Devon Landlords Newsletter Issue 2

Issue: 2

DEVON LANDLORDS A S S O C I AT I O N NEWSLETTER The DLA Is A Not For Profit Company

January/ February 2009

Page 2

Issue: 2

DEVON LANDLORDS ASSOCIATION NEWSLETTER

CONTENTS Page 4 Landlord jailed for failure to make proper checks on gas boiler.

Bristol HMO Search Team.

Advice and regulations on Gas AppliPage 5 ance maintenance.

Pages 6&7 Pre Budget Report.

Secret plans to constrain LHA. Page 7

Page 3

CONTACT DETAILS Committee Members: Stuart McNeil (Chairman) Peter Lewis (Secretary) John Shepley

Fire Safety.

Pages 8&9 Rent Officers housing benefit consultation.

Rebellion brews over proposed rent hikes.

Page 10

Lenders welcome LHA statement.

Credit Unions to help vulnerable.

Page

Landlord given 6 figure fine.

Housing Association’s eviction Christmas cards.

11

Pages 12&13 Tenants deposits and PROOF of damage.

Five ways to beat the credit crunch.

Page 14 skills.

Social landlords help workless tenants gain

Page 15

Change due for Buy to Let tenants.

Page

16

Possible REGISTRATION for BTL investors.

Page

17

Urgent review of LHA demanded.

Page

18

Landlord forced to refund rent on top of fine.

Starting out wins people’s millions.

Devon Landlords Association Torquay Office: The Chambers 141 St Marychurch Road Torquay TQ1 3HW Exeter Office: Queensgate House 48 Queens Street Exeter EX4 3SR Website: www.devonlandlords.co.uk All Enquiries: 01803 314750 Email: equiries@devonlandlords.co.uk

Page 19 Housing benefit changes by back door makes mockery of consultation.

New HIP regulations.

Page 20 Unregulated Letting Agents to be withdrawn from TDS. Page 21

BPF success stories in 2008.

Page 22

Council takes over private let in landmark case.

BTL Landlords not covered by payment holiday

plan.

Page 23 Gov. Minister sees no sense in more regulations for good landlords.

Page 24

Squatters take over Kings mansion.

Page 25 Social landlords not taking up empty homes.

Page 25 Survey finds tenants and landlords happy.

Page 26 Record numbers of landlords forced to repay deposits.

Page 27 NALS invitation to question Julie Rugg on ‘RUGG REPORT’.

All rights in and relating to this publication are expressly reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without written permission from the DLA. The views expressed in this newsletter are not necessarily those of the DLA and readers should seek the guidance of a suitably qualified professional before taking any action or entering into any agreement or documentation generally in reliance upon the information contained in this publication. Whilst the publishers have taken every care in compiling this publication to ensure accuracy at the time of going to press, they do not accept liability or responsibility for errors or omissions therein however caused.

Page 4

Issue: 2

LANDLORD WHO CLAIMS HE CAN’T AFFORD TO MAKE BOILER CHECKS FACES JAIL A Kent residential landlord will be returning to court next month (February) to find out whether he is going to be sent to jail for a continued breach of health and safety regulations on two properties he rents out in Yarmouth.

Madhu Bhajanehatti from Keston near Bromley was given bail by Yarmouth Magistrates' Court after being told there is the possibility he could face a custodial sentence for not producing evidence that his gas boilers were safe for tenants in the flats.

The 34-year-old had already been given a fine of £24,840 last October after being prosecuted by the local authorities for putting tenants at risk from carbon monoxide poisoning because he had no written record of Corgi-registered checks for gas heaters.

At the recent court hearing Bhajanehatti admitted failing to comply with an order to inspect and do work on boilers in his flats. He claimed he could not afford the £1,900 for the checks because of the economic downturn.

Bhajanehatti had previously been asked to produce boiler documents in February 2007. When he failed to do so he was taken to court where he pleaded guilty to 12 counts of failing to supply the information and was fined the £24,840 and told to pay costs of £13,481.

Later that year Bhajanehatti sold 10 of his properties, but remained responsible for two others.

Bhajanehatti requested more time to carry out the checks but was told by the bench that his offences were so serious that he faced the strong possibility of being jailed when he returned for sentencing on 6 February.

From Residential Landlord website

BRISTOL HMO SEARCH TEAM A new team has been set up to track down “rogue” landlords who have not licensed their House in Multiple Occupation (HMO).

To identify unlicensed HMOs, the team has records from Council Tax and Housing Benefit, these are being plotted to identify properties. They are investigating adverts on internet sites, newspapers and shop windows.

The team is also acting as a central point to field referrals from officers and taking reports from members of the public. Plans are being made to contact organisations that may go into HMOs, such as the Police and Health Visitors, so that they can pass on details of possible licensable HMOs. All these potential HMOs will then be targeted when the team visits certain streets across the City, to gather further information on the number of storeys and numbers of occupants. Where a property is found by

the team and where the landlord does not have a reasonable excuse for not having a licence, a £100 fee will be applied. If forms are not returned the Council will be looking to prosecute offenders.

For those landlords which are using the internet, we would recommend you make a point of saying that your property is licensed.

If you do receive a phone call or e-mail please bear with us and just confirm the address so we can verify it against our database.

From Bristol City Council Landlord News Thanks to John Poole for bringing this to our attention.

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 5

ENSURE GAS APPLIANCES ARE MAINTAINED! The Health and Safety Executive (HSE) is warning all landlords to ensure gas appliances are safe for tenants.

The call follows the successful prosecution of a landlady who had failed to ensure the safety of gas appliances in one of her properties.

On 15 December 2008, Aruna Pravin Kukadia pleaded guilty to a breach of Regulation 36(3) of the Gas Safety (Installation and Use) Regulations 1998. She was fined £5,000 with costs of £3,719.

Health and Safety inspector Andrew Verrall-Withers, said: “I hope this case sends a clear message to landlords who may be tempted to cut back on safety checks thinking that nothing will be done unless someone is harmed.

“We need landlords to make sure their gas appliances are maintained to a safe standard and an annual check must be carried out and recorded. This is a time when many buy-to-let landlords are under a lot of pressure, but they must make sure they don’t cut back on maintenance costs and put their tenants in danger”.

In May 2006, the HSE received a complaint about an incident in February 2006 involving a property owned

by Mrs Kukadia in Portinscale Road, Wandsworth. The complaint involved a heating system which was believed to be causing carbon monoxide leaks.

The HSE investigation showed that there was insufficient evidence for this, but a series of letters was sent to the defendant by the HSE to obtain the annual safety check records, which are required to be carried out and retained by all landlords renting property with gas appliances.

The records that were obtained from the defendant and the residents showed there were two gaps when the flat had been occupied in 2002/3 and 2005/6 and no annual landlord check had been produced.

The court heard that Mrs Kukadia had rented out 23 London properties and a series of other similar failures had occurred. It also heard that she had been provided with previous advice from the HSE in 2004, including letters and a leaflet clearly advising her about the safety checks she later failed to carry out. On that occasion the HSE eventually used an Improvement Notice to ensure one of her properties was checked.

From the Health and Safety Executirve

Free advice on gas safety is available from the HSE Gas Safety Advice Line 0800 300 363 (freephone service) and on www.hse.gov.uk

Regulation 36(3) of the Gas Safety (Installation and Use) Regulations 1998 states: a) “ensure that each appliance and flue to which that duty extends is checked for safety within twelve months of being installed and at intervals of not more than twelve months since it was last checked for safety (whether such check was made pursuant to these Regulations or not); b) in the case of a lease commencing after the coming into operation of these Regulations, ensure that each appliance and flue to which the duty extends has been checked for safety within a period of twelve months before the lease commences or has been or is so checked within twelve months after the appliance or flue has been installed, whichever is later; and c) A landlord shall ensure that a record in respect of any appliance or flue so checked is made and retained for a period of 2 years from the date of that check, which record shall include the following information:

i) the date on which the appliance or flue was checked; ii) the address of the premises at which the appliance or flue is installed; iii) the name and address of the landlord of the premises (or, where appropriate, his agent) at which the appliance or flue is installed; iv) a description of and the location of each appliance or flue checked; v) any defect identified; vi) any remedial action taken; vii) confirmation that the check undertaken complies with the requirements of paragraph (9) below; viii)the name and signature of the individual carrying out the check; and ix) the registration number with which that individual, or his employer is registered with a body approved by the Executive for the purposes of regulation 3(3) of these Regulations

Issue: 2

Page 6

PRE-BUDGET REPORT Mortgages for Landlords Yesterday the Chancellor presented his Pre-Budget speech which he hopes will stimulate the economy and help the UK avoid a long and painful recession. There was a somewhat vague promise to present plans to boost residential mortgages in the April 2009 Budget but there was no direct assistance for the Private Rented Sector.

The banks who just 12 months ago were fighting to secure as much Buy-to-Let business as they could no longer wish to lend. The chairman of the now state owned Bradford & Bingley told the Treasury Committee last week that Buy-to-Let in the UK was now dead. The Skipton pulled out of Buy-to-Let lending completely last week. The number of Buy-to-Let mortgages continues to drop and still there is no action from the Government.

It seems clear that the banks have effectively washed their hands of the Private Rented Sector. It also seems clear that the Government is not going to help either.

Landlords cannot allow the Government and Banks to do this. There would be no benefit to the UK economy in allowing large numbers of landlords to default on their mortgages. This would just make all Buy-to-Let lending increasingly difficult.

It is up to the Private Rented Sector to make the Government and Banks listen and act. NetRent.co.uk is talking to landlords all over the country to determine what positive action can be taken to make the Government and Banks listen and act.

From NetRent.co.uk Housing benefit (HB) The Government lifted the veil slightly on its 'behind closed doors' review of housing benefit to disclose that it is concerned with the current HB rules for those in the private rented sector, which can result in claimants living in properties that cannot be afforded by their working peers on a low income. The review is therefore looking at ways to ensure households receiving HB are no better off than working households in the same area who are not receiving HB. More generally, there were grumbles that the new local housing allowance (LHA) is costing too much, and the Government will - from April 2009 - cap the maximum amount of LHA that can be received to the five bedroom rate. Ominously, the Government will also look at the scope to constrain HB costs as a matter of urgency - this on the same day that it confirmed it had no immediate plans to extend direct payment of HB to the social rented sector.

SECRET PLANS TO CONSTRAIN HOUSING BENEFIT The small print of the pre-Budget report has revealed plans to constrain housing benefit as councils brace themselves for a surge in claims as unemployment and repossessions rise.

The government said it is “concerned that the costs of the LHA are greater than had been anticipated.”

It comes after the revelation that the Department for Work and Pensions (DWP) has posted a week-long consultation on how the boundaries in which housing benefit is calculated are drawn, a move that could see thousands out of pocket.

Consultations normally last three months, but this one has lasted just a week because the DWP claims the change ‘did not represent a change in policy’.

The BPF has said that this makes a mockery of the consultation process.

Many could be left worse off where areas are enlarged and swallow up places with cheaper rents, bringing down the average upon which the benefit is calculated.

Conversely, others could be better off, but if private landlords cannot have confidence that areas are split up fairly, then many would not offer homes to benefit claimants.

This would deliberately overturn a House of Lords judgement passed in July, which ruled the extension of Sheffield resident Daniel Heffernan’s area to be illegal.

Three years ago, Hefferman took the Rent Service to court saying that a review had made the area used to calculate his housing benefit unfairly large.

The area they used extended from Heffernan’s city centre locality, with its high rents, to neighbourhoods with lower rents, reducing the amount he could claim.

In July this year, the House of Lords ruled that his benefit had been calculated illegally. As a result, the Rent Service has had to commit to re-reviewing localities across the country according to the Lords’ new interpretation of the law.

The draft statutory instrument posted by the DWP on its website would seek to change the law. However, they have limited the review to a week and not properly informed stakeholders.

The rents are listed at http://www.therentservice.gov.uk/ BPF residential director, Ian Fletcher, said: “This makes a mockery of the word ‘consultation’. If DWP is going to consult, then it should do so meaningfully. At present, what we have is a government department trying to tick the box of consultation through sheer tokenism. When you meet landlords, many have a total disrespect for the DWP. That is a tremendous pity, but reflects a lack of transparency and engagement which is very unhealthy for good policymaking.”

(Continued on page 7)

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 7

SECRET PLANS TO CONSTRAIN HOUSING BENEFIT Councils are calling for the consultation period to be extended.

John Frost, head of revenues and benefits at Cambridge Council, said authorities needed more time to examine the implications of the proposed changes.

The number of benefit claimants is likely to rise due to current economic conditions and if the system wants to attract private landlords to provide accommodation they need to make sure private landlords have confidence that the benefit areas, and therefore levels, are being defined fairly.

In further announcements this week, the government confirmed: That it’s behind closed doors review of housing benefit was focusing on reducing the cost of the new local housing allowance.

That it would not be extending direct payment, an important element of the local housing allowance to social landlords, such as housing associations, for fear it would cripple their efforts to raise finance in the current climate.

Reacting, Ian Fletcher, added: “The PBR confirmed this week what many of us have been suspicious of, that the Housing Benefit Review is seeking to cut costs substantially, and stakeholders are being kept in the dark, because the answers are ones we wouldn’t like. Many private landlords will also have been left incredulous at the Benefit Minister Kitty Usher’s remarks this week about the problems of direct payment for housing associations raising finance. Private sector landlords already face direct payment. How does the Minister think they raise finance?”

From the BPF

FIRE SAFETY Following an investigation into a serious fire in a high rise building where Firefighters lost their lives, the subsequent report identified a hazard associated with the securing of electricity cables. The investigation revealed that in this instance, the cables were secured within plastic trunking by plastic cable fixings. When the trunking was exposed to heat from the fire, the trunking and plastic fixings failed, resulting in the cables falling to the floor.

The cables comprised the movement of Firefighters within the premises and were identified as a contributing factor to escape from the building.

Cables fixings should be of a material that prevents rapid failure when exposed to heat. Reference should be made to the relevant British Standard.. Cornwall County Fire Brigade would like to raise the awareness of this issue due to its safety critical implications to both Firefighters and the occupants of buildings.

For further information plese do not hesitate to contact Steve Halstead at Brigade Headquarters.

PROPERTIES FOR SALE ADVERTISING ON THE WEBSITE We are introducing a new web page where Members can advertise properties FOR SALE. This new section is limited to basic information about the property, location, size, number of ‘letable’ units and the contact name, telephone number and email address of the vendor. It will also be possible to add a small photograph of the property as we currently do in the properties for RENT section.

The new section will also enable members to offer for sale items that other landlords might find useful for their own properties (A photo will be possible in this section too) This will be a FREE service to Members

but the Association will have the power to vet the items for sale and limit the number being offered at any one time.

Please remember that for properties to RENT and for SALE as well as ITEMS for sale, THE ADVERTISING TIME ON THE WEB IS LIMITED TO FOUR WEEKS! You can renew after that of course but you must do so through the Office where a queuing system will be employed if the number of items coming in is greater than the system can cope with.

Peter Lewis (Secretary)

Page 8

Issue: 2

RENT OFFICERS HOUSING BENEFIT CONSULTATION You will doubtless recall from the last newsletter that the Rent Service decided to hold a consultation of only one week with regard to a change in policy relating to the setting of the Broad Rental Market Area. The following is their summary of the responses received to that consultation: PUBLIC CONSULTATION: RENT OFFICERS (HOUSING BENEFIT FUNCTIONS) AMENDMENT (No 2) ORDER 2008 Introduction In November 2008, the Department for Work and Pension (DWP) issued a Draft Statutory Instrument for consultation RENT OFFICERS (HOUSING BENEFIT FUNCTIONS) AMENDMENT (No 2) ORDER 2008.

The consultation document was sent to a number of key stakeholders such as local authority and landlord groups.

The consultation document was also made available on the DWP website. Recipients were invited to make their response by 28th November 2008. In all we received response from twenty –one.

Background The House of Lords delivered its judgement in the case of Heffernan V The Rent Services on Wednesday 30 July 2008. The majority verdict was that the Sheffield locality area used to determine Mr Heffernan’s Local Reference Rent was not arrived at with proper regard to the Rent Officers Order.

The appeal was allowed by a majority of three to two.

This finding essentially means that the construction of the Sheffield locality, used by The Rent Service to calculate Mr Heffernan’s Local Reference Rent, was arrived at in a fashion that could not be sustained in law.

The application of the House of Lords judgment on a national basis would have resulted in a far greater number than of more compact locality areas. This could have meant for a large number of tenants Housing Benefit would no longer cover their rent.

Ministers decided that changes were needed to the statutory framework underpinning the activities of rent officers in order to stabilise the situation. Consultation on these changes was carried out in November 2008.

General responses to the consultation document We consulted with a number of key stakeholders, namely:

• The three national rent services; • Local authorities associations; • Individual local authorities; • Landlord organisations; and • Welfare organisations.

Responses to the consultation identified three main areas of concerns, these were: Longer period for consultation Some respondents expressed concerns or disappointment over the short consultation period. Further concerns were raised by organisations and individuals that the scope of the consultation was not wide enough.

Disagree with relatively broad area.

Some local authority respondents wished to see relatively small areas that reflected rents within the authority boundary and no further. Concerns were in the main that: • the new Broad Rental Market Area is lacking clarity on how large an area should be; • the BRMA definition does not promote transparency and better understanding; • the new BRMA definition is even more ambiguous; and • it does not remove the ambiguity as to what constitutes BRMA/localities.

Changing the date from which Local Housing Allowance rates take effect from There was some confusion about whether the proposed changes supported the policy position. However, this is likely to have been due to ambiguity over the policy intention set out in the consultation letter.

Conclusion The Department recognises that a longer period of consultation would have been preferable. However, the implications of the judgment in the Heffernan case were so serious that urgent action was required.

The Department has considered carefully the comments that it received. In instances where opposition was noted about the transparency and clarity of new definitions, the Department took the view that these minor amendments did support the purpose of making these changes. This was to ensure the Order more accurately reflects the Department’s existing policy intention. In instances where minor drafting comments were raised, the Department made some changes.

The Rent Officers (Housing Benefit Functions) Amendment (No.2) Order 2008 was laid before (Continued on page 9)

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 9

RENT OFFICERS HOUSING BENEFIT CONSULTATION Parliament on 15th December 2008. It came into force on 5th January 2009.

List of respondents Lincoln City Council Ribble Valley Borough Council York City Council Oxford City Council Independent Consultant Cambridge City Council Rent Service Scotland Bury & Walkers Solicitor representing Residential Landlords Association Scottish Office Cornwall Residential Landlords Association British Property Federation Royal Borough of Windsor and Maidenhead

IRRV Benefits Faculty Board Glasgow City Council Department of Social Development Northern Ireland Citizens Advice Shelter The Rent Service Rent Service Wales Convention of Scottish Local Authorities Local Government Association

REBELLION BREWS OVER PROPOSED RENT HIKES Inflation-busting increases leave councils torn between protecting their tenants or their budgets The government is facing a rebellion from councils and tenants over rent increases that are double the rate of inflation.

It expects rent increases to average 6.2 per cent this year and 6.1 per cent the following year - more than double the 3 per cent rate of inflation.

Councils have said they are torn between protecting their recession-hit tenants from large increases and safeguarding their housing budgets. The budgets could be reduced next year through the government’s subsidy system if councils use their reserves to keep rents low.

The problem has arisen because the formula that all councils are expected to use when setting rents is based on last September’s inflation rate of 5 per cent.

The Local Government Association confirmed it would lobby the government to compensate councils that use their own reserves to keep rents low.

The formula would mean a 5.28 per cent increase from April for tenants of arm’s-length management organisation Carrick Housing.

Its tenants have written to housing minister Margaret Beckett demanding to be freed from the subsidy system, which is poised to siphon off more than £100 million from rents this year.

Mike Owen, executive director of Carrick, said: ‘Tenants were really cross that their rents were increasing by double inflation and the benefit of that rent increase was going directly to the Treasury.’

Rebellion is also brewing in Luton, where tenants face a 5.8 per cent rise. Council leader Hazel Simmons has written to Mrs Beckett demanding the freedom to set a lower increase, understood to be around 2 per cent,

without being penalised with less funding next year. ‘[We] have built a good relationship with our tenants, many of whom are on very low incomes, and will find this amount of increase a difficulty, especially in the current economic climate,’ she wrote.

A Communities and Local Government department spokesperson argued that the system offered a ‘very good deal’ for social tenants. ‘Our proposals will continue to protect local authority tenants so that increases will amount to no more than an estimated average of £3.95 per week, though for more than 60 per cent of tenants these increases will be covered by housing benefit,’ she said.

From Inside Housing

You Could be Advertising Here Call 01803 314750 For more information

Page 10

Issue: 2

LENDERS WELCOME HOUSING BENEFIT STATEMENT Reports that the government does not intend to move towards paying housing benefit directly to social housing tenants will be welcomed by lenders.

According to a recent report in the Financial Times, the minister responsible for housing benefit, Kitty Ussher, gave a firm re-assurance that housing associations (HAs) and other registered social landlords would continue to have a guaranteed stream of income in the form of benefit paid directly to them.

Following a meeting with the minister earlier this autumn, we wrote to her expressing “very serious concern” about any measures that could disrupt the income stream and therefore jeopardise the contribution lenders make towards funding social housing.

Housing benefit typically provides 60% to 70% of the income of HAs and most of this is received directly by landlords. This guarantees a strong and reliable cash flow, and is cost-effective for landlords. That income is ultimately a source from which HAs repay the funds they have borrowed to build and improve affordable housing.

However, the possibility of paying housing benefit not to landlords but to tenants – who would then use it pay rent to their landlord – emerged as part of a package of measures intended to improve financial capability among tenants and their overall ability to manage money The reality is, however, that any decision to pay housing benefit directly to tenants would expose the funding of the social housing sector to greater risk. That would have serious implications for HAs, lenders and other investors.

Since the introduction of private finance in 1989, total loan commitments of more than £50 billion have been advanced. One of the attractions for investors in the sector is its relatively low level of risk, an attractive quality as part of an overall investment strategy.

Payment of housing benefit directly to tenants would raise the risk profile significantly, possibly to the extent that investment in the sector would no longer be attractive.

Such a proposal would be damaging at any time in the market cycle. But in current financial market conditions, the impact would be more pronounced. Market conditions have already caused some institutions to withdraw from the social housing market, although perhaps only temporarily. Those remaining are adopting a more selective approach to lending.

In general, the risk profile of the sector has deteriorated over the past year in any case, partly as a result of increased likelihood of property sales by some landlords, so that they can continue to subsidise the development of social housing given lower government grants.

According to the Financial Times, a survey has revealed that three-quarters of HAs expect to face “significant financial difficulties” as a result of current financial market conditions.

It reported Ms Ussher as saying: “I am deeply concerned, in view of the lack of credit in the wholesale markets, that those who lend to registered social landlords should not have worries that somehow the income of registered social landlords could be threatened.”

That is a reassuring statement that will be welcomed by lenders.

From the Council of Mortgage Lenders

CREDIT UNIONS TO PLAY KEY ROLE IN HELPING THE VULNERABLE Giving credit unions and other third sector partners direct access to Social Fund money so they can better help those on low income who have difficulty accessing financial services is one of the options unveiled by Kitty Ussher today as part of a discussion on reforming the Social Fund.

Allowing third sector partners, such as credit unions, to deliver services to Social Fund customers directly, lets customers take advantage of the broader financial services these local organisations offer such as advice on money management and access to saving schemes.

Minister for Social Fund Kitty Ussher said: “The Social Fund already provides a vital service to those on a low income, providing loans and grants for emergencies and the other unexpected costs of everyday life to those in need. What has struck me is in some parts of the country there is fantastic expertise and enthusiasm

from a variety of external organisations including but not limited to charities, debt advice and credit unions that we could in theory work with, to make our service even better, making affordable credit available to more people and providing greater financial advice and support in difficult economic times. " Organisations such as credit unions are experienced in helping people on low incomes and have proved successful in giving them a sound financial basis upon which to progress. The Government will investigate how they might work more closely with credit unions and other external providers to deliver the further financial services that Social Fund customers need.

From DWP

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 11

SIX FIGURE FINE FOR SIDCUP LANDLORD A local landlord who rented out a dangerous and substandard property as bedsits has been handed out a six figure fine after a successful prosecution by the London Borough of Bexley.

Ludomir Szulc, owner and manager of the three storey, eight bedroom property, known as Priestlands Manor in Priestlands Park Road, Sidcup, pleaded guilty to 22 offences and was fined a total of £99,000 plus costs of £5,835 at Bexley Magistrates' Court on 18 November 2008. The fine was reduced from £110 000 after Mr Szulc entered a guilty plea.

Inspections by Environmental Health Officers in November 2007 revealed uncapped gas pipes in bedrooms, dangerous electrics, lack of adequate fire precautions, badly maintained and filthy bathrooms and kitchen along with a lack of hot water to kitchen and sinks. Some of the occupants included young children.

"This excellent result sends out a clear message to landlords that they must take responsibility for the management of their properties to ensure the health, safety and welfare of their tenants," says Bexley’s Cabinet Member for Regeneration and Housing, Cllr John Waters. "These kind of properties are typically

rented out to the most vulnerable in our community and this man took advantage of that situation. Landlords must know that they are not above the law. We are committed to making Bexley a safer place and helping everyone to have a decent home. Where necessary we will take enforcement action against landlords.

“I thought this sort of irresponsible behaviour had been stamped out decades ago, and I am delighted that the court has imposed a very heavy penalty."

Environmental Health Officers said that they had made every effort to work with Mr Szulc but that he had consistently failed to take their advice about works required to make the property safe for tenants.

The Council prosecuted him for failing to manage the property under the Management of Houses in Multiple Occupation Regulations 2006. Mr. Szulc had claimed he was going to redevelop the property into luxury selfcontained flats, but failed to do so.

All landlords have a duty to make sure that their properties are safe for tenants, including safe gas and electrical installations and adequate fire precautions.

From National HMO Network

HOUSING ASSOCIATION SENDS CHRISTMAS CARDS THREATENING EVICTION A housing association in Bristol has sent out 'Jingle Bells' Christmas cards threatening tenants with eviction.

Residents have been shocked by the cards which read: "Jingle Bells, Jingle Bells, Jingle all the way, please make sure you pay your rent, so in your home you'll stay."

The card goes on: "We want you to enjoy the festive period, but even more than this we want you to continue to enjoy your home, please make sure payments are kept up to date.

"Wishing you a merry Christmas and a happy new year from all the staff at Jephson's Bristol office."

The cards have been sent to around 650 homes in the South West owned by the Jephson Housing Association.

They include the Little America estate in Plymouth where residents have complained about the cards.

The 159 terraced homes were built in the 1970s and some have since been sold on and are now worth around £100,000.

The cards have upset some residents.

One said: "This may look like a Christmas card but most people see it more as a veiled threat. It certainly isn't very Christmassy and the cards have been sent at just the time when people are doing their Christmas shopping for their families.

"It feels as if the landlord is telling us not to spend too much on Christmas so we can afford to pay them their rent. They are acting like Scrooge."

Local Labour councillor Claude Miller said: "This is most unusual and not the sort of thing I would appreciate getting at Christmas. It is not the sort of thing we would send to our tenants, most of whom are very good payers.

"If a tenant is getting into debt they should get a personal letter rather than something like this. It is not what Christmas is meant to be about, good will towards all men. If they are sending a card they should keep it as festive as possible, not make threats like this."

John Evans, housing manager at Jephson Housing Association, said: "The Christmas period can be a time of great expense and like many social landlords we like to remind people of the importance of maintaining payments.

"We want to remind people that rent is an important payment in a way that we do not think is at all offensive. We have been writing to our tenants in this vein for many years without any problems."

From Telegraph.co.uk

Page 12

Issue: 2

MAKE SURE YOU HAVE PROOF BEFORE TRYING TO WITHHOLD DEPOSITS FROM TENANTS Buy to let investors they must provide sufficient evidence should they need to withhold part or all of a deposit warns mydeposits.co.uk, one of the Governmentapproved tenancy deposit protection schemes.

Some disputes arise because the landlord unfairly withholds the deposit. However, a growing number of reputable landlords who find tenants have damaged their property at the end of a tenancy are having to dig into their own pockets because they do not have enough evidence to justify withholding all or some of the deposit.

Landlords are entitled to withhold deposit money to cover damage beyond fair wear and tear caused by tenants. Under deposit protection legislation, tenants can now formally dispute the amount withheld.

If the landlord cannot provide evidence of damage or failure to clean, tenancy deposit protection schemes will often have no choice but to find in favour of the tenant.

Figures from mydeposits.co.uk for the third quarter of 2008 show that out of 125 disputes dealt with by independent adjudication, tenants received all or part of their deposit back 91 percent of the time.

Tenancy deposit protection legislation was introduced to

protect the rights of tenants by ensuring deductions from deposits are genuine. The onus is on the landlord to show any money being withheld is for a good reason.

David Salusbury, chairman of mydeposits.co.uk, said: “Landlords who genuinely need to withhold a tenant’s deposit at the end of a tenancy are able to do so, but they must take some simple steps to show any deductions are justified and proportionate.

“Preparing an agreed inventory with the tenant will provide evidence of any damage to the property or furniture, while bank statements can be used to highlight non-payment of rent. Photographic records can also be useful, as can any exchanges of correspondence.

“The vast majority of tenancies end harmoniously but when problems do arise landlords need to be prepared to safeguard themselves against abuses of the system.

Although the deposit remains the property of the tenant, landlords should not find themselves paying for any tenants’ misdemeanours out of their own pockets.”

From Residential Landlord website

Landlords are entitled to withhold deposit money to cover damage beyond fair wear and tear caused by tenants

FIVE WAYS TO TAKE ADVANTAGE OF THE CREDIT CRUNCH The turmoil in the financial markets over the last year or so, and particularly over the last couple of weeks, added to falls in the housing market will have significantly reduced the value of many people’s estates.

But what is a time of concern for many might also be an opportunity for some – not just for picking up bargains.

In terms of tax-planning, there are potentially significant advantages in taking action while values are low, especially for those able and prepared to take a longterm view. Here are some ideas for consideration.

Low value gifts Assets given away within the preceding seven years are of course taken into account for inheritance tax (IHT) purposes on death. The value taken into account is the value at the date of the gift; any increase in value between the gift and the death is immediately free of IHT. So, if Andrew gives an investment property now worth £400,000 to his children and then dies in five years’ time when it has increased in value to £500,000, the value for IHT is capped at £300,000. The £100,000 of growth is protected even though he dies during the seven year period. This amounts to a saving of £40,000.

But what if the bottom of the market has not yet been reached and the property has gone down in value to

£350,000 by the time he dies five years later? In fact his family would be no worse off because a special rule allows the lower value of £350,000 to be substituted in calculating the IHT bill.

Less payable capital gains tax Capital gains tax (CGT) is payable on most gifts if the asset has gone up in value during your period of ownership.

In the past, CGT has often been a factor preventing gifts being made.

Take Ben, who has a quoted shareholding in XYZ PLC now worth £100,000. He acquired it in 1998 for £90,000. He thought about giving it to his children a couple of years ago. At that stage it was worth £150,000, and he worked out that his gift would trigger an up front CGT liability of around £15,000. Now with the fall in the stock market, the gain is almost entirely covered by his annual CGT allowance of £9,600. And, above that, CGT is now only payable at 18%, giving rise to a CGT bill of merely £72 on the gift.

Gifts to trusts Many would prefer not to make large outright gifts to children or young adults, but since 2006 IHT is payable up front on gifts to most lifetime trusts in excess of (Continued on page 13)

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 13

FIVE WAYS TO TAKE ADVANTAGE OF THE CREDIT CRUNCH £312,000 (or £624,000 if spouses give half each). If one takes the view that values over the long term will increase, now might be a good opportunity to place assets in trust.

Mr and Mrs Cooper are in their 60s and have built up significant wealth. Their two children are at university.

While they want to ensure that their estate is preserved as far as possible for their family, they are of the view that the children should not receive assets at this stage in an uncontrolled fashion. The Coopers own a commercial building as an investment. Its value has come down over recent months. It is now worth £600,000, down from a peak of £850,000 about 12 months ago. However, that is still much more than the £300,000 they paid for it many years ago.

If the Coopers had given the property to a trust for their children last year, they would have had to pay up-front IHT of some £50,000. Now they can place it in trust without any up-front IHT at all. And there is no need to worry about CGT either: they can elect to ‘hold over’ the gains so that the trustees are treated, for CGT purposes, as acquiring if for £300,000. This means that any CGT liability is deferred until any subsequent sale by the trustees. So Mr and Mrs Cooper have got the property out of their estates and into trust without any tax liability. By using a trust, they save up-front CGT of £50,000 and at least £240,000 of IHT after seven years.

Recent deaths Executors dealing with the estates of those who have died recently will want to consider carefully whether the IHT bill can retrospectively be reduced where assets have fallen in value. There are two main types of relief

available here: • Where the deceased had made a gift within seven years of his death and the asset concerned had fallen in value during that period, the lower value can often be substituted as mentioned above.

Where certain assets are sold by executors for less than they were worth at the time of death, the lower sale price can generally be substituted and an IHT refund claimed.

Stamp duty The chancellor has temporarily raised the stamp duty land tax (SDLT) threshold from £125,000 to £175,000.

As well as assisting with the purchase of some properties this could be useful in the context of certain gifts.

Consider Edward who lives in Oak Tree Cottage, which is worth £400,000 and subject to a mortgage of £150,000. The house is now too big for him and he wants to move into his smaller second property.

His son, Fred, wants to move to Oak Tree Cottage with his young family and is happy to take on the mortgage.

Previously Edward’s gift of the property subject to the mortgage would have triggered an SDLT liability of £1,500 (1% of the amount of the mortgage). Now, however, there would be no SDLT at all as the amount of the mortgage is below the current threshold.

These are just some of the ways in which it might be possible to take advantage of values currently being low.

It should be emphasised, however, that this is only a summary and that specialist advice should always be sought.

By Charles Hutton Published on Citywire Website

MEMBERS WITH PAYPHONES IN YOUR PROPERTIES BEWARE! One of our members, with a payphone in his property, has informed us that he became the victim of a scam by his tenant who used the phone to receive messages from friends and relatives without paying.

This is how it works. The tenant dials a number either in the UK or overseas. The recipient can pick up the phone and speak to him for up to 40 seconds before he has to insert money. Once this happens he puts the phone down without inserting coins and dials again and he can continue this for as long as he

likes without paying a thing. He will not be able to speak to his friend but they can speak to him.

Though there has been no charge to your tenant, your phone will be charged a 49p connection fee each time he dials up and the connection is made. Remember, your tenant may have lots of friends who also cotton on to the same idea and use your phone. SO BEWARE! Do not let this happen to YOU!

Page 14

Issue: 2

SOCIAL LANDLORDS TO HELP WORKLESS TENANTS GAIN SKILLS With unemployment expected to reach two million by the end of 2009, the work of housing organisations in supporting tenants to access training and employment has never been more important. On 4 December the Chartered Institute of Housing (CIH) launched a new toolkit that will give local councils and housing providers practical guidance on helping residents to become more economically active.

Figures show that more than half of social housing tenants of working age are without paid work, twice the national rate¹. During an economic downturn, residents who are marginalised because of their life circumstances, lack of skills and experience, are likely to find it even harder to get into training and work. The new CIH toolkit will support housing organisations to offer this important support to their residents.

The new toolkit is sponsored by the new independent housing regulator the Tenant Services Authority (TSA) and includes the contributions of over 70 affordable housing providers.

In her foreword to the toolkit, Margaret Beckett, Minister for Housing and Planning, said: "I firmly believe that social housing should offer much more than a roof over people’s heads. It should also offer opportunities for people to realise their ambitions and fulfil their potential, and equip their children to do likewise. As this toolkit shows, social landlords have already helped literally thousands of people to overcome their difficulties and achieve their ambitions. We must now make sure this best practice is shared and adopted by all who wish to offer their tenants the best they can."

Helen Cope, author of the toolkit said: "We know that social housing contains too many workless households and that that this situation has only worsened in the last few decades. The solution lies in trying to ensure that housing and employment and skills services are interlinked. Many workless people face multiple disadvantages that cause barriers to gaining and sustaining employment. This might include low basic skills, lack of child care or high costs of transport to training or work. Now is the time to transform the sector’s response."

TSA Chief Executive, Peter Marsh said, "Encouraging registered providers of social housing to contribute to the social and economic well-being of the areas in which the housing is situated is one of the Tenant Services Authority's key statutory objectives.

Tackling worklessness is a key element of this work - breaking down barriers to learning, improving employability and enhancing the life chances of tenants. I am delighted to lend the TSA's support to this important toolkit." ¹ Professor John Hills’ report in 2007 Ends and Means: The Future Roles of Social Housing.

From the Chartered Institute of Housing

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 15

CHANGE DUE FOR BUY-TO-LET TENANTS The government is considering forcing mortgage lenders to give more notice to tenants who could be evicted when their buy-to-let landlord faces repossession.

Currently lenders must send a letter to tenants at least two weeks in advance of a repossession hearing involving their landlord.

If approved, lenders would have to inform tenants seven weeks before.

Lenders say they already make every effort to contact tenants who could be evicted.

'In the middle' Andy and Katie from Huddersfield were shocked to receive a letter sent to them by solicitors acting for their landlord's buy to let lender just two weeks after renewing their lease.

It informed them their landlord was being taken to court for a possession hearing.

Three months later they still have not been told if they will be evicted before the end of their tenancy

agreement.

The letting agent told them it was waiting for information from the landlord.

The lender and its solicitors said it could not tell them anything because its relationship was with the landlord, not with them.

That has left the couple frustrated and upset, as Andy told BBC Radio 4's Money Box programme: "I don't think it's right, it leaves us in the dark.

"We're just stuck in the middle between everybody."

Their experience is being shared by thousands of other tenants.

Adam Sampson, chief executive of the housing charity Shelter, says in some cases tenants are getting no notice at all that they face possible eviction: "Very rarely does the tenant have the remotest idea that the landlord isn't paying the mortgage.

"The tenant must be kept informed about all the steps towards repossession."

'Every effort' Landlords with buy-to-let mortgages are now falling behind with their payments more quickly than owner occupiers according to the latest figures from the Council for Mortgage lenders (CML).

Figures for July to September of this year show a jump of almost 50% in buy-to-let landlords who are behind by three months or more.

Sue Anderson from the CML insists most lenders do make every effort to make sure tenants know about repossession hearings: "Quite often they send someone round to knock on the door as opposed to just relying on the postal service."

Regulations regarding giving notice to tenants are laid out in the Civil Procedure Rules under the oversight of the Ministry of Justice.

It said the Civil Procedure Rules Committee is currently discussing whether to change the rules to give tenants seven weeks notice of a repossession hearing instead of the current two.

By Bob Howard BBC Radio 4's Money Box

“The tenant must be kept informed about all the steps towards repossession�

Adam Sampson, Shelter

You Could be Advertising Here Call 01803 314750 For more information

Page 16

Issue: 2

SAFER HOUSES—FIRE DEATHS HALVED IN UK 2 out of 10 homes still need a smoke alarm

BUY TO LET INVESTORS MAY HAVE TO APPLY FOR REGISTRATION IN THE FUTURE Residential landlords who use the services of estate agencies may be affected by a major change being proposed by a leading industry figure.

Bill McClintock, chairman of the board of the company operating the Ombudsman for Estate Agents (OEA) scheme, is calling for the registration of individuals working within the estate agency industry.

He is in talks with the Royal Institution of Chartered Surveyors (RICS), the National Federation of Property Professionals (NFOPP), the Register of Estate Agents (ROEA), the Property Codes Compliance Board (PCCB) and Government departments in order to drive the scheme forward.

McClintock, who this year celebrates 50 years in the industry, says he has long held the view that estate agents should be registered in order to protect consumers and that the latest round of legislation has now made this feasible without waiting for a fresh Act of Parliament.

He explained: “Under the Consumers, Estate Agents and Redress Act, which came into effect on 1 October, 2008, every residential estate agency handling property sales has to be a member of an approved redress scheme.

“This means that every residential sales estate agency in the UK has to belong to the OEA or the Surveyors Ombudsman Scheme (SOS). OEA now has almost 95 percent of UK residential estate agencies registered with it so between us and SOS we should know of every business trading in the UK. Any we don’t know about are now operating outside the law.

“Both schemes operate to a Code of Practice and it is a straightforward matter to amend both Codes to include a requirement for all member agents to use only registered

staff to advise on property values or negotiate sales.

“My idea is that all existing agents would initially be registered. After one year, those joining the industry would be required to train in order to join the register and those already in the industry would be required to demonstrate they had achieved at least that minimum standard in order to remain registered.

“One of the arguments against registration is that it is a barrier to entry to the profession but that, of course, is nonsense. To be a driving instructor in the UK you have first to register and then become the holder of a provisional permit to work while you demonstrate your proficiency and pass an exam.

“There are many other professions where a competence to do the job has to be demonstrated and that is not seen as a restraint of trade, so estate agency could easily be viewed in the same light.

“The big concern over the years is that individuals who break the rules or who are not professionally competent can easily move to a job in another estate agency, maybe in a different part of the country, and just start working again. Employers have nothing they can check to ensure the honesty or suitability of a job candidate.

“During all the time I have been in the industry there have been frequent calls for some sort of licensing or registration scheme and now we have the chance to bring this major benefit with minimum disruption. I see this as an industry-wide scheme and engaging all the professional bodies and unaffiliated practising estate agents rather than something run by OEA as an individual organisation.”

From Residential Landlord website

Page 17

Issue: 2

LANDLORD ACTION GROUP CALLS FOR URGENT REVIEW OF LOCAL HOUSING ALLOWANCE Residential landlords are turning their backs on families on housing benefit following changes to the law claims the Landlord Action organisation.

The introduction of the Local Housing Allowance (LHA) in April has meant a growing numbers of landlords losing out on rent; and the situation is worsening as the credit crunch takes hold.

Landlord Action director Paul Shamplina, who helps landlords recover their properties from bad tenants, believes LHA is a mistake and has called for an urgent review.

He said: “The government idea was to make private sector tenants more financially independent and learn to manage their own money, so the housing benefit is now paid directly to them.

“But the simple truth is, when times are bad paying the rent is not a priority for many tenants and there are many now who are just not passing it on to their landlord.”

Previously, tenants could elect to have the council pay their rent directly to the landlord but this is no longer an option unless the tenant falls behind with the rent or is identified through representation as being unlikely to pay it.

Shamplina has seen a huge increase in the number of landlords coming to him for help in the last two months.

He explained: “The rules say that if tenants withhold their rent landlords can apply to the local authority to have it paid to them, but by then it can be months in arrears.”

Providing evidence isn’t always straightforward. Parmi Janagle from Sutton Coldfield near Birmingham is a property portfolio manager and approached Landlord Action for help after experiencing first hand problems with LHA.

He said: “This was not a well thought out idea. The government wanted to empower tenants but it has had a counter effect. To assist local authorities identify cases where direct payment should be made there has to be evidence, by for example showing there is a County Court Judgement against the tenant or that the tenant has addiction issues backed up by a doctor’s letter.”

“Things like this all take time and meanwhile the rent arrears continue to build up. The reality of the situation is that many landlords who used to let to housing benefit tenants are thinking twice and now will not make their properties available to them.”

Shamplina added: “This is a problem of the government’s own making and both tenants and landlords are suffering as a result. Things can only get worse now because of the credit crunch. There should be an urgent review of LHA.” From Residential Landlord website

FEAR OF RETURN TO COUNCIL ‘GHETTOS’ Housing associations are to stop building mixed estates of privately owned and social rented homes because of the credit crunch, leading to fears of a return to ‘council ghettos’ says The Times. Bob Kerslake, head of Homes and Community Agency (HCA) said that during the past 20 years housing developments had a mix of 30 per cent social housing, 30 per cent private homes and 30 per cent shared ownership, but the significant financial risks from the credit crunch has made people reluctant to invest in housing developments. He said housing associations already have 10,000 homes for private sale or shared ownership that have not found buyers. Under latest plans, a third of homes on an estate will be social rented at very low rate, and the rest will be at subsidised intermediate rents – about 80 per cent of the market price – for lowincome earners.

Page 18

Issue: 2

LANDLORD FORCED TO REFUND RENT ON TOP OF FINE A Nottingham residential landlord has been ordered to refund 80 percent of his tenants rent after he failed to apply for a HMO Licence and let the house they were living in fall into disrepair.

Michael Singh owned the property at 69 Lenton Boulevard and rented it to five students from the University of Nottingham.

Following a prosecution by the City Council the five students, supported by Nottingham University Student Union, applied for a rent repayment order against Singh in the sum of £9,536 for the period of 25 August 2007 to 14 June 2008. The ground for the application was that the tenants were residing in an unsafe property arising from the landlord’s failure to licence the property as a house in multiple occupation (HMO).

Singh was previously fined £8,000 in July 2008 for letting the house fall into disrepair after officers from Nottingham City Council found the roof of the house was on the verge of collapse and leaking water. Officers

also discovered Mr Singh did not hold a licence to allow multiple tenants there.

Mr Singh claimed he was unaware of the requirement to license the property at the time it was let to the tenants, despite reminders from officers at Nottingham City Council.

The Tribunal found the Mr Singh showed a blatant disregard of his legal responsibilities as a landlord. The property was an unlicensed HMO throughout the tenancy, exposing the tenants to unacceptable risks to their health and safety, which was demonstrated by the landlord’s lax attitude to fire precautions as revealed in his incomplete application for a licence.

His failure to submit a valid application for a licence was aggravated by the dangerous state of the property when it was let. The Tribunal was satisfied that the landlord was aware of the condition of the ceilings and roof from the outset and chose to do nothing until Nottingham City Council demanded action.

From Residential Landlord website

STARTING OUT WINS PEOPLE’S MILLIONS Cornish project Starting Out has been awarded £50,000 to help Cornwall’s homeless, following a public phone vote.

The project will be run by a partnership of three established Cornish reuse centres and will provide furniture starter packs to help homeless people move into accommodation.

Uniquely the project will also encourage the recipient to take part in supported volunteering, with the possibility of taking part in accredited training and receiving employment support, a solution that should see the project becoming a mainstream sustainable service.

With 1500 annual cases of homelessness in Cornwall and approximately 500 families currently in temporary housing in Cornwall, the project will address a critical need on a county wide basis.

Alan Lethbridge, Operations Manager at RESOURCE said: “We would like to thank everyone who voted for Starting Out and ensured that this vital project received funding. The project attracted huge support across the county of Cornwall and also nationally from environmental organisations and homeless charities.”

Alan went on to say: “The Big Lottery, People’s Millions award is unique in that it allows the public to decide which projects get supported and for the Starting Out Partnership it is very reassuring to know that we have widespread public support.”

Dave Mildren, the Manager of the S.O.F.A. Project, added the thanks of all those associated with the S.O.F.A. Project for those who voted for the Starting Out Project, and added: “We already help hundreds of individuals and families in

our area each year, but this money will enable us to reach even more people who need our help, and will change many more lives for the better. It will also, hopefully, raise awareness of the plight of those, who, through no fault of their own, find themselves in a position that most of us cannot even begin to imagine. A huge thank you to the people of Cornwall who supported us. ” Starting Out will help people like Maria Turner who was made homeless at the age of 18 following a domestic dispute. Maria spent some time sleeping rough and at friends’ houses before being housed in unfurnished accommodation. When questioned about moving into unfurnished accommodation Maria commented: “Of course you feel relieved and grateful just to have a roof over your head, but not being able to cook and sleeping on the floor in a completely empty room soon becomes depressing and makes friends’ sofas look inviting again.

Maria went on to say: “Not having furniture can affect your whole life. Your health deteriorates without decent food or sleep and this makes it hard to get a job or stick to training. Then if you start staying with friends too much you could lose the tenancy” When questioned on how she feels about the volunteering side of the project Maria stated: “I would be happy to volunteer my time to help an organisation that has helped me and recognise all the brilliant opportunities that volunteering at the reuse centres could open up for me. I already do some voluntary work but am thinking of getting involved at RESOURCE because I really like what they do.”

For further information contact Dave Mildren at S.O.F.A on 01209 719733.

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 19

HOUSING BENEFIT CHANGE BY BACKDOOR MAKES MOCKERY OF CONSULTATION PROCESS The British Property Federation (BPF) has dismissed moves by the Department for Work and Pensions (DWP) to change housing benefit policy via the backdoor as making a mockery of the consultation process.

A consultation paper issued by the DWP plans to overhaul benefit payments changing the way they are calculated. Rather than being calculated on a local basis, they are set to be worked out on a larger, regional basis, leaving thousands out of pocket. Setting rates across a wider band of post codes would have a massive bearing on the amount of benefit paid.

The DWP is seeking to overturn the outcome of the ‘Heffernan’ judgement last July in the House of Lords, which successfully challenged changing the way benefits were calculated.

To sweep aside that judgement, the DWP has posted a draft statutory instrument on its website on 21 November, with an end date for consultation of 28 November.

Cabinet Office rules state that consultations should run for three months, but because this is a change to existing policy, it is allowed to run for one week, with many stakeholders unaware of its existence and the fact that the consultation closed 28 November.

The BPF is pressing for benefits to remain calculated on a local basis and insisting that the consultation period be extended so that those affected can respond.

This change would give the DWP a significant amount of power to define the areas they want without properly or fairly consulting on the issue.

BPF residential director, Ian Fletcher, said: “This makes a mockery of the word ‘consultation’. If DWP is going to consult, then it should do so properly.

If it does not feel the issue warrants ‘consultation’ then it should have the front to explain why. At present, what we have is a Government department trying to

tick the box of consultation through sheer tokenism.

When you meet landlords many have a total disrespect for DWP. That is a tremendous pity, but reflects a lack of transparency and engagement which is very unhealthy for good policymaking.”

In further announcements this week, the Government confirmed: That its b e h i n d closed-doors review of h o u s i n g benefit was focusing on reducing the cost of the new local housing allowance.

That it would not be extending direct payment, an important element of the local housing allowance to social landlords, such as housing associations, for fear it would cripple their efforts to raise finance in the current climate.

Reacting, Ian Fletcher, said: “The PBR confirmed this week what many of us have been suspicious of, that the Housing Benefit Review is seeking to cut costs substantially, and stakeholders are being kept in the dark, because we would not like the answers. Many private landlords will also have been left incredulous at the Benefit Minister Kitty Usher’s remarks this week about the problems of direct payment for housing associations raising finance.

Private sector landlords already face direct payment.

How does the Minister think they raise finance?”

From the BPF

This makes a mockery of the word ‘consultation’

CLG LETS LANDLORDS DECIDE DECENT HOMES STANDARD

NEW HIPS REGULATIONS

The government has dropped the method it uses to check the number of social homes that meet its decency standard. In the past, Communities and Local Government (CLG) has used figures from the English House Condition Survey (EHCS) to measure progress towards making 95 per cent of homes decent by 2010, but last year CLG realised that landlords reported nearly 300,000 fewer properties remained below the decent homes standard. CLG announced that it would rely solely on landlords’ figures from now on.

From Roof Blog

From April, homeowners will not be allowed to put their home on the market until all the key documents are in the home information pack, including a new property questionnaire. Currently sellers can start marketing their property as soon as they have commissioned a pack and for up to 28 days before they receive the pack. The property questionnaire will include information on flood risks, the safety of gas and electrical supplies, service charges, structural damage, and parking arrangements.

From Roof Blog

Page 20

Issue: 2

UNREGULATED LETTING AGENTS TO BE WITHDRAWN FROM TENANCY DEPOSIT SCHEME At the insistence of their insurers, The Tenancy Deposit Scheme will only provide deposit protection and alternative dispute resolution to letting agents who are members of recognised professional bodies.

From 6 April 2009, only regulated letting agents and corporate and individual landlords will be covered by the Tenancy Deposit Scheme and cover will be withdrawn from unregulated agents.

Tenants are being advised to ensure their landlords have made alternative arrangements to safeguard deposits as soon as possible.

The Scheme advises landlords and tenants to be certain that their lettings agents are members of either the Association of Residential Letting Agents (ARLA), The National Approved Letting Scheme (NALS), the National Association of Estate Agents (NAEA), or the Royal Institution of Chartered Surveyors (RICS).

Alternatively deposits should be protected under one of the other government authorised deposit protection schemes - Tenancy Deposit Solutions (trading as mydeposits.com) or The Deposit Protection Service.

The Tenancy Deposit Scheme is writing to all current tenants whose tenancy is shown to have been arranged through an unregulated agent to advise them of the change in protection that can be offered and the course of action to take to ensure protection as the law requires.

The agents concerned should advise their tenants and landlords of what they intend to do on their behalf.

In a statement The Tenancy Deposit Scheme said it regretted the action it has been forced to take, but points out that it is due to circumstances that are well beyond its control.

Caroline Pickering, NALS Independent Chair, said: “The TDS decision highlights the importance placed on both accountability and financial security within private rentals.

“Lettings firms need to guarantee optimum levels of trust and support for both tenants and landlords. This recent development will surely come as a wake-up call to all firms who are not part of any regulatory body and can not demonstrate to the consumer that they meet industry standards in the operation of their businesses.

“It is understandable that insurers are not willing to insure firms where there is no knowledge or controls of their accounting practices. This move coupled with the Rugg Report recommendations on licensing for letting agents, makes it clear to Government that the time has come to take action in establishing a licensing body and NALS is the obvious choice to assume the role.

“The answer for agents is simple, accreditation. NALS is the only Government recognised accreditation scheme for lettings and management agents in the private rented sector and offers consumers a benchmark of what to look for when considering the services of lettings agents.

“Agents must act now, the NALS criteria for entry to its scheme is entirely achievable by all professional firms and agents and we are here to assist firms through the application process.”

From Residential Landlord website

TORY THREAT TO AXE SUPER QUANGO Shadow housing minister Grant Shapps said that the recently launched Homes and Communities Agency (HCA) has ‘probably a year, 18 months’ from now to prove it can deliver or it would be scrapped by a Conservative government. He said that he could see the ‘potential areas of waste’ in the HCA’s ‘super-quango’ bureaucracy. His comments come weeks after David Cameron asked his shadow cabinet to recommend spending cuts.

From Roof Blog

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 21

BPF SUCCESS IN 2008 Here is a brief overview of the BPF's successes over the past 12 months.

Empty property rates We have fought a high profile and vigorous three pronged campaign, collecting information on the impact from the removal of the relief to provide to the Government; marshalling support from MPs, councils, development agencies and trade bodies to put pressure on ministers; and raising the profile of the adverse consequences in the broadcast, national and regional press and trade magazines.

Landlord and tenant issues We have provided our largest landlord members with the opportunity to share their experience of, and approaches from, those retail companies that are pushing for the introduction of monthly rents. The Owners’ and Occupiers’ Forum, which we established and administer, has brought together representatives from both sides to discuss the issues and explore areas of agreement. We have continued to promote the lease code 2007, the Commercial Landlords Accreditation Scheme (CLAS) and the Occupiers’ Satisfaction Index.

Community infrastructure levy We have worked very closely with the civil servants drafting the enabling legislation for CIL and have recently succeeded in having references to the uplift in land values removed from the draft legislation. We are continuing to monitor and assist the Government to ensure the final Act is acceptable to the industry.

Planning reform We have made highly influential inputs to the various consultations and reviews of the planning process and its operation, and have created our own Planning Manifesto outlining the twelve areas where we believe the planning system could be improved.

High density development and tall buildings In response to concerns from some members that aesthetic and heritage issues were having a disproportionate effect on planning decisions for tall buildings, we commissioned independent research with financial support from British Land and Land Securities. The resulting report has been well received by property companies and local authorities.

Professional rented sector We have succeeded in raising the profile of the professional rented sector within Government, both as a good thing in its own right and as a way of mitigating the impact of the housing crisis. We influenced the setting up of, and contributed to, the Rugg Review of the private rented sector, which recommends tax changes to support greater institutional investment.

REIT regime Working both on our own and in association with colleagues in the Property Industry Alliance, we have continued to push the Government to extend the scope of the REITs regime and to encourage the establishment of residential REITs. Greening of existing buildings We have administered a Parliamentary inquiry into the measures that can be taken to improve the energy efficiency of existing buildings, have continued to develop our methodology to help landlords and tenants monitor and reduce their carbon emissions from energy use and have advised the Government on the ways in which the property industry can reduce its carbon footprint.

Scotland We have been at the forefront of a campaign to reform further the Scottish planning system and have achieved significant commitments to culture change in the planning service from the Scottish Government. We have also achieved a commitment from the Scottish Government to postpone fundamental reform of developer contributions.

Funding infrastructure We have prepared a report, to be published shortly, calling for a broader debate on tax increment financing (funding infrastructure from the increase in local taxation flowing from new development) as a means of funding infrastructure.

Residential tenancy agreements We have created a web based standard assured shorthold tenancy agreement, in five different versions, that has achieved the Plain English Campaign’s Crystal Mark. It will shortly be available to anyone to use.

From the BPF

BLACK HOLE IN PUBLIC FINANCES The collapse of the housing industry, and subsequent fall in stamp duty receipts and capital gains tax on sales of homes, along with an increase in the number of those no longer qualifying for inheritance tax, will result in a £15 billion black hole in public finances, economists

have warned. And losses to the Treasury could ‘roll on’ for years as the property market is unlikely to bounce back to 2007 levels in the short term.

From Roof Blog

Losses to the Treasury could ‘roll on’ for years

Page 22

Issue: 2

COUNCIL TAKES OVER PRIVATELY LET HOUSE OF HORRORS IN LANDMARK CASE Medway Council has become the first authority in the country to be granted powers to take over the running of a privately let house after the residential landlord failed to carry out improvements.

It took a tribunal panel just 15 minutes to award to award the council’s housing team an Interim Management Order (ITO) during a recent residential property tribunal.

The order, which was approved under the Housing Act 2004, gives the council four months to bring the sixbedroomed Victorian terraced house in St Mary’s Road, Strood, up to a habitable condition.

Private contractors are carrying out the repairs to the property on behalf of the council, who will then bill the landlord. The council will also decide if it feels the landlord is ready to be given back control of running the property.

The extensive repairs list includes providing secure doors and locks, broken windows repaired, fire alarms installed, hot water supply, beds, and improvements to washing and cooking facilities.

Environmental Health officers are also dealing with a rodent problem. A report on The Medway Council website also mentions a putrid smell of stale urine and damp and that the full scale of the poor living conditions only become visible during sunlight hours because the landlord didn’t supply light bulbs in the property.

The Medway report adds: ‘The downstairs toilet and shower room is covered in mould and the bathroom ceiling is buckling under the weight of a leaky toilet system two floors above.

‘The garden is covered with rubbish and the broken windows give an indication of the horrors that await tenants who call the place home.’

Housing officer Mark Pledger was instrumental in bringing the house to the attention of the council and

the housing tribunal.

He said: “The property had been on our radar for a while, but it was during a routine visit to the house that I discovered the full extent of the problem.

“The house was in a dreadful condition. There was no management of the property and tenants were living in squalid conditions.

“The tenants had not had any contact with the landlord for about nine months and hadn’t been collecting rent.

As such, the property was in a dreadful state and people were coming and going as they pleased.”

Tenants have been given contracts and rent is now being collected for the first time in months.

Pledger continued: “We will be taking tenants shopping to buy them furniture like beds, fridges, cookers and chairs. We will also be letting them decorate their rooms to give them ownership of the property and make it feel like their home.”

Earlier this year the council’s housing department was given a zero rating by the government’s Audit Commission and rated as being the worst in the country. A series of dramatic changes, including new management and a crackdown on landlords who fail to comply with housing regulations, are already bearing fruit.

Medway Council’s Portfolio Holder for Community Services Cllr Howard Doe said: “This landmark case shows the high levels of work and commitment being achieved by Medway Council to improve housing conditions in Medway.

“The council has taken onboard the recommendations of the Audit Commission and is making great progress.

“This case shows how serious Medway Council is about targeting private landlords who opening flout housing regulations and show little or no regard to their tenants’ health, safety and wellbeing.”

From Residential Landlord website

BUY-TO-LET LANDLORDS NOT COVERED BY PAYMENT HOLIDAY PLAN homes, then it makes no sense for Simon Gordon, Head of mortgages to be exempt Communications, National it makes no sense for buy-to-let buy-to-let from these new measures. For the Landlords Association, c o m m e n t i n g o n t h e mortgages to be exempt from more highly-geared and smaller landlord, whose monthly mortgage H o me o w n e r M o r t g a g e these new measures payments rely heavily on monthly Support Scheme, said: rental income, tenants not paying can "Given that 71 per cent of quickly spell disaster. landlords expect rental arrears to be a major issue "By giving buy-to-let landlords the same breathing during 2009, the Government should extend the space, it would give them a chance to offer any recently announced measures, aimed at helping struggling tenants a similar period of time to get their struggling homeowners, to cover properties secured on finances in order and prevent the home being buy-to-let mortgage finance. repossessed and lenders evicting tenants."

"If the end game is to prevent people losing their From the NLA

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 23

BUY TO LET MARKET IS WELL PLACED TO WITHSTAND CREDIT CRUNCH REPORTS ANNUAL GUIDE The annual Buy to Let Guide published this week reaffirms the need for residential landlords and the private rental sector as prime elements of the housing market and is expected to encourage further sensible investment in the rental sector.

This reflects the view taken in the recent Rugg Report, which stresses the need to encourage small portfolio and individual private residential landlords.

Articles in the Guide demonstrate the consensus view that the Buy to Let market is well placed to withstand the conditions created by the credit crunch, despite the general tightening of mortgage criteria.

The Guide is being published electronically and is also available through members of the Association of Residential Letting Agents (ARLA), mortgage brokers and mortgage lenders.

The new edition, published by ARLA and the Council of Mortgage Lenders (CML), looks at the rental market in today's credit crunch conditions and examines investment in Buy to Let, the tightening of lending criteria and how to find the right mortgage for individual circumstances.

It also examines the market place, external influences and the changing demands for rental property.

The 2008/9 Buy to Let Guide also updates investors on legal obligations, tenancy agreements, insurance cover, tax and the mandatory requirements of tenancy deposit protection.

Ian Potter, Head of Operations for ARLA, said: “In troubled times like these, the health of the private rented sector is vital. This new edition of the very successful ARLA/CML annual guide to investment in the sector will help to keep current investors up-to-date and encourage new and long term investment in a part of the property market that will continue to grow.

“People need to be housed regardless of the kind of tenure they take. This Guide should be required reading for everyone with an interest in the rental market as it is important to understand current market conditions as well as the complexities of being a landlord today.”

To view the new Buy to Let Guide, contact an ARLA member letting agent or go to the link on www.arla.co.uk From Residential Landlord website

GOVERNMENT MINISTER: “NO SENSE OVER-BURDENING GOOD LANDLORDS WITH FURTHER REGULATION” Speaking at the first NLA National Conference, held in Birmingham on Saturday 29 November, Iain Wright MP, minister with responsibility for the private-rented sector, said the Government was committed to not bringing forward knee-jerk legislation that would hamper the growth of the sector but, instead would target the rogue operators which give responsible landlords a bad name.

In a thought-provoking speech to landlord delegates, the Minister said the private-rented sector had become a "great tool to help house the people of this country" and that he wanted to see the sector "not just survive over the coming months and years but thrive."

Dr Julie Rugg, co-author of the recently published independent review of the private-rented sector, spoke about the need for landlords to view what they do as a business and not purely as an investment vehicle. She reaffirmed how little evidence had been presented to support the view that retaliatory eviction was

widespread and that ‘studentification' had become a major national problem.

David Salusbury, Chairman, NLA, speaking at the end of the NLA National Conference, said: "The success of the NLA's first conference has demonstrated that constructive dialogue is the only way forward for the private-rented sector. The ‘trench warfare', which has so often marked discussions between decisionmakers and landlords, is now behind us.

"The Minister has re-affirmed what the NLA has known for years: the people who suffer the most from burdensome regulation are reputable landlords. The rogue operators will usually avoid being noticed; what we must now do is ensure they are not allowed to drop further under the radar."

From the NLA

the private-rented sector had become a "great tool to help house the people of this country”

Page 24

Issue: 2

SQUATTERS TAKE OVER KING EDWARD VII’S BRIGHTON MANSION In the 179 years since it was built, Fife House has been the home of dukes and princesses, and a refuge for a king.

But on Wednesday a motley band of squatters were writing a new chapter in the Regency mansion's illustrious history.

Up to 12 of them have moved into the Grade 1 listed property and pinned a notice in the porch declaring their legal rights under Section 6 of the Criminal Law Act 1977.

Palatial address: Up to 12 squatters have moved into ÂŁ1.75million building in Brighton Plush surroundings: The squatters are refusing to leave the extravagant Regency home which was recently refurbished Neighbours in Lewes Crescent, Brighton, fear it is only a matter of time before the invaders start throwing wild parties.

The squatters claim that they are taking care of the property One said: 'They look like scruffy students with combat trousers and baggy jumpers with holes in.

'But they're very polite and well-spoken. They seem like your typical middle-class dropouts.'

The four-storey, six-bedroom house, with sea views, was built in 1829 as a bachelor residence for the sixth Duke of Devonshire, and designed by architect Thomas Cubitt.

It was lavishly refurbished in 1848 by the architects who worked on Brighton's Royal Pavilion for the Prince Regent.

After the duke's death, the property was bought by Princess Louise, daughter of Edward VII, and her husband the Duke of Fife - who named the property Fife House.

The King was a regular visitor and stayed there while convalescing in 1908. The princess had a personal lavatory fitted for him with a columned porcelain pan and mahogany cistern which is still there today.

The squatters, speaking through a letterbox, stated they 'are not damaging the property, having parties or causing any anti-social behaviour' From Mail OnLine

Stunning: The bachelor pad for the sixth Duke of Devonshire was built in 1829

You Could be Advertising Here Call 01803 314750 For more information

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 25

SOCIAL LANDLORDS NOT TAKING UP EMPTY HOMES Government rescue deal under-utilised in areas with long waiting lists Landlords in hardest pressed areas snap up just 18 unsold homes Social landlords in the 20 areas with the longest social housing waiting lists bought just 18 homes between them through the government’s £200 million rescue package.

Government figures have revealed that providers in just four of the local authority areas with the greatest need for social homes have bought any stock at all through the national clearing house programme, set up in May to allow providers to buy up private developers’ unsold stock.

A total of 1,531 homes have been bought across England as part of the £200 million scheme, the figures show. But of these just 18 were in the 20 areas with the highest percentage of households waiting for a social home - only four of these areas have bought any homes

SURVEY FINDS LANDLORDS AND TENANTS HAPPY The vast majority of tenants get on well with their landlord, according to a new poll carried out by The Deposit Protection Service (DPS), the only government approved custodial scheme for the safeguarding of tenants’ deposits.

The new figures show that 84% of tenants get on well with their landlord and nearly a quarter of these described their relationship with their landlord as ‘fantastic,’ while 39% of tenants described their relationship as ‘okay.’ Only 16% of respondents said that they did not have a good relationship with their landlord.

With the UK experiencing a buoyant rental market at the moment - and 250 new landlords or agents signing up to The Deposit Protection Service every day - the new research disproves the common myth that tenants and landlords are always at odds.

Kevin Firth, Director at The DPS said: “It comes as no surprise that tenants and landlords are, in general, getting on. Our figures show that since deposit protection legislation was introduced, relatively few disputes have needed to be resolved through the Alternative Dispute Resolution (ADR) Service”.

From the DPS

at all.

Seven homes were bought in Bolton, where 23 per cent of households are on the waiting list for social housing.

Six have been bought in Middlesbrough, three in Lewisham and two in Mansfield.

But none have been bought in Sheffield, where 40 per cent are on the waiting list, or in Brent, London.

Liberal Democrat housing spokesperson Sarah Teather said the government should do more to allow councils to borrow and invest in social housing. ‘It’s little wonder that some of the hardest hit areas are the least able to take advantage of the scheme. Unfortunately, it’s struggling families facing the threat of repossession and homelessness who will pay the price.’

A Communities and Local Government department spokesperson said there were more deals in the pipeline to buy up homes ‘at the right prices in the right places’.

From Inside Housing

Page 26

Issue: 2

RECORD NUMBER OF LANDLORDS FORCED TO PAY BACK DEPOSITS Tenants are clawing back deposits from the clutches of landlords in record numbers, according to industry figures.

A remarkable 94 per cent of London tenants who challenge their landlord’s decision to withhold a deposit at the end of the tenancy win back at least part of the money.

Before the Government rolled out the Tenancy Deposit Protection Scheme in 2007, coffee stains and missing spoons could result in a tenant surrendering the best part of a month’s rent. As most tenancies last one year, an accurate picture of how the scheme works is only now emerging.

A third party will either hold the deposit from the beginning of your tenancy or repay you anything owed from an insurance policy. An independent adjudicator – the same company that resolves Premier League football quarrels – looks at both sides of a deposit claim and evidence such as photos and an inventory.

The latest figures come from mydeposits.co.uk, one of three private companies overseeing the scheme. The statistics show how difficult it is for a landlord to prove that the nail holes in the wall weren’t there before but are down to the hammer-happy occupier.

“If the landlord cannot provide evidence of damage or failure to clean, adjudicators will often find in favour of the tenant,” said a

spokesman.

Ian Potter, of the Association of Residential -Lettings Agents, thinks the scheme is a long overdue wake-up call to landlords.

“It hasn’t been a surprise to agents, who have long warned of the risks of dealing with a contractual matter with a lack of evidence,” he says. “Before the legislation, a lot of landlords believed they had a right to the deposit even if there was no justification.”

Without inventories, bad tenants are being let off the hook, according to David Salusbury, chairman of the National Landlords’ Association.

“Reputable landlords whose tenants have damaged their property are having to dig into their own pockets,” he says.

“When the tenant moves out, even if they have left the place in a mess, if there isn’t a record of what the property was like before, it’s difficult to prove the tenant is at fault.”

If you are in a deposit ding-dong, speak to your scheme’s administrator, which will be one of the following: www.mydeposits.co.uk, www.depositprotection.com www.thedisputeservice.co.uk From The London Paper

When the tenant moves out, even if they have left the place in a mess, if there isn’t a record of what the property was like before, it’s difficult to prove the tenant is at fault

You Could be Advertising Here Call 01803 314750 For more information

DEVON LANDLORDS ASSOCIATION NEWSLETTER

Page 27

NALS PUTS ITS NAME FORWARD FOR OVERSEEING MANDATORY LICENSING OF LETTING AGENTS The National Approved Letting Scheme (NALS) has welcomed discussions with Iain Wright MP, the Housing Minister responsible for the private rented sector, in order to drive forward the better lettings agenda in line with Government policy and public need.

The talks follow the recent findings of the Rugg report which was a Review of Private Rented Sector Housing. The project was funded by the Communities and Local Government department.

In an Industry Forum meeting held on the 11 November, discussions with the Minister centred on encouraging growth within the private rented sector, whilst at the same time securing the right level of protection for tenants and landlords.

The Rugg Report issued last month emphasised the need for added protection for both parties and called for independent regulation of lettings and management agents.

The NALS Forum reinforced that whilst there is unanimous support for mandatory licensing of lettings agents through an organisation independent of the industry that in order to be effective, it is essential that the licensing criteria be strictly ‘policed’ with strong penalties applied to firms who do not comply.

Chair of the Forum, Caroline Pickering, said: “The licensing body needs to retain independence to provide a solution that commands respect and can deliver the necessary strength of purpose.

“A clear message that has come out of both the Rugg Report and our meeting with the Housing Minister is that NALS is the obvious candidate for this role. We have in place standards that are rigorous but achievable by all conscientious letting agents.

“These standards are under continual review to ensure they best meet the changing demands of the industry.

It’s exactly what NALS was set up to achieve and we have the infrastructure, the independence and ability to deliver.

“Ultimately, we offer peace of mind to landlords and tenants who know that a firm bearing the NALS kitemark is committed to delivering good and well-defined standards of service.

“NALS requires all of its member firms to belong the Ombudsman for Estate Agents Scheme, which adjudicates on complaints against member firms. This scheme has proved enormously successful as the

Forum has unanimously confirmed.

“Indeed it was the consensus of the Forum that all letting agents should be required to join an Ombudsman Scheme in line with the requirement set for estate agents under the Consumer Estate Agents Redress Act. In addition, all NALS agents are required to belong to a Client Money Protection Scheme ensuring that client monies are protected.

“Our commitment to consumers and agents does not stop there.

We also require NALS firms to take part in a customer service audit which is carried out by Nottingham Trent University to check that service levels are indeed being met”.

From Residential Landlord website

One of the recommendations in the Rugg Report published in October 2008 was th mandatory regulation of letting agents If you want to query Julie Rugg about this come along to our Showcase on 10 March 2009 where she will be giving one of the seminars

You Could be Advertising Here Call 01803 314750 For more information

Page 28

Issue: 2 BATEMAN ADVERT

ADVERTISING RATES 500 copies distributed every two months targeting landlords in Devon Size and location of advert

6 issues

3 issues

1 issue

Page 468sq cm Back Cover £260.00

£150.00

£60.00

Page 468sq cm Inside

£210.00

£125.00

£50.00

Half Page 234sq cm

£110.00

£65.00

£25.00

Quarter Page 117sq cm

£70.00

£40.00

£15.00

Eighth Page 58.5 sq cm

£45.00

£25.00

£10.00

Enquiries to Christine—Tel 01803 314750 or email enquiries@devonlandlords.co.uk Notes:-