Tessa Shepperson of Landlord Law covers 3 challenges for 2022; - Cost of living crisis - Energy Efficiency - HMO and Rent Repayment orders

1. Three Challenges
for Landlords in
2022
Tessa Shepperson
A talk for Accommodation for Students
on 28 June 2022

2. Contents/Agenda
2
About Me
Introduction
The cost of living crisis
Energy Efficiency
HMOs and Rent Repayment Orders
Questions

3. About Me
3
● Tessa Shepperson – Solicitor
● Landlord & Tenant Specialist
● Runs Landlord Law online service, &
● The Landlord Law Blog
● Author and speaker

4. Introduction
4

5. The White Paper
● Published since this webinar was
commissioned
● Not covered (much) in the presentation
but will answer questions
● May never come to pass …
5

6. The Cost of Living Crisis
6

7. The Problem
● Inflation is going up
● Increased costs for landlords
● Increased costs for tenants
7

8. Landlords
● Increase income
● Reduce costs
● Reduce risk
8

9. Landlords – increase income
● Make sure you increase the rent
annually – even by a small amount,
even if same tenants remain
● Rent can be increased by
– Agreement
– Rent Review Clause
– S13 Notice
● White paper proposals – remove
rent review clauses, notice
procedure only with challenge to the
FTT
9

10. Landlords – reduce costs
● Shop around for deals –
– Insurance (e.g. Alan Boswell Group
Price Beater – mini course here)
– Agents
– Legal advice – Landlord Law!
– Tradespeople
10

11. Landlords – reduce risk
● Protect your income with guarantees–
eg Housing Hand or RentGuarantor
● Or insurance – e.g., rent guarantee
insurance
● Be careful about all inclusive rents –
make sure you can increase rents if
costs go up
● Take extra care over tenant choice
11

12. Tenants
● The cheaper it is for them the more
money they have for your rent!
● Help them reduce their costs
● Energy efficiency measures
● Vouchers?
● Electric car charging port
12

13. Energy Efficiency
13

14. Current obligations:
14
● EPC must be handed to tenants
before they sign the tenancy
agreement
● Property must have an energy rating
of E or higher
● Some exceptions apply, eg
– High cost (cost cap is £3,500)
– Insulation would negatively impact
property
– 3P consent unobtainable
– Wd devalue property more than 5%
● Exemptions must be registered
● Govt guidance is here

15. Energy Efficiency measures:
15
● Insulation (wall, roof, floor, hot
water cylinder)
● Draught proofing
● Low energy lighting
● Double glazing
● Solar panels
● Heat pump?

16. Funding:
16
● Cost cap of £3,500
● Energy Company Obligation –
Help to Heat – normally only for
means tested benefit
● Green deal
● Find out more

17. The future:
17
● Minimum rating to go up to C
● Not yet in force but believed to
be 2025
● Date may be deferred but will
happen
● Landlords advised to get work
done in good time

18. Energy Efficiency Guide
18
●Ebook (as at 1 Jan
2022)
●£6.00
●Find out more

19. HMOs
19

20. Four types of HMO:
20
● S254 Housing Act 2004 – ‘normal’
definition
● S257 Housing Act 2004 – converted
flats
● Council tax
● Planning (similar to ‘normal’
definition)

21. Separate definition for
Council Tax:
Regulation 2 Council Tax (Liability for Owners)
Regulations 1992.
“a dwelling inhabited by persons who do not
constitute a single household, each of whom
either:
(a) is a tenant of, or has a licence to occupy,
part only of the dwelling; or
(b) has a licence to occupy but is not liable
(whether alone or jointly with other persons) to
pay rent or a licence fee in respect of the
dwelling as a whole.”
21

22. S254 ‘normal’ HMOs
● Three or more occupiers
● Two or more households
● Sharing amenities (i.e. kitchen, bathroom,
toilet
● Tenants' main residence (or students)
Where it is one of the following property
types:
● Entire house
● House converted to bedsits or other non
self-contained accommodation
22

23. Households:
● Two people living together as a couple
● Family members – children, cousins,
siblings, half blood
● Certain employees eg carer
Irrelevant if:
● Sign a joint and several tenancy agreement
● Eat together ‘as a family’
● Store food in same cupboard, etc
● Most students will be a household of one
23

24. S257 HMOs
● Converted from a single dwelling
● Building consists of self contained flats
● Conversion work did not comply with
1991 Bldg regs
● More than 1/3 flats are let on short lets
● This is why permission may be refused to
rent out flats in converted blocks – as it
will make the block an HMO
24

25. Purpose built flats
● S254(8) Housing Act 2004
● If purpose-built block with more than
3 flats
● Not subject to licensing unless
● There is additional or selective
licensing in your area
25

26. When do you NOT get an
HMO
● Two people sharing
● Where the landlord is resident with up to
2 tenants/lodgers
26

27. The significance of being an
HMO
● You will be bound by the HMO
Management Regulations
● You may need to obtain an HMO licence
from the Council
27

28. When do you need to get a
license?
● In England:
● 5 or more occupiers (do not have to be
tenants)
● Two or more households
● In Wales – additional requirement re
storeys
● Or if those do not apply – you may need
a license if your Local Authority as an
additional or selective licensing scheme.
28

29. Storeys:
29
● Irrelevant now in England
● In Wales – a tenancy is licensable if it is
an HMO with three or more storeys
● Complex rules
● So, take advice if you are in Wales and
are not sure

30. If you are not sure:
30
● Landlord Law telephone ‘HMO Hotline’
service
● 30 minutes advice with an HMO
specialist solicitor (Anthony Gold or
JMW solicitors)
● £130 for non-members (includes 1
months free Landlord Law
membership)
● £115 for Landlord law members
● Click here

31. If your property is not an
HMO
31
● Do regular checks
● Unauthorised lodgers and friends
● When does a guest become an
occupier?
If you have an HMO license:
● Do regular checks to make sure the
occupier limit is not being exceeded.

32. Rent Repayment Orders
32

33. What is a Rent Repayment Order?
33
● Tenants can apply
● Application to the First Tier Tribunal
● If tribunal find L is guilty of one of a
range of offences – incl failure to
obtain an HMO license
● FTT can award up to 12 months rent
to the tenants
● If L has been convicted, then FTT
must award the full 12 months rent
● Otherwise, tribunal has discretion

34. Help for tenants:
34
● Local Authorities have a duty to
advise tenants and will usually do
so
● There are a number of services
who will assist tenants on a no
win no fee basis
● Student union and other services
may be available to assist
students

35. Recent case law
35
● Vadamalay v. Stewart – starting point
for the award is the full rent paid, not
LL profit. Only payment of utilities
will normally be allowed
● Rakusen v. Jepsen – order cannot be
made against superior landlord in
‘rent to rent’ situations. But decision
being taken to the Supreme Court
● Ficcara v. James – RRO limited to 12
months rent, not referable to number
of offences
● Awad v. Hooley – tenant arrears and
behavour can affect the award made

36. Recent case law
36
● D’Costa v. D’Andrea– reasonable
excluse defence upheld as LA had
promised to notify her if her property
became subject to licensing
● Kaszowska v. White – only a landlord
can be subject to RRO, not a director
of LL company
● Williams v. Parmara – no presumption
that LL should be ordered to pay all
the rent (80% rent awarded)
● Aytan v. Moore – blaming the agent is
not a reasonable excuse, LL should
have known

37. Telephone advice:
37
● Landlord Law telephone ‘Rent
Repayment Order Hotline’ service
● 30 minutes advice with a solicitor from
Anthony Gold solicitors
● £130 + 1 months free Landlord Law
membership
● £115 for Landlord law members
● Click here

38. Advice for landlords
● Student lets will normally be HMOs
● Will be licensable if more than 5
occupiers
● Or if LA has an additional or selective
licensing scheme
● Make sure you are properly licensed
before you let to tenants
● Student tenants highly likely to apply for
RRO
38

39. Landlord Law Services
39
● Weekly bulletin (+ FREE eBook) –
sign up at landlordlaw.co.uk/bulletin
● Landlord Law Membership:
– Tenancy Agreements
– Articles, FAQ and Guides
– Members forum
– More …
● Find out more at landlordlaw.co.uk
● See also the Landlord Law Shop

40. Any
Questions?
40

41. THANK YOU