Daily Telegraph wants to speak landlords facing difficulties regaining possession after council advice

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Are you landlord who is trying to retake possession of your properties and facing difficulties from the council? Then, Alexa Phillips, the personal finance reporter for the Telegraph would like to speak with you.

Alexa would like to speak to Property118 readers about:

• What has your experience been like?

View Full Article: Daily Telegraph wants to speak landlords facing difficulties regaining possession after council advice

Another Tribunal says ‘superior landlord’ NOT responsible for rent repayment order

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Another First Tier Property Tribunal has confirmed that a superior landlord cannot be held responsible for a Rent Repayment Order (RRO), following the landmark Rakusen case.

Tenant Riaz Moola had tried to argue that landlord Khalil M’barek was responsible for the property in the upmarket Belvedere Row Apartments in White City, London, from February to November 2022, and applied for a £31,635 RRO.

He argued that he had initially taken the property on a trial basis, paying £3,600 a month – and once he had decided to stay in the property, he had entered into a personal agreement with M’barek.

Landmark case

However, the tribunal referred to the Supreme Court case which ruled that these orders can only be made against an immediate landlord and threw out the claim.

It found that the parties did not both sign an agreement in the same form; M’barek signed one that identified the tenant as CoGrammar Ltd, while Moola signed one that identified himself as the tenant.

It said: “The tribunal prefers and accepts the evidence of Mr M’barek that for the period from 23rd March, his tenant was CoGrammar Ltd. As the tribunal has found that Mr M’barek was not Mr Moola’s immediate landlord, either before or after 23rd March, no RRO can be made in Mr Moola’s favour against Mr M’barek.”

Earlier this month, in the first case to cite Rakusen, landlord Sabour Mansour tried – and failed – to claim that he was the superior landlord of an unlicensed HMO and was found to be responsible for the property in Pott Street, Tower Hamlets. His two tenants were awarded more than £6,000.

View Full Article: Another Tribunal says ‘superior landlord’ NOT responsible for rent repayment order

February sees the lowest property sales in a decade

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Data published by HMRC show that non-seasonally adjusted property sales were up 2% from January, to 76,920 in February – but this is down nearly a fifth from last year (18%).

However, the seasonally adjusted figures show that things look even worse as transactions are down 18% in a year and 4% since January.

View Full Article: February sees the lowest property sales in a decade

Non-resident landlords being refused legal expenses on insurance?

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Hello, My landlord’s insurance is up for renewal, and while there’s no problem insuring the properties themselves, this year – for the first time ever – our broker is saying no one will include cover for legal expenses because I’m a non-resident landlord.

View Full Article: Non-resident landlords being refused legal expenses on insurance?

Consultation on single banding HMO rooms – Levelling-up and Regeneration Bill

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Please can Property118 post a request for interested landlords to respond to this consultation. The deadline is 31st March.

NC7 (New Clause 7) is Dame Caroline Dinenage’s amendment to the Levelling-up and Regeneration Bill and it will hurt tenants and landlords as the costs will inevitably be passed on.

View Full Article: Consultation on single banding HMO rooms – Levelling-up and Regeneration Bill

Isle of Wight to slap council tax on holiday homes rented out under 70 days

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The Isle of Wight Council has vowed to charge owners of second homes and empty properties more council tax as soon as it gets the go-ahead from the government.

Its ruling Alliance Administration had suggested putting a 100% tax premium on second homes and empty properties, however councillors agreed to delay a decision on the amount until the council was given more powers.

The government has promised that from next year, councils in England will be able to double the standard council tax rate on any home left empty for longer than a year, rather than the current two years. 

Rented out

In England, second homes will need to be rented out for a minimum of 70 days per year to access small business rate relief, rather than paying council tax from next month. 

At a full council meeting, Conservative leader councillor Joe Robertson (main picture) said that the rationale behind the 100% figure had not been set out and needed to be backed by evidence, analysis and data, reports the Island Echo website.

Cabinet member for strategic finances, councillor Chris Jarman, said it had been included after the council’s finance officer suggested the authority should maximise its revenue at every opportunity, saying that it sent a strong signal to property owners of its intent to bring the charges in at the earliest opportunity, so that they did not risk missing out on a substantial amount of income.

Councillor Julie Jones-Evans questioned why the authority should not make the most out of second homeowners, especially after the authority charged Islanders the most it could in a council tax increase this year.

Read more about Jersey.

View Full Article: Isle of Wight to slap council tax on holiday homes rented out under 70 days

Jersey to charge double council tax on holiday homes rented out under 70 days

admin    Uncategorized     agents

The Isle of Wight Council has vowed to charge owners of second homes and empty properties more council tax as soon as it gets the go-ahead from the government.

Its ruling Alliance Administration had suggested putting a 100% tax premium on second homes and empty properties, however councillors agreed to delay a decision on the amount until the council was given more powers.

The government has promised that from next year, councils in England will be able to double the standard council tax rate on any home left empty for longer than a year, rather than the current two years. 

Rented out

In England, second homes will need to be rented out for a minimum of 70 days per year to access small business rate relief, rather than paying council tax from next month. 

At a full council meeting, Conservative leader councillor Joe Robertson (main picture) said that the rationale behind the 100% figure had not been set out and needed to be backed by evidence, analysis and data, reports the Island Echo website.

Cabinet member for strategic finances, councillor Chris Jarman, said it had been included after the council’s finance officer suggested the authority should maximise its revenue at every opportunity, saying that it sent a strong signal to property owners of its intent to bring the charges in at the earliest opportunity, so that they did not risk missing out on a substantial amount of income.

Councillor Julie Jones-Evans questioned why the authority should not make the most out of second homeowners, especially after the authority charged Islanders the most it could in a council tax increase this year.

Read more about Jersey.

View Full Article: Jersey to charge double council tax on holiday homes rented out under 70 days

Housing market shows signs of ‘green roots’

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As Spring approaches, one organisation says that the housing market is showing signs of ‘green roots’.

The Guild of Property Professionals says that despite the continuing cost-of-living crisis, other economic factors are improving and any possible recession appears to be less severe than was predicted.

View Full Article: Housing market shows signs of ‘green roots’

Landlord’s troubles just go from one crisis the next…

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Home Reit, an investment trust landlord, was set-up to house Britain’s homeless. But the company has found itself running into increasing difficulties, with tenants’ complaints and failed rent payments, a negative short-seller’s report, a financial squeeze with falling stock prices and alleged criminal activities.

Home Reit was established around three years ago as a pioneer London stock exchange listed property fund (investment trust) specialising in providing properties to charities tackling the UK’s homeless problem – people living on Britain’s streets.

With ambitious aims, broadly in-line with Government polity, its stated target was to raise a fund worth £1bn which would provide enough rental housing to take 10,000 people off the streets.

However, so far things have not worked out quite that way. The trust company has lurched from one crisis to the next, with rent arrears and scandal, and it has been the victim of a report questioning the company’s business model. This is a short seller’s report, short sellers make money by betting on falls in a company’s share price.

Stock market listing

Launched on the London Stock Exchange in October 2020, Home Reit managed to raise £240 million in what turned out to be the largest initial public offering of any investment trust in that year. The investment trust company went on to quickly source and invest the proceeds into around 500 multi-occupation properties, all for homeless people around the United Kingdom.

In September 2021 a further £350 million was raised and used to buy another 366 properties. Come 2022 yet another £150 million was raised through investors to purchase a further addition of 216 properties; thus making a portfolio of over 1,000 sheltered accommodation properties, which were let out to 126 charities, housing associations and local authorities.

Tenant complaints

Trouble for the Reit started initially with complaints about living conditions by its tenants and when at the end of 2022 a group of shareholders claimed the company had misled the investment market. They claimed that instead of catering purely for the homeless, the Reit was letting some of the properties to tenants who are not vulnerable and would not be eligible for government assistance – Housing Benefit payments.

The company vigorously denied the allegations but subsequently admitted that it did not have sufficient information to identify how much of its income came from Housing Benefit payments and how much came from other rent payments.

The Trust’s problems got much worse when more of it’s tenants complained about the living conditions in some of the properties, coming up with long lists of complaints ranging from roof leaks to black mould, and withholding rent payments because of this. One charity said it owed almost £1m in rent and predicted the bill would just keep growing as long as the complaints were not dealt with.

A housing charity involved said that the Reit’s model was not working for its tenants. The charity otherwise manages more than 400 homes with in excess of 1,000 beds throughout the UK and stated that, “We’ve got properties that are unfit for people to live in and we’ve had to shut some of them down because they are just not right for anybody, let alone a vulnerable person.”

“We’ve been promised an amount of money that hasn’t been delivered. We pay for refurbishments as best as we can, but we can’t pay for everything. Tenants are living in substandard accommodation,” said the charity.

Both private investors and some leading city institutions such as M&G and Scottish Widows invested client’s funds into Home Reit, largely because the business model has worked in other countries and there was a nice social theme to the model that promised to meet the needs of multiple stakeholders; central government, charities, housing associations, local government and the homeless themselves.

Home Reit has responded to criticism from it’s tenants, telling The Guardian Newspaper that:

“Home Reit is shocked to learn of the state of disrepair at [one particular] …property. When Home Reit acquired the property it was in fair condition although the building survey identified some areas that required addressing as part of the agreed refurbishment, and the company understood there was a plan in place by the tenant with the developer to undertake this.

“Home Reit has been trying to gain access to the property since August 2022 as part of our regular inspections and this has not been given. Now we have been made aware we are trying to find a solution to move the resident out of the property as soon as possible.”

The Short-seller’s report

Adding to Home Reit’s difficulties was the publication of a short-seller report which has attacked the company. But the directors have stated that the report is “inaccurate and misleading” and “based on mistaken assumptions, misinformed comments, and disputable allegations”.

Home Reit’s auditors were reviewing Viceroy Research’s (the reports authors) allegations that many of the tenants Home Reit houses “cannot afford rent, have not been paying rent, are in administration, are run by bad actors, or simply do not provide social housing services”.

Home Reit in turn said it would be publishing “a full and detailed response demonstrating the factual inaccuracies and selective use of information.”

The Viceroy Research’s report alleges that several of the trust’s largest tenants don’t appear to be paying any rent and that many of the charities using the trust’s services don’t have the ability to service the leases on a long-term basis.

The short-seller also claims that many of Home Reit’s properties were bought at an inflated prices thereby artificially inflating its net asset value (NAV) and with it a management fee paid to the fund manager Alvarium.

Directors and shareholders

One non-executive director at Home Reit is Peter Cardwell, talkRadio’s political editor and a former special adviser to Conservative government ministers.

The trust’s shares were suspended at the start of this year after the company missed a deadline to publish its annual accounts, following which its accountants BDO started “enhanced audit procedures” would be undertaken. The directors have also faced legal action from shareholders who were angered after the share price fell by nearly 70 per cent.

The latest news on Home Reit is that Edinburgh-based RM Funds, with the backing of major shareholders, is proposing to try and convince shareholders that it could take over as investment adviser for the sheltered housing group after the previous adviser, Alvarium, cut ties the trust as it became embroiled in the series of escalating crises.

One professional source with inside knowledge of the matter has stated that if the trust’s board does not take up RM’s offer there is a risk of a ‘fire sale’ of Home Reit’s portfolio that would entail the eviction of many vulnerable residents.

As of last week Home Reit said it was seeking to extend its deadline for takeover offers and to consider other submissions for a new investment advisor.

View Full Article: Landlord’s troubles just go from one crisis the next…

LATEST: London landlord duo convicted of £1 million benefits fraud

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A landlord couple have been convicted of a £1 million benefit fraud stretching over 20 years.

Emmanuel Bay, 68, and Nancy Bay, 67, of Sudbourne Road, Brixton (pictured), were found guilty of 21 offences between 1999 and 2018 under the Theft Act, Fraud Act and Forgery and Counterfeiting Act.

Their crimes relate to fraudulent Direct Payments claims in the name of Emmanuel, who failed to tell Lambeth Council that he had recovered from a previous illness and continued to claim support.

He also failed to declare the purchase of three properties in Brixton, each of which would have removed his entitlement to support. Nancy Bay bought two properties during the period.

Fraud

Emmanuel Bay received numerous Direct Payments that he was not entitled to along with payments from the Independent Living Fund and Department for Work and Pensions as a result of his fraudulent claims and failure to declare his recovery, adding up to £1 million.

A third co-defendant, Bruno Matudi, 68, of Libra Road, Plaistow, was convicted of two Fraud Act offences during the four-week trial at Inner London Crown Court.

The fraud came to light when council officers from adult social care became suspicious when visiting Bay to conduct a regular review of his claim, and referred the matter to the council’s counter fraud team.

Sentencing will take place on 30th March and Lambeth investigators will now progress action under the Proceeds of Crime Act to recover any losses and proceeds of crime from assets held by the couple.

View Full Article: LATEST: London landlord duo convicted of £1 million benefits fraud