Freeholder Win Landmark Service Charge Ruling

The Supreme Court has had a stab at clearing up how landlords should split service charges when several homes share the same site.

The case - Aviva Investors Ground Rent GP Ltd v Williams - concerned flats and commercial premises in a block at Southsea, Hampshire.

At an earlier First-Tier Property Tribunal hearing, the leaseholders argued the landlord council not contractually obliged them to pay a percentage share of the service charge or ‘such part as the landlord may otherwise reasonably determine’.

The leaseholders claimed the landlord could not claim a variable amount.

The First Tier Tribunal agreed and struck out the wording, leaving the clause to say the tenants should pay a fixed percentage of the service charge.

The landlord appealed the decision to the Upper Property Tribunal and the Court of Appeal.

Law firm Penningtons Manches Cooper, acting for Aviva Investors, said the ruling was significant for hundreds of thousands of leases demanding leaseholders pay a fixed percentage ground rent and additionally allowed the landlord to vary the service charge percentages.

Tenants take the lovely landlord to the tribunal

Tenants praised their ‘lovely’ landlord but still took him before a property tribunal to seek an £11,000 rent refund.

The five tenants of the HMO near Euston Station, London, told a First-Tier Property Tribunal that they had a good relationship with rent-to-rent landlord David Ravelo. They called him a ‘lovely person’ but complained he was too slow in dealing with an ant infestation, mould and other maintenance issues.

The landlord - David Ravelo - admitted that he had failed to licence the house in multiple occupation near Euston Station, North London.

However, Ravelo had the penalty discounted from £20,000 as the offence was ‘mid-range in seriousness’ and paid utility bills for the tenants as part of their tenancy agreements.

Ravelo tried to blame his letting agents for failing to licence the property. Still, the tribunal pointed out he had other licensed HMOs and was an experienced landlord who knew his way around HMO red tape and what he had to do to make the letting legal.

Rent-to-rent is when a property manager or landlord sublets a home to tenants.

Licensing buck stops with the landlord

A landlord has lost his appeal against a fine for renting out unlicensed homes in a selective licensing neighbourhood.

City Estate Holdings owner Michael Kosmas was ordered to pay more than £9,000 in July 2021 for failing to licence the Gateshead homes.

Kosmas appealed the fine at a recent First Tier Property Tribunal. He argued his advisers failed to tell him of the licensing requirement, and as a professional landlord, he needed more time to keep up with changing legislation.

The tribunal countered he should have asked his lawyers to brief him on any legal points he should have been aware of.

The case will return to a First Tier Tribunal to reassess the fine amount.

£305,000 knotweed payout for blighted buy to let

A council which allowed Japanese Knotweed to creep from a cycle track to infest a landlord, Marc Davies’ rental home must pay £5,000 compensation.

The Court of Appeal ruled Bridgend Council, Wales, must pay the money plus £300,000 costs despite trying to eradicate the invasive plant.

Even though the council had worked to remove the plant, Davies argued his property value was blighted by the invasion, which was not his fault.

The decision overturned two lower court rulings and may have set a precedent for more cases against councils.

Barrister Tom Carter confirmed the importance of the ruling, saying: 

“It confirms that a homeowner who suffers a loss in the value of their home from the stigma left by Japanese knotweed even after it has been treated can recover damages for that loss.”

Knotweed is a bamboo-like plant that can grow up to 10 centimetres a day, displaces native plants and can lead to structural damage to property by punching through tarmac and concrete.

View Related Handbook Page

Licensing of Private Rented Properties

The Housing Act 2004 introduced licensing of private rented premises. It is compulsory to license larger, higher-risk dwellings, but local authorities are also able to license other types of rented premises, including other lower-risk HMOs and individual houses and flats, if they can establish that other avenues for tackling problems in these properties have been exhausted.

Investing in a Property

Investing in a private rented property can be achieved in a variety of ways. Sometimes landlords inherit a property that they then turn over to renting. Sometimes owners of properties become unintentional landlords because they are unable or unwilling to sell a property at the value the market currently dictates.