Author Archives: South London

By Judith Loeffler


Letting agents have been requested by HM Revenue and Customs (HMRC) to disclose information on rents collected for both let only and managed properties. Specifically, all agents are required to submit the name and address of each landlord for whom rents were collected, the amount of the total gross rent collected from the tenant for the landlord for the year ended 5 April 2014 and the address of the let property to which the rents relate. This information is to be submitted by the 10th September 2014. It is part of a wider campaign of HMRC closing in on landlords with undeclared buy to let income to counteract assumed widespread tax evasion on property lettings, whether intentional through inflated claims on expenditure or unintentional through a lack of knowledge.

The Let Property Campaign run by the tax authorities gives landlords an opportunity to bring their tax affairs up to date by telling HMRC about undeclared income through a voluntary disclosure. Officials are not just obtaining data from letting agents but also from local authorities and other bodies to track down those who don’t come forward. The tax office has sent letters to thousands of buy-to-let investors it suspects of bending the rules in order to pay less tax asking them to make contact or run the risk of a large fine or a criminal investigation. Landlords will have 30 days to respond prior to any action being taken.

To help landlords fully understand the legal requirements and avoid tax evasion through lack of knowledge, HMRC has issued a Property Rental Toolkit intended to give further guidance.

By Judith Loeffler

Legionnaires RESIZED


Under the Health and Safety Executive (HSE)  landlords of residential accommodation have responsibilities for combating Legionnaires’ Disease requiring landlords to have a Legionella Risk Assessment carried out in residential rental properties.

Legionella bacteria can be caught by breathing in small droplets of contaminated water and they can cause pneumonia-like illnesses including legionnaires disease, a potentially fatal form of pneumonia. Legionella bacteria are widespread in the environment and they can also contaminate purpose-built water systems such as cooling towers, evaporative condensers, hot and cold water systems and whirlpool spas. Whilst previous regulation only required risk assessments to be carried out for industrial facilities the revised regulation also requires for this to happen at residential rental properties – see HSE Approved Code of Pratice.

The required risk assessment needs to be carried out by a competent person and is to be repeated every year. The risk assessment will be based on a site survey of the water system to investigate water temperatures, storage tanks and water outlets. Based on this assessment the level of risk will be determined, best case it is a low risk requiring no further action, worst case it is considered high risk with further actions to be taken. The following factors increase the risk in a property:

  • There is a water tank in the property
  • The property has got a system boiler which is gravity fed from the tank as opposed to a combi boiler fed by mains pressure
  • There is an outlet in the property that is used very infrequently
  • There are elderly or ill people residing at the property

By Judith Loeffler



Each winter reports from tenants on damp in properties spike, particularly this winter as tenants cut back on heating due to high energy costs. Apart from causing long term deterioration to the property, damp and mould can also cause health issues. So it needs to be addressed; the discussion is often who is responsible for addressing it – tenant or landlord?

Damp and mould are usually a result of penetrating damp, rising damp or condensation damp. From a legal point of view ‘it is necessary to assess the source of damp or mould before any further advice can be given as to who the burden falls upon to correct the defect.’ In a nutshell any damp caused due to structural disrepair eg leaks (possibly undiscovered), damaged brickwork etc needs to be addressed by the landlord, possibly via the freeholder if it’s external disrepair to a leasehold property. If there is no structural issue causing damp, if the property has adequate ventilation sources like fans in bathrooms, extractor hoods in kitchen and if the heating system is adequate, the landlord is likely to have shown duty of care (though what exactly ‘adequate’ means is always open for discussion).

Any damp caused by condensation due to the tenant’s lifestyle is the tenant’s responsibility. Tenants have a responsibility to act in a ‘tenant-like manner’ which includes using the heating system correctly, ensuring adequate ventilation and avoiding condensation. Condensation is likely to be made worse if heating is used intermittently, if clothes are dried in the property, if extractor fans are not used despite being there, if trickle vents are not opened, if curtains are constantly drawn or if items are stacked directly against walls and ceilings hence cutting off air circulation. We sometimes get enquiries whether our tenancy contracts should include clauses asking tenants to heat and ventilate the property adequately – this is covered by tenants’ responsibility to act in a ‘tenant-like’ manner and it is questionable whether it would be any more enforceable if another clause to this effect was added.

The bottom line is that, even if a landlord has fulfilled all his or her obligations, it is in each landlord’s interest to work with tenants to minimise any condensation issues as it has the potential to damage the property long term if not dealt with. Additional options landlords can consider are to 1. Fit additional vents ranging from the cheapest yet less effective airbrick or grill vent solutions (passive ventilation units) to the more expensive heat recovery units for single rooms or positive pressure units fitted in loft spaces, 2. Replace towel rails in bathrooms with higher output radiators, 3. Ensure all walls are treated with surface cleansers and anti-mould paint, 4. Replace washing machines with washer dryers, 5. Improve insulation to minimise cold walls in the property which is where condensation will form.

By Judith Loeffler

Water damage RESIZED


Over the last few months we had our fair share of experiences related to water penetration into properties we manage. The key question is of course: Who’s responsible, who will pay for the damage to the property affected by the leak? The bad news is there’s no easy answer though we thought it might be interesting to share our experiences.

In a block of leasehold properties it usually ends up being the freeholders insurance paying for the damage repair – whether this is the council’s insurance in a council block or the building insurance put in place by the block management agent. There tends to be lots of back and forth, often stretching over months, before this is settled with the unavoidable consequence of both tenants and landlords being dissatisfied over this period of time.

Sometimes it is the ‘affected’ landlord’s content insurance settling the cost of making good the damage, again a route most landlords try to avoid given potential effects on future premiums. If a tenant’s personal belongings are damaged from a flood from above then the ‘affected’ tenant’s content insurance could be consulted. However in our experience hardly any tenants have this type of insurance in place.

In the quest of avoiding insurance claims, legal routes often get explored, although there’s conflicting advice on whether negligence on behalf of the ‘offending’ property’s owner or occupier needs to be proven or not in order to make this a viable route. Differing views are being shared in the landlordzone discussion forum, a Guardian article expresses the belief that negligence needs to be proven, whilst Tom Entwistle, Resident Agony Uncle of the landlord & buy to let magazine, states in the April 2011 edition that the principle of strict liability might be applied in suing the owner or occupier of the ‘offending’ premises in tort.

In all the cases we have seen the best advice we can give is to 1. Not to ignore the issue whether landlord of the ‘offending’ or ‘affected’ property – it will not go away, it will get worse, 2. Keep up a good and honest flow of communication with your property’s managing agent, fellow freeholders if applicable, the block management agent and the tenants  and 3. Act pragmatically: No one likes becoming ‘innocently guilty’ especially when duty of care has been fulfilled and no one likes making insurance claims. Trying to go down the legal route is an option, though careful consideration should be given to whether the gain will be worth it, both from a time investment and a monetary perspective. To understand the likelihood of success will most certainly require seeking (and paying for) legal advice.

By Judith Loeffler


Most of last year the debate about fees charged by letting agents to tenants has been in the spotlight. Toward the end of last year the debate turned toward fees charged to landlords. The debate focuses on renewal fees for tenant find services and on maintenance cost mark ups for full management services.

Many agents charge a renewal fee to renew the tenancy with the initial tenant after the fixed term expires, which tends to be after 12 months. Most letting agents charge landlords for keeping the tenant they initially found. The online forum mypropertyguide estimates that the renewal fee charged is usually between 50% and 100% of the original commission when a tenant decides to renew their original tenancy.

Another topic that popped up again end of last year was the practice of some letting agents to charge mark-ups to landlords for repairs and maintenance work. Will Davies, Managing Director of Aspect: ‘ Basically, letting agents can milk their clients by charging them a fee to manage the property and then they take a commission from the maintenance companies they use so their clients end up paying more than they should on top of the charges they are already paying for the service.’

In light of this negative publicity we’d like to reiterate that at Castle Estates (South London)

  • we do not charge any renewal fees for our tenant find service
  • we do no charge any mark ups on repair or maintenance work to our landlords and we do not get any commission from any of the contractors we work with

Our belief is that providing best possible value to our landlords is the foundation for a long term partnership. Not having flashy high street offices lowers our cost base vs traditional agents which in turn enables us to provide some of the lowest management fees whilst providing high service levels at the same time.

By Judith Loeffler



During both recent political party conferences the private rental sector was a key subject. Labour outlined plans to introduce rent controls with ‘predictable rents’ for longer tenancies.  The party expressed a preference for index-linked rent rises. Over the last year his would have left tenants in a worse off position as – in the last 12 months to August 2013 – private rental prices in Great Britain have risen by 1.2% and by 1.9% in London.  This compares to an RPI increase of 3.3% over the same time period. Labour also expressed the idea of launching a compulsory national landlord register as a way to filter out rogue landlords – assuming they would chose to comply with regulation and register accordingly.

The Conservatives highlighted plans for a Tenants Charter enabling private renters to demand longer tenancies under a new code of conduct for landlords which will provide greater security for tenants . Family friendly tenancies are another element of the government’s plan with model contracts and up to 5 year tenancies, providing stability for tenants in the private rental sector as outlined in the speech by Eric Pickles, current Secretary of State for Communities and Local Government.

At the same time calls for lettings agent regulation, discussion around racial discrimination by landlords and reports on rent-to-rent scams by self styled property ‘experts’ continue to be high on the agenda – showing very clearly that the private rental sector will continue to feature strongly in the public debate over the coming months.

By Judith Loeffler

3d character with question mark

Student accommodation has recently been quoted as lucrative investment for landlords. ‘Buy-to-let landlords who rent their property to university students are more likely to find tenants and receive rent on time’, according to a study by the National Landlords Association (NLA). According to the research, 1. Students are the least likely of all tenant types to miss a rental payment, 2. Student landlords experience the lowest incidence of voids and 3. Student tenants offer the highest rental yield at 6.7 per cent.

Another rental scheme which some have been led to believe to be a reliable strategy for rental properties is the rent to rent scheme. In essence, a head tenant will rent the property from the landlord long term and then sublet individual rooms at a higher price to as many tenants as possible (hopefully with the consent of the landlord). Often the head tenant will also increase the number of rooms to be let by turning common areas like a lounge into an additional bedroom. The head tenant makes a profit, the landlord has the property let long term, albeit at a lower price.

The scheme itself does raise some questions like

  • does it encourage overcrowding in properties
  • does it get tenants to pay inflated prices
  • what is the effect on the landlord’s mortgage and insurance agreements
  • how can the landlord ensure the property continues to be managed within the legal framework
  • how will the additional wear and tear be accounted for

The recent disappearance of a self styled rent to rent property ‘guru’, including the disappearance of tenants’ deposits held, clearly shows that what sounds too good to be true often is.


By Judith Loeffler

Tax evasion


HMRC’s ‘Property Sales Campaign’  had given expat landlord until 6 September 2013 to bring their tax affairs in order. Expats who had recently sold an investment property in the UK but had not declared their capital gains tax liabilities will now face heavy consequences. HM Revenue & Customs has launched 40 specialist taskforces to target tax evasion by expats in the buy-to-let sector, according to The Overseas Guides Company.

In Yorkshire this has already led to 12 cases of landlords being criminally investigated. With expat landlords buying and selling large numbers of new developments especially in London it is little surprise that HMRC expects to recover £4m in unpaid tax from the South East region.

By Judith Loeffler

Wandsworth Logo


We keep getting more and more enquiries about specific requirements for licensed Houses of Multiple Occupation (HMOs). This depends on the council a property is located in though here’s a closer look at our home Borough of Wandsworth. As a reminder – if a property is occupied by 3 or more unrelated people it is classed as an HMO.  Only HMO’s with 5 or more occupiers who make up 2 or more households and 3 or more storeys  must be licensed. However, all HMOs, licensed or not, must be managed in line with the Management of Houses in Multiple Occupation (HMO) Regulation 2006. If you want to read more about it here’s a link to the full wording of the legislation.

Within Wandsworth Borough the most common licensed HMO categories buy to let landlords will encounter are Category A or Category F. Category A is houses or flats – meeting the licensed HMO criteria – occupied as individual rooms or bedsits and flatlets which are considered to have a number of rooms for exclusive occupation though not necessarily behind one door. There is usually some sharing of facilities e.g. kitchen, bathroom and / or toilet. Category F consist of buildings which by erection or conversion, comprise self-contained accommodation with one front door, usually accessed off a common area, and with no sharing of amenities.

For any licensed HMOs within Wandsworth Borough the standards that need to be met refer to heating; facilities for the storage, preparation and cooking of food; sanitary conveniences and washing facilities; space standards; means of escape in case of fire and fire precautions and adherence to the principles of the Housing Health and Safety rating system. The detailed wording of the requirements can be obtained from us.

Fees for obtaining a license in Wandsworth Borough are dependent on the number of storeys in the property and whether the landlord is an accredited landlord but range from £1,020 for a first year license for a 2 storey property to £1,870 for a 5 storey property with re-licensing fees at about half of that.

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.