Listed property EPCs – possible exemption?

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Listed property EPCs – Whilst having a Listed property is not an automatic “get out of jail free card” it seems to be a rather complex matter as to whether or not a specific Listed property will be exempted. Even on government sites

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Are you under-insured? Inflation poses an existential risk to every property owner…

admin    Uncategorized     agents

Buildings insurance usually covers loss or damage caused by: fire, explosion, storms, floods, earthquakes, theft, attempted theft and vandalism, frozen and burst pipes etc, and a good landlord’s policy will cover much more besides.

A crucial aspect of property insurance is the buildings cover and the replacement value recorded on the policy. Get this wrong and you could be faced with a big shortfall in the event of a claim – it’s the difference between the value on the policy and the actual cost of re-instatement, after say a major fire.

The rapid rise of price inflation and shortages, particularly affecting building materials, now has the potential to leave thousands of property owners under-insured and subject to what is a condition written into every policy and what insurers term “averaging”, should they have occasion to make a claim.

The Condition of Average

When you insure a building you declare to your insurer the ‘insured value’, which then forms the basis of the insurance contract, the sum insured under your policy on which the insurer calculates the premium due. The insurer charges you this Insurance Premium every year, based on the declared sum insured.

The insured value represents what it will cost to re-instate the building and is not the same value as the market price. This insured value should also take into account all the associated costs of re-building, such as site clearance, professionals’ fees, building control costs etc.

It is very easy for a property owner to get this sum wrong, as without a professional assessment most commercial and some residential buildings are very difficult to assess when it comes to defining a true replacement value. Most insurers will up the insured valued annually to keep it in-line with inflation, but if the value is not right to start with, this safeguard does not help.

And with building materials costs rising at a faster rate that CPI and RPI inflation indices, it is almost certain that the replacement cost will race away from your initial insured value.

The consequences of getting it wrong

So, if you get your insured value wrong it will likely be less than the true value at risk, the valued your insurers have calculated your premiums on – you would be paying year-in, year-out less that you should have paid to cover the true property risk.

In the event of a claim therefore your insurers would more than likely look at the cost of the claim and apply their Condition of Average. This is a basic insurance doctrine and a clause in your policy that says that if you have declared an insurance value of say £400,000 on your building, and the total loss claim comes to £500,000, then you were actually 20% under-insured.

In this situation the insurers would be within their rights to reduce your total loss claim by 20%, or indeed any claim for a smaller amount would also be reduced by 20%. In the above example the insurers might pay out accordingly, or £500,000 x 0.8 = £400,000. You would be £100,000 out of pocket.

What’s more, any excess on the policy is deducted after the claim has been averaged, so your real loss with be even more.

A hard lesson to learn

This would be a hard lesson to learn after the event. Insurance contracts are based on a powerful legal principle which means it is a contract of the “utmost good faith”. Honesty and openness shall always be observed between the parties. Anything stated in the insurance proposal by the insured, and any changes that might occur after the policy is taken out, and that includes the insured value, must be accurate and -0declared to the insurer without delay.

Nick Williams, a partner and commercial surveyor at Arnolds Keys says that:

This is a serious potential problem for property owners (under-insurance) and “is a direct result of rampant inflation in the construction sector: the latest BCIS Building Cost Index published in February suggests a year-on-year rise of more than 10pc, with construction materials inflation running at nearly double that figure. These are cost rises well in excess of the already hefty CPI inflation rate – and the result is that it is very easy to find your commercial premises under-insured.”

It is good practice for property owners to commission an insurance valuation periodically to keep the insured valued (replacement cost) in-line with rising prices, especially in the case of replacement building costs. Landlords and property owners generally would do well to check their policies regularly and review the reinstatement cost on an annual basis.

A good landlord policy will cover far more that just the rebuilding costs, so it is worth shopping around and comparing policies’ cover like for like.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Are you under-insured? Inflation poses an existential risk to every property owner… | LandlordZONE.

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BREAKING: Minister reveals latest Government thinking on landlord regulation

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The government has revealed some of its thinking behind the expected increased regulation of the private rented sector within a written reply to a question in the Lords.

Although both parliaments are in recess Lord Greenhalgh, the government’s housing minister in the Lords, has outlined why Ministers are committed to requiring all private landlords to join a redress scheme, although he has revealed that the government is still ‘exploring’ the merits of introducing a national landlords register in England.

“There are a range of potential benefits that different models of registration could have, which are additional to those served by expanded redress provision,” Greenhalgh replied to Lord Bourne of Aberystwyth.

“These include, but are not limited to, providing local authorities with intelligence on private rented sector properties in their locality, making it easier for private landlords to understand their obligations and helping tenants decide whether to rent a property.

“As part of exploring proposals for introducing a landlord register in England, we are considering how the register could interact with wider commitments for reforming the private rented sector.”

Industry reaction

Sean Hooker (pictured), who heads up the Property Redress Scheme (PRS), one of the several organisations qualified to take on the job of landlords registration, says: “The best people to deal with this matter are tenants themselves and this is why a mandatory redress process is needed.

“Tenants need a simple, effective, and free way of raising complaints, with a compulsion on the landlord to put things right and consequences if they do not do so. 

“This would also act as a de facto register of rental properties and landlords making it harder for the criminals to hide.
“Yes, it also needs more resources for enforcement, however, this will make it easier for the authorities to target the worst offenders providing an intelligence-led and focused approach to stamping out unfit properties. 

“Redress can also act to educate and assist landlords to comply without the heavy stick of prosecutions and fines.

“A lot of the problems are down to mistakes and ignorance and a complaint resolution service can help landlords learn from the outcomes. 

“We await with anticipation the announcement of the new reforms and hope they bring a coherent and workable strategy to tackle this problem once and for all.”

The PRS has been working with NRLA to set up a redress pilot that has already had a significant take-up by landlords on a voluntary basis.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Minister reveals latest Government thinking on landlord regulation | LandlordZONE.

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Supreme Court rejects gas safety certificate appeal request

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The tenants in the Recarrell v Rouncefield case, who lost their appeal at the High Court, have now had their bid to have the case heard at the Supreme Court declined on the basis that it was not a point of general public importance.

View Full Article: Supreme Court rejects gas safety certificate appeal request

Rental market is ‘most competitive ever’ in living memory, says Rightmove

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The UK now has the most competitive rental market in living memory, portal Rightmove has claimed.

Its latest rental trends tracker reveals that this competition has pushed up rents outside London by 10.8% over the past 12 months, the first time this figure has ever exceeded 10%, while rents are now 15% higher than just before the pandemic hit.

This is being created by extraordinary tenant demand but an ongoing but significant drop in properties available to rent; tenant demand is up 6% but stock is down 50% compared to a year ago.

The figures for London are an 81% jump in tenant demand and a 47% drop in stock, leading to a new record of £2,193 rent being achieved for each tenancy on average.

Mismatch

Rightmove says the result of this ongoing mismatch between tenant demand and the properties available to rent means that tenants looking for a new place to move to are being faced with the most competitive rental market that the property portal has ever recorded.

Finding a reasonably-priced rental property means many tenants are now considering areas they otherwise would not have considered in suburban areas around cities.

Rightmove cites two examples in Merseyside, Prenton and Birkenhead, where average asking rents are £591 and £551pcm respectively compared to £876pcm on average for nearby Liverpool.

“There are several factors affecting supply and demand,” says Rightmove’s Director of Property Data Tim Bannister.

“On the supply side, we’re hearing from agents and landlords that tenants are signing longer leases, which has prevented some of the stock that would normally come back onto the market from doing so.

“When it comes to demand, we’re still seeing the effects of the pandemic, whereby tenants are balancing what they need from a home and how close they need to live to work with where they can afford.”

Read the rental trends tracker in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rental market is ‘most competitive ever’ in living memory, says Rightmove | LandlordZONE.

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EPC and Economy 7 Immersion Heaters?

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Can anyone advise how to heat water for an all-electric flat to comply with a reasonable EPC rating?

The previous EPC stated ‘Hot Water- Electric Immersion, off peak – Average. But recommended an insulation blanket on an already insulated tank.

View Full Article: EPC and Economy 7 Immersion Heaters?

What does the new Trecarrel House vs Rouncefield decision mean for landlords?

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The Supreme Court’s decision means that the interpretation of the law accepted by Court of Appeal’s in June 2020 remains binding on District Judges who deal with possession claims.

The Court of Appeal’s decision was greeted as a good outcome for landlords.

It has meant that where a landlord has failed to provide a new tenant with the last gas safety certificate before occupation they are able to remedy this by providing the certificate late.

That was a welcome relief to the many responsible landlords fearful that accidental mistakes in providing tenants with certificates could result in them permanently losing the ability to serve a section 21 notice.

Furthermore, a failure to complete a subsequent annual check on time will not bar the landlord from serving a section 21 notice provided the certificate is given to the tenant prior to serving the section 21 notice.

Again, this will be reassuring to landlords, particularly in recent circumstances where arranging gas safety inspections has been a challenge.

The Court of Appeal’s decision, however, did not resolve all the issues that have arisen since gas safety was linked to the section 21 procedure in 2015.

There are still difficult questions left unresolved. For example, what does this mean for a landlord who has failed to carry out a gas safety check at all before the tenant goes into occupation?

Are they able to rectify this breach and serve a valid s21 notice? While the Court of Appeal determined that late provision of the initial gas safety certificate is remediable, they do not go so far as to say that all historic gas safety breaches, including failing to actually have a certificate before the commencement of the tenancy, are capable of remedy.

In addition, the gas safety regulations only require landlords to retain the gas safety certificate for two years from the date of the check which means even where a check has been carried out before the start of the tenancy, landlords may face difficulties remedying the breach later or proving that they have done so.

Author bio: Robin Stewart is a senior associate at legal firm Anthony Gold.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – What does the new Trecarrel House vs Rouncefield decision mean for landlords? | LandlordZONE.

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NEWSFLASH: Judges reject appeal against Trecarrell vs Rouncefield decision

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Landlords have been given some good news today after the Supreme Court refused a further appeal in the landmark gas safety certificate Section 21 eviction case.

Known as the Trecarrell House Limited v Rouncefield case, it centred on whether a tenant can be evicted via a Section 21 notice if a gas safety certificate had been served after the tenancy has begun.

In June 2020 the Court of Appeal ruled in a 2-to-1 majority decision that late service of a gas safety certificate does not prevent a landlord from serving a section 21 notice on their tenant, provided the certificate has been given to the tenant before service of the section 21 notice.

The tenant in the Trecarrell v Rouncefield case had sought to overturn the Court of Appeal’s decision in the Supreme Court.

A panel from the Supreme Court consisting of Lord Briggs, Lord Stephens and Lady Rose have now rejected the tenant’s application on the basis that the application does not raise a point of general public importance.

The panel made the decision on the basis of written submissions from both parties’ lawyers, according to legal firm Anthony Gold, which acted for the landlord together with barristers Justin Bates and Brooke Lyne of Landmark Chambers.

NRLA support

The landlord’s successful appeal to the Court of Appeal was supported by the National Residential Landlords Association.

“The Court’s decision will be welcomed by private sector landlords who feared that a failure to provide the gas safety certificate before occupation permanently prevented them from recovering possession of their properties,” says senior associate solicitor at Anthony Gold, Sarah Cummins (pictured).

“It has been nearly two years since the Court of Appeal’s judgment and the Supreme Court’s decision to refuse to hear the tenant’s appeal now brings some certainty to this difficult area of law.

“There is no requirement for the Supreme Court to explain its reasons, but it may be that the promised abolition of section 21 notices played some role in the court’s decision to refuse permission to appeal.”

Main Pic: Trecarrel House in St Ives, Cornwall, the property involved in the case.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – NEWSFLASH: Judges reject appeal against Trecarrell vs Rouncefield decision | LandlordZONE.

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BREAKING: Judges reject appeal against Trecarrell vs Rouncefield decision

admin    Uncategorized     agents

Landlords have been given some good news today after the Supreme Court refused a further appeal in the landmark gas safety certificate Section 21 eviction case.

Known as the Trecarrell House Limited v Rouncefield case, it centred on whether a tenant can be evicted via a Section 21 notice if a gas safety certificate had been served after the tenancy has begun.

In June 2020 the Court of Appeal ruled in a 2-to-1 majority decision that late service of a gas safety certificate does not prevent a landlord from serving a section 21 notice on their tenant, provided the certificate has been given to the tenant before service of the section 21 notice.

The tenant in the Trecarrell v Rouncefield case had sought to overturn the Court of Appeal’s decision in the Supreme Court.

A panel from the Supreme Court consisting of Lord Briggs, Lord Stephens and Lady Rose have now rejected the tenant’s application on the basis that the application does not raise a point of general public importance.

The panel made the decision on the basis of written submissions from both parties’ lawyers, according to legal firm Anthony Gold, which acted for the landlord together with barristers Justin Bates and Brooke Lyne of Landmark Chambers.

NRLA support

The landlord’s successful appeal to the Court of Appeal was supported by the National Residential Landlords Association.

“The Court’s decision will be welcomed by private sector landlords who feared that a failure to provide the gas safety certificate before occupation permanently prevented them from recovering possession of their properties,” says senior associate solicitor at Anthony Gold, Sarah Cummins (pictured).

“It has been nearly two years since the Court of Appeal’s judgment and the Supreme Court’s decision to refuse to hear the tenant’s appeal now brings some certainty to this difficult area of law.

“There is no requirement for the Supreme Court to explain its reasons, but it may be that the promised abolition of section 21 notices played some role in the court’s decision to refuse permission to appeal.”

Main Pic: Trecarrel House in St Ives, Cornwall, the property involved in the case.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Judges reject appeal against Trecarrell vs Rouncefield decision | LandlordZONE.

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BREAKING: Major house builders forced to pay £2bn towards cladding costs

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Thirty five of the UK’s leading housebuilders have agreed to pay for the remediation of cladding on any building over 11 metres tall that they have developed over the past 30 years.

The package, brokered by Michael Gove, will initially be worth some £2 billion with an extension to the Building Safety Levy due to raise a further £3 billion.

This new agreement will be legally enforceable rather than being a ‘promise’, and builders who fail to sign up to the scheme will ‘face consequences’ says Gove.

For a list of the housebuilders involved so far, click here.

Also, Gove’s department is to introduce new powers that will enable enforcement on any companies who fail to sign up, as well as those that breach the agreement they have signed up to.

These new powers would allow the Secretary of State to block those who refuse to make and deliver on their commitments from building and selling new homes. 

As set out in January, a new government scheme will also see industry pay to fix buildings where those responsible cannot be identified or forced to in law.

Loans scrapped

This follows previous confirmation that plans for a 30-year loan scheme paid for by leaseholders would be scrapped. 
The new scheme will be funded through an extension to the Building Safety Levy that will be chargeable on all new residential buildings in England and raise £3 billion.

“Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause,” says Gove (pictured).

“I welcome the move by many of the largest developers to do the right thing.

“But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

But the proposals have not been without disappointment for landlords. After initially saying ‘qualifying leaseholders’ would not include landlords, the government recently relented and, after lobbying from the NRLA, included ‘accidental’ landlords with no more than three properties in total – i.e. excluding ‘professional’ landlords with multiple property portfolios.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Major house builders forced to pay £2bn towards cladding costs | LandlordZONE.

View Full Article: BREAKING: Major house builders forced to pay £2bn towards cladding costs