Speaking as a Pimlico HMO I was somewhat amazed at the stupidity displayed by 4 of my Bristol Bretheren who seem to have just ignored their local authority, and their responsibilities to provide safe decent accommodation.
The knowledge and attitude of local authority Environmental Health Officers can be patchy – they can be helpful, skilled, trained, or sometimes they leave you shaking your head in disbelief. You have to take the rough with the smooth, and in general things will turn out all right. What you cannot do is ignore them, or believe that the regulations apply to everyone else, but not you.
Housing Officers from Bristol City Council, found a series of problems at an HMO including:
Failure to provide adequate fire safety at the property.
Failure to ensure the shared areas of the property were maintained in a good and clean decorative order.
Failure to ensure the property was kept in good repair.
Failure to provide lighting in many of the shared areas of the property.
Keeping a property whose structure was a danger to the health of the occupiers.
Failure to provide information about the property when required to do so.
Bristol can offer a range of advice and support to help landlords comply with legislation, however, where landlords refuse to co-operate and where there are serious breaches of the Housing Act (as in this case) local authorities can and will take legal action to compel them to bring improvements.
On December 21, the landlords were summonsed before Bristol Magistrates Court in relation to alleged offences under the Housing Act 2004 and the Local Government (Miscellaneous Provisions) Act 1976. They, failed to attend Court or have representation – talk about committing suicide! The defendants were found guilty on all charges, and the combined fines totalled £30,036.30 and combined costs totalled £5,199.60.
The answer is that theory and practice vary. This is an age old question, especially in London where Flats are harder to find, and there have long been agencies who offer Landlords free advertising and charge the tenant (the oldest and best known “Flatland” has been trading on this model since 1971). Indeed before this website came into being Pimlico Flats used to rent through Flatland and 2 other of these agencies.
In theory according to The Accommodation Agencies Act 1953 an agent is not allowed to charge the tenant. The Act was originally passed as a short-term measure, however, after a series of annual renewals, it was made permanent by the Expiring Laws Act 1969. Although the legislation was introduced nearly 60 years ago, it can still be enforced and Flatland itself was successfully prosecuted by Westminster City Council in the 1990s. The Act was introduced to prevent agencies taking fees in advance from prospective tenants in return for details of properties, and Agents cannot charge prospective tenants for lists, addresses or details of properties that they have in their possession, and the Act is quite clear in this respect.
As a general rule, the agent is at liberty to act either for a landlord or for a tenant (and accordingly to charge the appropriate commission). The only restriction placed upon the agent by the general law is not to act for both. Thus relocation agents may charge tenants for finding specific accommodation which includes advertising their individual requirements. Where an agent takes a deposit or fee, refundable on demand, where the deposit is not in respect of any particular property, an offence is committed. Where an agent asked clients to sign an agreement under which a fee would become payable if and when they took accommodation found for them by the agent, the payments related to the finding of suitable accommodation and not for the supplying of an address, and no offence is committed. An amount chargeable at any time before the prospective tenant finds acceptable accommodation is an illegal payment, even if deemed returnable in the event of the prospective tenant not finding accommodation. Yet, an agent may legitimately charge for finding accommodation for a tenant who actually takes it, but may not demand a fee (even a returnable deposit) for merely supplying him with the address in the first place.
In practice Agents seem to find it fairly easy to charge fees without contravening the Act, or else the authorities find it too onerous to enforce the law. Agents also make money by charging for services – a local Pimlico Letting Agent made the following equivalent charges in 2010:
Administration £350
Referencing £52
Agreement £188
Inventory charges depending on the Flat & can vary from £80 – £300 per inspection. The tenant pays the Check In fee, the Landlord the Check Out fee.
The charges are subject to VAT. In theory the charges should reflect the actual costs to the Agent, however there are several online Agencies who offer Landlords free advertising, and they clearly only operate if they are making a profit from the charges to the tenant. They are clearly contravening the principle that the agent should only act for either the landlord or the tenant, but as with “Key Money” the authorities clearly don’t have the motivation to address what has become a custom & practice flouting of the law.
How does this rule apply to those who act as buying agents? Is it not possible for people to employ an agency to act on their behalf to find them a rental property – as happens in the sales sector?
The intention was to prevent agents evading rent controls through the practice of “key money” – but if the payment for finding a property is made on completion of the finding, and the agent is acting for the tenant and not the landlord, then there is clearly no issue. Remember IANAL.
It’s not normally my place to blog about legal precedents, but this case is so relevant to Pimlico, Property, and Flats (the themes of this blog) that I couldn’t resist reporting an unusual legal judgement about one of the most contentious property estates in the country – Pimlico’s Dolphin Square.
Dolphin Square, Pimlico (Westminster London SW1)
Dolphin Square is a massive central London complex of 1250 luxury flats that is home to dozens of MPs, peers, judges, lawyers, QCs and senior military officers, and where Oswald Mosley, Harold Wilson, Christine Keeler, Charles de Gaulle, CP Snow, Donald Campbell, and Princess Anne once lived.
For decades it was one of the biggest scandals in the UK’s housing history – the block, paid for with public money, was run for the benefit of a few wealthy individuals. Social Housing for Millionaires in a borough with thousands of homeless and overcrowded families.
In order to rid itself of it’s political embarrassment in 2004 Westminster City Council sold its 27-year head lease of Dolphin Square to US private equity investor Westbrook Associates for a BMV of £176.5 million. I wonder whether even then Westbrook had it’s Machiavellian plan to acquire the freehold in mind?
Leasehold Flats Can Buy their Freehold
Westbrook has been publically aiming to buy the freehold since 2007. The Leasehold Reform Housing and Urban Development Act 1993 (as amended by the Commonhold and Leasehold Reform Act 2002) gives tenants the right upon qualification to compel the sale of the freehold of the building or part of the building. Description of the process of buying the freehold of leasehold flats. The intention of this legislation was to enable individual flat owners to club together and break free from aggressive landlords.
The law was never intended to allow predatory head lessees to acquire freeholds for less than their market value, however Westbrook has taken advantage of the oddity that Dolphin Square has always been entirely let, either on decades-old regulated tenancies or assured shorthold tenancies but not on long leases so there are no leaseholders. The company was able to create 612 Jersey-listed companies, and sell each of them one or two Dolphin Square flats on 26-year leases, and then serve the Freeholder with a notice to enfranchise those leases. The owners of leases of more than 21 years have the right to buy the freehold, subject to no one leaseholder owning more than two flats. Changes in the 2002 act that were intended to help big London blocks enfranchise, even if many owners were subletting, abolished the ‘residency test’, which required occupation of a flat to qualify for enfranchisement.
The Freeholder is the life assurance company Friends Provident, who are not happy at this ruse.
‘We do not believe that the law was intended to allow foreign private equity investors to compulsorily acquire on the cheap a major asset of a British life assurance company that has held the property as one of its core investments for more than 70 years, the price offered to us in the legal notice compares unfavourably with the average £250,000 for which Westbrook sold the 1,200 flats held on 27-year leases to its 612 Jersey-based associated companies.’
Leaseholder Freeholder Legal Battle
Westbrook and Friends Provident are fighting it out at the Leasehold Valuation Tribunal, the Lands Tribunal, the Court of Appeal, and most likely the House of Lords as well. In 2009 the company brought a claim, but a week before the trial it pulled out, claiming it was because of “unfavourable market conditions”. In a second attempt, the company served a new notice in 2010, valuing the freehold at £111.6m – a £13.8m increase on the 2007 valuation. Friends Provident, which currently owns the freehold, has argued that the claim should be struck out given that Westbrook already abandoned its earlier claim. Giving his judgment last month, Mr Justice Arnold said that although enfranchisement laws allow the bringing of successive claims for enfranchisement, they do not allow the bringing of successive claims to be entitled to exercise the right to collective enfranchisement.
“I recognise that it is a strong thing to prevent a party from obtaining the court’s determination of what is accepted to be a reasonably arguable claim. However, Westbrook had a full opportunity to obtain the court’s determination in the previous proceedings, by bringing the previous claim, Westbrook caused Friends Provident and the courts to expend time and resources to deal with the claim. It chose to discontinue that claim shortly before trial. In my view, it both could and should have pursued that claim to trial to establish the entitlement of special purpose vehicles to exercise the right of collective enfranchisement if it wanted to maintain that entitlement.”
The High Court ruling is that the claim to use enfranchisement laws in relation to the 1,250-flat block “amounts to an abuse of process” and must be “struck out”, however on Monday afternoon, Mr Justice Arnold granted Westbrook permission to appeal the decision because the case raised an “issue of principle” that should be determined by the Court of Appeal.
IT disputes 
Reminds me of someone I know in Weston S M.