Welcome to The Summer Issue of the DABORACONWAY Newsletter! It has been a fantastic summer so far, we have had Wimbledon Tennis, Cricket, The World Cup, The Open and The Commonwealth Games. In this Issue we have articles on 3 Year Tenancies, Commercial Tenant Default, Property Licencing, Japanese knotweed and summer activity ideas among others. Read on to find out more...

Market View

Average house prices are now back at their 2007 peak with mortgage service costs not too stretched whilst interest rates remain so low. In our spring 2014 newsletter I reported that 'House Price Growth is broadly expected to match Income Growth as it is simply not possible to sustain the massive gap between the two and we expect the gap to narrow with House Price Growth broadly growing in line with Earnings over the long term'.

We are now starting to see signs that this gradual adjustment is taking place. However, the market will continue to remain strong in all areas and buyers will continue to compete pushing prices up, at a slower pace, whilst housing supply remains well behind what is actually required.

Interest Rates

I still maintain my personal view that as we move towards a “Living Standards Election” the Bank of England will continue to maintain interest rates at its present level. Although there is no doubt that the economy is substantially improved there are still significant challenges to overcome before interest rates should be increased:-

• The budget deficit, although reduced, is still excessively large.
• Construction is still well below its 2007 peak.
• Manufacturing is still well below its 2007 peak.
• Earnings per capita is lower in real terms and this is a problem for the economy as a whole.

When interest rates do start to increase, the Bank of England will ensure that this will be very slow and gradual as the bank knows that it is essential to ensure that borrowers should be able to cope with any increase.

David DaBora

Properties for sale and rent with DABORACONWAY, if you would like information on all of our properties just use the easy to click links below...

To see all of the properties that are currently available for sale with our Wanstead branch please click HERE

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To see all of the properties that are currently available to let with our Winchmore Hill branch please click HERE

The London Borough of Newham introduced a selective licensing scheme which applies to all private rented properties within the Borough since January 2013. They were the first Borough in the country to do so and now a number of other Local Authorities throughout the country are following suit.

The scheme was devised to address the impact of poor quality Landlords showing little or no interest in managing their properties properly, often letting to anti-social tenants who were causing problems for their neighbours. 

We went through the process of applying for the licenses on behalf of our clients. Anyone who did so by the 1st January 2013 was able to pay a reduced rate of &150. Applications for a 5 year licence received after this date were to be charged &500 (now the current rate) with the risk of receiving up to a &20,000 fine per property if Landlords did not apply. The application requested such details as the type of property, interested parties (property owner, landlord, managing agent, mortgage companies and leaseholders), property management arrangements, property information including the number and location of rooms, room sizes, fire alarms and smoke detectors.

Our first applications were submitted at the end of November 2012 and we received our first completed license in November 2013.

Why did it take so long?

Since the scheme came into effect 32,000 licences have been applied for and more than 30,000 have been issued which would account for a backlog.

Was it worth it?

Newham Council have visited nearly 3,000 properties, sent out over 5,000 warning letters and issued around 100 cautions for first time offences. The average fine levied is around &3,000 and the highest fine to date has been &25,500 plus costs, where a Landlord was found guilty of 24 disrepair offences after children were found to be living in an overcrowded, unhygienic and dangerous property.​ The Council has turned down licences for more than 100 unsuitable properties and they have nearly 300 prosecutions pending for unlicensed properties. They continue to receive 100 new licence applications every week and at this rate, Newham state that they should be close to 100% compliance by February 2015.

The Council intend for all Landlords within their Borough to be considered fit and proper, and if they identify 'a person of concern', then these persons are subject to a greater level of monitoring and the Council will only issue a one year license until such time that they are satisfied that the property is being properly managed.

Our Winchmore Hill office has recently been contacted by local Landlords asking for our views as Enfield Borough Council plan to introduce selective licensing. This has been met with opposition and a petition was raised and signed by nearly 2,000 people opposing the move as the Council are citing that privately rented homes are the key reason for anti-social behaviour in the borough. All the Landlords that I have spoken to strongly disagree with this.

Enfield Council are requesting &500 for a 5 year licence with a 50% discount for early applications. The latest, as we understand, even with the opposition, is that this is still going ahead with an introduction date of April 2015. We will be contacting our Enfield Landlords when we receive further details.

We were made aware on 26th June that Waltham Forest Council agreed to designate Waltham Forest as a selective licensing area. I have spoken to Waltham Forest Council and they cannot confirm at this stage how much the licence will cost. They were only able to state that licenses can be applied for from January 2015 and anyone who applies between January 2015 and April 2015 will receive a 50% 'early bird' discount.

We have already contacted all of our clients who let properties within the borough and we will update them further when we receive more information.

Even sooner, Barking & Dagenham Council have introduced their Licensing Scheme and we are currently assisting all of our Landlords within the Borough to meet the start date of 1st September 2014.

Redbridge Council contacted us in June 2014 as they are launching a 3 month campaign targeting letting/managing agents and Landlords of licensable Houses in Multiple Occupation (HMO's) who have not yet applied for a licence. This has been a legal requirement since April 2006 but only relates to properties that have 3 or more floors and have 5 or more occupants from 2 or more households with shared kitchen and/or bathroom facilities.

At this time we are not aware of Redbridge introducing selective property licensing.

Further afield, Liverpool Council are considering licensing, but in Milton Keynes the Council has opted not to introduce borough wide licensing after a feasibility study found it would have no significant impact on anti-social behaviour.

I, like many agents and Landlords see this as a money spinning exercise and with Newham generating between &5m-&10m so far, we can all understand why.

Do Councils think that a tenant will be better behaved if their landlord has a license?

Probably not, but when you see images like these...

...you can begin to see the standard of some properties and why they have introduced Property Licensing.

Personally, I would rather have seen the licensing schemes introduced for those unscrupulous Landlords who have no care for the safety of their tenants. Who following complaints and further investigation found themselves fined and made to license their properties, rather than penalise the genuine and honest Landlords, many of which we are pleased to say are our clients.

But, it appears that licensing is here to stay and we will advise and help our clients in any way that we can.

Written By Brett Miller, Area Manager

When a landlord grants a commercial lease to a tenant, there is always a risk that the tenant might breach the terms of the lease and that risk should be catered for in the drafting of the lease terms to include additional security by rent deposit or guarantor.

Where the tenant fails to pay rent due under the lease, which in most commercial leases will include for service charges, the landlord may threaten and ultimately take one of a number of possible courses of action to recover rent arrears. You should however think about whether you are wishing to preserve an ongoing relationship with the tenant. Subsequently the threat of Bankruptcy (in the case of an individual) or Winding-Up proceedings is becoming more common to secure the payment of rent. This may be an appropriate way to proceed where you simply wish to put pressure on the tenant to pay the rent but do not want to take steps to evict the tenant or commence action for forfeiture or levying distress.

At the outset where you think your tenant may be insolvent you should before taking any particular course of action always check with Companies House to see if any insolvency notices have been served.

As a pre-cursor to a Winding-Up Petition the service of a Statutory Demand may be effected and is a method of getting tough with the tenant but still without removing him from occupation. It is in the majority of cases an extremely effective action for getting the rent paid. This is because of the risk that unless payment is made within 21 days of the date of service of the Statutory Demand the landlord can initiate Winding-Up proceedings against the tenant under the terms of The Insolvency Act 1986. The advantage of taking this action is that it is fast and relatively cheap to do.

Should however payment continue to be withheld you can proceed with the Winding-Up Petition. The effect of doing so has the advantage that presenting such proceedings can cause substantial harm to the reputation of a company by the petition’s existence being in the public domain. It is the very real threat of these proceedings that encourage the debtor to pay the debt in full by return or at the very least back as quickly as possible.

The Petition itself is an Application to the court for an Order that the debtor company be wound-up because it is unable to pay its debts as and when they fall due.

The basic procedure is quick. A hearing is listed for a date in 4-6 weeks from the date of issue, undoubtedly focusing the mind of the debtor company. It essentially compels the tenant to deal with the debt immediately.

The major advantage however of presenting a Winding-Up Petition is the threat of advertising the same in the London Gazette in accordance with The Insolvency Rules. This statutory advertisement can be very damaging to not only the reputation of the debtor company but more so because its bank will immediately freeze its accounts. It is for this reason the company shall do all in their power to avoid the possibility of this occurring resulting in almost all cases full payment of the arrears outstanding, together with the costs incurred in presenting the petition, being received.

Should on the rare occasion this course of action fail in recovering those outstanding monies the Court may at the hearing date listed and upon the landlord’s request Order for the debtor company to be wound- up and the Official Receiver (a government department) appointed as Liquidator of the company. If however a proactive Liquidator is required to investigate and/or pursue directors for misconduct it is possible to have a Liquidator in private practice appointed by representation to the Official Receiver or if necessary by convening a Creditors’ Meeting.

It can be costly and time consuming to pursue the usual court proceedings available to landlords particularly as there is the possibility that the tenant will, in order to prolong proceedings and prevent the landlord from obtaining payment, defend a claim for rent arrears by putting forward a spurious counterclaim e.g. claiming the landlord's failure to make repairs to the property. It is for this reason in today’s economic climate the threat of tenant insolvency is now a very real prospect and a powerful tool in your armoury!

It should be noted that this method of applying substantial pressure on your debtor in recovering monies due to you may be used in respect of individuals and companies across all industry sectors and is not limited to merely the housing sector.

Robert Edge

Robert is part of the Commercial Litigation Recoveries Team at Devonshires and may be contacted on robert.edge@devonshires.co.uk

You may recall that the case of Superstrike Limited –v- Marino Rodrigues [2013] 1WLR3848 dealt with the scenario where a Landlord had granted a fixed term tenancy and taken a deposit before the tenancy deposit provisions of the Housing Act 2004 came into force. In this case on expiry of the fixed term, a statutory periodic tenancy arose and the deposit taken at the start of the fixed term tenancy was not handled in accordance with the provisions of the Act. In this case, Landlords were thrown into confusion as the Court of Appeal decided that the statutory periodic tenancy was a new tenancy and the requirements of the Act arose in relation to that tenancy. Because the Landlord had not complied with the Act, he was unable to validly serve a Section 21 Notice and the penalties contained within the Act applied.

This has, understandably, raised a number of questions not only in relation to pre 2007 tenancies granted but also tenancies granted after the Act and whether the Landlord had a duty to re-comply on the grant of the future tenancy or where a statutory periodic tenancy arises. In response, the Government has made an amendment to the Deregulation Bill, in order to provide some certainty and to clarify the position.

The provisions would provide:

1. A 90 day grace period for landlords of fixed term tenancies which were granted prior to April 2007 to deal with the deposit requirements;

2. Where a fixed term tenancy commenced after 2007 and the requirements of the Act were complied with at that time, the Landlord will not have to re-comply if a statutory tenancy arises. Nor does the Landlord have to comply where the Landlord enters into a new tenancy with the same tenant in respect of the same premises and which is not a statutory periodic tenancy e.g. a new fixed term.

This clarity will be welcomed by Landlords, however it is important to note that the Bill is currently in the House of Commons and must still progress through the usual channels before the provisions become law. If in the meantime, you are faced with any challenge regarding a deposit, you should take urgent legal advice.

Donna McCarthy, Partner, Devonshires Solicitors

Donna is part of a 20 strong team and advises Landlords on all aspects of tenancy management and litigation. She can be contacted on 020 7880 4349 or donna.mccarthy@devonshires.co.uk

www.devonshires.com

We may have holidays booked but this is definitely the time to look for the best that London has to offer and to take advantage of the many activities that are taking place, many of which are free!

Listed below are a selection of what’s on offer in London this summer and what we think will offer great days out for all ages:-

www.canarywharf.com/visitus/arts--events1/events/ This site gives information on a variety of events including:-

Beach Volleyball, Table Tennis, celebrate Shakespeare's 450th Birthday, visit the Jubilee Park and watch live performances, Children's Theatre Festival Music including Summer Sounds, Tributes to Wartime with the Royal British Legion Band, The Canary Wharf Jazz Festival and others.

http://www.roh.org.uk/about/bp-big-screens

http://www.popupscreens.co.uk/

For those that have always wanted to see an Opera or Big Screen Cinema out in the open, now’s the chance, look at these sites for locations during the summer months.

www.enfield.gov.uk For those of you who live near to our Winchmore Hill office check this site out to see what exciting events are happening in your area over the summer period including; Theatre with ChickenShed, Storytelling, Musical Evenings and markets.

If you live near to our other branches in Wanstead and South Woodford try these sites for some great ideas;

www.visiteppingforest.co.uk
www.walthamstow.towntalk.co.uk/events
www.redbridge.gov.uk

And as if this isn't enough the following link is swimming with possible days out:-

http://www.daysoutwithkids.co.uk/

From all at DABORACONWAY we wish you a great summer.

They sent root cuttings home to various nurseries including Kew. This easy to grow and hardy plant soon became a popular addition to many a large garden, and was to be found on sale up until the second world war. 

Unfortunately it became apparent as early as 1904 that the plant was rather too easy to grow and virtually impossible to control. Removed from its native environment, without any natural biological controls, the plant grew far taller and far more vigorously than it did in its native environment. In Japan the plant typically grows to 2m in height but in Europe and the USA it grows to 3-5m and demonstrated an ability to cover large areas of garden and park land, out competing and smothering the native flora.

It is highly likely that you will have seen Japanese knotweed, but will probably not have recognised it. Given its potentially destructive powers it is worth becoming familiar with this plant, see picture above. Once you “get your eye in“, you will find that it reasonably common especially along railway lines and on waste land.

Why is it a problem?

The ability of Japaneese knotweed to “kill off” other plants and thereby reduce bio diversity causes it to be classed as an “invasive species” requiring eradication wherever possible, but even more alarming is the destructive capability of its root system.

“The strong and vigorous growth of the Japanese knotweed can damage concrete foundations, buildings, flood defences, roads, paving, retaining walls and architectural sites. It can also reduce the capacity of channels in flood defences to carry water”.

So yes it’s a problem, especially in the urban environment as its roots or rhizomes can grow up to a depth of 3m and spread to a width of 7m.

The fear of Japaneese Knotweed is such that some mortgage lenders have refused loans on properties that have knotweed growing in close proximity, fearing that left untreated the knotweed may damage the property concerned.

So what can be done to protect properties from being destroyed by this green monster?

Fortunately Japanese knotweed can be eradicated by use of a strong glyphosate based herbicide spray. Spraying is best carried out in late summer or spring. Japanese knotweed is a tough plant and repeated annual spraying for up to four years may be required.

It is sometimes necessary to “dig” out Japanese knotweed for example to clear land for building. This method creates problems over disposal of the "waste" as Japanese knotweed is classed as a 'controlled waste' under the Environmental Protection Act 1990. Hence this method should be carried out by a specialist contractor.

For more detailed information of how to treat knotweed visit the Royal Horticultural Website; 
http://www.rhs.org.uk/advice/profile?PID=218

The future

The reason that Japanese knotweed is such a “problem” in Europe and the USA it is growing without the usual biological checks and balances which exist in its natural environment. This being the case it is hoped that the introduction of biological controls will limit the vigorous nature of its growth. The introduction of a plant sucking aphids from Japan is currently being trialed in various locations in the UK. Initial results suggest that these aphids reduce the “vigour” of the Japanese knotweeds growth, rendering the plant “harmless”, but its early days.

For now the best advice to Landlords is, identification followed by rapid eradication, using the methods described above.

Written by Lloyd Fothergill - Manager, Head Office

The past two decades has seen the relative decline of the owner-occupier, and the growth of the private-rented market. We are now in “generation rent”. Population growth, low levels of social housing construction, low interest rates, but combined with rising house prices and tighter controls on mortgage access since the 2008 “crash”, have impelled private rental growth. Buy-to-let has increasingly replaced the private pension as the preferred means of saving for retirement. Of the estimated 3.6 million households renting privately, it is estimated that 30% are families with children.

The standard assured shorthold tenancy lasts one year, 6 months being the minimum. When these tenancies were introduced in 1988, the market was geared to the young mobile renter, who often wanted to move on for job or personal reasons after a few months, or perhaps to purchase. Things have changed. Families with children of school-age are now having to accept 6 month or 1 year tenancies, with no certainty of renewal after that period. Rapidly escalating property prices in London and the South East may be encouraging some Buy-to-Let landlords to sell with vacant possession, but the property concerned is more likely than not to remain rented, but to some-one else.

In a House of Commons debate initiated by Labour on 25 June, there was a level of agreement between all the parties on the need for longer-term tenancies for private renters. MP's from all sides highlighted the negative aspects of short tenancies for families with children, and also for public services such as education, where moves between schools are becoming more frequent, and where some children are being deprived of school places for long periods, or forced to travelling substantial distances to their “old” school.

Nick Boles MP (Tory Minister) said, “We are developing a model tenancy agreement that landlords and tenants can use if they want to enter into longer-term tenancy agreements”, and promised its publication “later this summer”.

Emma Reynolds MP (Labour Shadow Housing Minister) stated, “We would legislate for longer-term tenancies to make three year tenancies the norm. Tenants would have a 6 month probationary period, and as long as they respected the property, and paid the rent on time, they would then have the stability of the rest of the 3 year period". She added, "We would build in protection for landlords - that is absolutely essential”.

All parties, faced with voter pressure ahead of the 2015 election, to assist private renters with children, seem to moving in the same direction, the difference being how much the change should be enshrined in law. We are likely to see change first in the Build-to-Let market, where institutional finance, seeking yield rather than capital appreciation, is likely to press for longer tenancies to minimise losses during periods when a property is empty. The concern of individual buy-to-let landlords is that bad tenants will be even more difficult to dislodge, will, in DABORACONWAY’s view inhibit the spread of longer tenancies, unless the Government in power extends and streamlines the relevant court procedures for obtaining vacant possession.
Watch this Space!

DABORACONWAY provides informal advice to any owner thinking of renting a property in future, whether or not it is currently tenanted.

FULLY MANAGED ASSURED SHORTHOLD TENANCY AGREEMENT- EXAMPLE

General Notes:

1) This Tenancy Agreement sets out the rights and obligations of the Landlord and the Tenant for the letting of furnished or unfurnished residential accommodation on an assured shorthold tenancy within the provisions of the Housing Act 1988 as amended by Part III of the Housing Act 1996.

2) This is a legal document and will bind the parties once it has been signed. If any party is unsure as to their rights and obligations under this Agreement, they should obtain independent legal advice before signing.

3) This Agreement may be used for residential tenancies of three years or less. Agreements for tenancies of a longer nature should be drawn up by deed.

4) Section 11 to 16 of the Landlord and Tenant Act 1985 – these obligations require the Landlord to keep in repair the structure and exterior of the Property and to keep in repair and proper working order the installations for the supply of water, gas and electricity and the installation in the Property for space heating or heating water.

________________________________________________________________


THIS AGREEMENT is made on the BETWEEN the Landlord and the Tenant. It is intended that the Tenancy created by this Agreement is and shall be an assured shorthold tenancy within the meaning of the Housing Act 1988 as amended by the Housing Act of 1996.

Landlord(s) Name:

Address:


If the Landlord’s address is not in England and Wales, the Landlord must provide an alternative address in England and Wales where notices can be served under s48 Landlord and Tenant Act 1987:

Landlord’s address for service:

Tenant(s) Name:

Address:
Property Address:

Including any common parts but excluding garage, out buildings, sheds etc


Term:
From and including:

To and including:

Rent:

Payment:

Deposit: &0.00 and will be dealt with in accordance with clause 2.

1. The Landlord shall let and the Tenant shall take the Property and Contents for the Term at the Rent payable as above.

2. DEPOSIT

The deposit scheme being used for this tenancy agreement is (insert appropriate Deposit Protection Scheme).

Written by Martin Gard - Manager, Head Office

We are pleased to welcome Rami Veromaa to the Guaranteed Rent Scheme team here at DABORACONWAY. Rami joined us in May, and has had previous experience working within the Local Authority sector. 

Rami believes that the Guaranteed Rent Scheme is a great product for Landlords seeking a guaranteed income for their properties. DABORACONWAY provide a fully managed service at no extra cost and with no risk of void periods for the whole 3 year term, this is an option all owners should consider.

Outside of working hours, Rami enjoys going to the gym 3 or 4 times a week. Although, you won’t find him there on a Wednesday, as Rami sets aside this evening to watch new releases at his local cinema.

Rami also likes to travel outside of London, to places like Paris and Amsterdam, where he visits friends.

If you require any further advice or information on the required standards with relation to the Guaranteed Rent Scheme, please contact Rami on 0208 989 5678 ext 242, or via email rami.veromaa@daboraconway.com.

A NIGHT AT ROLLERBOWL

Following on from the last quarterly night out the Wanstead, South Woodford & Winchmore Hill Sales & Lettings teams got together for their regular night out, this time with newcomer Kate Adams.

Kate has joined DABORACONWAY as part of the Governments Apprenticeship Scheme and has joined the Wanstead team as Branch Administrator.

We are glad to say that her administration is better than her bowling but bless her she tried!

The highest individual game score winners were Peter (Winchmore Hill) and Wayne (South Woodford) with an impressive 127 and Peter was the overall winner on the night (pictured). 

OLIVIA'S CHARITY RUN FOR CANCER RESEARCH UK

Marguerite and her Care Bear Team

It was upsetting to find out earlier this year that my close friend’s Mum had been diagnosed with Stage 4 cancer. A group of us decided that we would get together and show our support for Marguerite by taking part in a 5km run to raise money for Cancer Research UK and in many ways the treatment she would need.

So much fun was had at the Race for Life event that was held on the 22nd June 2014. This year was particularly poignant and it was wonderful to see Marguerite well enough to watch us cross the finish line. The work that Cancer Research UK does is incredible and it shows in the great recovery that Marguerite has made, so much so I have decided to continue my support for this charity by setting up a monthly donation.

If anyone wishes to make a donation please visit the JustGiving page by clicking here.

IN MEMORY OF DYLAN TOMBIDES

DABORACONWAY’S Area Manager Brett Miller went along to the Loughton Leisure Centre to support his son Dylan, who along with two other 15 year old West Ham friends took part in a mini triathlon to raise money for Cancer Research UK in memory of Dylan Tomides.

Dylan was a product of the famous West Ham football academy. In 2011 whilst playing for Australia in the Under 17’s World Cup in Mexico he was diagnosed with testicular cancer. In June 2012, after treatment, he was back to full health and returned to training and made his West Ham first team debut in September 2012.

Unfortunately and somewhat out of the blue he died in April 2014. This came as a shock to West Ham fans as most believed that he had come through his treatment and was doing fine. The boys were particularly moved by the news and decided to do a mini triathlon where each swam 38 lengths, ran for 38 minutes and cycled for 38 minutes, honouring the number Dylan wore on his back. They set up a Just Giving page and have raised over &2,000 which included a very generous donation of &500 from West Ham’s co-Chairman David Sullivan. Here is the link to the Just Giving page with a photo gallery of the day.

To donate to please click http://www.justgiving.com/Thomas-WilliamsDT38

We filled one of our DABORACONWAY cars with balloons and a competition was held to see who could guess the correct amount.

There were a number of entries and along with a donation to the school from DABORACONWAY a considerable amount was raised.

We also arranged for vouchers for the winner and Clare Dibble of Woodbridge PTA commented, "We had 1 correct answer and 3 that were only 1 answer away, so we divided the prize and gave First Prize of &10.00 and 3 Second Prizes of &5.00 each. It was a great afternoon, thank you for your sponsorship"

Written by Brett Miller