Answering Your Tax and Accounting Questions

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We’ve filmed a fair few episodes of The Property Tax Show now and as expected we have a ton of questions flooding in.
01:04 – Should I Register For VAT To Reclaim VAT On My Purchase?
02:04 Do I Need To Revalue My Property Every Year For My Accountant?
View Full Article: Answering Your Tax and Accounting Questions

Eviction – Judge thinks non-existant deposit should have been protected?

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Finally had enough of a bad tenant – constantly behind on his rent. I issued him with a Section 21 notice in December 2021. Naturally, he ignored the deadline to leave by mid-February 2022. He took me to court for wrongful eviction.

View Full Article: Eviction – Judge thinks non-existant deposit should have been protected?

Council tax bills equate to 37.5% of a tenant’s rent

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With rumours that the Government might be about to increase council tax bills in its Autumn Statement comes news that hard-up tenants are already paying council tax equivalent to 37.5% of their rent.

Ocasa, the specialist rental platform

View Full Article: Council tax bills equate to 37.5% of a tenant’s rent

Propertymark slams extension to no-fault notice periods in Wales

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All new tenancies in Wales from 1 December will have a statutory six-month no-fault notice period, while existing tenancies that convert to occupation contracts will see the extension under the Renting Homes (Wales) Act 2016 take effect from 1 June next year.

View Full Article: Propertymark slams extension to no-fault notice periods in Wales

Govt still ‘probing selective licensing’ three years after PRS consultation

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The government has been forced to admit that it is still considering the results of a consultation into selective licensing which ended three years ago.

Disgraced former Housing Minister Christopher Pincher (pictured)pressed the government to defend the schemes in his first question about housing since prompting the resignation of Boris Johnson.

The now independent MP asked what assessment it had made of the effectiveness of local authority enforcement of selective licensing designations and other existing measures against PRS landlords.

Housing Minister Felicity Buchan said: “We are also currently assessing the recommendations from the 2019 independent review into the effectiveness of selective licensing and will respond in due course. We will work with local authorities to gather more information about their selective licensing schemes to ensure they are continuing to deliver the intended outcomes and to help share best practice.”

Pincher also called on Housing Secretary Michael Gove to assess the potential impact of repealing Section 21 on the student housing market.

Reforms

Buchan replied it wanted as many tenants as possible to benefit from its proposed reforms, including students living in the private rented sector. Landlord groups have criticised periodic tenancies for discriminating against student landlords.

“We expect most students will continue to move in line with the academic year. We will continue to consider the impact of our reforms as we move towards legislation and will publish an impact assessment in due course,” she added.

Pincher – who served as Housing Minister for two years until February – quit as deputy chief whip in June amid allegations he sexually assaulted two guests at a London club.

There swiftly emerged revelations that then-Prime Minister Boris Johnson had ignored earlier accusations of sexual misconduct against Pincher before his appointment.

View Full Article: Govt still ‘probing selective licensing’ three years after PRS consultation

Unprotected deposit claim – 6 year rule?

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Hello, The 6 year rule? From the date of contract on an ex-tenant who is claiming compensation of £4-12k on 7.5 years on a tenancy that has now ended. They left on their own accord.

What should a landlord do after receiving a letter from the ex-tenant’s solicitor with threats?

View Full Article: Unprotected deposit claim – 6 year rule?

HMRC is targeting residential landlords with ‘nudge letters’

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HMRC is targeting residential landlords in its latest ‘nudge campaign’ that it suspects are not declaring their full rental income, warns tax advisers Kreston Reeves.

The campaign comes in advance of Jeremy Hunt’s first Autumn Statement and rumours of a further attack on residential landlords with higher rates of Capital Gains Tax (CGT) on property disposals and higher rates of National Insurance.

View Full Article: HMRC is targeting residential landlords with ‘nudge letters’

Average house price falls £4,159 in a month

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The average price of a property in the UK fell by 1.1% or £4,159 in October, data from Rightmove reveals.

And despite the weight of financial uncertainty, the fall is in line with the average 1.1% drop recorded in November during the pre-pandemic years of 2015-2019.

View Full Article: Average house price falls £4,159 in a month

Landlords slam London Mayor for excluding them from ‘rental summit’

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The NRLA has slammed London mayor Sadiq Khan for holding an emergency summit on the private rented sector without inviting any landlords.

Khan’s summit in the capital today will bring together private renters, charities, advocacy groups and politicians to address issues facing renters – but no landlord groups.

NRLA chief executive Ben Beadle (pictured) says it is disappointing in the extreme that the mayor feels he can solve the challenges faced in the capital’s rental market without any input from those who actually provide homes.

“The stark and simple reality is that whilst the demand for private rented housing in London continues to increase, the supply of such homes is falling,” says Beadle.

“This is a direct consequence of government policy aimed at shrinking the size of the sector, along with rhetoric from the mayor that suggests private landlords are simply a problem to be managed.”

Tinkering

He adds that if the mayor wants to address the cost pressures faced by households across London, he needs to focus on boosting the number of homes available.

“Anything else would merely be tinkering with the symptoms of the challenges in the rental market, without tackling the root cause of them.”

The mayor’s office reports that the average advertised London rent has hit £2,343 a month, which is more than double other parts of the country.

Khan insists: “Ministers must take this crisis seriously and act now. There is no time to waste so we have come together today to speak with one voice.

“Our demands to ministers are simple: implement your long-promised renters reform legislation and take action now to make rents more affordable for Londoners, using all powers at the government’s disposal.”

View Full Article: Landlords slam London Mayor for excluding them from ‘rental summit’

Legal: landlords cannot shift the blame for civil penalties on HMO landlords

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There is a licensing regime in England for houses in multiple occupation (HMOs) which comes under the Housing Act 2004. It requires that landlords of properties occupied by a number of tenants in two or more households, those who share facilities, to apply to the local authority for and to hold a licence to operate an HMO.

Holding such an HMO licence obliges landlords to comply with regulations pertaining to the condition of the property under section 234 of the Housing Act 2004. The regulations are prescribed under the “Management of Houses in Multiple Occupation (England) Regulations 2006” known as the “HMO regulations” and these relate to fire safety, gas and electrical safety, the decoration and cleanliness of the property, rubbish disposal etc.

Responsible person

The HMO regulations hold the responsible person individually or collectively as landlord, owner, manager or agent to account for the condition of the property to a higher degree than would be the case with single family lets.

Instead of going through with the complex and time consuming process of prosecuting a landlord for the offence of failing to comply with the regulations through the county courts, a local housing authority now has the power to impose a financial penalty on a landlord under section 249A of the Housing Act 2004, up to a maximum of £30,000 for each offence.

Dorval v Tendering district Council

In the case of Dorval v Tendering district Council Mrs Dorval and her husband were joint landlords and registered proprietors of an HMO for which Mrs Dorval applied for and obtained HMO licences for two adjacent properties and was permitted up to eight and six occupants respectively.

In 2018 managing agents were appointed to manage both properties but after officers from the local housing authority visited on a number of occasions, Mrs Dorval was sent schedules of work that needed to be done. There were also police visits following complaints about anti-social behaviour by the tenants. In August 2019 both the HMO houses were closed down following the service by the Council of Emergency Prohibition Orders under section 43 of the Housing Act 2004.

The Council then imposed financial penalties on Mrs Dorval amounting to £90,000 on the charge that she had committed five separate offences in respect of each property. Mrs Dorval then appealed the final financial penalty notices to the First-tear Property Tribunal (FTT).

The appeal

The appeal was listed for a hearing in November 2021 and again in January 2022, but following a number of requests by Mrs Dorval for the adjournment the Tribunal decided to go ahead with the hearing under its written representations procedure. This meant that a review with a view to a re-hearing was not possible and only a review of the FTT’s decision was possible.

Mrs Dorval was represented by solicitors earlier in the proceedings but later was unrepresented.

The financial penalties had been imposed on the basis that Mrs Dorval had failed to comply with the regulations and had committed offences at each property under the following paragraphs of the HMO regulations:

– Regulation 4(2), which requires the manager of the HMO to ensure that firefighting equipment and alarms are in good working order;

– Regulation 6(1) and (3) which relate to the testing of gas appliances and electrical installations;

– Regulation 7 which imposes a number of requirements about the cleanliness and decoration of the property, and the condition of handrails, banisters, stair coverings, ventilation and of any garden and boundary fences;

– Regulation 8 which requires the accommodation and any furniture supplied with it to be and to be kept clean and safe; and

– Regulation 9 which requires adequate arrangements for disposing of rubbish.

Witness statements were made at the proceedings by four local authority officers and two police officers, but the FTT in its decision acknowledged the witnesses were called and cross-examined, but said nothing about the content of their witness statements.

A bundle of 158 photographs indicated that the two properties were “in miserable condition”, but there was no labelling to indicate which photographs referred to which offences.

Mrs Dorval also made a witness statement and gave evidence to the FTT which was referred to briefly that her argument was that the condition of the property was the responsibility of the managing agents and that considerable damage was done by the tenants.

A witness statement by a director of the managing agents was in the bundle but there is no reference to this it in the FTT decision. There was an explanation by the FTT that there was a conflict between the agents and Mrs Dorval as to who was responsible for arranging repairs. It found that Mrs Dorval was primarily culpable under the HMO regulations. Her defence of reasonable excuse was turned down.

The decision largely upheld

The FTT said it was satisfied beyond reasonable doubt that Mrs Dorval had committed all the offences bar one or two and set out its findings about each instance of breach.

Mrs Dorval stated during tribunal hearings that some work had been done to the properties, and that some of the damage was caused by the tenants – saying she was a victim to the occupiers, a view recognised by the tribunal panel in its ruling. Dorval had no previous convictions.

That tribunal slightly reduced the fines, and following a subsequent appeal over the level of penalty another tribunal panel reduced the penalties again to £23,000. The Council had originally set fines of £90,000 but the tribunal panel ruled the issues were a rapid deterioration over a short period of time and therefore there was less culpability.

Judge Ruth Wayte concluded that the penalties “will in large measure remove any financial benefit to the applicant as manager over the period of the council’s involvement with the properties”.

Paul Honeywood, TDC Cabinet Member for Housing, said the level of fine showed landlords they must maintain their properties.

“We are not afraid to take action against rogue landlords who think it is acceptable for our residents to live in sub-standard housing – whether that’s issuing our own fines, or following various appeals through the tribunals.

“The vast majority of landlords in Tendring properly maintain their properties and want the same thing as us; decent quality homes for tenants, and in turn a rental income for them. We will always work with and support landlords who share this view.

“Unfortunately this case highlights the issues which can happen, rarely to this level, and we will not hesitate to take strong action to clamp down on landlords who flout the rules.”

The case has important implications as it confirms that tribunals must take into account a council’s policy when imposing civil penalties for these offences.

View Full Article: Legal: landlords cannot shift the blame for civil penalties on HMO landlords