Residential Landlord Summer 2009

PAGE 1 THE GUILD OF RESIDENTIAL LANDLORDS www.all4landlords.com

Res ident ia l Landlord

The Guild launches new Tenancy Manager Software

The Guild of Residential Landlords is pleased to announce the launch of brand new software called Tenancy Manager.

Two versions are available, a private landlord edition and a small agent edition. The only difference between the two is that the small agent edition has the added benefit of being able to track payments to landlord clients, deduct commissions from rents and a few other agent specific tasks. The small agent edition is ideally suited to small agents working from home or small office.

Both versions will track rent outs tanding, produce reports o f upcoming gas safety checks, PAT tests, fire alarm tests and electrical safety.

Risk assessments can be entered and the software will automatically produce arrears letters, tenancy agreements, notices for possession and other letters.

The software operates on both MAC and Windows computers and is only available to members of the Guild. It is Priced at £45.00 for the private landlord and £95.00 for the small agent edition. This is a one off charge and no recurring payments are required.

Further details can be found on pages 18 - 19 of this magazine and on t h e m a i n p a g e o f o u r we b s i t e www.all4landlords.com

IN THIS MAGAZINE

NEWSVarious news articles from on-line sources

LANDLORD OBLIGATIONSInteresting article on CO detectors

TENANCIES (GENERAL)Selection of cases

TENANCY DEPOSIT SCHEMESCase analysis of recent county court cases

LOCAL HOUSING ALLOWANCESelection of cases and new legislation

LOCAL AUTHORITYSelection of cases

LONG LEASEHOLDERConsultation information

Q & AQuestions and answers on landlord and tenant issues

RESIDENTIAL LANDLORD SUMMER 2009

http://www.all4landlords.com








The findaproperty.com rental index

UK Market

According to findaproperty.com, June 2009 saw the first increases in average asking rents in the UK since August 2008, providing further evidence that the rental market is experiencing a recovery.

The rise of 0.5% month-on-month, equivalent to a £4 pcm increase on the average rent, was admittedly modest; however, this month’s price increase cont inues the t rend o f g radua l improvement recorded over the past quarter in April, rental prices fell by 1% while in May there was no change in prices.

Rising asking rents have also been accompanied by a decline in supply levels of 0.4% in June 2009. This is the first time that supply has fallen since data was first collected for the Rental Index in January 2008.

A steady and continued fall in supply over a sustained period would help bring increased tenant competition into the market once again and would lead to further upward pressure on rents. However, supply has a long way to fall before it reaches the levels seen in 2008, and the number of properties available to rent in June 2009 was still 191% higher than the same time last year.

In recent months, the Rental Index has tracked a significant divergence in the performance of houses and flats, and that trend continues this month. Houses remain at the forefront of the recovery, with supply levels declining for the fourth consecutive month, and at a faster pace.

The supply of houses fell by 3.8% month-on-month in June 2009, the largest monthly fall since January 2008.

Asking rents for houses rose by 1.2% month-on-month, pushing the average rent up to £858 pcm. This was the second consecutive month of rising prices.

The recent recovery in the house market has been driven by larger properties but there is evidence that the trend is gradually cascading downwards to smaller properties. Rental prices for

houses with five or more bedrooms have risen for four consecutive months, whilst rents for four bedroom houses have increased over the past two months. Three bedroom houses are now also registering asking rent increases and were up by 0.3% in June.

News

City Tables

City

City TablesCity TablesAvg Rental

asking price June 2009

% monthly change

Avg Rental asking price June 2008

% yearly change

% rental yield

BrightonBristol

Newcastle Upon TyneCardiff

SouthamptonGreater Manchester

BirminghamMerseyside

NottinghamshireSheffield

Leeds

£1,048 -0.9% £1,086 -3.5% 4.34%£764 1.2% £786 -2.8% 4.64%£758 0.3% £754 0.5% 4.96%£738 0.1% £725 1.8% 4.44%£685 1.8% £781 -12.3% 4.73%£661 16.4% £693 -4.6% 4.81%£649 -0.2% £688 -5.7% 5.48%£611 -0.5% £623 -1.9% 4.43%£581 0.2% £600 -3.2% 4.12%£548 1.1% £524 4.6% 4.81%£544 -0.5% £681 -20.1% 3.55%

NEWSFROM ON-LINE SOURCES





In stark contrast to houses, the flat market continues to record rising levels of supply and falling rental values. Asking rents for flats declined for the 14th month out of 15, with rents falling by 0.8% month-on-month. Asking rents for flats are now 5.8% (£46 pcm) lower than June 2008.

Supply levels have also increased for the eighth consecutive month. However, an early sign of recovery in this market sector may be evident in the slowdown in the rate at which flats are coming on to the market.

Andrew Smith, Head of Research at findaproperty.com, comments: “There are some signs of a sustained recovery in the UK rental market and we are encouraged to see asking rents rise again and supply levels fall for the first time in 18 months.

“However, it is far too early to say that we are out of the woods yet and the UK rental market remains very sensitive to changing economic conditions. We would not be surprised to see an ongoing relationship between asking rents and supply levels over the forthcoming quarter as the market tries to find its level.”

London Market

Asking rents in the London market have fallen by 8.5% since their peak of £1,773 pcm in February 2008 to their trough of £1,623 pcm in April 2009. However, the average asking rent has not fallen below its April 2009 low-point, which may be an indication that we are close to the bottom of the market.

In June 2009 asking rents in London fell by 0.3%, following a rise of 0.4% in the previous month. These fluctuations are indicative of the volatility of asking rents across the capital – prices have

shown no consistent or sustained trend

month-on-month, and instead have yo-yoed from 1.1% rises to 1.6% falls over

the past 18 months.

London has, in effect, become a series of micro-markets which react to local supply and demand issues rather than following a unified pattern, with neighbouring boroughs often performing very differently.

In June 2009, the largest monthly increase was seen in Richmond upon Thames, where asking rents rose by 2.8% (£48pcm) month-on-month, whilst the City of London recorded the largest fall

of 3.4% over the same period.

Greenwich is the only region to show a yearly increase in rental asking prices (2.6%, or £32pcm). However, there are four boroughs where rental asking prices are showing a yearly double digit decline: Tower Hamlets (12.7%), Lambeth (11.6%), Newham (11.3%) and Islington (10.3%).

Andrew Smith, Head of Research, comments: “The London rental market has seen considerable volatility over the past 18 months and although the overall trend has been one of falling rents, the rate of decline has varied considerably. On several occasions rental growth has returned to the market only to be followed by further declines. There are certainly signs that the market is bottoming out; however, we expect fluctuations in rents to continue over the forthcoming months.”

Regional Market

The overall picture in the regional rental market is one of both month-on-month and year-on-year falls in asking rents. However, there are a number of

notable exceptions which are helping to drive the overall recovery of the market.

The South East experienced an increase of 0.2% in asking rents during June 2009, which is the third successive month that the region has recorded a price rise. In line with the national trend, houses have outperformed the market and risen by 0.7% month-on-month. With stabilising supply levels and rising rents, especially in the house market, the South East is a key driver in the overall UK market improvement.

The North West has seen a significant recovery in asking rents which have risen by 9.8% month-on-month, with Greater Manchester experiencing a 16.4% (£93 pcm) increase. This has been caused by a significant number of more expensive properties being marketed for rent in Manchester City Centre, Didsbury and Fallowfield.

Although these monthly rises are encouraging, the North West has experienced some of the largest declines in asking rents in the past year. Even with this recent growth, rents are still 4.6% lower than in June 2008 and it will take several months for it to become clear

News

“There are some signs of a sustained recovery in the UK rental market and we are encouraged to see asking rents rise again and supply levels fall for the first time in 18 months.”

Andrew Smith - Head of Research at Findaproperty.com





whether this is a start of a genuine recovery or a short term anomaly.

Andrew Smith, Head of Research comments: “The rental market in the South East continues to experience a revival, with supply falling and rents continuing to rise each month. However, this is not indicative of the regional markets as a whole, with areas such as the West Midlands, the East of England and Yorkshire and The Humber suffering significant month-on-month and year-on-year falls.”

Closure orders; closure notices; premises associated with nuisance; temporary hiatus

Commissioner of Police for the Metropolis v Dumble Divisional Court, Scott Baker L.J. and Silber J. February 6, 2009

The defendant was the occupier of a flat in a three storey block. Numerous complaints were received that the flat was being used in connection with the unlawful use of class A drugs: visitors had been seen at all time of the day and night, drug paraphernalia had been found in the common parts of the block, and other residents had been subjected to nuisance and annoyance.

The claimant police force issued a closure notice under s.1, Anti-social Behaviour Act 2003, and applied for a

closure order. The effect of the closure notice was to prohibit anyone other than the defendant (and his landlord) from being at the flat. The hearing of the order was adjourned and came on for hearing 16 days after the closure notice had been issued. At the adjourned hearing, the defendant argued that two of the requirements for a closure order were not satisfied because there had been no incidents of poor behaviour in the 16 days between the closure notice being served and the hearing: first, for the purposes of s.2(3)(b), 2003 Act, that the use of the flat could not be said to be associated with the occurrence of disorder or serious nuisance; and, secondly, as required by s.2(3)(c), that a closure order was not necessary to prevent the occurrence of such disorder. The Magistrates’ Court rejected those arguments.

The Divisional Court dismissed an appeal. In determining whether, for the purposes of s.2(3)(b) and (c), the use of premises is associated with the occurrence of disorder or serious nuisance and that a closure order is necessary to prevent such an occurrence, a court should apply the following principles: (i) if the disorder had permanently ceased, the statutory test would not be satisfied; (ii) a pattern of disorderly use and disturbance was likely to be material; and, (iii) a temporary hiatus in the continuance of such behaviour would not deprive a court of the power to make the order. The period of 16 days during which there had been no incidents of poor behaviour was no more than a temporary hiatus from a pattern of disorder and, in any event, was to be expected because - during that period - the property had been subject to the closure notice which prevented others being at the property.

Possession; limitation act; adverse possession; acknowledgement of title; without prejudice correspondence

Ofulue v Bossert [2009] UKHL 16

Lords Hope of Craighead, Scott of Foscote, Rodger of Earlsferry, Walker of Gestingthorpe and Neuberger of Abbotsbury

In 1976, the claimant purchased a property. They leased the property to tenants and went to live in Nigeria. In 1981, the defendant was allowed into occupation. In 1989, the claimants commenced proceedings for possession of the property, asserting that the defendant was a trespasser. In the defence (dated July 1990), the defendant admitted the claimant’s title but asserted that he was a tenant of the property.

In January 1992, prior to the hearing of the claim, the defendant wrote to the claimant a letter headed “without p r e j u d i c e ” . T h a t l e t t e r a g a i n acknowledged the claimant’s title; it also offered to purchase the property. The offer was rejected.

The possession proceedings were stayed in April 2000. In April 2002, an application by the claimant to lift the stay was dismissed and the proceedings were struck out.

News





In September 2003, the claimant issued fresh proceedings for possession. Those proceedings were defended on the basis that the defendant had been in adverse possession of the property for 12 years so that the claimant was not entitled to possession by operation of s.15, Limitation Act 1980. The claimant responded that the defendant had acknowledged the claimant’s title: (i) in the defence to the previous proceedings, which it was submitted was to be deemed to be a continuing acknowledgment until the determination of the proceedings in April 2002; and/or, (ii) in the without prejudice letter dated January 1992. Accordingly, it was submitted that time had not begun to run for the purposes of s.15, 1980 Act, until either April 2002 or January 1992, both of which were within 12 years of the date on which the fresh proceedings had been commenced (s.29, 1980 Act).

The High Court found that the defendants had adversely possessed the property for the necessary 12 years. An appeal to the Court of Appeal was dismissed. The Court of Appeal held,

inter alia, that: (a) the admission of title in the defence did not continue beyond the date of the defence itself (July 1990); and, (b) the January 1992 letter could not be relied on as an acknowledgment of title because it was written without prejudice to the earlier proceedings.

On appeal to the House of Lords, the claimant submitted that the Court of Appeal was wrong in relation to the continuation of the admission in the defence and that the without prejudice letter could be relied upon because, inter alia: (1) the claimant’s title was not at issue in the earlier proceedings and therefore the acknowledgment in the letter was sufficiently remote from the issues in the current proceedings to be admitted as evidence; and, (2) an acknowledgement of title is an exception to the normal without prejudice rule.

The House of Lords dismissed the appeal by a majority (Lord Scott dissenting on the admissibility of without prejudice correspondence). Where an acknowledgement of title is contained in a signed document, the acknowledgment arises at the date of the document itself.

Although it is possible for a written acknowledgment to be affirmed at a later date, such affirmation would require either re-service of the document or a fresh written and signed document; merely taking steps in proceedings does not constitute affirmation. Accordingly, the admission in the defence did not operate as an acknowledgement of title beyond the date of the defence itself.

Save where a statement is wholly unconnected with the issues between the parties, the general rule is that a statement made in without prejudice negotiations or correspondence should not be admissible in evidence other than in exceptional circumstances. It would set an unfortunate precedent to hold that an admission of title in a without prejudice letter was sufficiently remote from the issues in a possession action relating to the same land so as to be outside that general rule. Nor was there any sufficient p u b l i c p o l i c y e l e m e n t i n t h e acknowledgment of title to justify an exception from the general rule.

News





Rights of way

Heslop v Bishton & others [2009] EWHC 607 (Ch) HHJ David Cooke

The claimant was the freehold owner of a house in a residential street. The street was part of a housing estate. Between the claimant’s house and his garden, there was a strip of land owned by the first respondent, the freeholder of the common parts of the estate. The strip of land led both to other common parts of the estate and to a passageway beside the house, which was likewise owned by the first respondent and which also led to common parts of the estate. There were rights of way over both the strip of land and the passageway, exercised by occupiers of neighbouring properties.

The claimant built a wall and gateway over the rear end of the passageway, where it met the strip of land, the effects of which were to obstruct the right of way through the passageway and to reduce the strip of land to a size too small to pass through. Instead, neighbours were allowed to walk across his garden. Following complaints by neighbours and the freehold owner, the claimant commenced proceedings for a declaration that the route of the rights of way had been diverted over his garden so that there was no obstruction. The respondents counterclaimed for a declaration that the wall and gateway amounted to a substantial obstruction to the rights of way. The county court judge granted the respondents summary judgment and made declarations accordingly. The claimant appealed to the High Court.

The High Court dismissed the appeal. The alteration of a right of way involves: (i) the grant of a right of way

over a new route (which may be unilateral); and, (ii) the extinguishment of the existing right of way (which requires the consent of those entitled to the benefit). A person cannot by provision of a new right of way prevent acts of obstruction of the old route from being actionable.

Adverse possession; caravans; highways; illegal obstruction of land

R (Smith) v Land Registry & Cambridgeshire CC [2009] EWHC 328 (Admin) HHJ Pelling QC

For several years, the claimant had placed his caravan and associated structures on an area of land to the north of a road. He applied to register title to the land, asserting that he had acquired title on the basis of a 12 year period of

adverse possession. Cambridgeshire CC opposed the application to register title on the basis that the land formed part of a highway and contended that it was not possible adversely to possess a highway.

The Assistant Land Registrar refused the claimant’s application for two reasons: (i) it was not possible adversely to possess a highway; and, (ii) the evidence was not sufficient to establish adverse possession.

The claimant sought judicial review of the refusal. It was accepted that the evidence had not been sufficient to establish adverse possession but submitted that the Registrar had been wrong to find that it was not possible to adversely possess a highway.

The High Court dismissed the claim. As a matter of law, adverse possession cannot be acquired in respect of land over which a right of way exists; nor is it possible to claim adverse possession by reference to the illegal obstruction of land. To establish adverse possession, a claimant must demonstrate that he had dealt with the land as an occupying owner might have been expected to. The owner could not have been expected to use the land for siting a caravan as to do so obstructed the highway in breach of s.137, Highways Act 1980.

News





National register of landlords. Landlords Licence

The Rugg Report contained a review of the private rented sector One of the recommendations made was for a “light touch” licensing scheme for private sector landlords. The government has indicated its intention to introduce a national register for private sector landlords; all landlords would have to apply for a licence to let property, on payment of a fee of around £50; they would have to comply with certain standards, failure to do which would result in the licence being revoked and their tenants having to vacate the property.

The Association of Residential Letting Agents has introduced its own licensing scheme and requires all its members to be licensed under it. The licence will only be granted if the agent (i) abides by a code of practice issued by ARLA; (ii) joins an independent redress scheme; (iii) has professional indemnity insurance; (iv) annually audits its client account; (v) has client money protection schemes in place; (vi) undertakes continuing professional development; and, (vi i ) holds a gold standard professional qualification relating to lettings.

CONSULTATION, GUIDANCE ETC

private sector lettings; regulation; licensing; written tenancy agreements; assured shorthold tenancies

The private rented sector: professionalism and quality. The government response to the Rugg Review

Department of Communities and Local Government

May 2009

The government has published a consultation paper, setting out its proposals to implement parts of the Law Commission’s reports Renting Homes and Encouraging Responsible Letting and its response to the Rugg Review of the private rented sector.

The principal proposals are to establish a regulatory framework, based

o n a n a t i o n a l register of private landlords, which w o u l d p r ov i d e access to services such as standard forms for tenancy agreements and possession claims and information o n e n e r g y efficiency. There

would be power to remove a landlord from the register if he failed to comply with the regulatory regime. Additionally, the government intends to introduce mandatory regulation of private sector letting agents and management agents, including a code of practice, consumer protection measures and monitoring.

The government also proposes to introduce mandatory written tenancy agreements, either through mandatory minimum requirements or through a model tenancy agreement prescribed by statute. Currently, a tenancy cannot be assured - and therefore attract protection under the Housing Act 1988 - if the annual rent is more than £25,000. The government proposes to increase that limit to £100,000.

The paper also contains proposals on increasing supply in the private rented sector through a private rented housing investment fund, operated through the Homes and Communities Agency, and increased help to stimulate the availability of buy-to-let mortgages. There are also recommendations for increasing training for private sector housing managers and increased co-operation between local authorities and the private rented sector, including local lettings agencies.

The consultation ends on August 7, 2009. A copy of the paper may be downloaded from the DCLG website h t tp ://www.communi t i e s .gov.uk/p u b l i c a t i o n s / h o u s i n g /responseruggreview.

News




http://www.communities.gov.uk/publications/housing/responseruggreview.







Impact Assessment of a national register for landlords


June 2009

In response to the Rugg Review of the private rented sector, the government is consulting on proposals to introduce “light-touch” licensing of the private rented sector. This impact assessment sets out the cost/benefit analysis of the proposals.

The assessment assumes that there are three million rented properties in the England, six per cent of which are terminated early. It assumes that this equates to a four per cent dispute rate, with an average dispute cost of £1,000. Accordingly, the annual dispute cost is approximately £120 million a year (£1,000 x 3 million x 4%). It also assumes that five per cent of tenancy agreements do not comply with the tenancy deposit scheme, which equates to an additional annual cost of £14 million in non-compliance costs.

The assessment assumes that a licensing scheme will produce a 50% reduction in both dispute rates and incidents of non-compliance with the tenancy deposit scheme. Assuming a national register with an annual fee of £30-£50, the assessment concludes that there would be considerable financial benefits to light touch licensing, extending to approximately £600 million over the first ten years of operation. By way of comparison, full licensing by local authorities of all privately rented

properties would result in an increased cost.

Impact Assessment of regulation of letting and management agents by an independent body


June 2009

In response to the Rugg Review of the private rented sector, the government is consulting on proposals to introduce mandatory regulation of letting and management agents. This impact assessments sets out the cost/benefit analysis of the proposals.

The assessment identifies the main benefits of mandatory regulation as being to compel all agents to establish client money protection schemes and indemnity

insurance and to comply with a code of practice. The assessment assumes that approximately £2.5 million per annum of client money (both landlord and tenant) is misappropriated by agents; that sum is assumed to be reduced with an appropriate regulatory framework in place. It also assumes a joining fee and annual subscription of £180 per year.

On the basis of those assumptions, the assessment concludes that regulation would produce a net benefit of £4 million over 10 years.

Rhondda Cynon Taf HMO Licensing Scheme in 2009

From June 2009, the existing ‘passport’ arrangements for previously registered HMO’s in Rhondda Cynon Taf will expire. A new Additional HMO Licensing Scheme will be in place by then that will mirror our previous schemes and continue to make it compulsory for HMO’s in RCT that are two storey or more and which have four or more tenants l iv ing as three or more households to be licensed. This licensing scheme will apply to the same HMO’s as the old 2002 registration scheme and the

News





interim transitional licensing scheme that has been in force since June 2006.

Any landlord that owns an HMO that has not obtained a new licence under the Housing Act 2004 and who lets the property to 4 or more tenants living as

three or more households after June 2009 will be committing an offence.

“We have already licensed many of the HMO’s in RCT that require a licence either under the transitional scheme or mandatory licensing (i.e. three storey HMO’s with 5 or more tenants who share facilities). We are now concentrating our efforts on those landlords who to date have refused to licence or renew the licence for their property. We continue to work in partnership with responsible landlords to ensure their properties comply with the relevant standards and have offered financial incentives for the past two and a half years to ensure good landlords are not penalised with hefty licensing fees. We have therefore pledged to ensure a level playing field for the landlords of all licensable HMO’s and we will not hesitate to take prosecutions against those landlords who disregard the law. “

Update on licensing fees All landlords of previously registered properties currently receive a 50% discount on their licence application fee. The full price is currently £300 for an HMO in the additional Licensing Scheme and £400 for a Mandatory

HMO License. The discount is in recognition of the co-operation the Council has received from these landlords and the good s t a n d a r d s o f accommodation and safety that s h o u l d e x i s t w i t h i n t h e s e HMO’s.

As the ‘passport’ arrangements for p r e v i o u s l y r e g i s t e r e d HMO’s end in

June and all qualifying HMO’s become licensable, new fees will also be introduced. The 50% discount will no longer be available for any applications received after 30 June 2009 and the licence fee for all HMO’s will be £550 per property, even if your property was previously registered. The advice therefore is to submit your application in early to ensure you can qualify for the reduced fee.

Following the launch of the All Wales Landlord Accreditation Scheme, any accredited landlord can also now qualify for a £50 discount on the licensing fee.

The great gas switchover - Gas Safe Register replaces CORGI

Brits too trusting when it comes to gas safety

From 1 April 2009, Gas Safe RegisterTM replaces the CORGI gas registration scheme in Great Britain* and launches a campaign to make the nation gas safe. New research from Gas Safe Register reveals that when it comes to gas safety, Brits are far too trusting.

Alarmingly, over half of Great Britain’s population said they took it on trust that their gas engineer was properly registered and never checked that they were. A trust which if broken can make the difference between life and death.

With 14 people dying from carbon monoxide (CO) poisoning last year due to badly installed, repaired and maintained gas appliances, keeping the public safe is Gas Safe Register’s top priority. The ‘make Britain gas safe’ message is simple. Be safe, use a registered engineer and always check the card.

Pete Eldridge, chief executive of Gas Safe Register said: “As the new hallmark for gas safety in Great Britain, Gas Safe Register will make it much easier for the public to be gas safe because in the wrong hands, gas can kill. Our message is simple. To keep you and your family safe, always use a Gas Safe registered engineer when you have any gas work done in your home.”

Pete Eldridge continued:

News





“We will raise public awareness of the importance of always asking for the ID card and checking the unique licence number. Different types of gas work requires different skills, so it’s important that you check the back of the ID card to make sure your engineer is qualified to carry out the work you want them to do.”

Geoffrey Podger, Chief Executive of the Health & Safety Executive said:

“We welcome the new Gas Safe Register that will give a fresh impetus to this important area of public safety. There will be new publicity initiatives on gas safety as a result of the change, whilst reducing the costs to registered gas engineers.”

Gas Safe Register will offer the public an improved service making it easier to find and check an engineer. To find a Gas Safe registered business and to check each individual engineer to see what work they are qualified to do visit www.gassaferegister.co.uk or call the dedicated helpline on 0800 408 5500.

Every Gas Safe registered engineer has a photo ID card with a unique licence number, and details of the work they are qualified to do. To check this information simply enter the engineer’s licence number on the website or call the helpline.

The new register will aim to reduce the number of gas-related deaths and

injuries every year caused by incorrectly installed, badly repaired and poorly maintained gas appliances by raising awareness that appliances should be inspected regularly by a qualified engineer. Shockingly almost a fifth of households (19.05%) with a gas boiler had not had it serviced for at least three years. Gas Safe Register recommends that all gas appliances are safety checked and serviced at least once a year.

From 1 April, all work on gas installations or appliances must only be carried out by a Gas Safe registered engineer.

Gas Safe Register’s top tips to keep you and your family gas safe:

1. Always use a Gas Safe registered engineer for any gas work in your home – and check their ID card.

2. Make sure your gas appliances are safety checked and serviced in accordance with the manufacturer’s guidelines, or at least once a year.

3. If you live in rented accommodation, your landlord must arrange for a Gas Safe registered engineer to carry out a safety check every year on all gas appliances. You should be given a copy of the safety certificate before you move in or within 28 days of

the safety check. If you don’t have this certificate, ask your landlord.

4. Install an audible carbon monoxide alarm, which will alert you if dangerous levels are present in your home.

5. If you smell gas or think there might be a gas leak: turn off the gas at the meter, extinguish naked flames, open windows and leave the area. Seek medical advice if you feel unwell. Call the Gas Emergency Freephone number 0800 111 999.

Find and check a Gas Safe r e g i s t e r e d e n g i n e e r by v i s i t i n g www.gassaferegister.co.uk or by calling 0800 408 5500.

News




http://www.gassaferegister.co.uk





CO advice must be clarified

CO advice must be clarified is the view of John Stones of Detectagas, who believes the smoke test discrepancy is just the latest example of an industry that needs much greater consensus and stricter legislation.

John has repeatedly raised concerns that the test button on most CO detectors only checks the alarm bell and not the sensor, something which he believes means thousands of householders are living with a false sense of security. Now he has turned his attention to cigarettes. Whilst some detector manufacturers are still suggesting consumers can test an alarm with cigarette smoke, others have claimed the smoke can actually damage the sensors.

In one case currently under review, victims of a CO poisoning event complained to the manufacturer and its trade association, CoGDEM that their

alarms had not sounded during the incident. The manufacturer tested the alarms and reported that they had probably not sounded because the sensors had become blocked up with cigarette tar. GoGDEM, meanwhile, acknowledged that manufacturers should consider including instructions in user manuals that the CO alarms should not be exposed to cigarette smoke.

John says: “The case raises much wider concerns that need to be seriously addressed. If nicotine blockage affects the sensors, are the detectors safe to be installed in any rooms where smoker are present? Furthermore can they be safely installed in kitchens and attached utility rooms where cooking would produce grease which could affect the sensor in a similar way?

“Given that it is reasonable to expect people to fit CO detector alarms in kitchens as well as other rooms widely used by households, including many smokers, much more definitive safety instructions and warnings are clearly needed.”

Landlord Obligations





LEGISLATION

Houses in Multiple Occupation (Management) (England) Regulations 2009 (SI 2009/724)

Made: March 16, 2009 – In force from: April 13, 2009

The Management of Houses in M u l t i p l e O c c u p a t i o n ( E n g l a n d ) Regulations 2006 (SI 2006/372) impose duties on persons managing houses in multiple occupation (HMOs). One of those duties is to provide the local authority with the latest gas appliance test certificate for any gas appliance in the HMO if requested to do so.

HMOs are defined in ss.254-257, Housing Act 2004. Section 257 applies to a building or part of a building which has been converted into and consists of self-contained flats, if: (i) the conversion work did not and does not comply with building regulations; and, (b) less than two-thirds of the self-contained flats are occupied by the leaseholders under leases of more than 21 years or are in freehold ownership. As originally drafted, the 2006 Management Regulations do not apply to an HMO which falls within s.257.

The 2009 Management Regulations (SI 2009/724 ) amend the 2006 Management Regulations so that the duty to provider a gas appliance certificate is imposed on managers of HMOs that fall within s.257.

Distress for Rent (Amendment) Rules 2009 S.I. 2009/873

Distress is a common law remedy which allows landlords to recover arrears of rent by seizing property found on the premises that is subject to the tenancy. Section 71, Tribunals, Courts and Enforcement Act 2007, makes provision for the abolition of the common law power, but has yet to be brought into force.

Where a landlord proposes to levy distress for rent occupied under a Rent Act tenancy or an assured tenancy, he must obtain the leave of the court (s.147, Rent Act 1977; s.19, Housing Act 1988).

A landlord may levy distress himself or may appoint a bailiff to do so; such a bailiff must be certified for the purpose by the county court under the Distress for Rent Rules 1988. The Rules provide that the county court must publish a list of certified bailiffs in their area.

These Rules amend the 1988 Rules by requiring the list of certified bailiffs to be published on the Court Service website. They also require those applying for a bailiff certificate to supply a criminal conviction certificate which discloses all unspent convictions. The Rules make other minor changes.

Landlord Obligations

Introducing the all new debt collection service provided by the Guild.

If you have any debts that are no older than six years, you can use the service provided by the Guild in association with arc-collections. Please visit our website www.all4landlords.com and select “Debt collection service” to place a debt.

Costs

• The service is offered on a no win/ no fee basis.

• On successful collection, they will charge you 12.5% of the amount collected. There is no initial administration fee.

• If a tenant or guarantor trace is required, there is an admin fee of £30, plus if the trace is positive, a further £50 is payable by you.

• If you require the collection agency to take the debtor to court, they charge an £80 admin fee plus the court fees. Additional fees may be applicable if attendance at court is necessary. However, members of the Guild probably don't need to use the collection agency court service as we can assist you.







Letting to Minors (This case provides all landlords a warning regarding the pitfalls of letting to a minor)

Alexander-David v Hammersmith and Fulham LBC Also known as: Hammersmith and Fulham LBC v Alexander-David Court of Appeal (Civil Division)

01 April 2009 [2009] EWCA Civ 259; (2009) 153(13) S.J.L.B. 28; [2009] N.P.C. 57; Times, April 13, 2009;

Local authority housing; Minors; Liability for provision of housing; Grant of housing to minors

Abstract : The appel lant (D) appealed against a decision that the respondent local authority was entitled to possession of local authority housing she had occupied. D was 16 years old and homeless and the local authority, in accordance with its duty under the Housing Act 1996 s.193(2) , had entered into a written agreement with D granting her a non-secure tenancy. However,

following complaints about D's behaviour at the premises, the local authority served a notice to quit on D in accordance with the terms of the agreement. Possession p ro c e e d i n g s w e r e s u b s e q u e n t l y commenced and the local authority was granted a possession order. The court considered the position of a local authority when required to discharge its duty to secure accommodation for 16- and 17-year-olds although, under the Law of Property Act 1925 s.1(6) , minors were not capable of holding a legal estate in land. D submitted that under the Trusts of Land and Appointment of Trustees Act 1996 Sch.1 para.1(1) the agreement operated as a declaration by the local authority that it held the premises on trust for her, and therefore the local authority was unable to serve a notice to quit without committing a fundamental breach of trust. The local authority argued that the agreement had granted D an equitable term of years, and so the Trustees Act did not apply.

Appeal allowed. (1) Entering into an agreement which would have the legal consequences set out in Sch.1 para.1(1) of the 1996 Act was not an unlawful fetter upon the local authority's powers of management under the Housing Act 1985 s.21 or an unlawful disposal under s.32 of the 1985 Act. Local housing authorities could, in principle, grant tenancies to minors that were effective in equity, Kingston upon Thames RLBC v Prince [1999] 1 F.L.R. 593 CA (Civ Div) applied. There was nothing in the agreement to displace the obvious inference to be drawn from the fact that the agreement was in the local authority's standard form for creating legal tenancies with its adult tenants. A landlord who had full capacity to grant a legal tenancy, and who granted a tenancy without express qualification to the effect that something less than a legal tenancy was being granted could not subsequently say that what he had granted was an

equitable tenancy. A landlord did not elect to grant an equitable tenancy; such a tenancy arose in certain specified circumstances, recognised by equity. Schedule 1 para.1(1) of the 1996 Act therefore applied to D's tenancy. (2) For so long as the local authority held the premises on trust for D, it could not lawfully destroy the subject matter of the trust by serving notice to quit on D. The local authority was the lessor and trustee, and as lessor was the instigator of the breach of trust, Hammersmith and Fulham LBC v Monk [1992] 1 A.C. 478 HL considered. Service of notice to quit only on a minor beneficiary of the trust was not sufficient to terminate the tenancy that was being held by the local authority as trustee on her behalf. Thus, the possession order was quashed. (3) (Per curiam) It should not be too difficult for a local authority, in discharging its local housing authority and social services functions, to co-ordinate matters so that, whether by providing in the agreement for attention or services, or by permitting inspection of the premises by those charged with a child's welfare and thereby preventing the grant of exclusive possession, any agreement with a 16- or 17-year-old was not merely expressed to be, but was the grant of a licence rather than a tenancy. An agreement to grant a lease for the period until an applicant turned 18, rather than the grant of a lease, might also be an option. Whatever course was adopted, it was important that the inability of a minor to hold the legal estate was expressly recognised and that any agreement with a 16- or 17-year-old expressly stated that because an applicant was a minor, the local authority was not granting a legal estate, but was ensuring that accommodation was available by granting something other than such an estate.

Tenancies (General)





Possession; suspended orders; reasonableness; mental health

CDS Housing v Bellis [2008] EWCA Civ 1315 Pill, Scott Baker and Jacob L.JJ.

The defendant was the secure tenant of a flat in a block owned by the claimant. He was mentally unwell and suffered from delusions. In particular, he believed that there was electro-magnetic radiation emanating from the electrical and central heating system of the flat. As a result of that belief, he interfered with the electrical and gas installations to the property. That interference rendered the property unsafe and at risk of explosion.

The defendant moved out of the flat but left his belongings behind. The claimant obtained a court order for him to remove them to allow repairs to be undertaken, with which the defendant did not comply. The claimant sought possession. At the hearing of the claim, a consult psychiatrist gave evidence of the defendant’s mental state, concluding that “I suspect that, if [the defendant] were to return to his property and if he were to be left alone, without contact with the Community Team, it would be only a matter of time before there were further damage caused to the property.”

The county court judge granted pos se s s ion . On the ques t ion o f reasonableness, he found that the property was in a dangerous condition, that the claimants were concerned about the possible consequences of not undertaking the repairs to the property and that the landlord had done everything possible to avoid possession. As to the form of order to be made, he held that “I do not feel that the defendant

has the ability or the will to comply with any suspension or postponement”. The defendant appealed, contending that the judge should have considered the question of suspension separately and should have considered whether to make an order suspended on terms that the defendant adhere to a care and medication programme.

The Court of Appeal dismissed the appeal. Although the statutory scheme provides for separate consideration of the issue of reasonableness, this was a case where each stage of the proceedings relied on the same facts and revolved around the same question, i.e. whether the court could be satisfied that there was no real risk that the appellant would do no further damage to the flat. In light of the medical evidence that the defendant was likely to further damage the property, the consequences of the judge getting the judgment wrong would be catastrophic. Once the judge had found that there was

a significant risk, the only conclusion he could have reached was that possession should be granted.

Homelessness; intentional homelessness; good faith; misuse of statutory scheme

Ugiagbe v Southwark LBC [2009] EWCA Civ 31 Sedley, Jacob and Lloyd L.JJ.

In May 2006, the appellant entered into a tenancy with a private-sector landlord for a period of one year. In 2007, the appellant was notified that the tenancy would not be extended and that she would have to leave by the end of May. The appellant attended a local advice centre run by the local authority. She was told to attend the homeless persons unit (HPU) and advised that she w o u l d b e o f f e r e d t e m p o r a r y accommodation while a homelessness

app l i ca t i on wa s considered; she was also told that she should attempt to find friends and relatives who would allow her to store her belongings with them while she lived i n t e m p o r a r y accommodat ion . The appellant did not at tend t rhe

HPU because she did not want to be put into temporary accommodation, but instead asked her landlord to extend her tenancy while she looked for permanent accommodation through the authority’s allocation scheme. She was not successful in securing accommodation through the allocation scheme and her landlord finally asked her to leave in November 2007. She left when

Tenancies (General)





asked to do so, without awaiting an order for possession.

The appellant applied as homeless but was found to be intentionally homeless because she had left the accommodation without waiting for her landlord to obtain a possession order. On review, the appellant contended that she had not been aware that she could have remained in the property until a court order was obtained and that she had therefore acted in good faith and in ignorance of a relevant fact so that her act in vacating the property could not be considered deliberate sufficient to support a finding of intentionality (relying on s.191(2) , Housing Act 1996). The reviewing officer concluded that, if the appellant had attended the HPU, she would have been advised that she could remain in the property. Accordingly, he decided that she had not acted in good faith, a decision upheld by the county court on appeal.

The Court of Appeal allowed an appeal. For an act or omission not to be in “good faith” within s.191(2) requires impropriety or misuse or abuse of the scheme of Pt 7, 1996 Act; foolish or imprudent behaviour or unreasonable conduct is not sufficient. The advice the appellant had received was that, if she attended the HPU, she would be treated as homeless and placed in temporary accommodation. Although the appellant could be said to have been foolish in not following that advice, her subjective motivation was to avoid being treated as homeless, not to misuse or abuse the scheme of Pt 7. Accordingly, she had been acting in good faith.

Possession; tolerated trespassers; abolition of tolerated trespassers; replacement tenancies

Housing and Regeneration Act 2008 (Commencement No.5) Order 2009 (SI 2009/1261)

Housing (Replacement of Terminated Tenancies) (Successor Landlords) (England) Order 2009 (SI 2009/1262)

Housing (Replacement of Terminated Tenancies) (Successor Landlords) (Wales) Order 2009 (SI 2009/1262)

In force from: May 20, 2009

Tolerated Trespassers - Guidance for social landlords


May 2009

Schedule 11 to the Housing and Regeneration Act 2008 Act contains provisions designed to abolish the status of tolerated trespasser. Subject to exceptions, Sch.11 was brought into force on May 20, 2009: Housing and Regeneration Act 2008 (Commencement No.5) Order 2009 (SI 2009/1261). Schedule 11 does not, however, deal with the position where the landlord which obtained the possession order has subsequently transferred its interest in the dwelling; that is governed by the Housing (Replacement of Terminated Tenancies) (Successor Landlords) (England) Order 2009 (SI 2009/1262), which also came into force on May 20.

Future Possession Orders

Part 1 of Sch.11 amends the Housing Acts 1985, 1988 and 1996 to prevent tenants from becoming tolerated trespassers following a possession order being made. The key amendment in each statute is that the tenancy continues until a warrant for possession is executed: secure tenancies (paras 1-3); assured, assured shorthold and demoted assured shorthold tenancies (paras 5-9 ) ; introductory tenancies (paras 11-12); and, demoted tenancies (para.13). These amendments have been brought into force. (Although brought into force, the assured tenancy amendments are unnecessary following the House of Lords decision in Knowsley Housing Trust v White; Honeygan-Green v Islington LBC; Porter v Shepherds Bush Housing Association; [2008] UKHL 70; [2009] 2 W.L.R. 331.

Schedule 11 also contains proposed amendments (paras 3(3) and 8(3)) to the court’s power to discharge or rescind a possession order under either s.85(4),

Tenancies (General)





1985 Act (secure tenancies), or s.9(4), 1988 Act (assured tenancies). These proposed amendments were intended to address difficulties created by Marshall v Bradford MBC [2001] EWCA Civ 594; [2002] H.L.R. 22. That case was overruled by the House of Lords in Knowsley; accordingly, these provisions have not been brought into force. The position therefore remains as stated in Knowsley, that the court may make a possession order which provides that it will be discharged once all the arrears and costs are paid, notwithstanding that the terms of the order regarding repayment have not been strictly complied with: see further Knowsley at [97].

Domestic breakdown

Paragraphs 3(4) and 8(4) repeal s.85(5), (5A), 1985 Act, and s.9(5), (5A), 1988 Act, respectively. These sections gave tenants’ spouses and partners rights following the breakdown of a relationship and allowed those of them (and former spouses or partners) who were in occupation of the dwelling and who either had home rights under the Family Law Act 1996 or the benefit of an occupation order under s.35 or s.36 of the Family Law Act 1996 to apply for a postponement or suspension of the order, notwithstanding that the tenancy had come to an end. As the tenancy will now continue until the warrant for possession is executed, these provisions are redundant.

Mutual Exchange

Schedule 3 to the Housing Act 1985 contains grounds on which a landlord may withhold consent to an assignment

of a secure tenancy by way of exchange under s.92, 1985 Act. As originally drafted, ground 1 allows the landlord to withhold consent where the tenant or the proposed assignee is “obliged to give up possession” of his dwelling under a court order. Paragraph 4 amends ground 1 so that consent may be withheld at any time when a possession order is in force against the tenant or proposed assignee.

Existing Tolerated Trespassers

Part 2 of Sch.11 contains certain key definitions.

“commencement date” (para.26(1)) – May 20, 2009

“original tenancy” (para.15) – a tenancy which ended pursuant to a court order which has not been executed as at May 20, 2009

“termination period” (para.16(3)) – the period between the date on which the original tenancy came to an end and May 20, 2009

“ex-tenant” (para.26(1)) – the former tenant under the original tenancy, i.e. the tolerated trespasser

“ex-landlord” (para.26(1)) - the former landlord under the original tenancy

Conditions

As of May 20, 2009, an ex-tenant is deemed to become a tenant under a new tenancy, provided three conditions are satisfied: para.16(1).

(i) The “home condition” must be satisfied.

(ii) The ex-landlord must be entitled to let the dwelling-house.

(iii) The ex-landlord and ex-tenant must not have entered into another tenancy between the date of termination of the original tenancy and May 20, 2009.

Home Condition

The “home condition” is that the dwelling is the ex-tenant’s only or principal home on May 20 and has been so throughout the termination period: para.16(2). Where the original tenancy was a joint tenancy, it is only necessary for one of the ex-tenants to satisfy the home condition: para.23(1). Specific provision is made to protect an ex-tenant who is not in occupation on May 20 because a warrant of possession has been execu ted bu t who subsequen t l y successfully applies to set aside that warrant , e.g. on the g round o f oppression: para.16(4)-(6).

Successor Landlords

The requirement that the former landlord is entitled to let the dwelling-house does not address what happens where the former landlord has sold its interest in the land, e.g. where a local authority have transferred their housing stock to a social landlord as part of a large scale voluntary transfer. This is dealt with by the Housing (Replacement of Terminated Tenancies) (Successor Landlords) (England) Order 2009 (SI 2009/1262). The Order modifies conditions (ii) and (iii) so that a new tenancy will arise provided that:

Tenancies (General)





Tenancy ManagerWe are pleased to announce the release of our tenancy manager software.

When designing Tenancy Manager, 3 things were at the top of our mind. "Keep it simple, simple, simple". After testing virtually all rental property management software available, we found they were all so complicated. All a landlord wants to know is, when the rent is due and know when the safety checks are due. (And a few other things).

Two editions are available, Private landlord and Small Agent and it works on both windows and Mac.

Please note: The small agent edition is only designed for the very small agent who perhaps works from home or small office. There are no network facilities and provides basic managing agent requirements

Please visit www.keywee.co.uk to download the trial

*Please note: Although the software can be used outside England or Wales, the built in documentation (tenancy agreements, possession notices, rent increase etc.) are only suitable for use within England or Wales.



http://www.keywee.co.uk

http://www.keywee.co.uk


Features Include: Tenancy manager (Private landlord edition)

Tenancy Manager (Agent Edition)

Cost (to members of the Guild) £45.00 £95.00

Track rent owing

Report showing gas safety checks, PAT Tests, Electrical tests & fire alarm services due within 30 days

Write letters to tenants directly from software

Produce tenancy agreements directly from the software

Produce prescribed information for tenancy deposit schemes directly from the software

Optionally show only tenants in arrears

Optionally show only current tenants

Produce and track tenant invoices

Export selected tenant details for merging with Word or other mail merge of your choosing

On-line support via forum

Produce section 21 notices requiring possession

Produce section 8 (rent arrears grounds) notice

Quick copy labels for tenant addresses

Produce Risk Assessment forms

Produce a statement when to pay landlords less commission and any invoices (agent edition)

Produce landlord invoices (agent edition)




(ii) the successor landlord is entitled to let the dwelling-house; and,

(iii) the former tenant and the successor landlord have not entered into another tenancy agreement after the termination of the former tenancy.

The type of new tenancy depends on the identity of the successor landlord. For example, where a local authority have transferred their interest to a registered provider of social housing, a former secure tenant will become an assured tenant.

Replacement tenancies

Subject to the provisions regarding successor landlords, the tenant (generally) enjoys the same security under the new tenancy as under the original tenancy: para.17. The one exception is where the original tenancy was an introductory tenancy but the introductory tenancy scheme has been revoked, in which case the new tenancy is secure: paras 17(a)(ii), (d).

Generally, the terms and conditions of the new tenancy are the same as those of the original tenancy: para.18(1). Paragraph18(2) provides, however, that the terms are to be treated as modified so as to reflect any changes made during the termination period to the rent or to other terms and conditions of occupation. Accordingly, the rent and other sums payable under the new tenancy reflect the level of payments which the ex-tenant was paying during the termination period. Any outstanding sums relating to the ex-tenant’s occupation of the dwelling are deemed to be rent arrears due under the new tenancy: para.18(3).

Statutory provisions which apply to a tenancy of a particular type apply equally to new tenancies of that type: para.19(1). The exceptions to this general propos i t ion ar i se in re lat ion to introductory tenancies, demoted tenancies and demoted assured shorthold tenancies. An introductory tenancy is granted for an initial “trial period” of one year: s.125(2), 1996 Act. Unless the landlord takes action to determine the tenancy, the introductory tenancy normally becomes a secure tenancy at the end of the trial period. Likewise, demoted tenancies and demoted assured shorthold tenancies also last for a one year after which the tenancy will normally revert to being a secure or assured, depending on the identity of the landlord: s.143B(1), 1996 Act; s.20B(2), 1988 Act. Where a new tenancy is an introductory, demoted or demoted assured shorthold tenancy, the period of one year commences afresh from the date on which the new tenancy arises: para.19(2), (3).

Possession order

The possession order under which the original tenancy ended remains in force in relation to the new tenancy: para.20(1). Likewise, other court orders made before the commencement date which are in force at that date and which were made in consequence of or in connection with the possession order also apply to the new tenancy: para.20(1).

Continuation of tenancies

For certain purposes a new tenancy is treated as if it were a continuation of the original tenancy, i.e. as if the ex-tenant had never become a tolerated

trespasser but remained a tenant throughout the termination period. In addition, a court may order that the tenancy is to be treated as continuous for the purpose of certain actions.

Thus, for the purposes of succession rights, the new tenancy is deemed to be a continuation of the original tenancy so as to preserve the rule that there should only be one succession to a secure or assured tenancy: para.21(2)(a). For the purposes of determining whether a secure tenant qualifies to exercise the right to buy (s.119 and Sch.4 1985 Act) and the amount of his discount (s.129 and Sch.4, 1985 Act), the new tenancy is deemed to be a continuation of the original tenancy throughout the termination period: para.21(2)(b).

Ground 8 of Sch.2, 1985 Act, affords a ground for possession of a dwelling to which a tenant has been decanted to allow the landlord to carry out works to his former home: the landlord must establish, among other things, that “the tenant (or his predecessor) accepted the tenancy of the dwelling-house of which possession is sought on the understanding that he would give up occupation when, on completion of the works, the other dwelling-house was again available for occupation by him under a secure tenancy” (emphasis added). Accordingly, for the ground still to be available in relation to a new tenancy, it is deemed to be a continuation of the original tenancy: para.21(2)(c).

Continuation - Court’s Powers

In certain claims (referred to as “relevant claims”), the court itself may order that the new tenancy is to be treated as a continuation of the original tenancy in respect of a number of other

Tenancies (General)





matters: para.21(3). Relevant claims include claims bought by either party to the tenancy agreement for breach of a term of the original tenancy or for breach of statutory duty: para.21(4). Claims brought on or af ter the commencement date are included as are claims which were brought before the commencement date but which were not finally determined before that date: para.21(4). The most obvious example of a discretionary continuation order is where the tenant under a new tenancy wishes to claim damages for disrepair in relation to the termination period.

Compliance with consultation requirements

Landlords are obliged to consult their secure tenants (and others) (Local Authority Landlords) before taking certain actions. Consultation carried out during the termination period is not invalid as a result of a failure to consult - or of consultation of - ex-tenants: para.22(1) . The relevant consultat ion requirements are: (a) consultation on matters of housing management under s.105(1), 1985 Act; (b) consultation before disposal to a private sector landlord under Sch.3A, 1985 Act; (c) consultation in relation to a proposed transfer of management functions to a tenant management organisation under s.27AB, 1985 Act; and, (d) consultation of introductory tenants on matters of housing management under s.137(2), 1996 Act: para.22(2)(a).

Further details about operation of the provisions is to be found in Guidance i s s u e d b y t h e D e p a r t m e n t o f Communities and Local Government and can be downloaded from http://www.communities.gov.uk/publications/housing/toleratedtrespass

Surrender; return of keys; unequivocal act; landlord’s conduct

Artworld Financial Corporation v Safaryan [2009] EWCA Civ 303 Sedley, Dyson and Jacob L.JJ.

The claimant company - an offshore company established to manage the property of a trust - owned a substantial house in London. The house was principally controlled and used by a family who were the beneficiaries of the trust. In 2004, the family granted a lease of the house to the defendant for a period of three years at a rent of £390,000 a year. From the start of the lease, there were a number of technical problems with facilities at the property; the defendant complained but the problems were not resolved.

In May 2006, when there were 15 months remaining on the lease, the defendants decided to leave the house and returned the keys. The claimant instructed its agent to produce a “checkout report”. They also redecorated some of the rooms to the taste of the

family and r e s t o r e d s o m e furni ture a n d fi t t i n g s that had b e e n r e m ov e d before the defendant moved in. T h e younge s t member of

the family moved into the property for a period of three months and several members of the family used the driveway to park their cars.

T h e c l a i m a n t c o m m e n c e d proceedings to recover the rent for the remaining period of the lease (£487,500). The defendant resisted those proceedings on the ground that they had surrendered the lease, which surrender had been accepted by the claimant. The judge at first instance accepted that the lease had been surrendered and dismissed the claim.

The Court of Appeal dismissed an appeal. Whether there has been a surrender by operation of law after a tenant abandons leased premises must be determined by reference to the landlord’s conduct as a whole; the test is whether the landlord’s conduct is so inconsistent with continuation of the tenant’s lease that it could only be justified as being lawful on the basis that the landlord has accepted the tenant’s implied offer to return possession. The claimant’s actions in taking occupation of the house was inconsistent with continuation of the lease and the surrender had therefore been accepted.

Tenancies (General)




http://www.communities.gov.uk/publications/housing/toleratedtrespass







THE DPS GETS TOUGH OVER ‘MISSING’ CASH

TENANTS will soon be told if their landlords fail to protect their deposit, in a bid to give them a greater level of protection.

The new policy is being introduced by The Deposit Protection Service - one of three Government approved tenancy deposit protection schemes. It is already the only scheme to physically take a deposit from a landlord and hold it throughout a tenancy.

The new policy will come into force from June 1st – making The Deposit Protection Service the only scheme to routinely inform tenants that their deposit may not be protected.

Currently, nearly 1500 deposits a month are registered with The DPS, with tenant details, move-in dates and deposit amounts all given – but no cash is handed over for protection.

The DPS says that the move will also help to protect landlords from letting agents entrusted with deposits who fail properly to protect them.

Under deposit protection legislation that came into effect in April 2007, landlords have 14 days to register deposits

received from tenants with an approved Government protection scheme.

Schemes are not responsible for ensuring that landlords comply with the law, but The DPS knows that with the data it holds, it can play a vital role in exposing rogue landlords and agents:

Kevin Firth, director of The DPS, said: “The point of this measure is not to name and shame, but to help ensure landlords and agents are held to account for their responsibilities under the law.

“The DPS is already the safest option for tenants and landlords because we physically hold onto a deposit. Others insure it – which offers no certainty for tenants and leaves landlords vulnerable if a letting agent goes into administration.

“Now we will be giving an even greater level of protection to tenants, helping them to live in their home, happy and confident that their money has been properly protected.”

The DPS will write to landlords who have registered the tenancy but not paid the deposit after the legal requirement of two weeks; giving them a further week to pay over the cash. In the event that the money is not received, tenants will be told that their deposit may not be protected, potentially giving them grounds to take offending landlords to court. If found guilty, landlords face being fined up to three times the amount of the deposit.

Fergusen v Jones Birmingham County Court - Source Legal Action, Jan 2009 issue

Ms Jones was an AST tenant. She paid a deposit of £500.

Landlord failed to put deposit into authorised scheme within 14 days as required by HA2004, s213(3) and (4) Deposit only placed into an appropriate s c h e m e A F T E R L a n d l o r d h a d commenced possession proceedings.

Tenant counterclaimed for disrepair, and THREE times value of deposit

held - Judge Sheldrake held that the court had no discretion under s214(4) and had to order the Landlord to pay three times the deposit.

Landlord could not escape the penalty in s.214(4) by placing the deposit in an authorised scheme after the 14 day period.

[Authors note] It is probable this case is not reliable. It seems it was not argued fully. We are still of the belief that a deposit can be protected late, as long as it is done before a tenant makes a request for compensation and as long as the Deposit Protection Service is used.

Legal Action May 09 housing updates contain a few tenancy deposit cases, which further muddy the waters…

Tenancy Deposit Schemes





Source and opinion, nearlylegal.co.uk - http://nearlylegal.co.uk/blog/2009/05/tenancy-deposit-variations-on-a-theme/

Seghier v Rollings, Bow County Court, 6 March 2009.

An assured shorthold beginning in May 2007. A deposit was paid by Mr Seghier to the letting agent before the start of the tenancy. It was not protected, nor the required information given. Ms Rollings was apparently unaware of the existence of the deposit scheme. The deposit remained unprotected until shortly before the initial hearing of Mr Seghier’s claim in June 2008. At the hearing Ms Rollings gave a copy of the certificate of deposit to Mr Seghier, but the prescribed information was not provided then or subsequently. At trial, Mr Seghier sought an order that the deposit either be repaid or paid into a designated scheme account and the 3 x deposit be paid to him. HHJ Redgrave distinguished Harvey v Bamforth on the basis that Ms Rollings had still not complied with s213(6)(a). The phrase ‘as it thinks fit’ in s.214(3) meant the court must order either return of deposit (s.214(3)(a)) or deposit to be put in a scheme (s.214(3)(b)). Payment of 3 x deposit within 14 days. Clearly the Court was untroubled by the late compliance argument or the s.214 ‘must also’ point, assuming that either were raised.

Beal v McCartney, Plymouth County Court, 12 March 2009.

Ms McCartney granted Mr Beale a 6 month AST in March 2008. The tenancy agreement said that the deposit would be protected. It wasn’t. In September 2008, Mr Beal received a letter from the landlord’s mortgage lender informing him that a warrant of eviction was being applied for. The eviction took place on 22 October. Mr Beal made a claim for the deposit, 3 x deposit award and breach of quiet enjoyment. The Court awarded all this, with £500 for breach of quiet enjoyment. The Court observed that it was ‘quite clear’ that s.214(3) meant it must award the 3 x deposit and that ‘it is very silly of landlords’ if they don’t take notice. Interesting in that this appears to be a retrospective claim, rather than made during the course of the tenancy.

Universal Estates v Tiensia

Croyd o n Co u n ty Co u r t , 2 3 February 2009. Ms Tiensia was granted an AST on 19 May 2008 by UE. The rent was £2400 per month. A deposit of £2400 was paid in installments, with the last on 4 June. Ms Teinsia was in rent arrears from the start due to HB problems and the landlord served notice relying on grounds 8, 10 and 11 immediately after the second month’s rent was due. Ms Tiensia defended the possession claim and counterclaimed for the deposit and 3 x payment. The landlord registered the deposit with Tenancy Deposit Solutions Limited and faxed the certificate to Ms Tiensia.

The terms of the TDS Ltd scheme stated that the deposit must be protected within 14 days of being received from the tenant and details provided. On application for summary judgment, the DDJ held that the ‘initial requirements’ of the scheme itself (as well as s.213) required the deposit to be protected

within 14 days. This requirement could not be satisfied once the 14 days had passed. 3 x deposit ordered.

Depending on the wording of the terms of the particular tenancy deposit scheme (and I believe that they are broadly similar on this point), this is a good counter argument on the late compliance point. If the landlord has not protected the deposit within 14 days of receipt and the terms of the scheme are that they must, then they quite simply cannot comply wi th the ‘ in i t ia l requirements of an authorised scheme’ as per s.214(1)(a) and (2)(a). The details of the scheme itself are therefore important to check.

Tenancy Deposit Schemes




http://nearlylegal.co.uk/blog/2009/05/tenancy-deposit-variations-on-a-theme/













Social security; housing benefit; local housing allowance; maximum bedrooms

Housing Benefit (Amendment) Regulations 2009 (SI 2009/614)

Made: March 10, 2009 - In force from: April 6, 2009

The Housing Benefit Regulations 2006 (S.I. 2006/213) and the Housing Benefit (Persons who have attained the qualifying age for state pension credit)

Regulations 2006 (S.I. 2006/214) make detailed provision for the calculation of an applicant’s entitlement to housing benefit. Entitlement is calculated by r e f e r e n c e t o a m a x i mu m r e n t , determined by a rent officer. Where the applicant is seeking accommodation in the private rented sector, the maximum rent is the local housing allowance (LHA) determined by a rent officer for the broad rental market area in which the property is located. The LHA is calculated by ascertaining the median rent for properties of a particular size in that area, e.g. a median rent for two-bedroom properties. As a matter of course, rent officers only determine median rents for properties with up to five bedrooms as calculation of a median for larger properties is distorted because such properties are at the luxury end of the rental market. Rent officers may, however, on request provide figures for properties of more than five bedrooms.

These Regulations amend both sets of housing benefit Regulations so as to

limit the maximum amount of housing benefit to the LHA rate for a property with five bedrooms, regardless of the size of the family or the number of bedrooms in the property, i.e. an applicant in a seven-bedroom household will not have an LHA rate determined for seven-bedroom properties but the same maximum amount of benefit as someone i n a fi v e - b e d r o o m h o u s e h o l d . Transitional provision is made for those currently living in larger properties with housing benefit, whose benefit will be reduced as a consequence of the amendment: in such a case, the new limit will not be applied until the anniversary of the original claim, following which the applicant will have a further 26 weeks at the former rate to enable them to reorganise their family unit, find alternative accommodation or apply for a discretionary housing payment.

Local Housing Allowance / Housing Benefit

Tenancy Deposit Protection withdrawn from Unregulated Letting Agents

At the insistence of their insurers, The Tenancy Deposit Scheme will only prov ide depos i t protect ion and alternative dispute resolution to letting agents who are members of recognised professional bodies.

From April 6, only regulated letting agents and corporate and individual landlords will be covered by the Tenancy Deposit Scheme and cover will be withdrawn from unregulated agents.

Tenants are advised to ensure their landlords have made alternative arrangements to safeguard deposits as soon as possible.

The Scheme advises landlords and tenants to be certain either that their lettings agents are members of either the Association of Residential Letting Agents (ARLA), The National Approved Lettings Scheme (NALS), the National Association of Estate Agents (NAEA), or the Royal Institution of Chartered Surveyors (RICS); or that deposits are protected under one of the other gover nment au thor i s ed de pos i t protection schemes: Tenancy Deposit Solutions (trading as mydeposits.com) or The Deposit Protection Service.

The Tenancy Deposit Scheme will shortly be writing to all its members who are unregulated agents to inform them that they will have to make alternative arrangements to protect deposits when their subscriptions end in April. It will also be writing to current tenants whose tenancy is shown to have been arranged through an unregulated agent to advise them of the change in protection that can be offered and the course of action to take to ensure protection as the law requires. The agents concerned should advise their tenants and landlords of what they intend to do on their behalf.

The Tenancy Deposit Scheme regrets the action it has been forced to take, but points out that it is due to circumstances that are well beyond its control.





Homelessness; residence orders; reasonably expected to reside; review decisions

Holmes-Moorhouse v Richmond-upon-Thames LBC [2009] UKHL 7

Lords Hoffmann, Scott of Foscote, Walker of Gestingthorpe, Baroness Hale of Richmond and Lord Neuberger of Abbotsbury

Children Act 1989 governs the making of residence orders, which settle the arrangements as to with whom a child will live. An order may provide for shared residence and specify the periods during which the child is to live with each party (s.8(4)). Residence orders are commonly made by consent, in which circumstances there will have been no assessment by the court of the ability of either parent to accommodate the child; where the request for the order is opposed, however, and the court is asked to make an order, the court must consider how capable each parent is of meeting the child’s needs (s.1(3)(f)), which includes availability of accommodation for the child.

In 2005, the appellant separated from his former partner. They agreed a shared residence order in relation to their children. While still living in the family home, the appellant applied to the

respondent authority as homeless, asserting that he was in priority need because he was a person with whom dependent children might reasonably be expected to reside (s.189(1)(b), Housing Act 1996). The authority determined that he was not in priority need and upheld that decision on review, stating that

“When ch i ldren are s tay ing alternative weeks with each parent, and the other parent is adequately housed and the main carer, ...something more than the bare fact of staying is required before one would ordinarily describe the children as ‘residing’ with the homeless parent”

An appeal against that decision under s.204, 1996 Act, on the basis that the authority were bound by the decision o f t h e f a m i l y c o u r t a s t o t h e arrangements as to where and with whom children would reside, was dismissed. An appeal to the Court of Appeal was allowed ([2007] EWCA Civ 970; [2007] HLR 19; It was held that, although the terms of a residence order were not determinative of the question as to whether a child was reasonably to be expected to reside with a parent, if the order was made by a family court following a contested hearing, the family court was to be deemed to have taken into account the ability of the parents to accommodate the children and there was therefore no room for the authority to do anything other than follow that decision absent any intervening change of circumstances. Where the order was by consent, the authority could, however, c o n s i d e r f o r t h e m s e l v e s t h e reasonableness of an applicant’s expectation that a dependent child will reside with him. It was also held that, when judging the reasonableness of an applicant’s expectation that dependent children will reside with him, scarcity of resources was an irrelevant factor.

The House of Lords allowed the authority’s appeal. Whether the child of a homeless applicant can reasonably be expected to reside with him for the purposes of establishing priority need under Pt 7, 1996 Act, is a matter for the local authority to determine and cannot be dictated by the terms of any shared residence order made by a family court. The question for the housing authority was whether it was reasonably to be expected, in the context of a scheme for housing the homeless, that children who already had a home with their mother should be able also to reside with the father. In answering that question, the authority had to have regard to any order made by the family court, but such an order would only be part of the material which the housing authority take into account when reaching their decision and it remained open to them to decide that it was not reasonable to expect children who were not in any sense homeless to be able to live with both mother and father in separate accommodation. The two procedures - actions for residence orders and homelessness applications - were deciding different questions and should not become entangled with each other. It w o u l d o n l y b e i n e x c e p t i o n a l circumstances that it would be reasonable to expect a child who has a home with one parent to be provided under Pt 7 with another.

It was also held that the scarcity of housing as a resource could be taken into account when determining priority need. Although an authority cannot refuse to discharge their duties under the 1996 Act for want of resources, insofar as the criteria for priority need involve questions of judgment, they are entitled to take into account the overall purpose of Pt 7, namely to determine priority in the allocation of a scarce resource.

The appellant also argued that, as at the date of his application, he had still

Local Authority including homelessness





been living at home with his children, at which time he was accordingly both threatened with homelessness and in priority need. It was held that when an application is made when threatened with homelessness, the question of priority need is to be determined as of the date when he will become homeless.

The House of Lords also stated that, while courts should be vigilant to ensure that applicants are not wrongly deprived of benefits under Part 7 because of an error by a reviewing officer, nonetheless errors which do not not, on a fair analysis, undermine the basis of the decision should not be accepted as a reason for overturning the decision. Review decisions under s.202, 1996 Act,

should not to be subjected to the same sort of analysis as a statute or a judgment: “a benevolent approach should be adopted to the interpretation of review decisions. The court should not take too technical view of the language used, or search for inconsistencies, or adopt a nit-picking approach, when confronted with an appeal against a review decision” (at [50]). “Further...a decision can often survive despite the existence of an error in the reasoning advanced to support it. For example, sometimes the error is irrelevant to the outcome; sometimes it is too trivial (objectively, or in the eyes of the decision-maker) to affect the outcome; sometimes it is obvious from the rest of the

reasoning, read as a whole, that the decision would have been the same notwithstanding the error; sometimes, there is more than one reason for the conc lu s ion , and the e r ror on ly under mines one of the reasons; sometimes, the decision is the only one which could rationally have been reached. In all such cases, the error should not (save, perhaps, in wholly exceptional circumstances) justify the decision being quashed” (at [51]).

Local Authority including homelessness

Long Leaseholder / Freeholders

CONSULTATION, GUIDANCE ETC.

Financial Services Compensation Scheme - Treatment of service charges for residential property


April 2009

T h e F i n a n c i a l S e r v i c e s Compensation Scheme (FSCS) was established under the Financial Services and Markets Act 2000 to provide a statutory fund of last resort for customers of authorised financial services firms. If a firm becomes unable, or likely to be unable, to pay claims against it, the FSCS can pay compensation, up to a limit of £50,000 for each customer.

Section 42, Landlord and Tenant Act 1987, requires service charges collected by landlords to be held in one or more accounts and deems any sums to be held on trust. This guidance states that, in the event of the collapse of the financial institution with which the service charges are deposited, the FCSC would expect to treat leaseholders as individually entitled to protection and therefore eligible for a maximum of £50,000 each to cover the

loss of their proportion of the deposited funds. This maximum, however, applies to all the funds that the leaseholder has with the institution including any other funds deposited with the same institution in a personal capacity.

The guidance also emphasizes the importance of the landlord or managing agent keeping accurate and up-to date r e c o r d s o f e a c h l e a s e h o l d e r ’ s contribution, noting that it could be difficult for a leaseholder to successfully pursue a claim for compensation if there are doubts as to the precise ownership of the funds in the account.





Q&ALandlord and Tenant - answered by Adrian Thompson

Hi Adrian, I have a HMO license for my property. It

expires in March 2010. I have received a letter from the council saying they want to inspect the house.

They have also written letters to my tenants saying they are visiting. They want to see all the gas/electric

fire records, which is not a problem as they are all up

to date. I know it looks suspicious if I don't let them come around. But I try to respect my tenants privacy

and not bother them too much. Do you know what the

procedure is about them making such a demand.

I'm afraid, the local authority "must" ensure that there are no hazards under the housing health and safety rating system. They must inspect at least every five years for this purpose [s.55(5) & (6) Housing Act 2004]

55 Licensing of HMOs to which this Part applies

...

(5) Every local housing authority have the following general duties–

(a) to make such arrangements as are necessary to secure the effective implementation in their district of the licensing regime provided for by this Part;

(b) to ensure that all applications for licences and other issues falling to be determined by them under this Part are determined within a reasonable time; and

(c) to satisfy themselves, as soon as is reasonably practicable, that there are no Part 1 functions that ought to be exercised by them in relation to the premises in respect of which such applications are made.

(6) For the purposes of subsection (5)(c)–

(a) “Part 1 function” means any duty under section 5 to take any course of action to which that section applies or any power to take any course of action to which section 7 applies; and

(b) the authority may take such steps as they consider appropriate (whether or not involving an inspection) to comply with their duty under subsection (5)(c) in relation to each of the premises in question, but they must in any event comply with it within the period

of 5 years beginning with the date of the application for a licence.

Just a quick question which you might or might not be able to answer. We have an HMO with full fire alarm

system. We are about to take on a deaf tenant with an outreach worker. Do we have to modify the alarm

system to take account his disability. What is the legal

position?

The general rule on disability modifications is that the landlord can't unreasonably refuse any works the "tenant" may wish to make, as long as it is at their own cost. In addition, part of your consent to the works can include that they put the property back at their own cost at the end of the tenancy.

However, that refers to non statutory items (e.g. toilet modification, ramps etc). A fire alarm is different. I quote a couple of points from the sleeping accommodation guidance and the LACORS guidance:

LACORS

"In order to comply with the duties imposed by the FSO, the responsible person must carry out a fire risk assessment to identify what fire hazards exist at the premises and what measures have been taken (or will be taken) to minimise the risk. The risk assessment must pay particular attention to those at special risk, such as disabled persons, elderly persons, children, or those with special needs. Any other specific risks should be noted, for example the presence of dangerous substances at the premises. These details should be recorded and are known as ‘significant findings’. They must be recorded if the premises are a licensed HMO or if there are five or more people employed by the business as a whole (not necessarily at the premises being assessed). A fire risk assessment must be carried out irrespective of the requirement to record the significant findings. The responsible person must ensure that a competent person(s) carries out any





Q&ALandlord and Tenant - answered by Adrian Thompson

necessary fire prevention or protection works identified by the risk assessment (someone with enough training and experience, knowledge and other qualities to be able to implement the measures properly). This could, in many cases, be the responsible person themselves. The responsible person must also give all tenants and other relevant persons information on risks identified in the risk assessment and information on fire safety measures and procedures for the premises. All fire safety measures at the premises must then be subject to a proper system of maintenance by a competent person so as to be kept in efficient working order and in good repair. The risk assessment must be regularly reviewed to ensure that it is kept up to date."

SLEEPING ACCOMMODATION GUIDANCE

"If your premises have been converted into flats or a maisonnette you will need to ensure they have been altered in accordance with building regulations. If you are not sure then you should seek advice from a competent person as additional precautions maybe necessary. Although the main risk will be to people when they are asleep you may still need to consider special arrangements for times when people are working alone, or are disabled or when your normal occupancy patterns are different, e.g. maintenance staff or other contractors working at the weekend. "

Is there any way I can put a term in my contract to (a)

prevent the tenant from changing utility company and (b) stop tenants installing key / card meters for the gas

and electric?

This is not possible to do. Any term in a tenancy agreement purporting to prevent either of these things would not be binding on the tenant and would be unenforceable because of the Unfair Terms in Consumer Contracts Regulations 1999.

Preventing changing the utility company

Page 65 of the guidance on unfair terms provides that potentially unreasonable prohibitions include one against changing the phone or utility supplier. The guidance goes onto to state: “The tenant should have the choice of supplier although he may be required to keep the landlord informed of any change and to return the account to the original supplier at the end of the tenancy.”

In addition, on page 109 of the same guidance, it confirms that a potentially unfair restriction is “[The tenant must not] change the utility supplier without the landlord's consent in writing.” It provides such a term should be deleted.

Any clause in a tenancy agreement that is deemed unfair is not binding on the tenant.

Preventing installation of pre-payment meter

As the installation of a pre-payment meter is governed by statute (see para 7, sch. 2B Gas Act 1986 for gas meters and para 2, sch. 6, Electricity Act 1989 for electricity meters) and as statute overrides contract, any term preventing a utility company installing a pre-payment meter will be unenforceable. It will also be deemed as an unfair term under the unfair terms regulations, adding more weight to it not being binding on the consumer (or the utility company).








What are the benefits?• Underwritten by Zurich Insurance• Extremely competitive premiums for

residential and commercial property portfolios

• Malicious damage by tenant included• Definition of buildings includes landlords

contents Includes loss of rent and alternative accommodation cover

• Includes employers and property owners liability cover (£10m and £5m respectively)

TYPICAL PREMIUM COSTS (excluding flood areas or other high risk properties for example history of subsidence. Please check with Heath Lambert for a formal quote)

Buildings Cover - Residential£1.23 per thousand if total portfolio up to £1m£1.08 per thousand if total portfolio up to £3m£1.05 per thousand if total portfolio £3m+

The above includes IPT @ 5%

If a claim has been made in the last 2 years including and above £1500.00, there is an additional 25% added to the premium.

Contents - ResidentialDefinition of buildings includes landlords contents, so price is same as buildings.

Buildings Cover - Commercial£1.80 per thousand if total portfolio up to £1m£1.58 per thousand if total portfolio up to £3m£1.53 per thousand if total portfolio £3m+

The above includes IPT @ 5%

If a claim has been made in the last 2 years including and above £1500.00, there is an additional 25% added to the premium.

What next?

For more information on the insurance facility please contact the

following:

Jack HemmingsAccount handler

Tel: 0207 234 [email protected]

or

Kabir MiahAccount Handler0207 234 4464

[email protected]

Heath Lambert Real Estate133 Houndsditch

LondonEC3A 7AH

www.heathlambert.com

The Guild of Residential Landlords are an Introducer Appointed Representative of Heath Lambert Limited, an insurance intermediary authorised and regulated by the Financial Services Authority. Heath Lambert Limited is bound by its rules in the conduct of its general insurance mediation activities. Details of Heath Lambert Limitedʼs authorisation (registration number 312030) can be checked by visiting the FSAʼs Register which can be found on the website http://www.fsa.gov.uk/register or by contacting the FSA on 0845 606 1234.

Please note that as an Introducer Appointed Representative of Heath Lambert Limited The Guild of Residential Landlords can only refer your name and contact details to Heath Lambert Limited. We are not able to give you advice on any general insurance products or the Heath Lambert Limited services.

The Guild of Residential Landlords 51 Leadhall Lane

HarrogateHG2 9NJ

E: [email protected]: www.all4landlords.com

T: 0845 370 01 07

PROPERTY INSURANCE EXCLUSIVELY FOR MEMBERS OF THE GUILD OF RESIDENTIAL LANDLORDS

mailto:[email protected]




http://www.heathlambert.com

http://www.heathlambert.com

http://www.fsa.gov.uk/register




Documents

Residential Landlord Summer 2009