Monday, 17 February 2014

Are rogue landlords still on the loose?

Councils across the country were given a £4m cash boost in December to tackle rogue landlords in their area - but has anything changed?

In January, Channel 4 News heard from Gemma Jupe, a former tenant of the controversial landlord Fergus Wilson, who had taken a business decision to evict all of his tenants who were in receipt of benefits, because so many of them were in rent arrears.

When Gemma contacted her landlord over a faulty radiator he discovered she was on benefits, and she was told she would have to leave three months later after the New Year, even though she had never been late paying the rent.

Mr Wilson told Channel 4 News that, given he had the right to evict Gemma immediately, "we could not have been kinder to her."

Mr Wilson, who says he has five applicants for every property he rents, added:

"I am most concerned to see that Gemma Jupe has been identified in the media, because life is life and any future landlord will be reluctant to take her as a tenant.

"The best advice I can give to any tenant in these circumstances, is keep your head down - do not identify yourself in the media, so that you don't put any other landlord off taking you."

Following our interview with Gemma, other tenants got in touch to complain about their landlords. They wanted to remain anonymous, because they were afraid of being blacklisted by other landlords in the future.

My landlord was notorious in Portsmouth as a cheap, corner-cutting wide boy; when a window broke he'd replace it with cardboard, when the side of the house started buckling, he propped it up with scaffolding for a year and rented out the storage cupboard as a single room

- Tracey [name has been changed]

We moved into a flat in Twickenham in March - in September water came pouring through the light fitting in the hallway - the landlords just told me to put a bucket underneath. We were told that if we didn't like it, we could leave and that plenty of people would like our flat

- Lucy [name has been changed]

Twenty three councils shared the £4m so they could take on the "unscrupulous Scrooges" who force their tenants to live in squalid and dangerous properties, making their lives a misery.

And new legislation, which came into force in December, enable courts to take account of landlords' assets, as well as their income, when levying fines for housing offences.

So how are the councils that got the extra funding spending it? Channel 4 News takes a look around the country.

Do you live in one of these areas, or have you experienced rogue landlords?

Nottingham City Council won £124,000 funding in January to tackle people who run overcrowded or poor quality accommodation in the city. The funding will pay for an "intelligence hub" to gather information about where regulations are being breached and where unsuitable housing is located.

A social media site to raise awareness of the problem will be developed and a method devised for the public to report rogue landlords. Training for landlords about how to stay within licence and safety regulations will also be provided. Extra enforcement officers to carry out raids and inspections are also due to be recruited.

Barnsley Council received £230,000. The Council identified the areas as "hotspots" where they think "rogue landlords" may be operating. Operations are planned involving the council, police, firefighters, probation service and benefit and energy checks.

The crackdown will also include inspections, an accreditation of landlords scheme, the enforcement of repairs where work isn’t done voluntarily and encouraging owners to bring empty homes back into use.

A pair of Devon landlords in Januray were fined over £6,000 and ordered to pay costs after being prosecuted over repeated failures to safeguard the health, safety and welfare of their tenants in Newquay.

Bournemouth and Poole
Bournemouth and Poole councils were given £134,000 from the government following a joint bid to help fund work targeting landlords who are guilty of not managing their properties properly and protecting tenants.

The cash funding will be used to gather further intelligence on the rogue landlords to determine how they are operating and take action against those landlords whose properties are poorly managed in terms of property conditions and where landlords treat tenants badly, such as illegal evictions or not returning deposits and take formal action, including prosecuting the worst landlords to improve conditions for tenants.

North east
No councils in the north east were offered money to tackle rogue landlords, Ajay Jagota, who works for KIS Lettings, said.

He said: "Much as I would like to see it as a vote of confidence in the north-east’s landlords – and it would be completely deserved in all but a handful of cases if it was - it is very disappointing to see every single council in the region ignored and overlooked," he said.

Tuesday, 11 February 2014

Tenant beaten up after not paying rent

An angry landlord and his son punched and threatened a tenant before trying to drag him out of a car and attack him while in traffic, a court heard.

Flintshire pair Dennis Marshall, 64 and his son, Marcus, 24, were convicted of assaulting John Gradwell after a trial during which West Cheshire magistrates were told they lashed out over unpaid rent.

The pair went to see Mr Gradwell at the Chester property on July 2 last year and demanded £1,200 of unpaid rent before Marshall senior punched the victim and Marshall junior threatened to break his legs, said Marie Haydon, prosecuting.

Miss Haydon said: “The complainant John Gradwell was a tenant of Dennis Marshall. Mr Gradwell owed the defendant £1,200 in outstanding rent. After going to the property Mr Gradwell and the defendant became involved in a dispute over the outstanding monies and an internet transaction which Mr Gradwell said he had made.

“The complainant then said the defendant pushed him on the bed and punched him. Mr Gradwell said the defendant Marcus Marshall threatened to break his legs.

“After a conversation about going to a cash machine to withdraw the money, the victim ran away and flagged down a friend and got in to her car. The defendants then followed the victim and at traffic lights they opened the car door where Mr Gradwell was inside and tried to pull him out before punching him ten times.”

Marshall senior, of Melbreck Avenue, Hawarden, and Marshall junior, of Bracken Close, Broughton, Flintshire, denied assaulting Mr Gradwell but admitted there had been an incident arising from four months of unpaid rent.

Mr Gradwell sustained bruising to his face and legs as a result of the assault, the court was told, Richard Hallows, defending, said the matter had “got out of hand”.

He said: “Both deny assault. Clearly there was an issue and matters got out of hand. Mr Marshall (Dennis) was furious but accepts that he should have handled the matter better than he did.

“For Marcus Marshall, the offence is out of character. He is of good character. He too accepts that the matter got out of hand. Both have learned their lesson, they realise it should not have happened.”

Both were sentenced to 18 weeks in prison, suspended for 12 months and each ordered to complete 200 hours of unpaid work, and pay £50 each in compensation to Mr Gradwell.

Magistrates also ordered them to each pay £400 costs and a victim surcharge.

Friday, 7 February 2014

Landlords will have to pay up or sell up when April's new tax rules bite

Landlords who let their former homes may have to pay thousands of pounds more in tax when they sell these properties after April 5, following a reduction in a valuable tax break.
In some cases, the cutback to capital gains tax (CGT) relief could make it worth bringing forward a sale to avoid the extra cost, say accountants.

The increase in value in a rental property is generally liable to CGT at up to 28 per cent. But landlords selling a rental property that has previously been their home have long benefited from a number of reliefs.The period when they lived in the property is tax-free. "Letting relief" reduces taxable gains by up to £40,000. And, currently, there is no capital gains tax for the three-year period before the property is sold. However, for sales after April 5 this "final period exemption" is being halved to 18 months.

The reduction, announced in Chancellor George Osborne's most recent Autumn Statement, is forecast to raise an extra £360 million in tax for the public coffers over the next five years.
"It's very significant," says Tim Norkett, head of private clients at accountants Crowe Clark Whitehill. "There are big profits to be taxed."

Counting the cost
Many landlords in the capital could be sitting on six-figure gains from a property bought a decade ago.

Londoners who have moved in with their partner and rented out their old home are among those who could be hit by a higher tax bill when they sell, says Lucy Brennan, partner at accountants Saffery Champness.

As well as "accidental" landlords like these, the cut in relief will reduce the benefit of "flipping" - where, for example, a buy-to-let investor looking to sell a property they have not lived in previously makes it their home temporarily to qualify for the exemption.
Accountants said that landlords who have been considering selling should calculate the potential increase in tax to see whether it is worth seeking to offload their property by April. Lucy Brennan says the extra tax "could easily be thousands of pounds".
Take, for example, a rental property bought 10 years ago as a home that has increased in value by £200,000.

The halving of the exemption to 18 months means that £30,000 (£200,000 divided by 10 years, multiplied by 18 months) of previously exempt gains could be liable for capital gains tax.
The additional tax could therefore be as much as £8,400 (£30,000 multiplied by 28 per cent).
However, some landlords face lower increases, or even no extra tax, thanks to their other reliefs.
This could be the case for a landlord who lived for a long time in a property they are now renting out, Brennan says.

If, say, the property in our example was the landlord's home for the first seven years, currently, the combination of that tax-free period with the three-year exemption would mean gains for all 10 years of ownership were free of capital gains tax.

After April, with the reduced exemption, eight and half years of gains (seven plus the 18 months) would be accounted for by these reliefs. But the other year and a half of gains (£30,000) would still be covered by the landlord's letting relief.

On the other hand, where a landlord has made big gains on a property they have mostly rented out, they may well be facing a substantial increase to an already significant CGT liability.

Dropping the sale price vs. saving in tax
Experts have suggested that the relief change could trigger a mini rush to sell properties by April, and that after that point, landlords may be more inclined to hang on to properties rather than selling them because of the less-generous CGT rules.

In order to benefit from the existing three-year exemption, the exchange of contracts on the sale must go through before April 6, with completion before April 6 next year.

Given the potentially tight deadline, Norkett warns that prospective sellers should "watch out for buyers dragging their feet and trying to get some 'wriggle room' on price".

Brennan also cautions: "There's no point in taking a £20,000 drop in price to sell a property just to save £5,000 in tax."

Click here to read the original article: "Landlords will have to pay up or sell up when April's new tax rules bite"

Wednesday, 5 February 2014

Agents Accused of Ripping off Landlords

Estate agents nationwide are “burning the pockets of landlords by creepily adding costs to maintenance invoices” without the bill-payer knowing, according to a property entrepreneur.
Will Davies, who heads property maintenance and refurbishment company, claims London-based agents are routinely increasing landlords’ bills by requiring a commission on maintenance work that they book in through their property management service.
He said: “Basically some letting agents milk their clients by charging them a fee to manage the property and then they take an additional commission from the maintenance companies they use so their clients end up paying more than they should be on top of the charges they are already paying for the service.”
Agents are supposed to mention these ‘extras’ in their Terms of Business but, if they do, Davies says they are usually tucked away in the small print and their landlords have no idea that it is happening.
According to Davies, any agent who does this and does not make this clear to their clients is in breach of industry codes and the proposed guidelines from the Office of Fair Trading (OFT). He claims that making a ‘secret profit’ has always been contrary to Common Law principals but the industry has been slow to expose its own and jeopardise this lucrative source of cash.
He said: “Many letting agents are also a member of a recognised ombudsman scheme but this only provides a system of redress after things have gone wrong for individual clients who complain. It does not make its members be up-front about these charges in the first place or have any powers of enforcement.”
One agent, Featherstone Leigh, has started to tell its clients that it doesn’t do it.
Joanna Hamilton, its director, said: “Historically this has been a nice little earner for many of our competitors but the industry needs to move out of the dark ages and treat consumers fairly – there should be no room for these sort of practices.
“Landlords, many of which do not live in the area rely on their agent to look after their best interests and it is a great shame that many Agents – even those with reputable names, consider this ‘little bonus’ to be legitimate.”