BREAKING: Most radical shake-up of leasehold in a generation proposed by Law Commission

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Landlords could be forced to absorb greater legal costs if the takes on board the Law Commission’s most significant proposals for leasehold reform in a generation.

Its three new reports published today on leasehold enfranchisement, the right to manage and commonhold, propose reforms of the leasehold system and its replacement with a revived commonhold tenure.

It calls for an overhaul of the right to manage process and says landlords’ legal costs should not be passed to leaseholders, blaming costs as the prime reason why applications fail.

Under the proposals, leasehold houses would also be able to opt for right to manage, removing imposed management by the freeholder.

Campaigning group Leasehold Knowledge Partnership, says: “Coupled with the Government’s commitment to set new ground rents to zero and to ban leasehold houses, the proposals demonstrate in compelling detail why the leasehold system needs reform and how it could be done.

“It is a blueprint for a Government to reform this entire sector, if it so chooses.”

The Law Commission suggests that all new lease extensions would be 990 years, instead of the current 90 (flats) and 50 (houses), and that there should be no ongoing ground rent.

Under its reforms, landlords would not be able to pass on their legal costs during the enfranchisement process. In its commonhold report, it makes recommendations that would make it not just a workable alternative to residential leasehold, but the preferred alternative.

LKP adds that these reports are a, “nail in the coffin for predatory commercial interests seeking to exploit the feudal leasehold system”. But it adds that they depend on the Government choosing to bring them in.

The Government tasked the Law Commission to study the sector which it said, “has far too many problems including disproportionate costs to extend leases; poor value property management; and a slow and costly sales process”.

Read more about leasehold reform and what it could mean for landlords.

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Rogue landlords too easily flouting tenancy deposit laws, says campaigning group

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Rogue landlords are still flouting deposit laws, forcing tenants to take enforcement action into their own hands as weak policing of the system become more evident, it has been claimed.

In a recent incident, one group of tenants from Sheffield took their protest to their landlord’s house to force him to repay £800 after he failed to use an authorised deposit scheme.

The three tenants said they’d thoroughly cleaned the house before the end of their tenancy, but the landlord refused to return it and accused them of “trashing the house”.

But the housemates said the claims were mostly related to problems which were there when they moved in, or down to ordinary wear-and-tear.

They later found out that the previous tenants had also experienced difficulties in getting their deposits back.

After joining the ACORN tenants’ union, group members gathered outside the landlord’s house and successfully demanded their deposits back.

A spokesman for ACORN says: “We let the landlord know that we would not be intimidated…he caved in and massively reduced the amount they were claiming from the deposit, down to about £30 per tenant. Deposit theft is all too common, but no one should have to accept it.”

However, all this can be avoided if landlords use an approved deposit protection scheme, as mediation on the claimed costs would go through a redress organisation such as Property Redress Scheme (PRS).

Sean Hooker, PRS head of redress, says there is still a job to do to educate tenants and that if a deposit wasn’t protected then the advice should have been for them to take legal action. 

He says: “The tenants would have been able to get their deposit back plus one to three times the amount back. There are loads of landlords flouting the law – this is because the enforcement is effectively down to the tenants.” 

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Rogue landlords too easily flouting tenancy deposit laws, says campaigning group | LandlordZONE.

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Tenant jailed after attacking landlord over eviction notice

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An abusive tenant has been jailed for 14 months for attacking his landlord with a knife sharpener after he was given notice to quit.

Michael Bennett, 52, of Freeman Street, Grimsby (pictured), admitted assaulting the landlord, causing actual bodily harm and leaving him permanently scarred.

Grimsby Crown Court heard that he was angry about being asked to leave after not paying his rent, so first phoned the landlord to hurl abuse, and later threatened to kill him.

Bennett objected to being accused of damaging a window at the property, but the landlord was convinced that he was responsible for the damage and blamed him for it.

Relations between the two men deteriorated, but Bennett denied causing the damage and they later got into an argument.

Further threats

When the landlord turned around to walk away, fearing that he was about to be attacked, Bennett hit him with a knife sharpener then kicked him in the ribs and back. Bennett even called the landlord in hospital where he was being treated and made further threats.

Judge Mark Bury told Bennett: “There was plainly an issue, your relationship was non-existent. There was some damage to his property. He blamed you for it. You denied it. You and he got into an argument.”

Bennett, who had been previously convicted of assault, was jailed for 14 months but because he had been in custody for about six months, was not expected to be kept behind bars for much longer.

Read more about tenants from hell.

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Government pumps £105m into helping homeless move into privately rented sector

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Housing secretary Robert Jenrick is to offer an additional £105 million to help homeless people move into private rental market homes as well as other accommodation types.

The money, which is available until March 2021, is part of his department’s existing efforts to offer a wide range of accommodation providers financial help via local authorities to give 15,000 rough sleepers more permanent homes that are ‘good value for money’ and ‘safe’.

During the Covid lockdown homeless people were offered accommodation in hostels and hotels but the Ministry of Housing, Communities and Local Government is now seeking to give them a leg up into more secure but interim accommodation by supporting new tenancies within the private sector.

Landlords who take on tenants funded by the scheme will receive deposits and rent paid directly to them by local authorities and will be offered mediation services and cash incentives as sweeteners to be part of the scheme.

Called the Next Steps Accommodation Programme, it is part of the government’s wider rough sleeping initiative coordinated by Dame Louise Casey.

“We now have a landmark opportunity to break the cycle of rough sleeping and ensure that people do not return to a life on the streets,” says Jenrick.

“Today I am launching the funding to ensure that vulnerable people and rough sleepers continue to have a roof over their heads and are helped into longer term accommodation, enabling them to start to rebuild their lives.”

The Next Steps Accommodation Programme is part of a two-pronged approach to offer homeless people both interim accommodation and also more longer-term properties.

Read the Next Steps Accommodation Programme in full.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government pumps £105m into helping homeless move into privately rented sector | LandlordZONE.

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Precise – Limited Company BTL 75% LTV 5 year fixed at 3.54%

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For a limited period and to take advantage of the Stamp Duty holiday for properties under £500,00, Precise Mortgages has launched a new 5 year fixed rate Buy to Let mortgage for Limited Companies at 3.54% to a maximum of 75% Loan to Value.

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Help please and tenant’s surname spelt wrong?

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Hi, So basically my tenant’s AST runs out Aug 17th and I have served the 3 months notice during the lockdown, but the agent I used has spelt one of the tenant’s surname wrong looking at this? (Sidepoint),

I have told my tenant late Jan this year before the lockdown that I want the property back as I am moving in with my family.

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Don’t miss out! Industry group asks for your comments on new mandatory agent Code of Conduct

admin    Uncategorized     agents

Landlords have a once-in-lifetime opportunity to help shape the future of the private rental sector following the launch of a consultation today on the looming Code of Practice for agents.

This code will soon govern how agents encourage and respect diversity; treat consumers fairly; undertake training and development, deal with conflicts of interests, handle complaints and protect both client money and data. 

It also sets standards for transparency of communication and reporting property safety issues.

The steering group running the government-backed initiative has published the first draft of the code, which sets out the behaviours that landlords should expect of their letting agents when the code goes live.

Agents will soon have to apply for a ‘licence to operate’ which could be revoked if they are found to have ignored the code.

This will immediately chase the rogue letting agent element of the sector out of the industry and require the rest to adhere to higher levels of customer service and probity.

The Code will apply to agents across the UK and is the result of Lord Best’s Regulation of Property Agents (RoPA) report published last year.

The steering group’s chair, Baroness Hayter, says: “The new code of practice will look to set standards at a higher level than currently legally set. The ambition of the code is that it will become a requirement for obtaining a licence to practice in the future, which will increase trust across the sector.

“Input from consumers, stakeholders, interest groups and the industry is paramount to ensuring that the Code of Practice is balanced, fit for purpose and meets the requirements of a future Regulator.”

Watch this space for details of how to input into the consultation.

Read the code in full

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WARNING! CGT Going UP? – Property Investors Need To Act Now

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The Chancellor of the Exchequer, Rishi Sunak has announced a review of Capital Gains Tax.

In this video I discuss with Alex Caravello, Property118 Tax Consultant and Mark Smith, Cotswold Barristers, what implications this will have on property investors and landlords and what action landlords can take now before any changes take effect.

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BREAKING: Tenants to be given 60 days before rent arrears and other debt can be collected

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A new ‘breathing space’ scheme to give people in debt time to get proper professional advice and reduce the stress caused by impending legal action is set to go live next year following a consultation.

The Debt Respite Scheme regulations – which cover most debt including rent arrears – aim to give them a better chance to stabilise their finances during a 60-day moratorium on interest, charges and enforcement action while they seek help. It will take effect from 4th May 2021.

They could then enter a statutory agreement to repay their debts to a manageable timetable and would get legal protection from creditor action during this time.

Citizens Advice agrees that it’s an enlightened approach to debt management and will no doubt help many people struggling to make ends meet. But it adds that many tenants will need help with their finances long before the scheme is up and running next Spring.

The Government says that those who need debt advice often don’t seek it, and those who do get advice often don’t get the best experience because they leave it too late when their situation is at crisis point.

Debtors receiving mental health crisis treatment will also be able to enter a mental health crisis moratorium without engaging with this debt advice.

Protection will apply for the duration of their treatment and then for a further 30 days. If eligible, debtors can then access the 60-day moratorium.

Debt charity StepChange welcomes the move which it says demonstrates an increasingly enlightened approach to the treatment of people experiencing debt problems. Head of policy Peter Tutton says:

“We look forward to working on the detail of implementation constructively with the Government, to ensure that it fully meets the policy objectives of getting more people to the debt advice that they need, and then giving them a period of calm in which to begin the process of reaching a suitable solution to their problems without fear, harassment, intimidation or escalating cost.”

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LATEST: More details on Chancellor’s £5,000 green grants for landlords due ‘next week’

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Further details of Chancellor Rishi Sunak’s £2 billion Green Homes Grant scheme are expected to be released next week, LandlordZONE has been told.

David Pierpoint, whose organisation The Retrofit Academy is due to be at the forefront of efforts to implement the scheme and bring all the stakeholders together, says civil servants have been in touch with the industry for several months as the scheme has developed, and that a ‘wider picture’ is imminent.

“No one really knows what the scheme will really look like yet and it will take longer to get the full details as they’re still working on them, but the basics of how the installation and supplier scheme will work – for example – are likely to be made public next week,” he says. Other details include how the vouchers will work, and which companies will be approved to do the work.

The Green Homes Grant scheme is expected to be an unprecedented bonanza of environmentally-friendly funding for landlords, but there are several obstacles.

One is that the window of opportunity is small – landlords can apply for the vouchers to fund retrofit green refurbishment work from September onwards, but the scheme will only run until March next year.

The other is that green retrofit industry has just three-and-half months to get ready.

“The industry already has an annual turnover of £1 billion, but from September onwards it’s going to have £2 billion of work added to it almost overnight,” says Pierpoint.

How will the Green Homes Grant work?

Landlords in England will be able to claim up to two thirds of a property’s green refurbishment cost with a ceiling of £5,000 per rented home.

This will include loft, wall and floor insulation as well as, it is rumoured, new boilers, with no limit on how many properties a landlord can refurbish.

As advertised, the scheme is a significant improvement on the previous and largely failed Green Deal, which required landlords to take out high-interest loans, and was eventually closed down.

Now, to claim the full £5,000 allocation of free vouchers from the new scheme, a landlord will have to have a budget of £7,500 per property, of which two-thirds will come from the government.

Alex Hunt of Sussex-based specialist building firm Bright Green Homes, says he is worried how the scheme will be implemented.

“There is a danger you’ll get plumbers recommending that a new boiler is put in, but often it’s the insulation that needs sorting first – there’s no point having a super-efficient heating system pumping out warmth when it immediately disappears through the walls and windows,” he says.

“It’s vital that the scheme takes a holistic look at each property and works out which work is going to create the best environmental outcome, rather than a hodgepodge of different work being completed that could be contradictory and not achieve the green revolution the government wants.”

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – LATEST: More details on Chancellor’s £5,000 green grants for landlords due ‘next week’ | LandlordZONE.

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