The Property Ombudsman Scheme expels 4 agents

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Redress Scheme:

Every sales and lettings agent in England is required to register with a Government-approved redress scheme, which enables consumers to have their complaint reviewed independently in the event of a dispute arising that the consumer is unable to resolve with the agent directly.

The Property Ombudsman (TPO) scheme offers one of these schemes, an independent and impartial dispute resolution service to consumers who have been unable to resolve their disputes with a registered agent, and in the course of doing so TPO has recently imposed penalties on these four letting agents:

Camborne Properties Limited trading as Harper Brooks, a sales and lettings & management agent in Liverpool, has been expelled from The Property Ombudsman (TPO) scheme for the non-payment of awards.

TPO can confirm that they have received over 100 separate complaints from leaseholders regarding Harper Brooks who defaulted on making assured rent quarterly payments in 2017 that they were contractually obliged to do.

Most of the complainants have been investors from Asia buying from the developer to let to students prior to the development being completed. In one case, the leaseholder had bought a property, to be let as student accommodation from a developer who was targeting the build to let market.

Having failed to meet their obligations under the agreement the Ombudsman supported this complaint. Harper Brooks were directed to pay the outstanding rent owed and an additional award was made for aggravation, distress and inconvenience. The total award was £9,900.

All complaints about this agent that have been reviewed by the Ombudsman have also been supported. The awards total just under £431,715.52 of which £419,079.96 was unpaid rent under the guaranteed rent agreements.

The Drake Lawson Limited trading as Alexander Reed, a sales and lettings agent in Isleworth, West London, has been expelled from The Property Ombudsman (TPO) scheme for the non-payment of three separate awards.

The Ombudsman supported three cases against Alexander Reed, one complaint from a tenant and the other two from landlords. In all cases, the Ombudsman was extremely critical of the agent for not co-operating with the investigation. There was no documentary evidence provided and therefore no proof that they had met their obligations under the TPO Code of Practice.

The Ombudsman referred the agent to the scheme’s independent Compliance Committee which recommended the firm should be expelled from TPO and registration for redress.

Wara Ltd. trading as Secret Property and Wara. Buyers, sellers, tenants and landlords in Halifax are being warned that a local sales and letting agent trading under two different names, Secret Property and Wara, has been expelled from The Property Ombudsman (TPO) scheme for failing to pay an award of £2,300.

This means the firm Wara Ltd. trading as Secret Property and Wara, is not registered with a redress scheme, which is a requirement of every sales and letting agent in order to trade legally. However, Secret Property’s website remains active, though inaccessible without signing up, and Wara’s website still has properties listed for sale.

The case, which led to the agent’s expulsion, was referred to The Property Ombudsman (TPO) when potential buyers of a property on the market with Secret Property were dissatisfied with the agent’s performance.

The buyers wished to reserve a property and paid a £2,000 deposit to the agent in March 2017.   They said they were assured by the agent that if for any reason they withdrew, the deposit would be refunded. However, the buyers did not receive any written acknowledgement of the deposit or the terms and conditions attached to the payment.  When they subsequently decided not to continue with the purchase and requested for the deposit to be returned, they did not receive a response from the agent, despite sending two letters of complaint via Royal Mail’s tracked and signed for delivery service.

Katrine Sporle, Property Ombudsman, said:

“If an agent facilitates a pre-contract deposit, they have an obligation to take into account specific instructions from sellers. Before a deposit is taken, the circumstances under which the deposit is held, refunded, forfeited or used towards the purchase, should be clearly stated in writing, agreed by and issued to the relevant parties.�

Middlesbrough, TeesSurveyors Lettings Ltd (TSL), has been expelled from The Property Ombudsman (TPO) scheme for failing to pay awards in two cases relating to non-payment and late payment of rent. The awards total £3,133.06.  This means TSL is not registered with a redress scheme, which is a requirement of every sales and letting agent in order to trade legally.

In one case TSL failed to pass rent over to a landlord, despite rent payments being paid promptly each month by the tenant, leaving a shortfall of £1,201.25. As well as the missing rent, the Ombudsman awarded £500 for avoidable aggravation in relation to the missing rent and a further £100 for failing to respond appropriately to the complainant’s enquiry about gas safety certification. The award total across two cases is of £3,133.06.

Gerry Fitzjohn, Non-Executive Director and Chair of TPO’s Finance Committee said:

“All members of TPO are obliged to comply with awards made by the Ombudsman as well as co-operate with investigations, which TSL has failed on both counts. Although some attempt was made to pay the awards, this has not been settled in full. As part of TPO’s role to provide better consumer protection, we feel it is important to raise awareness to cases such as these, in the event that TSL attempts to continue trading with any existing landlords and tenants who may be unaware of the company’s position.�

The Ombudsman’s Terms of Reference, Codes of Practice, Consumer Guides and other documents about the operation of the scheme are available on the TPO website (www.tpos.co.uk), together with previous annual and interim reports, case summaries, further explanation of governance arrangements and a full list of registered agents.

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New Homes Ombudsman

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Commenting on James Brokenshire’s announcement of a New Homes Ombudsman, Katrine Sporle, The Property Ombudsman says:

“We welcome the news that Government will launch a New Homes Ombudsman. We have always agreed that new homes should be covered by an Ombudsman

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Landlords Help Please – Court summons in 14 days

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Calling Landlords – I’ve had a County Court request come through today for one of our current tenants of which we had failed to insure their deposit. This was pure human error where my husband was admitted to hospital for a severe heart operation at only 44 years old literally just after she’d rented from us a separate house.

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Boiler Grant still available?

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Hi, Please can I ask if anybody knows of any replacement boiler grants that are still available.

The tenant I have is a single mum on child tax credits.

The property is a 2 bed, mid terraced house.

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Escape to St Helens

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St Helens is a heritage town in Merseyside, home of our wonderful investment opportunity, Newton Road, with a choice of contemporary 2 and 3 bed new build houses.

St Helens is one of the best-connected towns in the country at the centre of the region’s motorway network

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Letting fee ban – A better plan?

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I run a small letting agency and am almost certain to exit the market when the fee ban comes in as it is income we cannot in all good conscience replace. I plan to go into commercial property and sales instead

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New Tenancy Rules Commencing Today

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Tenancy Regulations:

October 1^st 2018 is an important day in the private rented sector (PRS) as there are several rule changes coming into force which affect landlords and agents – you should be aware of these important changes by now, but here is a reminder.

The New HMO Rules

From today, all landlords (or managing agents) of properties which have five or more occupiers who form two or more households will need to have (or at the very least have applied for) a mandatory HMO license. Remember, there is no grace period and the penalties for not complying can be severe.

These guidelines are based on English law and are not a definitive interpretation of the law, every case is different and only a court can decide, so seek expert advice.

If you have a property with five or more occupiers who do not form just one household, and this includes children, regardless of the number of floors (storeys) the property has, you need an HMO license issued by your local authority.

The penalty is up to £30,000 fine, a First Tier Property Tribunal Rent Repayment Order and a Banning Order being placed on you, not to mention getting a criminal record.

Some landlords may need to make structural alterations or improvements to safety standards to comply with the new minimum room sizes in HMOs.

See our articles here and here

Section 21 rule changes

From 1st October 2018 the new Section 21 rules which came into force on 1 October 2015 for all new assured shorthold tenancies (AST), will apply to ALL ASTs.

For tenancies commencing prior to 1^st October 2015 there were two s21 notices: The Fixed-Term s21(1)(b) and the Periodic notice s21(4)(a). These are now replaced with one notice, the s21 6A notice with its prescribed terms, for tenancies started after 1^st October 2105, and ALL tenancies after 1^st October 2018.  A full collection of AST notices is available free of charge on a government website here

The older s21 fixed term notices had no time limit and could be served from day one, and lasted indefinitely. Now, since 1st October 2015, a valid section 21 notice cannot be served during the first 4 months of the 1st tenancy and it lasts for just 6 months.

For tenancies with rent periods of more than one month, for instance, quarterly rent payments, quite rare these days, proceedings must begin within four months of the notice termination date, otherwise a new notice must be served.

Section 21 Requirements:

These are the things which you MUST now have complied with in England and Wales for all new tenancies since 1^st October 2015 before you can serve a valid section 21 notice:

• The tenancy deposit rules have been fully complied with, and
• If the property is a licensable HMO or is within a selective licencing scheme area, then, failing a temporary exclusion certificate, you will need to produce this license.

The following prescribed legal requirements will also apply where the tenancy (or renewal) started after 1st October 2015:

• Service of the Gas Safety Certificate (served when the tenancy started), and
• Service of the EPC certificate
• Service of the government’s “How to Rentâ€� guide, the issue which was current at the time the tenancy started. See the LandlordZONE® How to Rent Guide archive here – now on the forth issue
• The correct prescribed information was issued and served for the tenancy deposit scheme.

Note: it is important that there is proof that these documents have been served, and the general advice here is to attach all these documents to the original tenancy agreement and have them signed for at the start of every tenancy.

For older tenancies, where there is no proof that the gas certificate was issued prior to the tenant entering the property, it is importance that the tenancy is not renewed; it should remain periodic maintaining its older tenancy status.

Some of the other documents can be served late, providing they are served before service of a Section 21 notice.

Retaliatory Eviction Rules

If a tenant has complained (in writing) about a condition in the property which represents a safety hazard you have 14 days in which to respond. If the local authority should subsequently issue an improvement notice as a result of a complaint from your tenant, then any Section 21 notice already served, or any new one you serve, would be invalid. A new valid one cannot then be served for 6 months after this.

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Health and Safety Checks

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Thought I send you my recent observation on H&S with fire prevention awareness week coming up shortly. I manage my properties and have been doing my pre-winter and H&S checks. I managed to see 6 tenants the other day so have now acquired few repair jobs (deep joy).

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A story for now and future generations to come

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A skyline filled with cranes greets you on the approach to Birmingham.  This is a very real and exciting indication of the scale of rejuvenation taking place in the city, and the potential it holds. 

This past Saturday

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Self-Assessment deadline approaches

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Landlords’ Tax:

New landlords should be aware that they need to register with HMRC for self-assessment and file a tax return no later than 31^st of January next, and landlords will so need to get geared-up for Making Tax Digital (MTD), a new way to file your tax return.

Anyone earning more than £2,500 in income from renting out property during the 2017-2018 tax year (6^th April 2017 to 5^th April 2018) must register with HMRC before the 5^th of October, just a week away as this is published.

By registering on time you will make sure that you comply with the law and have a User ID and Activation Code in good time for filing in January.

Your Personal Tax Account

HMRC has introduced this new service to allow everyone to manage their personal tax affairs through an online Personal Tax Account. It provides a convenient way to view and manage your tax affairs in one secure place. There are a range of services available currently and HMRC say there are more being added all the time.

You can use your personal tax account to:

• check your Income Tax estimate and tax code
• fill in, send and view a personal tax return
• claim a tax refund
• check and manage your tax credits
• check your State Pension
• track tax forms that you’ve submitted online
• check or update your Marriage Allowance
• tell HMRC about a change of address
• check or update benefits you get from work, for example company car details and medical insurance

Visit the HMRC website to sign in or set up your Personal Tax account

HM Revenue & Customs (HMRC) has been phasing in the use of online personal tax accounts for some time now but from 2020 onwards, all UK taxpayers (business and personal) will be required to manage their tax affairs online as part of the government initiative – Making Tax Digital (MTD).

While the staging dates for MTD are being staggered for different groups, to make implementation as smooth as possible, the government is encouraging taxpayers to go digital sooner rather than later. Users are being invited to sign up when they log in to their HMRC online services account or via the GOV.UK website.

What Landlords Need To Know about MTD

Making Tax Digital is the Government’s plan to transform the current tax system into a fully digital service, and landlords are among the first to be affected.

From April 2019, incorporated landlords with incomes above £85,000 (the current VAT threshold) will be expected to keep digital records for VAT purposes. You will also have to submit your VAT return to HMRC through MTD compatible software which will pull information from the digital records.

HMRC will be providing a list of approved accounts software suppliers, which will no doubt include the main-line tax accounting software providers.

Unincorporated landlords and small businesses with an annual turnover between £10,000-£85,000 will be required to join at the income corporation tax phase, which is likely to be April 2020. At this time you will be required to:

• Keep digital records detailing, dates, rental values, income and expenses.
• Send quarterly reports to HMRC using third party software, summarising your business’s income, expenditure and profits.
• Make an end of year declaration (after any necessary adjustments).

All of this will be done through your personal tax account which will securely store all of your tax records. When properties are owned by a partnership, submissions will be made to a business digital tax account by a nominated partner. In a jointly owned property, each individual who receives income will need to report it separately.

This is a major change to the way the UK tax system operates and landlords will be right at the heart of it. The sooner you get registered and in the swing of things the better. HMRC says the advantages of this are:

• An end to manual submissions means fewer mistakes and serious time savings.
• Quarterly reports will show you how much you owe in real time.
• You’ll have a single picture of your liabilities and entitlements through your personal tax file.

Software providers will be working with HMRC to make sure their tax accounting software is compatible with MTD to make the process as smooth as possible for users.

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