Homeless Homeowner – the law supports lawlessness

Homeless Homeowner – the law supports lawlessness

7:33 AM, 14th February 2014, About 9 years ago 64

Text Size

In an attempt to keep this brief, I have been renting my flat to my current tenants for almost 4 years. Last year I informed them that I will be needing the property. Their tenancy agreement was renewed but only for 6 months to which they agreed was enough time to sort out accommodation. The lines of communication have always been good and open with my tenants so you can imagine my shock and horror when on the day they were supposed to vacate the property and I move back in, they refuse to go. The irony is, they actually called the police and were told to leave the property and their tenancy was up. They then produced a council doc and the police informed me that I will need to legally evict them. Homeless Homeowner - the law supports lawlessness

Now, I’m not a property mogul, this was my home that was rented due to personal reasons. I had no idea of the procedure or how long the process will take. So here’s my dilemma; they are refusing to go, as they did not communicate with me and lead me to believe all is well, I now have no accommodation. I am 6 months pregnant and sleeping on my brothers sofa until I get advice as I’m told I can’t actually do anything.

I’m perplexed as I’m told these 2 young, able bodied individuals in full time employment do not have to pay me rent and theres nothing I can do about it. I’ve asked the council if they can help me since they are the ones advising people to stay on in other people’s properties..but as expected they don’t really care, it’s my problem.

Can anyone offer any advice? Paying rent and a mortgage while my tenants sit in my property rent free leaves a bad taste in my mouth. I’m so worried as I’m effectively homeless and see no resolution by the time my baby arrives! Just doesn’t make any sense to me…being a homeless homeowner is like being a starving baker, makes no sense at all.

All I’ve found is advice and guidance for tenants, where is the advice and help for gullible landlords like me??


Mark Alexander - Founder of Property118 View Profile

0:54 AM, 16th February 2014, About 9 years ago

Reply to the comment left by "Ray Davison" at "15/02/2014 - 23:14":

Hi Ray

Yes I agree.

Now let me share a secret with you that VERY few people know. Before I do though I must re-affirm that even if everything you have suggested to Ms Bee Ms Bee is both practical and she does everything you have suggested then she still remains wide open to a claim for up to three times rent for the next six years. I trust we concur on that point?

Now here's the secret. My family had six cases identical to Superstrike, i.e. tenancies that has been running before deposit protection and where we had also believed we had no requirement to protect and issue prescribed information when they turned periodic. On top of that we also had several other tenancies which had gone periodic where deposits had originally been protected but where we had not re-served prescribed information when the tenancies went periodic. These were classified as "potential threats".

I couldn't live with that risk so I took professional advice which could also apply to Ms Bee Ms Bee, and thousand of other landlords and letting agents of course!

Now I can't share the documentation because I have have signed up to terms which prevent me from doing that. I can, however, share the the legal principles.

A new tenancy, by way of deed, was offered to these tenants with an open admission that we had possibly screwed up based on something which had only recently come to light in a Court of Appeal case. Before we admitted that to our tenants we made certain they were happy and wanted to continue to live in the property.

The basis of their "potential claim" is referred to in a little known legal phrase known as a "chose in action" (see http://en.wikipedia.org/wiki/Chose)

A "chose in action" can be assigned by way of deed meaning no money needs to exchange hands, i.e no consideration. In this situation a separate deed is used to the tenancy agreement. The really clever bit is that the "chose in action" is assigned to the landlord. What that means is that if the tenant makes a claim and wins, the proceeds of the compensation belong to the landlord. Neat hey?

The reasons that our tenants agreed to sign were numerous. First of all we had a very good relationship with them. Second, they wanted to remain tenants in our properties. Third is that we offered our tenants a Deed of Assurance which was my brainchild made a reality several years ago by the same legal team - see https://www.property118.com/the-private-rented-sector-evolution-deed-of-assurance/40949/

The legal team who put this all together are a part of a firm of Chartered Accountants called Pacific Limited. They have a specialist landlords and high net worth clients department and act for clients across the UK.

They were going to sell this advice but instead decided to keep it exclusive to clients of their firm. This is because their professional indemnity insurance is not set up for selling legal advice schemes on a stand alone basis. I did suggest they team up with a large law firm to progress this but that's when Mark Prisk, Housing Minister, issued a statement to the effect that the Superstrike ruling was not what was the intended by the legislation. In a letter to the RLA Mr Prisk wrote "This was not the intention of the legislation and we are urgently exploring whether new legislation is required to clarify the situation" - see http://news.rla.org.uk/housing-minister-writes-rla-regarding-superstrike-ltd-confusion/

The letter from Mark Prisk to the RLA effectively killed the value of investing into a JV between Pacific Limited and a large law firm. Sadly, all has gone very quiet since Mark Prisk ceased to be Housing Minister and the position was downgraded. Accordingly we are all now left very much in limbo, save for the clients of Pacific Limited who have the best protection available to cover their backs, even if that is only the professional indemnity insurance of their advisers.

This post must NOT be construed as legal advice.

Ray Davison

16:57 PM, 16th February 2014, About 9 years ago

That's a very interesting piece of information, thanks for sharing it. I think the issue needs reawakening in the governments eye.

Yes we agree re the 6 month risk period that the questioner is in. Nothing much more she can do but what's been suggested then wait it out. The less agro they have though the less likely it will happen as they won't take legal advice and won't have their mates offering up the info in response to their moans.

Industry Observer

19:23 PM, 16th February 2014, About 9 years ago


Your post 15 Feb 0923 are you suggesting the tenant gets a six month right of occupancy on every agreement they sign, every renewal?

If so that is wrong - they get one go only

Ray Davison

20:40 PM, 16th February 2014, About 9 years ago

Reply to the comment left by "Industry Observer " at "16/02/2014 - 19:23":

IO, read the whole thread and you will see that It has already been established that there is only an inital 6 month min right of occupancy.

Industry Observer

8:26 AM, 17th February 2014, About 9 years ago

Life too short for whole thread Ray that's why I constantly suggest to Mark splitting them off when they get to 5+ pages.

His chose in action arrangement is clever but I've had severe doubts on it which I have discussed separately with him. As he says his advisers have PI cover

Mark Alexander - Founder of Property118 View Profile

8:55 AM, 17th February 2014, About 9 years ago

Reply to the comment left by "Industry Observer " at "17/02/2014 - 08:26":

@Industry Observer

I don't see the point of reading a thread half way through and then stopping to comment on a contentious point. Often those points are addressed further into the thread which is what happened here.

As it turns out, I have been wrong on a point of law for 25 years and was very grateful to be corrected on it. Ray was right and Romain highlighted this to me. I was naturally sceptical, which most landlords become after a while, but Romian very kindly pointed me to the relevant section of the legislation which I checked out for myself and then realised that I was wrong. Obviously I then apologised to Ray and thanked Romain. That's what Property118 is here for 🙂

I appreciate that you are equally sceptical about the Superstrike solution recommended by my professional advisers and that's fine. You are equally sceptical about the Deed of Assurance and that's fine too. However, if there had been any holes in it then I think Shelter and the DCLG would probably have pointed them out to me by now, don't you? These are two organisations which like proving landlords wrong just as much if not more than you do, and that's saying something! LOL

Ms Bee Ms Bee

21:09 PM, 17th February 2014, About 9 years ago

I'm not here to try and convince people of my situation, I simply want to get into my home. If I can't believe CAB, council etc what am I supposed to do? Although Industry Observer cannot get their heads around the issue, insinuating there is more than I am stating, I myself have been left confused as to what's happened.

I took the advice of attempts at negotiation. My tenants have said they would prefer to try work this out amicably and that they should have somewhere to go and will let me know (this was on Sunday). I received a message this morning saying they were unsuccessful and still can't tell me when they will be leaving. I have tried to contact them today, they are not answering their phones.

Someone has suggested I move back into the flat (is this even legal) although it's not possible as it's a 1 bedroom flat and they have a 2year old. I'm starting to feel extremely desperate here.

What would you do?

Ms Bee Ms Bee

21:15 PM, 17th February 2014, About 9 years ago

Reply to the comment left by "Industry Observer " at "15/02/2014 - 18:32":

I don't understand what you mean by 'how much does that handle tell you?'

And can you suggest where I can get advice that I can listen too?

I may not have your knowledge in this industry so forgive me, all I want to do is get myself settled before my child comes.

Caroline Benson

1:00 AM, 18th February 2014, About 9 years ago

Every day is a school day indeed! I was under the same misconception as Mark and thought a new 6 month fixed term tenancy resulted in a loss of the ability to serve a S21 for another 4 months. May I ask the experts, what's the benefit to the tenant of having a new fixed term tenancy over a statutory periodic tenancy if the landlord can give 2 months notice at any time? Or are there only certain circumstances under which a S21 can be served in this instance?
Many thanks.

Ms Bee Ms Bee

1:32 AM, 18th February 2014, About 9 years ago

Would anyone advise that I attempt to register the deposit now? And will it make a difference? Apologies if this has already been addressed.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now