Signing a Surname

Does a periodic tenancy count as being repeatedly renewed/granted?

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Signing Document

 

This was the subject of a decision in Walcott v Jones & Jones. Central London County Court, 15 November 2017

The tenants, who commenced a tenancy in 2007, argued that the Section 21 served was invalid because the Landlord had failed to adhere to the requirements of the Deregulation Act 2015. They argued that the oral monthly tenancy was a re-grant of the tenancy every month that each periodic tenancy was a re-grant of the tenancy and therefore the Landlord failed to comply with the Deregulation Act 2015 when serving the s21. The DDJ agreed in the first instance and the claim for possession was struck out.  Not surprisingly the Landlord appealed and the Appeal Judge held that a periodic tenancy for the purposes of Housing Act 1988 (as amended) did not amount to a ‘grant’ of a new tenancy . The tenancy merely continued. Parliament did not intend a ‘grant’ in such circumstances. The DDJ had erred in law and appeal allowed.

Whilst this is great news for Landlords it is important to note that from October 2018 the Deregulation Act will apply to all assured shorthold tenancies no matter when and how they commenced.

Should you be facing a similar situation, feel free to contact our Landlord and Tenant team on 01992 558411 and they would be more than happy to assist you.


Beware the Expiring Lease

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Lease Extension

I have noticed a huge increase in enquiries for lease extensions as Mortgage companies are becoming increasingly nervous about lending on shorter leases.  The less years to run on your lease the more expensive the premium to extend. Delaying could end up costing you thousands of pounds more.

 

What are your options?

You can extend your lease on a voluntary basis with your landlord or alternatively if your Landlord is unwilling to agree to a lease extension you can make a claim under the Leasehold Reform Housing & Urban Development Act 1993 (“the statutory route”)

If your landlord is willing you will need to agree a price and the terms which could include  an increased ground rent or other terms for agreeing to extend the lease.

If you use the statutory route, 90 years will be added to the remaining term and ground rent will be reduced to zero.  However in order to use the statutory route you have to satisfy certain criteria, one of which is that you have been the registered proprietor of the property for at least two years.

It is important in both cases to obtain a lease extension valuation by an experienced Surveyor to make sure that you are not paying too much or you are agreeing to terms that may be detrimental and unattractive to a prospective buyer.

What else do I need to think about?

If you use the statutory method you are required to pay your landlord’s reasonable legal and valuation costs.  If you are agreeing a lease extension with your Landlord it is likely that they will still want their costs paid by you as part of the agreement.

If you use the statutory route and you are unable to reach an agreement with the Landlord you are able to apply to the First Tier Tribunal (Property Chamber) for a determination of the premium and also the Landlord costs if you think that these are unreasonable.

Need more information?

Please ring Rita Wright for further information or even a chat to discuss your options on 01992 558411 Rita.Wright@BreezeandWyles.co.uk


Giving rookie renters a helping hand

StudentFollowing the recent A level results, many first-time students will be looking for last-minute accommodation, if they aren’t heading to their first choice of university with an assured place in the halls of residence.

Parents can help guide the rookie tenants through the process, but may themselves not be aware of how things have changed since their uni days or first-time flat rental.

All too often both parents and students get focused on the emotional upheaval or logistics, rather than the important details of checking out the property and making sure the landlord is a safe bet.

Privately-owned student accommodation is likely to be an HMO - or house of multiple occupation – if it accommodates three or more students, which places extra obligations on the landlord. For example, an HMO will need to satisfy special requirements regarding fire and general safety, utility supplies and management of communal areas, which could include fire alarms, extinguishers and fire blankets on every floor. You can also ask to see landlord's HMO licence. If a landlord doesn't have a licence when they should, they can be prosecuted and you may be able to reclaim up to 12 months’ worth of rent paid during the time that the HMO was unlicensed.

Whether the property is classed as an HMO or not, all landlords should ensure that gas appliances are covered by an annual check, that all electrical installations are checked every five years by a qualified electrician and that any appliances like washing machines, kettles or toasters have a PAT certificate.

In privately-owned student accommodation, any agreement is likely to be based on an assured short hold tenancy. This can be for a fixed term such as the academic year, for 12 months, or periodic, which may run from month-to-month. Most lets include the summer holiday period these days, with either full or reduced rent due.

A written agreement should be provided by the landlord, and as a minimum this should be a statement of the main terms, including the date it will begin, the rent due, when and how it must be paid, if the rent can be changed and how long the agreement is for. Under some agreements the tenants may be jointly and severally liable for the rent. This means that, if one of the tenants does not pay their share, the landlord can sue any of the other tenants for the unpaid rent and may pursue the easiest option.  For example, in a house share with a mix of home and overseas students, the landlord may choose to pursue one UK resident for the whole sum, rather than any of the overseas students. Also, it’s likely that every student will have to be backed up by a guarantor such as a parent.

By law, any deposit must be held by the landlord in a registered deposit protection scheme and you should ask to see evidence of this being done within 30 days. The deposits may be held in the name of one or more designated tenants.

The property should be checked carefully against the inventory, and whether this is a comprehensive record of all contents and the general condition of each aspect of the accommodation or a simple list, it's worth taking photographs of the condition of everything, including any damage or poor condition that you pick up as you go round the property, to ensure that you have a strong case for the full return of your deposit at the end of the tenancy.

Recently, a group of student tenants in Bristol took a letting agent to court and managed to overturn a deduction of £780 worth of charges which was being taken from their deposit to cover redecoration and cleaning. The students had photographic proof of the state of the accommodation when they took it on and could show it was cleaner when they left, as well as having evidence to demonstrate that works claimed for by the letting agent had not subsequently been done. Their attention to detail helped them secure a County Court judgement, and the return of the deposit.

Explained tenancy legal expert Rita Wright, of solicitors Breeze & Wyles Solicitors based in Hertford: “Thanks to the huge rise in demand for university places over recent years, many different types of investors and private landlords have entered the student accommodation sector. There’s been a big shift away from the scruffy digs that people used to experience at university, but there are still many older properties that may be more likely to pose problems in terms of repairs and general condition, and no sector is immune from difficult landlords.

“The important thing is to make sure young people have some guidance, and if necessary get the contract and terms checked out professionally. It's likely to be the parent who is on the line as guarantor, so it’s worth taking time to be sure, and not just jumping to secure a last-minute property.”

Some tips from Rita include:

  • If you’re using a letting agent be sure of their procedures and where a holding or advance rental deposit is required, find out if it will be refunded if the application fails to complete, for example if you don’t pass a credit check
  • Ask to see the relevant licences, such as for a House in Multiple Occupation, and for any gas or electrical installations and appliances
  • If the letting agent or landlord says that any work will be undertaken as a condition of you taking on the tenancy, get it in writing before signing any agreement
  • Read the small print on the tenancy agreement and if anything doesn’t sound right then get it checked out, as once you’ve signed, you’re committed
  • Check the inventory – dispute anything that’s not accurate and take photographs when you move in
  • Make sure the deposit is being held in a Government-backed scheme.

If you have any questions about Tenancy agreements and Landlord Disputes, please contact our Landlord and Tenant department on 01992 558 411 and we will be happy to discuss this in greater detail with you.

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Reference:

Licensing of houses in multiple occupation in England: a guide for tenants

News coverage of student getting back their deposit after court action


Landlord and Tenant Act 1954

Anyone thinking about investing in Commercial Property needs to have a good understanding of the Landlord and Tenant Act 1954.

Part 2 of the Act gives tenants occupying for business purposes a right to renew their lease on similar terms to the existing one. It applies where:

  • There is a tenancy as opposed to a licence
  • Where the tenant is in occupation for the purpose of business and
  • Where the tenancy is not specifically excluded from the 1954 Act

Our resident Property Litigation expert Rita Wright says “It is extremely important that Landlords take advice before entering into any business lease with their tenants. If a Landlord were to terminate a lease wrongly which is protected by the Act they are likely to face a Court Injunction and a claim for damages”

Apart from a lease being specifically excluded from the Act, the Act won’t apply if the term granted is less than 6 months and the tenant’s total occupation does not exceed 12 months (unless of course the lease provides for an extension of the term).

If a Landlord wants to terminate a lease which has protection of the 1954 Act, there is a procedure that must be followed. The Landlord must serve a notice and prove one of the statutory grounds under the Act.

The notice must be served within very strict time limits and it is important that it is drafted correctly. Some of the most common grounds used are reconstruction and substantial works or the Landlord’s desire to use the premises himself.

If a notice is served and is not a valid notice or served incorrectly this may substantially delay the Landlord from regaining possession of the property.

For advice and assistance in this particularly tricky area of law please contact Rita Wright or the Commercial Property Team at Breeze and Wyles Solicitors Ltd on 01992 558411

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.


One bad apple can spoil the whole Portfolio

Do you have a property or block which is letting the rest of your portfolio down?

Are you encountering ongoing and unresolved disputes that are proving difficult to resolve?

Most estate or property managers will likely have at least one property or estate within their portfolio that has issues that are difficult to resolve and may require work that goes over and above the normal property management services provided. It might be one particularly difficult resident or tenant, or there may be substantial service charge or rent arrears which are preventing the estate or property to be properly managed.

Good property managers these days are also very concerned about how they stand reputationally with their leaseholders, occupants, tenants and landlords for whom they manage properties for. With the ease of the internet it is easy for a reputation of a property management company to take a downward turn if one property hits the right website or media with complaints or comments from unhappy occupants. It might be an estate set-up or accounts issue, or an issue more general like poor developer build or conversion. Even repeated changes of property manager can cause inconsistency and the level of service provided can diminish.

We recommend seeking legal advice as soon as possible to try to resolve complex property or estate issues, and try to prevent cases from escalating to legal or Tribunal proceedings. If a legal claim or Tribunal matter has already been raised, however, we can also assist with these and seek to resolve the matter.

If you are experiencing issues with such properties within your portfolio please get in touch on 01992 558411. Our highly experienced expert lawyers and legal staff can provide you with the advice and assistance you require to suit your property management and legal needs.

Janina Lamb is a litigation solicitor at Breeze and Wyles Ltd specialising in general litigation, property disputes, and debt recovery, and can deal with a wide range of issues including landlord and tenant, estate and leasehold management issues including residential property tribunal cases, service charge disputes, and general debt recovery.


Autumn Statement 2016: Letting Agents banned from charging administration fees

In today's Autumn Statement Chancellor Philip Hammond announced that Letting Agents can no longer charge tenants for their admin fees and that responsibility must fall to the Landlords

The Chancellor said: "We've seen these fees rise, despite our attempts to regulate them. Landlords appoint the agents, so landlords should pay for them and this will be done as soon as possible."

Administration fees are estimated to affect over 4.3 million households.

Rita Wright Property Litigator at Breeze & Wyles Solicitors Limited said: "Property Agents supporting Landlords and Tenants in the rented private sector will have to pass all of the cost onto their Landlords. As a result Landlords will be forced to seek to recover these costs through increased rents. While this is a reasonable clarification of the burden of the expenses the net result is that rents will increase in a market where rents are already at a historic high. More tenants will find rents un-affordable creating a higher percentage of default at a time when Landlords are already being squeezed by the governments previous changes."

For help and assistance in any property related issue please contact Rita Wright on 01992 558411 or email Rita.Wright@BreezeandWyles.co.uk


Winter Property Blues

bw-winterAs winter approaches and the nights start drawing in landlords and property managers might find themselves facing increasing issues with tenants and leaseholders due to the inclement weather. The winter weather brings with it a whole multitude of potential issues for managed properties and estates and blocks as more and more people stay indoors with the heating on and the windows closed, which can cause damp and condensation, whilst snow and ice create an ice rink for pathways. It is certainly recommended that landlords inform their tenants on how best to ventilate their properties and also know what a landlord can do help alleviate slippery and icy surfaces.

It can be simple issues like these that can prompt a tenant or leaseholder to become disgruntled and start to default on amounts due under their agreement. More so since the recession many landlords have found themselves in dispute with their tenants or leaseholders, or substantially out of pocket for rent and service charges for sometimes insubstantial reasons. It is usually when arrears and costs start to become unmanageable that lawyers get involved and try to resolve the situation. However smaller issues that could have been dealt with when they were first reported can snowball into expensive and difficult situations. We recommended seeking legal advice as soon as possible, even if an issue seems minor, to prevent them from escalating.

We have also seen a notable rise in disrepair issues being raised when attempting to tackle arrears and obligations in privately rented properties. Issues such as damp and repairs can be raised by a tenant and landlords may be obliged to attend to these issues to avoid legal complications later on. Further to the Deregulation Act 2015 a Landlord might be prevented in pursuing possession of their property if disrepair has been raised by their Tenant previously. Two key material points in time are when the Tenant first moves into the property and when they move out. It is highly advisable to have a comprehensive pre-tenancy checklist and condition of property report for both dates so that any subsequent issues or challenges can be checked if necessary.

Difficulties can also arise when planning for and carrying out works and repairs during the winter season on estates. The rainy grey weather can not only affect the timetable for works to be carried out but potentially the overall finish. The services or works done at a leasehold estate should be at a reasonable price and of reasonable standard. If for whatever reason those works fall below what might be considered reasonable a challenge might be made to the cost and quality to the First Tier Property Tribunal, a specialist forum for such leasehold disputes.

If you are finding yourself encountering issues with your rental or leasehold property please get in touch. We can provide advice and assistance and our experienced expert lawyers and legal staff are able to provide you with advice to suit your individual and property management needs.

Janina Lamb is a litigation solicitor at Breeze and Wyles Ltd specialising in general litigation, property disputes, and debt recovery, and can deal with a range of issues including landlord and tenant, estate and leasehold issues including residential property tribunal cases, service charge disputes, and general debt recovery.

Contact us today on 01992 558411 or email janina.lamb@breezeandwyles.co.uk

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.


Landlords lose and whiplash gets cracked in Osborne’s autumn budget

Backtracking on the contentious cuts to Working Tax Credits caught the headlines when Chancellor George Osborne delivered his Autumn Budget statement, alongside a boost to building and good news for first time buyers.

The Chancellor announced the allocation of £4 trillion of public spending over the next four years, with an £8 billion reduction in borrowing now being forecast and a predicted surplus of £10 billion by 2019-20.

In a package of measures designed to help with housing, Mr Osborne announced a doubling of the housing budget to £2bn a year, to fund 400,000 new affordable homes by the end of the decade, to both buy and rent. Help to Buy has been extended with restrictions removed on shared ownership schemes, so more people can get on the housing ladder.  There’s also a new Help to Buy equity loan scheme that will give London buyers 40% of the home value from early 2016, doubling the 20% offered under the current scheme.

But for second home owners and landlords looking to add buy to let properties to their portfolio, the Chancellor dealt another blow by announcing a massive 3% extra levy in land tax stamp duty on such purchases with effect from April 2016. The money raised will be used to fund investment in local communities. This follows on the heels of his last Budget when he announced that there would be a cut in tax relief on mortgage interest for landlords.  Tax relief is set to be gradually restricted to the basic rate, currently 20%, where landlords had previously been able to offset mortgage interest against top rates of tax.  The shift was to tackle what the Chancellor called an “unfair advantage” for landlords over homeowners.

Said Brendan O’Brien Managing Director of Breeze & Wyles Solicitors Limited:  “Landlords have been in the Chancellor’s sights for some time, with high levels of buy to let pushing up house prices and reducing affordability for first time buyers.  Buyers of second homes will also be caught by this new rate of stamp duty on their future purchases.  With the policies he set out today, it’s likely to reduce some heat in the housing market, once the new stamp duty level kicks in.”

He added: “The other sting in the tail for landlords and others making capital gains is the shift towards faster digital taxation processes.  Mr Osborne has ambitions to build one of the most digitally advanced tax systems in the world and one result of this will be faster collection of capital gains tax, which is payable on any gain made by a landlord or second home owner on a property when they sell up.”

The Chancellor also announced that people will no longer be able to get cash compensation for minor whiplash claims, in a crackdown designed to cut the number of fraudulent claims and likely to lead to reduced motor insurance premiums.   Instead, such injuries are expected to go to the small claims court with the upper claims limit increased from £1,000 to £5,000.

Underused courts will also be closed, saving £700m which will be used towards the introduction of new technology into the court service.

ENDS

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

 


Checklist for new rules on s21 notices

On October 1st 2015 the Deregulation Act 2015 came into force which has major implications for Landlords serving s21 notices.

So what are the changes?

  • The new rules restrict a landlord from serving a s21 where the tenant has made a written complaint to the landlord about the condition of the premises or common parts of the building and the landlord has not responded or given an adequate response;

 

  •   There is no requirement for the s21 notice to specify the last day of a period of tenancy;

 

  •  A landlord cannot serve a s21 notice in the first four months of the agreement;

 

  •  Possession proceedings must be started within six months from the date of the s21 or if a s21 (4) notice giving more than two months notice, four months from the date specified in the notice.  A fresh notice must be given if proceedings have not been started within these time limits;

 

  • Introduces a new prescribed form of s21;

 

  •   Prevents service of a s21 unless the Landlord has provided the tenant with an Energy Performance Certificate or a Gas Safety Certificate;

 

  •  Prevents service of a s21 unless Landlord has provided the tenant with prescribed information and to satisfy this requirement the Landlord must give the tenant a copy of “DCLG Howe to Rent: The checklist for renting in England”;

 

  • The tenant also ahs the right to a rent apportionment of rent paid in advance in respect of a period falling after s21 notice brings the tenancy to and end.

The changes will only apply to Assured Shorthold Tenancies granted on or after 1 October 2015

The changes will not apply to a fixed term Assured Shorthold Tenancy granted prior to 1 October 2015 even if, after that date, the fixed term AST becomes a statutory periodic tenancy.

Note that from 1 October 2018, the new rules will apply to any tenancy irrespective of when it was created (except for the requirement for the landlord to provide prescribed information about the rights and responsibilities of the landlord and tenant under the tenancy).

It is advisable therefore, to provide the prescribed information, energy performance certificate and gas certificate at the start of a tenancy to make sure that these requirements have been satisfied.

You should immediately stop the practice of serving a s21 notice on the first day of a tenancy. Any notice served within the first four months of the tenancy will be invalid.

Landlords will also have to be more proactive in issuing possession proceedings if a tenant does not vacate the premises by the date set out in the s21 notice. If the landlord has not issued proceedings within six months of the date the notice is given or, if a s21(4) notice was served requiring more than two months to be given, within four months of that date, it will have lost the right to do so based on that notice and a fresh notice will have to be served.

If you have any questions on the new rules or indeed need further information please contact:

Rita Wright / Rita.Wright@breezeandwyles.co.uk / 01992 558411


Why not try Commercial Property Rent Reduction before it makes you insolvent?

Following on from my previous blog entitled ‘Why is Retail suffering more in this recession?’ I referred to rent negotiations in my article. I feel that it is worthwhile examining the complexities of Administrator and Landlord negotiations when a retail business finally collapses.

With the commercial retail lease having been concluded in a very different rental environment unsustainable rents are being demanded and paid when turnover and protiability is under significant pressure. As mentioned in my article property overheads are one of the major costs that contribute to the business’s demise together with funding and staffing costs.

The primary property issues in an administration are twofold and are considered below: -

1. When a retail business enters administration it is subject to a moratorium on legal proceedings. The Landlord’s ability to recover rent arrears is limited and he will now need to fall back on some of the tools that his lawyers created from him at the time of the lease. Enforcement of the right to recover rent arrears using quasi proceedings such as sending in the bailiffs is stymied by the Moratorium. See paragraph 43(6) of Sch B1 Insolvency act 1986. The Landlord may also have no right to any rent deposit deed.

So what rights might exist? Among those rights will include recovery from former tenants, guarantors and subtenants.

a. Former Tenants – in order to take advantage of this option the Landlord must act quickly otherwise the recourse may be lost (see section 17 Landlord and Tenant (Covenants) Act 1995)
b. Guarantors
c. Sub-Tenants – section 6 of the Law of Property Amendment Act 1908 provides the Landlord the ability to serve notice and miss out the insolvent tenant and recover directly from subtenants up to the amount of the arrears outstanding.

2. What happens next with regard to the property?

The premise upon which an Administrator is appointed will be one of the following with a and b being the most likely reason: -
(a) rescuing the company as a going concern, or
(b) achieving a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being in administration), or
(c) realising property in order to make a distribution to one or more secured or preferential creditors.

It is unlikely that this would be achieved since in the retail environment where the business is dependent on location for its goodwill, the administrator would not be able to achieve the outcomes a and b without the premises as part of an onward sale. This requires the Landlord and the Administrator to negotiate on the relationship and at this point the Landlord may be able to negotiate something in relation to the rent arrears. The rent arrears may be unlikely but it may be that the Landlord can negotiate with the incoming purchaser to ensure that its losses are reduced.

What can be acheived by early discussions?

There is no doubt that the fact of insolvency makes the outcome less certain. So start early.

All of this being said, the current economic environment does not lend itself to Landlords having a laissez faire attitude to empty premises. Before entering Insolvency retail companies are advised to see whether any form of alteration to the terms of the lease can be negotiated. All parties are losers in insolvency and Landlords know this better than most. With their exposure increasing three months after the tenant vacates as a result of empty rates the pressure is on them to find solutions to tenant insolvency.

The only fly in this ointment is that some Landlords do not have the flexibility to re-negotiate as they themselves may be leveraged to the hilt and finding it difficult to fund the interest on the bank loans secured on their properties.

If the content of this article interests you please contact me on 01992 558411 or e mail me at brendan.obrien@breezeandwyles.co.uk