SOCIAL HOUSING

PAY TO STAY:

Social housing tenants with household incomes of £40,000 and above in London, and £30,000 and above in the rest of England, will be required to pay a market, or near market, rent for their accommodation.

The government aims to make such tenants pay a fair level of rent, or make way for those whose need is greater.

Local authorities will repay the rent subsidy that they recover from high income tenants to the Exchequer, contributing to deficit reduction. Housing Associations will be able to use the rent subsidy that they recover to reinvest in new housing. The government will consult on and set out the detail of this reform in due course.

REVIEW OF LIFETIME TENANCIES

The government will review the use of lifetime tenancies in social housing to limit their use and ensure that households are offered tenancies to match their needs. This should help ensure the best use is made of the social housing stock.

REDUCTION OF SOCIAL SECTOR RENTS

The government will reduce rents paid by tenants in social housing in England by 1% a year for four years from 2016-17 to 2019-20, reducing expenditure on housing benefit and universal credit.

Residential service charge demand and the requirement to identify the landlord

The Upper Tribunal (Lands Chamber) (UT) has held that service charge demanded from a tenant under a residential lease had not become due, as the demand did not comply with section 47 of the Landlord and Tenant Act 1987 (LTA 1987).

A demand for rent or other sums payable to the landlord must contain the name and address of the landlord (section 47(1)(a), LTA 1987). The “landlord” means the immediate landlord. The sum will not become due until the information is provided.

T was a long leaseholder in a block of flats. The parties in this case had thought that Cameret Court Limited (CCL) was T’s immediate landlord and that Cameret Court Residents Association Limited (CCRAL) was a party to T’s lease only in its capacity as management company. However, this was incorrect and CCRAL had become T’s immediate landlord.

The landlord’s agents had served demands which contained the names and addresses of both CCL and CCRAL. However, the UT considered that it was unclear whether either of those companies was being identified as the landlord. If a demand provided the name and address of two or more different companies without identifying which of them was the landlord, it did not provide the required information.

Section 47(2) of the LTA 1987 therefore applied. However, to satisfy section 47, all that was required was for a notice to be given to T informing her that CCRAL was T’s landlord and provide its address.

This serves as a cautionary reminder of the strict requirements of section 47. Landlords should check that their practice accords with its provisions, as failure to comply could delay collection and lead to disputes.

Case: Tedla v Cameret Court Residents Association Ltd [2015] UKUT 221 (LC) (20 May 2015)

The answer to this is that they do not. They are Land Registry documents required to remove the reference to the charge from the relevant registered title. Panel 6 in form DS1 is drafted as follows:-

“The lender acknowledges that the property identified in panel 2 is no longer charged as security for the payment of sums due under the charge”

The phrasing of the form makes it clear that the form can only be completed once the charge has actually been released. However, in a recent case Garwood The Bank of Scotland PLC [2012] EWHC 415 (Ch) the court considered that filing a form DS1 can operate as both evidence of discharge and an application to alter the register. In that case, the charge was considered capable of reinstatement on the title on the grounds that form DS1 had been submitted due to a “mistake”.

Here are some practical points which follow from this:-

1. Release of a charge may not be delayed by not dating the form DS1/DS3 as it should already have been released.
2. The fact that a DS1/DS3 has not been executed or supplied or registered does not necessarily mean that a charge has not been released.
3. Release of the charge might be contingent on something happening such as completion of a transfer but should not be contingent on completing form DS1/DS3.
4. Where a charge has been discharged prior to completion but form DS1/DS3 has been delayed or lost in the post then it might be possible to provide other evidence of discharge in order to allow the matter to proceed on the basis that the seller’s solicitor can still provide an undertaking to forward form DS1/DS3 once received.

Right To Buy (RTB) Discount Increase

From the 6th April 2015 the maximum available discount for RTB matters will increase. The annual increase (6th April 2015 – 5th April 2016) is linked to the percentage rate change in the Consumer Price Index.

The discount for RTB matters 2015/16 are now:-

£103,900.00 for homes in the London Boroughs

£77,900.00 for homes outside of the London Boroughs

All transactions that commenced prior to 5th April 2015 will not be eligible for the increased discount and so will not need an updated s.125 notice.

Only applications made after 5th April 2015 will be eligible for the updated discount.

Key Property Issues

On 18 March 2015, the Chancellor of the Exchequer, George Osborne, delivered the March 2015 Budget.

As far as the property industry is concerned, the main announcement of interest was the government’s commitment to the long-promised review of business rates. The property industry has been lobbying the government for some time on this issue and its crippling effect on businesses in England and Wales continues to hinder economic recovery.

The Help to Buy: ISA is another step in the right direction for those looking to get on the housing ladder but one wonders how much it will really help when, in certain parts of the country, the rise in property prices continues to outstrip wages.

The government continues to tweak around the edges of the planning system. However, its proposed reform of the CPO procedure will interest those advising on property development.

On 31st January 2015, the Department for Communities and Local Government (DCLG) and the Homes & Communities Agency (HCA) launched a consultation on proposals to streamline the resale of shared ownership properties to make it quicker and easier to sell them.

Currently, if a shared ownership householder wants to sell their home, first they must seek the consent of their housing provider (usually a housing association) to assign the lease. To gain this consent the shared owner must put their intention to sell in writing to their housing provider. Once the shared owner has done this, the housing provider has eight weeks in which to decide whether to nominate itself or another purchaser to acquire the shared owner’s interest in the lease before the home can be put on the open market.

The opportunity on the part of the housing provider to nominate the next purchaser continues during the period of shared ownership for each owner and for 21 years after a householder has bought the property outright.

These provisions are perceived to have hampered the selling of shared ownership homes because:

• They overcomplicate the process when the householder wants a quick and straightforward transaction.
• Lenders see the process as a fetter on realising the value of the home. This has meant the market for lending on shared ownership homes is restricted.

The consultation is therefore considering how the process can be revised to reduce the delays currently caused and to simplify the procedure. In particular, it is looking at how the pre-emption right could be watered down, especially as in practice, housing providers do not use it as often as expected.

The consultation closes on 28 February 2015.

The Landlord and Tenant Act 1985 (LTA 1985) introduced limits on the recovery of service charges. The LTA 1985 has been substantially amended by subsequent Acts, most notably the Commonhold and Leasehold Reform Act 2002 (CLRA 2002).

In the LTA 1985 the limit originally placed on the service charge that could be recovered was a fixed amount (prescribed by the Secretary of State) for the cost of the qualifying works. If the landlord wishes to pass on its costs to tenants in excess of the fixed amount, he has to comply with the tenant consultation process prescribed by the LTA 1985.

The CLRA 2002 changed the limit (currently set at £250) so that it attached to the amount of the contribution sought from the tenant and not the cost of the works. A consultation process is still required.

In the recent case of Phillips v Francis and Others the High Court held that the correct approach to determine when section 20 of the Landlord and Tenant Act required a landlord to consult with tenants was to aggregate all works in a given year. The Court of Appeal recently overturned this decision and held that this clearly was not a sensibile approach and cannot have been intended by Parliament.

The approach would have required landlords to consult on any service charge items, no matter how small, once the £250 per tenant limit had been reached. Following the latest ruling it is considered landlords may identify sets of “qualifying works” for calcualting whether the £250 threshold has been reached.

As some of you may know, Friday 5th September is the first anniversary of Gill’s death.  Thanks to the generous donations received from colleagues, clients, family and friends to the fund, and to the fund raising efforts of Gill’s daughters, Alice and Natasha, we have received the following update from Tujatane Tongabezi Trust School:

“We cannot thank you all enough for this amazing contribution to the children of Tujatane, Tongabezi Trust School.   I just wanted to forward to you some photos taken yesterday.  The building is almost complete.  

The left hand room is the art/sewing room – our Metcalf room.  Beth has had a meeting with the local community to discuss plans for our sewing project and we have a large number wishing to get involved and so very happy to have this opportunity.”

Many thanks to everyone who donated.

Order made increasing right to buy maximum discount for houses

On 20 July 2014, the Housing (Right to Buy) (Maximum Percentage Discount) (England) Order 2014 (SI 2014/1915) was made and came into force on 21 July 2014.

The Order increases the maximum percentage discount for a house under the right to buy to 70% and also:

• Applies where a tenant’s notice claiming the right to buy has already been served but the conveyance or grant of the property has not yet taken place. However, this will not apply where, within 21 days of the Order, a tenant has given written notice to their landlord that they would prefer the relevant percentage discount which applied prior to the date of the order to apply.
• States that where a section 125 notice has been served by a landlord, but the relevant property has not been conveyed and its price has changed as a result of the Order, then a landlord must serve an amended section 125 notice reflecting the new maximum percentage discount.
• Where there has been a change of secure tenant after a notice claiming the right to buy and the tenant has submitted a notice that they do not want the higher discount to apply, then this should be disregarded.

The Order follows the Housing (Right to Buy) (Limit on Discount) (England) Order 2014 (SI 2014/1378), which increases the cap on the discount available under the right to buy to £102,7000 for dwelling-houses situated within the areas of London authorities and £77,000 for dwelling-houses outside the areas of London authorities.

We are delighted to announce that Jane Sewell joined us as a Partner on 5 January 2014. Jane previously worked as a Partner at Winckworh Sherwood. Jane will be working within our Development Department, focusing predominantly on working with our existing Registered Provider client base.

Jane has over twenty five years experience acting for Housebuilders ( both in house and private practice) as well as for Registered Providers. Jane’s arrival will add further expertise and experience to our existing team