05/12/2019

Property Guardians, vanishing companies and still getting it wrong

Camelot! Camelot!
I know it sounds a bit bizarre,
But in Camelot, Camelot
That’s how conditions are.

Camelot! Camelot!
I know it gives a person pause,
But in Camelot, Camelot
Those are the legal laws.*

You may or may not have heard that one of the largest Property Guardian firms put itself (and all its related companies) into voluntary liquidation on 6 November 2019 (eg this one). But that is what Camelot did.

The reasons for this are unknown (effectively the Dutch parent company appears to have pulled in inter-company loans, making the child companies technically insolvent, so a deliberate internal decision. They are calling it a ‘re-structuring’. There is speculation that this may be related to Camelot pleading guilty to a failure to licence an HMO and multiple breaches of the HMO management regulations, with sentencing hearing on 10 January 2020, but I’m not sure that avoiding the reputation damage and fines would be enough to trigger this step.)

Now, it appears that the Guardians’ deposits have been transferred to a new company called Watchtower Security Solutions Ltd. Which, unsurprisingly, has the same directors as the Camelot companies.

Watchtower has been pressurising Camelot guardians to sign up to new licence agreements with them, for the properties that they are already in. Some of these, at least, are at an increased monthly licence fee. But here is the front page of these new licence agreements.

licence agreement

“This agreement is also excluded from the Protection from Eviction Act 1977”??

Oh come on, Watchtower, you know this is not the case (Our note from 7 YEARS AGO!). Camelot settled a number of cases precisely on their failure to comply with the Protection from Eviction Act 1977 notice requirements. (I may give details of a couple in the future, because any NDA in the settlement was with Camelot, not Watchtower, and Camelot are in liquidation and can have no interest or value in the NDA any more. We’ll see.) Camelot knew full well that the PfEA applied. Watchtower are the same people, so I don’t know why they are still trying to pull this nonsense.

Now, does A G Securities v Vaughan apply? There is an interesting question there. The whole point of A G Securities was that the licensees had been given licences of the whole property, but at different times, so could not be considered joint tenants. But if Watchtower are giving new ‘licences’ to guardians who are currently occupying a property, at the same time, that looks a lot like a joint tenancy of the whole… This might get interesting for Watchtower, who have clearly not bothered with advice from a competent residential landlord and tenant lawyer.

There is still a further question. From what I have seen Camelot’s ‘authorisation’ agreements with property owners would be likely to automatically end on Camelot’s insolvency. I’d be surprised if it was otherwise, as this would be a standard commercial clause. Did Watchtower get the agreement of every single property owner for Camelot’s authorisation to grant occupation licenses before or upon Camelot entering liquidation? I do not know, but unless such an assignment (or a new authorisation) was agreed with the property owner, Watchtower had and has no basis to be ‘granting’ new licenses to guardians, let alone requiring them to sign up to those licenses.

Of course, the guardians are the ones with no place or say in any of this, save that whoever actually has the right to bring possession proceedings (and it may not be Watchtower), at the least has to give them 28 days notice, then proceedings at court.

As ever, some Guardian companies conduct themselves as if landlord and tenant law doesn’t apply to them. This is not a good look, as well as being wrong.

(*I hate musicals on the whole, on the basis that I generally disapprove of life bursting into song at random moments, let alone with orchestral accompaniment. But there we are, it had to be done. Apologies to Alan Jay Lerner.)

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

10 Comments

  1. Ben Reeve-Lewis

    Is there any record anywhere of the amount of guardian let properties out there I wonder? I very much doubt it, given how fast they are springing up everywhere. As you know Giles my office is a quarter of a mile down Walworth Road from yours and in my 500 yard lunchtime walk to the Vietnamese grocers for my sweet pork bun, I pass 6 properties with posters on the front saying they are protected by guardians and another 3 on the short walk to the bus stop behind Burgess Park.They seem to be becoming as numerous as dodgy rent 2 rent HMOs. Not that I am suggesting that guardian companies should be equated with rogue landlords you understand.

    Reply
    • Giles Peaker

      No, I don’t think there is.

  2. Daniel N

    Got to wonder why they’re even mentioning the Protection From Eviction Act 1977 in the written agreement at all?

    Even from the perspective of trying to swindle the occupiers it’s just not a good idea. If the occupier doesn’t know what the PFEA1977 is, it just gives them (or any adviser they consult) the hint that they should look it up. If they already know what it is, they presumably also know that you can’t contract out of it if it applies.

    Reply
    • Giles Peaker

      It is odd. But the whole thing is odd.

  3. Ben Reeve-Lewis

    Thats a good point actually Daniel. You dont usually see reference to the PFEA in contracts. Its like sayiing “You know that PFEA? Well thats nothing to do with us. We wouldnt even mention it normally” haha

    Reply
  4. Michael Barnes

    I am wondering about the legal standing of the “main residence” clause.

    Reply
    • Giles Peaker

      In what way? It will usually be the guardian’s main residence.

  5. DCH

    There are three of us in an ex Camelot property. The owner hasn’t (and will not) sign up with Watch Tower. I have advised the other two NOT to sign with Watch Tower and NOT to pay the rent to the temporary bank account in Holland that we were told to. So effectively, we are now squatters until the owners decide what to do. I have no idea what has happened or will happen with our deposits.

    Reply
  6. Joe

    What a precarious mess. Everytime it’s the same state of affairs. It’s like they can’t put one foot right.

    Reply

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