Thursday, March 25th, 2010 in Landlord, Managing Agent, News, Residential
Steven Wood of Coffin Mew solicitors has written an article about a recent court case regarding Landlord, Managing Agent and Tenant rights surrounding the Deposit Protection Services (DPS) and access to monies deposited with it.
He concludes,
Most landlords are now aware of the legal requirement to protect deposits taken in connection with shorthold tenancies. To date there has been little reported litigation under the provisions of Chapter 4 of the 2004 Act and this case is a useful benchmark of the courts’ attitude and interpretation of the Act. Crucially, it serves as a reminder that until such time as a deposit is properly protected the landlord is precluded from utilising the accelerated possession procedure set out in s.21 of the Housing Act 1988 and which is one of the main reasons why landlords choose to use shorthold tenancies. Perhaps less obvious though is the hidden cost for the landlord if it gets it wrong – the deposit in this case was relatively high at £2,700 but, even so, the cost of the legal proceedings will have far outstripped the amount of money at stake. The moral of this case is simple: ignore the deposit protection provisions at your peril.
Read the full article.
Tags: Leasehold estate, Property Law and Real Estate
Sunday, March 21st, 2010 in Commercial, Landlord, News, Residential
A law report summarised by Charlotte Wicks of Cambridge solictiors, Mills & Reeve discusses the implications for UK service charge VAT treatments in the light of a recent European Court of Justice case. She writes
A recent decision of the European Court of Justice has cast doubt on HMRC’s long held view that service charges relating to common areas follow the VAT treatment of the services supplies under a lease.
If service charges are treated as a separate supply then an additional charge to VAT would arise on both commercial and residential properties where the landlord has not opted to tax.
Landlords of commercial property which is VAT opted are not affected by this issue. However, if HMRC practice does change, landlords of residential property or un-opted commercial property will need to start to charge VAT on service charges. This may require landlords to register for VAT (if they are not registered already). Landlords should now seek to amend old leases and agree new leases to ensure that VAT can be charged on service charges pertaining to common areas. Action should not be required on old leases which are silent as to VAT because with these leases it ought to be possible to add VAT to the service charge if a change in HMRC practice starts to apply the standard rate.
Tenants who can recover VAT but do not currently pay VAT on such service charges may see this as an opportunity. They could ask their landlords for a VAT invoice on these service charges in order to recover the input VAT incurred.
In all likelihood given the uncertainty over the case, this is an issue which will be litigated in the UK courts. Watch this space!
RLRE Tellmer Property sro v Financní reditelství v Ústí nad Labem (2009) STC 2006
Wednesday, March 17th, 2010 in Commercial, Managing Agent, News, Service Charge
Shopping Centre magazine hosted a round table discussion on Facilities management and “Total Facilities Management” or TFM during March.
Link to our scan of the article below.
100301-shopping-centre-tfm-article
Or link to Shopping Centre Magazine website.
Tuesday, March 16th, 2010 in Landlord, News, Residential
Residential tenants are reminded by the COI (Central Office of Information) that they have a right to challenge service charges.
- check your service charge demands
- understand the law relating to challenges to service charges
- read your lease
- you can still challenge if you have paid your bill
- challenges are often based on charges been unreasonably high or workmanship being unacceptable
The Leasehold Advisory Service is a free service run by the government giving free legal advice for Landlords and Tenant leaseholders.
Read the full article.
Tags: Central Office of Information, coi, Housing, leasehold advisory
Thursday, January 21st, 2010 in News, Residential
The local council in Derby is trying to increase council housing rents to align with other social housing landlords.
Vice-chairman of the panel John Newbold said: “We know as tenants we can’t change it, but we want to discuss it in view of the financial insecurity a lot of tenants are facing. In my view, the rise of 2.5% to 3% is looking good but there are other things we need to discuss, such as service charges.”
The Government wants local authorities and housing organisations to work towards similar rents to those of social landlords, which are traditionally higher than local authority charges.
Tags: Council house, Derby, Housing, Public housing
Tuesday, January 19th, 2010 in News, Residential
The Nearly Legal blog has a nice year end post about the volume and type of work undertaken by the Residential Property Services Tribunal or LVT
It compares firstly Service Charge s.27A applications with Enfranchisement applications and for the first time since 2006 there are more service charge applications (nearly 3000) than enfranchisements (just over 2000)
Francis Davey, the author, puts this down to
I would like to think that better publicity of the service charge jurisdiction has pushed s.27A applications higher, but that may also be due to increasing financial straights in which leaseholders find themselves and a concomitant reluctance to pay anything that is not strictly required.
His second chart relates to determinations about Fair Rent and Market Rents and the former vastly outstrips the latter by around two to one each year since 2006.
Nice summary, thanks Francis.
Tags: housing law, Legal Information
Friday, December 4th, 2009 in Landlord, Managing Agent, News
The Companies Act 2006 made substantial changes to private company management.
1. There is no need to appoint a company secretary unless you want to. If you do he/she will have same responsibilities as now.
2. All companies must have at least one actual person as a director. All directors must be at least 16.
Directors file service addressed on the public record with residential addressed held as protected information at Companies House.
3. Private companies will no longer hold an AGM. 10% of shareholders can demand a meeting (5% in certain circumstances). If private company meetings take place they require a 14 day notice period.
4. Written resolutions will become easier to use, requiring a simple majority (for ordinary resolutions) or 75% (for special resolutions) of eligible votes.
5. Arrangements can be made so that communications can be sent and received in certain ways, especially electronically if shareholders agree emails and websites can be used more than at present. Individual members can still ask for hard copies.
A company’s name, number, registered office and other particulars currently required to be displayed on business letters and other documents must now also be provided on electronic documents as well as the company’s website.
6. Companies formed under the new Act can choose to have new streamlined default model Articles. Existing companies can also choose to take advantage of these new model articles in whole or in part.
7. The Statutory rule that private companies can’t give financial assistance to buy their own shares has been abolished.
8. Private companies must file their annual report within nine (previously ten) months of the year end.
The medium-sized group exemption form preparing consolidated accounts has now been removed.
9. There is now a simpler solvency-based procedure to enable private companies to reduce capital without court approval.
10. The amount companies have to do has been greatly reduced and they can take steps to take advantage of the deregulatory benefits of the Act.
Transitional arrangements will make it as easy as possible for companies to take up these benefits.
Source: BERR
Thursday, December 3rd, 2009 in Landlord, Managing Agent, News
THE SIMPLE FACTS ABOUT THE COMPANIES ACT 2006
Decisions taken by shareholders
Written resolutions no longer need to be signed by all the shareholders instead a simple majority of the eligible shares for ordinary resolutions or 75% for special resolutions.
Companies can choose to make more use of electronic methods and resolutions can be circulated by email or other electronic methods such as websites, with shareholders agreement.
Shareholders Meetings Streamlined
Private companies will no longer hold an annual general meeting although shareholders can demand a meeting if at least 10% (5% in certain circumstances) wish to. Shareholders still have the right to receive accounts.
Shareholder meetings for private companies can now all be on a 14 day notice period, unless different arrangements are specified in a company’s Articles.
Company Secretary
Private companies will not have to appoint a company secretary unless they choose to do so.
If they choose to do so they will have the same authority and responsibilities as now and will continue to be registered at Companies House.
Filing Directors Addresses
Directors will be required to file a service address on the public record at Companies House. This may for example be their company’s address, rather than their private home address.
A director’ private address will be held as protected information at Companies House.
Reduction of Share Capital
Private companies can now choose to reduce their capital by special resolution supported by a solvency statement by each of the directors.
Financial Assistance to purchase Private Company’s own shares
The statutory rule that companies cannot give financial assistance for the purchase of their own shares has been abolished for private companies.
Directors Conflicts of Interest
Directors have always had a duty to avoid a situation in which they have an interest which conflicts or may conflict with the company’s interests unless the matter has been duly authorised. At the moment only shareholders can authorise such a conflict of interest.
In future in the case of existing companies, it will be possible for those directors who do not have an interest in the matter to authorise it if this is specifically permitted by the company’s Articles.
Forming a Company from October 2009
The Memorandum of Association will become a historic document which will simply record the facts at the time of incorporation.
The Articles will set out the principles covering the way the company conducts business.
New companies registering under the 2006 Act will be able, if they wish, to take advantage of a new default model Articles of Association for private companies. These are set out in a clear language and reflect the way many small companies operate.
Existing companies can also choose to adopt these new Articles.
In future neither the Memorandum or the Articles do not have to state the objects of the company. This means that companies need not be restricted in what they do, but they can choose to be restricted if they wish.
Electronic Documents
Electronic communications, including emails and websites will in future need to include the company’s name, number, registered office and other particulars.
Accounting Arrangements form April 2008
The deadline for private companies to file annual accounts and reports will reduce from ten months to nine.
The exemption from preparing consolidated accounts by medium sized groups has been changed so as to apply now only to small groups.
Directors
All companies must have at least one actual person as a director and cannot just have companies acting as directors.
A new minimum age of 16 is set for directors. Existing underage directors will cease to be directors when the age criteria comes into force.
The Companies Act 2006 confirms current law in respect of the duties of directors.
A summary of these 10 things you need to know will be published tomorrow.
Tags: Companies Act 2006
Wednesday, November 25th, 2009 in Commercial, Landlord, Managing Agent, News
The Estates Gazette published a summary of some LBS MBA students’ research into service charges and how they are the cause of friction between landlord, tenant and property managers. Property Services sponsored the reserach and a summary of the work is on their website.
Tags: Master of Business Administration
Wednesday, November 18th, 2009 in Managing Agent, News, Residential, Service Charge
A report in the Belfast Telegraph says that the Stormont parliament may investigate property management companies who do not fulfil contracted services such as common parts cleaning and garden services.
Interesting to read the comments under the article – some residents seem to think sacking the managing agent is a solution, but surely an independently audited service charge account would serve the purpose?
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