Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Recoverability of Money Paid in Relation to Unfair Terms

There is a certain amount of interest recently in the ability to recover monies paid in respect of terms in agreements, which have later been found to be unfair. This has been a live issue in respect of the aftermath of the case of Office of Fair Trading v Foxtons as well as the Office of Fair Trading v Abbey National & Others.

Given the decision of the High Court in OFT v Foxtons, there has been understandable interest in the ability of landlords to recover money in respect of agents’ renewal commission charges where those charges might be unfair.

The first thing to point out is that a finding of unfairness does not make a contract void. Under regulation 8(1) of he Unfair Terms in Consumer Contract Regulations 1999 a term that is unfair is deemed to be unenforceable. Regulation 8(2) clarifies that the making of a single clause unenforceable does not make the contract non-binding provided it can still operate shorn of the unfair clause.

It is accepted law that where a whole contract is void due to a mistake or other problem then there is a total failure of consideration and therefore all payments made can be recovered. Where a contract is rendered void by statute then it will depend on the actual statute whether there is a right to recover monies paid. However, none of this has any relevance to unfair terms matters as nothing in the regulations renders a contract void but merely makes certain clauses within it unenforceable.

Where a contract is unenforceable, and presumably where it contains unenforceable terms, there is no right to recover monies paid unless a total failure of consideration can be shown. Where a degree of service has been provided this is unlikely to be the case.

Therefore a declaration of unfairness, while it will make a clause unenforceable and will certainly therefore prevent further monies being claimed in reliance on it will not necessarily give rise to a right to recover money. It would be necessary to show that the entire contract was unfair and therefore that there had been a total failure of consideration to achieve this.

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

Lettings EPCs and HIPs

Further to our post yesterday on the suspension of HIPs and the amendments to the EPC regulations, the amendment has now been published on the OPSI website.

From an examination of the amendment regulations it can be seen that the main change is an insertion of a new regulation 5A into the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007. The new regulation 5A simply states that where a property is being sold and it doesnot have a valid EPC one must be commissioned before it is put on the market.

The amendement regulations make no change to regulation 5 of the original EPC regulations which require let properties to have an EPC available to show a tenant at the time that written particulars are provided or the property is shown, whichever is th earlier.

Therefore, the HIPs amendement will have absolutely no effect on the rental market.

Filed under: England & Wales, ,

HIPs Suspension and Lettings EPCs

The DCLG has today announced that it is suspending the operation of Home Information Packs from immediate effect.

It should be noted that there are no plans (and the Government has no power) to suspend EPCs. The announcement states that a new statutory instrument called the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2010 will be introduced to amend the EPC regulations to require vendors to have instructed an EPC before commencing marketing. Unfortunately, this regulation is not yet available and until it is made available there is no answer to whether this will alter the position on EPCs for letting of residential property.

However, there is no reason to think that this will affect residential lettings in any manner and agents are advised to obtain EPCs before showing property or providing written details as they should have been doing all along.

Filed under: England & Wales, ,

ASTs and Security of Tenure after 1 October

It has come to our attention that some landlord and tenant advisors are suggesting to agents and landlords that tenancies which convert to ASTs on 1 October 2010 will not be able to be terminated under s21 of the Housing Act 1988 until 6 months after that date, ie not before 1 April 2011.

This is simply not correct and is based on a misunderstanding of the wording of section 21.

S21(5) states that a possession order cannot be made until “six months after the beginning of the tenancy”. The error is assuming that tenancies which convert to ASTs on 1 October start from that date. Tenancies which have converted on 1 October are not new tenancies starting from that date. They are new tenancies from their original date of inception which have simply fallen under the statutory control of the Housing Act 1988 from 1 October. Therefore the 6 months for the purpose of s21(5) starts from the original start date of the tenancy and not from 1 October.

Filed under: England & Wales,

Additional and Selective Licensing Consent

Following on from our previous post on the plan to give a blanket consent to all local housing authorities in England to operate Additional and Selective licensing schemes. It seemed that this had been put to one side in the consultation response from the DCLG and no further announcement has been made.

However, this firm has been told by contacts within some local authorities that the blanket consent has actually been granted and that they are free to carry through discretionary HMO and landlord licensing schemes provided that they are satisfied that the legal requirements for such a scheme have been met. We are informed that several local authorities will now be carrying such schemes forward.

This is very surprising as there has been no announcement from the DCLG. Hopefully they will now clarify the position.

UPDATE- With thanks to Mark we have now obtained a copy of the blanket consent authorisation signed by the Housing Minister an a copy can be downloaded here.

Filed under: England only, , ,

The Election and Potential Changes to Housing Policy

Now that there is some information as to the complexion of a new Government a number of people are wondering how this will affect Housing policy.

The new Communities Secretary is Eric Pickles, the Conservative part Deputy Chairman but the new Housing Minister has yet to be announced and it is also unclear as to which of the coalition partners he or she will belong. The two front runner must presumably by Grant Shapps, the Conservative former-Shadow Housing Minster, and Sarah Teather, the Liberal Democrat Housing Spokesman.

Particular interest will be attached to the proposed change in the maximum rent threshold in the Housing Act 1988 which is due to come into force on 1 October, the new HMO planning class which was introduced on 6 April and which David Cameron stated he would repeal, the devolving of Housing competencies to the Welsh Assembly which was a casualty of the sweeping up period prior to the election, and the proposals to regulate lettings agents and create a national landlord register which were supported to some extent by all parties but which may be put on the backburner due to a desire not to spend any money.

At the moment nothing has been said about any of these matters and we will all simply have to wait and see.

UPDATE: A press release on the DCLG website states that Eric Pickles will be asking the new Housing Minister (when they are appointed) to look again at the various schemes to assist homeowners in avoiding mortgage repossession.

UPDATE: Sarah Teather has been appointed to a junior ministerial post elsewhere and twitter states that Grant Shapps is to join Eric Pickles team so it seems likely that Mr Shapps will be the new Housing Minister.

Filed under: England & Wales

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Filed under: England & Wales


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