Monthly Archives: June 2013

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By Craig Smith

Tenancy deposit

There has been yet another court case due to confusion around tenancy deposits and this one has sent the lettings industry into a spin about what does or doesn’t need to be done. The case in question is Superstrike Vs Rodrigues where the landlord had issued a section 21 notice for the tenants to vacate. The tenancy started before the tenant deposit protection came in on 6th April 2007.

The issue with this case is that the tenancy actually started before 6th April 2007 and became periodic after that date. Once the tenancy had become periodic, it was deemed to be a new tenancy in the eyes of the law and therefore the deposit should have been registered. In turn, this meant that the landlord could not rely on their Section 21 notice for the tenants to vacate.

The tenants challenged the notice that was issued as the deposit had not been protected in line with the Housing Act 2004 legislation. As the wording isn’t all that clear, a lot of landlords could find themselves in a bad position if they have had long term tenants. Right now, there will probably be a lot of landlords checking their files to make sure they are within the law and with good reason! By not registering the deposit as it should have been a landlord can find themselves not only unable to give notice to the tenant (they could but they would lose if it went to court) but also having to pay back more than 3 times the deposit amount to the tenant.

Back in November 2012, there was a similar case that caused landlords to make some important changes to their processes. The deposit may need to be protected, we already know that, but once the tenancy has gone to a periodic status it means that a new set of prescribed information needs to be issued to the tenants. This information should already have been provided to the tenant at day one and needs to be given again at the first periodic stage. The deposit protection schemes are yet to release anything further on what they advise landlords and agents to do.

By Judith Loeffler

immigration

During the Queen’s Speech at the opening of parliament reference was made to new immigration rules requiring landlords to check the immigration status of tenants in the future. The aim is to make certain that prospective tenants have the right to be in the UK. Non compliance could result in thousands of pounds worth of fines.

It seems that how exactly this proposal would work in real life is yet unclear as – in an interview on BBC Radio 4 – Health Secretary Jeremy Hunt stated that this stage was only about ‘announcing areas we are going to tackle’ and that details will be provided ‘when the time is right’.

Richard Jones, Policy Director of the Residential Landlords’ Association (RLA), commented: ‘Whilst the RLA fully supports measures to ensure everyone in the UK is legally allowed to be here, today’s announcement smacks of political posturing rather than a seriously thought through policy. The proposal will not work in practice. Employers have been required to make similar checks but it has made no real difference to the numbers of illegal immigrants in the country. For a government committed to reducing the burden of regulation it is ironic that they are now seeking to impose a significant regulatory burden on landlords making them scapegoats for the UK Border Agency’s failings.’

At Castle Estates South London we use an external referencing company to reference prospective tenants. This service is included in both our full let service and our full management service. Standard elements of this professional  referencing already include identity checks, checks on potential court judgements as well as references from current employer and landlord – these checks are likely to highlight any immigration irregularities though under the new proposal this might not be deemed sufficient.

 

By Judith Loeffler

emptyhouse

Since 1st April 2013 it is at local authorities’ discretion to charge full Council Tax on empty properties.  Owners of properties that are empty because of building work will lose the automatic right to be let off Council Tax for up to a year. Local councils vary in their new approach: Some are charging full Council Tax from day one, whilst others are allowing a short grace period and then either levy full Council Tax or a proportion of it for the next months. Specifically, the changes are:

  1. Exemption class A for properties requiring or undergoing major repairs for up to 12 months has been abolished and each council can decide whether to award a local discount in its place
  2. Exemption class C for properties that are empty and unfurnished for up to six months has been abolished and each council can decide whether to award a local discount in its place
  3. Councils can decide to charge an additional premium of up to 50% on homes that have been empty and unfurnished for two years or more
  4. The minimum discount that councils can give for furnished homes that are no one’s ‘sole or main residence’ – eg second homes and unoccupied furnished lets – has been reduced from 10% to 0%.

Within the borough of Wandsworth the council decided on

  • Considering granting a 100% discount for unoccupied and unfurnished properties for a maximum period of six weeks
  • Considering a 25% discount for uninhabitable properties for the maximum period of one year if the property needs, or is undergoing, structural alteration or major repair. This will be considered from the date the property required the structural alteration or major repair
  • Properties that have been kept unfurnished and have not been occupied for more than 2 years will, from 1 April 2013, attract a premium rate of council tax of 150% based on the current band in which the property falls

Southwark Council is allowing empty, unfurnished properties to be exempt for two months, after which the full charge is applied. However, there is no exemption at all for empty, furnished rental properties. On properties empty for two years or more, it will also charge a premium of 50%.

Information as to what each local council has decided should be on their websites.