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Landlord receives maximum 20,000 fine for not applying for a selective licence

A London-based landlord, previously fined £15,000 for failing to comply with selective licencing, has again been fined £20,000 for renting out a property without a selective licence.  
 
Rudolph Pink was prosecuted by Thanet Council and the fine is the largest handed out for a selective licensing offence in Thanet.
 
In 2011, Thanet District Council designated certain parts of Cliftonville West and Margate Central as a selective licensing area. Unless subject to exemption, all privately rented properties within the area must be licensed with the council. Selective licensing was introduced to help tackle low housing demand and anti-social behaviour, and is part of the council’s wider regeneration activities in Margate. The scheme requires landlords to comply with a range of conditions to ensure good property management.
 
Pink of Clapham Road, London, failed to make a selective licence application for a rented house in Warwick Road, Margate despite council requests that he comply with the scheme. 
 
He did not attend Canterbury Magistrates’ Court on Tuesday 16 December 2014, but the prosecution case was proven in his absence. Pink was fined £20,000 and ordered to pay a contribution of £120 towards the council’s prosecution costs and a victim surcharge of £120.
 
Cllr. Richard Nicholson, cabinet member for housing and planning services, said: “Selective licensing cannot simply be ignored. This fine of £20,000 is the maximum possible for this type of offence and sends out a strong message to those landlords who are continuing to ignore the scheme. Officers are actively investigating all addresses in the designated area and will be doing everything they can to ensure 100% compliance with the scheme.”

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Landlords still excluded from Flood Re

The Government has made some changes to the Flood Re agreement – but rental properties are still not covered.
 
The latest changes to the agreement struck between the Government and insurance industry include covering expensive properties in council tax Band H. But landlords and flat owners will still be excluded by the scheme which aims to protect people living in areas at risk of flooding from high insurance premiums.
 
The draft regulations currently stand to exclude a number of groups of the property industry, including the majority of leasehold properties, the private rented sector and, up until last week, top end properties in council tax Band H.
 
The British Property Federation (BPF) has criticised the government for not widening the scope of the scheme further, questioning why homeowners in council tax Band H are given priority over those who live in a leasehold flats.
 
The BPF and other industry bodies have repeatedly sought an explanation from DEFRA on why it has billed the scheme as protection for ‘homeowners’, but proceeded to leave a large swathe of homeowners outside the scheme. 
 
The BPF has continually voiced its concerns over the exclusions applied to the Flood Re regulations. It welcomed a concession made earlier in the year for owner-occupied leasehold units in blocks of three of fewer to be included in the scheme, but has been frustrated by Government’s reluctance to explain why this threshold was chose. The scheme also excludes properties built after 2009, even though those owners end up paying the Flood Re levy. 
 
It is estimated that there are 800,000 leasehold properties at risk of flooding in the UK, with 70,000 of these at high flood risk. Anecdotal evidence has shown that some leaseholders exposed to the open market have seen their premiums increase by 500% and excesses increasing from £300 to £25,000 following a flood incident.
 
The Government today published its response to the consultation on Flood Re regulations that it ran earlier this year, which has diluted the views of 134 individuals and counted them as one response.
 
Ian Fletcher, director of policy at the British Property Federation, said: “While we are pleased for those homeowners in Band H, there is little festive cheer in this announcement for leaseholders, landlords and small businesses.”
 
“The Government and insurance industry continues to pick and choose who can participate in Flood Re, seemingly at whim, and this latest announcement will look odd to the millions of owners of flats, that they are not protected against escalating premiums, whilst the most expensive houses in the country are. Promises that the Government and insurance industry will monitor the situation of those excluded groups are worthless whilst they remain so airy-fairy on what would trigger them to act, and how they would do so.” 

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Crown court slams landlord

A Southall landlord who refused to comply with planning laws has been served with a confiscation order and given an 18-month conditional discharge.
 
Bhupinder Singh Gill of Lady Margaret Road, Southall, appeared at Isleworth Crown Court on 5 December 2014. The court made a confiscation order for £66,325 that Gill made as proceeds from illegally renting his house and its outbuilding as accommodation. Gill was also given a conditional discharge for 18 months and ordered to pay £4,765.57 towards costs and a £15 victim surcharge.
 
The result comes after an investigation by Ealing Council’s planning enforcement team. Officers took legal action after the landlord failed to comply with an enforcement notice served on him by the council in May 2009.
 
The notice required Gill to stop using his property as five self-contained flats and its garden outbuilding as another flat and remove all en-suite kitchens, internal partitions and doors being used to separate them. 
 
The flats could have been used for accommodation for more than 12 people at a time. 
 
Gill’s appeal against the enforcement notice was dismissed by the Planning Inspectorate in January 2010 and he was given 12 months to comply with the notice. 
 
Councillor Jasbir Anand, Ealing Council’s cabinet member for housing, employment and skills, said: “We have given Mr Gill every opportunity to work with officers and rectify his mistakes. He chose to ignore the warnings and court orders and is paying heavily for it now. His greed and disregard for the law could not go without punishment and we are pleased with the court’s decision to impose such heavy penalties. Hopefully this will deter other unscrupulous landlords planning to ignore the law.” 
 
Gill has six months to pay the court costs or could serve up to 18 months in prison if he defaults.  

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More unwelcome surprises regarding deposit protection

The Court of Appeal has handed down a decision in the case of Charalambous v Ng on tenancy deposit protection. 
 
Tenancies where deposits were taken before tenancy deposit legislation came into force in 2007, which then turned into periodic, also before the law came into force, will now have to protect deposits. These landlords were outside the original decision, but now must comply.
 
The Residential Landlords Association (RLA) said this will only impact few landlords, those that have a tenancy that falls under the following categories:
  • A very long fixed term AST which started before 2007
  • A periodic AST which started before 6th April 2007
  • A continuation as a contractual run on following the end of the fixed term
In response the RLA has updated Section 21 forms on the website to make sure that they are up to date with the changes implemented by the recent ruling.
 
The RLA said this constant ‘shifting sands’ of tenancy deposit regulation is frustrating and highlights the dangers of passing legislation based on flawed data and analysis, and that unintended consequences can arise many years afterwards.
 
Some seven years after tenancy deposit legislation was enacted, new circumstances are being discovered and only causing headache for those trying to remain inside the law.

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Water bill warning for Welsh landlords

New Welsh Government regulations under the Water Industry Act come into force from 1 January. All landlords with properties in the D?r Cymru Welsh Water and Dee Valley Water authority areas will become jointly liable for tenants’ water debt if they do not share tenant information with their water company.
 
Most of the affected properties will be in Wales, however properties in parts of Cheshire, Herefordshire, Shropshire and Gloucestershire will also fall within the scheme which applies where owners do not live in the property (therefore excluding those letting rooms in their homes).
 
Landlords need to provide:
• full name
• date of birth (where available)
• the start date for the tenancy
• property address
 
There will be a period of 21 days to submit this information. Landlords will need to supply details of existing occupants by 21 January 2015 and for new occupants within 21 days of the start of their tenancy. Failure to provide the information will result in joint liability for water supply and sewerage charges.
 
This Welsh Government’s Tackling Poverty Action plan includes a commitment to reduce the number of people who get into debt with their water supplier. All paying customers cover the cost of others not paying their bills and, in Wales, this currently adds between £15-20 per year to each bill. The scheme is intended to support tenants in helping them to budget accordingly and ensuring they receive information about support for paying their bills, such as social tariffs, assistance funds or payment plans.
 
The easiest way to meet the obligations of the scheme is through submitting details via Landlord TAP.
 
Water UK established Landlord TAP to provide landlords and managing agents with a single national website to provide tenant information to water and sewerage companies. Once registered, you can use the forms on this web site to pass the required information to the relevant water company automatically, receiving a unique transaction receipt reference for your records.
 

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Rogue property firms named and shamed after FOI battle

The Ministry of Justice (MoJ) has been forced to release the name of every property firm convicted of housing offences in England and Wales following a ruling by the Information Commissioner. 
 
Justice officials were ordered to disclose the data after the Commissioner, who arbitrates in freedom of information disputes, ruled businesses are not entitled to the same protections as individuals.
 
The data has been published by Environmental Health News (EHN) which has produced an interactive map. Clicking on the pins on the map reveals corporate landlords or property firms which have been fined, how much and what for.
 
According to the data the most prosecuted property firm is Burnley-based Aspire Group Developments, which rents out hundreds of properties across former Lancashire mill towns. It has been successfully prosecuted five times under the Housing Act 2004.
 
Aspire is owned by Jamie Carter, a former Barclays bank management trainee turned property developer, who built up his rental empire by buying from people desperate to sell as well as buying cheap property at auctions. It has assets worth just over £13m. It trades under the name Aspire Home Lettings, previously Aspire Group Developments.
 
The firm was prosecuted last year for failing to make repairs to dilapidated pigeon-infested house with broken windows in Oldham. The 80-year-old tenant complained to Oldham Council but Aspire ignored a notice requiring it to make improvements within 56 days. 
 
Aspire was also prosecuted by Burley Council for ignoring problems in one of its properties, including blocked drains and overflowing waste pipes. 
 
According to Environmental Health News Aspire has received £168,690 in housing benefit so far this year from Burnley Council. Last year it received £184,287. 
 
Carter admitted to EHN there had been a “small number of incidents” where Aspire hadn’t “got it exactly right” but insisted there was “no money” to be made from the housing benefit system. 
 
Other firms named and shamed on the database include Midas Property Management in Liverpool and Watchstar Ltd and Watchacre Ltd in Haringey, London. 
 
Watchstar and Watchacre are both owned by Mehmet Parlak who was fined £40,000 for HMO offences last year and £23,000 in 2012.
 
The Chartered Institute of Environmental Health vice president Stephen Battersby said criminal landlords should not be able to operate in the housing market. 
 
“The fact that these agents have been prosecuted successfully means they can safely be described as criminal - that is fact. These are the firms who should not be allowed to operate in the private rented sector,” he said. 
 
Battersby said the firms on the database were only the “tip of the iceberg” as prosecutions were usually a last resort.
 
“It is only when the notice has failed to be complied with or license breached or no licence applied for after requests do authorities move to think of prosecution,” he said. “So these prosecutions are only the tip of the iceberg. Even if many landlords act responsibly, this data indicates that far too many landlords around the country are getting away with flouting the law and endangering their tenants.”
 
EHN created the database by linking the MoJ’s list of prosecuted firms to, where possible, publically available court reports, council press releases and company addresses.
 
 
 

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Brighton HMO landlord fined 6,000

A landlord of a shared house in Brighton whose property had ‘filthy’ living conditions, an obstructed fire escape route and who failed to register the home has been fined £6,000.
 
Antony Paul Martin, from Coulsdon, Surrey, pleaded guilty to charges under the Housing Act 2004 and the Management of Houses in Multiple Occupation (England) Regulations 2006 at Eastbourne Magistrates Court.
 
The property concerned is at 8 Upper Bevendean Avenue in Brighton, BN2 4FF.
 
Martin pleaded guilty to managing a HMO without the required licence and four breaches of management regulations due to:
  • Failure to ensure that that the internal structure in each part of the HMO that is used as living accommodation is maintained in good repair.
  • Failure to ensure that all means of escape in case of fire were kept free from obstruction and maintained in good repair.
  • Failure to ensure that the yard was maintained in repair, good order and clean condition.
  • Failure to ensure that his name, address and telephone contact number as the person managing the HMO was displayed at the property.
Council officers visited the premises found that the property was in generally poor condition with:
  • Tiles hanging off the kitchen ceiling
  • Holes in a bedroom ceiling
  • Means of escape obstructed
  • Worn stair carpet which was causing a trip hazard 
  • Items dumped in the rear yard
  • Filthy living conditions and poorly maintained shared kitchen and bathrooms
  • No working fixed heating
  • No fire alarm system
Investigations began after routine reminders to licence the property in 2013 were ignored.
 
On 5 December 2014 Martin was fined £2,000 for the failure to licence the HMO and £1,000 for each of the four management offences, totalling £6,000. In addition Martin was ordered to pay costs to sum of £600 and £120 victim surcharge.
 
Cllr Bill Randall, chair of the housing committee, said: “Residents living in the private rented sector shouldn’t have to languish in filthy properties that don’t have adequate fire alarms or escape routes.
 
“This prosecution underlines the need for licensing of HMOs which generally pose the biggest fire risks so that properties are inspected to protect the health and safety of residents.
 
“We will work with landlords to help them meet basic standards but if landlords fail to cooperate with us we will prosecute them.
 
“So far more than 1,803 HMOs have been licensed under our successful additional licensing scheme.”
 

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Landlords owed more than 800m in unpaid rent

A third (32%) of landlords in the UK – approximately 500,000 – say they have experienced rent arrears in the past 12 months, according to research from the National Landlords Association (NLA).
 
The research shows that a typical landlord faces £1,649 of outstanding rent each, totalling £850m worth of rent arrears across the UK.
 
The NLA research also shows that one in five (22%) landlords in the UK – approximately 300,000 – are worried that their tenants won’t be able to keep up rental payments over the next year.
 
The research supports the launch of the NLA’s latest campaign: rent, risk resolve. The campaign aims to highlight four of the biggest risks facing landlords and help them to minimise the impact on their lettings business:
  • Rent arrears
  • Rising interest rates
  • Local landlord licensing and regulation
  • The introduction of rent controls
NLA chairman Carolyn Uphill said: “All landlords will be affected by one or more of these issues to some extent somewhere down the line and it’s vital to keep in mind the major threats to the success of your business.
 
“Regardless of the size of your portfolio the potential impact of these risks can be devastating on both the business and personal life. As the largest landlord association in the UK, we have a duty to support and advise on how to plan ahead effectively and manage these risks.”
 
The first focus of the NLA’s campaign will be the risk of rent arrears. The NLA has produced a guide to support landlords to deal with the problem.
 
A landlord’s guide to rent arrears enables landlords to spot potential arrears early and provides strategies to put in place to mitigate the impact. To find out more about the campaign, or to download the free guide, visit www.landlords.org.uk/rentriskresolve 

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Intermediaries remain popular choice for BTL investors

The latest landlord research from specialist buy-to-let mortgage lender Paragon Mortgages has revealed landlords prefer to source buy-to-let finance via intermediaries.
 
The lender’s Private Rented Sector Trends survey, which has been tracking landlord confidence and views on the buy-to-let market for 20 years now, reported more than a third (36%) of landlords in Q4 preferred to source buy-to-let finance exclusively via intermediaries. This is a 6% increase over the past three months, up from 30% of landlords in Q3.
 
In comparison, 23% of landlords in the last quarter of 2014 preferred to source buy-to-let finance directly from lenders, and 23% sourced through a mix of intermediaries and lenders, which reduced from 28% in Q3.
 
Large-scale landlords – those with five or more properties, were more likely to prefer to source all their buy-to-let finance via intermediaries - 40% compared with 23% of small-scale landlords (those with up to five properties). Small-scale landlords on the other hand were almost twice as likely to source buy-to-let finance directly through a lender – 35% compared with 19% of large-scale landlords.
 
Some 60% of landlords agreed that intermediaries provide a valuable service in finding the best buy-to-let deals, in comparison with only 6% who disagreed. Additionally, more than four out of 10 landlords (42%) surveyed said that sourcing directly though a lender is only suitable for the more simple buy-to-let propositions.
 
John Heron, managing director of Paragon Mortgages, said: “Although the market has seen strong growth this year, many landlords remain cautious, particularly in view of interest rate expectations, the weaker conditions that we have seen in the housing market and the disruption we are likely to see around the general election in 2015. When combined with the positive benefits that professional mortgage advice can bring, it is no surprise to see landlords turning more to the intermediary sector in less certain times. 
 
“Landlords, especially those newer to the market, recognise the benefits of using a trusted, experienced and knowledgeable broker to help source their finance. Brokers have always been key to the buy-to-let mortgage market and will continue to be, going by this research, for as far ahead as we can see.”
 

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RLA urges clarity before legislation on revenge evictions

The Residential Landlords Association (RLA) has welcomed calls by MPs and peers to hold off on new legislation to restrict so-called revenge evictions which it said could damage the private rented sector.
 
A new report by a cross-party group of MPs and peers has called for much better data on the scale of retaliatory evictions in the private rented sector and questioned whether new restrictions are really necessary.
 
A private member’s bill to address retaliatory evictions – where tenants who complain about the state of their property are then issued with an eviction notice – failed to pass through the House of Commons in November. But peers are to debate similar measures as an amendment to the Deregulation Bill in the New Year.
 
And now the All Party Parliamentary Group for the Private Rented Sector has published a report warning that without more evidence to clarify the ‘bewildering’ variety of data on the issue, it’s not certain that legislation is ‘necessarily the best tool’. 
 
The RLA said the report offered a welcome opportunity to consider the true extent of the problems of retaliatory evictions before further action is taken.
 
RLA chairman Alan Ward said: “Today’s report brings some much-needed clear thinking to the debate which should be based on facts and data and not on hyperbole.
 
“Retaliatory evictions are wrong and the RLA condemns any landlord who engages in such practices. But the RLA agrees that Parliament needs clear, independent evidence on the scale of the problem before it can decide how best to take the matter forward. The Minister has admitted the government does not have the data.”
 
The amendment to the Deregulation Bill would mean that where a landlord is given a notice from their local authority to improve their property, they could not regain possession of the home for six months.
 
But the RLA supports the APPG’s view that this approach would provide no incentive for a landlord to rectify problems swiftly. The report instead calls for a landlord to regain possession rights as soon as improvements have been made.
 
The MPs and peers also call for a time limit to be set in which a local authority would have to investigate a tenant’s complaint. After this, the report calls for landlord to regain full rights to repossess the property to avoid an indefinite period of limbo for tenants and landlords alike.
 
Alan Ward said of this proposal: “It is simply absurd that the amendment could potentially leave a tenant trapped in what could be unsafe properties for a prolonged period of time.”

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