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Raising the Rent – how an interest rate rise could cost tenants

With the first base rate in over a decade having hit last year and with experts predicting more rate increases for the year ahead and with rents at their highest in years, coupled with a shortage of affordable private and council/housing association rental properties, it seems rents are likely to continue to increase.

Hitting renters harder

Any raise in interest rates will inevitably trickle through to a rent increase that could put the private rental market as far out of reach as owning your own home.

Landlords have also been hit with a raft of regulations and conformity requirements, as well as tax relief reductions, and considerable increases in the stamp duty on buy-to-let property purchases. All of this creates a perfect storm for landlords, and inevitably it’s the tenants who end up paying – quite literally.

If you’ve had a letter from your landlord and the rent increase seems excessive, what can you do? And if you’re in the other camp and your tenant refuses to pay the increase, what are your rights as a landlord?

Tenants’ rights

Your landlord’s ability to increase the rent will depend on what type of agreement you have. If you have what is referred to as a periodic tenancy or rolling agreement, then your landlord cannot increase more than once a year without your agreement. If you have a fixed-term tenancy then again, the rent can only be increased if you agree. If you don’t agree with the rise then the rent has to stay at the set rate until the fixed term ends. Once that point is reached then the landlord can increase the rent, usually to stay in line with inflation.

Any rental increase must be fair and realistic, so a good way to check that you’re being treated reasonably by your landlord is to find out the average local rental value for like-for-like properties. This will give you a baseline to work from, and negotiate a fair rise with your landlord. Your landlord must also give you at least a month’s notice of any increase. If your tenancy is a fixed yearly agreement, then that notice period increases to six months.

Going to a rent tribunal

If you feel the increase is unreasonable or even unlawful, then you can challenge it at a rent tribunal. However, you can only go to tribunal if:

  • Your tenancy agreement is an assured or assured shorthold one
  • Your rent increase is a part of a section 13 procedure
  • You apply to go to tribunal before the new rent increase takes effect.

Landlords

It’s important to remember that tenants have rights too, and that you cannot simply implement an excessive rent increase. If the increase could be perceived as a way of forcing a tenant to vacate then you could be subject to legal action by the tenant.

However, landlords are protected by the law too. If a tenant refuses to accept a rent increase then you may be able to take the dispute to an arbitrator or first-tier tribunal. If your agreement is a fixed term tenancy then you may also be able to issue a Section 13(2) Notice of the Housing Act 1988, which will propose an increase at the end of the fixed term and before a new agreement is signed.

If there is a clause in your tenancy agreement that states that rent rates can be reviewed after a certain period into the tenancy then you must make sure that the clause is fair and complies with the Unfair Terms in Consumer Contracts Regulations 1999.

If a tenant flatly refuses to pay any rent, then you may have grounds to start proceedings to have them evicted from the property.

If you are a Landlord or a Tenant and have concerns about rent or any tenancy issues please contact our Dispute Resolution Department on 01202 294411 who will be happy to assist you.

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Keep Christmas for the children

 

Christmas celebrations for children are often marked by family divisions when relationships break down. According to statistics from the ONS around 100,000 children per year see their parents divorcing, with many of those families separating immediately after a last Christmas together. Family lawyers see a surge in new enquiries for divorce each New Year.  Alongside this are those, children who will be affected by family breakdown, but who are not shown in those statistics, as their parents are not married.

 

Whilst a separation may offer hope of ending a difficult time, too often it marks the start of a new challenge, with couples engaged in a drawn-out and difficult process, instead of collaborating to find common ground.

 

For many families, the final Christmas will be marked by arguments and behaviour that may be used as an example of the unreasonable behaviour in a divorce petition.  To proceed with a divorce, the marriage must be shown to have irretrievably broken down, with adultery and unreasonable behaviour being the most common grounds which enable a party to proceed immediately with divorce proceedings. It is possible to wait for a period of at least two years separation immediately preceding the issue of the divorce petition, which will require the other party to consent or five years separation without the other party’s consent. Separate living arrangements can be difficult to achieve before assets have been divided through the process of divorce, highlighting why adultery and unreasonable behaviour are the most commonly used grounds. Whilst the separation for unmarried couples appears to offer a simpler exit strategy, it underlines the lack of legal protection for cohabiting partners.

 

There have been calls for a change in the law to allow for ‘no fault’ divorce without a long separation, with those advocating the change arguing this could reduce animosity and provide a better environment for children.  Most recently Baroness Hale, the first female President of the Supreme Court, spoke out to say that the law should be changed to address injustices, including ‘no fault’ divorce, statutory backing for Pre-nuptial Agreements and greater rights for cohabiting partners, who have been shown to be at greater risk after a  separation, with fewer routes for financial protection.

 

Many people who have been living together for any length of time, sharing a home and bringing up children, think they have some special rights through a ‘common law marriage’, but unfortunately there are no such protections unless an asset is legally owned by the parties, for instance  if your name is on the title deeds for a property, as joint tenants or tenants in common, if you have a jointly named savings account or you have contributed to the purchase price of the family home which is owned by the other party.

 

The lack of financial remedies for cohabiting couples is often the biggest issue.  While a parent can be made to contribute to the maintenance of their children, there is no such protection for a former partner to claim maintenance if they cannot work while bringing up the children of the relationship.  Similarly, they may find themselves with nowhere to live.

 

Whether starting out or in a committed relationship, whether married or cohabiting, it is sensible to think about protecting assets through a Pre or Post nuptial agreement or a cohabitation agreement.  For many couples, simply having the frank discussion that goes into making such an agreement can help to create a positive, open attitude in a relationship from the start.  While Pre or Post nuptial agreements are not yet legally binding in the UK, they have increasing weight after being tested in the courts.

 

For those couples anticipating their last Christmas together, the advice is to seek a collaborative approach to arrangements for both children and financial matters.  For divorcing couples, mediation will usually involve reaching an arrangement separately from the actual divorce proceedings, with the resulting agreement being presented to the Courts for a formal consent order to be  approved.

 

Collaborative Law and mediation are the best way to  lessen  the pain of separation.  Most couples find these options a way to resolve matters more quickly and easily which assists in putting the children’s interests first.  The actual process of divorce has become much simpler in recent years and many couples are taking a DIY approach, but involving a specialist mediator, and receiving advice from a solicitor concerning what is a fair settlement, can make the difference between a good or bad separation, particularly where children are involved, and this is true for cohabiting couples also.

 

For advice please contact a member of our Family Team.

 

Web site content note: 

This is not legal advice; it is intended to provide information of general interest about current legal issues.

 

 

Bournemouth Food Bank Appeal

This Christmas we have been collecting provisions for the Bournemouth Food Bank appeal.

The Trussell Trust supports communities and churches to open food banks across the UK.

The Bournemouth food bank is part of The Trussell Trusts’ network of 428 food banks, working to tackle food poverty and hunger in our local communities, as well as across the UK.

The Foodbank Network was founded in 2004 after four years of developing the original food bank based in Salisbury. Since then The Trussell Trust has helped communities work together to launch food banks nationwide in a wide range of towns and cities.

In 2016/17, The Trussell Trust’s Food bank Network provided 1,182,954 three-day emergency food supplies and support to UK people in crisis. Of these, over 430,000 went to children.

No-one in our community should face hunger. The food bank provides 3 days’ nutritionally balanced emergency food, and offers support to local people in crisis who are referred to them by support agencies.

Initially each office was given one large box to fill but by the end of the appeal we had several boxes and bags filled to the brim with a variety of food.

On 20th December 2017 the boxes were taken to the Bournemouth Food Bank depot in Charminster where we were met with a team of packers, collectors, distributors and coordinators who were busy arranging food parcels for those people in the local area who rely on this much needed service.

It is fantastic to know that over the Christmas period and into the New Year local families, the elderly and vulnerable people who need the Food Bank will not go hungry.

Bus Stop Club Christmas Hampers

Over the last few weeks Aldridge Brownlee have been collecting items to donate to the Christmas Hampers being given to local families by the Bus Stop Club in Ferndown.

Sarah Jenking and Nicola Bennetts of Aldridge Brownlee delivered the donated items to the Bus Stop Club on Tuesday morning and helped wrap boxes and pack the Christmas hampers for those less fortunate over the festive period. The Christmas hampers contained mince pies, Christmas puddings and the essentials to make a Christmas meal, little treats and presents for the families, young people, parents and elderly people who use the Bus Stop Club.

The Bus Stop Club offers local support services and a listening ear to families in crisis. Aldridge Brownlee have been supporting the Bus Stop Club for the last few years and are marvelled by the excellent job Susan Sutherland, who runs the charity, is doing. The Bus Stop Club is making a huge difference to many people’s lives within the local community.

If anyone would like to help or donate to the Bus Stop Club, please visit here for further details. If you or someone you know requires assistance themselves from the Bus Stop Club over the festive club please contact Mrs Susan Sutherland on 07866 692528.

Residential Evictions; the rights and wrongs

Living in rented accommodation comes with plenty of uncertainty. A landlord could serve an eviction notice on a Tenant at any time, especially if a tenancy agreement has ended. But sometimes, evictions are unfair, unjust, or plain illegal. So what constitutes an illegal eviction and what can tenants do to defend their rights?

When the landlord has the right to evict

Landlords can evict tenants:

  • If the end of a fixed term contract has been reached.
  • At the end of the period set out in a legal notice to leave (a section 21 notice, minimum 2 months notice).
  • By obtaining a section 8 notice, which can notify you of eviction at any time during the duration of the tenancy agreement, for example if you are in arrears or have broken the terms of your tenancy agreement.

A ‘Notice to Quit’ must first be served on the Tenant. If the Tenant doesn’t leave then the landlord has the right to apply to the court for a possession order. However, there is no guarantee that the court will grant the order, and Tenants are entitled to present their case in court if they disagree with the landlord’s claims.

Who is allowed in?

Only high court enforcement officers (bailiffs) have the right to forcibly remove a tenant. The landlord or letting agent does not have right of access to a property without a tenants permission, and forced entry could be regarded as harassment.

The key piece of legislation to refer to is the Protection from Eviction Act 1977, which clearly lays down the various definitions of harassment, which includes refusal to carry out repairs, intentional damage to the property, insulting or threatening behaviour, withholding keys, or changing the locks.

Many of these tactics are used by unscrupulous landlords to force tenants to move out. An eviction that has been brought about by constant harassment (or even bribery) constitutes an illegal eviction, especially if they forcibly throw a tenant out of the property, change the locks to prevent a tenant gaining entry, or threaten a tenant. Remember that, even when a landlord has a court order, the only people that can remove a tenant from your property are high court enforcement officers.

The law is designed to provide protection for both landlords and tenants when it comes to evictions. It is the landlord’s responsibility to ensure that any eviction is legally compliant, and the tenant is obliged to comply with the tenancy agreement, as well as with the law.

If you need any advice either as a tenant or a landlord contact our Dispute Resolution Department for an initial fixed fee appointment on 01202 294411.

Chancellor announces get-fit regime

An extra £3 billion to prepare for Brexit over the next two years and a vision of an economy that is ‘fit for the future’ were at the heart of the Chancellor’s Autumn statement. And despite downgrading growth and productivity forecasts, after public sector net borrowing hit £8bn in October, Philip Hammond announced a raft of new investments. Alongside the £3bn set aside for Brexit, he plans to inject £6.3bn into the NHS and £500m to support emerging technological development, such as Artificial Intelligence.

Housing is also in the spotlight, with £15.3 billion new financial support for house building over the next five years, with the Government setting aside £1.2 billion to buy land and £2.7 billion for related infrastructure. The Government also announced plans to create five new so-called ‘garden’ towns, and a headline-grabbing cut in stamp duty for first time buyers.

Stamp duty is currently paid on property purchases over £125,000, with a ‘slice’ tax where buyers pay at the relevant rate for each band, rather than a flat rate across the whole amount. With immediate effect, stamp duty is abolished for first-time buyers on properties worth up to £300,000, or on the first £300,000 of a property worth up to £500,000.

The change in stamp duty has caught most of the attention. It’s certainly a move that will be welcomed by first time buyers, but does add yet more complexity to the application of this particular tax, where we already have different rates for second home owners and landlords. Buyers need to read the small print before rushing out to make an offer, as there are clear distinctions on who is eligible. It will not apply if any property has been owned at any previous time, whether here or anywhere else in the world, and it must be the only or main home for the buyer. In a joint purchase, everyone would need to qualify as a first-time buyer. Buyers will need to check out the detail with their solicitor, and the benefit must be claimed when the Stamp Duty Land Tax return is made to HMRC during the purchase process.

For the NHS, £3.5 billion of new funding has been made available for upgrading NHS buildings and improving care and a further £2.8 billion has been set aside to support improvements in A&E performance and to reducing waiting times for patients.

For individuals, the basic-rate income tax threshold will rise to £11,850 in April 2018, up from £11,501, and the higher rate threshold will rise from £45,001 to £46,350. Alongside, the National Living Wage, paid to those aged 25 and over, will increase from £7.50 per hour to £7.83 per hour from April 2018, while the National Minimum Wage will also increase:

21 to 24 year olds  18 to 20 year olds  16 and 17 year olds  Apprentices
£7.38 per hour  £5.90 per hour  £4.20 per hour  £3.70 per hour

In areas focused on supporting small business, the switch to link business rates to the Consumer Price Index, instead of the Retail Price Index, has been brought forward by two years, with the Government saying businesses will save £2.3bn as a result. There will be retrospective legislation to tackle the so-called ‘staircase’ tax, which had affected the business rates bill for many small businesses in communal offices, with those having more than one office linked by a communal lift, corridor or staircase being charged more.

Also, the VAT threshold at which registration is required will remain at £85,000, but alongside there will be a crack-down on VAT evasion online, with greater powers to make online marketplaces responsible for the unpaid VAT of their sellers.

Other initiatives to tackle avoidance and evasion risks will see new technology for HMRC; new global rules to force the disclosure of certain offshore structures to tax authorities; and a change to international corporate tax rules to ensure globally-operating digital companies pay a fair amount of tax.
As with the Chancellor’s previous statements, his eye is very much on managing the economy through the coming Brexit negotiations and the country’s exit from the European Union.

Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.



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