord company and £20,000 to the company’s director.

Fines paid

Work to address the issues has now been completed by the landlord who has also paid the fines which will be used to fund further investigations in the Norfolk district. The council has refused to name the landlords after LandlordZONE made enquiries because the person involved has been cooperative and the ‘civil matter has been resolved’.

Councillor Claire Bowes (pictured), executive member for housing and homelessness, says the vast majority of Breckland’s landlords provide well-maintained homes for their tenants and the quality of housing overall is very good.

She adds: “However, this case shows that the council will not tolerate a decline in housing quality or for residents to be put at risk and we will take action to protect our residents’ right to live in a safe home.”

View Full Article: Landlord pays £40,000 fine after large HMO found ‘shoddy and unsafe’

Landlord secures huge victory in £18,000 Rent Repayment Order case

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An Upper Tribunal has slashed a landlord’s Rent Repayment Order by £16,000 after taking pity during an appeal hearing on her “precarious financial position”.

A First Tier Property Tribunal had ordered Renee Daff to pay two tenants £18,000 for failing to licence her flat under Tower Hamlet’s selective licensing scheme, but a judge found the first tribunal had labelled her a professional landlord without taking her financial circumstances into account.

Daff rented out the property in Tannery House after becoming seriously ill and returned to her native Australia. After moving back for a while, she rented it out again in 2018 for six months – unaware of the new licensing scheme – and then moved back in 2019.

When the former tenants applied for an RRO, she tried to get a licence but was told the property was exempt.

Judge Martin Rodger KC said that although Daff was to blame for not finding out about her licensing obligations, there was no evidence that she had deliberately sought to avoid her responsibilities.

Interest payments

The court heard that although she owns two more flats in the UK and one in Australia, the income was no longer sufficient to service the interest on her portfolio.

The judge ruled: “While the appellant’s property portfolio is not insignificant, she has never sought to make a living from it, and to treat her as if she is running a professional letting business would be unjustified.”

He added that the circumstances of the case were exceptional as Daff was of limited means, had no earning power, and was in very poor health which had “contributed to her lack of attentiveness to her licensing obligations”.

Rodger said: “She is in a precarious financial position. In my judgment the achievement of the statutory objectives of punishing defaulters and deterring future offences does not require the imposition of disproportionate penalties.”

View Full Article: Landlord secures huge victory in £18,000 Rent Repayment Order case

Lloyds Bank’s plans to build ‘thousands’ of rental homes prove over optimistic

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Lloyds has grown its rental portfolio to 1,000 properties and has another 700 in the pipeline as it bids to become one of the UK’s biggest landlords, albeit far off its original objectives.

The bank has some way to go if the publicly-owned institution is to meet its target of buying and operating 10,000 homes under its Citra Living brand by the end of 2025.

When it launched in 2021, Lloyds boasted that it intended to acquire 50,000 build-to-rent properties by 2030 which would oust Grainger as the nation’s number one.

Grow and build

A spokesman tells LandlordZONE that Citra Living, “continues to grow and build relationships with significant UK homebuilders under a strategy of helping more people live in the kinds of homes they want in the places they want to live”.

He adds: “Citra has a healthy pipeline of future properties with locations such as Scotland, Wales and the East Midlands, covering more than 700 homes.”

Citra operates 1,000 homes in locations including Chesterfield, Yate, Ashford (main picture) and Brentford, and those under development include Northumberland, Cramlington, and Gaydon. Last week it bought 124 BTR apartments at a regeneration project in Warley.

Shared ownership

Earlier this year, the firm launched a pilot shared ownership scheme – Pathways by Citra Living – in 26 BTR properties at Keepmoat’s Coney Green development in Derbyshire. The scheme aims to help would-be homeowners, who can buy between 25% and 75% of their home and rent is charged on the balance.

It’s not always plain sailing for large financial institutions looking to diversify into property; John Lewis’s rental property boss Chris Harris resigned last week after playing a key role in the retailer’s plans to expand into rental housing, with a target of constructing 10,000 new homes.

View Full Article: Lloyds Bank’s plans to build ‘thousands’ of rental homes prove over optimistic

What remortgaging landlords think about fixed rates

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Fixed-rate remortgages continue to be the preferred choice for buy-to-let property owners – but the gap between choosing a two-year or five-year fixed rate is narrowing, a survey reveals.

Landbay says that 79% of landlords will choose a fixed-rate mortgage when it’s time to remortgage though the preference for a five-year fixed rate has seen a decline.

View Full Article: What remortgaging landlords think about fixed rates

Brace Yourself for Shocking Mortgage Rates!

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Hold onto your seats because we have a jaw-dropping revelation about mortgage rates today that will leave you stunned.

Did you know that a seemingly modest 6.43% rate offered today is equivalent to a whopping 25.7% rate back in 1980?

View Full Article: Brace Yourself for Shocking Mortgage Rates!

Famous landlord to pay £166,000 legal costs after losing court claim

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Multi-millionaire landlord Judith Wilson (main picture, inset) has been hit with a £166,000 court bill after losing a legal battle against Tonbridge and Malling Borough Council.

Wilson, wife of the controversial Fergus, who was once dubbed ‘Britain’s worst landlord’ by the national press, claimed her Victorian property in Wateringbury village, Kent, became an eyesore after the authority carried out safety repair works on an external wall, removing large sections of brickwork.

She said workers re-inserted the original bricks “any old how”, resulting in an odd multi-coloured effect which sparked complaints from disgruntled village residents, reports The Daily Mail.

The property tycoon sued the council for £100,000 at Central London County Court.

Took control

The authority’s lawyer said it took control of the project to make it safe, denied all liability and had counter-sued to cover its costs. He told the court that Wilson had accepted the property was in a dangerous condition in 2019 while a risk assessment pinpointed the building as, “likely to collapse – and with the potential consequence of fatalities”.

District Judge Samuel Rippon threw out Wilson’s claim, saying the works had been necessary for safety reasons. He added: “She admitted that both she and her husband are control freaks who generally controlled every part of a project.”

The pair carved out a huge real estate empire and were once thought to have owned 300 homes before selling most of them off in recent years. Last June, Fergus Wilson was banned from selling off his houses in a bid to avoid paying a £250,000 legal bill. It came after he was banned for life from contacting Ashford Borough Council after a 10-year campaign of abuse against its staff. 

Read morea about the Wilsons.

View Full Article: Famous landlord to pay £166,000 legal costs after losing court claim

GETTING REDRESS: ‘Who agreed to an illegal HMO – agent or landlord?’

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Suzy Hershman (main picture), Resolution Department Lead at HFIS, examines a shocking case her team dealt with recently and highlights what landlords can learn from it.

The case

A landlord with a four-bedroom property in East London alleged that his agent had rented the house to approximately 12 tenants, exposing him to a potential fine or prosecution as his HMO licence only allowed four people to live within it. 

Although he signed a guaranteed rent contract with the agent which was straightforward (albeit skewed in the agent’s favour), what’s disputed are the negotiations that took place before the tenancy started.

The landlord claims he did not agree to it being operated outside its licence conditions, while the agent says it was already over-crowded when they took on the property.

The agent has since refused to relinquish the house despite the landlord giving notice under the terms of the contract.

The local agent that the landlord used was a member of the Property Redress Scheme and therefore the landlord’s complaint came to us.

What happened?

This case began last year when, after finding that the property was overcrowded and that local people had been complaining about the tenants, the landlord asked that it be returned to him once the contract with his agent expired in April this year.

The second issue was that the agent had paid the landlord £300 a month less than agreed. Our case officer suspected that the landlord didn’t want to take all the money because he knew the property was being rented out illegally, but it was only a hunch.

Nevertheless, the agency took almost twice as much in rent as they are paying the landlord.

We felt that although the landlord and agent did have a written agreement, the agent behaved unreasonably and continues to do so by not relinquishing the property.

Therefore, an award has been given to the landlord for the poor conduct of the agent.

Agents should always keep good records of their dealings with landlords particularly when they are changing, agreeing or discussing important features of a tenancy. 

We felt this agent considered the landlord somewhat naive and that they could get away with taking advantage of him.

An example of this is that when the landlord gave notice under the terms of the rent guarantee contract, the agent claimed they couldn’t return the property to him until the tenants moved out – which is likely to be a long time – and that’s exactly what’s happened.

What are the key lessons here?

• Landlords and agents should record all their discussions and negotiations prior to signing contracts in writing – otherwise working out who’s telling the truth in a dispute can be difficult later on.
• Vet your agent very carefully – for example what’s their office like? How do their staff talk to people on the phone? Are they accredited and do they have valid redress membership displayed in their windows?
• Don’t assume rental contracts are balanced – some agents write them to be in their favour and not so much in your interests.
• If you’ve signed an agreement with an agency, it is possible to negotiate if you feel they are unreasonable – but very few landlords do.

View Full Article: GETTING REDRESS: ‘Who agreed to an illegal HMO – agent or landlord?’