It’s only going to get worse

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Benefit Tenants:

Paul Shamplina of Landlord Action continues his popular TV series of Nightmare Tenants, Slum Landlords. The series, on Channel 5, makes especially interesting viewing for landlords, and will be appearing again soon.

Paul says, “…a few weeks ago I started filming for the new series of Nightmare Tenants and one of the cases was for my landlord Emmanual in Dagenham where we attended on the eviction.  The landlord was owed £6k by a tenant, who unfortunately ran in to money problems but failed to communicate with the landlord about his current situation (which is very common).

The tenant had taken the tenancy out in his name and came recommended to the landlord from his neighbour, so no referencing was taken out. But, unbeknown to the landlord the tenant moved in his wife and three kids into this flat in Dagenham.

“Now this was the part I see a lot,” said Paul, “and increasingly growing in our sector, the tenant was all packed with his suitcases waiting with his wife and three kids for the bailiff to arrive, so he could receive his documentation to say that he had been evicted, so he could go to the council to try and be rehoused in first off temporary accommodation.”

This is a distressing situation no landlord wants to see children becoming upset because they have been thrown out of their home, but councils are putting this on families and forcing landlords to take legal action until the bailiff stage.

Paul says, “The bailiff confirmed to me, this is happening on an unprecedented scale.  That day by the way he told me he had 12 evictions and two weeks previously he was attacked with a hammer.

“We even reported recently of a case where the Council had allegedly told the tenant to break back into the property that they had just surrender the lease on. They had made themselves intentionally homeless.  So they instructed a locksmith to change the locks.

The previous Housing Minister, twice removed, Brandon Lewis, wrote to all councils in the country to make sure that the “Prevent Homelessness” initiative, under a new Act that came in, says councils have to intervene at 56 days, but clearly they are not doing so.  That means acting after receiving a section 21 notice, and not waiting for a bailiffs eviction date.

The National Landlords Association reported that 49% of tenants who receive a section 21 notice said their local advice centre or local council had told them to ignore it.

This totally contradicts the Government’s brief.

Councils have a duty to rehouse tenants based on a priority, but if a particular council does not have enough temporary or long-term housing to re-house, the easy option is to say: ‘Come back when you are evicted’.  Recently it was reported that there are 52,000 people in temporary accommodation in London and half of those people had to move to another Borough.

One London Borough has 22,000 people on its waiting list.

“Yes the challenges are great,” says Paul, “…with Councils not being able to secure enough properties in its Borough to rent, meaning they have to rely on the private landlords, who are willing to rent out their Buy-to-Let to a benefit tenant.

“With such challenges of rising rents, demand strong from the private tenants, changes in the Benefit System to a hugely controversial Universal Credit – all this is causing rises in evictions, as well as caps to the benefit system.  Landlords are worried because the benefit is not be paid direct to them, and tenants often don’t pass it on as rent.

“Unfortunately, we see more and more landlords at Landlord Action saying they are having to evict a tenant on Section 21 proceedings. This is because they have been advised by the council to ‘stay put’, along with the fact that small landlords are selling up because the figures don’t stack up. It’s a lot harder to rent a property nowadays (with less return), because of rising costs and more regulations, says Paul

“Unfortunately reality kicks in with the economics, and I do see more and more landlords, especially in the London and the South East, who do not want to rent to Benefit Tenants. This is despite the fact that we know that they stay in a property longer and look after it better, wanting it to be a long term home.

“Let’s hope the Local Authorities get the funding from Government they need to build more social housing. In the year up to March 2016 it was only a mere 32,110 compared to 66,600 twelve months prior, a 24 year low.

We hold our breath!

Paul Shamplina of www.landlordaction.co.uk

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – It’s only going to get worse | LandlordZONE.

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It’s only going to get worse!

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So a few weeks ago I started filming for the new series of Nightmare Tenants and one of the cases was for my landlord Emmanual  in Dagenham where we attended on the eviction. 

The landlord was owed £6k by a tenant

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Landlords Business Restructure Spreadsheet

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Property118 Limited has just released a new spreadsheet for landlords and their accountants to download free of charge.

The spreadsheet is incredibly easy to use and produces instant results.

Find out whether it might be possible to restructure your business so that you only pay corporation tax on a significant amount of your future your rental profits

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Abandoned van how to remove it?

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I am looking for some advice I am sure someone will have an answer or point me in the right direction. I own a small block of flats together with the management company and freehold.

It has been reported to me that a van has been parked in the car park for the last 6 months and has not moved.

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New Scottish Tenancy Regime could deter major investors

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New Housing Tenure Scotland:

One housing adviser has said that the new rules on renting in Scotland will hit planned institutional investment.

The adviser, a member of the Scottish government’s advisory group on property, has expressed fears that the new rules on residential tenancies would “torpedo” institutional investment in Scotland’s build-to-rent sector.

Under the new rules the traditional fixed-term tenancy arrangement is to be a thing of the past, where tenants will get unlimited length security and landlords get virtually none.

Under the new tenure a landlord will no longer be able to ask a tenant to leave simply because a fixed term has ended. If the landlord wants to end the tenancy at any time he/she will need to justify this action by giving the tenant/s one or more of the 18 specified reasons for ending a tenancy contract – 8 mandatory grounds and 10 discretionary grounds on which a tribunal is to decide.

Although the housing charities have campaigned on these changes and have welcomed them, their introduction is not being universally welcomed, and as has been pointed out, they could have unintended consequences on the letting market.

The Scottish government has been trying to attract institutional developers to move into the rental housing sector which is seen as a way to relieve some of the shortages. Scotland currently has only around 2 per cent of its housing stock owned in this way, this compares to 5 per cent plus and growing in England.

The Scottish government launched a rental income guarantee scheme, designed to reduce the risk for and encourage investors. However, John Boyle, director of research with Rettie & Co, one of the companies involved in the Holyrood advice framework, has said that the new tenure rules could impact the benefits of the scheme.

Mr Boyle has said:

“Institutional investors want long term tenants, which the new legislation promotes, but now the tenant has long-term security while the landlord does not. For big funds there’s a risk to reputational damage in all this so it’s a further obstacle to getting them to invest in Scotland.”

Scottish Housing Minister, Kevin Stewart, argues, the new tenancy agreement benefits tenants as well as landlords and “sits alongside our commitment to deliver at least 50,000 affordable homes during this parliament”.

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Luxury Retirement Home Investment In Stately Manor

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This Grade II listed building was previously the birthplace of British ex-Prime Minister Sir Anthony Eden. It will be sympathetically renovated to transform it into a luxury retirement property.

Investors can purchase a suite in Windlestone Hall from £117,500 and receive 10% returns over a ten year commercial lease.

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Landlords need to prepare for ‘revenge eviction’ claims

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Section 21:

The Deregulation Act 2015 introduced new rules on 1 October 2015 including a number of provisions designed to protect tenants against unfair eviction, where the tenants have raised a legitimate complaint about the condition of their home.

In some cases this will make it more difficult for landlords to evict a tenant, especially if the tenant is deliberately using dilapidations as an excuse not to pay rent and avoid eviction. Landlords need to plan ahead and prepare for such a situation.

Landlords therefore are being urged to set up basic procedures to protect themselves against accusations of retaliatory evictions.

A legal specialist Danielle Hughes has said that many landlords are leaving themselves wide open to legal claims of retaliatory eviction and property disrepair by failing to put clear processes in place to deal with tenant issues.

The introduction of laws against retaliatory evictions – in which landlords are accused of evicting a tenant solely because they have made a complaint about the condition of the property – were brought in as part of the Deregulation Act 2015. The laws currently only apply to assured shorthold tenancy agreements (ASTs) entered since October 1, 2015, but will apply to all ASTs from October 1, 2018.

According to Danielle, landlords are now at increased risk of seeing their claims for possession defeated in court as tenants gain a greater understanding of the new retaliation eviction legal defence.

She said: “Landlords may be shocked to discover that tenants could potentially successfully fight a claim for possession based on what has until recently been known as the “non-fault” eviction process.

“This defence can not only invalidate a section 21 Housing Act notice and lead to the judge striking out a claim, but can also prevent a new section 21 notice being served for six months.

“There is a particularly strong chance of this happening in cases where landlords have failed to deal effectively with complaints and have had an improvement notice or an emergency remedial action notice served on them by the local authority.”

According to Danielle, landlords should actively encourage tenants to report any problems with the property to them in writing at the earliest opportunity to avoid the problem escalating to the point where the local authority becomes involved.

“The law sets out that landlords must provide an “adequate response” to complaints within 14 days of receipt,” she said. “The belt and braces approach is to inspect the property regularly and undertake any work required within a reasonable timeframe, depending on the works required.

“Most landlords pride themselves on being responsible, and are keen to be made aware of issues with a property so that they can both protect their asset and continue to provide safe and secure homes for their tenants.

“Keeping properties in good repair is not only preferential, it’s also essential to avoid other legal action being taken, such as housing disrepair claims, a hazard notice being served by the local council, and investigations into a breach of licence conditions, with the latter two carrying risk of criminal sanctions.”

There are cases in which landlords carrying out genuine evictions will be legally protected, including situations where the tenant has caused the disrepair, if the property is genuinely for sale on the open market (not to family, friends or business partners), and if at the date of the section 21 notice, the mortgage lender requires vacant possession to sell the property.

“However,” said Danielle, “It goes without saying that the best approach is for landlords to be proactive in managing their property to ensure they’re not accused of a retaliation eviction in the first place.”

Here Danielle sets out her key tips for landlords to protect themselves against allegations of revenge evictions:

1)    Be aware of your repair obligations as set out in the Assured Shorthold Tenancy Agreement and under Section 11 of the Landlord & Tenant Act 1985;

2)    Make open channels of written communication available so that tenants are able to report any problems;

3)    Implement a system whereby you respond to any written complaint within 14 days of receipt. If you will be away, then arrange for someone to monitor this for you. If a letting agent manages the property, ask them about their process for responding to ensure they are doing so in a timely manner, as ultimately the landlord bears the overarching responsibility for repairs and responses;

4)    Put in place a schedule for any works to be completed within a reasonable timeframe, depending on the nature of the work needed;

5)    Keep records of your responses to the tenants in case the details are ever needed in court;

6)    Keep a log of any repair work you have undertaken;

7)    Retain any evidence you might have of occasions on which tenants have refused to allow access to the property for inspections or for repair work to be undertaken. This could prove vital.

8)    Most importantly, check whether there are any outstanding complaints with the property and address any such issues before service of notice under Section 21.

Danielle Hughes is a solicitor at Kirwans law firm

Retaliatory Eviction and the Deregulation Act 2015: a guidance note

Section 21 Notices

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Tenant Referencing

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Good tenant referencing is an essential part of the lettings process as it will give you all the information and advice you need to make an informed decision about the tenants that want to rent your property.

With a reference and credit check completed by Advanced Rent’s tenant referencing service

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New tenancy laws in Scotland

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Tenancy changes Scotland:

Whilst some are hailing the new tenancies in Scotland a “new dawn” for private tenants, many landlords are viewing the change with some trepidation.

The tenancy reforms, which are effective from the 1^st of December, following a long gestation period through the Scottish Parliament, give tenants some sweeping powers over their landlords which campaigners have long awaited: longer notice periods, indefinite security of tenure and limited rent rises are now on the statute book.

The private rented sector makes up around 15% of all homes in Scotland, a figure which compares to around 20% in England & Wales.

The new rules usher in a new era in the Private Rented Sector (PRS) in Scotland, somewhat reminiscent of a highly regulated rent controlled PRS in Britain, under 1950s and 60s Labour governments. This was a time when Rachmanism* flourished, and set in train a long-term decline in the PRS until it was revived by Margaret Thatcher, with the introduction in 1988 Housing Act of the Assured Shorthold Tenancy.

The move is away from the principles of the Assured Shorthold Tenancy (AST), which has given landlords in Scotland, as well as England and Wales, the flexibility to fix rents at make levels, and to re-possess as and when necessary, without the need to justify the reason for doing so to a judge, for nearly 30 years.

This shorthold principle has encouraged thousands of new landlords to enter the buy-to-let market safe in the knowledge that they can evict if things go horribly wrong, as they sometimes do with private landlords and tenants.

That’s not to say landlords want to evict at the drop of a hat: most landlords encourage their tenants to stay as long as possible. Over 90% of tenant evictions in England occur because of rent arrears.

Landlords in England, therefore, will be watching the results of these changes with baited breath, and perhaps more than a little trepidation, given that any new Labour government would undoubtedly follow Scotland down the same path. Mr Corbyn’s rhetoric at the last Labour party conference certainly seemed to confirm this intension first proposed by his predecessor, Ed Milliband.

One positive in all this would seem the moving of landlord-tenant disputes out of the courts and into a property tribunal, similar to the system operated in Australia, but the “jury is out” on how this operates in practice.

So, from the last Friday, private residential landlords in Scotland, letting to a new tenant, should be aware that these new rules will add significantly to the security of tenure of their tenant, going far beyond anything so far in force in England, though Wales is itself considering changes to its tenancy laws, so watch this space.

The “no-fault” section 21 style possession claim goes out in Scotland, and tenants are entitled to longer notice periods, depending on how long they have been in occupation. There is no fixed term tenancy, but indefinite security of tenure. In addition, any rent increase is limited to once in 12 months.

Any dispute between a landlord and tenant will be heard at the new specialist first tier tribunal and, in Scotland from January, all letting agents will have to be registered and follow a statutory code of practice.

Other legislation in Scotland allows local authorities to apply to the Scottish Government to have an area designated as a Rent Pressure Zone (RPZ) if they think rents are rising too much in a certain area. A number of councils, including Edinburgh and Glasgow, have already indicated that they are considering zones.

Shelter Scotland’s Graeme Brown, has said:

“Today represents a new dawn for all private renters in Scotland. These new laws bring unprecedented security of tenure to private renters, with landlords now needing a good reason to evict tenants.”

Bob Cherry, head of lettings for Galbraith, a leading Scottish letting agents, cautioned that there are elements in the new legislation which landlords need to be very careful about, in particular the fact that it will not be possible for landlords to terminate a new Private Residential Tenancy with notice, without cause, whereas as tenants can leave relatively easily.

“However there are several aspects of this legislation which may make relationships between tenants and landlords more secure. For example, tenants will have improved security of tenure and whilst this could sometimes create difficulties for landlords who have a genuine reason to need to end a tenancy agreement, the vast majority of our landlords are seeking a long term let and the new PRTs will help to achieve this in many cases,”, Mr Cherry has stated.

“Where the relationship between the tenant and the landlord does break down, there may be an element of streamlining the process for resolving disputes, but we will have to wait and see how this system operates in practice.”

*Peter Rachman gained notoriety for his exploitation and intimidation of (mainly immigrant) tenants in London’s Notting Hill in the 1950s and early 1960s. Britain’s rental laws at this time gave lifelong security, which gave rise to Rachman’s brutal treatment of tenants, circumventing the protective tenancy laws by using bully boy tactics. “Rachmanism” later gained an entry in the Oxford English Dictionary as a term meaning the exploitation and intimidation of tenants by unscrupulous landlords.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – New tenancy laws in Scotland | LandlordZONE.

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Banning orders and criminal database to be introduced April 2018

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New banning orders, which could see landlords barred from letting or managing a property indefinitely, will be introduced in April 6 next year it has been announced.

The Government said the move will go ahead subject to the regulations being approved by each House of Parliament

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