Dangers of rent-to-rent highlighted by landlord’s £11k rent repayment order

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A rent-to-rent landlord operating a flat in central London has been ordered to pay rent back to his tenants totalling just over £11,000 via a rent repayment order or RRO.

The case highlights the challenges faced by rent-to-rent agreements, as the case involved a freeholder, leaseholder, landlord and a managing agent.

The landlord – David Ravelo – who operates the four-bedroom maisonette close to Euston Station that housed the five tenants, must foot the bill after a First Tier Tribunal judged that he had operated the property as an HMO without a licence.

The local council, Camden, has operated a borough-wide additional licencing scheme since 2015.

HMO licence

Ravelo’s five tenants, who each paid £800 a month, claimed their rent back for between five and 12 months up until 1^st December 2020, when an HMO licence was finally secured for the flat.

Revelo admitted that the property did not have a licence before that date, but claimed he had a ‘reasonable excuse’, saying that his managing agent “unequivocally misinformed him as to the current licensing status of the property”.

This was rejected by the Tribunal, which said “he has experience of other properties requiring HMO licences and was fully aware not only of the requirements but also how to check that those requirements had been met”.

The court heard that Ravelo considered the property to be in an ‘excellent condition’ and that the tenants said they had a good relationship with their landlord who was a ‘lovely person’. But they said he was too slow when it came to repairs and maintenance issues, including a major infestation of ants and mound in one of the bedrooms.

Ravelo’s bill could have been much twice as much – some £20,000 – but the Tribunal awarded a 50% reduction on the RRO because the offence was in the ‘mid-range’ of seriousness. Deductions were also made for the utilities that Ravelo paid for as part of the tenancy agreements.

Read the judgement in full.

Read advice on licencing. 

View Full Article: Dangers of rent-to-rent highlighted by landlord’s £11k rent repayment order

Official ONS report on house price inflation

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Average UK house prices reached £294,000 in December 2022 – £26,000 higher than 12 months ago, according to the Office for National Statistics (ONS). 

The latest UK House Price Index from the ONS revealed average UK house prices have increased by 9.8% in the last 12 months to December 2022

View Full Article: Official ONS report on house price inflation

WARNING: Judge tells landlord ignorance is no defence against licencing fine

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A landlord has lost his appeal against a fine for renting out unlicensed properties after arguing that the seller’s solicitor had failed to tell him about a selective licensing scheme.

City Estate Holdings bought two houses in Westbourne Avenue, Gateshead, at auction in April 2020, and let them out in August. In November, the council told it both properties needed a licence, which owner Michael Kosmas applied for three days later. However, the company was fined more than £9,000 in July 2021.

A First Tier Property Tribunal found that Kosmas was unaware of licensing requirements and that it had been “entirely reasonable” for him to rely on his professional advisers, which gave him the defence of reasonable excuse. It said that even with this, “the imposition of a civil penalty would have been unnecessary to achieve the objects of the licensing regulations”.

Solicitors

Kosmas had described himself as a professional landlord but acknowledged that he was “unlikely to be able to keep up with the changing regulations applicable to rented property”. He said the seller’s solicitors, along with his firm’s own solicitors, failed to tell him about licensing requirements.

At appeal, Upper Tribunal Judge Elizabeth Cooke, who is also President of the Property Litigation Association, said City Estate Holdings could have instructed its solicitors or a letting agent to find out and advise it on the regulatory position about letting the property.

She said that being a good landlord might go towards mitigating the amount payable in a financial penalty, “but it does not amount to the sort of exceptional circumstance that might justify a decision not to impose a financial penalty where it is proved beyond reasonable doubt that the offence has been committed and the respondent has failed to establish the defence of reasonable excuse”.

Another First Tier Property Tribunal will now decide on the size of the fine.

Read more about landlord fines.

View Full Article: WARNING: Judge tells landlord ignorance is no defence against licencing fine

Fire safety tax for developers could ‘curb UK home building’

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The top five UK home builders are likely to be disproportionately hit by hefty taxes, according to Bloomberg Intelligence. 

Large UK home builders such as Taylor Wimpey, Bellway and Berkeley are likely to be hit by heavy taxes (80% of the industry levy) for fixing apartment-building safety issues

View Full Article: Fire safety tax for developers could ‘curb UK home building’

My Deposits ruling – No wonder landlords are selling up?

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Yet another reason to sell up. My deposits have just ruled that unless a landlord has a court order they cannot be awarded money from a deposit to pay towards legal costs!

My Deposits has awarded in favour of my ex-tenants by giving their money back even though they withheld rent twice over 2 years

View Full Article: My Deposits ruling – No wonder landlords are selling up?

Attention all landlords! Are you tired of managing rental properties and the hassle?

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Are you ready to sell your investment and move on to other opportunities? If so, we have the solution for you.

We are a team of real estate professionals, dedicated to helping landlords sell their properties quickly and efficiently. We understand the unique challenges that come with selling rental properties

View Full Article: Attention all landlords! Are you tired of managing rental properties and the hassle?

LATEST: Official ‘property portal’ being tested by landlords prior to launch

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Private landlords and agents have started helping the government to test its impending property portal.

In answer to a written question about its progress since the announcement as part of the Renters Reform Act white paper last June, DLUHC minister Dehenna Davison (pictured) said it was busy doing research.

“We are conducting ongoing policy and digital development which has included user research with potential users of the portal, such as private landlords, property agents, local authorities and private renters,” said Davison.

“We will continue to conduct testing of potential solutions for the property portal to make sure the system works for different users. Announcements will be made in the usual way.”

The government announced the portal, explaining that it would provide, “a single front door to help landlords to understand, and comply with, their responsibilities as well as giving councils and tenants the information they need to tackle rogue operators”.

Database

It is expected to be similar to, but more comprehensive than, those in Wales and Scotland, using the address of each private rented property in England to create a database of homes and their landlords/agents.

This is likely to include the owner of the property, the company managing it if applicable and a contact address for the owner/management.

This portal could then be linked to any redress cases linked to the property and its landlord and will include any information on outstanding enforcement orders and other breaches of the Decent Homes Standard.

It is still unclear whether it will include regulatory information such as additional or selective licencing, gas safety, MEES and electrical checks.

If you’ve been approached by DLUHC to test out the portal get in touch with LandlordZONE via email.

View Full Article: LATEST: Official ‘property portal’ being tested by landlords prior to launch

Tenants face ‘bleak future’ unless landlords are helped to offset rising mortgage costs

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Ballooning mortgage costs will make an already tight rental market even harder for tenants seeking affordable homes to let, landlords have warned.

Their representative body the NRLA has published research that shows nearly two-thirds of landlords, based on a survey of nearly 800, have at least one buy-to-let mortgage and that among these a third must remortgage over the next 12 months.

Based on Bank of England (BoE) predictions that higher intertest rates will see their BTL mortgage costs climb by an eye-popping £175 a month, something the NRLA says will make an already serious supply problem in the rental market worse.

The BoE also recently said this mismatch between the demand for, and supply of rented housing, is in part a consequence of higher borrowing costs. This is already pushing up prices. The Office for National Statistics today revealed that rents continue to rise significantly across the UK.

Chris Jenkins, its Assistant Deputy Director, says: “Rental prices continue to increase at pace with the largest annual percentage change since UK records began in 2016.

“London’s rental growth continues to pick up with the strongest growth for over seven years.” 

Portfolio shrinkage

Despite the strong demand, 30 per cent of landlords told the NRLA that they plan to cut the size of their portfolio this year, the highest level of planned disinvestment seen in more than six years.

Read more: How to cope with losing mortgage interest relief on your mortgage.

Ben Beadle, Chief Executive of the NRLA, says: “It is time the Government stepped in and accepted calls by the NRLA, the [recent DLUHC] Select Committee and others for tax measures to encourage the supply of homes to rent.

“Without this, renters face a bleak future as finding somewhere to live becomes increasingly harder.”

Read more stories about landlord mortgages.

View Full Article: Tenants face ‘bleak future’ unless landlords are helped to offset rising mortgage costs

Where is the Landlord registered?

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I hold the registered title of Absolute Guarantee to long residential Under Lease to flat and parking space. The residue of the Superior Lease transferred by the Developer to the Right to Manage Company (RMC) a registered limited company subject to a trust in which Leaseholders are Unitholders each hold a £1 paid-up share and was served Notice by the Transferors the RMC is the Landlord.

View Full Article: Where is the Landlord registered?

NRLA call for tax regime change as landlords face higher mortgage costs

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A third of private landlords with a buy-to-let mortgage face the prospect of higher costs this year, according to the National Residential Landlords Association (NRLA). 

The Bank of England has warned that by the end of the year

View Full Article: NRLA call for tax regime change as landlords face higher mortgage costs