Our regular guest blogger Ben Reeve-Lewis tells us about some little known legal points.
The Suzy Butler case in the news at the moment highlights how little so many amateur landlords know about their legal responsibilities. The fact is even if a landlord lets out only one property, whether to travel abroad or help with finances, the minute they hand over the keys they have in effect started a business and just like any business there is tax to pay, and laws that govern the running of that business.
Believe it or not, even a sole landlord with a tiny 1 bedroom studio flat that they have let out are in exactly the same position as an entire local council acting as landlord of a housing stock consisting of thousands of properties. Largely the same rules and regulations apply.
Most landlords are at the very least on nodding terms with the requirement to serve notices, obtain possession orders etc but what of some of the more obscure bits of legislation that are just as binding and that landlord’s can fall foul of without knowing?
Section 48 Address
Under a piece of legislation known as the Landlord and Tenant Act 1987 a landlord must provide an address for themselves where the tenant could serve documents if they needed to, for instance where a tenant wants to take their landlord to court for failing to carry out repairs. The address doesn’t have to be the landlord’s actual home address but an address must be supplied.
If the landlord doesn’t supply what is called a Section 48 address then the law states they are not entitled to receive any rent until they do. Section 48 of the LTA actually says this…..
Where a landlord of any such premises fails to comply with subsection (1), any rent or service charge otherwise due from the tenant to the landlord shall (subject to subsection (3)) be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with that subsection.
Many landlords I deal with come a cropper with this requirement, including on one occasion a local council in the Northwest of England who realised that their tenants got letters from different sections based in different offices around their borough so a tenant could not determine which of them was the Section 48 Address and as a consequence weren’t entitled to receive rent from their thousands of tenants. Needless to say they corrected that one very quickly.
Most modern tenancy agreements have a section on them specifically for that purpose but older agreements or where there is no written agreement can lead to problems if the tenant is advised about this.
Request for the landlord’s address
In addition to the section 48 address we looked at above, there is also a legal requirement for the landlord to provide their address, (not simply an address for service of documents). Section 1 of the Landlord and Tenant Act 1985 states that if a tenant puts a request in writing to the landlord asking for their address the landlord has to respond, also in writing and within 21 days giving their address.
Section 48 might make it difficult for a landlord to receive rent until they comply but the penalty for breaching this one is far more severe. The Act says…..
A person who, without reasonable excuse, fails to comply with subsection (1) commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale.
The bit about a “Summary Offence”, means it is a criminal offence prosecuted in the magistrates court… A level 4 fine is currently about £2,500….…Not very nice huh?
Show me the money
Many landlords whose tenant’s owe them rent will think it reasonable to contact the tenant to ask them to pay them, and it is….up to a point. The thing is, at what point does the asking for rent become unreasonable? And if it is deemed unreasonable guess what? It can be criminal offence.
Section 40 of the Administration of Justice Act 1970 states……
A person commits an offence if………….harasses the other with demands for payment which by their frequency, or manner or occasion of their making , or any accompanying threat or publicity are calculated to subject him or his family or his household to alarm, distress or humiliation
I once prosecuted a landlord under this legislation. He was a baker who rented out a flat above his shop. When the tenant owed him rent he placed a poster in the shop window telling all local cake fans that his tenant owed him money.
One of the most common complaints made about landlords by tenants is being harassed for missing rent payments. This is an outrage you may say…..what’s the world coming to?…….That’s as may be, but it is still a law, binding on the landlord, and complaining about its lack of fairness will get you nowhere.
Providing a rent book
It is always in a landlord’s interest to provide a rent book or to otherwise receipt for it. If a tenant ends up in arrears and the landlord wants to go for possession on that then they will have to prove their case. If there is no record of payments then how does a landlord prove it? I am amazed at how many tenants I meet who never ask for receipts even though they have been paying rent for years.
Section 4 of the Landlord and Tenant Act 1985 is an interesting little oddity. It requires the landlord to provide a rent book or similar document but strictly speaking only when it is a weekly tenancy. The law states this……
Where a tenant has a right to occupy premises as a residence in consideration of a rent payable weekly, the landlord shall provide a rent book or other similar document for use in respect of the premises
So in the absence of saying anything else about the period of the rent it can be taken that if a tenant pays weekly or monthly there is no requirement for the landlord to provide a rent book at all, only if it is a weekly tenancy.
Tax duties for landlords living abroad
Rent is an income and as such landlords are supposed to be paying tax on it. If a landlord is resident in the UK then tax is paid in the usual way, but what if the landlord is sunning themselves in a Spanish idyll while their rental property back in the UK is paying for the Sangria?
The tax rules are that the tenant, who is paying more than £100 a week in rent, or their managing agent (with no lower rent limit) is supposed to be deducting the tax element and paying it to the tax man on the landlord’s behalf.
Landlord wanting to avoid this must apply for a thing called the Charities, Assets and Residency (CAR) Personal Tax International certificate. This will allow the landlord to receive all rent monies and submit quarterly accounts to the tax office.
Failure to arrange either of these things will result in the tax man getting very bolshie, looking into their affairs and generally spoiling their day.
These are just some of the weird and strange little known areas of laws relating to landlords and their tenants. There are others. A would be landlord would expect the professional letting agent to make sure they don’t fall foul of these, that’s why they are paying them after all, but the problem is, most of the time the agents don’t know about them either………housing advisers and lawyers do though.
I have said elsewhere in my ramblings that there is good money to be earned in property, as long as the landlord follows the rules and does a bit of homework before they get into the game. Landlords have a choice, keep everything above board and get on with it or sit and moan about the unfairness of landlord/tenant law
About Ben Reeve-Lewis: Ben was the Tenancy Relations Officer for Lewisham Council for 11 years, prosecuting landlords for harassment and illegal eviction. Now he is a freelance housing law training consultant with a more balanced approach, delivering housing law courses for the Chartered Institute Of Housing, Shelter etc. His aim now is to help the housing world work as a interdependent system that benefits all.
Have you had problems with any of these matters? Or do you have any other small legal points to share which are often overlooked?