Licensing Consultation in Southwark

Reply to the comment left by "Victoria Morris" at "23/10/2014 - 09:25":

Hi Victoria,

I am happy for you summarise and submit my comments as you wish but I think your submission should be your views and not your understanding of mine.

What I mean is that in section 1 above i don't think my comments add upp to your summary exactly.

What we ask is that the licensee is the party with the practical control of the property. If the licensee is away a lot or goes to Spain for the winter every year, for example. The owner or head tenant needs to consider if the practical property management is best left in the original licensees hands.

If the practical control is delegated then perhaps the burden of being the licensee should be as well. It is not our main concern because we will hold the licensee responsible if the property is badly managed. Not a big deal but I don't think we have said the same thing.

Would anyone running a business really sell up, pay agents fees, taxes, CGT, stamp duty, tens of thousands of pounds of costs, to get away from a duty to licence which has limited costs and is an annual administrative burden that is less than a tax return.

Surely to move from Southwark, which has one of the best capital and revenue return rates in the country, somewhere else is not a good use of your capital invested.

My understanding is that very few licenses have been surrendered in Newham so I think this selling up thing is a bit of a red herring. I also think that there is vastly more demand for London property than supply so I have to say that the PRS sector will continue to grow because I don't think returns are materially affected by the costs of licensing.

If license fees, repairs and replacement costs are allowable against tax the only true costs are where improvements are required. Though I can see that a small number of landlords will have to invest to comply with conditions this will not be universal.

Chris,

Everyone on this website including you knows that I did not say that 'ASB is not directly attributable to the PRS' If other posters understand my position it's OK if they disagree but that is what I think the evidence says.

So asking the same question again and again and again is just meaningless. I will never agree with your construction of my statement. So what is your point ? This is not question time on TV. If you think that making a statement look bad is a massive victory well I can't influence that.

I have volunteered to be here to debate the proposal I have drafted, answer questions and encourage a key group of stakeholders who are difficult to communicate with to become engaged with our consultation process.

The debate is not moderated but if you can't treat this as a mature process I will just cease responding to you specifically. Trying to trap me into saying something just does not take this forward, the decision is not made or altered here.

However it is just irritating for me personally to have to deal with the way you post so I can just excercise a choice to stop.

I've not trapped you its your statement seems clear you said

JD Quote “We have agreed that the data is not absolute, in that no one can tie ASB to tenure, because the data does not record tenure. ”

no-one can tie ASB to tenure.......the data does not record it

Surely you are saying there is no link to ASB - if i'm getting it wrong explain your statement to me as you say it cannot alter the decision here so it's no skin off your back to clarify this one.

Reply to the comment left by "John Daley" at "23/10/2014 - 17:16":

irritating the way i post?....odd personal comment not sure why you choose to stifle debate, if i infringe the rules i'm sure Mark will inform me. Its just business from my side of the debate nothing personal.

Reply to the comment left by "John Daley" at "23/10/2014 - 17:16":

I am concerned that your comments here concentrate on costs. As long as they are reasonable I do not know of any landlord who would object on that alone. My concern is the daily operation of any scheme by Southwark Council and who will bear overall responsibility for advice given to Southwark landlords which they abide by only to find that the next person they deal with at Southwark has a different opinion. Will persons, such as yourself, presently working on the consultation. remain at the head of those operating any such scheme to ensure what you intended - the flexible, "common sense" approach, leaving good landlords to get on with what they do best and concentrating efforts on the rogue landlords - is what is actually put into operation?

"If license fees, repairs and replacement costs are allowable against tax the only true costs are where improvements are required". Not quite correct, as if an expenditure is put against tax, there is still 80% left to physically pay and will come out of any profit the landlord is making.

If adjustments involve knocking walls as Southwark's HMO rules deem rooms too small the cost would be thousands with costs for the permission from the freeholders (Southwark Council in our case) as well as the planning permission from Southwark Council and this is likely to be a capital cost and therefore not allowable against tax. This would easily wipe out any profits for more than a year and this is only if the Council give permission for the adjustments - in a block of flats it could be less likely that the property could be adjusted in this way. Therefore the Landlord would need to sell or rent to 1 or 2 persons only.

Reply to the comment left by "John Daley" at "23/10/2014 - 16:55":

Red herring? - err maybe the Newham LL's haven't worked it out yet, these things take years to filter down in the same way the ASB took years to build up or councils taking time assessing the outcome of the Enfield Judicial Review case.

"Would anyone running a business really sell up, pay agents fees, taxes, CGT, stamp duty, tens of thousands of pounds of costs, to get away from a duty to licence which has limited costs and is an annual administrative burden that is less than a tax return."

Its nice Southwark are now assessing the risk case and giving financial advice to private LL's during the consultation window and are even prepared to publish the benefits of staying put as seen here.
I missed that in the docs link can you make sure it's up there? - I'm sure Victoria and Yvette and other LL's will take suitable advice from their chosen advisers but you've missed a tiny little detail from your list I could be forgiven for thinking you did that on purpose - namely if you keep your eggs in the borough designated areas at some point in the future you run the risk of prosecution and a criminal record for things you wouldn't have to deal with if you operated in (say) Lewisham or the next street in Southwark’s case.
Need I remind everyone failure to disclose the downsides in financial investments is a serious problem and heavily policed by the regulators.

Hallo John

I felt very happy to get some sensible answers from you regarding 2 issues. I though it is good/sensible practice to make a summary of your replies. Seems that other people on this blog also were encouraged by your answers and thought it is a good idea to have a summary.

The summary I made was submitted here for anybody to comment, including yourself. No comment was received.

Of course the summary I have provided on the official consultation website should not speak in your name, rather they should be interpreted as my understanding of what you said in this blog. If you feel necessary, I am happy to post a clarification to this extent on the consultation site, just let me know.

However, you are now providing an additional long-winded answer to this simple issue: MUST the 'local manager' be also the licensee, or not.

If feels to me we need to go one step back. Here we are then.

I have suggested a CLARIFICATION related to the Consultation Document Section 7.3. Licensing procedure and to the Proposed Standard – Regulation 3. This clarification is based on my interpretation of the replies you gave here to my questions. This is the clarification I suggested:

The ‘landlord’ for the purpose of licensing may choose if absent for a long period of time to delegate the practical control of the property, collecting rent and arranging repairs etc, to a ‘local manager’. In this case it will be the ‘landlord’ who will be held responsible for the discharge of all the duties that are imposed by licensing and be responsible for any penalties of failure to comply with the terms of the scheme, and not the ‘local manager’.

The above is a suggested CLARIFICATION and not a replacement of the said sections.

The clarifications is using extracts from your documents, literally reproducing your formulations, except that it highlights that a license may not be held by the 'local manager'.

The objective of the clarification is to state clearly that (for example) if a landlord has to take employment abroad for a longer period he will not be FORCED to have a license in the local manager's name. The business rationale is that the local manager will charge extra for the responsibility of having the license in his/her name (even though he/she will perform all the actual local duties of the license). In addition, the licensees often change the 'local managers' so it will be difficult to change the license as well.

Can you please let me know what in my proposed clarification does not reflect you views, so that we can all be clear on this issue.

I am looking for clarity, which one of the objectives of the proposed licensing scheme.

PS. Since you have not commented on my other summary of your answers regarding the fire risk assessment, I take it you agree with the summary.

many thanks

Reply to the comment left by "John Daley" at "23/10/2014 - 16:55":

"Would anyone running a business really sell up, pay agents fees, taxes, CGT, stamp duty, tens of thousands of pounds of costs, to get away from a duty to licence which has limited costs and is an annual administrative burden that is less than a tax return."

Perhaps not immediately.

But this anti all landlord policy will certainly act as a deterrent to good landlords.

The sweetener of low initial licence fees won't last, once bulldozed through, they will be double in 5 years time as will the amount of red tape.

I won't be investing in Southwark, that's not a red herring.

I'm not sure that Southwark council are fit and proper persons capable of licencing anyone. Who is going to licence them to make sure they don't break the law ?

http://www.landlordzone.co.uk/news/rogue-council-officers-in-illegal-eviction-conspiracy?dm_i=11G,2WRM9,28UQU,AIP9O,1

Southwark Council has now apologised to their former tenant and paid him a significant amount in compensation. The details of the settlement remain secret. Rogue council officers conspired to ignore legal procedures to evict a social housing tenant who then spent a year homeless living on the streets. Judge Anthony Thornton QC, sitting at the High Court, said: “The conspiracy also involved housing officers short-circuiting the defendant’s standard procedures that should have been followed before and during the execution of the warrant and the taking of a dispossessed tenant’s possessions into storage for safe-keeping.”

Anyone know what happened to all the rogue Housing Officers at Southwark council? how many were involved in the conspiracy? Are they still there? How come the Licensees need to be fit and proper persons with no criminal record but the Licensors don't?