Furnished or UnFurnished?

Furnished or Unfurnished? What is the legal definition? My tenant claims I have not provided what I should have done.

In fact there is no legal definition of furnished, unfurnished or even part-furnished in the UK - these are terms which have come about through custom and practice - in reality they have no industry standard so legally the tenant accepts things as they are when he signs the contract.

What is defined in law is that all furniture and furnishings supplied must meet fire safety standards and it’s in your interest as a landlord to check that they all comply with fire resistance specifications. Electrical and Gas appliances should also be checked.

Letting fully furnished, part-furnished or unfurnished no longer has any implications regarding security of tenure for the tenant or for taxation. However, Council Tax and the 10% Depreciation Allowance may be affected - you don’t pay Council Tax during voids if let unfurnished, but if you do this you cannot then claim the 10% Depreciation

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Squatters in my Property - what can I do?

Squatters - my property has been unoccupied for only a short time and I have discovered that squatters have moved in. What can I do?

This is a question that comes up quite often. Most landlords are surprised to learn that squatting in itself is not a crime. Occupying a property without the owner’s consent is technically known as trespassing but you as landlord cannot use force to effect an eviction without yourself committing a crime.

However, waiting until the property is unoccupied and then changing locks is not a crime either, though you are obliged to take care of belongings.

Fortunately, it is quite straightforward for owners to evict trespassers legally if they follow the correct procedure. The owner will need to apply to the local County Court or the High Court for a possession order using the special procedure for squatters. You don’t need to know the name of the squatters to use this procedure.

If you can show that the occupiers are in fact trespassing you should receive a possession order within a couple of weeks, which may be delayed further depending on if the occupiers defend their position or ask for more time to find alternative accommodation, which may cause delay in the leaving date.

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License or Lease ?

I understand that if I let on a license my tenant has fewer rights under the law. Can I simply call my agreement a license instead of a tenancy agreement?

Landlords would often prefer to let under a license as it does indeed give the tenant fewer rights under the law.

However, this is far from a straightforward issue and there have been many legal cases fought over the distinction between a license and a lease (tenancy agreement).

Property can be occupied but not necessarily “possessed”. The distinction is a subtle and elusive one but nevertheless very important. Occupation of property comes under four main headings in English law: Freehold (owner), Leasehold (tenant), License (authorised occupier) and trespasser (squatter).

A license allows occupation but does not give the occupier legal title in land, as does a tenancy. So, a guest in a hotel has a license to occupy, as does a lodger in a property where the landlord is in occupation, and as does a company which occupies a serviced office or workshop space.

The big advantage to a landlord is that the licensed occupier can be removed (subject to the notice period in any agreement) without too much trouble – they have no legal protection.

Had the occupier been granted a tenancy, then they would have legal protection (security of tenure) either under the Housing Acts (1988 & 1996) for a residential tenancy, or under the Landlord & Tenant Act 1954, in the case of a commercial tenancy.

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Tenant Absconded – Abandonment?

My tenant has abandoned the property, or at least it appears to be the case, since there’s been no sign of him for 3 weeks now. He owes me 2 months’ rent but he has left all his possessions in the property. What can I do?

This is a common story and one which we get asked about frequently on the LandlordZONE Forum.

The legal term for this is abandonment.

The major problem for the landlord in this situation is that legally there is no conclusive evidence that the tenant intended to surrender the tenancy, which is valid until the end of the fixed-term.

The fact that all the possessions are still present appears to support that view.

Even though the tenant appears to have left owing 2 months’ rent it does not give the landlord the right even to enter the property, let alone take it over and re-let.

Had the tenant handed back the keys, given notice of intention to surrender, or indeed had a removal van round to remove possessions, then the case would be a straightforward one and the landlord could safely take-over again.

As it is the tenant may be on an extended holiday, in hospital, unavoidably delayed somewhere or even in prison – the landlord takes over at his peril.

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Picking the wrong route to recovery – a landlord fails to recover service charges

Barrister Mark Warwick, who acted for Mott Macdonald in the case discussed in this article, describes how the courts have now ruled that landlords must strictly follow the terms of leases when recovering service charges.

An important case decided in the Court of Appeal last week (note to eds: July 23rd 2008) has sounded a wake up call to landlords and agents. Simply stated it means it is vitally important they fully follow the language of leases in order to recover service charges. Failure to do so led to landlord Leonora Investment losing a claim for £263,117 plus costs because it did not follow the prescribed procedure.

The decision in Leonara Investment Co Ltd v Mott Macdonald Ltd [2008] EWCA civ 857 is vital because it concerned a set of leases whose provisions as to service charges were structured in a familiar way.

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Landlords and The Party Wall Act

Being a Landlord you rely upon your tenants to do many things; pay the rent and look after your property would be the main two but passing correspondence on to you can be equally important, particularly when protecting your property from structural damage could depend upon you receiving that correspondence.

As prices have risen over the last few years more and more owners have decided to extend their homes as a cheaper alternative to moving. Many of these alterations will put adjoining properties at risk of damage and structural movement which is why they fall within the scope of The Party Wall etc. Act 1996.

Many owners believe that the Act only covers work which involves alterations to a party wall but the scope of the Act is much wider than that. It also covers adjacent excavations (such as those for the foundations of extensions) and under the Act ‘adjacent’ means within three or six metres depending upon the depth of the excavation. This means that as well as loft conversions most domestic single storey extensions, even on semi-detached or detached houses, require notice to be served under the Act.

So how can you ensure that you are given the opportunity to examine the proposals, and if necessary appoint a surveyor, before work commences? The procedures laid down in the Act are actually very helpful to adjoining owners if only owners planning building work followed them.

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Tenancy Deposit Schemes - 12 months on…

The new tenancy deposit schemes have been operating for 12 months. This is an important review, of considerable interest to landlords and letting agents, by Daniel Dovar and Michael Walsh, barristers at 33 Bedford Row - April 2008

Introduction

The tenancy deposit schemes came into force on 6 April 2007. The idea of the schemes is to safeguard tenancy deposits and to provide ADR methods of resolving disputes in relation to deposits. From that date it has been necessary for every deposit taken by a landlord in respect of an assured shorthold tenancy to be protected by a tenancy deposit scheme. If it is not it will not be possible to serve a s21 notice and thus obtain possession (Housing Act 2004, s215).

See also para 7B(d) of the revised form N5B (Accelerated procedure claim form) which states:

“If your claim for possession is in relation to an Assured Shorthold Tenancy where a deposit was taken after 6 April 2007, you must provide evidence that such deposit is safeguarded with a tenancy deposit scheme (TDS) authorised under Part 6 of the Housing Act 2004”.

The scheme applies to any deposit taken in relation to a new assured shorthold tenancy granted on or after 6 April 2007. It is not applicable to continuation tenancies, ie where the tenant stays in occupation as a statutory periodic tenant (Housing Act 1988 (HA 1988), s 5)).

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Commercial Rent Arrears Recovery - PainSmith Solicitors Legal Update - April 2008

For commercial landlords with tenancies created under the Landlord and Tenant
Act 1954, the imminent introduction of the Tribunals, Courts and Enforcement Act
2007 (“the Act”) is set to have an effect on the way in which they recover any rent
arrears. The new procedure which has been introduced in order to comply with the
European Convention on Human Rights can be found under ss 71 to 87 of the Act
and is known as Commercial Rent Arrears Recovery (CRAR).

Commercial Rent Arrears Recovery - PainSmith Solicitors Legal Update - April 2008

The provisions are anticipated to come into force later this year and they are firstly
set to abolish the well recognised common law right to distrain1 for arrears of rent.
In its place will be CRAR which replaces the traditional remedy with a clear modern
day system which will allow commercial landlords to instruct enforcement officers
(i.e bailiffs) to collect arrears of rent. If a landlord seeks to utilise this statutory
remedy they will be required to follow a more stringent procedure which involves
the satisfying of some strict pre-requisites including the service of notices and the
obtaining of a Court Order.

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Arbitration - PainSmith Solicitors Legal Update - April 2008

Many property professionals will be familiar with arbitration clauses. In the past
these used to be relatively popular but, with the advent of Tenancy Deposit
Protection and the end of the TDSRA scheme their usage has tended to fall away.
This is unfortunate, as when dealing with higher value claims a well crafted
arbitration clause can actually produce a quicker, cheaper and more effective form
of settlement for both sides.

Arbitration is governed under the Arbitration Act 1996 which was designed to set
out a quick, effective, but thorough form of arbitration to be used in the United
Kingdom. The Act has been so effective in so doing that its forms have been
adopted by other countries and it is the de facto standard for international
arbitration.

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Energy Efficiency & Energy Performance Certificates

Energy Efficiency

Energy efficiency improvements cost less than you think. Central heating, insulation, and double glazing can increase the long-term value of your properties and make them more attractive to renters. What’s more there are many grants available and they can reduce your income tax bills.

Here are some simple things you could do to improve the energy efficiency of your properties:

- Top up your loft insulation and insulate your walls. Your energy supplier is offering big discounts on prices for insulation right now – make the most of them!
- Update your heating system with a high-efficiency condensing boiler and effective heating controls
- Take advantage of significant discounts and buy a new, more energy efficient washing machine, fridge or freezer

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