Pets and property experts warn ‘work needed’ to make reform bill workable

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A group of leading figures representing animal charities, pet owners and property managers have warned that much work will be needed in the coming months to make the Renters (Reform) Bill acceptable to landlords and tenants.

The group, which has largely welcomed the bill, tells LandlordZONE that it must balance the needs of both sides and establish the circumstances under which landlords can refuse a pet under its new ‘statutory presumption in favour of acceptance’.

But as the legislation passes through parliament, guidance will have to be worked out because, as the bill stands, other than leasehold or freehold restrictions on animals, landlords will have to give a ‘valid reason’ why they wish to refuse a pet.

This could include their own allergies to pet hair, for example, or a pet not being suitable for a property.

“It’s about providing landlords with a set of tools to help them make a fair and reasonable decision about why their property is or is not suitable for a pet,” says Scott Fryer of Battersea Dogs & Cats Home.

Heidi Shackell (pictured), CEO of The Lettings Hub, says the bill is also vague about how referencing and insurance will work and, for example, “if a pet fails referencing and the tenant or landlord cannot secure an insurance policy, will this be good enough reason to refuse a pet?”.

She also says the legislation may prove hard to police because if a landlord or agent has several tenants chasing a home and one of them has a pet (and is not picked), how could it be proved that they’ve been ‘refused’ the tenancy?

Nevertheless, landlords will have to be careful when advertiseing their rental properties, as will letting agents.

“We need to get portals like Rightmove engaged with the issue of pets because it’s no good having ‘yes’ or ‘no’ to them within listings – once the bill gains Royal Assent, ‘no’ (due to property decisions) or ‘pets considered’, will become the accepted options” suggets Jen Berezai (pictured), founder of Advocats.

It is claimed that Ministers are also looking at ways to encourage property leaseholders and freeholders to be more pet friendly by making it easier and cheaper to alter a building’s terms and conditions to allow them.

Pet issues

“Our research shows that a significant proportion of the ‘pet issues’ landlords have particularly in cities are due to leaseholder or superior landlord rules on pet ownership within buildings, with approximately 37% of all rental dwelling being leasehold properties,” says Fryer.

Did you know? Rightmove recently revealed that the percentage of all its listings advertised as ‘pet friendly’ has dropped from 7% to 4%.

Elizabeth Ormerod of the Society for Companion Animal Studies, added: “Pets are good for human wellbeing, and we know from our research that people who are brought up alongside them see many health and psychological benefits from animal companionship.”

A final area of discussion was whether the new measures within the bill, and particularly the six weeks given to landlords and agents to refuse/agree if asked to accept a pet, will apply only to existing tenancies or new ones.

Several people within the group said they understand it will initially only be for existing tenancies, not new ones, although this has yet to be confirmed officially. If applied to new tenancies, the group said, then the six-week waiting period would be ‘unworkable’.

Who are the experts?

Elizabeth Ormerod from the Society for Companion Animal Studies; Scott Fryer from Battersea Dogs and Cats Home; Dr Sandra Mcune from the University of Lincoln; Debbie Rook from the University of Northumbria Law School; The Lettings Hub CEO Heidi Shackell and Jen Berezai, founder of Advocats.

View Full Article: Pets and property experts warn ‘work needed’ to make reform bill workable

COMMENT: Binning ‘no fault’ evictions will only help ‘nuisance tenants’ – claim

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A leading lawyer warns that by abolishing section 21 the government will be helping nuisance tenants at the expense of the weak and vulnerable.

Under the Renters (Reform) Bill, landlords will be able to evict for behaviours ‘capable of causing’ a nuisance or annoyance as opposed to behaviours ‘likely to cause’ a nuisance or annoyance.

Although the government says this means that a wider range of tenant behaviours can be considered in court, Ian Narbeth, solicitor at DMH Stallard, argues that this misses the point.

“Lawyers may argue about the subtle change in wording, but most cases don’t get to court and by the time they do, the behaviour is serious and anti-social – not just capable of being so,” he explains. “Until now, landlords served section 21 notices on anti-social tenants and did not need to go to court.”

With the massive backlog in cases, it can be many months before cases are heard, witnesses may fear harassment by an aggressive neighbour or their family and friends, while landlords can give no guarantee of succeeding and witnesses will fear reprisals, especially if the eviction fails, adds Narbeth.

Troublemakers

“Instead of landlords dealing with the problem simply and confidentially, abolishing section 21 means troublemakers must have their day in court and many victims will choose to suffer in silence or else leave their homes rather than give evidence.

“The government will be helping nuisance tenants at the expense of the weak and vulnerable, which is the opposite of what it is claiming.”

Landlord Action’s Paul Shamplina has already warned that there could be more section 8 rent arrears cases, prompting a social housing crisis with many tenants struggling to be rehoused as a result of scrapping section 21, while the TDS charitable foundation says it might not provide the hoped-for feelings of security or encourage tenants to complain when rental homes are in short supply.

View Full Article: COMMENT: Binning ‘no fault’ evictions will only help ‘nuisance tenants’ – claim

Landlords selling up boosts supply of affordable homes

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Faced with rising mortgage rates and mounting costs, a wave of landlords is opting to sell their properties, leading to a surge in the availability of affordable homes, Zoopla reveals.

The housing platform says that 11% of homes currently listed for sale were previously rented out

View Full Article: Landlords selling up boosts supply of affordable homes

Binning ‘no fault’ evictions will not make tenants more secure, Government warned

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Removing Section 21 might not provide the hoped-for feelings of security and encourage tenants to complain when rental homes are in short supply, warns a housing charity.

The TDS charitable foundation’s poll of 2,000 private renters found that a lack of affordable accommodation influenced tenants’ willingness to escalate complaints and request energy efficiency upgrades. 

Its report – Living in the PRS in 2023 – explains: “There is a risk that even with the removal of Section 21, tenants will be reluctant to raise complaints and the new landlord ombudsman will receive a low number of complaints.

“We therefore invite the government to think more expansively about the range of factors that influence feelings of security and avoid assuming that tenancy law is the main or only driver of tenant behaviour.”

Most tenancies are ended by the tenant rather than the landlord, according to the charity, with only 12% of tenants who moved in the last 12 months doing so because the landlord asked them to leave.

changing needs

Moves in the rental sector are largely related to changing needs or preferences of occupants, such as wanting a larger or smaller home, or job-related reasons.

Read more: Will Section 8 be enough when Section 21 evictions go?

The findings reveal that while many tenants believe that the energy efficiency of their property could be improved, they are reluctant to do so in case the landlord increases the rent (38%) or asks them to leave (25%). However, 39% had requested improvements and of these, 74% were either happy or somewhat happy with the response.

Some of those moving in the last six months encountered problems that the Renters (Reform) Bill aims to address, such as reporting that the landlord/letting agent was unwilling to let to them due to their race, gender, or other personal characteristics (9%), or didn’t want to let to tenants with children (12%) or to tenants on benefits (5%).

Read the report in full.

View Full Article: Binning ‘no fault’ evictions will not make tenants more secure, Government warned

Call for London’s councils to get MORE landlord licensing powers

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In a call that will cause dismay among landlords in the capital, one organisation is urging for MORE devolved licensing powers to be handed to London’s councils.

A think tank called Centre for London has published a report entitled: ‘Licence to Let: How property licensing could better protect private renters’.

View Full Article: Call for London’s councils to get MORE landlord licensing powers

Tax Benefits of Malta Residency

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The tax benefits associated with retiring or otherwise relocating to Malta can be significant. This is something I know firsthand because my wife and I took that leap back in 2016.

Below is a very short summary of some of the tax benefits my wife and I have enjoyed whilst living in Malta.

View Full Article: Tax Benefits of Malta Residency

LEGAL: common sense prevails in lease dispute

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Lease disputes are time consuming, costly and most can be avoided when leases are well drafted in the first place. This article addresses a case where the landlord failed to ensure that the lease was properly drafted.

The lease gives a tenant the right to use the property for its approved business or commercial use for a period of time, in exchange for money paid to the landlord.

The contractual nature of leases in England and Wales means that the exact wording of the lease is crucial, that’s because the courts will interpret this wording at face value, binding the parties to its exact terms.

But what if the wording of the lease does not make business sense? Can this term be varied, can a term be implied into the lease at the discretion of the courts?

This was the question which arose in the case of Rail for London v The Mayor and Burgesses of the London Borough of Hackney. The UK High Court had to consider what happens when the express terms of a lease do not make sense in the wider business context.

Was rent still payable when the underlease was surrendered?

In this case the rent payable under the lease was defined by reference to sums payable under a sub-lease. On the face of it, this meant that if the sublease was surrendered, no rent was payable.

The Court decided that this did not make commercial sense in the context of the wider transaction between the parties. But could a term be implied into the lease that rent remained payable?

The facts of the case

Hackney had granted a 99 year lease of the railway arches to London Underground, who then sublet for the same term, minus one day. The rent under London Underground’s lease was defined as percentage of the commercial rental income from the sub-tenant in the arches.

However, in 2003, the sublease was surrendered for a premium of £7 million and London Underground continued to pay the rent in line with the provisions of the now non-existent sublease until 2019.

When Rail for London – London Underground’s successor – became responsible, it challenged the obligation to pay rent, arguing that with no sublease, no rent was payable under its own lease.

Rail for London asserted that as a result of the surrender, no basic rent had been due after the surrender took place, and sought repayment of around £6m paid during the intervening period to Hackney. Hackney disagreed. Ultimately, Rail for London issued proceedings on 9 March 2021 seeking various declarations, including that basic rent was not payable under its lease.

In its Defence, Hackney argued that (1) on the true construction of Rail for London’s lease, the basic rent continued to be payable after the surrender, (2) that further or alternatively a term should be implied to this effect or that Rail for London was “estopped” by convention from asserting that basic rent is not payable under its lease as a result of the Surrender.

Hackney argued that the commercial purpose of the principal agreement was so that Hackney would obtain by the mechanism of a long lease-back in the form of a lease to Rail for London, the net rental income from the arches for a 99 year term. Rail for London argued that this was not part of the commercial purpose.

Hackney’s counterclaim said that Rail For London had breached its obligations under its lease by failing to pay rent since September 2019, and sought declarations (1) in the alternative that (a) its interpretation of the lease with Rail for London was the correct one, (b) that a term was to be implied into this lease to that effect, and (c) that Rail for London was “estopped” by convention from asserting that the basic rent was not payable as a result of the surrender, and (2) that Rail for London should provide Hackney with the information necessary to calculate the unpaid basic rent.

In its reply to Hackney’s defence and counterclaim, Rail for London argued that with regard to estoppel, by convention that Hackney disclosed no reasonable grounds for defending the claim because it was seeking to use estoppel by convention as a sword, not as a shield.

The upshot was, Rail for London was seeking a declaration from the Court that no rent was payable under its lease and Hackney was arguing that rent continued to be payable, even after the sublease was surrendered, and that therefore it was entitled to the back-rent payable after Rail for London stopped paying.

Hackney’s case was that either the express wording of the lease meant that rent was still payable or, failing that, that a term to that effect should be implied.

The court’s interpretation

The Court considered the wording of all the relevant clauses in the lease and concluded that, on the express wording alone, at face value, no rent would be payable under the lease after the surrender of the sublease.

However, the court then considered whether a term could be implied into the lease. This would be to the effect that, even after the sublease was surrendered, rent would continue to be payable.

Looking into the background, the court decided that original purpose of the commercial agreement was to enable London Underground to extend the East London Line.

The sale and lease-back arrangement gave London Underground control and use of the property to enable it to extend the line without the need for a capital payment to Hackney. In exchange, Hackney would receive a percentage of the commercial rental income from the property which was to be paid by the underlease to Hackney.

Taking the whole arrangement in context, the Court concluded that it made no commercial sense for Rail for London to stop paying rent under its own lease when the sublease came to an end. It was therefore reasonable and equitable to imply a term into the lease requiring it to continue to pay rent.

Lessons to be learned

Hackney was fortunate in this case that the court took to view that terms which did not make commercial sense could be varied or implied, rather than taking them at face value.

It would have saved a lot or argument, time and expense had the leases been drafted differently in the first place. When the parties negotiate the terms of leases, especially those involving complications with head and sub-leases, drafting solicitors need to be mindful of the possible scenarios that could ensue.

View Full Article: LEGAL: common sense prevails in lease dispute

Braverman under pressure to reverse ‘outrageous’ HMO rules for asylum seekers

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Scores of housing groups and legal centres have called for ministers to abandon plans to remove licensing requirements for HMOs used as asylum accommodation.

In an open letter to the Home Secretary Suella Braverman and Housing Secretary Michael Gove, 137 organisations including Crisis, Shelter, the Refugee Council and Amnesty International urge them to rethink proposals that they say would leave asylum seekers housed in unsafe accommodation with inadequate protections against fire and overcrowding.

The changes outlined in the proposed Houses in Multiple Occupation (Asylum-Seeker Accommodation) Regulations would exempt landlords in England and Wales offering asylum accommodation from regulations governing everything from electrical safety to minimum room sizes.

They would no longer have to register with local authorities and could house asylum seekers for two years without getting an HMO licence.

The groups believe existing landlords and temporary accommodation providers will be incentivised to switch their properties to asylum accommodation, which may be more profitable. This could include properties which might not have met HMO standards.

As well as leading to an increase in substandard properties, it could exacerbate local housing and homelessness pressures, with the potential for people seeking sanctuary to be blamed for causing them.

Enforcement

They add that councils would no longer receive HMO licensing fees from properties used for asylum accommodation, drastically reducing the funds available for enforcement work.

Mary Atkinson, at the Joint Council for the Welfare of Immigrants, says the government is essentially proposing a two-tier system of housing, with fundamental human rights for people born here but not for those who come here seeking safety.

“This is outrageous. Everyone deserves a home that is decent and safe – by stripping away these protections for people seeking sanctuary, this government is putting people’s lives at risk,” she adds.

Read more: Essential guide to HMOs.

View Full Article: Braverman under pressure to reverse ‘outrageous’ HMO rules for asylum seekers

‘SURGE’: Co-living to soon hit 27,000 beds in UK, says Savills

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The UK’s co-living sector has trebled since 2019 as the formerly London-centric concept catches on around the country.

Popular with recent graduates and young professionals, co-living – which technically is often classsed as HMO – is a form of purpose-built rental housing generally comprising studio bedroom units and large amounts of high-quality communal space such as gyms, co-working areas, resident lounges and cinemas.

The number of co-living beds completed and opened to residents more than doubled last year, with 2,000 new beds in operation, bringing the total number to 3,422 and a further 21,599 in the pipeline, reports Savills.

Surge

“There has been a significant surge in co-living pipeline activity since the onset of the Covid-19 pandemic in early 2020, with residents drawn to this type of tenure due to its emphasis on community and resident interaction at a time when we weren’t able to venture far from our homes”, says Paul Wellman, associate director of research.

“In the five years to March 2020, applications were submitted nationally for 10,950 co-living beds. Yet in the three years since then, plans for a further 12,150 beds have been submitted, demonstrating the appetite from developers, investors and lenders for the sector.”

Catching up

London accounts for 82% of the total UK market, however regional cities are starting to catch up and are expected to be the main driver of growth in the short-to-medium term.

James Hanmer, head of UK PBSA investment & co-living, says Manchester, Sheffield, Glasgow, Birmingham, Bristol and Leeds are proving popular cities for the concept.

“These are markets that have already seen high levels of investment into built to rent and are home to large numbers of young professionals looking for both amenities and community,” he adds.

“However, we are also seeing schemes come forward in smaller markets such as Reading, Brighton, Guildford and Kingston, highlighting that co-living isn’t solely the preserve of major cities.”

If you want to see what an upmarket co-living space looks like then The Sessile (see main pic) in Tottenham Hale in North London by developer Way of Life, which operates seven such buildings across the capital. Its latest offers properties starting at £1,995 for a studio.

View Full Article: ‘SURGE’: Co-living to soon hit 27,000 beds in UK, says Savills

Is it better to sell property fast or sit and wait?

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Should landlords hold onto their properties for as long as possible following the BOE’s announcement that inflation fell to 8.7% in April?

Despite the fall in inflation, The Guardian is reporting the financial markets are betting on an interest rate rises to 4.75% in June and 5.4% by the end of the year

View Full Article: Is it better to sell property fast or sit and wait?