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Residents' fury over £2m bill to replace Grenfell-style cladding

After the sad event of Grenfell on 14 June 2017 the matter of replacing similar type cladding on 228 buildings which subsequently failed fire safety checks continues.

I have been instructed in respect of matters arising from 2 of those buildings in order to consider the provisions of the lease and the extent that the landlord can recover the costs of the replacement cladding and associated works from the leaseholders.

The high costs of the works comes not just from the required new cladding but also the amount of time that must be spent on the matter by a number of parties. These include the fire safety authorities, contractors and experts. 

Whilst the extent of the works are considered, planned and consulted there can be an additional requirement, enforced by the fire authorities, for fire marshals. This could extend to a 24 hour watch on the premises until the existing cladding is replaced. The cost of the fire marshal service is high but without this provision the fire authorities could enforce a shut down of the building.

The comment from the Housing Ministry that they would like to see private sector landlords meeting the costs of the works themselves is rather hopeful but whilst the outcome of the pending First Tier Tribunal will be of real interest on this issue (although it would not be a surprise to see any appeal either way) any other landlords and leaseholders need to start by considering their own building and the provisions of their lease.

Landlords or leaseholders can contact me on 0113 244227 or g.archer@burywalkers.com

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Residents in a privately-owned high-rise block with the same cladding that was used on Grenfell Tower may be forced to pay millions for replacement panels to be installed.
Leaseholders at Citiscape in Croydon, south London, face a bill of up to £2 million to remove and replace the aluminium composite material (ACM) panels, thought to have fuelled the spread of the Grenfell Tower fire.
The building is one of 228 across the country which failed fire safety tests carried out by the Department for Communities and Local Government (DCLG) in the weeks after the blaze, in which 71 people died.
Eight New Year's resolutions for buy-to-let landlords

A helpful eight pointers for landlords to take on board into the new year are linked below. The reference to there being over 160 pieces of legislation currently relevant to the rental market highlights the amount of regulation that landlords and agents are subject to. 

I have commented in my previous posts on the new regulations coming into force later in the year and the further legislation that the government has in mind. Landlords and their agents need to be aware of the various requirements. Bury & Walkers LLP can assist in ensuring they are compliant and address issues arising from alleged breaches. 

Please contact me if you have any queries on g.archer@burywalkers.com

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From making sure you're on top of your tax affairs and becoming well-versed in the latest rules and regulations to paying attention to safety and energy efficiency, here are eight resolutions that will stand you in good stead.
Help on renting costs is on its way … but not until 2019

Private renters currently have a number of costs to take into account before they can think about getting the keys, including up to two months’ rent as a deposit, the first month’s rent in advance, as well as any letting agent's fees . That is set to change although renters will have to wait a while longer yet.

Landlords may already have been aware of the proposals to ban letting agents fees and to cap the size of the tenancy deposit that can be taken. Now the newly named Ministry of Housing, Communities and Local Government has confirmed that the rule changes have been pushed back to 2019.

A spokesman said: “This government is determined to make sure the housing market works for everyone. That’s why we’re delivering on our promise to ban tenant fees, alongside other measures, to make renting fairer and increase protection for people in the private rented sector.

“We announced our Tenant Fees Bill, which has been first published in draft so it can be fully scrutinised by everyone affected. As confirmed in our written evidence to the Communities and Local Government Select Committee, we expect the ban to come into force after spring 2019.”

A cap on tenancy deposits to the value of 6 weeks rent is higher than the originally mooted 4 weeks rent cap. Nonetheless it is perhaps another reason why it is reported that 20% of landlords are planning to reduce the number of homes in their portfolios this year. A number of regulatory changes and taxes introduced are seen as undermining the viability of many landlords' businesses and, in turn, removing the incentives to invest in new residential property at a time when the demand from potential tenants for rented property is higher than ever.

For those landlords who are going to "stick things out" then it would not be surprising to see an increase in the rent charged in light of the letting agents fee ban. Agents will still charge landlords for their services and if some of those costs cannot be recovered from the tenants, the landlords will pick these up.

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With so much focus on the costs of getting on to the first rung of the property ladder, the challenges facing those simply trying to get into the renting market are often overlooked. However, for young people unable to call on family or friends to front up the significant costs of moving into a rented property, the options are limited.
For those straight out of education, it can be the biggest financial outlay they have had to face. A deposit of up to two months’ rent, plus letting fees, plus the first month’s rent, can add up to thousands of pounds.
Landlords face buy-to-let clampdown

As from 30 September 2017 lenders apply new rules to assess buy-to-let mortgage applications from landlords who own four or more mortgaged properties.

Landlords who seek finance will now have their entire property portfolio assessed, as opposed to just the individual property subject to the mortgage application.

Portfolio landlords will face increased paperwork which will need to include a schedule showing all their properties and a summary of their experience as a landlord in addition to a statement of assets and liabilities including all outstanding mortgage balances. As lender requirements will change it is anticipated that there will be a decreased number of lenders offering mortgages with costs increasing for landlords as a result.

The further squeeze on landlords may convince a number to sell some or all of their properties. Bury & Walkers LLP specialise in auction sales and possession claims to assist in this process.

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Previously, landlords were able to show that their overall rental profits met the interest cover threshold for their total mortgage payments. Now, each individual property will need to meet the bank’s minimum ratio.
We don’t yet know how each buy-to-let lender will adapt their rules to reflect the new regulations, but a few have already announced their plans in relation to rental income.
Agencies expelled from Ombudsman scheme for non-payment of rents

The Property Ombudsman (TPO) scheme has been providing consumers and property agents with an alternative dispute resolution service since 1990.

The Ombudsman’s resolutions are designed to achieve a full and final settlement of the dispute and all claims made by either party. The Ombudsman can, where appropriate, make compensatory awards in individual cases up to a maximum of £25,000 for actual and quantifiable loss and/or for aggravation, distress and/or inconvenience caused by the actions of an agent.

The Ombudsman provides redress, where appropriate, to consumers whose complaints are considered on a case by case basis.

The Ombudsman is not a regulator and does not have the authority to take regulatory or legal action against an agent, impose fines or dictate the way agents conduct their business. It can however expel agencies from the scheme and the quoted article below covers 3 such expulsions. In the first example, TPO is now warning consumers to be aware that the agent is not registered with a redress scheme, which every sales and letting agent is required to in order to trade legally.

Two of the cases referred to involved the agent not passing on rental income to the landlord. I have had 2 similar instructions from landlords in the past week and action is now being taken by me to recover the unpaid rent. Please contact me on g.archer@burywalkers,com if you have any queries.

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The Property Ombudsman scheme has today announced three expulsions of agencies as a result of non-payment of rent or awards.

Firstly, a lettings agent in Luton has been expelled from TPO for 10 years after the Ombudsman supported a complaint relating to non-payment of rent received on 31 properties.
How to spot a carbon monoxide leak

Smoke alarms and carbon monoxide alarms must be installed in rented accommodation under Regulations that came into force on 1st October 2015. Carbon monoxide alarms are only required in a room of the rented premises if the room is wholly or party used as living accommodation and the room contains a solid fuel burning appliance. 

Guidance on the Regulations as provided by the Department for Communities and Local Government can be found here.

There is a requirement to check that the alarms are in working order on the day that the tenants are entitled to possession of the property. Arguably, therefore, someone needs to attend the property on the first day that the tenants enter into possession so as to check that the alarms work and for them to record (the tenant signing the inventory for example) that they are in working order. This will ensure the Regulations are complied with.

The linked Guide contains further details as to the requirements for smoke alarms and their placement along with how the local authority may enforce the provisions and impose a penalty charge of up to £5,000.

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Every day, four people in the UK are treated for carbon monoxide poisoning – yet 58pc of the population admit they would not know how to spot a leak.
These are the shocking findings in a new survey by Certas Energy, which reveals a gaping hole in the nation’s knowledge of carbon monoxide (CO) poisoning and general boiler maintenance.
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