Suspected gas explosion serves as wake-up call to lax landlords

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The tragic events of Sunday morning, in which two-year-old George Hinds was killed and four adults were injured in a suspected gas explosion in Heysham, Lancashire, have sent shock waves far and wide.

Two properties (pictured above, before the explosion) collapsed and a third was seriously damaged in the blast. Following the devastating incident, 30 to 40 people were evacuated from their homes. Matt House, from North West Ambulance Service, said he had not seen an explosion like this one in the UK during his 20 years of service.

The investigation into the cause of the horrific explosion is currently underway, with officers working their way through the very difficult site. Assistant chief fire officer Ben Norman, has said that investigators are viewing a gas explosion as “the most probable cause, but we’ll only confirm that clearly when the experts make their conclusions.”

How common are explosions in residential properties?

Fortunately, explosions are rare in residential properties, but when they do occur it is generally due to gas leaks. However, an article published in The Independent in February, highlighted an ‘alarming spate’ of recent incidents – nine suspected gas explosions affecting tenants and homeowners across Britain between late October 2020 and February of this year, with four people killed and 13 injured, along with dozens of others evacuated from their homes.

Although they generally happen infrequently, the spate of recent blasts follows a 33 per cent rise in the number of gas explosions and fires linked to flammable gas, according to the Health and Safety Executive’s latest annual statistics. The figures reveal that there were 41 gas explosions and fires from flammable gas causing death or injuries in the year until April 2020, an increase from 31 incidents the previous year.

A spokesperson for the HSE told The Independent there were no plans to review the rise in cases, but some safety experts and gas safety groups have been calling on government to take a wider look at gas safety in the UK, asking why so many explosions have been happening at domestic properties lately. This most recent incident serves as a stark reminder to all property owners, of the importance of doing all you can to make sure your property is safe.

What are landlords’ gas safety obligations?

As this particularly tragic case highlights, gas safety must be taken very seriously. While property can be replaced, lives cannot. Landlords have to comply with a lot of regulations, but those relating to gas safety are among the most important. Penalties for landlords who are not compliant with gas safety regulations are up to £6,000 for each offence, or six months in jail. If a tenant dies while staying in your property due to negligence, then there’s even the possibility of being prosecuted for manslaughter, which can lead to a long sentence. 

The Gas Safety (Installation and Use) Regulations 1998 apply to any landlords providing a property with a gas appliance or with gas lines connected. Landlords must make sure gas appliances and flues are safely installed and maintained by a Gas Safe registered engineer.

If you’re letting a property with gas appliances in it, you are responsible for:

1. Scheduling gas safety checks – During a gas safety check, a registered Gas Safe engineer will make sure that your boiler is working properly and that your tenants aren’t at risk. Learn more about gas safety checks.

• Maintaining a record of Gas Safety Certificates and providing your tenants with copies – landlords must provide a gas safety certificate at the start of the tenancy (before the tenant moves in), and within 28 days of each annual gas safety check, if there is a gas installation.

• Any other maintenance associated with gas appliances you’ve provided. Although landlords aren’t responsible for the safety of tenants’ gas appliances, if they connect to the property’s appliances, you are responsible for the condition of the connecting flues and pipework.

Landlords must also be aware that, in respect of Assured Shorthold Tenancies (ASTs), a Section 21 eviction cannot be used if a copy of a valid gas safety certificate has not been provided to the tenant before the tenant entered into occupation of the property.

Steve Barnes, Associate Director at Hamilton Fraser Total Landlord Insurance advises, “The best ways to prevent yourself from facing the justifiably harsh penalties for non-compliance with gas safety, are to make sure you schedule a gas safety check at least once a year (more if you have appliances that need it) and to keep a record of your Gas Safety Certificates and checks. If you use an agent to manage your property, make sure that your contract states who is responsible for what and that your agent provides you and your tenants with new Gas Safety Certificates on at least an annual basis. If you have any questions about how gas safety might affect your insurance policy, feel free to contact our team on 0800 63 43 880. Our policy will cover most eventualities but does not include incidences of faulty workmanship or any pre-existing defects or damage or wear and tear.”

What can you do to protect your tenants and your property?

Any fire needs three things to come together – fuel, oxygen and ignition. In the case of domestic gas explosions, there are four things that need to combine: gas (the fuel), oxygen (which is present in air), the ignition (for example a lighting a cooker or switching on an appliance) and a fourth cause which is almost always poor workmanship or human error of some kind, for example poor maintenance or a faulty appliance.

Preventative measures are always the best when it comes to stopping explosions caused by gas leaks from happening; fortunately these are within landlords’ control:

1. Regular maintenance – ensure installations and annual services are carried out by a Gas Safe Register engineer. Infrequent checks to heating appliances can lead to gas leaks which can result in explosions.

• Contact details – it’s crucial to act fast in an emergency. Make sure your tenants have the correct contact details if they suspect a gas leak. Gas Safe Register has detailed information on who to call and what to do if your tenants smell gas or have been feeling unwell and experiencing headaches, nausea or dizziness and suspect it’s carbon monoxide poisoning.

• Flammable substances – advise tenants to minimise the use of flammable substances and never to leave combustible substances near heat.

• Gas ovens – if you have a gas oven in your property, make sure tenants know how to use it, and remind them to turn it off correctly.

If you smell gas or suspect a carbon monoxide leak

Call the national gas emergency helpline on 0800 111 999.

• Do turn off the gas at the meter unless the meter is in a cellar/basement
• Do put out naked flames
• Do open doors and windows
• Do keep people away from the area affected
• Don’t smoke or strike matches
• Don’t turn electrical switches on or off

For more information on landlords’ responsibilities for gas safety, including what to do if your tenants prevent you from carrying out a gas safety check, read Hamilton Fraser Total Landlord Insurance’s Landlords’ guide to gas safety: everything you need to know.

As a valued LandlordZONE reader you’re entitled to 20% off Hamilton Fraser Total Landlord Insurance’s policies, call the team today on 0800 63 43 880 quoting code LZ2021 or get a quote online in under 4 minutes. 

Pic credit: Google

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Carer’s allowance claim v rental income

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I am looking to make a claim for carer allowance, having had to retire at 63 and to move back home to care for elderly ill parents. My company pension is not included in the rules for carer allowance.

However

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Portuguese Golden Visa popularity

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Astons, the international experts on real estate, residency and citizenship through investment, has revealed that it’s not just green list inclusion for UK holiday makers that could see travel to Portugal increase this year, with investment into the nation’s Golden Visa program also expected to climb in 2021.

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‘Property guru’ deletes social media post criticising the poor

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Property guru Samuel Leeds has managed to drum up the wrong kind of publicity again by using social ‘baiting’ techniques on Twitter.

Tweeting a photo of himself in front of a white Range Rover (pictured, above), he boasted: “The reason most people fail in business is because they suck. If you can’t get rich when living in the UK in 2021, then you probably deserve to be poor.”

This incurred plenty of mirth and wrath among hundreds of Twitter users and resulted in Leeds deleting his original tweet.

Some posted links to Danny Butcher, the former soldier who took his own life after getting into debt by spending thousands on a Property Investors training course.

Another of Leeds’ tweets sparked much hilarity among the online community. He posted: “When it’s 11pm and you’re still searching for that property deal,” showed him looking into the window of an estate agent.

One Twitter user joked: “You’re gonna love this website called Rightmove. You can even browse it while eating your kebab.” Another remarked: “Siri, how do I embarrassingly tell people every day that I’ve got money?”

Baggy jumper

Many of the tweets have taken aim at his clothes in the original tweet – baggy jumper and denim shorts. Said one: “Pipe down and stop raiding the local Scope bags.” And another posted: “Money can’t buy looks, personality or humility it seems.”

His last typically modest Tweet on the subject: “I dress like shit but still make more money than all of my haters put together,” was also roundly mocked.

One said: “To have to tweet this shows desperation. No expensive training courses being sold, a money pit of an investment up North, and renting an £8,000 a month Beaconsfield pile – house of cards is gonna collapse…”

Earlier this year, Leeds gained hundreds of critics by posting a video on TikTok where he extolled the virtues of ‘buying low, renting high’ in the north of England.

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Pandemic related arrears should be top of the Housing Minister’s in-tray

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The pandemic-related debts of tenants and landlords should be “top of the Housing Minister’s in-tray”, according to the National Residential Landlords Association (NRLA) following the formation of a new Welsh Government.

In the wake of the Senedd election on 6 May

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Troubled high-profile property developer Martin Skinner dies

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Troubled property developer Martin Skinner has died of a heart attack while trying to rebuild his business during a trip to Dubai.

The 42-year-old founded Inspired Asset Management and pioneered micro apartment developments, which was one of the largest firms doing office-to-residential conversions in the capital during the mid-2010s.

He also acted as an adviser to co-living provider The Collective and worked with the British Property Federation to help define micro-living.

Martin was jailed for 22 weeks in 2018 after crashing his Porsche while high on cocaine and banned from driving until May 2022.

Months later his property firm collapsed into administration after being badly hit by Brexit and government changes to the buy-to-let market.

He told Mail Online: “I went into prison with 43p in my bank account and 30p in my pocket. And at the time we had about £500 million in projects.”

He had recently posted a series of social media updates during his trips abroad, with the message: ‘Living my best. Homeless…but no longer bankrupt life.’

Nick Tadd, director at Property Tribes, says Martin influenced and inspired the property community in so many positive ways.

He posted: “Martin was a larger than life character who touched everyone he came into contact with, with his infectious laugh, his boundless energy, his joie de vivre, his sharp business acumen, and his kind and generous nature.

“We are indebted to him for his support of us as individuals and also the Property Tribes community, which Martin always claimed helped him return from his first bankruptcy.”

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LATEST: Blow for commercial landlords as tenant wins court battle

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International gym operator Virgin Active has won court appeal to have it’s recovery plan implemented against strong opposition from landlords, writes Tom Entwistle.

A London court has ruled in a commercial tenant’s favour allowing it to write off some of its rent arrears on the majority of its venues. Despite strong opposition from its creditors, Virgin Active will now avoid future steep rent payments.

The Virgin branded gym operator has welcomed the court’s decision for its controversial restructuring plan that the company says will save thousands of jobs across its international locations. It argued that had the action been lost, the company feared the business would have had to go into administration within days.

The gym business was launched in Britain in 1999 and has grown to 236 clubs in eight countries including Australia, South Africa, Italy and Botswana, with over one million members worldwide.

Severe blow

The ruling represents a severe blow for landlords as it is likely that more companies will now follow suit and seek a reduction in their debt using the same previously untried court process.

With many retailers, and especially those affected by the shut-downs, have seen their rent arrears and other debts building-up since March 2020 when the pandemic brought about closures for non-essential sales, gym operators being a prime example.

During the court hearings Virgin Active’s counsel argued that without the restructuring plan it was putting forward, the company would go into administration. This, it was argued, would be the worst of all outcomes for most classes of the gym company’s creditors.

In a statement the company had said: “Virgin Active is pleased that the court has supported its view that the restructuring plan represents a fair solution to the impact of the Covid crisis which has resulted in our clubs being closed for most of the last year.”

However, the landlord representatives had argued that the company could have tried other options, such as selling the business or selling off some venue assets, to address its debt problems.

Mr Justice Snowden, presiding, ruled that with Virgin Active’s restructuring plan “no member of a dissenting class will be any worse off than they would be in the relevant alternative.”

Meaning that this course of action was better that that entering into administration, throwing hundreds of employees out of work and selling off parts of the business.

Landlords are now worried by the ruling. They put up strong opposition to the new court processes which allow companies to restructure in this way as, are they argue, it “sets a dangerous precedent”.

Landlords say it allows wealthy backers to extract value in good times but claim insolvency when times are tough.

The Virgin Active group, which is 18% part-owned by Sir Richard Branson, has faced serious cash flow problems since the pandemic started as, like many similar non-essential leisure businesses they have had to close their doors for long periods.

Dangerous precedent

Speaking for the commercial landlords, the British Property Federation (BPF), the commercial real estate trade association’s chief executive Melanie Leech said: “This restructuring plan sets a dangerous precedent.

“The law is now allowing wealthy individuals and private equity backers to extract value from their businesses in good times but later claim insolvency, as simply a means to get out of their contractual obligations with property owners.

“This is fundamentally inequitable and the government should not allow it to continue.”

Under the new ruling landlords of commercial properties could be forced to write off millions of pounds in rent arrears at a time when many of them are struggling with their own financial problems.

Financial pain

The company’s landlords including Aberdeen Standard Investments and British Land say that they will now be left “shouldering a disproportionate part of the financial pain” from the Virgin Active plan.

Virgin Active sought to implement its refinancing plan under Part 26A of the Companies Act, meaning that creditor groups, such as its landlords, could in future be forced to accept a struggling tenant’s terms, even if they vote against the scheme.

Virgin Active’s new approach the it’s problems follows a string of controversial company voluntary arrangements over recent years as retailers faced declining business on the high street. These have been used by leading chains of retailers including Debenhams, Arcadia Group, New Look to name but a few.

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Government tax policies shrink buy-to-let property purchases by 250,000 over five years

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The government’s assault on private landlords is achieving its much-predicted end-game as new research reveals that 250,000 fewer buy-to-let properties have been purchased by landlords over the past five years.

Estate agency Hamptons says the reduction in buy-to-let property purchases is a direct consequence of the government’s 3% stamp duty surcharge on second home purchases and the Section 24 tapering of mortgage interest relief.

It is five years since the additional stamp duty charge was introduced for landlords and four years since the mortgage interest changes began to kick in.

These changes have also generated other dramatic changes – in 2015 landlords bought 16% of properties on the market each year, but today that figure is 11%.

London hit hardest

Hamptons also says that London and the SE have seen the greatest drop in landlord purchasing activity, from 20% of the market in 2015 to 11% now.

As a result, landlords have purchased 61,300 homes in London since 2016.  However, this number would have risen to 103,300 or 69% more homes had the tax changes not been introduced.

This drop-off in new investment means 81% of all rental homes in the capital today were bought before April 2016, compared to just 65% in the North West where landlord purchases have remained more resilient.

Aneisha Beveridge, Head of Research at Hamptons, says: “The tax changes introduced from 2016 onwards have undoubtedly taken the heat out of the buy-to-let market.  Landlord purchases have dropped and consequently the rental sector is 7% smaller than it was at its peak in 2017.

The NRLA recently called for the 3% additional stamp duty levy to be scrapped.

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Council launches ground-breaking scheme to buy empty properties off private landlords

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Landlords with empty properties in Middlesbrough are being urged to sell up to a local housing group looking to source more social rented housing.

The scheme – an initiative between Middlesbrough Council and the Ethical Housing Company (EHC) – aims to tackle both the issue of poor living conditions and the high number of empty properties.

It is expected to get the go-ahead next month to start in Newport, North Ormesby and the town’s central ward.

Councillor Ashley Waters, executive member for regeneration, told the Local Democracy Reporting Service that EHC would work hand-in-hand with the council.

He said: “We blame the landlords for empty properties. Look at the state areas get left in, and how the people who get put in these houses get no support.

“This is about being able to go in and get these homes to what we call a ‘social housing standard’. We’ll then be able to support people in the area with good housing and good rates to improve the area.”

Tees valley

EHC runs alongside the Ethical Lettings Agency, which lets and manages properties for private landlords. The community interest company has a portfolio of more than 60 properties in the Tees Valley area which it has bought from home owners and landlords, often off market. 

Waters added: “If we’ve got £500,000 to spend and they can put in £500,000, then we can do double with the same amount of money.

“We’re not saying to landlords ‘we’re going to buy these properties off you’, or use compulsory purchase orders. What we’re saying is, where we can, we’re going to improve areas.”

EHC director Carla Keegans (pictured) tells LandlordZONE that properties in these areas – covered by selective licensing schemes – are empty largely due to over-supply and poor condition.

“She adds: “We are backed by long-term social investment with a social purpose to help meet housing need. This project is an example of us working with a local authority to help bring up standards in problem parts of the PRS in defined places as part of wider regeneration plans.” 

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Minister reveals bid to re-launch commonhold with help from new ‘industry council’

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The government has launched an initiative to re-ignite interest in Commonhold, the tenure introduced in 2002 by the then Labour government but which has failed to catch on.

Housing secretary Robert Jenrick (pictured) has announced a Commonhold Council which will be charged with reinvigorating interest in the tenure, which he says is a key plank in the government’s plans to give property owners ‘more control over their home and building’.

The announcement is one of the key recommendations into reforming property market made by The Law Commission last year.

Commonhold enables property owners, usually within apartment blocks, to take collective control of a building and take greater control of who manages it and the costs involved.

But the tenure has not taken off in the way many had hoped, largely because developers and freeholders find leasehold more lucrative via ground rents and other charges.

Also, commonhold doesn’t suit the many mixed-use developments that are being built these days and it hasn’t been supported by mortgage lenders.

To remedy this the Commonhold Council is to have representatives from many organisations within the property market.

This includes RICS, the British Property Federation, Building Societies Association, Federation of Private Residents’ Associations, Home Buying and Selling Group, Home Builders Federation, Law Society, campaigning Leasehold Knowledge Partnership and 12 others.

Rather oddly, though, no representatives from the property management sector are on the council.

“We are taking forward the biggest reforms to English property law for 40 years – and the widespread introduction of commonhold builds on our work to provide more security for millions of existing leaseholders across England, putting an end to rip-off charges and creating a fairer system,” says Jenrick.

Simon Law (pictured), Chairperson of the Society of Licenced Conveyancers, says: “We have long campaigned for reform of leasehold legislation and a move to widespread adoption of Commonhold in its place.
“It is greatly encouraging that the Government is now taking this seriously.”

Read more about the government’s plans.

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