tenanted property objectives know what questions to ask the bankrupt and other parties understand...
TRANSCRIPT
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TENANTED PROPERTY
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Objectives
Know what questions to ask the bankrupt and other parties
Understand the difference between solely and jointly owned property
Have an idea about the types of tenancies you are likely to encounter
Know when and how to collect rent Know what duties the OR has as landlord Understand how to dispose of a tenancy
agreement
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Background
Cases with equity – IPs Increase in cases with
no equity or negative equity
Increase in technical queries
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Initial Questions
Is the property solely or jointly owned?
Is there a current tenancy agreement?
Additional questions to ask the bankrupt …
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Solely or Jointly owned?
Solely owned Legal estate vests Tenancy is a contract
which vests in trustee OR is therefore landlord
when trustee
Jointly owned OR not legal owner Only beneficial interest
vests in trustee Tenancy remains
responsibility of joint owners
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WHICH TENANTED PROPERTY SHOULD THE OR BE MOST CONCERNED WITH?
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Types of tenancy
Main types: Assured Shorthold Tenancy Statutory Periodic Tenancy
Other types: Assured Tenancy Protected Tenancy Secure Tenancy
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Collection of rent
If a current valid tenancy: Collect rent from date of Bankruptcy Order
Solely owned property – from tenant or any agent appointed
Jointly owned property – from bankrupt(s) or any agent appointed
Don’t collect if tenant is a squatter or in default
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Managing agents
Solely owned – can allow them to continue acting for OR if they will
Check agreement and terms are acceptable Jointly owned – agreement remains vested
with joint owners OR can ask agent to forward bankrupt’s
share
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Enquiries to be made…
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OR as landlord…
Solely owned property – OR is the landlord from date appointed trustee. Tenant peaceful enjoyment Tenancy Deposit Scheme Insurance Repair and maintenance Gas Safety Electrical Safety Fire Safety (if furnished) Inspect property and return deposit
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Damage Deposit
Since 6 April 2007 must be held in government approved scheme
Monies held on trust for tenant (OR cannot claim for estate)
Solely owned – OR responsible for holding deposit appropriately
Jointly owned – bankrupt and joint owner still responsible
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Insurance requirements
Joint owned – 1 bankrupt
Joint owned – both bankrupt
Sole owned
Equity Building insurance
Building and public liability
Building and public liability
No Equity
No insurance Public liability Building and public liability
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Repairs & Maintenance If solely owned property Refer to tenancy agreement for what is
covered Generally you should keep in repair the
exterior structure Keep in repair and proper working order
installation for supply of water, gas and electricity and for sanitation, and for space heating and heating water
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Gas & Electrical Safety Gas Safety (installation and Use) Regulations
1998 Annual safety check
Electrical Equipment (Safety) Regulations 1994 Every 1 to 5 years
Obtain copy certificates or get checks done
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Disposing of tenancy Only way to end OR’s liability in a solely
owned property is to end tenancy either by: Issuing a section 21 notice requiring tenant to
leave after 2 months (should not be used); Disclaiming the tenancy.
Section 21 notice can only be issued after minimum 6 months term, may take several months to enforce. Court action needed to evict
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Disclaimer Only in solely owned property, and if property
is onerous: If major repairs are currently needed If property is dangerous If tenant has defaulted, or is a squatter
Should not be disclaimed “just in case” Can disclaim later if something comes to light
that is onerous, even if rent already collected
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Effect of Disclaimer Disclaimer destroys the tenant/landlord
relationship Does not destroy tenant’s right to occupy Rent does not revert to bankrupt Brings bankrupt’s interest in tenancy to an
end May affects mortgagee’s ability to appoint a
receiver Only consider in exceptional circumstances
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Family Home Provisions Section 283A does not apply to investment
property May apply in certain circumstances – e.g. if
the tenant is the bankrupt’s spouse or former spouse
Will not re-vest after 3 years (Don’t send MP1)
Should not offer bankrupt chance to purchase interest back (but can be done in exceptional circumstances)
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Conclusion…
Do you now know: What initial questions to ask the bankrupt? The difference between solely and jointly
owned property? About the types of tenancies you are likely to
encounter? When and how to collect rent? What duties the OR has as landlord? How to dispose of a tenancy agreement?
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Thank you!
Any Questions?