Rees-Mogg: ‘Dear landlords.. sorry about all the pain, but there’s no more help on the way’

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The Government has expressed sympathy for landlords’ Covid-related struggles and has praised their patience but still hasn’t announced any new practical measures to help them.

Speaking in the Commons, Conservative MP Robert Syms called for a debate on residential landlords as he said the sector was “very unhappy”.

He told MPs: “It provides valuable property for people, yet throughout this crisis landlords have been prevented from managing their properties and evicting people, even those with arrears from well before the crisis.

“I know of landlords who have not been able to evict people exhibiting anti-social behaviour and causing distress to other tenants because of restrictions the Government have imposed.

“Some people who could pay rent are not paying rent, but some of the residential landlords are still having to pay mortgages. This is a troubled sector and we should explore all the issues.”#

‘Wasn’t unsympathetic’

Responding to the question, Leader of the House of Commons, Jacob Rees-Mogg (pictured), said he “wasn’t unsympathetic” to landlords’ plight.

However, while he offered no new initiatives, Rees-Mogg pointed to the lifting of the stay on possession proceedings, and added: “Although we have laid regulations to require bailiffs not to enforce evictions until 11th January, there are exemptions – this is important – for the most serious cases, such as anti-social behaviour and illegal occupation.”

Rees-Mogg added: “We are grateful to landlords for their forbearance during this unprecedented time.

“Some may have been able to benefit from postponements of mortgage payments, which have been made available, but we strongly encourage tenants in all relevant Government guidance to pay their rent or to have an early conversation with their landlord if they have any difficulty doing so.”

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As built-to-rent developers embrace pets, how much longer can landlords refuse them?

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A large new apartment development about to open its doors in London is the most recent to offer those buying or renting at the site the opportunity to live with their pets.

Network Homes’ Evolution development in Southall will offer residents the opportunity to bring their pets with them across the whole site, although its developer says that any four-legged friends will have to be vetted before they move in.

But sites like Evolution, and others in London including be:here Hayes, Black Horse Mills in Walthamstow and Duet at Salford Quays, are challenging perceptions that landlords and home builders are anti-pets.

They’re encouraging change in the private rented sector which is slowly becoming more pet-friendly, helped by the Government’s new model tenancy contract which has been changed to encourage landlords to take on more tenants with pets.

Pets bill

Also, the Dogs and Domestic Animals (Accommodation and Protection) Bill currently going through Parliament aims to give tenants the right to live with their pet.

Lisa Ley, Network Homes’ head of sales and marketing (pictured), says that due to strict regulations, lack of space, or access to the outdoors, many apartment providers aren’t able to accommodate a four-legged friend.

She says that the opportunity to live in an apartment in London that permits domestic animals is “a rare luxury”.

Prices at Evolution start from £65,000 for a 25% share of a one-bedroom apartment priced at £260,000, the rest is owned by Network Homes and owners pay a subsidised rent along with their mortgage.

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Ignorance is no defence against licensing fines, absentee landlady discovers

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An absentee landlord has been fined £2,500 for failing to licence a property that she had been renting out for several years.

Warning letters were sent to the landlord’s last known addresses, however, the property in Axon Place, Ilford, remained occupied and unlicensed after an inspection by a housing enforcement officer from Redbridge Council.

The landlady involved, who cannot be named, could not claim ignorance – there are ten apartments within the two towers on Axon Place already registered with the Redbridge selective licensing scheme.

A first-tier tribunal has now ruled that she should have paid a £616 fee under the scheme for private landlords renting to single families.

Quality housing

Council leader Jas Athwal (pictured) says: “The selective licencing scheme has been in place in many parts of our borough for several years now to make sure local people have access to decent quality housing.

“I hope this sends a clear message to property agents, companies, and landlords that if they don’t work with us to licence their properties properly, then they could face prosecution and a hefty fine.”

This isn’t the first time that a London borough has come down hard on a landlord for not licensing their properties.

“Earlier this year, Brent Council prosecuted Stephen Ige for renting out three properties – a ground floor flat in Chaplin Road, Willesden Green, and ground and first floor flats in Douglas Road, Kilburn – to tenants without a licence. He was fined £90,000 by magistrates.”

Read more about selective licensing.

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Property Investors Awards – Winners Announcement 2020

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Now celebrating its 10th year, the Property Investors Awards 2020 is taking place online. This year’s award winners will be announced as a ‘premiere’ on Youtube, Saturday 28th Nov at 7 pm.

The ceremony is hosted by Ranjan Bhattacharya and Cyril Thomas who will reveal this years property investor award winners across 11 categories.

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Ask three months rolling rent in advance?

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After the tenant fee ban, can landlords now ask for three months rolling rent in advance rather than normal one month in advance?

This is not the case where the tenant pays rent every 3 months, but is that the tenant pays three months rent at the start of the tenancy and then keeps paying monthly rent for each month going forward.

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WARNING: ‘Landlords who assume letting agents are responsible for compliance do so at their peril’

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Scores of landlords risk a hefty fine or even a lettings ban as many wrongly assume estate agents are keeping their properties compliant. 

Research by online letting firm Apropos finds that many don’t realise that they are solely liable for any compliance issues, and it reports that some have uncovered ongoing serious safety problems when changing agents.

CEO David Alexander says although it’s natural for landlords to assume that an agent will keep up-to-date with regulations, there are many agents who don’t fully comply, leave issues for months or even years, and don’t explain the situation or a landlord’s liability.

He says: “We’ve found examples such as a failure to modernise electrics and obtain the appropriate EICR certification, black mould and damp in a property in breach of the housing health and safety rating system which the previous agents had failed to tell the landlord about, and a property which had no smoke detectors – the previous agent had explained that the tenants would put those in.”

He adds: “All of these breaches of regulations highlight a very sloppy, and illegal, approach to letting which risks the health of the tenant and places the landlord in a position where they could be fined and, in the worst cases, banned from letting.”

John Stewart, deputy policy director for the National Residential Landlords Association, tells LandlordZONE that it’s recently seen an increase in local authorities taking action against both agents and landlords where obligations haven’t been met.

He says: “It is vital that landlords understand precisely what their legal oblations are, even where they have contracted with a third party to discharge their duties.

“Using a management or letting agent doesn’t provide protection to landlords from liability for breaches of regulations.”

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Landlord Action wins gong at new property industry awards

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Landlord Action has won Best Legal Landlord Services of 2020 during the inaugural Property Reporter Awards pipping rivals Legal for Landlords and RKB Solicitors to the post.

The awards saw some 1,000 applications and nominations from both inside and outside of the property sector, championing the efforts and achievements of UK property professionals and recognising excellence within the industry.

The awards ceremony was an unusual one due to Covid; the results were announced via a live Twitter feed, on which video messages of support from sponsors and a selection of judges feedback was shared alongside the winners.

“It’s great to be recognised by esteemed judges that Landlord Action is the best in class but also because being a regulated firm of solicitors is so important in this ever-changing world of property possession in the courts,” says Shamplina (pictured, top).

“Landlords will need us more than ever due to Covid, and we will use our expertise to help landlords and agents in difficult times.

“I can’t believe we have been doing this for 20 years.  Thanks for the Property Reporter for putting on these online awards; a great innovation.

“Lastly we are recruiting, so any paralegals and solicitors with experience of landlord and tenants, feel free to contact us.”

Shamplina was also a finalist for the Best Spokesperson of 2020, where he was up against both Andrew Montlake and Kate Faulkner, who won. The awards were sponsored by the NRLA.

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Travelodge CVA results in landlord defections

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The move follows a successful exchange of contracts before Travelodge’s CVA break clause deadline on 18 November 2020.

Hotel operator Travelodge drew the ire of many of its landlords back in June when it announced its second CVA (Company Voluntary Arrangement) in 8 years.

The CVA was passed by creditors on the 19th of June, which resulted in the top slicing of £144m from Travelodge’s rent bill, and with some of its landlords receiving no rent until 2022.

It was the final straw for some of Travelodge’s landlords; they were minded to enter into discussions with alternative operators. With the backing of private equity investors these alternative operators were willing to take on new leases with Travelodge landlords.

The result was a Travelodge Owners Action Group – a coalition of Travelodge landlords, representing more than 400 hotels. It launched AGO Hotels, a new platform that will see the budget hotelier replaced with French hotel chain Accor and its Ibis hotel brand.

AGO Hotels is a hotel group describing itself as offering a “landlord friendly platform”, an innovate hybrid risk and reward sharing lease structure. This arrangement gives landlords exposure to the operating company through an income share and capital stake.

The offer from AGO to the Travelodge owners was a new 25-year fully repairing and insuring lease, index-linked at 50% of the original Travelodge rent. Owners would in addition receive a 50% share of the operation’s EBITDA and annual dividends from the 49% equity stake in AGO (share weighted according to rent payment).

It has now been confirmed that AGO Hotels has secured at least nine hotel leases from Travelodge following a successful exchange of contracts.

The new budget hotel operator says it’s “all systems AGO”: nine Travelodge hotels are to switch to AGO Hotels before the CVA break deadline under its ‘landlord-friendly platform’. Launched in July it incorporates the hybrid lease structure which is designed to deliver stable asset values and cash flow.

AGO Hotels was launched in July 2020 as a landlord-friendly platform in partnership with Accor, the leading global hospitality group. Accor will act as operator for the hotels under its ibis budget brand and AGO will fund rebranding costs.

AGO Hotels was co-founded by Viv Watts and Lionel Benjamin to offer landlords this innovative hybrid lease structure. It is designed to provide a combination of guaranteed fixed rent plus profit participation, delivering stable asset values and cash flow.

By combining the benefits of institutional leases and operational participation, the AGO Hotels platform offers: a 25-year FRI lease from AGO Hotels; an equity stake in AGO Hotels for incoming landlords, and; profit participation calculated on the basis of each hotel’s EBITDA.

A spokesperson from AGO Hotels said,

“The first nine hotels to switch to the AGO Hotels platform is a real milestone, marking the culmination of a long journey to provide landlords with an alternative lease structure to safeguard their interests and the value of their investments.

“The platform has very significant expansion potential by offering the best of both worlds – institutional leases and operational participation.

“AGO Hotels is in discussions with owners of individual hotels and portfolios who stand to benefit from our disruptive business model, enjoying downside protection and upside participation.

Philip Lassman, VP Development, Accor Northern Europe said,

“Accor is pleased to be a founding partner of AGO Hotels which has now secured nine new hotel sites. AGO is an innovative model for the UK with strong potential for the ibis budget brand”.

CVA backfires on Travelodge

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Do more to help tenants and landlords, cross-sector coalition tells Ministers

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The UK’s leading organisations representing landlords, lenders, letting agents and tenants have written to The Times to demand government action to support both renters and landlords, including interest free loans for tenant to clear their rent arrears.

Their comments follow Chancellor’s Rishi Sunak’s spending review yesterday, in which he warned that the economic impact of Covid was ‘only just beginning’.

The senior members of each organisation that have signed the letter include people who are at often at loggerheads over other issues such as evictions or rent caps. But the seriousness of the situation has drawn them together.  

These are: Ben Beadle (pictured left, National Residential Landlords Association); Alistair Cromwell (Citizens Advice); Timothy Douglas (ARLA Propertymark); Joanna Elson OBE (Money Advice Trust); Lord Bird MBE, (pictured, below Big Issue); Phil Andrew (StepChange) and Paul Wootton (Nationwide Building Society).

The letters says: “Hundreds of thousands of people who rent their homes face an uncertain future due to the economic impact of coronavirus. “Many are worried about the risk of losing their homes because of rent arrears arising through no fault of their own.

“Whilst many private landlords and letting agents have done what they can to support affected tenants, the overwhelming majority of landlords are individuals – many renting out just one property, often as a pension – and are unable to continue to subsidise struggling tenants indefinitely.

“As the financial fallout continues, we need to sustain tenancies wherever possible.

“The best way to ensure this happens is to make sure that tenants are able to pay their rent, which is why the UK Government must now come forward with a package to provide financial support to reduce these arrears.

“This should include boosting emergency funding to councils for grants to support those in receipt of benefits, and interest-free, government-guaranteed hardship loans for tenants, similar to the schemes developed in Wales and Scotland.

“We call on Ministers to act swiftly to provide tenants and landlords with the security and stability they need during the current public health crisis.”

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Compliance Conundrum when tenant won’t leave?

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We purchased a converted property at auction 15 years ago. One flat was occupied with a tenant on an AST, and a low rent. The property was barely habitable then, and we assumed the tenant would move on, and we could refurbish.

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