Landlord loses appeal over £10k fine for HMO run via ‘sham tenancy’

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A rogue landlord who created a sham tenancy agreement to dodge HMO rules has been fined £10,000.

Tanvir Hussain had appealed the original fine from Islington Council but this has been thrown out by a First Tier Tribunal which ruled that he had named only four of the six tenants on the tenancy agreement to circumvent HMO regulatory provisions.

The house in Stroud Green Road, London, had been let under a 12-month assured shorthold agreement in 2015 to Mr Millen, Miss Johnston, Miss Harvey and Miss Morris.

The freehold was owned by Hussain’s brother, Jangeer Hussain, and managed at the time by Liberty Estate Agents.

During an Islington Council inspection in 2019, it found there were six occupiers and discovered breaches including blocked escape routes, poorly maintained fire alarm and no notices displayed for escape routes.

Unlawfully

Hussain told them that except for Mr Millen and (possibly) Miss Curd who lived with him as a single household, the other occupants of the property were there unlawfully.

He admitted he operated a “light touch” in relation to his duties as the landlord – despite operating a commercial business from the ground floor premises. He said that except for receiving the rent from Liberty, he did not visit or inspect the property.

The tenants said the tenancy had originally been granted to six people and that there were five bedrooms.

They said Liberty had insisted that only four tenants were named on the agreement and it advised them that there was no limit on the number of people who could live there. The Tribunal agreed that Liberty was acting on Hussain’s authority, aimed at circumventing HMO rules.

It reduced the original £14,999 fine because seven of the eight breaches were resolved.

Read the tribunal decision in full.

Read more about HMOs.

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Sheriff Rides in to Tackle Transfer Times of Orders for Possession

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As Sheriffs, we are continuing to monitor transfer times of Orders for Possession from the County Court to the High Court for landlords, and other claimants who want a faster and more effective transfer system.  So, we will be sharing our research with the Property 118 community

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Compensation of 60 years regulated tenant?

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I have inherited a property with a regulated tenant of over 60 years standing. I am aware that to gain an EICR the property will require a complete rewire. The property is immaculately maintained and decorated by the tenant.

How do I stand regarding making good the damage this will cause and the cost of uplifting carpets

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LATEST: Investors battle PRS developer over plan to change Loan Note terms

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Several investors in PRS residential developer The High Street Group who are part of a larger group owed an estimated £43 million are resisting an attempt by the company to suspend an early redemption clause within their Loan Note agreements.

The Newcastle-based firm is holding a special resolution meeting at its HQ on 1^st June at which, it is expected, a decision will be made to remove the clause, which enables investors to be repaid within 30 days upon request.

A spokesperson for The High Street Group tells LandlordZONE: “The vote will continue on the planned timetable and we encourage all eligible parties to take part.

“Our investor proposal is a pragmatic, viable and responsible course of action to support the company’s successful corralling of resources to continue its investment programme.”

But some of the 2,000 investors who hold Loan Notes with The High Street Group – which is one of the largest PRS developers in the UK – say the company should instead be placed into administration and ultimately liquidation so that its assets, which include 15 sites worth some £100m, can be sold to pay off its creditors.

Patience is running thin among the group, LandlordZONE has been told, who are unhappy that if the vote goes through, they will have to wait until 2025 to find out if they will get their money back.

Difficult period

It’s been a difficult 12 months for The High Street Group. One of its subsidiaries has been wound up following a battle with a creditor, other companies within the group have struggled to post their accounts on time and auditor PwC recently resigned after revealing it was unable to access company information.

But the Loan Note holders, who say they fear the company could be making moves to protect its assets in case of a potential move to administration or liquidation, are divided on what to do. Some believe it should be given the extra time while others say ‘enough is enough’ and want their money back.

100% of investment

A spokesperson from The High Street Group, which developed the Hadrian’s Tower in Newcastle (main pic) adds: “Investors will receive 100% of their investment plus the agreed interest, but without the ability for early redemption.

“This measure is not unusual, in fact during the pandemic the FCA gave permission for investment firms to pause redemptions to maintain the viability of the sector.”

The company says its proposal have been met with strong levels of support with 50% of investors already agreeing to the new terms.

“New funding has been agreed for all our projects, which are now remobilising. The investor proposal is the final element of our fight back from the pandemic to take advantage of a newly emerging buoyant market,” the spokesperson adds.

Read more about the PRS developer sector.

Pic credit: The High Street Group.

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New national design code being tested across 14 areas in England

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A new national design code meaning areas are beautiful, well-designed and locally-led is being tested across 14 areas in England, Housing Minister Christopher Pincher has announced. The code will ensure future developments are beautiful and fit in with local character.

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Sad death but no agreement with daughter who was resident?

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Very sadly a long term tenant has died. The contract was an AST started in May 2005 and rolled ever since. As no new fixed-term tenancy or ‘renewal’ has ever been signed, and as the fixed term tenancy ended (in Oct 2005) I assume it is now a new ‘periodic’ tenancy that has been created.

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Minister rejects claims of mounting rent arrears, homelessness and struggling courts

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Housing Minister Lord Greenhalgh has roundly dismissed fears about rising rent debt, homelessness and an overwhelmed court system.

During a debate on rent arrears, Lord Carrington asked him to consider an affordable short-term credit scheme to support tenants in arrears who weren’t claiming benefits, and pointed to the recent housing resilience survey which suggested that the proportion of private renters in arrears had risen from 3% in 2019 to 9% in 2020.

However, Greenhalgh told peers: “We are aware of the exhortations from many organisations, but we consider that the increase in rent arrears is not statistically significant between the two surveys. It went from 7% to 9%.”

Lord Kennedy of Southwark (pictured) asked: “Is it not time for the government to accept the need for a Covid rent debt fund to clear Covid arrears for the most financially destitute renters, who are at severe risk of homelessness?”

Lord Greenhalgh said two-thirds of the tenants in the survey had two months or less of rent arrears.

“My officials carefully studied the Scottish and Welsh schemes to support tenants with rent arrears.

“I understand that a relatively small number of loans have been made by these schemes. Indeed, the government continue to believe that it is right to provide non-repayable financial support rather than encouraging further debt.”

He said that there had not been the massive spike in homelessness that has been alluded to.

Pile up

“I am not aware of a pile-up in the courts. Indeed, we have seen a massive drop in the number of repossession cases. It decreased to 262 repossessions in January to March 2021 – a reduction of some 96% – and 214 local authorities had no landlord repossessions at all.”

Lord Greenhalgh added that to support landlords, mortgage lenders had agreed to offer payment holidays of up to six months, with since April, “forbearance options tailored to the individual landlord”.

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NEW INDEX reveals Welsh licensing ‘postcode lottery’ for landlords

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Landlords’ experiences of patchy licensing standards enforcement across the UK is well known but now the NRLA has published solid data showing how those operating in Wales face a ‘postcode lottery’.

The organisation has published its inaugural Welsh Enforcement Index that ranks the country’s councils according to their efficiency both enforcing housing standard and administering licensing in the private rented sector.

This report, which has been several years in gestation, includes the shocking revelation that councils in Wales who charge the most for property licensing are often the slowest at processing applications, one of the key bugbears of many landlord who are forced to licence their properties.

Also, the report reveals a ‘regulatory gap’ between an introduction of licensing regulations and enforcement at a local level – suggesting councils are good at voting through selective and additional licensing schemes but not so good at getting tooled up to administer them.

The NRLA has scored each of Wales’ local authorities based on staff levels, inspections, PRS complaints, licence costs and licence processing efficiency.

Denbighshire, Gwynedd and Flintshire Councils scored highest on the Index and Monmouthshire and Powys ranked lowest in the Enforcement Index (see full list below).

“Overall whilst there is cause for optimism in some Welsh regions, the application of the rules is inconsistent and this is a situation which must be addressed urgently,” says John Stewart (pictured), Deputy Director of Policy and Research at the NRLA.

“What our research underlines is the need for better, more efficient enforcement of existing regulations before we take steps towards the introduction of new rules.

“We hope that this Index can serve as the basis of a wider discussion on how Wales’ local authorities can play a bigger role in the development of a fairer, better functioning private rented sector.”

Read the index in full.

A similar index for England is expected to follow.

Full list by local authority

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Tickets going fast as Paul Shamplina joins Landlord Sales Agency’s David Coughlin for the first time in The Ultimate Landlord Show

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It’s the upcoming online event that’s got everyone talking, and with just days to go, if you’re a landlord, now is the time to make sure you’ve registered your ticket to attend.

This Wednesday 26^th May, see LandlordZONE’s Paul Shamplina and David Coughlin, two of the biggest titans in the Landlord sector, share their secrets, reveal the truth behind how to generate wealth and success right now, and weigh in on answering some of the most important Landlord questions you should be asking.

The event promises to cover everything from the boom in house prices, gazumped buyers and dives deep into exactly why a surge of Landlords are wanting to get out of the market and sell their portfolios, and how they’ve overcome eviction bans and delays. Plus find out why right now is an opportunity for Landlords that happens only once every 20 years.

Places are limited, so if you’re a landlord you’ll want to make sure you’re part of the action. To register your FREE VIP ticket, only available via LandlordZONE click on the link below:

https://attendee.gotowebinar.com/register/2393536073481700110

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Tickets going fast as Paul Shamplina joins Landlord Sales Agency’s David Coughlin for the first time in The Ultimate Landlord Show | LandlordZONE.

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LATEST: Councils ask ministers to tackle rent arrears as evictions ban end looms

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London boroughs have warned of an imminent summer wave of homelessness in the capital as the end of the evictions ban looms.

Homelessness previously peaked in 2005 when there were 63,800 households in temporary accommodation, but with 60,680 London households already in temporary accommodation, boroughs fear new records could be set this year unless the government increases investment in homelessness prevention.

London Councils points to a triple whammy of upcoming risks: high unemployment and rent arrears, the lifting of the eviction ban on 31st May, and uncertainty over homelessness funding.

Even before the pandemic, it had highlighted the unsustainable growth of homelessness costs in the capital, spending £1.1 billion on homelessness services in 2019/20.  

It estimates there are 165,000 homeless Londoners living in borough-provided temporary accommodation, accounting for two-thirds of England’s total. 

Almost 70% of London households in temporary accommodation have at least one child, with the most recent figures putting the figure at 90,000 children.

Councillor Darren Rodwell (pictured), London Councils’ executive member for housing and planning, says: “Boroughs are doing everything we can to tackle homelessness in the capital, but ultimately we need the government to rethink its welfare policies and to boost long-term funding for local services if we’re to reverse these disastrous trends.”

London Councils is calling on the government to confirm both short-term and long-term funding arrangements, to end the five-week wait for Universal Credit payments to begin and to make sure Local Housing Allowance continues to match the cost of renting in London.

It also wants it to restore government funding for councils’ local welfare assistance schemes supporting residents in financial crisis and – with 243,000 London households on boroughs’ housing waiting lists – to improve councils’ resources for building social housing.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: Councils ask ministers to tackle rent arrears as evictions ban end looms | LandlordZONE.

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