Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Section 8: Back to Basics

From time to time it is important to go over old ground. It can be easy to lose track or just need a quick reminder of the basics of possession cases.

Section 8 notices, as I’m sure you are all aware, can be used as a vehicle to gain possession of the property whilst at the same time obtaining the rent arrears that may have developed. There are a number of different situations that can trigger the requirement of a Section 8 notice which could be scrutinised in an incredible amount of detail. With regards to this blog entry, I am going to focus more specifically on the mandatory and discretionary grounds and how they differ in the courts eyes in particular with relation to the more common grounds for possession i.e. grounds 8,10 and 11.

The Housing Act 1988 s.7(3) stipulates that when the court feels that any of the grounds listed in Pt 1 of Sch.2 of the 1998 Act are satisfied then possession must be granted for that property. If this is compared to Pt 2 which substitutes the phrase ‘must be’ with the far less convincing ‘may be’ then it starts to become clear why having mandatory grounds is infinitely more desirable that simply pinning hopes on discretionary grounds. As a general rule we as a firm only advise issuing proceedings on mandatory grounds unless the evidence is particularly strong on discretionary, as we have found that judges tend not to be too receptive to the idea of handing over possession of the property to the landlord and making the tenant potentially homeless, unless there is overwhelming evidence against them or the mandatory grounds have been met.

The most commonly used of the grounds for possession are 8, 10 and 11. Ground 8 is mandatory whereas 10 and 11 are discretionary. If for example the tenant at this point pays some of the rent arrears to the landlord, enough to just about drop below the 2 month minimum requirement (if it was a monthly rental period) to claim ground 8, it would mean the claim would be resting on discretionary grounds which, as explained earlier, are far from reliable, particularly in matters involving rent arrears. The discretionary grounds in cases such as this service the role of supporting the mandatory ground and are normally too weak by themselves to satisfy possession criteria. As soon as the mandatory ground is lost the case for the landlord is generally lost along with it.

This is not always the case. However, if a mandatory ground can be relied upon it is preferable to do so rather than assuming possession will be granted on discretionary.

With discretionary grounds, on the making of an order for possession, the court can postpone the order for as long as the court sees fit. In this period the court will normally issue certain conditions with regards to the payment of the rent arrears as well as any other conditions that the court deems applicable. If these conditions are followed, the court can discharge or rescind the possession order if it sees fit. Can you see the pattern here? The level of discretion available to the court is illustrated by the repeated use of the term ‘if the court sees fit’. The only discretion available to the courts when it comes to mandatory grounds is a delay from the usual 14 days to a maximum of 6 weeks in cases of exceptional hardship, but this in itself has a high threshold in which to satisfy.

In light of the above costs need to be considered and proceedings against a tenant to gain possession is not an insignificant sum. To risk this sum on the courts discretion, particularly when the order for possession would result in the tenant being made homeless, may not be the best course of action.

This blog has been drafted in response to a comment. Thank you for your continued support Valerie.

Filed under: England & Wales, , , , ,

More on service charges….

Peter recently asked what is the best way to recover Insurance Premiums having written to the Lender and not received any reply and should he go to the County Court or the LVT?

The situation is not clear cut. Both methods could be adopted and both have pluses and minuses.

Leasehold Valuation Tribunal (LVT)

You could apply to the LVT for a determination of the reasonableness of the charge. The LVT will normally issue Directions and there will be a hearing. At the hearing the panel will review and use their own expert knowledge to assess the reasonableness whether the Tenant attends and disputes or not. There is no procedure for a default ruling if the tenant does not take part and thus the process can take longer than obtaining a Judgment. The benefit is that if you fear a defence or problems there are no real costs sanctions and if you wish to deal with the matter yourself some people find the process easier than the Courts

County Court

You are entitled to apply for a monetary Judgment. You can today do this on line via the Money Claims website https://www.moneyclaim.gov.uk/web/mcol/welcome. The Court will then issue the claim and serve this upon the Defendant. They will then have 14 days to indicate if they wish to defend. If no defence you can seek a Judgment in default but if defended you will then have to deal with the tenants defence and if it relates to the reasonableness of the charge the matter is likely to be transferred to the LVT to rule upon. Assuming the amount claimed is less than £5000 this matter will be dealt with as a small claim and generally no legal costs (or just a very small amount ) are recoverable save where the tenant has lodged some form of counter claim for more than £5000.

Once you have a Judgment from the Court or a determination from the LVT the mortgage lender should then pay or you can take steps to forfeit the lease.

Please remember which ever route you follow ( and my personal preference would be the Court since you can obtain a default Order) you must ensure you have strictly complied with the terms of the lease and statute governing service charges. If in doubt it is always best to check as otherwise you could find that the sums are not payable. In particular I would highlight that the LVT may say that the sums are reasonable but may not be payable yet if the Landlord has not complied with the Lease terms etc. Generally the Courts will expect freeholders to fully understand the lease and the law governing these matters!

This blog has been submitted in response to a comment from a reader. Thank you for your continued support Peter.

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

Wales is going up

The The Assured Tenancies (Amendment of Rental Threshold) (Wales) Order 2011 is coming into force on the 1 December 2011. This means that the threshold for assured shorthold tenancies is moving on up from £25,000 to £100,000 in Wales too.

Filed under: England & Wales, FLW Article, ,

Feedback please…

Dear Readers

We always like to make sure that the blog is serving the needs of those who read it. Therefore we thought we would request for some feedback on what you would like to read more about and what you think we should cease writing about.

Therefore if you have a mo, please comment so that we may improve on this service.

Regards

PainSmith Solicitors

Filed under: England & Wales, FLW Article,

The Swimming Pool

In Grimes v Hawkins the High Court held that a Claimant that dived into a private pool and became tetraplegic did not have a claim against the homeowner.

It turned out that the Claimant was an 18 year old girl who had been invited to a party at the Claimants house. The Claimants were away and their daughter stated that she invited 5 people but in fact 20 turned up.

The court determined that the Claimant was a lawful visitor and that she also had consent to use the pool. The Claimant had been swimming in the pool and had dived into the middle when the unfortunate accident occurred.

The Claim was brought both under the Occupiers’ Liability Act 1957 and in common law negligence. Thus the defendant owed a duty to the Claimant to take such care as in all the circumstances of the case was reasonable to see that the Claimant was reasonably safe in using the premises for the purposes for which she was invited or permitted by the occupier to be there.

In its discussion the court held that there is always risk in swimming and diving, in any pool. Even where an expert diver dives into a purpose built diving pool his dive is not free from risk. Much depends on the diver’s technique, the angle of entry and so on. It is well known that diving always carries with it a risk of injury (particularly to the head or neck) if the dive is badly executed, or carried out in water that is too shallow to accommodate it. None of this is specialist knowledge. Every adult of normal intelligence knows it. The Claimant in this case knew it.

Accordingly the pool was not unsafe for diving. The court had no doubt that some mature adults faced with a group of young adults in high spirits, some of whom had had too much to drink, would send them all home rather than allow any of them into a swimming pool. But that is not to say that the duty owed to the Claimant under the Occupier’s Liability Act 1957 required the Defendant to put the pool out of bounds that night. The Defendant was not required to adopt a paternalistic approach to his visitors, all of whom were adults, all of whom were making choices about their behaviour, exercising their free will.

The court therefore did not accept that it is incumbent on a householder with a private swimming pool to prohibit adults from diving into an ordinary pool whose dimensions and contours can clearly be seen. It may well be different where there is some hidden or unexpected hazard but there was none here.

The court therefore held that Defendant was not in breach of his duty to the claimant under the Occupier’s Liability Act 1957.

We thought this case would be interesting for our readers as we often get asked about a landlord’s liability when a pool is included in the demise. We hope that this case reassures most of you.

Agents and landlords are however advised to ensure that the tenancy agreement includes clauses which places a positive obligation on the tenant to ensure that all children near the pool are monitored and the pool is used appropriately.

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

Service charges: what do you need to know?

Over the past two decades the rules dealing with service charges have changed completely and there now exists a fairly comprehensive set of rules which as can be seen in cases reported from the Leasehold Valuation Tribunal (LVT) can catch out the unwary.

The starting point for all Property Managers and Leaseholders must be the actual Lease itself. It is no good to say “Well good practice is this…” if the lease does not allow or includes a particular mechanism this must be followed. One of the things which many leases contain is some sort of Certification mechanism. If this is included In the lease unless and until this process is followed in full the service charge will not be payable and unless done in a reasonable period of time may not be payable at all! As to what is reasonable this will always depend upon the actual circumstances but usually a common sense interpretation will be given.

Next are the various statutory rules governing service charges and the collection of these. Some of the main items can be summarized as:

1. All demands must contain a Summary of the Leaseholders rights. Without this no valid claim has been made.
2. Leaseholders are entitled to inspect accounts and all receipts and invoices.
3. Leaseholders are entitled annually to a copy of the insurance policy.
4. Any works which will cost any one leaseholder more than £250 must be subject to a detailed consultation following a set formula
5. If there are any costs associated with works and if for any reason the sum cannot be demanded within 18 months details of the amount etc and the fact it will be claimed must be notified to the leaseholder.

The above gives a brief synopsis of some of the major pitfalls that lie in service charges and the recovery.

Today most disputes about residential service charges even if begun via the Court will normally be actually adjudicated on by the LVT. This is a specialist property Tribunal. The LVT has jurisdiction to deal with most disputes as to the reasonableness of service charges and can make set offs although it does not have jurisdiction to deal with breach of covenant claims. Generally the process before the LVT is similar to the County Court although not always as formulaic. The LVT will issue Directions and then list a matter for hearing. At the hearing there will usually be a panel of a Chairman (usually a lawyer), a Surveyor and sometimes a third lay member. The panel will often inspect the property before the hearing and then go on to hear evidence before usually retiring to then give a written decision within about 6 weeks of the hearing.

Parties should be aware that on occasion even if issues are not raised by a party the Tribunal may raise them such as the service of appropriate consultation notices and Summary of Rights and Obligations. Property Managers should always have available these documents when they attend an LVT and be able to show that they have complied. Without it the consequences can be significant as the LVT seems to be taking a tough line on compliance. What is often said to be the real benefit of the LVT is that generally it has no powers to award costs. In certain circumstances it can award a party its costs up to a maximum of £500. It is also able to order that a particular party should pay to the other side any fees paid to the LVT and also to adjudicate on whether the costs may be included as a future service charge expense. It is worth noting that many commentators believe it is likely that the jurisdiction of the LVT will be increased and the rules on costs will be changed probably giving the LVT powers to award up to £5000 per party.

It is vital that all Leaseholders and Property Managers give careful consideration as to the lease and the rules. In particular Owner Managed blocks (e.g. where the Leaseholders have purchased their own freehold) do need to be aware that these rules apply equally to them and there is no opt out simply because in effect the freeholders and leaseholders are one in the same. If in doubt you should look to take advice at an early stage to prevent problems later!

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

AGENTS BEWARE!

We have recently heard of a situation where an Agent was fined for having a To-Let Board in a Conservation Area.

Whilst this of itself is not unusual the circumstances are. The area had only been very recently designated as a Conservation Area and whilst the local authority had written to some agents in the area they had not written to all and in their own evidence not the agent prosecuted! The agent had erected a board in the area but when contacted by the local authority immediately took steps to remove the same and removed it within 24 hours. The agency has no prior convictions. Notwithstanding this action the local authority still prosecuted and the agency received a small fine.

The real issue here was the huge amount of time which members of the management team had to spend dealing with a matter which was dealt with promptly by the agency who held their hands up straight away, admitted the mistake and dealt with it. It is vital that you make sure you are up to date on details of Conservation Areas and the like which in some areas, particularly in towns are changing frequently. The moral is if in doubt check with your local authority planning office or risk prosecution and the time and expense involved!

Filed under: England & Wales, FLW Article, ,

Why is 80 years so important with a Long Residential Lease?

Many people today are finding when they come to sell (or buy) a long residential lease of a flat that questions are raised over the length of the lease. Many mortgage lenders are now demanding longer terms of lease before they will consider a property to offer good security and many more conveyancing solicitors are now alive to the issues and costs which can be incurred when a lease becomes short.

Generally most residential leases can be extended under the Leasehold Reform and Urban Development Act 1993 provided the Lease has been owned for 2 years. The procedure is however complicated and full of pitfalls for the unwary. In particular there is an issue if the length of term falls below 80 years in that the Leaseholder will then need to pay to the Freeholder one half of any marriage value (this is of itself a topic for another blog!). This can hugely affect the price payable for the extension since if more than 80 years is left on the lease then the price is basically calculated having regard to the Ground Rent payable ( apologies to all you valuers out there for over simplifying this). It is vital that all Leaseholders keep this in mind and should always take advice about extending a lease well in advance of 80 years and if you are looking to buy a lease getting close to this deadline that you factor these costs into your purchase considerations.

The moral is take care and know what length of lease you may have and act before it reaches 80 years!

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

Association of British Insurers

I was reluctant to blog this but I have been persuaded that it might help some readers. The ABI has released some factsheets on what to do if you have been affected by the current unrest. The good news is that most domestic and commercial insurance policies will cover you for fire and looting.

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

Yes, they’re back…

in court arguing over a deposit again!

Suurpere entered into an assured shorthold tenancy agreement with the landlords Nice and Anor for a period of 6 months on the 9th January 2009.

For a number of reasons the relationship between the parties began to deteriorate and the landlords served a Section 21 and issued possession proceedings on this notice which was in fact defective.

The landlords did not lodge the deposit with a scheme pursuant to Section 213 of the Housing Act 2004 until the 20 July 2009. On the 10 August 2009 the tenant issued for this breach, which included the landlords’ failure to provide the “prescribed information”.

On the 14 August 2009 the tenant left the premises allegedly due to the landlords unlawful harassment. The deposit was returned to her in full on the 1 September 2009. In their defence the landlord’s confirmed that the tenant had received her rent in full and that their failure to register the deposit was a “innocent technical breach”.

The county court judge applied the decision in Draycott and held that because the landlord had registered the deposit before the tenant issued proceedings, the sanctions in Section 214 (4) (3 times the penalty) did not apply. The tenant therefore appealed.

The landlords claimed that pursuant to the Hashemi case because the tenant “vacated” on the 14th August 2009 the court had no power to make an order under Section 214 (4).

However, the Appeal court held that in Hashemi the date on which the tenancy ended was clear but in this case the tenant did not accept that her tenancy had been determined because she brought a claim for wrongful eviction, claiming that she was forced to vacate as a result of the landlord’s harassment. Therefore Hashemi did not apply.

The tenant relied on Tiensia and argued that due to the landlord’s failure to register the deposit with a scheme and provide the requisite information in the prescribed form she was entitled to an award of a sum of money equal to 3 times the amount of the deposit. The Court of Appeal agreed with this and awarded 3 times the deposit because the tenancy had not been lawfully determined.

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

Civil Unrest

For anyone affected by the current disturbances everyone at PainSmith Solicitors hopes you are safe and well.

Filed under: England & Wales

Tenants Insurance

We have been contacted by a number of agents with regards to the insurance clauses in their tenancy agreements and in some cases their terms of business.

We understand that a well known landlord insurance company is suggesting that some of our clients need to amend their terms of business and tenancy agreements in line with the office of fair trading (OFT) guidance.

The clause that is causing the problem relates to the insurance the tenant is advised to obtain. PainSmith Solicitors documents advise tenants that they should obtain insurance and warns them that the landlord insurance will not cover their belongings. The clause is therefore not unfair as the tenant is not forced to obtain insurance.

The guidance that the insurance company is referring to was published in 2005 therefore we are unclear as to why this has been raised by them now however, if you are using PainSmith Solicitors documents and assuming that the clause has not been amended then you are all advised that the clause complies with the OFT guidance and as such no papers need to be sent to the insurance company for them to “check”.

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

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, , , ,

Council Tax- A Reminder

We have had a few calls from agents about a live in landlord’s liability for Council Tax. The position has not changed since our last blog and so for those that may have missed it please click here.

Filed under: England & Wales, FLW Article,

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