National Landlord Day 2018 - Biosphere slides

Welcome to
National Landlord Day
Conference and exhibition 13 November 2018
Sponsors:

Opening and
introductions
Scottish Association
of Landlords
John Blackwood
National Landlord Day 2018
Stephen Jardine
Conference chair

Conference and exhibition 13 November 2018
Tweet #LandlordDay
Sponsors:

Protecting your rental income
in the face of changing
taxation
Paul Macaulay
Turcan Connell

Protecting rental income in the face of changing taxation
Paul Macaulay, Turcan Connell

• with effect from 1st April 2015
• progressive tax bands, nil band of £145,000
LBTT – residential property rates
Land and Buildings Transaction Tax
Purchase price LBTT rate
up to £145,000 0%
above £145,000 to £250,000 2%
above £250,000 to £325,000 5%
above £325,000 to £750,000 10%
over £750,000 12%

• Example:-
Buy-to-let purchase - £300,000
LBTT - £4,600
(0% for first £145,000; 2% for the next £105,000;
5% for the next £50,000).
Land and Buildings Transaction Tax (contd.)

• with effect from 1st April 2016
• applies to acquisition of additional dwellings of £40,000 or more
• additional flat rate of 3%
– unless replacing only or main residence
– claim repayment if sell existing main residence within 18 months
LBTT – Additional Dwelling Supplement

• Example (purchaser already owns a dwelling):-
Buy-to-let purchase - £300,000
LBTT - £4,600
ADS - £9,000
£13,600
• ADS potentially repayable
LBTT ADS

• CGT on disposals of residential property still at 18% or 28%
• subject to availability of usual reliefs such as Private Residence Relief and Lettings
Relief
• non-residents subject to CGT on disposal of UK residential property with effect from
6th April 2015
Capital Gains Tax

• with effect from 5th July 2016
• profits on certain property disposals subject to income tax rather than CGT?
• HMRC “… considers that generally property investors that buy properties to let out
to generate property income and some years later sell the properties will be subject
to capital gains tax on their disposals rather than being charged to income tax.”
Transactions in land – anti-avoidance rules

• currently up to 45% tax relief
• to be reduced to basic rate tax (currently 20%) from 2020/21 tax year
• phased in gradually from 2017/18 onwards:-
Restriction on deduction of mortgage interest from rental income
Tax Year % of costs deducted
from profits
% of costs deducted at
basic rate
2017/18 75% 25%
2018/19 50% 50%
2019/20 25% 75%
2020/21 0% 100%

• Property income allowance - £1,000 (from April 2017)
• replacement of the “Wear and Tear Allowance” (from April 2016)
• replacement of “Domestic Items Relief”
Other income tax deductions

• partnerships
– flexibility to share income
– tax implications?
– recent tax changes still apply
– tax transparent
Alternative ownership structures

• limited company
– profits and gains taxed at corporation tax rates – currently 19%
– finance costs still fully deductible against corporation tax
– further tax cost to extract profits?
Alternative ownership structures

• administration
• borrowings
• Capital Gains Tax – incorporation relief?
• Land and Buildings Transaction Tax and Additional Dwelling Supplement
 multiple dwellings relief
 ADS?
 6 or more properties = non-residential rates and no ADS
Incorporation

1. Five properties, each with a value of £180,000
LBTT and ADS £30,500
2. Six properties, each with a value of £180,000
LBTT (at non-resi rates and no ADS) £9,713
LBTT and ADS on incorporation

• maximise reliefs
• alternative structures
• compare against different asset classes
Summary

We take all reasonable care to ensure information contained within this document is accurate, however, we
give no guarantee to the accuracy and completeness of the information or to any errors and omissions that
may occur due to circumstances beyond our control.
Firm Information
Turcan Connell is a Scottish Partnership regulated by The Law Society of Scotland. Registered office: Princes
Exchange, 1 Earl Grey Street, Edinburgh, EH3 9EE. London address: 12 Stanhope Gate, London, W1K 1AW
Risk Warnings
Information provided in this document and any opinions expressed are for general use and not personal to your
circumstances, nor are they intended to provide specific advice. No information in this document should be
viewed as an offer or recommendation to undertake any specific activity.
All information provided is based on our understanding of current legislation which is subject to change. It has
been produced for information purposes only. Professional advice should always be sought before taking any
action. Turcan Connell or any of its associated companies cannot take any responsibility for losses incurred
through acting or failing to act on the basis of anything contained in this document.
Intellectual Property
All rights to use the content of this document belong to Turcan Connell and any unauthorised use, including
transmission, extraction, modification and distribution is strictly prohibited. You may not reproduce part or all
of the content of this document in any form unless it is for personal use.
©Turcan Connell
19

Breakout sessions now available to attend
An alternative vision of private rented
sector housing
Dispute resolution – supporting a claim
Understanding Universal Credit
Investing in training
Biosphere:
Ozone:
Showdome:
Salisbury suite:

An alternative vision of private
rented sector housing
Graham Simpson MSP
with Stephen Jardine

Short term letting – what’s all the fuss
about?
Top 10 things to look out for with landlord
Insurance
Could an empty home be your next
investment?
Quality (mid tenancy) data – are your
SSORTed?
Biosphere:
Ozone:
Showdome:
Salisbury suite:

Short term letting –
what’s all the fuss about?
Fiona Campbell Adam McVey
ASSC City of Edinburgh
Council

Lunch is served in the Stratosphere area
Programme resumes 13:40 hrs
Please visit our exhibitors’ stands
Sponsors:

Handling difficult situations
Reducing costs in implementing the letting
agent code?
Quality (mid tenancy) data – are your
SSORTed?
Understanding Universal Credit
Biosphere:
Ozone:
Showdome:
Salisbury suite:

Carolyn Hirst
Hirstworks

Handling Difficult Situations
13:40 – 14:15
Carolyn Hirst
Hirstworks
13 November 2018

Hirstworks ©
Difficult Situations
can of worms complaint complexity complication
dog's
breakfast
entanglement gordian knot
hard nut to
crack
headache hornet's nest
hot water mare's nest mess pandora's box predicament
problem quagmire quandary snake pit trouble

Hirstworks ©
Complaints
What do complainants want?
• to know who is dealing with the complaint;
• to be listened to and believed;
• to be treated fairly and efficiently;
• to be kept informed of progress;
and
• to believe that professionals are committed to the people they are
serving and will take responsibility and ownership for the services
they deliver.

Hirstworks ©
A suggested approach
1. Have a simple
and timely
process
2. Be objective,
impartial and fair
3. Be comfortable
with conflict
4. Resolve
whenever
possible
5. Look after
those complained
about

Hirstworks ©
1. Have a simple and timely process
• recognise a complaint and deal with it proactively;
• have as few stages in your complaints process as possible;
• publish and meet your time-scales for responding;
• make sure all staff know and understand your complaint handling
process;
• keep your promises/commitments – do what you say you are going to
do;
• use feedback to improve your service.

Hirstworks ©
2. Be objective, impartial and fair
• hear the concerns – try to listen with a view to understand, not to
defend;
• show empathy – demonstrate that you can ‘see the same picture’ –
there are two sides to every story;
• be as impartial as you can when gathering and establishing the
relevant facts;
• wherever possible don’t investigate yourself;
• give reasons for your decisions.

Hirstworks ©
Seeing the same picture?

Hirstworks ©
What do you see?

Hirstworks ©
3. Be comfortable with conflict
• conflict can be experienced as win or lose;
• negative feelings and actions if think have ‘lost’ - impacts on future
relationships;
• there are two common reasons why people get into conflict: they do not
communicate clearly and they have different needs or interests;
• helps to understand and work with the conflict.
The most effective way to manage conflict is to manage your own
response to conflict and your relationship with others.

Hirstworks ©
People in conflict
Express a strong
sense of grievance
Think their solution
(outcome) is the
only one
Validate and
invalidate – collect
evidence to prove
they are right and
the other is wrong
Ignore common
ground
Seek to win at the
expense of the
other
37

Hirstworks ©
Vicious cycles in customer–employee interactions
Traut-Mattausch, E., Wagner, S., Pollatos, O. and Jonas, E., 2015. Complaints as starting point for
vicious cycles in customer–employee-interactions. Frontiers in psychology, 6, p.1454.

Hirstworks ©
Conflict is a whole body experience
Triggering event
Physical responses -
how the body reacts to a
conflict situation
Emotional responses -
the feelings experienced in
conflict
Cognitive responses -
include perceptions and
thoughts about a conflict
Behavioural responses -
the actions taken in response
to a conflict
Hirstworks ©

Hirstworks ©
Remember your ABC’s
• Attend – pay attention to what is happening and recognise the warning
signs;
• Be calm – don’t take the bait. Be aware of your own response to the
situation;
• Communicate – listen and keep listening. Seek first to understand, then
to be understood.

Hirstworks ©
What do angry people want?
They want what we all want:
• help and for someone to make a genuine effort on their part;
• acknowledgement of their situation and feelings;
• choices and alternatives.
Need to ‘fix the person’ before you can ‘fix the problem’.

Hirstworks ©
Working with anger
Using the DESC sequence
• what you are experiencing and/or
seeingDescribe
• the effect it is having on youExplain
• that you understand the behaviourShow
• your preferred alternative behaviourCommunicate

Hirstworks ©
If the behaviour continues
• if the inappropriate behaviour continues, then you may need
to set out the consequences using the “if …..then….” process;
• for example - “if you continue to shout at me, then I will end
this conversation”.

Hirstworks ©
4. Resolve whenever possible
• can be helpful to negotiate/mediate a resolution;
• saying sorry is an expression of regret not an admission of liability;
• apologise when you have got it wrong - a good apology includes
– reason
– regret
– remedy

Hirstworks ©
Mediating a resolution
Common
ground
Position Position
Needs
and
interests
Needs
and
interests

Hirstworks ©
Guidance on apology
https://www.spso.org.uk/
leaflets-and-guidance
SCOTTISH PUBLIC SERVICES
OMBUDSMAN (SPSO)

Hirstworks ©
5. Look after those complained about
https://administrativejusticeblog.files.wordpress.com/2017/12/
effects-of-complaints-report-15-december-2017-final.pdf

Hirstworks ©
Being complained about
The findings
71% of people
complained about
report their work
practice has been
affected by a complaint
67.2% report their
health and well-being
being affected
66.7% are more
cautious in dealing with
service users
61.2% say their attitude
to service users has
been affected
33.3% frequently check
and double check their
work
27.9% have become
unsure of their work
practice

Hirstworks ©
Being complained about
Good practice guidelines
• have clear processes which involve and support the person
complained about;
• tell the staff member about the complaint and make appropriate
support available;
• say how and when they will be involved in any investigation -
important to be listened to, heard and be able to give their ‘side of
the story’;
• tell them about the decision/any associated actions;
• involve them in identifying any shortfalls and in the development of
solutions.

Hirstworks ©
In summary
1. Have a simple and timely process
2. Be objective, impartial and fair
3. Be comfortable with conflict
4. Resolve whenever possible
5. Look after those complained about
Questions?
Contact details
Carolyn Hirst
cahirstworks@aol.com

Enforcing tribunal decisions – the role of
the sheriff officer
Understand your EPC and improve its
rating
Investing in training
Could an empty home be your next
investment?
Biosphere:
Ozone:
Showdome:
Salisbury suite:

Enforcing tribunal decisions –
the role of the sheriff officer
Ronnie Murison
Stirling Park LLP

Part of
Making a Difference
‘Enforcing tribunal decisions
– the role of the sheriff
officer’
Ronnie Murison –
Stirling Park LLP
13th November 2018

Part of
Making a Difference
Role of sheriff officer
• historic profession
• code of practice
• regulated
• messenger-at-arms
• our functions
• legislative evolution

Part of
Making a Difference
Taking possession back
• vacant properties
• charge for removing
• form 4 notice (date of removal)
• removing the tenant(s) and occupants etc.
• possessions left in property

Part of
Making a Difference
2 DAYS
14 DAYS
2 DAYS

Part of
Making a Difference
Recovering any arrears
• tracing former tenants
• commercial assessment
• charge for payment
 pre-requisite to certain diligences
 establishes apparent insolvency

Part of
Making a Difference
Earnings arrestment
• prescribed deductions from salary
• DAIP issued within 12 weeks
• exemptions
• penalties for non-compliance

Part of
Making a Difference
Prescribed deductions
Net earnings (monthly salary) Deductions
Not exceeding £494.01 Nil
Exceeding £494.01 but not exceeding
£1,785.61
£15 or 19% of earnings exceeding £494.01,
whichever is the greater
Exceeding £1785.61 but not exceeding
£2,684.51
£245.40 plus 23% of earnings exceeding
£1,785.61
Exceeding £2,684.51 £452.15 plus 50% of earnings exceeding
£2,684.51
Example 1. Net salary of £10k p/a = £64.47 per month
Example 4. Net salary of £30K p/a = £473.53 per month

Part of
Making a Difference
Arrestment
• freezing funds/goods held by 3rd party
• protected minimum balance (banks) of £494.01
• automatic release after 14 weeks
• duty of disclosure with penalties

Part of
Making a Difference
Attachment & auction
• moveable effects (outside dwelling)
• attaching cars (DVLA/HPI checks)
• exceptional attachment order (inside dwelling)
• auction
• cost consideration?

Part of
Making a Difference
Regulated costs
* First-TierTribunalOrders
Charge forPayment £81.16
Earnings Arrestment £60.56
Arrestment £81.16
Attachment (variable) >£100.60
Allexecutedfees are recoverable from the Respondent

Part of
Making a Difference
The modern sheriff officer
 tablets & mobile printers
 real-time reporting
 investigative
 treating customers fairly
 ISO 27001 & 9002

Part of
Making a Difference
Our locations

Part of
Making a Difference
Additional information
Additional information available on request - please contact Scottish
Association of Landlords if you would like an electronic version of the
following leaflets:
• Enforcing a payment order from FTT for private landlords
• Stirling Park information sheet
• Stirling Park contact sheet

Part of
Making a Difference
Questions
Ronald J Murison,
Director of Sheriff Officer Services
Stirling Park LLP, 24 Blythswood Square, Glasgow G2 4BG
DX 512051 Glasgow Central
r.murison@stirlingpark.co.uk
0141 565 5765/07771 845539
Enquiries to: 0141 565 5765 or officers@stirlingpark.co.uk
Tracing: trace@stirlingpark.co.uk

Refreshments are served in the
Stratosphere area
Programme resumes 15:30 hrs
Please visit our exhibitors’ stands
Sponsors:

What’s new in property
finance?
Duncan MacInnes, Ruffer
Hugh Meechan, The Mortgage Lender
David Morrison, EQ Accountants

Tribunal decisions –
what can we learn?
Jim Bauld
TC Young Letlaw

First-tier First Year
Jim Bauld
TC Young Solicitors

First-tier Tribunal
Housing and Property Chamber
• Housing (Scotland) Act 2014;
• sheriff court jurisdiction transferred to
FTT-HPC on 1 December 2017;
• “Actions arising from tenancies and
occupancy agreements” under existing
legislation;
e.g. regulated and assured tenancies.

FTT-HPC jurisdiction
• FTT-HPC has sole jurisdiction in all civil proceedings
arising from a private residential tenancy (PRT) under
Private Housing (Tenancies) (Scotland) Act 2016;
• PRT introduced 1 December 2017;
• jurisdiction includes payment actions in all tenancy
regimes.

Making an application to
FTT-HPC
• application form to be prepared;
• lodge with FTT-HPC office;
• separate application for eviction and arrears;
• include required attachments;
• no fee payable.

Application process
• application received by tribunal;
• checked by staff;
• passed to President / tribunal member;
• sifting process;
• either dismissed, further information sought or referred to
tribunal.

Applications dismissed at “sifting”
• frivolous or vexatious;
• dispute has been resolved;
• “not appropriate” to accept application;
• application is for a purpose other than that specified in
application;
• identical to previous application.

“Frivolous” applications
• ALL applications are now checked by a legal member
before proceeding to tribunal;
• much more stringent than sheriff court;
• application will be dismissed at sift if they are “futile,
misconceived, hopeless or academic”;
• application has no prospects of succeeding.

Scott v Bachhaznadji
• application for eviction lodged 5 February
2018;
• CMD (case management discussion) set for 16
April;
• sheriff officers could not find the tenants to
intimate CMD date;
• Chamber President made the decisions;
• where tenants' address is not known
application should be rejected at sift;
• no provision in FTT rules for service by
“advertisement” or on “walls of court”.

Armstrong v Clark
• arrears payment case lodged 8 February 2018;
• tenant's address in application was his work address;
• tribunal asked landlord to obtain home address for
former tenant;
• requests for correct address sent to landlord;
• landlord told tribunal to phone tenant at work and ask;
• sifting member dismissed the application on 6 June
2018;
• “not a function of the FTT to establish the address of
a tenant”.

KJB Housing v Rae
• application lodged 3 January 2018;
• seeking eviction from a PRT;
• notice to leave dated 17 December 2017;
• notice specified 18 January as the
effective date;
• at sift, notice deemed invalid and
ineffectual as failed to specify correct
date;
• application thus “frivolous” and rejected.

Badahur v Sachmerda
• application lodged in name of estate
agents;
• tenancy agreement listed the agent as the
landlord;
• land register check showed property
owned by Mr Badahur;
• no explanation why tenancy/application
not in his name;
• rejected at sift by legal member.

McConville v Mohammed
• eviction application in short assured tenancy;
• NTQ/section 33 notice handed to tenants in agent's office;
• not proper service;
• NTQ can only be served by recorded delivery or sheriff
officers;
• application rejected.

Process after “acceptance”
• notice given to all parties that application accepted;
• written representations requested from other party;
• tribunal may issue “directions”;
• fix case management discussion or hearing.

Case management discussion
• heard by legal member alone;
• identify issues to be resolved;
• identify agreed facts;
• discuss what witnesses / documents
required;
• discuss whether “evidential” hearing is
required;
• can make “final” decision at CMD.

Hearing
• held in public;
• held on weekdays during normal business
hours;
• tribunal will consist of legal member
(chair) and at least one “ordinary”
member;
• can proceed in absence of party;
• at least 14 days’ notice given to parties by
FTT.

“Overriding objective”
• FTT-HPC must give effect to “overriding objective”;
• “deal with the proceedings justly”;
• must manage proceedings in accordance with this
objective;
• parties must assist tribunal.

“Deal with the proceedings justly”
• proportionate to the complexity of the issues and the resources of
the parties;
• seeking informality and flexibility in proceedings;
• ensuring parties are on equal footing procedurally;
• using the special expertise of the First-tier Tribunal effectively;
• avoiding delay, so far as compatible with the proper consideration
of the issues.

Evidence at hearings
• documents to be lodged 7 days in advance;
• can lodge late with permission of FTT;
• witnesses should be listed in advance.

Decisions at hearings
• majority vote but chair has casting vote;
• decisions must be in writing;
• statement of reasons to be given if requested in eviction
cases;
• if decision not unanimous, chair must also give a note on
minority view.

Decisions at hearings
• all published on the FTT website;
• many decisions in favour of landlords;
• payment orders made;
• eviction orders granted;
• still the occasional problem though!!!

Hall v Beattie
• hearing 11 September 2018;
• eviction action;
• all in order except section 11 notice;
• named person was not tenant;
• tribunal held notice was mandatory;
• allowed adjournment for re-service in correct form.

Lewis v McKenzie
• eviction action
• application lodged 16 March 2018
• CMD 11 May 2018
• tribunal questioned validity of NTQ and AT6;
• adjourned to 18 July 2018;
• decided both were invalid;
• application refused.

Patience v Owens
• eviction action;
• CMD 6 June 2018;
• short assured tenancy;
• NTQ served by sheriff officers;
• no section 33 notice;
• landlord unaware it was needed;
• application dismissed.

Royal College of Surgeons v Murray
• eviction application;
• based solely on AT6 procedure;
• ground 8 eviction;
• CMD 22 June 2018;
• no specification of grounds in part 3 of AT6;
• FTT held AT6 invalid and dismissed application.

Scotcrafts Leasing v Kajaks
• eviction case;
• CMD 23 August 2018;
• NTQ and section 33 hand delivered on 28 December 2017;
• tenant accepted he had received them;
• FTT held service invalid and application dismissed.

Tenancy deposit cases
• The Tenancy Deposit Schemes (Scotland)
Regulations 2011;
• must lodge deposit with an approved scheme within
30 days of start of tenancy;
• must provide information to the tenant re deposit
amount, date paid, details of scheme and
circumstances in which deposit can be retained;
• currently 3 approved schemes in Scotland.

Tenancy deposit cases
• over 90 published decisions on HPC website;
• if regs breached, award “must” be made;
• almost all make awards against landlords;
• most seem to be 1 or 2 times the deposit;
• very few have the full possible sanction!

Gordon v Ghafoor
• tenancy started 28 February;
• deposit of £650 paid;
• tenant moved in and moved immediately out;
• keys returned 5 March;
• deposit not paid into scheme;
• landlord argued no need as tenancy had ended within 30
day period.

Cook v Gilliard
• successive tenancies from 2014-2017;
• deposit £500 paid to letting agent;
• lease said lodged with SafeDeposits Scotland;
• actually lodged with LPS;
• no information given to tenant;
• deposit returned at end to landlord.

Scheltdorf v Singh
• deposit of £550 paid;
• not lodged with any of the schemes;
• landlord defence was “cash was put in a safe deposit box
with RBS”.

Appeals
• appeal to Upper Tribunal;
• on point of law only;
• requires leave of the FTT;
• must seek leave within 30 days of
receiving decision;
• if leave refused, applicant can ask for
leave from Upper Tribunal;
• also a “review” process.

Questions?
Jim Bauld: jdb@tcyoung.co.uk
www.tcyoung.co.uk
Read our blog: www.tcyoung.co.uk/blog
Follow us on Twitter: @TCYLetLaw

Summing up and close

Thank you for coming
See you next year
Sponsors:

National Landlord Day 2018 - Biosphere slides

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