Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Hey Oxford!

As many of our readers will be aware Oxford City Council has now launched it’s scheme to license every HMO within it’s jurisdiction. The primary rationale behind this was the need to deal with poor management of properties within Oxford.

In February, shortly after the new scheme was introduced, Oxford prosecuted Oxford Letting and Property Management Ltd for failing to manage a HMO property.

Oxford was alerted by a tenant of a property to a series of breaches of the HMO Management regulations, including:

  • Failing to repair common parts;
  • Failing to repair damaged windows;
  • Failing to ensure that the means of escape from fire was kept in repair; and
  • Failing to repair damaged kitchen units and worktops.

The agent pleaded guilty to offences under the HMO Management regulations and was fined £2000 with an additional award for costs of some £910.

Whilst the agent recognised the various breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006 and pleaded guilty accordingly the matter will not end there. Oxford will now be considering whether the agent is suitable to mange licensable HMOs. While we do not condone the agent’s failure to manage the property appropriately this is a very severe response which could destroy the agent’s business and is a hard lesson to learn.

Agent’s must not forget that they are directly liable for HMO property under the HMO Management regulations. If a landlord refuses to make necessary repairs to a property the agent will not be able to hide behind their status as the landlord’s proxy in order to avoid prosecution.

Filed under: England & Wales, FLW Article, ,

Where does the liability for water usage lie?

The Flood and Water Management Act 2010 is expected to come into force in October 2011. Section 45 of the Act amends the Water Industry Act 1991 to place an obligation on the Landlord to provide the tenant’s contact details to the relevant water company. The rationale behind this is to prevent tenant’s departing properties without providing water companies with appropriate forwarding addresses and leaving unpaid bills. Should the landlord fail to comply with this provision he will become jointly and severally liable the invoices of the water usage at the rented property.

The supplemental regulations that the government has created to bring the provisions into force are still in draft. However we understand that they will require the water companies to set up appropriate websites for landlords to provide the necessary information.

These changes place a significant new obligation on landlords. It also gives the water companies a substantial benefit over other utility providers who do not have the benefit of this kind of statutory protection. Landlords and agents should consider amending their tenancy agreements to specify that tenants must provide evidence of the water bill being paid to date otherwise it will be deducted from the deposit.

Filed under: England & Wales, FLW Article, ,

Census in England

I am sure that many of you are looking forward to completing the Census form over the weekend, what else would you do on a spring weekend!? However we understand that there is some concern over whether landlords or agents are required to do so for unoccupied properties.

It is the householders of a property that are compelled by law to complete the census questionnaire. Landlords have no such legal obligation but they are encouraged to do so.

The census is used to understand the population and to plan for the future for such things as healthcare therefore it is the landlords choice to complete one form or two.

Filed under: England & Wales, England only, ,

Making better use of Energy Performance Certificates and data.

On 2nd March 2011 the Department for Communities and Local Government released a publication detailing consultations on the effectiveness of EPCs in a number of areas.

The Climate Change Act 2008 commits the UK to a statutory target to reduce its carbon emissions. With the UK dedicated to reducing its emissions by 80% in 2050 any strategy that assists with this target is going to be welcome. The EPC provides vital information on the energy efficiency of buildings which allows the government to assess whether we are on the way to the target reduction.

Therefore the consultation is aimed at improving the effectiveness of the EPC with a view to making better use of the energy performance data.

The consultation while wanting to improve and enhance the use of the EPC it is also looking to extend the scope of the requirement to include:

Houses in Multiple Occupation (HMO)
At present the law does not require EPCs to be produced when rooms are rented out in a HMO property however, the recommendation is for EPCs of the whole property to be made available to prospective tenants. This will ensure that from the outset when the first room is let the Tenant will have access to a valid EPC of the whole building. As a valid EPC lasts 10 years the obligation on the Landlord is unlikely to be considered onerous.

Short Term Holiday Lets
At present EPCs are not required for short term holiday lets as people renting a holiday home for a short period of time would be unlikely to consider energy efficiency when selecting a property. However the DCLG proposes that EPCs should be required if holiday lets are rented out for a combined total of four months or more in one year. This ensures that properties rented for less than four months are still immune from the requirement.

Extension of Display Energy Certificates to a Commercial Building
A Display Energy Certificate is like an EPC except it records the actual energy consumption of that building up to a period of three years. The recorded energy consumption must then be displayed as a certificate in a similar format to an EPC. Currently they are only required for public buildings larger than 1,000m2 and are required to show how efficiently the building is operated. The Certificate is accompanied by an Advisory Report which sets out three levels of cost-effective improvements which can improve the building’s efficiency.

Given that commercial property is responsible for 18% of carbon emissions in the UK the proposal to extend DECs to commercial properties is an attractive one. Current government plans aim to reduce the floor area in public buildings to 250m2 and it is hoped that the DCLG proposals to initially pilot the scheme voluntarily to commercial buildings will be taken up.

Finally the DCLG is also looking to clarifiy when an EPC is required on the sale or letting of building. The DCLG has put forward a proposal to amend Regulation 5(2) of the 2007 Regulations making it clear that the Regulations require Landlords to make an EPC available to a prospective tenant as soon as they request either information about or to view a building, and they further seek to remove the opportunity for Landlords to defer making an EPC available until contracts are exchanged on sales. The amendment is not a complete rewording of the regulation but clarification that Landlords must make an EPC available at the earliest opportunity.

Whether you like or dislike the introduction of the EPC, buildings account for 50% of the UKs carbon emissions and a reduction is needed.

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

Documents

The new Assured Shorthold Tenancy Agreement is available to buy at the PainSmith Shop. The AST is fully up to date with the new clauses prescribed by the TDS (as set out in the document TDSG). The changes come into force on the 6th April.

Whilst there are quite a few changes to the TDS rules, you are advised that the change to the agreement is simply one sentence.

Filed under: England & Wales

Cancellation Notice

In a recent case in Watford County Court an agent sought his commission for the successful sale of a property in October 2009.

The Defendant defended the claim on the basis that no Cancellation
Notice in the prescribed form pursuant to the Cancellation of Contracts in a Consumer’s home or Place of Work etc Regulations 2008 had been served.

In response to this defence the agent was relying on schedule 3 of the Regulations which excludes certain contracts from the Regulations. One such contract is for the sale or rental of immovable property.

However, the court held that the contract entered into by the parties was not a contract for the sale or rental of immovable property but one of marketing and as such schedule 3 did not apply.

The court also held that this was a commission contract and therefore caught by the Regulations. Therefore where no Cancellation Notice had been provided then pursuant to clause 7(6) the contract is unenforceable.

The agent’s case was dismissed.

Thank you to Mr Kennedy who brought this case to our attention.

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

Unlawful Eviction

We very rarely get asked questions about the possible consequences of an unlawful eviction where there has been violence. This is possibly a good thing or possibly a situation that agents stay clear of.

However, some recent cases have prompted this article only to provide some guidance to those that face such a situation.

In Boyle v Musso, Mr Boyle, began withholding rent due to some disrepair at the property. Rather than carrying out the repairs pursuant to the landlords section 11 repairing obligations, the landlord attended the property with another man and assaulted Mr Boyle.

The landlord was convicted of assault occasioning actual bodily harm and upon failing to reply to Mr Boyle’s civil claim for unlawful eviction also had a default judgement entered against him.

The judge noted that Mr Boyle had healed relatively quickly but he was left suffering from depression and panic attacks. The judge therefore found that Mr Boyle was left with serious and debilitating continuing anxiety as a result of the attack and awarded:

£15,000 for trespass to the person, to include injury to feelings;
£2,000 damages for finding that the dispute was for withholding rent;
£4,000 for breach of the quite enjoyment covenant;
£750 for loss of belongings;
and then finally the return of the deposit and three times the amount of the deposit for failing to register it with a tenancy deposit scheme.

In Strydom v Fowler, Mr Fowler fell into rent arrears. His landlord issued possession proceedings but while Mr Fowler was on holiday he changed the locks. When Mr Fowler forced his way into the house he found his landlord standing there with an iron bar. Mr Fowler ran away, but broke his heal when climbing over a gate. Mr Fowler therefore counterclaimed for breach of the quite enjoyment covenant and trespass.

The court awarded the landlord rent arrears and damages for dilapidations totalling £2,600. The court then went to assess Mr Fowler’s claim and stated that when making an assessment the court considers the difference of the value of the property occupied and unoccupied and reached a figure of £12,500. However the court then considered Mr Fowler’s actions and held that he had been unreasonable when failing to respond to the landlord for 5 weeks and failing to respond to the text messages the landlord had sent him in an attempt to resolve the situation.

The court therefore awarded Mr Fowler:

A reduction of the £12,500 to £2,500;
£3,000 for breach of the quite enjoyment covenant; and
£1,250 for trespass.

Whilst each case is decided on it’s own merits the courts are taking quite a hard line with landlords that decide to take matters into their own hands without consideration for the tenants rights. Whilst the landlord will often feel aggrieved about the length of the legal process when attempting to obtain possession they are reminded that the figures displayed above are a possible consequence of a heat of the moment decision.

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

Localism bill

As some of you will recall we mentioned some possible changes to the Tenancy Deposit Protection legislation. These TDP changes do not however, appear to have survived the committee stage of the bill. This is not to say that they will not get back in later but it is of some concern that what we considered to be improvements has been overlooked.

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

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, , , ,

Enforcement of possession orders

Landlords and their agents often breathe a collective sigh of relief following a successful court hearing for a possession claim. The hearing often represents the apex of many months of preparation and relief that the tenants, in contravention of their agreed obligations, will finally be ordered to leave and make good their breaches. However relief at this stage is premature. Tenants, even if they remain after the date a court orders them to leave, still have rights and there is a further process to embark upon to remove the tenant and pursue them for their debts.

Firstly evictions of tenants in England and Wales can only be carried out either by county court bailiffs or, if proceedings are in the High Court, high court sheriffs. The warrant can only be applied for once the date for possession on a court order has passed. Bailiffs will then attend the property to evict tenants and in most cases are successful in doing so, although police officers and further court proceedings for contempt of court can be necessary.

Pursuing debts:

If you have a money judgment against a tenant who subsequently fails to pay what is ordered, you have three options:

1. Pursue your former tenant(s) for the monies owed. However, further costs, delays and court proceedings may not be a viable option.
2. Drop the matter entirely and write off the lost monies against your tax liabilities.
3. Wait for a few months before doing anything. Your judgment remains valid for the next 6 years and the financial status of the former tenant(s) may change in that time.

Pursuing debts in England and Wales are inherently difficult and this should be borne in mind before undertaking the time and further costs incurred in pursuing the debtor. The first step is to find a forwarding address for the tenant. If the tenant has left no forwarding address then enquiry agents can be instructed to ascertain their whereabouts.

Once a forwarding address has been obtained the following enforcement options are available:

An attachment of Earnings:

Apply to the court for an order permitting the regular deductions from the debtors monthly/weekly wage.

Third Party Debt Order:

Apply to the court for an order which permits the release of funds by a third party. The third party is usually a bank or building society.

Charging Orders:

This option is only available if the Debtor has property and usually ideal where you have a Guarantor. The charge does not extract money from the Debtor or the Guarantor but secures the debt against property which is then discharged when the property is sold, just like a mortgage.

Bailiffs/Sheriff:

The Bailiff or Sheriff is instructed to attend the Debtor’s home and seize goods if the Debtor does not agree to pay the debt or enter into a dialogue with regards to a payment plan.

Partial Settlement:

Sometimes debtors are prepared to make a single lump sum part payment in full and final settlement of the outstanding debt which may be more economic than accepting small instalments over a lengthy period.

Given the inherent problems with recovery, it is in the landlord’s best interest to obtain a guarantor where possible to maximise the chances of recovery. Where a guarantor is not a possible option then landlords are advised that taking a commercial view on recovery can be the most pragmatic and cost effective option.

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

Gas Safety

The Old Bailey will this summer be hearing the case of a Plumber charged with the manslaughter of a woman who died of carbon monoxide poisoning. It is alleged he breached his obligations under regulation 26 (9) of the Gas Safety (Installation and Use) Regulations 1998.The Plumber has pleaded not guilty to the charges.

This case should serve as a reminder to landlords and agents to ensure they comply with the obligation to maintain all gas fittings and flues in a safe condition and that the gas safety check is carried out by a registered engineer every year.

Many agents contact us on the helpline in complete frustration due to the tenant’s refusal to grant access for these checks and given the potential consequences the frustration is understandable.

Whilst a landlord will not be able to transfer this responsibility onto the tenant in any circumstances the legislation does make it clear that the landlord is only required to take all reasonable steps to gain access for the checks. Reasonable steps do not include forcing entry or using management keys to gain entry in the absence of consent.

Possible options to gain access include applying for an access injunction or even applying for possession. The injunction is the quicker and potentially the more expensive of the two options and the threat of an injunction is possibly most effective when a tenant understands that the costs of any action will be sought against them.

Whilst it is accepted that this is a very difficult task in some cases, landlords are strongly advised to ensure that they retain confirmation of requests for access, cancellation notices, appointment cards, missed appointment cards and the like to defend their position when and if necessary.

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

Deposits, set for change?

The Localism Bill rather surprisingly (or not, depending on which side you are on) includes new sections which are designed to make amendments to the Housing Act 2004 and specifically to the tenancy deposit protection provisions.

The changes are intended to clarify the concept of ‘initial requirements’ and remove the late protection loopholes as discussed in Draycott v Hannells and Tiensia v Universal Estates. The Bill also hopes to remove the loophole of returning the deposit to the tenant in full prior to any proceedings and then asserting that s214(4) does not apply because in the absence of a deposit they can not be subject to the three times penalty.

If the changes are implemented tenants should find it far easier to pursue landlords or agents who have failed to protect their deposits and landlords will not be able to register the deposit and escape liability after the initial 14 day period.

From the landlords point of view the changes are an improvement because it is hoped that the law will be a little more certain with less grey areas and loopholes! The Bill will also be introducing a variable penalty rather than a fixed 3 times the deposit penalty. The tenant will be entitled to their deposit back or have it paid into the custodial scheme and then will also receive a further sum of money equivalent to not less than the deposit and not more than three times the deposit.

The benefit of this regime for the landlord is that when making an order the Court will consider why the landlord did not protect the deposit, what the landlord knew or should have known about his obligations, and how quickly he resolved the situation. This means that landlords that are still ignorant of the legislation may still be penalised but they may be subject to a more manageable penalty.

It is not certain or clear whether the amendments will make it into the legislation but given the case law surrounding this issue it is likely that the amendments will become law.

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

Categories

RSS CLG Housing What’s New

  • An error has occurred; the feed is probably down. Try again later.

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 61 other followers

Have you tried the PainSmith toolbar?

Useful links and access to the PainSmith blog in a convenient toolbar within your web browser. Available from: painsmithlettingshelper.ourtoolbar.com/