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Tyneside Flats – What are they?

They are a property development scheme in Tyneside. The main difference in these to other flats is the responsibilities laid out in the lease. A Tyneside flat appears from the front as a single fronted terraced house. However, there are two or sometimes three flats on top of each other. Each flat has its own separate front and back door and garden areas.

 

Construction of Tyneside flats started in the late 1800s as low-cost housing for a growing workforce. With separate floors and staircases, there is no relation between the lessees internally or externally. The backyard is divided in half. Originally each garden would have its own coal house and private outside toilets. It was an ingenious solution at the time for affordable housing. Now they make for profitable investments for landlords. The land was often sold on the condition that only properties with no more than two households could be built. Who enforces these rules now is unclear.

 

There are complications with the legal status of a Tyneside flat and the responsibilities between the landlords. The upper flat shelters the lower flat and the lower flat supports the upper flat. This has led in the past to specific legal schemes known as Tyneside flats cross or crossover lease arrangements. Under the Tyneside flat scheme, each tenant, even if holding the freehold of their own flat, becomes the landlord of the other. This allows the responsibility to be enforced without an external landlord or management company.

 

This type of flat ownership has come into context recently as part of the recent Law Commission leasehold reform. Another alternative to leasehold being commonhold which has also been considered. It is something to keep an eye on in the future as what will happen.

 

How to Insure the building

 

The terms of the lease dictate the insurance arrangements. Previously there have been two methods. These are as follows: –

 

The first-floor flat owner will insure the freehold interest of the ground floor as the landlord of the flat and vice versa. The lease may grant each flat owner the right to see proof of the current insurance policy. Or both owners may be required to insure the whole of the property in joint names and split the cost equally.

 

We now have a policy that covers this type of property, therefore, all the above is no longer required. Solicitors have in the past advised to take out a criss-cross lease indemnity that covers either party in the event of the absence of insurance. However, we now have the policy that you need. Speak to us about these properties and how to insure them.

 

Our policy includes:

• Replacement value of the property following loss or damage by the insured perils
• Tracing and repair of leaking underground pipes drains and cables
• Accidental breakage of fixed glass, double glazing, ceramic hobs, and sanitary fixtures
Malicious damage by third parties
• Loss of rent or alternative accommodation costs
• Damage to landscaped gardens
• Replacement of keys and lock replacement following a theft
• Accidental loss of metered water
• Emergency access
• Theft of fixed fabric of the property including fixed CCTV equipment and security lighting
• Specified contents cover

Tenants Fee Bill

The new tenants’ fees bill is due to have a second reading in the House of Lords.

 
This bill is going to affect the whole property industry. The same fee ban has already taken place in Scotland and shook the industry to its core. 55% of letting agents disappeared overnight or merged with other companies in that case. It also increased rents for tenants by 7%.
 
The details of the bill are still up for debate. It could extend as far as including renewal fees, arrears fees and anything else that letting agents could charge.
 
Does this mean that landlords will pick up the bills? Will letting agents add it to the rent charge? Will landlords have a choice in future of letting agents? We anticipate that this will rock the market. A lot of landlords will lose out as estate agents who do lettings and sales go into liquidation. It could force Landlords to choose a new agent and the choice could be very limited in the future. How will it affect tenants? It will be good for them as there will be no fees involved. However, will there be a reduction in service? If letting agents are charging tenants for any form of their service the charges will be heavily landlord based.

Update: The Tenants Fees Bill has been Announced

The Government has now confirmed that the tenants’ fee bill will take place from the 1st June 2019. This will dramatically change the whole way that letting agents charge tenants. It could possibly be detrimental to landlords, causing them to increase their rents. The main amendments are:-

  • The maximum security deposit is now limited to five weeks rather than six. The original proposal by the Government capped the deposit at four weeks rent. Various landlords then campaigned to increase it, arguing that the average charged was 4.8 weeks. Hence the increase to five weeks.
  • Default fees are now permitted where costs arise from the fault of a tenant. For instance, where the tenants have lost a key or other security device or where the tenant is two weeks late in paying their rent. Where there are further contractual breaches the landlord will be able to charge for damages. However, if a tenant fails to pay, the landlord will either need to pursue the claim in court or make a claim against the security deposit. There is also a clause in the bill that allows the Government to change the charges in future. This will mean that further changes will not require going back to Parliament.
  • The landlord and/or agents are now only allowed to take one holding fee for a property at any one time. They must pay the first tenants deposit back in full before taking a second holding deposit. That is unless the tenants choose not to enter the tenancy or provide false information. In these cases, the landlord and/or agents can hold the deposit.
  • Where landlords and/or agents retain a deposit they must explain to the tenant in writing why they are doing so.
  • If there is a right to retain the deposit but the tenancy is still not entered into it must be returned to the tenant.
  • The landlord/agent must refund the holding deposit if the landlord/agent breaches any terms. Or if the landlord or existing tenants behave in an unreasonable manner, delaying the tenancy going ahead.

Summary

The tenant fee bill is going to completely transform the letting market. It throws the emphasis from tenants back to landlords for fees. It will be interesting to see how the market changes over a period of time with letting agents not being able to charge fees. A substantial amount, we suspect, will go out of business or change their method to instead charge landlords. This may leave the market with a very small amount of independent letting agents and large corporates.

It will be interesting to see how the market will react over the next few months. The government wanted to put an end to tenant fees so whether that happens remains to be seen. It is surprising to us why all landlords have to take on the burden of the cost. But we understand the frustration from tenants point of view and the amount that they have to pay out. We hope that this will equalize the position for all parties concerned.
 
Mark Harrington
 
Managing Director
 
iInsure365
 

New Fitness for Human Habitation Bill

The Homes Fitness of Human Habitation and Liability for Housing Standards Bill (Fitness for human habitation) is now going through the Commons.

 

Firstly, how will this affect landlords and tenants in the future? Its report stage is due on the 26th of October this year.  It then goes back to the House of Commons for a third reading before it goes through the House of Lords. It is then considered for amendment at the end with royal consent.  However, it has crossed party support and could well become law.

How will it affect you?

The bill would give private and social tenants the ability to take landlords to court if their homes are unsafe. It means tenants would have rights to repairs for property issues. Things such as mould, excess cold, fire risk etc. It compels landlords to carry out works to their properties. The courts are able to give the Injunction to promote landlords to do work or give large damages. Where landlords fail to carry out works the tenants have rights to take legal action. This is on the grounds that the property is unfit for human habitation.
 
Most Societies and the National Landlord Association have given their backing to the bill.  Keep an eye on our newsletter as we will keep you updated on when this Bill becomes law.  It has wide-ranging consequences for landlords and tenants as well as wide support.

Update

 

We can confirm that the private members Bill has now passed and is now law. The Bill gives greater responsibility to residential landlords. It implies in a residential tenancy that the property must be fit for human habitation at the beginning of the tenancy and throughout. The Landlord & Tenant Act of 1885 was the original legislation. The latest bill is an update to that. It means that tenants have the right to take legal action if landlords fail to keep properties in a state that is fit for human habitation.
The definition of fit for human habitation is as follows. “So far defective in one or more matters that it is not reasonably suitable for occupation in the condition”

 

What does this mean for landlords?

 

The bill focusses on landlords making repairs and keeping the property liveable. The items it addresses are below:

  • Stability – this could be due to the property having subsidence etc.
  • Freedom from damp – although a grey area freedom from damp means that landlords now need to ensure that the property is free from all forms of damp
  • Internal arrangement – ensuring that the interior of the property is fit for human habitation
  • Natural lighting – this is to ensure that there is as much natural lighting within the property as is possible.
  • Facilities for the preparation and cooking of food – it is essential now that landlords provide cooking facilities. Landlords must repair these within a set period of time. Landlords can involve the local authority if repairs are not done quick enough.
  • Water supply – landlords need to ensure that they have a consistent water supply.
  • Drainage and sanitary convenience – these need to be free from any form of problems and that they actually work.
  • Ventilation – the landlord needs to ensure that the property is and has a free flow of air.
  • Facilities for the disposal of wastewater – the landlord has the responsibility to make sure that there is a working outlet for waste water.

The above is going to be very important with landlords that deal with HMO Properties.

 

Why is this needed?

 

There have been long-standing concerns about property standards for a considerable length of time. In 2016/2017 the English Housing Survey found that 38% of private renters lived in poor or substandard housing.
The current Statute of obligations regarding the upkeep of properties has become outdated. They have ceased to become effective as a result of annual rent limits. The bill now applies to all residential property thereby bringing to an end the outdated anomalies. It also gives tenants a civil remedy meaning they can appeal against their living conditions.

 

Are there any exceptions?

 

There are some exceptions from the implied covenant to keep properties in a suitable state. Landlords will not be liable for the unfitness of a property in the following circumstances:-

  • Natural disaster
  • Tenants failure to use the property in a tenant like manner

The legal remedies are for the tenants to report the matter to the local authority. The local authority will then have the right to impose fines and potentially stop the landlord for re-renting the property. The tenant will also have the right to damages in the Courts. It is therefore important that landlords not only maintain their properties but keep them updated on a regular basis.

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