Airline immigration case just the ticket for landlords

While the worlds of lettings and budget air travel might appear disparate, landlords might want to show thanks to Ryanair after it successfully challenged a recent legal claim over an immigration dispute.

When the Home Office imposed a penalty on the budget airline after it was found that two Albanians had illegally entered the UK on a flight from Spain using forged Greek passports, Ryanair went to the Central London County Court to state a challenge.

Spanish officials had failed to notice the forgeries, but UK Border Force officers were more vigilant. As a result, the Home Office penalised Ryanair £2,000 for each Albanian, but the airline contested the charge.

Parallels are clearly drawn for landlords under the Right to Rent scheme, which stipulates that documentation has to be checked to ensure that potential tenants and other occupiers of a property aged 18 or over have a legal right to be here.

The Code of Practice that accompanied the implementation of the Immigration Act 2014, set out in the Immigration (Residential Accommodation) (Prescribed Requirements and Codes of Practice) Order 2014, says that landlords “will not be penalised, if, having taken all reasonable steps to check a document’s validity, they are fooled by a good forgery which appears to be genuine.”

The difficulty comes in knowing what a good forgery is, but the Ryanair case seems to give at least a clue as to a definition.

Two immigration officers gave statements that missing security elements in the passports used by the Albanians were in their view “reasonably apparent” to a member of airline staff and that they should have been spotted. However, other immigration officers in similar cases had found that the forgeries were not “reasonably apparent”. The Court took the view that missing security elements that are relatively hard to find, even for trained professionals, would not be reasonably apparent to busy airline staff, even though they have an annual refresher course.

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk

EPCs 10 years on – time to reassess their impact?

It’s a decade since residential properties in the UK were first required to have a ten year Energy Performance Certificate (EPC) before they could be sold or let. As the ten year anniversary approaches, the time has come for the early starters to be reassessed.

Originally part of the Home Information Pack (HIP), loved by a few and loathed by many - but which would have been useful if implemented as originally intended, the EPC survived when the HIP requirement was abandoned in 2010.

At first regarded as a bureaucratic irritation rather than a necessity, the EPC gained more traction recently when the introduction of Minimum Energy Efficiency Standards (MEES) meant that from April 2018 it will be difficult, but not impossible as some suggest, to let a property with an Energy Efficiency Standard below Band E on its EPC. There are exemptions that can be registered, but these are subject to re-application every five years, and it is by no means certain that this will continue ad infinitum. Indeed, it’s expected that the rules will become tougher and eventually exclude Band E properties.

With that in mind, it could be beneficial to review the EPC for your property even if you are not yet required to replace the original purchased 10 years ago. In fact, some landlords are relying on an EPC that exists from when they purchased the property, and therefore was provided by the vendor rather than themselves.

Where a property is Band F or G, but also for those with a low score in Band E, having a new EPC assessment could make the difference between 10 years of worry-free letting and the stress of not knowing whether an exemption granted in time for April 2018 will be renewed in 2023.

The energy assessor who provides the EPC will check for items such as double glazing, boiler efficiency, radiators, and insulation for the hot water tank, walls, and loft. The results are fed into a software program that produces a figure for the EPC, which in turn determines the banding in some instances. The assessor can override the program if there’s visual or written evidence that standards are higher than the software assumes.

Where you are borrowing to fund the purchase of a lettings property, your lender may want confirmation of its energy efficiency standards, especially where the current banding could make it borderline in the future and therefore bring a possible diminution in its asset value. Therefore, taking care of what was once regarded as a merely administrative necessity could pay dividends.

Certain classes of building are exempt from the need for an EPC. As far as residential landlords are concerned, the principal category concerns those that are officially listed as of historic interest.

From April this year, tenants have had the right to ask their landlords to approve their installation of energy efficiency measures. Originally this would have fallen under the Green Deal - a scheme that already had drawbacks before its funding was withdrawn because of low take-up.

Improvements were supposed to be funded through energy bills applicable to a property, provided the benefits of the improvement outweighed the cost of making them.

But it’s much better to make these improvements independently, as part of an investment in your lettings property, rather than using a scheme that allows tenants to take charge, as this may ultimately restrict which energy company you can use in the future, as not all energy providers are involved. While this may seem insignificant, consumers are growing more energy aware and may resent having their opportunities to switch curtailed.

My recommendation is that where tenants ask to carry out an energy survey, you allow it to go ahead, but then consider whether or not it’s to your advantage to implement the improvements yourself so you retain control. It may also be that the work can be completed at lower cost than the tenant’s chosen contractor offers.

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk

PRS - A political hot potato

The private rental sector (PRS) is in danger of becoming as hot a political potato as the EU.

Labour currently has no intention of a referendum on EU membership while Ukip has driven the Tories to despair with its relentless campaign to abandon the EU - and a referendum policy as a populist idea.

But what could be more populist than introducing controls for the PRS, driven by the urge to do highly visible things such as ending letting agents’ fees, which Labour has failed to push through before the General Election in May 2015 but which it promises will be on its agenda, along with three year tenancy terms and fixed rents?

Rent caps in places of high property values are one of the biggest fears that could drive the PRS into terminal decline. Yields become ever smaller as rents are constrained during periods of strong capital growth. Many owners would find it more beneficial to cash in and invest the money somewhere more sensible. Even a bank deposit account with three per cent interest could be better than renting at two per cent yield with all the accompanying risks of repairs, dilapidations, and the costs of regaining possession when yesterday’s dream tenant becomes tomorrow’s nightmare as their economic circumstances change.

Figures from ARLA show that 17 per cent of landlords are expected to sell one or all of their properties in the next 12 months, the highest proportion since 2008. The same source also revealed 59 per cent of lettings agents are reporting more would-be tenants than properties available. Just as the PRS needs to retain landlords, many are plotting their escape route to reap the benefits of the property price surge.

When you talk to lawyers and owners of high end properties in London’s prime quarters it becomes apparent that what interests buyers more is long term capital growth than short term low yield income. Buy to let is out, buy to reap substantial profit could well be coming in if it’s not here already.

Rent caps across the country are unrealistic because there are so many regional variations in property prices and therefore what seems like a fair return on investment. Are we to return to the days of the regional Rent Tribunals as the first avenue of escape for tenants served with notice to quit? The Tribunals, chaired by lawyers, could fix rents as well as deflect a notice to quit and were readily accessible to tenants with some savvy and no lawyer.

With commentators predicting that in very short time there will be more private sector renters than owners, restrictions on landlords and lettings agents could be as good for Ed Miliband as the right to buy council houses turned out for Margaret Thatcher.

Longer tenancies are also a real issue. A tenant who seems heaven-sent on day one could be the tenant from hell by month seven but then it would be too late to serve notice so easily. Employers, who see their staff and assess their performance every day, get four times the trial period it’s proposed to give landlords even though contact with the tenant is frequently non-existent and, at best, sporadic. Three year tenancies by default with a six month trial period will be seen as too risky to be realistic by many landlords. What is designed to protect tenants could actually reduce their chances of finding a home in the first place if availability shrinks. Rents would then rise because the cap is intended to be assessed through market conditions.

Lettings agents’ fees are another conundrum. It’s wrong, it’s said, for agents to charge for referencing or administration such as the inventory but under current plans landlords, and their agents by default, will soon be responsible for checking the immigration status of tenants and their right to live and work in the UK. This would need to apply to every tenant, with a birth certificate and some form of photographic identification to be safe even for those claiming UK birth and lifelong residence. Let to the wrong person and there’s a £3,000 penalty. If that person is working without the right to do so the penalties are stiffer still. When a tenant with the right to live in the UK arrives on the doorstep and it then transpires they don’t have the right to the employment they are using to pay the rent what does the landlord do - allow the tenancy because there’s no right to deny it and then report the tenant for paying the rent?

Someone has to fund the lettings agent’s time in processing all this as Civil Service substitutes because few landlords will want to undertake the task. If there are no fees for tenants, only for landlords, then rents will have to rise to cover the cost. But when the rent is capped, how can the cost of fees be applied?

There is too much fag packet planning and not enough real thought going into all this regardless of which political party happens to be having another bright idea today. Everyone is agreed on the importance of the PRS, everyone agrees it could be fairer all round, but who is going to sit down and work it all out as a policy and not a series of knee-jerk responses to the latest comment article?


Lisa Simon, 
Partner
Head of Residential Lettings
T: 020 7518 3234 
E: lisa.simon@carterjonas.co.uk

Carter Jonas picks up two ESTAS awards

Our Residential Lettings team were represented and collected two awards at THE ESTAS AWARDS “Estate & Letting Agent Awards 2014” on Friday, 9th May 2014. “Best Medium Lettings Chain” and a “People Award” for our Bath Head of Lettings Sharon Hunter – only awarded to 5 individuals nationwide.

The Awards are in their 11th year and were hosted by Phil Spencer, the TV property expert.

The ESTAS determines the best Estate and Letting Agents in the country through research carried out amongst customers. There were 790 entries and 32,000 questionnaires completed.

I would like to personally thank all of our Clients for voting for us and give my assurance that we will continue to strive to deliver good customer service.


Lisa Simon, 
Partner
Head of Residential Lettings
T: 020 7518 3234 
E: lisa.simon@carterjonas.co.uk

Legionella checks could be vital

Most people associate Legionnaires’ Disease with exotic climates or big hotels and conference or leisure centres.

But it can be much closer to home than you think - quite literally if you have a wet air conditioning system, swimming pool, or open water tanks in your property.

If the property is let, to comply with the Health and Safety Executive’s Code of Practice, landlords need to ensure that the risk of exposure to legionella in the property is properly controlled and where necessary carry out a risk assessment prior to letting.

Legionnaires’ Disease is the result of legionella bacteria infecting the lungs. It is usually contracted through breathing in small droplets of contaminated water. It is not contagious and cannot be spread directly from person to person.

Legionella bacteria is commonly found (often in harmlessly low numbers) in sources of water, such as rivers and lakes. However, the bacteria can rapidly multiply if they find their way into artificial water supply systems such as air conditioning.

Large buildings such as hotels, hospitals, museums and office blocks are more vulnerable to legionella contamination because they have larger, more complex water supply systems in which the bacteria can quickly spread. But with the increasing complexity of domestic properties, the threat should not be ignored.

Carter Jonas' heads of lettings and property managers have Legionnella and, Water Safety training and where they identify possible risk of Legionnaires’ Disease, will recommend an external consultant to carry out a risk assessment.

For more information visit The Health and Safety Executive’s Code of Practice.


Lisa Simon, 
Partner
Head of Residential Lettings
T: 020 7518 3234 
E: lisa.simon@carterjonas.co.uk

Short Listed for the ESTAS 'Estate and Letting Agent Awards 2014'

I am delighted to report Carter Jonas Residential Lettings have been short listed for the ESTAS ‘Estate & Letting Agent Awards 2014’.

The ESTAS determines the best estate and letting agents in the country through research carried out amongst their Clients about the service they have received from their agent.

This year 32,000 surveys have been submitted and we have been short listed for four Regional Categories and ’ Best Medium sized chain’.

The results will be announced by Phil Spencer, TV Property expert at the 11th annual ceremony on 9th May 2014. We are thrilled to have been shortlisted and are very grateful to our Clients who took the time to complete and submit surveys regarding our service.


Lisa Simon, 
Partner
Head of Residential Lettings
T: 020 7518 3234 
E: lisa.simon@carterjonas.co.uk

Eliminating the silent killer - carbon monoxide

No human sense can detect it, yet very quickly it can overcome its victims with disastrous consequences. It kills 50 people in the UK every year.

Carbon monoxide detectors are now a legal requirement in Scottish lettings properties, where new boilers or gas appliances are installed, but not in England. It’s a curious situation where someone in Gretna is legally protected, yet their friend in Carlisle currently legally neglected!

The Government has just added enabling powers to the Energy Bill, during its passage in the Lords, to introduce a requirement for carbon monoxide and/or smoke alarms in private rented properties and a review is promised not only of whether smoke or CO2 alarms should be mandatory but also of minimum standards for private rented properties.

A Derby landlord was recently prosecuted after a tenant who had reconnected a condemned gas boiler was subsequently killed by the fumes it gave off. During tests after his death, so much carbon monoxide was present that four neighbouring properties had to be evacuated.

Gas appliances had not been tested subsequent to a test arranged by the agent who introduced the tenant. The agent was not contracted to manage the tenancy and no further tests were carried out.

Landlords are culpable if tenants die in their properties from a defect that could have been foreseen or prevented, such as carbon monoxide build-up.

Here at Carter Jonas, we have taken the decision to advise landlords to adopt best practice and install carbon monoxide alarms. New appliances should already go some way towards protecting tenants, often it’s older appliances that cause the problems. The only way to manage this risk is to eliminate it by use of alarms.

Combustion appliances fuelled by solid fuel, oil, or gas all have the potential to cause carbon monoxide poisoning if they are poorly installed or commissioned, inadequately maintained or incorrectly used. As of 1 October 2010 alarms have been mandatory for newly installed stoves but this does not extend to every potentially dangerous situation.

As part of our management service for landlords, we are recommending and arranging for carbon monoxide alarms to be fitted in their properties over the next few months to both protect the occupier and give our clients peace of mind.

Lisa Simon, 
Partner
Head of Residential Lettings
T: 020 7518 3234
E: lisa.simon@carterjonas.co.uk

Obscure court case causing problems

A seemingly obscure case in the Court of Appeal is proving a headache for politicians and could be a problem for some residential landlords.

A seemingly obscure case in the Court of Appeal is proving a headache for politicians and could be a problem for some residential landlords.

The effect of the ‘Superstrike’ case, the name of one of the parties involved, could have far reaching effects for landlords who have had the same tenants in a property since before deposit protection legislation came into effect in April, 2007.

In Superstrike, what’s known as a Section 21 notice was served to evict the tenant but the move failed because the tenancy dated from January, 2007, and then continued in 2008 under what the appeal court determined was a separate statutory periodic tenancy.

The court ruled that this in effect created a new tenancy but the deposit had not been protected with a tenancy deposit scheme so the landlord was prohibited from obtaining the eviction order. However, politicians say this was not the outcome intended when legislation was drafted and they are now looking at how to correct the anomaly.

In the meantime, landlords who have not protected deposits need to do so using one of the approved schemes. They are obliged to serve the tenant with what’s called Prescribed Information and the scheme leaflet for the tenancy deposit organisation they use.

There are various options to overcome the situation and every landlord needs to be confident that they are in the right position individually with regard to deposit protection and also be aware that further court rulings or legislative amendments from Government could further affect their position.

 

For further information; ‘Likely Implications of Tenancy Deposit Protection Case Superstrike Ltd v Marino Rodrigues’, has been produced in collaboration between the industry bodies ALA, BPF, NALS, NLA, RLA RICS and UKALA.

I will happily point landlords in the right direction for the advice they need and in some instances may recommend that the deposit is returned to the Tenants prior to serving a Section 21 notice.

Lisa Simon, 
Partner
Head of Residential Lettings, Mayfair
T: 020 7493 0676
E: lisa.simon@carterjonas.co.uk