Snow is on the way to London as I write and I am like a kid at Xmas. I love snow, I love the look of it and even the chaos it brings with it.

I got so excited at the prospect when listening to the weather on the radio the other night that I missed the sink whilst draining my spaghetti and poured boiling water on my foot and ended up In Kings College hospital A&E.

This caused me to appear in Lambeth County court yesterday defending a mortgage repossession case wearing slippers.

They have got used to my last minute, unplanned appearances in Hawaiian shirts and converse but I think the slippers tipped the judges hands, enabling them to finally decide if I actually know what I am doing or am just a confident blagger.

I have of course known the answer to that one for some time.

Oxford gets tough on HMOs

A bitty news week on the housing front, I’m sure you will agree. However the story that struck me the most is Oxford City Council’s announcement, reported in a number of places, that they are extending HMO licensing to ALL HMOs not just those of 5 person or more and 3 or more floors.

They are threatening fines of £20,000 for not licensing and estimate that this will require 5,000 properties to register. Whether a landlord registers or gets done for not registering its a nice little earner all round I would say.

Of course amongst the landlord fraternity this has gone down like Abu Hamza speaking at an English Defence League meeting.

We all know that HMOs tend to have the worst property standards going and the highest rate of social problems amongst their tenants but they are an essential part of the PRS and with the age limit for the Shared room rate of housing benefit raised to 35 in January we will need more HMOs than ever.

A balance must be struck between, on the one hand raising standards and safety in these properties, with suitable penalties for breaches and on the other disincentivising landlords from bothering to rent out HMOs.

I followed a thread on Property 118 about this where many landlords aired their views on HMO licence fees and if those views are extrapolated across the country it doesn’t bode well for the future of HMOs.

As a council worker I have to say I don’t know where they will find the staff or resources to police this project or what Oxford landlords will do in response. Certainly one to watch.

The bedroom tax rears its head

The prospect of bedroom tax has been rearing its ugly head again. For those of you that may have missed this one it isn’t a tax on when you get ‘jiggy in the kissing club’ with your spouse but a fiendish method to save more public purse pounds by cutting benefits where a tenant has more bedrooms than they need.

Government got defeated on this in a vote back in December but they have vowed to push it through again in February.   These plans are being attacked by a growing band of social landlords who are quite rightly pointing out that once again it is the poorest who get kicked in the teeth.

Yes there are the odd cases out there, beloved of the Daily Mail and Express of people doing very nicely on benefits but most aren’t. Could you live on £65 a week JSA? Losing £14 a week from your limited benefits can be crippling for some and the bedroom tax doesn’t take into account people’s more complex individual circumstances.

The bedroom tax in practice

24 Dash ran just one such example. Welshpool tenant Jamie Carter and his daughter and autistic son were moved from their flat by social services as being unfit for their occupation and into a 3 bedroom house.

Under Bedroom Tax rules he would have to choose between losing much needed benefit or downsizing to a 2 bed and forcing his autistic son to share a room with his sister.

Mr Carter, who needs the accommodation and has to provide a certain number of respite hours requiring specific accommodation each week said:

“I love my children, I don’t want to lose them. I don’t know how I would provide a good life for them – I’m out of work and this tax could just cripple me.”

Of course some people will be happy to downsize and free up larger accommodation for others but Jamie Carter’s family are just one example of ordinary people with more complex lives than government plans take into account.

DHP – Councils are losing it

Right, that’s my weekly slag off of government out of the way, now lets have a go at councils.
The tight-arse award of the week goes to Wirral Council as reported in the Guardian  Many people don’t know there is a thing called DHP. Which stands for Discretionary Housing Payment.

This is an extra fund attached to housing benefit, through which a council could decide to top up people’s rent shortfall or make single payments to help out those in difficulty.

As with all council budgets, funding is on a ‘Use it or lose it’ basis. If they underspend by £50,000 on the DHP budget by the end of March they lose it for the following year, so it makes sense to spend it helping your most vulnerable local residents doesn’t it?

So why do so many council underspend on DHP? Wirral topped the league of 6 councils who are reported to have spent less than 50% of their allocated budgets with just 8 weeks to go before the end of the financial year.

You would think these departments think its their own bloody money.

Of course the system itself is just plain daft. If a company were so efficient that they managed to underspend on a service they would expect to be rewarded but councils get penalised for saving money. It’s a mad world.

And finally the ‘Kick Shapps’ moment.

Housing Excellence ran the wonderfully titled “No dust on Shapps” article.  “the Prime Minister and the Government is determined to put housing centre stage, meaning tangible progress is already being made – with plenty more moves on the way , said Mr Shapps.

The thing is he has been saying this for nearly 2 years but not much is happening.

In the article he makes much of the fact that he is ending the practice of many years whereby councils have to give a proportion of the rent they collect to central government stating “For years, councils have been captives of a centralised system”.

What he is conveniently leaving out is that this boon is only in return for councils taking on billions in housing debt in return for keeping the rents.

One wag posting on a website this week asked when the government would be introducing the ‘Reformation of Reality Bill? When indeed?. Now, where’s my slippers?

Ben Reeve Lewis

Ben’s runs  Home Saving Expert, where he shares his secrets on defending people’s homes from mortgage repossession Visit his blog and get some help and advice on mortgage difficulties,  catch up with him on Twitter and check out his free report “An Encouraging note on Dealing with your Mortgage Lender” and have it sent right to your inbox.

Pasta picture by naotakern

Hi Last year my tenants were in arrears of rent and weren’t responding. Eventually in July 2010 they turned up at my Agent’s with the keys expecting to get their deposit back. They didn’t because they’d left the house in a mess and owed rent. (I have since got a CCJ against them) In the meantime I had to refurb the house.

The local authority allows 6 months Council tax exemption on empty property but only allowed me 5 months because they said that the tenants had given them a date in June 2010 that they had left the property. Because the keys weren’t returned until July this was the date that my agent notifed to the Council that the property was vacant (we didn’t know they had apparently left in June because there was still furniture in the property which could be seen through the windows so we had no reason to believe they had gone).

The Council is insisting the exemption time starts from when the tenants notifed them not when our agent notified them. I am arguing that we did not get possession of the property until the keys were returned and indeed if they had not been returned the only way we could have got possession was via a Court order. Consequently my argument is that until the tenants returned the keys, they still had possession of the property no matter what they had told the Council. Am I right?

Are there any local authority people reading who would be able to answer this question?

Did you know that the definition of an HMO for council tax is different from the one that is used for licensing and similar purposes under the Housing Act 2004.

The definition is in Regulation 2 Council Tax (Liability for Owners) Regulations 1992. This states:

The following are the classes of chargeable dwellings prescribed for the purposes of section 8(1) of the of section 8(1) of the [LGFA]-
Houses in multiple occupation, etc
Class C a dwelling which
(a) was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household; or
(b) is inhabited by a person who, or by two or more persons each of whom either-
(1) is a tenant of, or has a licence to occupy, part only of the dwelling; or
(2) has a licence to occupy, but is not liable (whether alone or jointly with other persons) to pay rent or a licence fee in respect of the dwelling as a whole.

So this means that if you, the landlord, reserve part of the property for your own use, for example if you keep a room to store your own possessions in, then you will be the person who has the primary liability for council tax.

In the current economic climate, Councils are under pressure to raise as much tax as they can, so if your tenants are not paying their council tax, the Council Officers will be looking for an opportunity to make you responsible.

Goremsandu -v- LB of Harrow

This was looked at in the recent case of Goremsandu -v- London Borough of Harrow. Here the tenants had a joint and several tenancy agreement but paid their rent separately to the Landlord. Also as they did not require the furniture which was let with the property, it had been stored in a conservatory which therefore could not be used (as there was so much furniture in it).

The Council claimed that these two facts meant that the landlord was responsible for the council tax, and this view was upheld by the Valuation Tribunal.  However when the landlord appealed to the High Court, the decision was overturned, and the Court confirmed that the property was not an HMO for council tax purposes.  You will find a more detailed report on the Nearly Legal Blog.

However this case serves as a useful reminder that if you want to avoid any liability for council tax, you should put all tenants on one tenancy agreement (on a joint and several basis) and not reserve any part of the property for your own use or storage.

Landlord responsibilities

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

Ben Reeve-Lewis

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?

“The NLA supports the Raise the Roof campaign’s call for the Rent-a-Room threshold to be increased to £9,000 pa. The scheme threshold has not changed since 1997, while the average single room rent has increased by more than 75%. This has resulted in the majority of landlords who let a room being required to complete a tax return removing much of the benefit of the scheme. At a time when household finances are becoming increasingly stretched, and there is an ever greater need for affordable housing, the Government should do all it can to incentivise potential landlords to let a room.”

The story has now been picked up by the Independent who have reported it here.  You can read more about the campaign, and sign the petition here.