Blogs and advice on Residential Property Management London
Increasing rents under Assured and Assured Shorthold Tenancies
Most of the time the landlord is more in control when it comes to the rent payable by their tenants. If the tenant is unable or unwilling to agree a rent increase, either within the existing assured shorthold tenancy (‘AST’) or on a renewal, the landlord can serve notice under Section 21 of the Housing Act 1988 (“the 1998 Act”) to end the AST (once outside any fixed term or pursuant to any break provision in the agreement) and re-let the property at an acceptable rent.
However, where landlords let to longer term tenants either under assured tenancies or ASTs, or they otherwise have no desire to end the current tenancy, the landlord needs to consider the correct process where they intend to lawfully impose a rent increase. This will be particularly relevant should the Government’s proposals to end the “non-fault” process for possession under Section 21 of the 1998 Act become a reality, creating longer term security of tenure for residential tenants. This Legal Update sets out the process for increasing rents payable under assured tenancies and ASTs.
Most modern residential leases include a provision to enable a landlord or management company to recover their legal costs from their leaseholders through service charges. This will usually enable legal costs incurred in litigation with any leaseholder(s), for example to pursue recovery of unpaid service charges from leaseholders, to be funded via the service charge. However, Section 20C of the Landlord and Tenant Act 1985 allows a residential leaseholder to apply for an order that any costs incurred by their landlord or management company in connection with any proceedings before a Court or Tribunal are not to be regarded as “relevant costs” when determining the amount of service charges payable by that leaseholder “or any other person specified in the
All flats and some freehold properties, especially the ones located on managed estates are subject to covenants affecting how the property is to be used and setting other rules in relation to when and to whom the property might be let. It is important for Property Owners and their Agents to consider those requirements prior to letting to ensure that all obligations are complied with and thus avoid disputes. It is highly important for Block Managers, Developers, Managers and their Managing Agents to be familiar with any restrictions on, and obligations affecting, the letting of units within a development.This is a brief guide as to the matters to be considered when permitting the letting of a residential unit.
How to check
Check your lease or in the case of freehold property, the Transfer.
What to look for
In our experience the covenants placing restrictions on or imposing obligations for Property Owners intent on letting might include all or some of the following:-
A prohibition on letting of part only or taking in lodgers or paying guests
– This will prevent the letting of rooms within, as distinct from the whole, property.
– It will also prevent the letting of the property separately to its garage or parking space where the same is demised under a single Lease or Transfer.
A prohibition on letting of the whole
The UK Government has announced plans to consult on new legislation to abolish Section 21 evictions, which are also called no fault evictions in England. This will effectively create open ended tenancies, and lead to what the Government believe will be more effective means of getting their property back when they genuinely need to do so.
Under the UK Government’s proposals, landlords will have to provide a concrete, evidenced reason already specified in law for bringing tenancies to an end.
To ensure landlords have confidence the Government will allow them to be able to end tenancies where they have legitimate reason to do so. To this end, Ministers at Westminster will amend the Section 8 eviction process, so property owners are able to regain their home should they wish to sell it or move into it.
Carrying out major works on a property or development is sometimes followed by a
disagreement from one or more property owners who have an obligation to contribute to minor/major works.
This can lead to a delay in the works starting due to the dispute itself, or because a property owner
refuses to pay their share of the works.
For the most part, Landlords and management companies are in a strong position when faced with
such disagreements and can rely on the provisions requiring the property owner to contribute to such
works in the relevant agreements (Leases or Transfers). However, what happens if the Landlord is
faced with a dispute by a Leaseholder claiming that the works are improvements and not repairs, and
are therefore not payable? This Legal Update will look at what a Landlord should consider before
imposing charges for major works if an element of improvement is included in the schedule of works.
Landlords, Management Companies and their Agents sometimes come across to complaints of nuisance being
caused by neighbours in a block or development. This most often involves noise but can also include
other forms, such as smells, dust and vibrations caused by works. Nuisance can also take a physical form,
such as damage to property. However, establishing whether a private nuisance has been caused is far
from simple and a Court will consider multiple factors when determining whether a nuisance has been
committed. Courts will look at elements that are required to establish a nuisance
claim, and what Landlords and managing agents should be aware of.
What is ground rent?
Ground rent is rent paid under the terms of a lease by the owner of a building to the owner of the land on which it is built. Ground rent is exactly what it sounds like – a sum of money leaseholders pay the freeholder to occupy the land a leasehold property is built upon. Ground rent must only be paid if it’s detailed in the lease. If it isn’t, the landlord won’t be able to recover any ground rent from the leaseholder.
The government has just provided a fairly detailed indication of what steps it is to take to approach to ban ground rents, what it sees,
as unfair practices relating to rents on leasehold property and the sale of leasehold houses.
Ground rents will be restricted to a peppercorn in future leases and new long leases of houses will be banned,
subject to limited exemptions.
As the home ownership population continues to age, young and middle-aged individuals are renting for longer and landlords are having to adjust to new regulations.
Combined with this, uncertainty around Brexit has curbed housing market growth. Since 2016, London is growing slower than other areas such as Manchester, Birmingham and Cardiff.