Here is a question to the blog clinic from Nat who is a landlord:
One of my tenants has just moved out and I have realised that a change in my rent collection system (I changed the rent due date) in 2006 resulted in an underpayment on her part.
She maintains she has paid every month since she has moved in but can’t prove it because her bank does not have statement details before 2009.
I have offered to waive the money owed from 2006 if she pays the sum I believe she owes as a final settlement. She is adamant that she owes nothing and is claiming that I actually owe her a refund.
The best way to prove the underpayment is to do a proper schedule of arrears. Do it in a spreadsheet (eg Excel) and do a separate entry for every day the rent fell due and every payment made by the tenant, with a running total up the side.
For a tenant who has been in the property a long time it may be a long job, but it is the only way to prove the arrears.
It should end up looking something like this
I just had an angry tenant phone to say that £40 hidden in her bedroom has been stolen today (Tuesday). I was in her flat today by agreement, as was our cleaner and our valuer. I was not with the cleaner and the valuer all the time. I had told the tenant not to leave... Read more
The proportion of so-called For Sale By Owner private house sales in the US has slumped from 13 per cent of all transactions in 2000 to just nine per cent last year - a sign that estate agents’ work is recognised as invaluable for most deals.
This may come as a blow to those in the UK who want alternatives to estate agents, whether through truly private sales directly between sellers and buyers, or through the increased use of online services which in some cases claim to be anti-estate agent.
Another surprising statistic just released from the US is that while there were an estimated 140,000 real estate brokers and agents working in that country back in 2000 there are no fewer than 198,000 now according to the Bureau of Labor Statistics.
This information has emerged as part of the fall-out over the possible impact in the US of the acquisition of the Trulia property sales portal by the Zillow portal - roughly equivalent to Rightmove buying Zoopla in the UK.
Zillow firmly denies that the $3.5 billion acquisition of Trulia - which has still to be agreed by competition regulators - will lead to what US realtors fear most, that is the setting up of a national online agency service which by-passes traditional agents.
"We started Zillow as a media property, not a real-estate brokerage. We sell ads, not houses. In real estate, there will always be a practitioner in the middle of a transaction, helping consumers with an infrequent, complex and emotional transaction" according to Zillow’s chief executive, Spencer Rascoff.
As in the UK, the desire of sellers to use estate agents - despite a downturn squeezing household budgets and despite the proliferaton of online alternatives - may ensure that Zillow and Trulia never go down the direct house sales route.
- For Sale By Owner
- Online Estate Agents
The Bank of England should be prepared to introduce even stricter mortgage controls if the housing market looks to be over-heating, warns the International Monetary Fund.
“Accommodative monetary policy is appropriate for now, given weak inflation pressures, but policy might need to be adjusted quickly if inflation takes off. Interest-rate increases may also need to be considered if macro-prudential tools are in insufficient to deal with financial-stability risks from the housing market” says a jargon-filled IMF note - the Fund’s usual method for releasing its analysis of one country’s economy.
The warning comes less than a week after the IMF raised its UK growth forecast for the fourth time in nine months.
The note says that a “steady increase in high-loan-to-income mortgages implies that households are gradually becoming more vulnerable to falls in income and interest-rate shocks” suggesting that the BoE should “stand ready to tighten these limits should current settings prove ineffective in reining in those risks.”
The IMF dismisses the recent slowdown in mortgage approvals and consequent dip in house price growth as purely temporary. It says it notes “some recent signs of deceleration in house prices, but these might only reflect a temporary slowdown as lenders learn new loan-approval procedures” and adds that “historical experience of the U.K.’s relatively large house price swings suggests caution.”
The IMF also says the UK should ensure more new homes to provide a lasting solution to its housing market risks.
- Bank of England
- housing market
Hunters Property Group is merging with Hunters Group Limited to form a 112-branch agency conducting around 10,000 sales and lettings transactions annually - with the promise of substantial new acquisitions later this year.
A joint statement by Kevin Hollinrake, managing director and co-founder of Hunters Property Group, and John Ozwell, founder and chairman of Hunters Group Limited, says “we’ve been friends and admirers of each other’s businesses for many years and are very excited about the potential that Hunters has to become a huge brand across the UK.”
The expanded network promises to have over over 140 offices by the end of the year - so will have at least 28 new branded branches within just over four months - with a plan for further growth to around 500 offices in five years’ time.
The news comes just a few days after the announcement that Hollinrake, a millionaire Yorkshireman reported to have once lived in a castle, has become the Conservative candidate for the local parliamentary seat of Thirsk and Malton. This means he will almost certainly become an MP at next spring’s general election.
He started Hunters from just one branch in York in 1992. It then expanded in the so-called Golden Triangle area around Leeds, Harrogate, York and Wetherby, reaching 49 branches. Then in 2011 Hunters purchased the franchised branches of Countrywide’s Bairstow Eves, taking the company name across wider parts of the UK, including London for the first time.
No announcement has yet been made on the future senior management of Hunters if Hollinrake makes it to Westminster.
- Kevin Hollinrake
Home owners expect house prices to rise further but are becoming increasingly concerned about mortgage constraints according to research by Zoopla.
Some 92 per cent of the 7,810 owners who took part in the portal’s latest sentiment survey expect house values to rise further over the next six months, with the average prediction for price growth over the remainder of the year currently stands at 7.6%.
The Mortgage Market Review and associated new lending rules have both slowed down the mortgage application process and made securing finance more difficult with 40 per cent of those surveyed acknowledging that securing a mortgage is now harder than it was three months ago.
For the first time in well over a year, London homeowners are not the most confident across the country about house price rises in their area.
South east England, the south west, the east of England and the west Midlands have all overtaken the capital in terms of homeowner confidence. With London prices having moved up so far and fast, the proportion of homeowners in the capital who expect prices to rise over the next six months has fallen from 98 to 92 per cent over the last three months.
- Owner Occupiers
- housing market
The Welsh version of Help To Buy has been given a boost by the announcement that participating housebuilders no longer have to hold a consumer credit licence.
Until now, builders had to hold a specific consumer credit Type C Credit Brokerage licence; even if the builder was part of a larger parent company with that licence, the builder had to obtain its own separate licence.
This had to be obtained, and shown to the Welsh government, before the builder could advertise any of its units as being available under the Welsh Help To Buy system.
But the cost and delay involved in obtaining that licence has become a "significant deterrent" to the success of Help To Buy in the principality according to a Welsh government spokesman. So the requirement has now been scrapped.
Figures produced by the UK Treasury six weeks ago - the latest data available - show that only 369 homes in Wales have been sold under the Help To Buy mortgage guarantee scheme. This is the equivalent of only five per cent of the HTB completions across the UK.
First-time buyers accounted for most of the sales in Wales - a total of 309. The average value of Welsh properties bought under this guarantee scheme is about £114,800 while the average value of all homes across Wales is just below £164,000.
- help to buy
- New Build Homes
There’s a new twist to the story about how tough it is for first time buyers to get a mortgage - it turns out it may be harder to borrow money from someone of the opposite sex.
Research shows that those borrowing for the first time often get smaller loans or have tougher restrictions imposed if they deal with staff of the opposite sex.
A 10-year study conducted through London's Cass Business School analysing 5,000 loans granted through one overseas bank suggests the process is worsened when the application is online or by telephone, because little may be known about the individual borrower apart from the obvious fact of their gender.
“For consumers, this has negative repercussions in the form of higher interest rates, smaller loans and lower demand. For credit providers, it means lower profits in the long-run due to fewer returning customers” says a Cass spokesman.
The authors established that gender bias was strongest when the competition from other lending institutions was weaker or where the branch size was smaller.
- First Time Buyers
- Cass Business School
I have been attempting to buy a Buy to Let property now for some time now (at least six months) but have hit an impasse. I and the vendor have agreed a price and I have had a 75% LTV buy-to-let mortgage application approved. However, the property needs renovating – new GCH, kitchen and bathroom... Read more
If you fail to protect your tenants deposit you are in difficulties. Not only can you not serve a section 21 notice – your tenants can bring proceedings at court for the penalty award.
Which, if the deposit was for a chunky sum, could prove expensive for you.
However not everyone’s situation is the same. For example
- You may not actually want to evict your tenant, or
- They may owe you rent – a lot of rent, or
- Maybe you’re not sure whether you need to protect the deposit at all
To help, I have now done one of my ‘trails’ – a series of questions and answers to help you find out the right answer for you.
It isn’t free I’m afraid, its part of the Landlord Law service so you do need to be a member to use it. I am recommending all members who take deposits use it before drafting up a section 21 notice.
I’m calling it the Tenancy Deposit Compliance Checker and you will find it here.
I would like to provided clarity over what constitutes a Revenge Eviction, and what is simply a landlord serving notice without giving a reason, after concerns have been raised that the term was being misused in the media, giving good landlords a bad name. The Citizens Advice Bureaux (CAB) recently revealed that twice as many... Read more
The post Using a section 21 should not be considered a Revenge Eviction appeared first on Property118.com.
A post on a County Court case, one well worth looking at for the application of public law principles, the Equality Act and reasonableness. I’m working from a note of judgment, so any quotes should be taken as being from a note, rather than a transcript.
Peabody Trust v Steven Evison (By his litigation friend) Wandsworth County Court 17 July 2014.
Mr E was the assured tenant of Peabody. He had been since after 2000 (date not clear from the note), but had lived in the property since 1981, when his father took the tenancy from Peabody, so had lived there for 33 years.
In 2012, Mr E’s rent account began to fall into arrears. In September 2012 he was visited by a Peabody officer (the only one to deal with Mr E’s tenancy through this time). The officer noted that Mr E was hearing impaired, but said he could tell Mr E had understood him as ‘he paid the rent after the visits in September and October 2012′ up to January 2013. The rent payments stopped in January 2013.
As a consequence SL [Peabody's officer] referred the case to [Peabody]’s welfare benefits team. The referral said that [Mr E] had impaired hearing and found it difficult to communicate by telephone and had difficulty managing his affairs (I am paraphrasing) – but did not suggest any other problems. The welfare benefits team contacted (or attempted to contact) [mr E] but he did not engage. The next step was to issue possession proceedings which they did on 23 June 2013. That in fact was only four days after SL’s referral to [Peabody]’s welfare benefits team according to SL in his witness statement.
There was another referral to the welfare benefits team, in exactly the same terms, in January 2014, but by this time, there had already been a hearing in the possession claim. Mr E did not attend and an outright possession order had been made. Moreover, Mr E had been evicted and had turned up at his sister’s home asking for shelter.
Fortunately, Mr E found a solicitor. The solicitor was concerned at the difficulty he had in taking instructions and promptly made an application to set aside the possession order on the basis of his concerns over Mr E’s capacity to conduct litigation. By October 2013, there was report from a consultant psychiatrist which confirmed that Mr E did not have capacity to conduct litigation under the meaning of the Mental Capacity Act 2005 and that Mr E also had multiple disabilities – bi lateral deafness & learning disabilities – and due to a lack of school support, had great difficulties in reading and writing, which impacted greatly on dealing with the benefit system.
This report was available at the end of October 2013, but Peabody’s second referral to the welfare benefits unit of 4 January 2014 made no mention of these issues (or apparently that Mr E had been and then remained evicted). Mr E told the welfare team ‘I have help from elsewhere’, possibly meaning his solicitor, and the team did nothing.
The possession order was set raise on 6 January 2014. Peabody’s reaction was to pursue the proceedings, seeking a possession order, up to this hearing. Apart from two brief contacts from the welfare benefits team, Mr E hd received no other assistance from Peabody. Despite the set aside, the psychiatrist’s report and the official solicitor acting for Mr E.
Peabody has a written policy on dealing with vulnerable tenants (as it must) and that policy is described in the judgment as ‘a model of its kind’. Mr E, the Court found, would clearly fall under the definition of a vulnerable tenant.
He has learning difficulties, he has mental health needs, he has significant problems with financing and budget, he is at risk of losing his home and is illiterate.
SL admitted he did not follow or operate the policy. It was put to him that he did not follow paragraph 2.10, that having local knowledge he did not discuss the services of the tenant and family support team and did not make a referral to that team as appropriate. Nor is the tenant and family support promise (effective December 2013) in any shape of form fulfilled. The promise is that a case will be referred to a support worker who will keep in touch and will be the first person you speak to if you have problems. The promise indicates that [Peabody] will agree a support plan, etc. Of course it is not necessarily the case that had SL followed the policy and fulfilled the promise that the position in relation to arrears would be any different to that which it is now but I considered that it may well have been. It may well have been that given the support envisaged [Mr E] would have been given assistance to get HB and get a back date of HB to July 2014 [sic, presumably July 2013] and that would have resulted in arrears being half what they are now. Of course [Peabody]‘s failure to follow its own policy does not mean that [Mr E] has a defence to the claim for possession but it is simply something I have to weigh in the balance when considering reasonableness. I consider it right to give it a considerable amount of weight. Especially given the clear evidence in Dr. Daly’s report.
Barber v London Borough of Croydon  EWCA Civ 51 (our report here) was referred to and followed in finding it was not reasonable of Peabody to have done nothing except the referrals to the welfare benefits team, as Peabody had failed to follow their own policy.
On the Equality Act 2010, Mr E alleged a breach. The Court found that the possession proceedings had arisen as a consequence of Mr E’s disability, due to the rent arrears arising from his inability to sort out benefits through his disabilities.
Given the prima facie discrimination, the court found
The pursuance of the possession proceedings is not proportionate or in pursuance of a legitimate aim – the aim is to preserve [Peabody]’s financial position and preserve housing stock. But in all the circumstances in this case the seeking of the possession order is not proportionate. Section 15(2) did not apply until January 2014, but from then [Peabody] could not say that they did not know that [Mr E] was disabled as from that time they had knowledge of D’s disability.
Further arguments under s.20 and s.35 Equality Act were not dealt with, given this finding.
On the arrears. the position was complicated by Mr E being subject to the bedroom tax, a deduction of £31 per week on rent of £150 per week. A friend of Mr E gave evidence that he would be moving in as a lodger and could afford to pay a share of the rent as he was employed. A further person might also be moving in as a lodger. This was enough to satisfy the court that rent could be paid in the future with payments of £10 per week to the arrears.
For the reasons given the making of the possession order is not reasonable. The question is what to do. Do I dismiss the claim or adjourn it generally or adjourn it on terms with a stop gap date. On balance I consider that litigation should be finite and having made this decision (which was clear cut) the matter should be put to rest and so I will dismiss the claim.
And Peabody to pay Mr E’s costs.
What is the point in having a policy on vulnerable tenants if it isn’t followed? It is simply inviting a public law/Equality Act defence of the kind run here. When the evidence is laid before you of someone’s vulnerability and disability – as with the psychiatrist’s report of October 2013 here, disclosed in the course of proceedings – wouldn’t it make sense to actually act on it? Rather than steam on for an eviction (as the court put it, Peabody “has sailed onwards to seek to reinstate or obtain another possession order in place of the one set-aside on 6 January”).
The worrying thing about this case (and it is far from untypical), is that even after solicitors had made it completely obvious to the landlord that the tenant was disabled and vulnerable, with an expert report, the landlord still failed to engage their policies. So, what are the prospects for a vulnerable, disabled tenant without legal representation (and determined representation at that)?
My grateful thanks to Mr E’s solicitor Haroon Sarwar, and counsel, Faisel Sadiq for the note of judgment.