Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Mortgage Arrears

The arrears on Jayashankar’s mortgage account were in the region of £14,000 and so Lloyds TSB obtained possession.

Jayashankar applied to suspend the warrant for possession but the application was refused because the court was not satisfied that Jayashankar had the financial means to pay the arrears.

The question for the appeal court was whether they had any jurisdiction to entertain an appeal from a refusal to stay a warrant once the warrant has been executed, that is once Lloyds TSB has obtained possession.

Section 36 of the Administration of Justice Act 1970 states:

“36: Additional Powers of the Court in action by mortgagee for possession of a dwelling house
(1) Where the mortgagee under a mortgage of land which consists of or includes a dwelling house brings an action in which he claims possession of the mortgaged property, not being an action for foreclosure in which a claim for possession of the mortgaged property is also made, the court may exercise any of the powers conferred on it by subsection (2) below if it appears to the court that in the event of its exercising the power the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage or to remedy a default consisting of a breach of any other obligation arising under or by virtue of the mortgage.
(2) The court –
(a) may adjourn the proceedings, or
(b) on giving judgment or making an order for delivery of possession of the mortgaged property. or at any time before the execution of such judgment or order (my emphasis), may –
(i) stay or suspend execution of the judgment or order
(ii) postpone the date for delivery of possession’
for such period or periods as the court thinks reasonable.

Therefore the courts power under the above section to adjourn mortgage possession proceedings, stay or suspend execution or postpone the date for delivery of possession, comes to an end once a warrant has been executed.

However counsel for Jayashankar stated that CPR 52 allows a judge to suspend the warrant under section 36 on the basis that at the hearing of the appeal from the District Judge the Circuit Judge could exercise all the powers of the lower court and could make any order that the District Judge could have made, that is to suspend the warrant. However, the court was not persuaded and insisted that legal certainty should prevail. Permission to appeal was granted but Jayashankar’s appeal was dismissed.

It is possible that the court may have reached a different decision if the warrant had not been executed but until then, this is the binding precedent.

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

OFT evaluates Foxtons!

Not the company but the infamous outcome of the case.

On the 19th July the Office of Fair trading released a press release on its evaluation of its consumer enforcement case against Foxtons for breaching the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). In February 2010, the OFT secured an enforcement order from the High Court when it ruled that Foxtons’ renewal commission terms were not transparent, this led to Foxtons amending some of the terms. The evaluation has now found that the OFT intervention has resulted in positive benefits for consumer landlords that use Foxtons with an estimated annual benefit of at least £4.4 million.

The enforcement order relating to Foxtons declared that the terms listed below are unfair, not binding, and may not be used or relied upon in contracts with consumer landlords:

a. Terms which require landlords to pay renewal commission to Foxtons after the sale of their property to a third party because the original tenant remains in occupation.

b. Terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant.

c. Terms relating to renewal commission, where the tenant remains in occupation, and in some cases an occupant introduced by the tenant, after the initial fixed term where the agent is not asked to provide any additional service.

In this press release the OFT has stated that they are concerned about the number of agents that are unaware of the Foxtons case and have contacted these agents to advise them to ensure that the terms of business are transparent.

If you need help with the terms of business you may be interested to note that we do provide a drafting a service.

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

Read the Lease!

In Akorita v Marina Heights (St. Leonards) Limited a long leaseholder refused to settle service charge demands because the freeholder failed to comply with a term of the lease when submitting the demand.

Akorita’s main argument was that service charges are only payable when the amount to be paid has been properly certified by the freeholders surveyor, in this case no such certificate had been provided.

The clause in question read:

“To reimburse to the Lessor a sum (hereinafter referred to as “the Service Charge”) equal to one seventh (or such other proportion as may be determined by the Lessor’s Surveyor depending upon the number of Units eventually using the access drains or other communal parts) of the costs expenses outgoings and matters mentioned in the First Schedule hereto the Service Charge to be due and payable on demand and the amount of the Service Charge to be ascertained and certified by the Lessor’s Surveyor acting as an expert and not as an arbitrator once a year up to the Thirtieth day of June in each year (or if such ascertainment shall not take place on the Thirtieth day of June then the said sum shall be ascertained as soon thereafter as may be possible as if such sum has been ascertained up to the Thirtieth day of June aforesaid) commencing on the Thirtieth day of June”.

The Upper Tribunal held that on the proper construction of the above clause it is a condition precedent to any liability of Akorita to make payment either on account of service charge or by way of a final balancing service charge payment once Marina Heights has obtained a certificate. Therefore in the absence of a certificate Akorita had no service charges to pay and until the certificates are obtained the liability will remain nil.

Given that Marina Heights had lost the appeal the Tribunal also made an order preventing them from recovering any costs through any future service charge demands pursuant to a clause in the lease. This decision was also no doubt based on the fact that Marina Heights had insurance cover for the costs.

I think the title says it all and its Friday so no sermons.

Filed under: England & Wales, FLW Article, ,

Should they have got away?

In R v Q a legal loophole, no tenant will be pleased to hear about has been revealed.

Q either owned or managed a property on behalf of his niece. The Property was divided up into bedsit style accommodation and it was accepted that Q wanted the tenants to leave.

Q had served a 2 month Notice to Quit however this notice was defective and the tenants refused to leave until Q obtained a court order. Upon the expiry of the notice Q’s son visited the property along with 5 men and threatened the tenants with a knife and subjected them to other types of abuse which included turning off the utility supplies.

The harassment by Q’s son continued but there was no evidence to show Qs involvement in any of the activities. It was crucially for this reason that the case was dismissed by the Crown Court. However the local authority pursued the matter up to the Appeal Court.

The Court of Appeal considered the primary question to be whether Q was guilty of an offence under section 1 (3A) of the Protection from Eviction Act 1977 on the footing that he was vicariously liable for the acts of his son. The Court held that no because on its true construction section 1(3A) requires the actual participation of Q and in this case there was no room for vicarious liability.

S1(3A) reads:
Subject to subsection (3B) below, the landlord of a residential occupier or an agent of the landlord shall be guilty of an offence if—
(a)he does acts likely to interfere with the peace or comfort of the residential occupier or members of his household, or
(b)he persistently withdraws or withholds services reasonably required for the occupation of the premises in question as a residence,
and (in either case) he knows, or has reasonable cause to believe, that that conduct is likely to cause the residential occupier to give up the occupation of the whole or part of the premises or to refrain from exercising any right or pursuing any remedy in respect of the whole or part of the premises.

The court held that the phrase ‘does acts’ suggests a requirement of actual participation by Q and more importantly that there is a requirement of knowledge or having reasonable case to believe that Q’s son would take the action he did for Q to be found guilty under the above section. Neither of these elements had been established by the prosecution and therefore the Appeal was also dismissed.

The Court of Appeal emphasised that with this decision they were not suggesting that offenders may not on appropriate evidence, be convicted as a secondary party in a joint enterprise or incitement, or indeed as a co-conspirator. However without the evidence linking the landlord to the harassment the decision in this case will no doubt be followed by the lower courts.

Filed under: England & Wales, FLW Article, ,

Localism Bill, AGAIN!

You are probably tired of the posts on this Bill but we thought that some of our readers would be interested to note that Lord Shipley has recommended the following addition:

“Standards for private sector lettings and management agents:

The Secretary of State may by regulations set the standards that private sector lettings agents and management agents must adhere to.”

We would like to hear from anyone on whether they think this is a good thing or not and if so why. If its any consolation to those not wanting what we suspect is an attempt to register agents, we do not think that this will survive the committee stage.

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

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