Government landlord commits to large sustainability investment

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One commercial landlord, a Singapore registered real estate investment trust, established to invest directly and indirectly in UK commercial assets, has already bitten the bullet!

Elite Commercial REIT a £293m market cap business has re-geared leases, getting lease commitments from its government tenant, to invest £12.5m over the next three years in an Asset Enhancement Initiative (AEI). These works will improve the sustainability and energy efficiency of buildings in its portfolio that are currently occupied by the UK’s Department for Work and Pensions (DWP).

The DWP is one of the UK’s largest department responsible for people’s welfare, pensions and child maintenance and it occupies buildings throughout the UK.

The real estate investment trust Elite says it is to collaborate with its major tenant, the DWP, to boost the sustainability and energy efficiency of its occupied estate.

The AEI works are to include repair, replacement or upgrading of existing lighting, heating and cooling systems, as well as insulation and solar panels. The aim is to upgrade the Trust’s properties’ Energy Performance Certificate (EPC) ratings to meet the forthcoming higher regulation standards.

Shaldine Wang, chief executive of the commercial property management group, Elite, has said:

“Investing in retrofitting works to enhance the energy efficiency ratings of assets in the portfolio will contribute towards reducing their environmental impact.

“This win-win initiative demonstrates our commitment to adapt our portfolio to address sustainability and climate change requirements, and to extend the relevance of our assets to tenants,” she says.

Elite’s re-gearing of the DWP leases means that it’s got commitment from its government tenant to support its new investment, to be matched with DWP’s agreement to the removing of lease break options. The lease re-gearing gives Elite the added security of knowing that its high quality government tenant is committed to stay for the full length of its lease.

Elite currently has 117 properties leased to the DWP which represent over half of the Reit’s total portfolio in gross rental income, with a lease break option currently set for March next year.

After the re-gearing, Elite secures nearly 80% of its income from the government estate through to 2028, in return for its commitment to the new investment in sustainability, albeit with a small number of the properties enjoying some rent reductions.

Commercial landlords under pressure to improve

The Elite move is likely to be one of the first of many moves to secure tenants into the future by committing to improve the energy efficiency of their tenants’ buildings, while they remain in situ.

The government’s commitment to its net zero target means it is lifting the minimum energy efficiency standard in to-let non-domestic buildings to an EPC rating of ‘B’, as part of its target for the UK being net zero by 2050.

Currently, with very few buildings exemptions, landlords must not let a building not complying with the minimum energy efficiency standard, currently set at an ‘E’ rating on a valid Energy Performance Certificate (EPC).

But the “E” rating is a now likey to be an interim measure, and landlords are sitting on an investment “time-bomb” as the target is to be lifted to a minimum energy efficiency standard for non-domestic buildings to ‘B’ by 2030.

To achieve this higher rating will involve owners in considerable expense for most buildings, though upgrading should result in lower maintenance and energy costs.

It has been estimated that the 2030 upgrading deadline to an EPC “B” for all those buildings affected could involve a total of around 85% of the UK’s rented commercial buildings.

Consultation

The Department for Business, Energy & Industrial Strategy is soon to publish the results of a recent consultation on changes needed to the Minimum Energy Efficiency Standards (MEES) Regulations in the commercial sector to meet the new target commitments, entitled ‘Non-domestic Private Rented Sector minimum energy efficiency standards: EPC B implementation’.

The government is proposing a phased-in implementation of the ‘B’ minimum standard by setting an interim target for 2027 of a minimum standard of EPC ‘C’ for commercial buildings, but this target has yet to be agreed.

It has been estimated by the government that currently around 10% of UK commercial let buildings are still below the minimum ‘E’ rating. From 1 April 2023, commercial landlords with tenants in situ will be breaking the law if they continue to let, if the building has an energy rating below ‘E’.

In some cases buildings will be without a valid EPC after 2023 if the usual 10-year EPC lifespan has expired. It is the government’s intention to change the rules on this so that a building must always have an EPC in place which lasts the whole length of the tenant’s occupation.

This would mean that in future, in cases of lease renewals, there would be a change to the current guidance that suggests that an EPC is not necessary at that point.

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‘Disappeared’ lettings agency to pay £30,000 to tenants over unlicensed HMO

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A rogue letting agent has been hit with rent repayment orders totalling more than £30,000 after failing to licence an HMO.

The owner of 67 Cleveland Way in Bethnal Green let the property for single household use to Home Connect Ltd, who in turn sub-let it to J&G Home Share Limited, who then rented it as an HMO.

A First Tier Property Tribunal heard that the property was covered by Tower Hamlets Council’s additional licence scheme which has been running since April 2019.

One of the five tenants, Axel Buchaillot, lived there from September 2020 until March 2021, paying £628 a month. He told the tribunal that all six rooms in the property were occupied by separate households during that time.

The tribunal also heard that J&G Home Share Limited had taken no active role in the proceedings and had effectively gone to ground. The five-year-old company appears to have ceased trading – its Companies House listing reveals it is about to be struck off the register for failing to submit its annual accounts, although it still has an active director – Manuel Perez.

Judge Shepherd ruled that the agent was the responsible party with regard to the rent repayment order as it had granted the licence/tenancies to the applicants.

He said: “The tribunal has no hesitation in finding that the premises were being operated as an unlicensed HMO at the time of all of the applicants’ occupation, such that the applicants are all entitled to rent repayment orders.”

Each of the five tenants were awarded full rent repayment orders, adding up to £30,310.

Read the tribunal decision in full.

J&G Home Share Limited has 28 days to appeal the decision.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – ‘Disappeared’ lettings agency to pay £30,000 to tenants over unlicensed HMO | LandlordZONE.

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Misleading New Permitted Development Rights Claim

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Linda and I have been myth-busting following a number of people contacting us to highlight our series on planning and permitted development had missed a recent update. Some social media posts had pointed to changes in industrial PD rights.

Unaware of any changes

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Landlords urged to help house Ukrainian refugees – but how will it work, NRLA asks?

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Landlords need more support if they are to help house fleeing Ukrainians, according to the National Residential Landlords Association.

Following the Home Secretary’s announcement that 100,000 extra refugees will be allowed to come to the UK, chief executive Ben Beadle says it’s right that the country provides all the support needed to those fleeing the conflict.

“We urge all private landlords to consider what accommodation they might have available to house those who want to come here,” adds Beadle (pictured).

“To assist with this, it is vital that the government swiftly provides details as to how landlords can easily register properties that might be suitable for those who need homes.” 

In answer to a question about what the government was going to do about a lack of accommodation for refugees and asylum seekers, Home Office minister Kevin Foster told the Commons: “We are certainly concerned about the lack of suitable accommodation across the United Kingdom in terms of dispersal areas, which is why we are keen to sign up new areas to become dispersal areas.”

Priti Patel said it had lowered various requirements and salary thresholds so that refugees could be supported.

“Where family members of British nationals do not meet the usual eligibility criteria but pass security checks, UK Visas and Immigration will give them permission to enter the UK outside the rules for 12 months and is prioritising all applications to give British nationals and any person settled in the UK the ability to bring over their immediate Ukrainian family members.”

She added that the government was enabling Ukrainian nationals already in the UK to switch free of charge into a points-based immigration route or to the family visa route.

“We are extending visas for Ukraine temporary workers in some sectors, and they can now stay until at least December 2022.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords urged to help house Ukrainian refugees – but how will it work, NRLA asks? | LandlordZONE.

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BREAKING: Landlords win ministerial apology over UC rent arrears problems

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The benefits minister has apologised for contradicting experienced landlords about how rent arrears from Universal Credit (UC) are paid and has moved to improve the system.

Benefits landlord Mick Roberts had long been frustrated by the fact Third Party Deductions – taken from a tenant’s Universal Credit payment to cover rent arrears and prevent them from being evicted – has been paid to landlords at completely different days and dates to the Housing Element, which is paid at the same time as Universal Credit.

But when his MP wrote to Minister for Welfare Delivery David Rutley (pictured) in November, Rutley insisted Roberts had got it wrong, despite having bank statements to prove it.

Rutley, who is responsible overall for the management and delivery of Universal Credit, has now written to MP Alex Norris to clear up the muddle, saying: “I sincerely apologise for any confusion and inconvenience the previous reply caused…I share your constituent’s frustration and have worked with my officials to get clarity on the situation.”

Aligned

Roberts called for the payments to be aligned and the Minister has announced that from March, new applications for rent arrears from PRS landlords will receive deductions directly via the Universal Credit system – ensuring they are calculated, deducted and paid to landlords following each assessment period. Existing arrangements will not change.

In the letter, he explained how a third-party payment system paid out the arrears based on a different time-frame, rather than the Universal Credit system.

Rutley added: “Officials are looking at how Universal Credit will operate when legacy payment systems are retired, including how deductions for rent arrears can be paid to landlords in the most efficient and sensible way.”

Roberts (pictured) says he’s not happy with the response because Universal Credit and the third-party teams don’t talk to each other and simply pass the buck.

“It’s taken three years to get a reply and it doesn’t change my situation,” he tells LandlordZONE. “Let’s hope the new system will be better for new claims.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – BREAKING: Landlords win ministerial apology over UC rent arrears problems | LandlordZONE.

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TECH: Fed up hunting down reliable tradespeople, landlord launches his own search site

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Tired of ringing around trying to find tradespeople to fix leaky roofs or broken boilers, landlord Danny Neibert has launched his own online service offering a new way to find and instruct a range of different handymen.

Rezigo, which is due to launch tomorrow, offers property managers including landlords an letting agents and easy way to find local conveyancers, electricians, locksmiths, plumbers, cleaners, removals and storage services, waste clearance and maintenance providers.

Neiberg (main picture), who has been a residential landlord for 20-years, claims that Rezigo is a product of his and co-founder Simone Neiberg’s experience of landlording ‘pinch points’ which they have used to build a ‘sophisticated portal that lets users compare trade quotes, book jobs, pay suppliers, and leave ratings and reviews all in one place’.

They claim that hundreds of suppliers have already been signed up to use the service, which is about to go live.

The Neibergs say they searched unsuccessfully for technology that would help them source and manage all aspects of their property projects and, when they couldn’t find it, built their own tech.

Unique?

It claims to be unique because landlords and letting agents can book appointments with a few clicks, and because it eliminates supplier ‘phone arounds’.

“We built a bespoke platform for my existing property business, which has evolved over the years in terms of functionality and complexity,” says Danny Neiberg.

“And so, equipped with a solid understanding of the stresses associated with the home services sector, we set out to create the ultimate prop-tech solution.”

“I’ve been absolutely floored by the reaction so far – from both suppliers and would-be customers.”

Read more about tradespeople.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – TECH: Fed up hunting down reliable tradespeople, landlord launches his own search site | LandlordZONE.

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LATEST: Landlord wins review of selective licensing scheme for ‘value for money’

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External auditors are to investigate selective licensing in Nottingham following a complaint about whether it provides value for money.

One of the city’s landlords has made a formal objection about the scheme which charges them up to £890 every five years for each rental property. John Gregory, from auditor Grant Thornton, spoke to councillors at the last audit committee about the issues raised, reports Notts TV.

He said: “It concerns the value for money of the scheme and the way it was managed. How much it costs. How much it has brought in terms of fees paid by the landlords. Basically, whether it was a worthwhile exercise.”

Giles Inman (pictured), business development manager at landlord group EMPO, tells LandlordZONE that it supports the landlord’s challenge as there are no effective measures to property regulate the scheme.

“Other councils inspect properties prior to a licence being issued and afterwards, while Nottingham just say they’ll attempt to inspect 50% of the properties in the five-year period,” he explains.

“How can the council properly regulate it if they’re not doing those inspections? This should be about safeguarding and protecting tenants.”

Set up in August 2018, the scheme covers about 26,000 properties and comes to an end in July 2023. Nottingham Council is set to approach the government to apply for a renewal in October.

EMPO says it will consider forming a committee to draft a submission against the renewal once it has had a chance to look at the council’s own study into the scheme’s success.

Councillor Jane Lakey told the recent meeting that she wanted to know whether it was an efficient, well-run scheme before making a decision. She added: “On a wider context, I have actually looked for reports on the effectiveness of selective licensing and I am yet to find one.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Landlord wins review of selective licensing scheme for ‘value for money’ | LandlordZONE.

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Landlords report wave of ‘unfair’ HMO council tax revaluations that quadruple bills

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Councils are seeking to reclassify HMO properties as multiple single dwellings for council tax purposes to raise additional revenue, it has been reported.

Conservative MP and former cabinet member Penny Mourdaunt has criticised the wave of revaluations in comments to The Telegraph newspaper, saying that: “This is a growing problem, and it is arbitrary. It is stopping homes from being built because developers’ business models become unviable.”

Many of the 500,000 HMO landlords in the UK offer rooms within their properties via a single monthly charge including rent, bills and council tax.

This is usually calculated and paid based on the property size but now councils are changing the way they interpret the rules and treating the HMO rooms as individual homes with separate council tax bills.

It is claimed that the revaluations mean that, in many cases, if landlords are forced to pass on the extra cost, tenants face a 20-25% rise in rent to cover the extra cost.

A rising number of landlords are now facing a tough decision over whether to foot the bill themselves or hike their rents to cover the shortfall.

Read advice about council tax and landlords

The Telegraph cites one landlord told by the Valuation Office Agency that his HMO’s council tax bill would rise from £1,821 to £7,287, while another was reported to have filed for bankruptcy after his pair of 12-bedroom HMOs were re-classified.

The British Property Federation claims councils are targeting areas of their boroughs where HMOs are at their most dense in a bid to raise extra funds as central government funding dwindles year on year.

Read the Telegraph article (requires subscription).

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Landlords report wave of ‘unfair’ HMO council tax revaluations that quadruple bills | LandlordZONE.

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Pay by Direct Debit to automatically get the £150 council tax rebate

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Households across England are being urged to set up direct debits with their local council to receive a £150 council tax rebate to help families manage the costs of living inflation.

People who pay council tax by direct debit

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Led by EPC assessor or retrofit specialist?

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EPCs give very brief ‘recommendations’ in order to increase your score and rating but……what maybe ‘recommended’ may not be right for your property. Are we then supposed to employ another specialist to look at the building in terms of seeing IF the recommendation chosen earlier WILL actually be compatible with it long term?

View Full Article: Led by EPC assessor or retrofit specialist?