Wednesday, 29 April 2015

£3 million to help landlords meet fire safety rules

Private rented sector landlords will be required to have working smoke alarms on every floor of their property and carbon monoxide alarms in rooms where a solid fuel heating system is installed with effect from October 1, 2015.

Alarms must be tested at the start of every new tenancy - the regulations do not stipulate the type of alarm to be installed; rather, landlords should make an informed decision and choose the best alarm for their circumstances and property. Landlords who fail to comply with the duties outlined in the regulations may be subject to a civil penalty.

The good news is that the Government launched a £3million fund on March 19 which means thousands more tenants living in private rented homes will have working smoke and carbon monoxide alarms distributed through England’s 46 fire and rescue authorities.

The funding will benefit private rented houses across the country, providing around 445,000 smoke and 40,000 carbon monoxide alarms which will be available free from local fire and rescue authorities to private sector landlords whose properties currently do not have fitted alarms.

The new legislation coming into force in October that requires anyone renting out their home to ensure there is a smoke alarm on every floor of the home at the start of the tenancy is very positive and Carter Jonas property managers will ensure that our landlords adhere to this rule to ensure tenant safety.

However, whilst landlords will be under a duty to install and initially test alarms, Housing Minister Brandon Lewis, when announcing the proposals which he hoped would prevent 26 deaths and 670 injuries a year, said tenants were urged to “regularly test their alarms to ensure they work when it counts”.

Lisa Simon, 
Partner Head of Residential Lettings
T: 020 7518 3234 

Monday, 27 April 2015

Give farmers a break – that is the plea to the Rural Payments Agency

Farming leaders are quite rightly calling on the RPA to take a lenient attitude to genuine mistakes made by farmers this year as the new Basic Payment Scheme is in such chaos.

The RPA have had to delay the application deadline by a month following the abandonment of their online application process in favour of a paper based system.

The failure to get the online process up and running means farmers will now have to carry out calculations manually which previously were supposed to be done automatically by the online system.

So farmers are now exposed to making errors which could have a significant impact on the payments they will receive as penalties are applied.

Also, having printed out a number of the forms that I have received by email on behalf of clients, there is clearly plenty of scope for basic mistakes to creep in.

For example, in contrast to the old paper forms which were printed in a booklet where all the information on one field could be completed on one line crossing two facing pages of the booklet, this is no longer possible because the two pages now have to be printed separately.

Therefore part of the information for each field will have to be completed on two separate sheets of paper. There are 11 fields per sheet and 10 columns to be completed for each field, four on the first page and six on the second page.

What used to be a reasonably straightforward task of following one line across two pages in a booklet has been made more complicated than it should.

A facility to print two A4 pages on one A3 sheet of paper would have been a great help both to farmers and the RPA but that does not seem possible at present.

So if your farm receives a visit from an RPA inspector this year, you should not sign off the inspector’s findings without looking at them very carefully and ensuring you have a witness present as to what is said.

In my experience such inspectors often downplay the potential consequence of their findings, partly so they can complete their task and possibly also because they do not always appreciate the consequence their findings may have on a farmer’s support payments.

Therefore utmost care is required this year in completing the BPS application form and advice should be sought if an inspector comes to call later in the year.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Monday, 20 April 2015

Parliament's dying Act clarifies tenancy law

You may be growing weary of election-speak and politicians but before Parliament dissolved at the end of March there was one outcome that brings major relief for landlords in the private rental sector (PRS).

One of the last acts of the Commons was to pass into law the Deregulation Act 2015, which came into force on March 26, 2015. It clears up the confusion caused by the now infamous Superstrike case, the outcome of which caused some panic about deposit protection and whether or not a valid Section 21 notice could be served to regain possession.

The outcome is still mindbending for some, but the important date to remember is June 23, 2015, by which time all deposits held but not registered with an approved tenancy deposit scheme must be registered and the prescribed information given to the tenant.

It has been compulsory since April 6, 2007, for landlords to protect a tenant’s deposit in respect of an assured shorthold tenancy (AST) in an approved tenancy deposit scheme and to provide certain prescribed information to the tenant within 30 days of receipt of the deposit. Failure to do so prevents the landlord serving a valid Section 21 Notice to bring the tenancy to an end and leaves landlords at risk of a financial penalty of up to three times the deposit.

A deposit on an AST taken before April 6, 2007, that continues to be held as a statutory periodic tenancy which also started before April 2007, does not need to be protected. In these circumstances, landlords seeking to gain possession of the property using notice under Section 21 of the Housing Act, 1988, must protect the deposit and issue the Prescribed Information to the tenant prior to serving the Section 21 notice.

A deposit on an AST taken before April 6, 2007, that continues to be held against a statutory periodic tenancy which began after April, 2007, must be protected with an authorised scheme, if this has not already been done, by whichever is the earlier of either:

- the 23rd June 2015, or;

- before a court decides on proceedings under Section 21 of the Housing Act 1988 (possession) or;

- before a court decides on proceedings under Section 214 of the Housing Act 2004 (failure to protect a deposit).

A deposit taken on an AST after April 6, 2007, and correctly protected, with Prescribed Information served to the tenant, does not need the Prescribed Information reissued to the tenant on future renewals of the AST or where the AST rolls into a statutory periodic tenancy so long as the landlord, tenant, and property information remain the same and the deposit remains in the same tenancy deposit protection scheme.

The Deregulation Act also clarifies that where an agent has protected a deposit on behalf of a landlord, the agent’s contact details can be provided within the Prescribed Information.

The law is relevant to any deposit currently held on an AST. It assists landlords who did not re-protect deposits or re-serve Prescribed Information when a tenancy was renewed or when a statutory periodic tenancy arose. Tenants must still be given revised Prescribed Information about their deposit if there is a change in tenant(s), landlord(s), premises or the deposit protection scheme.

There are also changes creating a new form of Section 21 notice coming into force on July 1, 2015. Any tenancy created after that date will need to use a new style of Section 21 notice, tenancies created before then, or based on renewals or extensions of tenancies created before then, can still use the old style notice. From June 1, 2018, all ASTs will need to use the new style notice irrespective of when they began.

The remaining changes to Section 21 - the limit on serving notice in the first four months and the various alterations regarding tenant complaints about condition - do not come into force until October 1, 2015, and, again, are only applicable to new tenancies commencing after that date until they become applicable to all tenancies from October 1, 2018.

Lisa Simon, 
Partner Head of Residential Lettings
T: 020 7518 3234 

Friday, 17 April 2015

Was it an administrative error?

The farmer-owned dairy co-op First Milk hit yet more trouble last Friday as their milk suppliers failed to receive their monthly cheque as expected.

First Milk blame this on an administrative error but there are continued fears about the organisation’s financial stability which must be arousing fear among the 1,200 farmers who supply milk to the co-op.

Since the turn of the year First Milk has been rocked by a number of problems that started in January when they announced a delay in paying the monthly milk cheque by two weeks.

This sent shock waves through their membership. Then in February First Milk announced a change in the way farmers would be paid for their milk by introducing an “A and B pricing contract”.

Instead of paying farmers a single price for all the milk they produce, farmers from April 1 would receive a fixed price for the “A” milk; approximately 80 per cent of their produce and a second variable price for the “B” milk.

The “B” price is being set to reflect the short-term prices such as those on the spot and milk powder markets. This clearly introduces uncertainty for First Milk members who will not know what price they will be receiving for their milk at the end of the month.

Then in March First Milk announced its milk price for April would likely end up being around 20p/litre which is well below the cost of production.

This makes one wonder how long dairy farmers can continue to supply milk at this price, especially as other dairy farmers are being paid significantly more by other milk buyers.

In this context some farmers on the best contracts are still being paid more than 30p/litre, an incredible 10p per litre more than most First Milk producers are getting for doing more or less the same job.

Why don’t farmers change contracts? Well the answer is that it is not easy to change contracts and for some there will be no choice at all. Many of the beleaguered First Milk suppliers will have to hang on in hope of better prices to come or cease dairy farming altogether.

So with the milk price at around 20p per litre, First Milk producers are facing a difficult choice and their confidence in the management of the organisation will have not grown when their monthly milk cheque failed to hit their bank accounts last Friday.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Friday, 10 April 2015

The abolition of Milk Quota

As I sit writing this article on April Fools Day, I cannot let the day pass without making mention of the abolition of Milk Quota.

It was introduced across the then EEC on April 2, 1984, some 31 years ago almost to the day as a mechanism to control milk production because of the “milk lakes” and “butter mountains” which were growing in intervention stores.

How times have changed: back in 1984, under the Common Agricultural Policy, famers received support not through direct payments but via the support of commodity markets. When a commodity fell in price, it was bought into intervention stores thereby supporting the market price, which not surprisingly encouraged overproduction.

Since 1984 intervention support has all but disappeared and farmers now receive support through direct area-related payments not linked to production and they then have to sell their produce at whatever price they can get.

Accordingly farmers are now exposed to world commodity prices which tend to be volatile and dairy farmers are currently facing very low milk prices due to an oversupply on global markets.

But back in1984 when quotas were introduced, it was not the price that was the problem, but the fact that without warning farmers were forced to cut their production to stay within the level of Milk Quota they were allocated.

Failure to do so would result in fines at the end of the year. As a result milk quota became very valuable because farmers could not expand without securing extra milk quota.

Milk Quota rather than milk price was the limiting factor.

I cut my teeth as a young surveyor back in the 1980s dealing in milk quota and I can remember trading quota at more than 80p a litre for sale and 22p/litre for lease.

These were crippling prices for some but in more recent years the UK has remained under quota and as a result the value of Milk Quota plummeted to a fraction of a penny and now has finally been scrapped altogether.

However, other European countries such as Germany, the Netherlands and Ireland have all been going over quota on a regular basis and it is assumed that without the constraint of Milk Quota, production there will rise.

It is estimated that across the EU the additional milk production following the lifting of quota is likely to be similar to the total production of Ireland and there are fears this will hinder the recovery of milk prices, particularly here in Europe.

So, although the passing of milk quota will not be mourned by many it does represent the end of an era of EU agricultural policy which encouraged production without heed to whether there was a market for the produce.

That era has now well and truly passed and dairy farmers currently find themselves all too exposed to the reality of “the market”.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Tuesday, 7 April 2015

Basic Payment Scheme has slid into chaos

Giving credit to the Rural Payments Agency does not come easy as their administration of the Basic Payment Scheme has slid into chaos.

Last week the Western Daily Press reported the shock announcement by the RPA that, for this year at least, the new online computer system has been abandoned for making the claim.

However, I commend the RPA for facing up to the very real problems that farmers and their advisors were facing with the failings of the online process.

We are also grateful that the EU Commission has extended the deadline for submission of the BPS application from May 15 to June 15 because of problems being experienced with the introduction of the new scheme throughout Europe.

But the practical details about how the application process will now work are only just emerging and there are a number of important points to note.

First, you still need to ensure you are registered on the new RPA online system. This is usually reasonably straightforward and the easiest way to do this is to call the RPA on 03000 200 301.

Once registered you will need to check your business details, appoint any agent you may wish to deal with your claim and check the level of “permissions” you wish to give yourself or your agent.

Then, although the deadline for the submission of the BPS application itself has been extended to June 15, the deadline for submission of entitlement transfers remains May 15. This is important because in this first year of the BPS, any spare entitlements which are not claimed will be confiscated permanently and their value placed in the National Reserve.

This means claimants must make sure they have matched their eligible land with the equivalent number of entitlements and if any adjustment in their number is required, these need to be made by May 15 and not June 15. To transfer entitlements you need to complete a paper RLE1 form which can be downloaded from the RPA website.

To make a claim, the RPA have produced a blank claim form (BPS5) which can also be downloaded from the website. However, the RPA have said they will be emailing sometime in April pre-populated forms to people who claimed last year with a copy of their RLR maps. So it seems sensible to wait for these pre-populated forms and plans to arrive rather than trying to complete the blank form from scratch.

This is obviously a busy time in the farming calendar and so it is welcome that the application deadline has been pushed back to June 15 but this is no reason to be complacent because there are still tasks which need to be dealt with by May 15.

Farmers and their advisors need to keep their wits about them during this crucial period.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Thursday, 2 April 2015

Regions to be cheerful

Will Mooney, Carter Jonas partner and head of commercial and professional services in the eastern region, ponders the politics of the powerhouses.

The recent Budget statement acknowledged the potential of regional powerhouses and the considerable heft that economically successful regions contribute to the national and international performance of the UK.

Not before time. On the face of it, there appeared to be positive policy initiatives which could be good for the eastern region and spending plans for the kind of things for which this region – if you consider Cambridge as the heart of the hub - is known and recognised.

There will be £11 milllion to invest in new technology incubators to be channelled through Tech City UK – the government body which funds technology clusters. A £40 million pot will assist with research in to the ‘Internet of Things’ which, in his speech, the Chancellor rightly identified as the next stage of development in ‘the information age’.

Then there was the potential of a deal whereby 100 per cent of growth in additional business rates could be brokered for and kept by local authorities in areas like Cambridge, among others. This was described in the speech and in the subsequent media coverage as a ‘roll out of the Manchester model’ and a key component in formulating a northern powerhouse which sees Manchester and Leeds at the metropolitan heart of this hub.

Naturally enough, many in business in this region gave what is couched as a ‘cautious welcome’ to this and other elements of the Budget and for understandable reasons.

It is churlish to say it, but there has been a full-on eastern powerhouse for the best part of 20 years and does the powerhouse model, in modern times, really orginate in Manchester? We’re a long way from the heyday of the wool trade in which industrial Manchester was the centre of that economic power push.

Equally, one could argue that at a county level, never mind a regional level, there are issues of disparity and identity with which we struggle here in a way that a northern powerhouse might not. Although try telling that to the Houses of York and Lancaster.

In Cambridgeshire, there is a marked distinction between the north and south of the county; try lumping Ipswich in with Norwich and you won’t be popular; locations in Hertfordshire and Essex which border London have more in common with each other than their country or coastal county compadres. And whither Lincolnshire and Northamptonshire? Arguably, the former has more in common in its southern rump with north Cambridgeshire and the latter, a compatability with the Oxford corridor.

While government and civil service assistance to provide the broad policy and economic framework and infrastructure in which any region can seek to prosper is to be welcomed, it is questionable whether direct intervention - some might say interference - in trying to impose a regional identity and common cause is the best use of their time in the modern age.

After all, the latest detailed study of the genetic sources of the UK, has identified that there are 17 dominant genetic clusters which tend to reflect the de-facto, regional identities, not bureaucratic boundaries, within our nations. The largest of these clusters covers southern, central and eastern England and dates back to the the collapse of the Roman Empire when Angles and Saxons settled here.

Will Mooney MRICS

Commercial, Cambridge