Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Oxford HMO Licensing- Update

We have received a letter from Oxford City Council.

It appears that they are considering the licensing scheme further. New recommendations will be put to the Executive Board and from them to the full Council in meetings on 18 October. It may be that these recommendations will include the withdrawal of the current licensing designation (due to come into force on 22 October) and the making of some alternative designations to introduce HMO licensing over time.

PainSmith Solicitors welcome any reconsideration by the Council of its HMO licensing scheme.

Filed under: England & Wales, England only, FLW Article, , ,

Oxford Challenged Over HMO Licensing

PainSmith Solicitors along with Jonathan Manning and Justin Bates of Arden Chambers have been instructed by a group of Oxford landlords, lettings agents, and other interested parties to pursue an action for judicial review of Oxford City Council’s decision to make an additional licensing designation for the whole of Oxford.

We have previously posted on this issue and as a result of discussions that sprang from that post we have been instructed to send a pre-action protocol letter to Oxford. A (slightly edited for client confidentiality) copy of that letter can be seen here.

Both we and our clients take this action with some regret. As a firm PainSmith Solicitors (and our clients) wholly support the licensing of HMOs provided it is carried out with proper consultation and in accordance with the law in a reasonable and proportionate manner. Unfortunately, the scheme proposed by Oxford does not do this.

The scheme, if carried forward as currently planned, would leave many landlords with their properties designated as HMOs but because Oxford intends to “phase” licence applications over the next 3-4 years these landlords would not be able to apply for a licence. This would, as a consequence, place these landlords in breach of the law and further make them unable to serve a valid notice under section 21 of the Housing Act 1988 on their tenants. This situation cannot be what the Council intends and is simply irrational.

We hope that Oxford uses this opportunity to rethink its policy on additional HMO licensing.

Filed under: England & Wales, England only, FLW Article

Bed Bugs and Landlord’s Liability

A recent story on the BBC News website highlights that bed bugs are back and spreading in the USA and Western Europe. We are often asked about pests and who is responsible for their eradication.

During the tenancy if pests arise it will normally be up to the tenant to deal with them (after all the property has been let to them) unless there is some alternative provision in the tenancy agreement. If the cause of the pests is disrepair at the property (for example mice entering through holes in the external walls) then the landlord may also have some responsibility to resolve the issue.

Where pests are present at the start of the tenancy the issue is more complex. A landlord does not ordinarily give a warranty to a tenant that the property is pest free and habitable at the outset of the tenancy. Therefore, it is debatable whether a landlord is necessarily liable for the presence of pests in a property at the start of a tenancy. However, where a property is let furnished a warranty is given that the property is pest-free at the outset of the tenancy (although no warranty is given that it will stay that way) and where a tenant discovers that a furnished property, as a whole, is infested they may be able to declare the tenancy repudiated, move out, and sue for damages following the principles laid down in Smith v Marrable. However, in this case the landlord was clearly refusing to deal with the issue and so it must be doubted whether the same actions could be taken if the landlord was unaware of the infestation and then took all reasonable steps to deal with it on it being brought to his attention. It should also be noted that in Smith the whole property was infested with rats and so the fact that bed bugs were present in a bed would not necessarily be sufficient to allow the tenant to claim repudiation.

If the property is an HMO then the Management of Houses in Multiple Occupation Regulations will apply. These create a prosecutable offence if the property is not clean at start of tenancy and it may be the case that a Court would hold that the definition of clean should include freedom from pests. However, this has not been tested to our knowledge.

Where tenants import fleas of bugs into a property then the Courts have held that this is a breach of the tenant’s implied obligation to use the property in a tenant-like manner.

In short, all landlords should do their utmost to ensure that there are no pests in a property at the outset of a tenancy. Using a professional firm may give the landlord some fallback should pests be found later. Failure to do so might involve serious consequences.

Filed under: England & Wales, FLW Article, ,

Deposit Variation Deeds for 1 October

The PainSmith webshop now has deeds of variation available for all three tenancy deposit schemes.

These deeds are designed to vary the terms of existing common law tenancies which will become ASTs on 1 October to incorporate mention of the relevant deposit protection scheme and any clauses required by that scheme.

Deeds for the three schemes can be found here.

Filed under: England only, ,

Rent Arrears on Common Law Tenancies- Last Chances to Act

Landlords who have common law tenancies which will become ASTs on 1 October and whose tenants are in arrears of rent should act now.

Once those tenancies become ASTs the tenant will need to be in 2 months of arrears before the landlord stands a good chance of securing possession in Court. If proceedings are issued before the tenancy converts then it will not become an AST, even if the Court hearing is after 1 October, and the landlord will be able to seek possession under the common law rules of forfeiture. These require the Court to award possession however small the level of rent arrears. While the tenant has the option of paying the outstanding rent and staying in the property he will also be obliged to pay the landlord full interest and their legal costs so the tenant has an incentive to pay up and the landlord does not lose out.

By contrast if the landlord waits until after 1 October he will need to wait for a full two months worth of rent arrears to accrue, give 14 days notice under section 8 of the Housing Act 1988 and then start proceedings. In Court he will get an order for the arrears, interest, but probably less than his total legal costs but the tenant has no right to stay if they pay the landlord. Therefore the incentive on the part of the tenant to pay the debt is much reduced.

However, proceedings must be issued by the Court before 1 October. In practice this means they will need to have been sent to the Court by 27 September at the very latest.

Filed under: England only, , ,

New TDS Required Clauses

The Dispute Service, operators of one of the two insurance backed tenancy deposit protection schemes will shortly be providing guidance as to their position on the changes to the maximum rent threshold under the Housing Act 1988.

More importantly we understand that TDS will be updating document TDS G which contains the prescribed clauses that TDS require to be placed in any tenancy agreement that is to be dealt with under the scheme. There are to be two different sets of clauses. One set will be for Assured Shorthold Tenancies that are being formally registered with TDS to comply with the requirements of the Housing Act 2004 (although these are unchanged from previous versions) while the other are for Non-Housing Act tenancies which are not being registered but wish to make use of TDS to resolve any disputes over the tenancy deposit at the end of the tenancy.

It should be noted that TDS will now be charging for their adjudication services in relation to disputes over Non-Housing Act tenancies.

We understand that the new version of TDS G will be available from Monday 13 September. On that date it will also be possible to purchase ASTs and Non-Housing Act tenancies incorporating the new clauses from the PainSmith webshop. It will also be possible to purchase deeds of variation which will insert the relevant information for any of the three protection schemes into a tenancy agreement which is converting to an AST on 1 October.

You can view all our posts on the AST threshold change by following this link.

Filed under: England & Wales, ,

DCLG FAQs Regarding ASTs after 1 October

The DCLG have decided the final version of their FAQs regarding the Housing Act 1988 rent increase threshold to be placed on their website. We have seen an advance copy and are pleased to note that some changes have been made as a result of representations made to the DCLG by this firm, among others.

Most notably the DCLG has now resiled from their earlier position that all tenancy deposits for tenancies that have converted to ASTs must immediately be protected on 1 October. This is a view that we have previously criticised. The DCLG have listened on this point and the FAQ now states:

We do not consider that deposits taken before 1 October will need to be protected as these were not taken in connection with a shorthold tenancy and therefore do not meet the criteria for protection specified in the Housing Act 2004.

However, agents and landlords should be aware that this is a matter for the Courts to decide and it would be wise to protect deposits on 1 October and certainly on any renewal of the tenancy.

DCLG has, however, maintained their position that a section 21 notice issued in respect of a tenancy which becomes an AST on 1 October cannot expire until 6 months after that date, ie. not before 1 April 2011. This is a view that we do not agree with and have previously criticised. We are pleased to note that the DCLG has watered this position down in the light of our representations and now says that it will be for the Courts to make a final decision on this issue. Doubtless such a case will appear in the Courts in short order.

You can view all of our blog posts on the Housing Act 1988 rent threshold increase by following this link.

Filed under: England only, ,

HMO Planning Permitted Development Order Published

Yesterday, Grant Shapps announced that the promised further amendments to the General Permitted Development Order (GPDO) designed to undo the creation of the C4 planning class had been laid before Parliament.

We have previously posted on the creation of the new C4 planning class and you can find all our posts on this topic by following this link.

Essentially the new amendments mean that movement between the C3 and C4 use classes in either direction is permitted without the need to apply for permission. Larger HMOs which have more than 6 occupiers will not be able to take advantage of the new Order as these properties do not fall into the C3 or C4 category and they will probably still need to seek planning consent.

Irrespective of the changes there is still significant doubt as to whether planning consent is actually required for all HMOs as it is debatable as to whether a change to HMO use (of any size) necessarily constitutes a material change of use.

Individual local authorities will still have the ability to make a direction (known as an article 4 direction) to dis-apply this part of the GPDO for parts of their district if they can present a reasonable case for doing so. They will need to conduct a suitable consultation in advance of making such a direction. Further, for 12 months after the direction has been made there is the possibility of claiming compensation if financial loss is suffered by the local authority refusing to grant planning consent in respect of a matter which would have been exempt from the need to seek planning consent but for the direction. Given the squeeze on budgets it is doubtful that many local authorities will want to incur the costs necessary to make a direction.

Finally it should be remembered that none of this applies in Wales.

The full Town and Country Planning (General Permitted Development) (Amendment) (No.2) (England) Order 2010 can be seen here.

Filed under: England only, FLW Article, ,

Where to see us in September

This month members of PainSmith are speaking in a number of locations where it may be possible for agents or landlords to see them:

Marveen Smith is speaking for:
ARLA Region 18 Meeting, Maidenhead, 9 September
Association of Relocation Professionals, London, 22 September
ARLA Residential Lettings and Management Level 4, London, 28 September
ARLA Region Meeting, Chiswick, 30 September

David Smith is speaking for:
ARLA Seminar on HMOs, Birmingham, 20 September
ARLA Repossession and Court Procedures Course, Birmingham, 21 September
Harrow Borough Council Landlord’s Forum, London, 22 September
ARLA Seminars on the Housing Act threshold change and section 21 notices, London, 23 September and 24 September (NB. 24 September provisional)

Please note this is not a definitive statement of the diaries of the individuals named who also have other meetings and speaking engagements for private clients.

Filed under: England only,

Housing Act Threshold Changes Coming Soon

It is now less than a month to the change in the maximum rent threshold of £25,000 found in the Housing Act 1988 in England.

We have written a large number of posts on this topic which can be found by following this link.

Filed under: England only, ,

Short Lets After 1 October

We have recently come across another unanticipated issue which may become a problem after 1 October. A number of properties in London are let on ‘short lets’ to individuals working or holidaying in London. In the past the high rents charged on these properties meant that they were excluded from the Housing Act 1988. However, with the increased rent threshold this exception will apply to far fewer of these properties.

Premises being let for the purposes of a holiday in London will still fall outside the Housing Act 1988 and these will not present a problem. However, properties being let to individuals who are working in the UK for a short period and where the rent is below £100,000 per annum (pro rata) will now fall under the Housing Act 1988. This of course means that the tenant is entitled to 6 months security of tenure in the property.

To clarify, there is no requirement that a property which falls under the Housing Act 1988 is let for 6 months as is sometimes believed. It is perfectly possible to let such a property for a shorter term. However, a Court is simply not empowered to give possession on a section 21 notice any sooner than 6 months from the start of the initial tenancy. Therefore letting a property for a shorter period is a calculated risk on the part of the landlord as he is at risk of the tenant continuing to pay the rent and simply staying for 6 months with little or no recourse.

What options does the landlord have? If the landlord has resided in the property before as his main residence then he can give a notice before the tenancy begins under ground 1 of Schedule 2 to the Housing Act 1988. This would allow a section 8 notice to be given at any stage giving the tenant 2 months notice to vacate provided that the landlord wishes to reside in the property again as their main home. Otherwise the only option will be to avoid creating a tenancy at all. If a landlord wishes to do this then they will need to provide some services as a part of the agreement which will require access to the property. A landlord who was providing regular cleaning and fresh towels and linen as a part of the agreement should be able to argue that he has not created a tenancy at all but has only created a licence and so the provisions of the Housing Act 1988 will not apply at all. Of course, this will involve a lot more organisation on the part of the landlord but it may be worth it if it is necessary to be sure that vacant possession of the property can be obtained.

Filed under: England only, FLW Article, , ,

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