The rules will apply from 23 August 2020 until 28 March 2021.

We will go over some of the main changes that will impact you as a private landlord if you are seeking to evict tenants.

If You Have An Ongoing Eviction Case

If you have an ongoing case that has been stayed due to the temporary ban on evictions, you are likely to need to issue a “reactivation notice” to the court and the defendant. If you do not do this, the case will remain dormant.

This may not apply if the case was “brought on or after 3 August 2020 or in which a final order for possession has been made”.

Coronavirus Impact Statement

Where you are evicting someone for not paying their rent, you will now need to include a statement setting out any knowledge you have about “the impact of the coronavirus pandemic on the Defendant and their dependants”.

Updated Rent Account

The “reactivation notice” must contain an “updated rent account for the previous two years”. This means you will need to provide the rent history beforehand, rather than at court.

The Courts Don’t Have To Hear Your Case Within 8 Weeks

Normally the date from the issue of the claim form until a hearing should not be more than 8 weeks. However, this requirement has been lifted due to the expected backlog of cases.

High Court Eviction Notice Period

High Court bailiffs will now have to give notice to the tenant of an eviction in the same manner as County Court bailiffs already have to do. This comes in separately from the other provisions and is not a temporary measure.

Priority Cases

The purpose of the new rules is to limit the number of eviction cases coming before the courts. According to Compliance Officer for The Guild of Property Professionals, Paul Offley:

…the Government is eager to only have cases that are a priority go through the courts if possible. Priority cases have been defined as those that include anti-social behaviour, extreme rent arrears, domestic abuse, cases involving squatters, fraud or unlawful subletting….If a case does not fall into the category of being a priority, the Government is encouraging parties to use an independent third-party mediator to assist them in reaching a mutually acceptable agreement to resolve their dispute, rather than going to court.

New rules for possession proceedings

Further Reading

You can find full details about the changes on the Judiciary website: Civil Procedure (Amendment No. 4) (Coronavirus) Rules 2020 & the 123rd Practice Direction Update and Civil Procedure (Amendment No. 3) Rules 2020 & the 122^nd Practice Direction Update.

Conclusion

It is likely to be more difficult to evict tenants even after the ban is lifted in August. The new rules coupled with extremely busy courts means bad news for landlords with tenant troubles. The courts are going to prioritise the worst cases and expect landlords to try to resolve issues with renters wherever possible.

If you are impacted by the new rules in anyway, you should speak to a legal professional immediately.

The BBC is meant to be an unbiased commentator which acts solely in the public interest. However, there are a number of financial incentives which I believe may bias it against new independent entrepreneurs and small individual property investors. I will lay out my case and leave you to be the judge.

What Control Does The Government Have Over The BBC?

The Chairman of the BBC Board is appointed by the Queen under the advice of Ministers. As Britain is a constitutional Monarchy this means that the advice of Ministers is always taken by the Queen. Essentially Ministers of the Government select this person. The BBC Board then select the Director-General of the BBC who is “responsible for the creative, editorial and operational leadership” of the broadcaster.

Furthermore, the BBC is paid for via the TV licence fee and the Government have the power to propose legislation to remove this source of funding should they choose to do so.

Of course, this arrangement does not lead to a potential for bias in favour of the political party in power, as they could be replaced by the opposition, therefore it would not be in the interest of the BBC to lean entirely in one direction or the other. What does make sense however is for the BBC to have a bias – conscious or otherwise – in favour of the interests that back both main political parties.

Following The Money In Politics

As generally speaking, the Government is either controlled by Labour or The Conservatives, we will focus on these two parties.

The Labour Party receives many of its largest donations from trade unions. In Q1 of 2020, for example, it received £401,875 from Unite the Union, £291,575 from UNISON and £290,125 from GMB. Unions represent the interests of workers, not business owners and may have a negative view of landlords. Unite the Union, for example, is in favour of rent controls which would set limits on the amount that can be charged by landlords.

The Conservative Party’s big donors tend to be rich individuals and large companies. Donations in Q1 of 2020 include £250,000 from a former banker and head of an online trading company, £200,000 from a Russian government-linked businesswoman and £125,000 from a construction machinery company, Unatrac Limited.

Although it may seem at first glance that the Labour Party might be seen to be biased in favour of workers, and the Conservatives might be considered to have a bias in favour of big business, we need to consider the incomes of outgoing prime ministers.

Following Ex-Prime Ministers’ Money

When a Prime Minister leaves office, they will look for work in the private sector. It, therefore, makes sense for a PM to pay heed to the recommendations of big business when they are in power to build up such relationships.

Former Labour Prime Minister Tony Blair has taken a number of roles after leaving office including appointments with JPMorgan Chase, earning £2 million “in his part-time role as adviser….without ever having to go into the office” according to the Telegraph, and a role with Zurich Financial Services. He has also spoken at corporate events including being paid £182,000 for a 30 minutes speech. Former Labour Prime Minister Gordon Brown took an advisory role at PIMCO, the world’s biggest asset manager (although his fee went to the Office of Gordon and Sarah Brown to support his charitable and public service work rather than to him directly).

Former Conservative Prime Minister David Cameron has received a number of appointments in the private sector including with life sciences company Illumina Inc and consultancy for First Data Corporation. Former Conservative Prime Minister Theresa May has received a number of speaking fees including £100,000 from bank UBS Switzerland.

This means that the leadership of both major parties have a financial reason to support big business, regardless of their public political positions.

What BBC Bias Could This Lead To?

As we have seen the BBC is indirectly influenced by the government. The government is invariably run by parties that are either backed by big business or the unions.

Big business has a financial interest in preventing competition from smaller firms so parties backed by them are likely to support legislation which favours larger enterprise over smaller businesses.

The Unions represent the interests of workers rather than business owners and investors and therefore parties backed by them are more likely to be biased against business more generally. However, the politicians that lead these parties also have a personal interest in listening to big business and therefore may turn their attention to smaller players.

This means the pressure from both sides is for the BBC to be biased against small business owners and property investors, particularly ones that are not seeking the backing of major corporations.

If my hypothesis is correct, this would mean the BBC would be more likely to run programming that is biased against wealth creation education, small entrepreneurs that are not seeking funding from large enterprise and individual landlords. Where property and starting a business is mentioned, little instructional information would be provided and conventional paths would be advocated for. The BBC would also be more likely to back more traditional career paths and university education.

I will leave you to judge if you think my hypothesis is correct and if this is reflective of BBC programming or not. Either way, every business and organisation has the potential for bias in favour of its backers and its own products/services. This is not a problem. The problem only arises when you are not aware of the potential bias. Even if you disagree with my conclusions, I hope this gets you thinking about this topic more deeply.

The Case

A single disabled mother of two children aged 21 and 16 contacted a letting agent to view a property. She told the letting agent that “I work part time and receive some Housing Benefit”. The letting agent replied: “Many thanks for your enquiry regarding the above property for let. Unfortunately we do not accept housing benefit so could not proceed with a let on this basis.” The mother then brought a claim for indirect discrimination under the Equality Act 2010.

Why Did The Court Rule No DSS Policies Are “Indirect Discrimination”?

The court found that women and people with disabilities are more likely to be on housing benefit. It is unlawful to indirectly discriminate against protected characteristics, in this case sex and disability.

Indirect discrimination is defined in law as:

1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B’s.

(2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B’s if—

(a) A applies, or would apply, it to persons with whom B does not share the characteristic,

(b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it,

(c) it puts, or would put, B at that disadvantage, and

(d) A cannot show it to be a proportionate means of achieving a legitimate aim.

– Section 19 of Equality Act 2010

The court looked at statistics from the housing charity Shelter showing that women and disabled people are more likely to be on housing benefit. The court said:

The policy applied to persons with whom the Claimant does not share the protected characteristics, namely men and non-disabled people, as well as women and disabled people….

The policy put persons with whom the Claimant shares the protected characteristics of sex and disability (namely women and disabled people) at a particular disadvantage when compared with persons with whom the Claimant does not share the characteristics (namely men and non-disabled people).

County Court at York

The parties in the case agreed that the policy wasn’t justified so arguments as to why this type of policy could be considered proportionate were not heard by the court. The judge ruled:

The burden is (or would be) on the Respondent to prove that the policy was a proportionate means of achieving a legitimate aim. The parties are agreed that the policy was not justified.

County Court at York

Does This Case Set Precedent?

This case was heard in the County Court so it does not set precedent, meaning the ruling is not binding on other judges. However, if letting agents or landlords continue to have “no DSS policies” in place they will need to show the courts why they are “a proportionate means of achieving a legitimate aim”.

Does This Mean Landlords Cannot Refuse DSS Tenants?

No. It means that landlords cannot refuse tenants on the basis that they are DSS tenants, but if a DSS applicant is refused on other “proportionate grounds” this is lawful.

That means if a DSS applicant fails referencing, for example, it is unlikely that it would be unlawful to reject the tenant on this basis. However, not accepting an application on the grounds that the prospective tenant is on housing benefit is likely to be unlawful.

If you are a landlord or letting agent that has a “no DSS” policy it may be advisable to remove those words from any advertising you have and to contact a solicitor for full legal advice regarding your policies.

So when Samuel Leeds offered me the opportunity to interview him, it seemed like a great chance to get his view on things. In this interview I will ask Samuel about his opinion on his critics, his top bit of advice, about the future of his company and much more.

Hi Samuel, thank you for agreeing to do this interview! Much appreciated. As a property investor and educator you have inspired so many people to get into property. What inspires you most about property?

The thing that inspires me most about property is that it is bricks and mortar, you can see it and touch it. I love being able to make a living whilst providing homes for people.

You have made hundreds of videos, written books and have put on countless training courses. If you could teach only one lesson to people about property what would it be and why?

If I could teach one lesson about property it would be to invest with your formulas and not your feelings. Property is a business and it is so important to know how to calculate the numbers and not get wrapped up in the emotion of the houses.

Who is your role model in business and what have you learnt from them?

I have many role models in business but one of the most influential mentors in my life was Jim Rohn. I never had the honour of meeting him before he died but have listened to thousands of hours of his seminars and talks.

Can anyone do well in property or are there personality types it is not suited to?

Anybody can do well in property if they really choose to, but the reality is that not everybody will. Becoming successful in anything takes hard work, commitment and patience.

Some people say that ‘no money down’ deals are impossible. Is this true? Can you give some examples of ‘no money down’ deals you have done?

“No Money Down” deals are deals where you personally put none of your own money into the deal. All deals require some money somewhere, but it absolutely doesn’t have to be the buyer.

An example of this would be that when I bought my castle using a combination of bridging finance and other peoples money. I myself didn’t pay a penny to purchase that castle and the profits will pay back the investors and the bridging company. Most of my property transactions have been no money down deals.

You have given out so much advice and information to people freely, there must be very little you haven’t shared before. However, is there any advice that you would like to give people that you haven’t said publicly yet?

I hold very little back when teaching what I know, namely, property investing. I rarely talk about auction properties because I fear encouraging people to bid at an auction and buying a dud property, of which there are many! The rules are very different from buying at auction so I only teach my advanced students usually. If I had to offer a piece of advice I would say make sure you pay for a survey before you bid and never resent the money spent even if you lose the bid.

Clearly, you are passionate about property and education, but if you weren’t doing that what would you do?

If I wasn’t doing property and education I would most likely work full time within the church because I love helping people and my faith is very important to me.

Recently, you have been dealing with a lot of criticism both from social media and mainstream media. You have replied to it all and explained your case. Do you think any of the criticism has been justified? What do you think motivates the criticism?

I don’t try to understand why people say the things they do or even think the way they do. My job is to deliver a top quality service to my customers, provide good accommodation to my tenants and be a good husband and dad to my family. I believe I do a good job of that.

If you could speak to one of your critics face-to-face who would it be and what would you say to them?

I would have very little to say apart from continue to let my actions speak for themselves. Everybody is entitled to their opinion and free to believe what will serve them best in their life. I am not here to convince anybody of anything, but to train those in property that want to be trained.

What are your plans for the future of your business? Anything coming up that you haven’t yet spoken about?

I am very excited about some online software and property tech that we are building. Most recently I have partnered with “Deal Sourcr” which is an app that streamlines the best property deals from the internet and calculates the return on investment automatically.

Thank you so much for taking the time to do this interview. Is there anything more you would like to add before I let you get on with your busy day?

Property is the second best investment, the best is yourself. Thanks for the great questions and thank you for your excellent contribution to the property community.

In conclusion…

I very much appreciate Samuel’s willingness to share his time and provide the community with his insights. You can find more info about Samuel Leeds on his website here.

In the future I intend to interview various people in the property industry including deal sourcers, rent to rent experts, property investors, landlords, new arrivals to the property industry and more. If you would like to be interviewed for this blog, please do get in touch with some details about yourself.

If you are a landlord you may have heard of ‘guaranteed rent schemes’ and wondered exactly what they are and if they are a good idea. In this article, I will take a look at guaranteed rent schemes, their pros and cons as well as who exactly they are for.

Overview: Guaranteed Rent Schemes

A guaranteed rent scheme is where a local council, letting agent or investor takes over the management of a property from a landlord in exchange for guaranteed rent. This means that the landlord does not need to manage the property, deal with tenants or worry about voids. The landlord also often does not have to pay for minor maintenance issues during the term of the contract, although they might have to cover larger maintenance depending on the conditions of the specific scheme.

These schemes allow landlords to keep their properties as passive investments rather than a business that they need to manage. If the house cannot be filled, the rent is still paid to the landlord by those operating the programme.

Council vs Private Guaranteed Rent Schemes

There are two main types of guaranteed rent schemes: those run by local councils and those run by letting agents/investors.

Local council schemes are set up to provide social housing. This means that the tenants may be on housing benefit or Universal Credit. The council guarantees the rent payments as some landlords are concerned about taking on these tenants. Whether this arrangement would suit you will depend upon the type and location of your property. Because of the nature of this kind of scheme you may not be able to command as high a rental income as you would from private guaranteed rent companies.

Private schemes will normally take on a property and either rent it out by the room (HMO/multi-let) or offer the property for short-lets. They may even conduct a light refurbishment of the property, either for free or by splitting the costs with you. Often you will find that you make the same or similar amounts to what you would get from having your property managed by a traditional letting agent on a single-let basis, once you consider fees and voids. The only difference is you have the stability of receiving a guaranteed amount each month.

Who A Guaranteed Rent Scheme Isn’t For

If you are an active landlord who enjoys managing tenants and has enough time to deal with the number of properties you own, these schemes probably won’t suit you. If you have the time, you can do up your properties, turn single-lets into HMOs or put them on Airbnb and advertise them as short-lets yourself.

If you see property as running a business, and you have the time and expertise, then this type of scheme will not suit you. Obviously, guaranteed rent schemes need to make a profit, so you can certainly make more money by managing everything yourself.

Who Guaranteed Rent Schemes Are For

If you would like to see your property as an investment rather than a business, this type of scheme is for you. Many people would prefer not to deal with all the headaches of maintenance, voids and tenant complaints. Guaranteed rent allows a property owner to enjoy passive income and focus their time on other things. You may choose to view your property this way because you simply don’t have time to focus on it because of your other business activities or you might be retiring and simply don’t want the hassle.

Another, less obvious, reason you might choose this option is to focus your time on growing your property portfolio, rather than managing it. If you are in the process of growing a portfolio of 10’s or even 100’s of houses, problems will soon start mounting up. This type of scheme allows you to get a stable income from your properties, without the hassles of management, meaning you can build your portfolio as large as you like!

Similar Benefits To Owning Commerical Property

With commercial real estate, the property is taken on for a period of years by the business and maintenance is taken on by them as well. With residential properties, the tenant is not tied in for as long and it is your responsibility to maintain the property. Some investors choose to stay away from residential properties and buy commercial real estate for this exact reason.

A guaranteed rent scheme offers many of the same benefits, but with residential properties! Your property is taken on for a period of years and maintenance is generally handled by the operator of the scheme.

Downsides of Guaranteed Rent Schemes

There are some potential downsides. Because of the popularity of these schemes, there are rogue operators out there. Some operators attempt to take on properties under a short-hold tenancy agreement (AST) rather than a commercial lease or a management agreement. Make sure to deal with knowledgable companies that have an appropriate understanding of this type of scheme.

Some people will recommend avoiding small companies or individual investors, however they can often offer a more personal service and take the time to understand your needs. You will need to use your judgment in assessing which scheme, if any, is right for you and your properties.

Conclusion

Guaranteed rent schemes can work for some landlords. They turn what is normally an active business into a passive investment. They are not suited to landlords who prefer to do the work of running a business and keep the associated profits however. If you do decide to go for a guaranteed rent, make sure you deal with a company with the requisite knowledge of this area of property investment.