Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Oxford, again….

We have been provided with a copy of a letter that Oxford City Council is distributing to relevant parties in the lettings industry.

As regular readers will know, the Labour government amended the planning use classes in April 2010 to limit the C3 use class and created a C4 use class for HMOs’. We reported on this here.

After the election the new coalition government amended the General Permitted Development Order to allow movement between the C3 and C4 classes. This was reported here.

Local Authorities can opt out of the GPDO by making an Article 4 Direction and requiring planning permission to switch from C3 to C4 use. Oxford is stating that they have a shortage of housing and a high demand for HMO accommodation. This might appear to be inconsistent with a policy of increased planning control but Oxford justify the policy by stating that there is a shortage in all types of accommodation and that wholesale conversion to HMOs in all areas means that other areas are not satisfied. However, Planning Policy Statement 3 requires local authorities to adopt planning policies that provide sufficient living accommodation for all types of use. It will be for Oxford to show that their new restrictions on HMO accommodation do not violate this policy statement.

Finally, there is some doubt as to whether Oxford’s article 4 Direction will actually matter. As we explained in this post the fact that a property use moves from one use class to another does not automatically mean it is a material change of use, which requires planning permission.

It should also be noted that Oxford is not permitted to charge a planning application fee for applications made as a result of an Article 4 Direction and one possible way of frustrating the proposals is simply for a large number of landlords to make applications thereby tying up resources.

Thank you to Mark at College and County

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

Breaking Out!

In MW Trustees Limited and Others v Telular Corporation, the landlords sought a declaration that the tenants had failed to effectively serve a notice to terminate pursuant to a break clause.

The break clause read as follows:

If the Tenant shall wish to terminate this Lease on the Break Date [i.e. 1st March 2010] and shall give to the Landlord not less than six months [notice] in writing to do so and up to the Break Date the Tenant has paid all the Rent and other sums due under this Lease, then on the Break Date this Lease shall cease and determine, but without prejudice to any claims which either party may have against the other for breaches of the covenants and conditions of this Lease occurring prior to the Break Date.

The service provisions in the lease were:

Any notice to be served by any party to this Lease must be given in writing and shall be valid only if:-
(a) It is sent by special delivery post or delivered by hand.
(b) It is sent:
(i) To a company, at the registered office of the company
(ii) Where the receiving party is not a company, at the address shown in this Lease or such other address as that party may notify to the other parties from time to time.
(iii) in the case to the Tenant only, to the premises.


Clause 8.7.2 provided that service of any notice will be deemed to be effected:-
(a) By hand, at the time of delivery, or if delivered after 4pm on a working day, on the next working day
(b) By special delivery post, on the expiry of 2 days from delivery into the custody of the postal service.

There had been a change in the landlord and notice of the change had been accordingly served. However despite the notice of change the tenants served the notice to terminate on the previous landlord. The notice, sent by special delivery, read

this letter is to inform that Telular Corporation wishes to exercise its right to terminate its lease according to section 8.8.1 of our lease for the [premises] …… on the Break Date of March 1, 2010. If Telular Corporation is required to submit any additional information to secure this Break Date lease termination, please do not hesitate to contact me…..

Following an exchange of emails the tenant discovered that the notice had been sent to the wrong party and emailed the managing agent informing them of the wish to terminate the lease. The managing agent on behalf of the landlord responded stating:

Dear Ms Voltz We accept the attached letter and can confirm we are happy for you to break the Lease, however please could you re-address this letter to the following address:- Posel Trust MW House 1 Penman Way Grove Park Enderby Leicester LE19 1SY. I look forward to hearing from you soon….

The court concluded that the landlords by their actions knew full well the tenants intended to terminate the Lease and that the managing agent on their behalf accepted the notice to terminate the lease. The court held that in sending the email in the form that the managing agent did, he represented that this was the Claimants’ position and accordingly they were prevented from subsequently challenging the validity of the Notice or alternatively they had waived the requirement for the Notice to be served in the way specified in the Lease.

The court therefore held that the tenants have plainly acted on the basis that there was no issue and that it had served an effective Notice. The landlord’s application was accordingly refused.

This case emphasises the importance of reading the lease and ensuring that you are familiar with the file before undertaking any work on behalf of a client. It also makes clear that agents should be very cautious before acknowledging break and option notices lest they prejudice their client’s position.

Filed under: England & Wales, FLW Article, ,

More Safety Legislation?

The Fire Safety (Protection of Tenants) Bill is currently before Parliament. It’s objective is to ensure that all rented residential properties have a fire detection system which complies with modern standards. This means that all landlords will be required to install a mains operated battery backed smoke alarm before the tenancy agreement is signed.

If the legislation is passed the tenant will be required to test the smoke alarm at least once a month and notify the landlord of any defects, who will then be required to carry out the repairs.

Where a landlord fails to comply with the legislation commits an offence with a sentence of 12 months in prison and or a fine of £5,000 or for more serious offences up to two years in prison and or a fine.

The bill is in its very preliminary stages and because it is not directly supported by the government it is extremely unlikely to be made law. There will also be a need for secondary legislation to be created to pass enforcement powers to local authorities. This means that enforcement will probably be by trading standards or environmental health officers as is the case with EPCs or HMOs. Given the substantial pressure on local authority budgets this new challenge is unlikely to be welcomed.

Filed under: England & Wales, FLW Article, ,

Meanwhile back at Deposit protection HQ….

While we await the outcome of Potts v Densley & Pays in the High Court, followers of deposit protection litigation might be interested in a case with similar facts to Potts, but a different outcome in the county court.

Gemma Shepley v Majid Yassen, Tameside County Court, Thursday 13th January 2011 (Unreported), has been spotted and commented on by Nearly Legal.

To recap, in Potts v Densley & Pays the main issue is, can the tenant sue for the usual penalties where the landlord has protected the deposit after the end of the tenancy but before the court hearing and failed to provide the prescribed information?

The Shepley v Yassen facts mirror Potts: the deposit was not protected during the tenancy, and after the end of the tenancy the tenants issued proceedings (in May 2010) for the usual remedies. The deposit was protected in August 2010 with DPS. But the prescribed information was never served on the tenants.

The (County) court held that protection after the end of the tenancy was not acceptable. The cases of Draycott and Tiensia were distinguished on the basis that in those cases the deposits had been protected late but had still been placed into schemes before the tenancy ended.

NL comments that this “seems to be absolutely correct. If a landlord can put the deposit into protection after the tenancy has ended then it makes a total nonsense of the legislation and almost encourages a “wait and see” attitude.”

Painsmith agrees. Currently no-one is sure of their position when a deposit is protected after the end of the tenancy and this is disconcerting for both landlords and tenants. With the Potts v Densley & Pays judgment still not handed down, landlords, tenants and lawyers are indeed having to wait and see, whether we want to or not. A High Court decision that deposits cannot be protected after the end of the tenancy would be welcomed.

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

Consultation Works

Where landlords of long leases (more than 21 years) wish to carry out works they must consult the leaseholders before they are entitled to a contribution towards these works. If the consultation process is not followed pursuant to s.20 Landlord and Tenant Act 1985 the landlord’s ability to recover monies is capped at £250 per leaseholder. The landlords can apply for a dispensation from these consultation requirements however this is subject to the LVT’s approval.

In Daejan Investments Ltd v Benson and others, Daejan sought to recover some £270,000 of service charges from five leaseholders in respect of the works to the common parts of the building containing their flats. However, unfortunately for Daejan, the LVT found that that it had failed to comply with the consultation requirements.

Specifically the LVT held that Daejan failed to:

1. set out a summary of the observations received and the landlord’s response to the initial notice;

2. ensure that the estimates were available for inspection at a place for the period specified in the notice;

3. give 30 days to enable leaseholders to make observations on the estimates.

The LVT held that it would be wrong to grant the landlord dispensation from the consultation requirements because it considered that the leaseholders had been prejudiced by not seeing the full estimates and having a shortened opportunity to make observations. This is despite the fact that the leaseholders had not identified what comments they would make, if any, if given the opportunity. Daejan appealed to the Upper Tribunal (Lands Chamber).

The Upper Tribunal dismissed the appeal and held that the LVT had to focus on the scheme and the purpose of the consultation requirements and any financial prejudice to the Landlord was irrelevant. However, the Tribunal confirmed that the extent to which the leaseholders were prejudiced or disadvantaged was relevant and a common sense approach should be applied when making any findings.

Daejan appealed unsuccessfully to the Court of Appeal. The Court of Appeal reiterated most of what was said by the LVT and emphasised that following the consultation process in the proper manner was the essence of the statutory scheme and curtailing consultation was a serious failing that could cause significant prejudice.

Whether or not and in what circumstances the LVT will grant dispensation, retrospectively or otherwise, is not clear following this judgment. However, where there has been no prejudice to the leaseholder due to a minor breach or where works have been carried out in a genuine emergency dispensation may be possible.

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

A rise in dangerous homes?

A BBC report over the weekend cast a gloomy and critical eye over the private rental sector, based on a report from the Chartered Institute of Environmental Health (CIEH). The report says that “One million rented homes in England ‘are dangerous’”, further adding that the number will rise because of changes in housing benefit and legal aid.

However, the government has abandoned any plans for a national landlord register, and has believed that too much red tape will be worse, not better for tenants. (See Grant Shapps’ comments).

Legislative protection of the health and safety of tenants exists in plenty. In addition to the landlords repairing obligations under the LTA 1985, any agent will be aware of the powers of local authorities to enforce standards under the HHSRS: for example there is no legal obligation on a landlord to take away polystyrene tiles or to put a banister on stairs – but an environmental health officer and local authority has the power to insist this is done. Such powers exist in respect of owner-occupiers too.

Further we have had agents report to us that despite the fact that it is compulsory for EPC ratings to be included in written information given to prospective tenants, some local authorities have advised that they are not acting where this is not done.

To predict a future of rogue landlords rampaging over the rights of tenants living in derelict properties is to ignore the hard work and the substantial self-regulation that landlord groups, bodies like NFOPP and NALS and many landlords and agents themselves, as well as local authorities, put in to make sure that people get decent affordable housing. The CIEH itself reports on how local authority initiatives are helping to raise standards in housing.

The large number of the queries we get to our helpline service regarding health and safety and repairing obligations is testimony to the fact that agents and landlords do want to know their obligations and seek to uphold them.

Painsmith has blogged extensively on disrepair, the HHSRS, EPCs and the private rental sector.

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

Potts –v- Densley & Pays Update

As advised on the 4th February 2011, PainSmith attended the hearing at the High Court today.

There were 3 issues considered by the court, 2 of which were subsidiary and therefore not relevant for the purposes of this blog.

The main issue before the court was, can the tenant sue for the usual penalties where the landlord has protected the deposit after the end of the tenancy, albeit before the court hearing.

The judgment has been reserved but we hope that the court will hand it down in late March and obviously we will publish the decision as soon as we receive it on this blog.

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

Releasing the deposit after an order for possession

We sometimes get asked about the apparent arbitrariness of judges when it comes to ordering the release of the deposit when making an order for possession based on rental arrears. Some judges make orders along the lines of “All or any deposit monies paid by the Defendant to the Claimant be credited to and set off against judgment debt together with any costs outstanding”. Others refuse to deal with the deposit at all and say that it is a matter for the relevant deposit protection scheme despite the landlord/landlord’s representatives making submissions requesting an order such as the above.

The fact that the judge does not make reference to the deposit in the order does not stop the landlord from claiming the deposit as payment towards any judgment for arrears, interest and legal costs obtained, however you will have to follow the prescribed process that is required under the rules for each scheme. For example, the DPS requires landlords to make a single claim and obtain a statutory declaration before they agree to the release of the money to the landlord. It is therefore important for agents to familiarise themselves with the rules of the scheme that they are registered with when advising landlords on how to proceed.

You can view all our posts on deposits by following this link.

Filed under: England & Wales, FLW Article, ,

Tenancy Deposit Protection- A Further Binding Decision

On Wednesday 9th February 2011 PainSmith has a case appearing in the High Court which should provide a further binding decision on Tenancy Deposit Protection under the Housing Act 2004.

In Potts –v- Densley & Pays there are two issues for the Court to consider:

1. Whether the trial judge had made the wrong decision in refusing to award the penalty pursuant to s214 of the Housing Act 2004 for three times the value of the deposit despite having found that the Landlord had breached s213 by failing to lodge the deposit with a deposit scheme.

2. Whether the prescribed information required to be given to the tenant pursuant to s213 (5) and s213 (6) of the Act had been complied with in these particular circumstances.

This case relates to the registration of the deposit post the expiration of the tenancy and PainSmith is acting for the Claimant. Although it is unlikely that we will receive a decision on the 9th February it will no doubt be reported on this blog as soon as we receive it.

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

Domestic violence and homelessness

Under Section 177 (1) of the Housing Act 1996, victims of domestic violence are automatically treated as homeless and must be re-housed by the local council as a priority. A case reported last week examined the definition of domestic violence.

In Yemshaw v London Borough of Hounslow [2011] UKSC 3, Lady Hale considered other definitions in use by local and national government and found that that there had been a huge shift in the understanding of domestic violence since the Act came out in 1996.

This case involved a mother, who left her council house and took her children with her. Hounslow council refused to accept her as a priority homeless person because she had not suffered any physical violence or threats of violence. Yemshaw had confirmed that she feared her husbands’ reaction if she confronted him about a possible affair and also stated that her husband denied her money.

Lady Hale commented that the definition of domestic violence had widened since 1996 and should be interpreted in the same way as in family matters, that is, “threatening or intimidating behaviour and any other form of abuse which, directly or indirectly may give rise to the risk of harm” and should include the locking of someone in a house and even depriving them of food and money.

Following the ruling Hounslow council said that the decision by the Supreme Court had widened the criteria significantly and raised questions for all local authorities when dealing with homelessness. The council said however, that in light of this decision it would change its policy to ensure that victims of domestic violence are treated as priority in situations such as these.

As the net catching incidents of domestic violence for the purposes of homelessness has been widened, obliging local authorities to more fully consider the circumstances in which applicants approach them, we would repeat the comments of Mrs Yemshaw’s solicitors and hope that although each case would be considered on its merits a hidden group of victims might now be able to come forward allowing lots of women to get away from abusive relationships.

Filed under: England & Wales,

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