The Greedy Landlord: Finding the balance between profit and goodwill

In the world of property management, landlords often find themselves navigating a complex terrain where financial interests must be balanced with the welfare of tenants. Profit and goodwill form a delicate balance, one that a landlord, who's been managing rental properties for decades, is all too familiar. Recently, a chance encounter with a potential tenant seeking an affordable rental home in a conservation area shed light on the stark differences in perspective that can shape these relationships. TheBigRetort

A recent encounter with a militant flat seeker looking for a rental property revealed a strikingly different viewpoint to lettings than most landlords might expect. This particular tenant, firmly believed that landlords should reduce rents for tenants, not out of goodwill, but because it was the "right" thing to do. 

Her perspective was clear: greedy landlords should provide lower rents. Any financial sacrifices they might make were secondary. It did not form goodwill but was simply the guilt that arose from the bloated profits made by landlords. In short, it would be easier to get a camel through the eye of a needle than to get a greedy landlord through the pearly gates.  The uppermost landlord, He upstairs, would simply send the greedy down to the basement into the fires of hell. Such was her thinking.

No, she did not understand maths or finance and didn’t care. “You have made too much money out of property and so you should give some back.” 

She seemed quite angry and there was little Greedy Landlord could do to placate her. Had she listened she may have discovered that Greedy Landlord’s long property management journey had been marked by a commitment to providing quality housing while maintaining a successful rental business. 

Successful in that if it loses money then it is probably time to move on to greedier pastures. 

While profit is undoubtedly a significant aspect of this venture, it had never been the sole driving force for Greedy Landlord. 

Instead, Greedy Landlord had strived to find a harmonious balance between profit and goodwill, recognising the importance of both in keeping good tenants and in making good tenants great.

On the other hand...  the militant flat seeker's view was rooted in the naïve belief that landlords have already profited handsomely from their tenants and so should now give something back. 

Greedy Landlord, who had occasionally been in a position to offer reduced rents (when circumstances allowed), was taken aback by the militant flat seeker's response. He did have a flat coming on the market, who knows? 

He tried to argue that there were many factors governing why she was being forced out of a beautiful conservation area into the hinterlands of Zone 6 London or beyond. 

“What are they” She asked not really pausing for an answer. She simply assumed that any goodwill was trumped by profit and that lower rents were an entitlement rather than a gesture of goodwill.

Greedy Landlord's approach, not that uncommon among responsible property owners actually, had always emphasised the importance of maintaining a balanced perspective. Providing reduced rents, while commendable, is not always feasible for every landlord due to various factors such as market conditions, property expenses, and government policies. A balanced approach acknowledges the need for a rental business to remain financially viable while also valuing long-term tenant relationships. Failing that it’s sell then bank or invest elsewhere.

Militant Flat Seeker didn’t care. She was being driven out of the conservation area in which she had enjoyed reduced rents for years. 

But that was then and this is now. Now rents were on the up and up all over London and she blamed Greedy Landlord. If there was a property crash then he would have to sell up and she could at least then afford to rent at a lower rate. Or buy? 

But then when she bought would she not want house prices to increase?

She seemed annoyed and frustrated. "Of course!"  

She did not seem to be able to do the maths, as she previously admitted, on why taxation had increased rents. Like Mr Micawber, “My other piece of advice, Copperfield,’ said Mr. Micawber, ‘you know. Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.”

The encounter with the militant flat seeker serves as a stark reminder of the varying priorities and values that shape the landlord-tenant relationship. While profit is a fundamental consideration for landlords, many, like Greedy Landlord, so named by the militant flat seeker, understand that goodwill and positive relationships with tenants also play an important role in the success of their rental business.

And a business it is after all. Even if it is not treated as such for tax purposes by HMRC. Not itself averse to taxing buy-to-let landlords differently, further ensuring rent increases.

Finding a balance between profit and goodwill is a challenge that responsible landlords strive to meet, recognising that the welfare of their tenants and the health of their rental business are intertwined. Why re-let every 6 months at a higher rent with subsequent voids and improvements if you can let for years, with some improvements along the way?

Greedy Landlord continues to embrace this approach, understanding that while profit is important, the goodwill that comes from providing quality housing and respectful relationships can be equally rewarding. In the ever-evolving landscape of property management, it's the delicate balance between these factors that ultimately defines the path of responsible landlords. If only Militant Flat Seeker realised. 

Instead, she cut the encounter short with a withering look: “Well, nice to meet you, bye!” she said. Even though it clearly wasn't.

Wait! Greedy Landlord nearly called out. After all he had a flat coming onto the market..?

Then he remembered Mr Micawber and paused, saying “Nice to meet you too!” Even though it wasn’t. 

He watched Militant Flat Seeker angrily cross the road before no doubt heading towards Zone 6 London and beyond. 

Meanwhile, Greedy Landlord had a flat, in the conservation area, Zone 2 London, soon to be empty, and at a reduced rent.

Editor's note.

 In response to concerns about the potential reinstatement of mortgage interest relief (MIR) for landlords, UK housing secretary Michael Gove has reiterated the government's stance. Reinstatement is not on the horizon. Gove emphasised that there are two key factors at play in the decision. Firstly, so the argument goes, many “older” landlords had previously benefited from MIR, and its reinstatement could be seen as favouring them. Secondly, Gove questioned the fairness of granting landlords a more favourable tax regime compared to individuals purchasing homes as their primary residences. This points to a broader issue in the taxation of property ownership: homeowners are often exempt from capital gains tax when selling their primary residences, while landlords are liable for both capital gains tax on property sales and income tax on their "total" rental earnings. Despite what they may be paying in mortgage interest. The differences in tax treatment between homeowners and landlords remain a subject of debate and consideration for housing and tax policies in the UK. And form the primary reason why rents are soaring. 

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Council prosecution sparks controversy as prosecutor fails to appear

 

In a recent legal case involving the London Borough of Lewisham, two defendants, found themselves in the spotlight, accused of introducing an additional skylight to their roof without planning permission. However, this case has now raised a series of pressing questions about the Council's prosecutor - who failed to make an appearance, much to the annoyance of a district judge. 

A skipped court appearance

On the morning of October 5, 2023, a case was scheduled at the Bromley Magistrates Court. The two defendants had previously requested an adjournment. A request that was refused outright by Lewisham Council's prosecutor. Nonetheless, on the day, it was the noticeable absence of the Lewisham Council's prosecutor that became the focus of attention, particularly for District Judge Turnock.

Appointed by the Queen in 2020 upon the advice of the Right Honourable Robert Buckland QC MP (pictured) and the Lord Chief Justice of England and Wales, the Right Honourable The Lord Burnett of Maldon, District Judge Turnock is a highly respected figure within the legal world. Not a person to mess with one would have thought. 

On the day of the hearing, the defendants' representative, Mr. Quentin Hunt, a direct access barrister at 2 Bedford Row Chambers, arrived early with his clients for pre-hearing discussions but was met with an empty prosecution table.

Where oh where was the prosecutor?

As the court clock ticked and minutes moved into hours, District Judge Turnock patiently and graciously began making enquiries. But the proceedings were stalled by an email from Lewisham's legal department, received at 11:23 am. (The case should have commenced at 10am.) The email disclosed that the prosecutor was unwell, and therefore, no prosecutor would attend the hearing. Subsequently, the court adjourned the case to October 31, 2023, leaving all parties at an impasse. 

Wasted costs application

Following the unexpected turn of events, District Judge Turnock indicated that a wasted costs application against Lewisham Council would be considered, pursuant to Section 19 of the Prosecution of Offences Act 1985. This application allows for the recovery of costs incurred due to an unnecessary or improper act or omission by the prosecution.

Defence's stance

The defence, represented by Mr. Quentin Hunt, now argues vehemently that the non-appearance of the prosecutor constitutes both an unnecessary act and improper conduct on the part of the prosecution. Unsatisfied with the explanations provided, they extended an invitation to the prosecution to furnish medical evidence, which the latter declined to do. 

Furthermore, the defence highlighted that no effort had been made to contact the court or the other parties to explain the prosecutor's absence, a courtesy that would have been anticipated under different circumstances. So, a prosecutor who intended on criminalising good residents for having no evidence of permission for a skylight sees the spotlight fall on them for an untimely and unexplained absence at court. Even if it is conceded that the prosecutor's pre-existing condition genuinely prevented attendance, the defence contends that this was a condition that was known. They argue that the Council had failed to establish adequate processes to manage such foreseeable absences.

Implications and potential outcomes

This case raises significant questions about the conduct and oversight of legal proceedings, particularly when a sole prosecutor, as claimed in this case, is unable to attend due to a preexisting condition. The lack of timely and appropriate evidence, coupled with the failure to contact the court or the other parties in a more timely manner, has given rise to concerns about oversight and potential contempt of court. Moreover, it's not the first time this prosecutor has failed to attend court, as noted in a previous case. 

The defence asserts that the Council's inability to manage such absences, particularly when they are a foreseeable possibility, represents an improper omission that could justify the payment of costs.

As the case unfolds, it is yet to be seen how District Judge Turnock will rule on the wasted costs application. The legal community and the wider public will be closely monitoring the case as it may set an essential precedent for the handling of prosecution oversight in legal proceedings. Certainly, had the defendants themselves failed to appear at court without good reason they would be clapped in irons.

The defence barrister

Quentin Hunt, the barrister representing the defence, boasts over two decades of specialised experience in criminal law. His reputation for fearless representation and an encyclopedic knowledge of the law has earned him many accolades, including the title of 'Direct Access Barrister of the Year' at the SME Legal Awards.

Will there be light at the end of the skylight tunnel?

The outcome of this case is yet to be determined and will be closely followed by legal experts, the public alike, and of course The Big Retort.

Editor's Note: Context and Disclaimer

It is important to note that this case has a historical backdrop, with prior interactions between this prosecutor and this blog's editor. In an unrelated prosecution case, the council's prosecutor issued warnings against the editor for perceived interference. This information is provided for context but should not influence the assessment of the current case, which is an independent legal matter with its own unique circumstances.

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James O'Brien Ayatollah of the Airwaves: Buy-to-Let controversy lives on

Some years back, we ventured into the realm of James O'Brien, the outspoken LBC radio presenter known for his fearless approach to contentious issues. At the time, O'Brien was fervently condemning buy-to-let property investors, accusing them of inflating rent prices and obstructing the younger generation's path to homeownership. However, our revelation about O'Brien's involvement in the buy-to-let market left many across the nation shocked and bewildered. The Big Retort

Moses on Mortgages

In 2014, LBC’s James O'Brien engaged in a spirited on-air exchange with the Archbishop of Canterbury, Justin Welby, focusing on the Church's land ownership and its impact on tenants. O'Brien's Moses-like critique implied that God had ventured into the realm of demon buy-to-let landlords.

O'Brien's relentless sermon

O'Brien's relentless sermon on buy-to-let painted landlords as the culprits behind housing unaffordability and skyrocketing rental costs. In his view, there were demons lurking within the whole sordid property system. 

St James passionately singled out pensioner investors. Igniting a heated on-air debate, O'Brien ranted: “If we’d have invented this [buy-to-let] system now and tried to sell it to the British public, they’d have chased us out of the country. Yeah… what we’re gonna do… we’re gonna create a system in which people have already got a lot of money; they will 'sort' of buy a house. But they’ll borrow a bunch of cash to buy it! You who have got less than them, you’re gonna pay their mortgage for them. [Smiling inanely in his Podcast] Okay!"

Significantly he added: " Is everybody cool with that - yeah...? Rich bloke here, already got a house. Got a bit of money in the bank! Uses it… uses it to get a - put a - deposit in a flat. You! You’re earning enough to pay a mortgage, but you haven’t got a lump sum to pay the deposit on-- So you’re gonna buy him another house! Is that okay! You’re just gonna buy him a flat...? By living in it and paying for the privilege. (Smiles) Vote me!”

Vote me indeed. First-time buyers were ‘nowhere near being able to afford’ to purchase O’Brien’s former Queen’s Park home - and even if they could, they couldn't - because James held on to it to rent it out.

Begone, Satan!

Our revelation that O'Brien was both an outspoken critic and also a secret player in the buy-to-let market came as a shock to many. Archbishop Welby though seemed unaware of it when he was pushed by O'Brien into defending God's right to rent for profit. It added an intriguing layer to our story. 

While lambasting others for their involvement in buy-to-let, we revealed that O'Brien had retained his former home in Queen's Park as a buy-to-let. All while moving on to pastures new in buttered-parsnips Chiswick - a move often dubbed 'rent-to-buy' in buy-to-let jargon.

Property Investment Details

O'Brien's former property in Queen's Park was prominently advertised for rent at a substantial monthly price. While he claimed to be living there making much-needed improvements to get planning permission. It was eventually sold in 2013, netting him a considerable profit. This then allowed him one year later to sit in front of God’s property managing agent Archbishop Justin Welby and point the moral finger and condemn the rest of the buy-to-let flock too.

The Rachman of the Airwaves

While it might not be entirely fair to compare O'Brien the Prophet from Ampleforth to notorious landlords like *Rachman, he undoubtedly profited from his retention of his then former home - for five and a half years. Given his past experience as a buy-to-let landlord, which he did not confess to the Archbishop Justin Welby, or his listeners, his vocal criticism of buy-to-let investors seemed somewhat dubious. Our report raised questions about the consistency of his stance and whether his critiques might be perceived as hypocritical, given his substantial financial gains from buy-to-let. Our estimates suggested that he may have earned well over a million pounds from his property investment endeavours. It does seem somewhat ironic, doesn't it?

Buy-to-Let on Damascus Road

In light of James O'Brien's history in the buy-to-let market, this story prompts us to re-evaluate the consistency and integrity of some of his viewpoints, surely. While he once profited from buy-to-let, he now vehemently argues against it. A transformation akin to Paul's conversion on the Road to Damascus. It reminds us that, while he can significantly influence public opinions and positions, O’Brien’s personal involvement in buy-to-let also leads him to conveniently forget his own past as a demon landlord. A past from which he profited, hugely. Is everybody cool with that?

[*Perec "Peter" Rachman (16 August 1919 – 29 November 1962) was a Polish-born landlord He operated in Notting Hill, London, England in the 1950s and early 1960s. He became notorious for his exploitation of his tenants, with the word "Rachmanism" entering the Oxford English Dictionary as a synonym for the exploitation and intimidation of tenants.]

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The ongoing battle of KJ Building Supplies

In the heart of a thriving Lewisham community, in southeast London, KJ Building Supplies stands as a vital resource for builders and homeowners alike. However, this seemingly unassuming DIY business has found itself at the centre of a complex planning and enforcement dispute with the Council, prompting questions about the boundary between local governance and the law.

The saga began when KJ's was invited to apply for planning approval for an open storage area adjacent to the shop. The request was met with disappointment as planning officer Russell Brown exercised "officer delegated powers" to deny the application. The decision hinged on two key allegations: first, that the land had undergone an unauthorised change of use to a "builder's yard," and second, that a shipping container had been installed without proper permissions.

In response to this setback, KJ’s owners appealed the decision to the planning inspectorate, seeking a reconsideration of the case. Here, the plot thickens. The planning inspector raised concerns about the wording of the allegations and invoked a section of the 1990 Act, allowing corrections if no injustice would result. The inspector's fixation on the grammatical nuances of the allegations, particularly the placement of apostrophes in "builder's yard" from "builders yard," introduced an unexpected diversion.

The dispute centred on whether the land in question belonged to a single builder, multiple builders, or KJ's as a builders' merchant. The misplaced emphasis on grammatical minutiae overshadowed a more critical issue: the categorisation of the land as a "builder's yard" in the first place. KJ's Building Supplies primarily serves as a builders' merchant, specialising in the sale of building materials, with the adjacent land serving as an open storage area.

As the planning appeal was dismissed, enforcement officer Samuel Cadman reignited the enforcement action. By describing the land as a "builder's yard" in a letter delivered on June 6, 2023, Cadman took an unconventional approach, citing the Police and Criminal Evidence Act 1984 and stating that owner Kevin Bottomley had "the right to remain silent." This legal development raised questions about the proper role of local councils in advising individuals of their right to remain silent through written communication.

The battle between KJ Building Supplies and Lewisham Council has stirred a groundswell of community support under the banner of "Betterfication, not Gentrification." Over 800 supporters have signed a petition, highlighting the importance of preserving community assets against aggressive planning enforcement.

This ongoing legal saga underscores the challenges businesses like KJ's face when confronted with planning and enforcement actions and raises broader questions about the intersection of local governance and legal procedures. The fight to safeguard KJ's as a community resource continues, and it remains far from over.

Coming soon: The right to remain silent.

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The Kafkaesque battle of a DIY store in Lewisham

From the beginning, the case of KJ Building Supplies has unfolded in a Kafkaesque manner. It began with a planning contravention notice issued seven years ago. It demanded that local DIY shopkeeper, Kevin Bottomley (pictured), aka “KJ,” cease various activities related to his builders’ merchants. A busy store on the busy A20. 

Kevin had, in fact, sold the shop to his young charge Will Buckle (pictured). However, due to a series of errors and questionable decisions made by planning enforcement officers, Will’s dreams for the future of the store quickly descended into madness. 

Enforcement overreach

Back in June 2016, following a sole complaint, the then enforcement officer Janet Hurst initially determined that the land on which a metal container sat, and which had been introduced that year by Kevin, was not the only thing in breach of planning.

Hurst included the land too, even though it had been used that way for many years. In fact, the description of the breach would notably change over time, with devastating consequences for KJ Building Supplies and for its owners.

The planning application

In 2017, a planning application submitted on behalf of KJ Building Supplies was only actually initiated at the council's invitation. However, this application focused solely on retaining an "existing” metal storage unit to the side of the shop. Then, this seemingly straightforward request took a convoluted path.

Curiously, the completed planning form simply asked to retain the ‘Existing storage unit to the side.’ While the planning officer Russell Brown recorded DC/17/102699 “A retrospective application for the use of the land on the east side… for a builders yard (Sui Generis)…” 

The term "sui generis," Latin for "of its own kind," was introduced to assess whether this unique use of land as a builders’ yard, including a storage container, aligned with existing land use classifications. The officers also claimed that it was in a conservation area, which it wasn’t.

The planning application was refused under delegated powers held by Brown. Since departed from the council. Former head of planning Emma Talbot wrote, “The use of the site as a (sic) open builders' yard with storage container would, by reason of the design and temporary nature of the storage container be unsuitable and inappropriate on a prominent route in the Brockley Conservation Area.”

The land alongside K J Building Supplies wasn’t actually “in” the Conservation Area. It was not even a builders’ yard. Shoppers came. They went.  The end.

(Emma Talbot was somewhat reluctant to present her qualifications to us. She was catapulted through the ranks to the top planning job following the walkout of former head John Miller, who saw through the part-shambolic Lewisham Gateway project. Talbot has since left Lewisham to head up regeneration and development in Harrow, following in the footsteps of her previous Lewisham maternity minder, Viv Evans, who is now chief planning officer… in Harrow.)

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London Yellow Box Junctions: Still a TfL cash cow?

Much of the talk in the media and on the Internet is about the ULEZ expansion. However, let us not forget that other cash cow seemingly out to pasture. Yellow Box Junctions (YBJs) in London have always been a contentious issue for drivers. In the past, these junctions have often been perceived as revenue-generating traps rather than tools for traffic management. While our past discussion initially looked at the tenure of former Mayor Ken Livingstone, the question remains: Are YBJs still a lucrative source of income for Transport for London (TfL)?

A few years back, during the tenure of then London mayor Ken Livingstone, we ran a story on YBJs and the alleged Congestion Charge scam. It sparked outrage among London drivers. Many voiced their concerns. Arguing that these junctions were exploited by TfL to extract fines from unsuspecting motorists, turning them into cash cows rather than serving their intended purpose.

The current landscape

Fast forward to today, and London's transportation scene has evolved into the ULEZ expansion. While YBJs still exist, the focus has shifted somewhat. Under the leadership of the current Mayor Sadiq Khan, there have been notable policy changes, as well as increased scrutiny of TfL's practices.

Policy changes

The most significant change is the increased emphasis on transparency and fairness in all but deeds. The current Mayor has sought to strike a balance between road safety and preventing YBJs from becoming a mere revenue stream. As a result, TfL has introduced measures to ensure that YBJs are primarily used for traffic management purposes.

A call for transparency

The current Mayor's administration seems keen on addressing past controversies. TfL claims it now has a commitment to transparency. This suggests a desire to understand and potentially rectify any issues related to YBJs. But, will it?

While YBJs in London have been a source of contention for years, Sadiq Khan's efforts as mayor  strike a balance between road safety and fair enforcement and are worth noting. The question of whether YBJs remain cash cows or tools for traffic management may not have a definitive answer, but it's clear that the conversation is evolving in a direction that aims to prioritise the interests of London's drivers and visitors. It’s important to scrutinise the impact of YBJs and hold TfL accountable for their management to ensure that London's roadways are both safe and fair for all Londoners and its visitors.

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Lewisham Arthouse Open Studios: A glimpse into the creative hub in need of support

 

On Saturday, we had the pleasure of attending the Lewisham Arthouse Open Studios. This vibrant art facility has been a cornerstone of the local creative community for some years now. However, it has recently found itself in dire need of financial support to continue its vital work. TheBigRetort...

The Lewisham Arthouse is much more than just a building; it is a hub for artistic expression, creativity, and cultural and soulful enrichment. The event, which ran from the 31st of September to the 1st of October, showcased the immense talent of local artists while shedding light on the challenges faced by this essential institution. 

Rosey Prince

One of the primary concerns is funding. The future of this important art facility hangs in the balance. It needs substantial financial assistance to maintain its infrastructure and continue its support for local artists. 

As we wandered through the small studios during our visit, it was evident that this place is teeming with artistic energy and potential. However, it was equally evident that the building itself needs some tender loving care.  

Janine Nelson

Despite the challenges, the artists exhibited their works with great passion and enthusiasm. Their dedication to their craft and the Lewisham Arthouse was inspiring to witness. This creative oasis is not just a space for artists to work; it's a community where ideas flourish and collaborations thrive.

Visiting the Lewisham Arthouse is an opportunity to immerse oneself in a world of art, imagination, and innovation. To support this important facility, individuals and organisations are encouraged to dig deep.

Dot Young

The Open Studios event was a testament to the talent and resilience of local artists, even in the face of financial uncertainty. It is our hope that the council and other stakeholders will recognise the vital role that the Arthouse plays in nurturing creativity and culture within the community and will provide the much-needed funding to ensure its continued success.

Art thrives when it has the space and support to flourish, and the Arthouse deserves nothing less.

Reuben Thurnhill, the General Manager of the co-operative, stands as a passionate advocate for both art and funding. His dedication to preserving and enhancing this valuable institution is commendable. We extend our best wishes to him and the entire team at Lewisham Arthouse as they navigate the challenging path towards securing the support they need. 

Reuben Thurnill

LEWISHAM ARTHOUSE

Address: 140 Lewisham Way, London SE14 6PD

Phone: 020 8691 9113

Email: info@lewishamarthouse.org.uk

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