Author: regan

Landlords could face a prison sentence for breaching the Government’s ‘Right to Rent’ checks in a series of measures to tackle illegal immigration, announced by the Government over the weekend. Proposals will be included in the forthcoming Immigration Bill that will require landlords to check the immigration status of prospective tenants, allow landlords to evict illegal immigrants without going to court in some cases, and introduce tougher penalties, including prison, for landlords who persistently let to illegal immigrants. The Immigration Bill will introduce a Home Office notice intended to “remove the protections currently afforded to illegal immigrants by the Protection for Eviction Act and the Housing Act 1988”. The expectation is that this notice will be clear and unambiguous, empowering landlords to “take steps to evict the tenant, after a short notice period, without the need for a court process for repossession, unless eviction requires the use of force.” Repeatedly failing to evict illegal immigrants would be a new offence carrying maximum penalties of five years’ imprisonment or a fine for convicted landlords. The National Landlords Association (NLA) chief executive Richard Lambert told Radio 4 the plans could lead to tenants “doing very desperate things” and violent confrontations. Lambert accused the government of introducing the plan “out of the blue” in response to the Calais migrant crisis. The Government also plans to create a blacklist of criminal landlords and letting agents, with a ban on letting for those repeatedly convicted of housing offences. Communities Secretary Greg Clark said the government would crack down on “rogue landlords who make money out of illegal immigration”. Residential Landlords Association (RLA) chairman Alan Ward questioned why responsibility for immigration had fallen on landlords and letting agents rather than employers. “The ability to evict illegals may answer the problem of abandonment if an illegal immigrant is removed by the authorities, but is a potential minefield if we get it wrong. Just because a landlord has the right to evict, it doesn’t explain how to go about it,” he said. “There must be better support to ensure landlords are able to validate tenants’ right to rent and what to do when a tenant loses that right. We have real concerns as the Home Office have failed to allocate any meaningful budget to informing landlord, agents and tenants about the right to rent process.” A pilot Right To Rent project has been operating in Birmingham, Wolverhampton, Dudley, Sandwell and Walsall since last year. Since December, landlords and agents in these areas have been required to check the immigration status of all new adult tenants, sub-tenants and lodgers entering into new tenancies to assess whether they have right to rent in the UK. Section 20 to 37 of the Immigration Act 2014 contains provisions to make it compulsory for landlords to check the immigration status of all new adult tenants.

The number of people evicted by their landlords rose 46% in England and Wales, since benefit cuts came into effect in 2011, official statistics suggest. More than 43,000 households in rented housing were evicted in the 12 months to June, according to the Ministry of Justice. In addition, rents rose across the UK, with the average rental price for a home reaching £1,000 a month, up by £100 from the previous year, HomeLet data showed. The figures also showed that rental increases were growing faster in the south-west of England. Homeless charity Shelter’s chief executive Campbell Robb pointed out that many people were being unable to afford a home, and urged the government to “invest in building genuinely affordable homes.” “Every day at Shelter we see the human cost of the country’s unfolding affordability crisis with growing numbers of families finding themselves on the verge of homelessness, and petrified that any small drop in income could leave them with the bailiffs knocking at the door.” Statistics also revealed that landlords willing to rent people who receive state benefits fell since 2011, and that less than 10% of landlords lowered rents in response to the cuts. A spokesman for the Department for Communities and Local Government said repossessions continued to fall, being 17% lower than this time last year, and that the numbers of landlord possession claims were down 14% on the previous quarter at their lowest point since 2012 “This Government has kept strong protections to guard families against the threat of homelessness. We’ve increased spending to prevent homelessness with over £500 million made available to help the most vulnerable in society and ensure we don’t return to the bad old days when homelessness in England was nearly double what it is today.”

The budget is often full of surprises, and none more so than the recent Summer Budget announced by Chancellor Osborne. It has been a long time since a Budget has included so many changes effecting landlords. The Chancellor has set out plans to cool the buy-to-let market as it could be seen as a problem if there are any future downturns or property prices crashes. The plans laid out include changes to the way income is taxed on rental property income, reduced tax relief for higher earner landlords and also an increase in the amount of regulation and requirements for renting a property. Whether the buy-to-let industry has helped the property price boom or not, it is now something that is clearly on the radar of the government for the foreseeable future.

The Landlord Group’s Chris Sharpe is back in action on Channel 5’s Bad Tenants, Rogue Landlords, working on behalf of landlords to secure their property from illegal tenants and squatters. In the first episode of the new show, while a landlord is away working in Mexico, squatters take over his Cheshire home. Chris Sharpe goes to the three-bedroom bungalow to serve the squatters an eviction notice. “I will explain to them, in no uncertain terms, they will have 24 hours,” says Chris. “That is it.” While the owner was 4,000 miles away, the home had clearly been broken into, and the squatters had left the house outside trashed. “Whoever’s doing it, they need dealing with.” The only one home was a dog, so Chris left eviction notices on the front and back doors. 24 hours after the eviction notice was served, Chris goes with police to evict the squatters. Again, they find nobody in but the dog, but the home is clearly being lived in. Upon finding the home empty, the police leave and Chris begins to move out the squatters’ belongings. Around an hour after police leave, the squatter turns up at the home, a woman who had been left jobless and homeless after a back injury. “There’s no happy ending,” says Chris. “We’ve still got to deal with this. But this shouldn’t be on Carl’s shoulders. This is not his problem to carry.” Bad Tenants, Rogue Landlords returns at 8pm, Thursday 19th April on Channel 5. Squatting and trespassing are major problems for landlords across the country. At The Landlord Group, our dedicated team are committed to evicting squatters quickly and cost effectively. Read more about our Evicting Squatter services.

The National Landlords Association (NLA) has highlighted some important issues for landlords to consider. The trade body for UK landlords pointed out that the recession resulted in increased tenant demand and higher rents in many areas. However, it is still important for landlords to keep a close eye on their finances. In line with this view, the NLA has issued ten top tips for landlords. 1. Thoroughly research the rental market in your area to< make sure you are charging the right level of rent and not pricing yourself out of the market". 2. Buy-to-let borrowers having difficulty keeping up with mortgage repayments should speak to their lender and try to arrange a new repayment plan. If you are coming to the end of a deal, search the market for a mortgage which best suits your needs. 3. Marketing your property is important to ensure you do not experience rental voids (periods when the property is unoccupied). 4. Courtesy, reliability and availability will make for a happier tenancy all round. Communication is critical. 5. Landlords should carry out proper checks on prospective tenants, including credit checks, bankruptcy searches and previous residency information. 6. Complying with the long list of rules and regulations for landlords is imperative to ensure your tenants are happy and you do not risk your reputation and your bank balance. This includes placing tenants’ deposits in a Government-approved protection scheme. 7. Drawing up an inventory at the beginning of the tenancy will reduce the likelihood of any disputes once the tenant moves out. 8. Taking out insurance may also be a good idea. Your lender will require buildings insurance, but the NLA also highlights the need for cover against injury to tenants and their guests, and insurance for void periods. 9. Start a rainy day fund to cover any emergency expenditure on repairs or maintenance. 10. Join a landlord association to benefit from the advice and experiences of other landlords. “Proper advice for landlords is critical. By following the NLA’s top tips, landlords could increase their chances of getting the most from their properties at a time when the wider economic outlook is not looking so good.”

Thousands of landlords are setting up companies in a move to allow them to avoid new taxes on rental income, potentially cutting the Treasury’s tax haul by hundreds of millions of pounds, a Telegraph study has found. Under rules coming into force next week, buy-to-let property investors in the higher rate tax bracket will face new limits on their ability to claim mortgage interest as a cost to offset against their rental income, blowing a hole in some landlords’ financial plans. But if the investor sets up a company, the bill no longer applies. A study of Companies House and Office for National Statistics data by The Telegraph indicates that more than 4,560 property companies have been incorporated in the past three months alone. That is a rise of just over 50pc on the level seen in the same period a year ago, and indicates the volume of landlords taking the opportunity to limit the rise in their tax bill. The true number is likely to be higher, as investors have had since the Summer Budget in July 2015 to plan for this change.

What’s changing?

Anyone who buys additional residential property, including second homes and buy-to-lets, will have to pay an extra 3 percentage points in stamp duty from April 1, 2016. The additional charge applies above the current “stamp duty land tax” rates. This means there will be 3pc tax (currently zero) to pay on homes worth up to £125,000, 5pc tax (instead of 2pc) on homes that cost between £125,001 and £250,000, and 8pc (currently 5pc) on homes worth between £250,001 and £925,000. Homes worth up to £1.5m will be subject to 13pc stamp duty and those over this amount will incur a 15pc charge. In practice this means that someone buying a £450,000 house will have to pay an extra £13,500 of tax. Anyone buying a second home has 36 months to sell their original property. They can then get a refund on the extra tax. In addition, anyone who sold their home before November 2015 but does not currently own their own home has until November 2018 to buy a new one without paying the extra tax. Corporate investors will also benefit from the falling rate of corporation tax, which is due to be cut to 17pc in the tax year 2020-2021, as well as reduced capital gains tax charges. There are additional costs to setting up a business, however, including administrative expenses and taxes on dividends or salaries when the income is paid out. In addition, the average mortgage for a company costs 0.8 percentage points more than a loan to an individual, according to brokerage Mortgages for Business. As a result, Gary Heynes, national head of private clients at tax advice and accounting group RSM UK, believes incorporating only makes sense for investors with more than 10 properties, and a plan to hold those investments for the long term.

Changes made by Chancellor George Osborne to the rental market will affect almost half of landlords, a trade body has claimed. Osborne announced in his July Budget that landlords would soon only be able to claim for actual wear and tear. At present they are able to claim a set amount, regardless of the level of wear. Research by the National Landlords Association found that this rule will affect 47% of all landlords. The rules will apply only to furnished properties and the trade body said 24% of all landlords operated exclusively in this sector. Some 22% rent out a mixture of furnished and unfurnished properties while more than half (53%) operative only on an unfurnished basis. There is a consultation on the new system which will run until 9 October 2015. The new rules will take effect on from 6 April 2016 for Income Tax purposes and 1 April 2016 for Corporation Tax. They will cover the cost of replacement furniture, furnishings, appliances and kitchenware provided for tenants including:

• Movable furniture and furnishings
• Televisions
• Fridges/freezers
• Carpets and flooring
• Curtains
• Linen
• Crockery or cutlery

Chris Norris, head of policy at the National Landlords Association said: “We fully understand the frustration of those landlords who let exclusively on a furnished basis as the removal of this allowance will very likely represent a reduction in the relief they can claim. “However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished, or part-furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future. “The NLA has broadly welcomed these proposals as it should lead to a fairer system for more landlords. However, as we transition from one system to another, we will push to make sure that any landlords who’ve made recent investments with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged.”

It can be very frustrating to a landlord to discover that his or her tenant doesn’t have the means or perhaps the intentions to fulfil the obligations of the tenancy agreement. This may be the tenant building up substantial rent arrears or allowing the standard of the property to fall into decline through neglect and a general lack of care. Very often, as landlords when we tell our tales of tenant woe to our friends and family, we hear responses such as, “can’t you just boot them out if they’re not paying?” and “why don’t you just wait until they’re not in and go round and change the locks?” While such friends and family may have only the best intentions at heart, a landlord who was to follow these friendly words of advice to the letter would, more than likely find himself with a claim for unlawful eviction adding to his stresses and frustrations. Outlined below are two such cases. These are intended to be read purely for interest in order to show how a court responds to and handles unlawful eviction claims. Salah v Munro Willesden County Court April 2009 Ms Salah signed an assured shorthold tenancy agreement (AST) for a room for a period of 6 months. The tenant applied for housing benefit which was granted, but only for part of the rent. Mr Munro, the landlord had a ‘no housing benefit’ policy – and decided to enforce it. He told Ms Salah to leave. Subsequently, in May 2008 Mr Munro’s brother and girlfriend visited the property and again demanded that the tenant leave and return the key. Ms Salah refused to comply and went out, taking the key with her. On her return to the property Ms Salah found that the locks had been changed and some of her property was in bags in the street and other items were missing. She spent a night in hospital following an asthma attack, then stayed with various different people until being re-admitted to the property ten days late following a court order. Missing furniture was not replaced and Mr Munro accused Ms Salah of being a prostitute. After the 6 month term had expired, Mr Munro disconnected the gas and electricity supply to the room. Following this Ms Salah stayed at a friend’s house for a month. Mr Munro re-connected the electricity supply once he was notified this Ms Salah had been granted funding for a committal hearing. Ms Salah only stayed occasionally at the property after this time. In January 2009 Mr Munro saw Ms Salah at the property and called the police. The police confiscated Ms Salah’s keys! Willesden County Court awarded the following:

• Unlawful eviction £8,600 – calculated at £200 per night for 43 nights
• Aggravated damages £2000
• Exemplary damages £2000
• Special damages £1000
• Total £13,600

The tenants rent arrears of £750 were deducted from the damages, not including the period when Ms Salah was excluded from the property. The court assessed the rent at 50% for the period without gas. This is the second of our two featured cases of Unlawful Eviction Kirklees Council v Susan Lowe Bradford Crown Court May 2009Mrs Lowe, the landlord waited while the tenant and her partner were away for the weekend during July 2007. She removed the tenant’s belongings from the property leaving them outside in the rain and changed the locks.The landlord refused to cooperate with council officers when they contacted her and did not comply with a County Court Injunction requiring her to reinstate the tenant.In May 2009 Mrs Lowe pleaded not guilty to charges relating to an unlawful eviction. She was found guilty of the offence under The Protection from Eviction Act 1977 and also of criminal damage to the tenant’s belongings. She was given a two year conditional discharge and ordered to pay costs of £1,500 Both of these cases are examples of what can happen if the correct legal advice is not obtained. The Landlord Group can advise you on all issues relating to tenant eviction to ensure that you do not fall foul of the law. Our specialist in house solicitors can advise you on how to get your property back quickly. For further information contact The Landlord Group on tel no: 01924 376 222 or email: enquiries@thelandlordgroup.co.uk.

At The Landlord Group we are occasionally challenged by the lack of a landlord’s address in England and Wales on the Tenancy Agreement. Section 48 of the Landlord and Tenant Act 1987 requires that a tenant is provided with an address where notices may be served on the landlord. This address must be in England and Wales and can be the name and address of a managing agent. Where no such notice has been served, rent and / or service charge payments are not legally due until such time as the notice has been served. Nor can action for possession due to rent arrears be made, unless the tenant’s arrears accrued after the service of the notice. A section 48 notice can be included within the tenancy agreement and this is the easiest way to ensure that all tenants receive the notice. In this case, where the notice has not been served, you should serve a notice under section 48 and the tenant will become liable to pay rent. The Landlord Group can assist with the drafting and service of Section 48 Notices. For further information contact The Landlord Group on tel no: 01924 376 222 or email: enquiries@thelandlordgroup.co.uk.

On 1 September 2012 new legislation came into force which made squatting in a residential building a criminal offence with squatters facing up to six months in jail and/or up to a £5,000 fine. Section 144 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 provides that a person commits an offence if:

• The person is in a residential building as a trespasser having entered as a trespasser
• The person knows or ought to know that he or she is a trespasser
• The person is living in the building or intends to live there for any period.

Squatting made illegal For the purpose of Section 144 a ‘building’ is defined to include any structure or part of a structure (including a temporary or moveable structure) and a building is ‘residential’ if it is designated or adapted, before the time of entry, for use as a place to live. An offence is not committed by a person holding over after the end of a lease or licence (even if the person leaves and re-enters the building). Section 17 of the Police and Criminal Evidence Act 1984 has also been amended in order to give a (police) constable power to enter and search any premises for the purpose of arresting a person for an offence under section 144. The early indications suggest that the legislation is effective. The Landlord Group has dealt with numerous police forces on this very issue leading to successful police intervention without the need to rely on a civil action through court proceedings. With the assistance of The Landlord Group, arrests have been made and squatters have been fined and/or jailed under the new law. The main squatting advisory websites are not happy with the new legislation. They accuse the government of bringing in the new law against a background of media myths and not dealing with the underlying problem of lack of affordable housing. However, the good news is that they are now advising against squatting in residential buildings although, as one would perhaps expect, they are looking for opportunities to challenge the new law in court. As is stated above, the offence applies only to residential properties. If, as is intended, the offence will act as a deterrent to squatters intending to occupy residential properties, one would expect those squatters to seek out vacant commercial properties. The current economic climate has led to an increasing number of businesses failing and leaving empty premises across the country. For assistance with evicting squatters from your commercial property or residential property please contact The Landlord Group on 01924 376 222 or email: enquiries@thelandlordgroup.co.uk.