LATEST: High Court intervenes dramatically in rent-to-rent sector over RROs

The High Court has intervened dramatically in the rent-to-rent sector after three judges ruled that a landlord ©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - LATEST: High Court intervenes dramatically in rent-to-rent sector over RROs | LandlordZONE.

LATEST: High Court intervenes dramatically in rent-to-rent sector over RROs

The High Court has intervened dramatically in the rent-to-rent sector after three judges ruled that a landlord who sublets their properties via this kind of scheme are not liable for Rent Repayment Orders (RROs).

The ruling overturns a previous decision by the Upper Tribunal in Rakusen v Jepson, which ruled that an RRO application could be made against any landlord of the relevant property for the relevant period of the relevant offence.

Leaseholder and landlord Martin Rakusen granted a tenancy of his flat in Finchley Road, London, to Kensington Property Investment Group Ltd (KPIG) in May 2016, introduced by agents Hamptons. KPIG then entered into separate written agreements with the four tenants.

In November 2018, Hamptons told Rakusen that KPIG wanted to apply for a licence but none was granted and Rakusen did not renew KPIG’s tenancy in May 2019. The tenants then applied for, and won, RROs totalling £26,140.

Significant difference

Giles Peaker (pictured) at says the judgement will make a significant difference to those seeking RROs against less than salubrious landlords.

He adds: “A crumb of comfort is that the Court of Appeal accepted the policy intent and the ‘on the ground’ situation with dodgy rent to rent/intermediate landlords may both merit the extension of RROs to superior landlords. But the Court of Appeal consider that is now a matter for parliament.”

Tim Frome (pictured), MD of , says the decision limits a tenant’s options if they have a case for a RRO against an intermediary landlord, particularly if that intermediary landlord has subsequently gone out of business.

“At the Property Redress Scheme we have a number of members who undertake rent to rent tenancies and we regularly assist both the agents and their consumers to come to resolutions on complaints,” adds Frome. “We’ve also been in regular dialogue with the government on the growing rent to rent industry and they are looking carefully at whether it needs further regulation.”

©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - LATEST: High Court intervenes dramatically in rent-to-rent sector over RROs | LandlordZONE.

Source : Landlord Zone More   

What's Your Reaction?

like
0
dislike
0
love
0
funny
0
angry
0
sad
0
wow
0

Next Article

LATEST: Minister confirms plans for huge shake-up of tenancy contracts

A serious shake-up of assured shorthold tenancy (AST) contracts is on the cards when the Renters Reform ©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - LATEST: Minister confirms plans for huge shake-up of tenancy contracts | LandlordZONE.

LATEST: Minister confirms plans for huge shake-up of tenancy contracts

A serious shake-up of assured shorthold tenancy (AST) contracts is on the cards when the Renters Reform Bill is published this autumn, the government has confirmed.

In answer to a Parliamentary question about how the PRS benefits the economy, Housing Minister Lord Greenhalgh (main pic) said the government was committed to delivering a package of reforms.

“A key part of our future PRS reforms is to ensure the flexibility of private rental tenancies is retained, whilst balancing increased security for those tenants who need and want it, alongside driving an improvement in the quality and standards of PRS accommodation,” he said.

In the consultation document – – the government said landlords who evict tenants for rent arrears or anti-social behaviour using ‘no fault’ grounds masked valid reasons for eviction, which fuelled a culture of mistrust and uncertainty.

No practical purpose

“The ability to use section 21 rests in the assured shorthold tenancies regime. The government is of the view that, with section 21 removed, the assured shorthold regime no longer serves a practical purpose as the ability to create fixed-term tenancies already exists in the Housing Act 1988.”

With , all future tenancies would be assured, either as fixed-term assured tenancies or contractual periodic assured tenancies.

It would mean the default position will be that a tenancy is a periodic assured tenancy unless the landlord and tenant have agreed a fixed term in writing.

A tenant under an assured tenancy won’t be evicted unless the landlord can provide grounds under Schedule 2 of the Housing Act 1988 or at a break point in the tenancy contract where a break clause has been agreed between them.

©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - LATEST: Minister confirms plans for huge shake-up of tenancy contracts | LandlordZONE.

Source : Landlord Zone More   

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.