Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

23 January, 2012 • 09:59 4

What duty does a Landlord have if the tenant leaves their belongings in the property once they have vacated?

The above question is one which we get frequently asked by agents on the PainSmith helpline. It is often the case that tenants will vacate a property and leave their personal possessions behind which can pose a real problem for landlords.

The Torts (Interference with Goods) Act 1977 requires a landlord to take care of the tenant’s possessions and states that they have a duty to ensure that they undertake all reasonable efforts to trace the tenant to return their possessions. It is only when the tenant cannot be traced and a reasonable period of time has lapsed, can the landlord under the Torts (Interference with Goods) Act 1977 sell the possessions. Part II of Schedule 1 states that the tenant should be given at least 3 months notice of the landlord’s intention to sell. However a clause in the tenancy agreement is enough to vary this 3 months to for example, 14 days.

Usually the landlord will hold a forwarding address for the tenant and so will be able to trace the tenant this way however if the tenants whereabouts are unknown then reasonable steps should be taken to trace the tenant including placing an advertisement in the local newspaper and notices on local community boards.

If the landlord manages to trace the tenant the Act goes on to state that a written notice must be served by the landlord on the tenant stating their intention to dispose of the possessions, how to arrange collection and that disposal of the possessions will occur only once the notice has expired. The notice should go on to further state that if the possessions are not collected by the expiry of the notice then the possessions will be sold. If a landlord and tenant are in dispute as to the possessions (such as ownership) then the they cannot be sold until the dispute has been resolved. Where the possessions are sold without confirming who the actual owner of the possessions is, the landlord takes the risk of having the actual owner turning up at his door to make good on this sale without consent, which could mean paying double the actual value of the possessions.

When it comes to selling the possessions the landlord must account for all proceeds of sale, less any reasonable costs (such as storage) and should use the best method of sale which is usually by auction. Any proceeds left over will belong to the tenant up until six years after the sale.

It is often the case that some items that may have been abandoned by a tenant are of little or no value. If this is indeed the case then steps should be taken to determine that the possessions are of little value, for example a letter confirming this by the auctioneer before a landlord or agent on their behalf, disposes of them by any other means.

Filed under: England & Wales, FLW Article, , , ,

18 January, 2012 • 21:30 9

All very frustrating, but what are the options?!

Painsmith has recently encountered the Kafkaesque world of the tenancy deposit protection schemes, specifically the DPS and its new rules relating to the release of the deposit following a court hearing.

DPS is currently refusing to release deposits where the courts have not specifically ordered it and they have changed their rules to reflect the same. Under rule 29 (a) DPS will only release the Deposit if the Court Order specifically refers to the Deposit and how much to be paid out to the tenant.

Several of our landlord clients have obtained a possession order on the grounds of rental arrears and are finding it impossible (or very nearly impossible….or just very expensive) to get the deposit released, even where the contract specifically allows for the deposit to be applied against rental arrears.

Of course it is always open for the tenant to agree the release of the deposit to the landlord, but once possession is obtained many tenants lose interest in co-operating with their former landlord.

In the absence of an agreement from the former tenant the landlord is left to apply to the scheme to ask for the release of the deposit. We believe this should simply be a matter of drawing the scheme’s attention to the court order for possession and rent arrears and the clause in the contract, which allows the deposit to be used against rental arrears, where applicable.

However on more than one occasion recently a landlord’s application to the DPS for the release of the deposit has been refused and the applicant referred to clause 29 of the terms and condition ( see above) and informed that if they want DPS to release the deposit to them they must either arrange for the Court Order to be amended or a Third Party Debt Order to be obtained.

Concurrently, courts are refusing to make orders that would satisfy the DPS rules with many judges refusing to address the issue of the deposit on the grounds that it is a matter for the scheme and they do not want to usurp the jurisdiction of the Adjudicator.

You will recall that part of the point of these schemes was to take the matter of deposit handling away from the courts and instead use an alternative dispute resolution, that is the Adjudicator. However landlords find themselves facing courts that refuse to deal with the deposit because it is a matter for the scheme, and the scheme refusing to release the deposit without a court order so the whole thing becomes farcical.

Painsmith has historically been involved in deposit protection reform and we would suggest that between the schemes and the courts there needs to be some clarification.

Filed under: England & Wales, FLW Article, , , , , ,

10 January, 2012 • 12:58 0

It’s not the lawyers! It really isn’t!

Delays in possession hearings are not common in our experience but they can happen. In the case of Benesco Charity Ltd v Kanj and Unknown Persons the occupiers of a property were granted permission to appeal a possession order thus delaying the execution of the bailiff warrant for possession.

Benesco granted Speedway Tyres a 10 year lease. Mr Kanj set up the company but it was his wife that was the director of the company. Speedway and an associated company, Speedway Autocare Ltd (Autocare) was placed into a creditors voluntary liquidation.

The liquidator appointed for both companies disclaimed the lease. This meant that Speedways obligations under the lease were at an end. However this did not put at an end any lease that Speedway may have granted to third parties for the property. Mr Kanj received notification of the disclaimer.

Benesco then issued possession proceedings on the basis that Mr Kanj and the other unknown persons were trespassers. Mr Kanj defended on the basis that at some point he was granted a sub tenancy by Speedway or Autocare. However at the hearing Mr Kanj then changed his position and stated that he did not have a personal tenancy but that a tenancy had been granted to Autocare by Speedway.

There were other issues too but dealing with the delay aspect, the court decided that upon reading the witness statements it did appear as though the issue over the sub tenancy needed to be dealt with and as such the witness statements could not be rejected at a possession hearing which is summary in nature.

A person is entitled where there are matters raised in the witness statement to take the matter to trial. The court found that on the evidence there was an arguable case that at least Autocare had a sub tenancy. The court accepted that it was not clear what the true position was but stated that Mr Kanj and his wife could be cross examined in court and should not have been dismissed out of hand.

The moral of the story…….delays are possible even when the tenants/occupiers case appears to be groundless.

Filed under: England & Wales, FLW Article, , , , , ,

29 December, 2011 • 10:30 0

Setting the record straight….

It has come to our attention that some companies claiming to be experts in the field of Landlord and Tenant law are advising agents not to serve section 8 notices until tenants are into their third month of arrears because some judges insist that to serve a notice during the second month is “no longer acceptable”. The companies go on to suggest that certain firms deliberately issue notices prematurely in order to ensure adjournments and thus increase their own fees.

Leaving aside the accuracy of the statements and without joining in any mudslinging, Painsmith comments as follows:

1. Under ground 8 of schedule 2 of the Housing Act 1988, if rent is payable monthly and at least two months’ rent is unpaid the grounds for possession are made out. Rent means rent lawfully due from the tenant. This is spelled out in the Housing Act. Where rent is payable in advance but the tenant does not pay the rent on the payment date, then from the day after the rent payment date that months’ rent is lawfully due but unpaid, and ground 8 is made out.
2. Painsmith deals with hundreds of section 8 notices a certain number of which lead to possession proceedings for rent arrears. Painsmith has never experienced a judge adjourning a hearing on the basis that the section 8 notice should have been served in the third month.
3. Where the tenants pay quarterly then ground 8 is made out if “at least one quarters’ rent is more than three months in arrears”. In this case then you would need to wait until the tenant was three clear months in arrears.

Of course there is no compulsion to serve a section 8 notice on ground 8 immediately that the ground is made out. However the law is clear: where a tenant pays monthly in advance ground 8 is made out the day after the second unpaid rental due date has passed. As the leading landlord and tenant legal practitioners in this field Painsmith has a duty to set the record straight.

Filed under: England & Wales, FLW Article, , , ,

9 December, 2011 • 22:58 0

“Why Do I Need Court Proceedings? And What Do These Involve?

Many of our readers will know why there is a need to obtain a Court Order to evict residential tenants however for those that do not we hope the below helps.

If someone is occupying a residential property whether lawfully or not then an Order of the Court is required (a Possession Order) which generally can only be enforced by County Court bailiffs or Sheriffs Officers. This is true of squatters and tenants but this blog post is limited to tenants. If you evict a Residential Tenant from their home without a Court Order you can find yourself as Landlord (or others who assist in this such as an agent) liable to both civil action for damages and a right of re-entry from the tenant and also possibly criminal prosecution under the Protection from Eviction Act 1977 which can render you liable for a fine or in severe cases a custodial sentence. For these reasons alone it is vital that the correct procedure is adopted to avoid such penalties.

If therefore the Landlord wants to get his or her tenant out he should make sure he follows the correct process. The starting point will be the tenancy agreement itself to see on what basis the tenant can be evicted. If the Landlord simply wants the property back and there are no major breaches then generally the fixed term will need to be ending or for the agreement to have a break clause which the landlord can rely upon. Most types of residential tenancy require some form of notice most usually a s.21 notice and for others some form of Notice to Quit.

If there are breaches of the agreement itself such as none payment of rent then different notices may need to be served such as a s.8 notice for assured tenancies (including Assured Shorthold Tenancies).

Once the notice has expired an application can be made to the Court. Usually this will be the County Court local to the tenanted property. Whilst you can apply for possession through the accelerated (a misnomer!) process where you have a expired s.21 in the case of a s.8 or where you wish to seek costs, rent arrears and interest as well as possession pursuant to the expired s.21 then you will be listed for a first hearing. This should be within 8 weeks of issue but we have experienced recently delays which we have posted about. At the hearing if the Judge is satisfied that you have complied with the rules then unless your tenants have a Defence you should obtain a Possession Order. This will usually be for either 14 or 28 days but the Court can extend the time up to a maximum of 42 days.

Once you have this Order the tenants should vacate by the date given, if they do not then you will have to apply to the Court for a bailiff appointment. This will then be listed and again usually within about 4-6 weeks. Whilst the bailiff does not have power to use force to evict the Tenants in our experience we have found that the bailiffs are very effective at doing their job and persuading tenants to leave.

It is perhaps worth highlighting a point we have made in previous blogs given the current state of the economy. We are seeing more and more tenants who are approaching the Local Authority to be rehoused once given notice by their Landlord. Sadly most Local Authorities will not properly consider the tenants request for re-housing until a date has been fixed for the bailiffs appointment and the tenants themselves will be advised that if they vacate before-hand then they will have made themselves voluntarily homeless and the Local Authority will not assist.

So once the bailiff has executed the warrant the landlord will hopefully gain possession to relet his or her property to another.

It is important that all the way through you get the process right. If not then the whole procedure can be delayed substantially and the costs for the Landlord can escalate. This blog assumes no defence has been lodged and only gives a brief overview.

We appreciate that Landlords often at the time of evicting a tenant wish to limit their financial exposure and hence we offer a capped price eviction service but it can often be a false economy to not take advice on the whole process at the outset!

Filed under: England & Wales, FLW Article, , , , , , ,

4 December, 2011 • 16:01 2

Back to Basics 4: Section 21

A section 21 notice is not a notice to quit. Many people that call the helpline refer to a section 21 as a notice to quit even today and it’s not, so stop it!

A section 21 notice is used by the landlord when he wishes to gain back possession of the property at the end of an assured shorthold tenancy, pursuant to a break clause or even where the tenant is in the periodic period of the tenancy. There are two types of section 21 notices that a landlord can serve on a tenant. The section 21(1)(b) notice and the section 21(4)(a) notice.

Although both notices refer to section 21 they should not be confused with each other especially given that have very different notice requirements. If the wrong notice is served and relied upon then it can delay or hinder possession proceedings.

Depending on whether the tenancy is either of a fixed term or a statutory periodic will depend on which notice a landlord will need to serve.

The Section 21(1)(b) Notice – Fixed Term:

A section 21(1)(b) is served during the fixed term of a tenancy. A landlord serving this notice must give not less than two months notice stating that he requires possession. The notice should specify a date “on” which the landlord requires possession. The notice cannot expire before the end of the fixed term unless the landlord is relying on a break clause in the tenancy agreement. Therefore a notice should not be dated to expire before the last day of the tenancy as this would make the notice invalid and whilst it could be dated to expire on the last day of the fixed term there are many out there that believe that dating the notice to expire on the last day makes the notice invalid. We at PainSmith do not.

Other issues that need to be noted are that tenants have 6 months security of tenure and so a landlord can not issue court proceedings on a section 21 until the tenant has been in residence for 6 months. The other issue is that any notice served pursuant to a break clause should comply with the provisions of that break clause and then finally if the notice is served in the fixed term to expire in the periodic period it’s still a section 21 (1) (b) that needs to be served.

The Section 21(4)(a) Notice – Periodic Tenancies:

A section 21(4)(a) is served after the fixed term has expired when the tenancy is a statutory periodic tenancy. A landlord serving this notice must give two clear months notice stating that he requires possession and the day on which the notice expires must be at the end of a period of the tenancy. The section 21(4)(a) notice often causes the most confusion amongst landlords due to the fact that if the wrong date is specified on the notice then it becomes invalid. To avoid this pitfall it is vital that a landlord looks at the tenancy agreement to assess what the tenancy period is.

Some of you are aware that unlike a section 21(1)(b) a date need not be specified on the notice and instead the ‘saving provision’ can be used following the decision of Lower Street Properties Ltd v Jones however, rather oddly we still find some of you are dating the notice. Why complicate things?

Filed under: England & Wales, FLW Article, , , , , , ,

30 November, 2011 • 15:02 2

How long do Court Proceedings for Possession take?

As many of our regular readers may be aware the time taken for Courts to process claims particularly in the London Region has extended dramatically.

We would normally say that an accelerated possession claim if no Court hearing was required would take about 2 to 3 months from issue of proceedings until bailiff appointment. For traditional proceedings normally we would have the first hearing date within 3 to 4 weeks of issue.

Sadly we are finding that these dates are taking much longer with dates for hearings under traditional hearings taking up to 4 months! Unbelievable but true in a recent case we issued in a London Court. Despite representations to the Court they said pressure of work meant nothing could be done.

With regards to accelerated possession claims where hearings have been listed by the Court or the Defendant has lodged a Defence form we have found that these may not be listed for up to 5 months! Again a recent example we faced where an Order had been made but the Defendant immediately made application to set aside and Defend.

Whilst some Courts are still sticking to the more usual times generally the hands of Landlords are tied as to which Court to issue in. The rules provide that generally such possession claims must be issued in the County Court and in particular the Court with jurisdiction for the area in which the rental property is situated.

Certainly a worrying development that all practitioners need to be aware of and the implications of the same!

Filed under: England & Wales, FLW Article, ,

18 November, 2011 • 13:49 1

Back to basics 3: Voluntary Surrender and Abandonment

It can be tricky to know the correct procedure to take when you believe that the tenant has vacated the property. The main issue you want to avoid like the plague is a claim for unlawful eviction. Claims of this nature can be troublesome to deal with, costly and will hinder your attempts for possession a great deal. It is therefore crucial to follow the relevant steps to make sure that vacant possession can be gained without undue delay.

Surrender is one of the more amicable ways to formally bring an end to a tenancy. The Landlord and tenant mutually agree that it is best for all concerned to end the tenancy. Signing a deed of surrender ties up all loose ends and ensures that parties are not unwittingly still involved in the tenancy. This is a situation that is best avoided to mitigate chances of a nasty surprise somewhere down the line.

All circumstances are easier to deal with when you have mutual agreement between the parties. As I am sure a number of you attest to, sometimes not all the boxes can be ticked off, and it is situations like these that you need to be careful about. This is where abandonment notices can be worth their weight in gold.

Abandonment notices are very simple concepts. It is simply a note on the door saying that if they are still in occupation can they let you know within 14 days. This time limit can be altered but in past experience, we as a firm believe that 14 days both allows sufficient time for the tenant to inform the landlord or agent of his presence, whilst at the same time ensures that the Landlord does not need to keep their property off the market for too long and therefore does not lose out on potential future rental payments.

I will add a cautionary note here. Although the notice needs to be visible i.e. not hidden in a bush, it should not be brought to the attention of everyone and their dog who is going to pass the property. Those that call the helpline have stressed that they are concerned about third parties noticing that properties are empty when they get sight of these notices and therefore it is advised that you simply use your common sense.

Back to the notice itself, if no contact has been made by the tenant in the time frame stipulated, then the day after it has expired that is the fifteenth day, the locks can be changed and the property put back on the market. There is obviously the issue of dealing with the tenant’s possessions if any have been left behind but that is a topic for another day.

For those on the helpline there is a draft Deed of Surrender and Abandonment Notice in the document vault.

Filed under: England & Wales, FLW Article, , ,

26 October, 2011 • 10:02 5

Back to basics 2: Notice to Quit

A second opportunity to delve into the basics of Landlord and Tenant law has arrived. This time I am looking at Notices to Quit and the common pitfalls that are easily made but fatal to the effectiveness of the Notice.

It is important first of all to nip in the bud a common misconception when it comes to Notices to quit. They and Section 21 notices are NOT one of the same thing. They indeed are used in completely different situations. Granted, the way they are applied can be seen as similar, however they should not be confused as it would result in a notice as useful as a chocolate teapot.

A notice to quit is a tool to be used to bring about the end of a common law/company let tenancy. Section 21 notices are used to end an assured shorthold tenancy. So if the tenancy agreement that is in place is an AST serve a Section 21 not a Notice to Quit.

A point of law that makes numerous Notices invalid is when the date of expiry should be and when it should or can be used. The date of expiry must be either at the end of a complete period of the tenancy or on the first day of the new period. If this is a little too vague, there is an alternative method. The case of Chez Auguste Ltd v Cottat stated that there was no need to give an exact date on the notice. This may appear harsh on the tenant but there was a caveat to this declaration. It just needs to be clearly identifiable to a reasonable tenant as to when the Notice will expire. As well as this, it cannot be used in the fixed term unless it is used in conjunction with a break clause.

There are certain other points that must be followed when the Notice has been served. Once the Notice has been served, rent cannot be demanded. Payment of mesne profits (equal to the rental sum) must be taken instead without prejudice to the effect of the notice to quit. It must be made clear to everyone who looks at the transactions that there is no intention to create a new tenancy found. Street v Mountford tells us that if there is no intention to create legal relations then no tenancy is created. This is particularly important because the last thing you want as a Landlord or Agent is to get to the point where the Notice to Quit has expired and possession is close, only to find that the tenancy will continue due to a few seemingly innocent statements.

These requirements must be strictly applied otherwise the notice will generally be found to be invalid. It may seem like a lot of effort but caution is the best approach. Make sure as many checks as possible take place and that will ensure that time is not wasted, particularly in a situation like possession matters where time is generally of the essence.

A number of you may well be signed up to our helpline. If you indeed are and wish to access a Notice to Quit, then it is available via the document vault which you have access to.

It is worth noting that if it is a common law tenancy and your sole ambition is to gain possession at the end the of the fixed term, a letter stating you require possession will suffice. A letter will also suffice if the tenancy has a break clause, again no Notice to Quit is required to exercise the right. A Notice to Quit is only required once the tenancy has become periodic.

Filed under: England & Wales, FLW Article, , , ,

24 October, 2011 • 10:04 4

The Tenants Bankrupt!

We have come across two decisions from earlier this Summer dealing with the problem of what to do when faced with a Tenant who is made bankrupt or enters into a Debt Relief Order.

Generally anyone who is made bankrupt or obtains a Debt Relief Order is subject to certain moratoriums on proceedings and the recovery of money which they owed prior to the Court Order making them bankrupt etc. This means that landlords can find themselves with a tenant who has run up arrears which they then cannot recover save for making a claim in the insolvency process under which it is likely they will only recover a small proportion of the monies.

In Sharples v. Places for People Homes Limited (bankruptcy) and Godfrey v. A2 Dominion Homes Limited (debt relief order) the Court of Appeal gave consideration as to whether a Landlord may bring Possession proceedings relying on arrears as a ground for possession not withstanding that the Tenant was subject to some form of insolvency procedure.

The Court determined that Landlords could bring proceedings relying on the rent arrears in the usual way if the ground could be made out then the insolvency of itself would not prevent the court making an Order for Possession in these circumstances. What the Court did say is that the Court could not make a monetary Judgment and nor could it suspend any Order on terms requiring the arrears to be paid.

Whilst often a Landlord may be best advised to rely on Section 21 if at all possible obviously this is not always available. Landlords will therefore still have the option of Section 8 proceedings.

Filed under: England & Wales, FLW Article, , , , , ,

10 October, 2011 • 13:39 3

Ground 14

Most of you will have heard about the coalition governments crack down on anti social behaviour especially in light of the recent rioting and looting. However, the coalition government is taking it that one step too far, in our humble opinion, and suggesting that those that are convicted of anti social behaviour should be evicted from rented accommodation even where the anti social behaviour has nothing to do with the rented property.

In August 2011 the Department for Communities and Local Government released its consultation on “A new mandatory power of possession for anti-social behaviour.” The consultation is aimed at making Ground 14 of Schedule II of the Housing Act 1988 a mandatory ground for possession.

Looking at the consultation itself statements that should be noted are:

“It is clearly right that eviction for anti-social behaviour should remain exceptional: the loss of one’s home is a serious sanction and eviction may simply displace the problem elsewhere rather than providing a long term solution.”

“But where landlords turn to possession as a last resort in order to provide respite to communities and as a serious sanction against perpetrators that process can take too long”.

“Most importantly though lengthy possession proceedings mean that the suffering of victims is further extended”.

“….serious anti-social behaviour and criminality beyond the immediate neighbourhood of the property can clearly be taken into account”.

The consultation then asks those that wish to respond to consider the following questions:

1. Do you agree that we should extend the scope of the current discretionary ground for possession for anti-social behaviour and criminality in this way?
2. Do you agree that we should construct a new mandatory power of possession in this way?
3. Are these the right principles which should underpin a mandatory power of possession for anti-social behaviour?
4. Have we defined the basis for the new mandatory power correctly? If not, how could we improve the definition?
5. As a landlord would you anticipate seeking possession using the mandatory power in some or all of the instances where this would be available?
6. Are there other issues related the introduction of a mandatory power for possession for anti-social behaviour that we should consider?

So how to respond in a rational and clearly though out manner, difficult, but here goes.

If Ground 14 is made mandatory both social and private landlords will be allowed to issue possession proceedings not only where the tenant is convicted for anti-social or criminal behaviour but also if the occupier or a visitor of the tenant has such a conviction. So will this lead to problems with the convicted father visiting his children? Does this contradict one of the coalition government’s aims, to promote family life, I think so.

Its quite clear that this consultation is in response to the riots in August and that there was as much though put behind it as Teresa May’s statement about the Right to Family Life and the cat. But whilst the consultation appears to recognise that the court process is too long it makes no reference to why that is and no reference to how that should be improved. Even where landlords have mandatory grounds for rent arrears the process can take too long with agents and landlords taking their frustrations out on us poor, overworked lawyers (its true!).

One has to wonder however with the current housing shortage and the problems that were recognised with the younger generation following the rioting whether moving people on is really the best we can do. We live by the principle that “if you do the crime you must serve the time” but after that time people are entitled to get on with their lives because this justice system promotes the right to rehabilitation. It is obviously very difficult for some to accept this especially where they have been victims of a serious crime but this consultation is not promoting re-habilitation it is promoting ostracising certain sections of the community which can lead to an increase in crime and looting.

This cycle must end and housing, communities and the court system needs investing. Under Ground 14 it is possible to get possession where the tenants are a nuisance in our experience and this is simply going too far.

Filed under: England & Wales, FLW Article, , , , ,

6 September, 2011 • 17:36 5

Squatters

On the 2 September 2011 Judge Fiona Henderson ordered Camden City Council to comply with a freedom of information request made by a member of the Advisory Service for Squatters. Judge Henderson when making the order stated that it was in the public interest to release the information, adding that there was a strong public interest in bringing empty properties into use, that squatting not was itself a crime and there was not a direct link between squatting and crime.

The council has 28 days (29 September) to comply with the Information Tribunal.

In response Mr Grant Shapps the Housing Minister, said rather than trying to prevent the anti-social and unfair practice of squatting, this judge is instead insisting that Camden City Council publish a ‘squatter’s road map’ – which in other areas has led to the numbers of squats doubling. I think this is madness, really. It’s clearly opposite to the expressed direction of [Government] policy.”

The Government has a £100 million fund to help councils bring empty homes back into use. About 80,000 homes are vacant across the capital, many of them under local authority control. Mr Shapps said: “I also want to shut the door on so-called ‘squatter’s rights’ once and for all, and end the misery, expense and hassle that far too many people have had to endure for too long, which is why we are consulting on making squatting a criminal offence.”

We have at PainSmith noted that squatting appears to be on the increase where landlords and even tenants have gone away on holiday. Obtaining a possession order can take a few weeks and as such precautions should be taken which could include hiring a house sitter or even having a friend visit your home every so often. If however squatters do get in and they refuse to leave upon a reasonable request then proceedings should be initiated.

Reasonable force is only an option for a Protected Intending Occupier, that is a tenant under the Rent Act 1977 or Housing Act 1988 and Displaced Residential Occupiers that is homeowners who are being prevented from occupying the property by squatters. For anyone else, including landlords, force is simply not an option despite what you might read elsewhere!

Filed under: England & Wales, FLW Article, , , ,

1 August, 2011 • 13:43 0

Houseboats

In Mew and Just v Tristmire Limited the leaseholder obtained possession orders upon the expiry of 2 notices to quit.

Mew and Just lived in houseboats which were located in a rectangular shaped plot around the edge of a harbour. The houseboats are converted landing craft which were constructed locally during the Second World War. They were subsequently modified and made water tight and habitable. They were once capable of floating but now rest on wooden platforms which are supported by wooden piles driven and cemented into the bed of the harbour. Services such as water, gas and electricity were connected but they could also be easily disconnected.

An expert giving evidence at court confirmed that generally houseboats can be removed by crane and then floated to a new location however in this case given the age and condition, if the houseboats were moved they would be probably be damaged or destroyed.

When Mew and Just purchased the houseboats they did not purchase the plot that the houseboats were situated in, they were owned by Tristmire who served a number of notices to quit and section 13 notices to raise the rent. However Mew and Just claimed that they were not licensees of the plots but assured tenants under the Housing Act 1988 and as such the notices were invalid.

The argument put to the court by Mew and Just was that the houseboats have a degree of permanence so as to make them part of the plot and cannot now be removed without their disintegration. That even if they were in good repair they were just like houses on stilts which are not intended to be removed.

But the court found for Tristmire and held that that the houseboats remained essentially boats, albeit adapted for residential use. They were constructed elsewhere and placed in the plot and did not as such form part of the realty and therefore remain as chattels. The court compared the houseboats to caravans, which as designed, are moveable.

Therefore because the houseboats did not become affixed to the land Mew and Just could not become assured tenants and were indeed licensees and the notices were therefore valid.

We often get asked whether ASTs can be granted for houseboats and it is a grey area as confirmed above. It is the degree of permanency that is relevant and this detail needs to be obtained before any decision is made.

Filed under: England & Wales, FLW Article, , , ,

30 May, 2011 • 22:44 0

Not an AST?

In Kahlon v Isherwood the court held that a tenant that had a Assured Tenancy but agreed to the grant of an Assured Shorthold Tenancy as part of a settlement of court proceedings was, in fact, still an Assured Tenant.

Isherwood became a tenant in 1994. Since 2000 there had been 3 claims for possession due to rent arrears. On the third occasion the parties agreed to mediate and reached an amicable solution to Kahlon’s claim for arrears and Isherwood’s claim for disrepair. As part of this agreement Isherwood also agreed to sign a new Assured Shorthold tenancy for a period of 12 months and in return arrears of rent were written off.

The ‘new’ tenancy term began on the 2 June 2008. This agreement included a break clause at any time upon the expiry of 2 months notice. The ‘new’ tenancy did not have the same security of tenure as an assured tenancy where such notice would be ineffective as a means to end the tenancy.

On the 31 March 2009 Kahlon served notice on Isherwood to expire on the 2 June 2009. Upon the expiry of the notice possession proceedings were issued and Isherwood defended claiming he was an Assured tenant.

The county court rejected Isherwood’s defence and awarded Kahlon possession. Isherwood appealed.

The Court of Appeal held that when a tenant losses his security of tenure he must be fully aware of the effect of this change in status. That in this case Isherwood should have been served with a prescribed notice pursuant to section 20 and schedule 2A of the Housing Act 1988.  This notice has a prescribed form and must  include a warning of the legal consequences of becoming an Assured Shorthold tenant and this would have assisted Isherwood in making an informed decision about the change of status.

The court held that in the absence of this notice Isherwood was still an Assured tenant and set the order for possession aside.  The notice requirements were not negotiable and could not be waived by the court even where the original agreement which demoted the tenancy had been approved by the court.

Whilst the decision seems a little unfair on the landlord who wrote off a substantial amount of arrears as part of the mediation agreement the court made the only decision available to it. The legislation makes the process very clear and attempts to circumvent the procedure will fail.  Care should be taken when entering into any form of agreement to demote a tenancy from Assured to Assured Shorthold and advice should be sought.

Filed under: England & Wales, FLW Article, , , , ,

5 May, 2011 • 07:39 0

Changes to Court Procedures

The UK coalition government has published proposals to reform the way cases are handled in the county courts. In respect of housing litigation, the proposals include retaining the £1000 small claims limit to housing disrepair cases and the provisions of the protocol mandatory for rent arrears and mortgage possession cases.

The deadline for responses to the consultation is the 30 June 2011.

The protocol for rent arrears applies to social landlords, such as local authorities and housing associations, not to private landlords.

The protocol reflects the guidance on good practice given to social landlords and private registered providers in the collection of rent arrears. It recognises that it is in the interests of both landlords and tenants to ensure that rent is paid promptly and to ensure that difficulties are resolved wherever possible without court proceedings.

Its aim is to encourage more pre-action contact between landlords and tenants and to enable court time to be used more effectively. The protocol requires specifically for the landlords to contact a tenant as soon as possible after the tenant’s rent arrears accrue, to discuss the arrears, the tenant’s financial position and his or her entitlement to benefits.

The protocol no doubt leads to suspended possession orders in order to allow the tenant the opportunity to repay the arrears however, given the current problems we have with court backlogs this is a welcome consultation as it is hoped that it will assist with reducing the number of claims issued.

Filed under: England & Wales, FLW Article, , , , ,

11 April, 2011 • 09:46 7

To take Possession or not to take Possession

Landlords are commonly faced with a tenant’s disappearing act, most often as a result of the tenant being in financial difficulties. Although landlords instantly feel relieved by not facing an expensive and lengthy court procedure what beckons is the likelihood of entering into the unknown world of abandonment.

Some assistance is given under the provision of section 5 of the Housing Act 1988, which in summary confirms a tenancy only ends when a tenant voluntarily gives up possession or a Court Bailiff executes a possession order. For a surrender to be effective it must be unequivocal between the landlord and tenant. Surrender does not just take place because the tenant hands the keys back, there must also be some agreement by the landlord. Nor does the granting of a possession order in it self permit the landlord to take back possession. It is the execution of the possession order by a Court Bailiff that lawfully entitles the landlord to possession.

But this has little use when a tenant has absconded, unknown to the landlord whether the tenant will return or not. A wrong move may result in a landlord and their agent being faced with civil and/or criminal proceedings for unlawful eviction.

So what may constitute abandonment

This is not exhaustive and will depend on each individual case but some consideration should at least be given to the following before possession is taken:

• Are there rent arrears, in particularly most recently?
• Has the tenant removed his possessions?
• Has the tenant left food in the fridge that may have gone off?
• Has the tenant left post at the property?
• Ask the neighbours if they have seen the tenant or seen anything unusual?
• Has the tenant left all the keys in the property?

In addition to the above, a landlord will be strongly advised to serve what is often referred to as an Abandonment Notice. This provides a 14 day notice warning the tenant that if they fail to contact the landlord, possession will be taken. However, it must be noted that abandonment is not a legal procedure but a process of proving to the court in the event of a claim for unlawful eviction that all reasonable steps were taken before possession was taken back. This may prove to be a persuasive defence. If there are any doubts then a possession order should be sought.

Given the potential repercussions of abandonment, considerations must be given when dealing with these situations. In particular, agents should ensure a process is in place and landlords are fully advised before possession is taken back.

Filed under: England & Wales, FLW Article, , , ,

14 March, 2011 • 10:03 5

Article 8, the Tenant’s Human Rights.

We have been asked a few questions recently about a tenants right to remain in a property when there are rent arrears. We understand that some landlords and agents are concerned that tenants are defeating possession claims pursuant to Article 8 of the European Convention on Human Rights.
>
> The reason for this concern is probably due to the recent cases in the Supreme Court. In Hounslow LBC v Powell, Leeds CC v Hall and Birmingham CC v Frisby the Supreme Court held that where a local authority brings possession proceedings relying on mandatory grounds for possession any defence to the claim, can include the tenants entitlement to have the proportionality of his eviction assessed under Article 8.
>
> Given that these cases are concerned with social landlords as opposed to the private market, I will briefly explain the facts of the Powell case.
>
> Mrs Powell fell into arrears and upon serving her with a notice to quit, Hounslow County Council issued possession proceedings. Mrs Powell admitted that there were rent arrears but then also averred that the reason for the arrears was due to the delays and errors made by Hounslow in processing the benefit claim.
>
> Hounslow has since offered Powell suitable accommodation.
>
> The reason for this article is to reassure those landlords that believe that tenants who are on benefits have rights to the property beyond that provided for in the Housing Act 1988.
>
> The cases have one thing in common that is local councils who are subject to the test of proportionality when they apply for possession. This test of proportionality is not expected to be relevant in the private sector as that would prevent landlords from managing their own property in the manner they see fit within the parameters of the Housing Act 1988.

Filed under: England & Wales, England only, , , ,

4 November, 2010 • 12:38 0

Possession Proceedings and Human Rights

The Supreme Court has recently handed down its decision in Manchester City Council v Pinnock.

This case concerns whether it is appropriate for a Court to consider Article 8 of the European Convention on Human Rights when making a possession order.

Article 8 guarantees respect for private and family life (including respect for the home) and prevents interference with this by the state except in accordance with the law and only as “necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

While Article 8 cannot apply to private landlords as they are not organs of the state the Courts most certainly are and they are therefore bound by it. Accordingly the decision in Pinnock may be relevant to the private sector even though the Supreme Court took care to state that nothing in their decision “is intended to bear on cases where the person seeking the order for possession is a private landowner”.

So the decision of the Supreme Court is that Article 8 should be taken into account by Courts when dealing with possession actions by local authorities although they stress that it is only in the most exceptional cases where Article 8 would actually have the effect of preventing possession where the domestic law allowed for it. They have not ruled in relation to private landlords and are conscious of the impact of Article 1 of the First Protocol (which prevents deprivation of a person’s possessions except in accordance with law designed to protect the general interest) but this does not mean that they would not rule that Article 8 applied to private landlords if the matter came before them.

This is a worrying development for private landlords. It is undoubtedly the case that consideration will be given by some tenants to advancing an article 8 defence. More particularly it opens up questions about the use of the Accelerated Possession process for section 21 notices and their equivalents in Scotland and Northern Ireland and particularly about the use of section 21 notices in a ‘retaliatory’ manner where the tenant has complained about disrepair etc.

The battleground for 2011 may just have been set out.

Filed under: England & Wales, FLW Article, Northern Ireland, Scotland, ,

5 November, 2009 • 12:42 0

When is a Trial Not a Trial……

When it is a hearing of course! The recent case of Forcelux v Binnie in the Court of Appeal reviewed the status of initial hearings under part 55 of the Civil Procedure Rules, which govern possession actions. It seems that the first hearing before a Court is not a trial even though a possession order may be awarded and it may be the only hearing.

The key upshot of this is that it is far easier for a tenant to apply to set aside any possession order made at such a hearing where it has been made in his absence. This is because any attempt to set aside a decision made at trial can only be made by application under rule 39.3(3) and this requires that the party seeking for the order to be set aside must show:
1. He acted promptly;
2. He had good reason for his non-attendance; and
3. He has reasonable prospects of success at an re-trial.
This can be hard to do and therefore has the effect of preventing many re-hearings of matters where the defendant was not at the original trial. However, as the first hearing of a matter under CPR 55 is not a trial CPR 39.3(3) does not apply and the Court power to set aside the hearing is provided by CPR 3.1(2)(m). This does not require prompt action or the Defendant to show that they have reasonable prospects of success but merely requires a the Court to be persuaded that justice will not be done without a proper hearing.

In practice, this means that many more Defendants may have the opportunity to apply to the Court to set aside possession orders where they can show that the overriding objective of fairness will be best served by doing so. Agents and landlords should be aware that this may allow unscrupulous tenants to delay possession further and should also be aware that simply proceeding to a hearing without the presence of the tenant may not be the ideal situation that it may first appear to be.

Filed under: Uncategorized, , ,

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