Too many cars!

To play fair, you can only park as many cars as you have spaces for on site.  Stands to reason, and you would think everybody could understand that.  Visitors parking is scarce and often visitors have to park off-site.  

In this case an action was started against the owner of the property whose tenants were flagrantly breaching the rules, day after day, night after night.  And, not ine cat at a time – typically 3 or 4.  

Once the landlord understood that our Client was serious they used our action to start taking breach proceedings against their tenants.  This resulted in the tenants moving on and RingleyLaw’s costs being covered by the owner.   Hopefully, with getting better tenants next time, this owner will make sure their Agent is clear on how many spaces come with the property and also get a previous landlord reference!

Housing crisis – is a change to volumetric planning an answer?

Static wage inflation, rising rents, stagnating house price growth, and a house building industry propped up by overseas buyers and help to buy along with an onslaught of legislation and taxation on private landlords are not helping us build enough homes to solve the housing crisis.   So is volumetric planning the answer?

In the UK .minimum space standards look at the floor area, not the living space.  The only way to avoid these .minimum space standards is to depart from the C3 use class which itself in the name itself (C3 – dwelling house) is stuck back in yesteryear and go for use class C1 – hotels, boarding houses, guesthouses.  Ordinarily use class C1 is for hotels and the nonsense that you will find is that rather than develop a format that supports compact living or as the name of developer ‘packaged living’ so nicely describes.   The buzz word co-living (where you build in mass and downsize the self-contained space whilst providing community space so people can live outside the home) seems here to stay, it is a solution that is accepted in leading European cities such as Amsterdam and in Asia with Korea and Japan being exemplars.

A developer wanting to provide an alternative modern way of living has to either face a sui genesis application where prospects of town planners getting their heads around it, or having precedents or planning  guidance to follow mean a more drawn out application process than normal, or take the easy route and go for C1 which means paying vat on rent and risk potential criticism or planning enforcement if longer stayed proves that the C1 use is actually C3 in disguise.

Could the solution be to consider space in volumetric terms?  Innovation and the availability of fixtures and fittings means that smaller spaces can be used so much more interestingly and creatively than ever before. 

If for example the traditional 2.4m high unit was increased to 3.7m the init size could easily be reduced from the current space standards minimum of 28sqm to 20sqm.  And surely a well designed galleried study over a kitchen and sleeping deck on top of part of the lounge is easier to keep tidy and inviting to visitors than a single studio flat with everything on view.  

GDPR one year on

The world of property management is a complex one crossing the relationships of the freeholder, management companies, property owners, who then may themselves be landlords and their sub-tenants.  Along with the role of managing agent comes the expectation that things can just get done without some participation from owners and residents on site.  Of course, this challenge is exaggerated somewhat more when there is no concierge or staff on site. 

Below is an advice note for Clients, many of whom are directors of management companies, so are not exempt from being treated as a business when dealing with residents and owners on site.

Put simply there are 5 reasons why you may contact someone.  These are:

(a) Consent: the individual has given clear consent for you to process their personal data for a specific purpose.
(b) Contract: the processing is necessary for a contract you have with the individual, or because they have asked you to take specific steps before entering into a contract.
(c) Legal obligation: the processing is necessary for you to comply with the law (not including contractual obligations).
(d) Vital interests: the processing is necessary to protect someone’s life.
(e) Public task: the processing is necessary for you to perform a task in the public interest or for your official functions, and the task or function has a clear basis in law.
(f) Legitimate interests: the processing is necessary for your legitimate interests or the legitimate interests of a third party unless there is a good reason to protect the individual’s personal data which overrides those legitimate interests. (This cannot apply if you are a public authority processing data to perform your official tasks.)

As a freeholder or management company director arguably there is a contract in place.  The lease or transfer document for houses creates a contractual reason why communicating with an owner should occur.  Added to that there is the legitimate interest clause that covers situations where…..

And, then there is the …. clause to rely on in an emergency.

What is important, is that when choosing to communicate by email (as opposed to post or hand delivering documents) that you know when you obtained someone email address and what they thought they were giving it to you for at that time.  For example: if someone gave you an email address to consider joining an RTM (right to manage) group but then did not join up, arguably the right for you to use that email address would expire when the purpose for which it was given has ended.

The biggest risk is intentionally or accidentally exposing someone’s email address to another party involuntarily.  This is easily done as in the old days we all used to Cc owners on site.  Now quite clearly unless you can prove that the person giving their email address agreed to this Bcc is the only realistic option.  Along with a note to let people know that others have been Bcc’d for fear of people simply thinking that you forgot to copy everyone else in.  

For communications between directors (where only directors are involved) then Cc would be appropriate.  

Over the year we have received three GDPR complaints.  One where the persons email was exposed by the client in a residents group; another where an owner wished to receive some types of communication – but not others…. this is a very tricky one and almost impossible to police.  And, a third where despite reporting an urgent repair wanted the owner wanted to take no part in being contactable to let the contractor into the building.  Tricky, as the client did not want to foot the expense of paying for office staff attendance either.    

Much has changed in the way we operate at Ringley to deal with this.  We now record the date and time a person gives us their email address.  Every time a member of staff first sends an email out to a person they have to categorise which of the 4 allowable reasons they are relying on as authority to do so.  We also now Bcc groups and include a message explaining why. 

Our over-cautious approach has caused a little upset but not too much – for example where a directors email is sitting on a stray record card, not an owners record card then the system will detect that their email does not appear to actually be a directors email and Bcc all directors for safety.  We believe our data clean up efforts are pretty much complete and our Customer Care team continues to classify all new email addresses put into the system daily.

GDPR has also affected the way that owners can log into the Gateway so as a reminder if you are experiencing a problem this will be because either we do not have your email address correctly assigned to an owners record card, or we have not assigned your email as an ‘owners’ email address.      

Sites, where sub-letting is not controlled by the lease, are problematic as in theory we have to rely on good spirited community ethics and the legitimate interest clause to try to ensure we can engage the many many residents in sublet properties in a community-driven agenda.

Government announces; section 21’s set to be axed for UK landlords.

The government has decided to take action and abolish Landlords ability to serve a section 21 notice. This has come in light of many claims from various tenant support groups, suggesting that 46% of tenants received a notice to leave the property within 6 months.

Removal of section 21 could cause landlords to leave the already struggling property market and would mean many landlords wanting to rent out their property short term will no longer be able to do so, leaving them no choice but to rent indefinitely Unless sufficient grounds were given, of a similar kind to those that have been issued in Scotland.

As of December 2017, Scottish landlords were no longer allowed to serve section 33’s (their version of a section 21) for a no-fault possession, however the government have added a few extra grounds for possession if a landlord has “reasonable cause” for example, needing to sell, refurbish or move back in. Scotland now has open-ended tenancies meaning there is no end date, like the “assured tenancy” and it’s looking like it will be that way here also.

The end of the section 21 comes after many campaigns from various organisations claiming that it causes tenants to ‘live in fear’.

Many tenants and support groups see this as a victory, however, this abolishment will more than likely lead to landlords driving up the cost rent causing tenants to suffer as a result. This will also lead to Landlords that ‘need’ their properties back to cause an even larger decline in the already diminishing housing stock unless additional provisions are put in place. In reality, the government needs to listen to landlords and give them the ability to obtain their property back when ‘needed’ as this is what happens the majority of times anyway. 

Could BTL investors avoid 3% stamp duty surcharge following tax tribunal ruling?

Buy-to-let investors could soon fill the HMRC with stamp duty surcharge refund requests. This is following on from a potential precedent set at a recent tax tribunal that saw a couple acquire a neglected building and were able to refute the additional 3% stamp duty charge on purchases of second homes.

It was revealed at the tribunal, held in Bristol, that potentially, buy to let investors could avoid paying the 3% stamp duty surcharge. This instance could cause many more landlords who have already paid the surcharge, to demand a refund from HMRC and suggests that many property purchases could fall short of the additional 3% surcharge and just consist of the standard rate stamp duty.

Paul and Nikki Bewley acquired their uninhabitable bungalow in Western-super-Mare and made the decision to bulldoze the original build in order to make way for a new property, thinking they would not accountable for the 3% charge for Taking on the additional property.

HMRC argued this view, believing that the 3% charge was applicable, as the property was capable of being used as a dwelling sometime in the future.

However, a recent tax tribunal ruled against the HMRC and in favour of Paul and Nikki Bewley, stating that they are only able to charge the 3% if the home is in an acceptable living condition right away.

HMRC has yet to decide on an appeal, stating: “We’re considering the judgment carefully.”

But, this ruling suggests that many buy-to-let landlords could be exempt from the 3% surcharge, when buying a property that is uninhabitable at the time they purchased it.

Commercial Trust Limited, a specialist buy-to-let broker, considers that this ruling could represent an opportunity for past claims from buy-to-let investors who have paid the additional 3% charge on properties that were uninhabitable at the time of purchase.

All change for right to manage

Right to manage is under the spotlight. The Law Commission wants to make it quicker and easier for leaseholders to take control of the day-to-day management of their block.

Right to manage is about to get an overhaul
Right to manage is about to get an overhaul

If you own a flat, you can already take on the right to manage or RTM, which gives you and your neighbours rather than your landlord, responsibility for managing your building.

This includes dealing with utilities, repairs, maintenance and insurance. It is what is known as a “no-fault” right, so leaseholders can exercise it without having to prove any mismanagement by their landlord.

As it stands, many people think the right to manage journey is too technical, too slow, too uncertain and too expensive.

  • leaseholders have to pay most of the landlord’s costs.
  • Any errors in completing the paperwork can cause long delays and even prevent leaseholders acquiring the right to manage altogether.
  • Right to manage doesn’t apply to owners of leasehold houses (as opposed to flats), to those who want the RTM over multiple buildings on an estate, or to anyone whose buildings have more than 25% commercial or other non-residential space.
  • RTM companies often don’t know the extent of the management functions they have become responsible for, particularly when it comes to shared property like gardens and car parks.

In response the Law Commission is running a consultation to make the process more transparent and straightforward.  Proposed changes include:

  • Extending the qualifying criteria so that leasehold houses, not just flats, qualify for the right to manage.
  • Permitting multi-block RTM on estates, and removing the 25% commercial space restriction.
  • Reducing the number of notices that leaseholders must serve as part of the claim process.
  • Introducing deadlines for procedures and exchanges of information between the landlord and RTM company, so that the process doesn’t stall.
  • Exploring options for a more balanced costs regime.
  • Giving the tribunal exclusive jurisdiction over RTM disputes so it can resolve disputes quickly, and waive minor procedural mistakes made in the process of claiming the RTM.

At Ringley we have many years of experience advising leaseholders on right to manage.

We agree that the system is over-complicated and we look forward to seeing what comes out of the consultation. Anything that makes the process more user-friendly for leaseholders has to be a good thing.

But any changes to the existing system may take some time, so if you are already committed to  the RTM route or are thinking of doing so in the near future and would like some help, take a look at the Ringley website where we have lots of useful information. We have RTM specialists ready to take your call and we are also about to produce an E-book helping leaseholders through the process that will be ready to download in the next few weeks.

Finally, if you would like to share your RTM journey and take part in the consultation, you can find the online response form here.

The right to manage consultation will be open until 30 April 2019.