Industry comment, updates and news from the Websters team.

Major changes ahead for private sector landlords and their agents

Tuesday, September 5th, 2017 in Landlord, News, Residential

Adele Nicol of Anderson Strathern LLP reports that new legislation, concerning Private Housing (Tenancies) (Scotland) Act 2016, creates a new form of residential tenancy known as the Private Residential Tenancy (“PRT”). Once the Act is in force it will not be possible to create new Assured or Short Assured Tenancies; existing leases will be phased out, for example a tenant inheriting an Assured or a Short Tenancy will acquire a PRT instead. The ability of a landlord to bring a PRT to an end is more limited than for a Short Assured Tenancy.

The new legislation also contains related provisions including on rent review, and on rent control (in “pressure zones”)

The changes in the Private Housing (Tenancies) (Scotland) Act 2016 have not yet been brought into force. The Scottish Government has indicated that this will happen in December 2017.

Read more here.

The Construction Industry Scheme – 2017 Update

Wednesday, July 12th, 2017 in Commercial, Landlord, Managing Agent, Mixed Use, Residential

Zoe Stollard of Clarke Willmott provides insight into the Construction Industry Scheme and the changes which have been implemented in 2017.

The Construction Industry Scheme (CIS) is designed to decrease perceived undeclared payments in the construction sector. It requires contractors to register for the scheme and to withhold tax before payments are made to sub-contractors under contracts relating to construction operations. The amount of tax withheld depends on the registration status of the sub-contractor:

  • if they are unregistered, 30% must be withheld;
  • if they are registered, 20% must be withheld; and
  • if they meet certain criteria and register for gross payments, 0% must be withheld.

The contractor must then pass to the HMRC the amounts withheld.

Prior to April 2017, contractors could verify whether sub-contractors were registered and whether they could be paid gross online or by phone. From the 6th of April 2017 sub-contractors must be registered online.

Read the full article here.


The advantages of external audit for managed property portfolios

Saturday, April 1st, 2017 in Commercial, Landlord, Managing Agent, Residential, Service charge audits

When we started specialising in service charge audits they were frequently undertaken as part of the property owner’s general annual audit. This was not a satisfactory situation because specialist knowledge is needed for accurate service charge accounting assessment.

  • Landlords and tenants have transparent financial relationships
  • Tenants trust that the service charge is correct and fair at no added cost to the landlord
  • A reduction in investigations by tenants into service charges, saving time and money for landlords
  • Specialist advice on current techniques for the internal accounts team
  • Almost all general practice accountants and auditors unfortunately do not have the specialist knowledge and experience to fully understand your needs

Since that time many large landlords in the UK have moved to providing independent audited accounts for their service charges thus removing one cause of landlord : tenant conflict

Presence of tenant’s chattels frustrates vacant possession on break

Wednesday, January 4th, 2017 in Commercial, Landlord, Managing Agent

Burges Salmon LLP reports that, in the case of Riverside Park Ltd v NHS Property Services Ltd, the break clause in an NHS lease provided that the break would only be effective if vacant possession given but partitioning, kitchen units, window blinds and other such items were left in the premises.Therefore the landlord argued that the NHS had not given vacant possession of the premises and that therefore the break was invalid. The key issue was whether the items were fixtures or tenant’s chattels. If the items were chattels then vacant possession had not been given and the test for distinguishing chattels and fixtures centres on the degree of annexation and the object/purpose of annexation. The court determined that the items were chattels and not fixtures, because they were only “slightly attached” to the premises and did not provide a lasting improvement to the premises. The court also noted that, even if the items had been fixtures, the NHS had still not complied with the break clause, because the definition of “premises”  specifically excluded partitioning and tenant’s fixtures.

Disrepair to Property – New Obligations for Landlords

Sunday, December 11th, 2016 in Commercial, Landlord, Managing Agent

Paul Greatholder of Russell-Cooke reports that there is an obligation upon the tenant to return demised property at the end of the tenancy in a good state of repair. The problem with dilapidations disputes was that there was a perception that landlords were exaggerating their claims, thus leading to a failure to resolve disputes  in a commercial way. The Civil Procedure Rules in 1999 was not designed to change the law, but to persuade parties who are in a dispute to take certain steps before issuing court proceedings to see if the dispute could be resolved, or at least any differences.  The ‘persuasion’ arises from the risk that if a party chooses not to follow a protocol…..

Read the full article here.

Are litigation costs a service charge?

Wednesday, November 16th, 2016 in Commercial, Landlord, Managing Agent, News, Residential, Service charge audits

Eversheds has reported that, whilst there is no hard rule that use of general words in a service charge clause prevents recovery of related legal costs, in order to be certain, an obligation to pay solicitors’ costs under the service charge provision should be clearly spelt out. If those solicitors’ costs are to include litigation costs then that should equally be made clear.
Remember that, even where the lease makes provision for recovery of costs as part of the service charge, this can be overridden by the provisions of s20C of the Landlord and Tenant Act 1985.
This was clarified in the recent case Sinclair Gardens Investments (Kensington) LTD v Avon Estates (London) LTD.

Read the full article here

Are you a seller/landlord? Why replies to property enquiries must be accurate and up to-date

Tuesday, October 4th, 2016 in Commercial, Landlord, Managing Agent, News, Residential, Service Charge

In an article by Mills and Reeve, a tenant of part of a building had some concerns regarding the service charge. Due to these concerns, payment of the service charge was withheld by the tenant. There was correspondence between the tenant and the landlord’s managing agent’s solicitor regarding this matter and a service charge dispute had arisen on at least five occasions. In readiness for a sale of the property, draft replies to commercial property standard enquiries were prepared and the replies said that there were no disputes outstanding, likely or in the past and that there were no service charge arrears. The buyer’s solicitors asked for further information in relation to the service charge accounts and collection period. This information was not provided. Consequently, the court decided that the buyer was entitled to terminate the sale contract, have the deposit returned and to receive damages for deceit.

Read the full article here

Repairs: Landlords at risk in mixed-use buildings

Wednesday, September 7th, 2016 in Commercial, Landlord, Managing Agent, News, Residential

Samantha Bell of Gordons has reported that, in the recent case of Queensbridge Investments Ltd v Lodge, a landlord owned a property which had been let to residential and commercial tenants. The tenants claimed that the disrepair to the property was causing safety issues. Due to the landlord’s failure to carry out repairs, the residential tenants applied to the First-Tier Tribunal for a management order under Section 24 of the Landlord and Tenant Act 1987. In other words, the tenants wanted the Court to take management of the building out of the landlord’s hands.

Read the full article here

Long awaited decision on Ft-T Rule 13 costs released

Wednesday, August 3rd, 2016 in Commercial, Landlord, Managing Agent, News, Service Charge

Hardwicke’s report that the Upper Tribunal (Lands Chamber) has now published its long awaited decision concerning the proper interpretation of the power to award costs for unreasonable conduct of proceedings. The decision, determining 3 conjoined appeals in which in every case the appellant had had an order for costs made against it, will be of interest to all who appear in the Tribunal on residential property cases…

Read the full article here

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