Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

How long do Court Proceedings for Possession take?

As many of our regular readers may be aware the time taken for Courts to process claims particularly in the London Region has extended dramatically.

We would normally say that an accelerated possession claim if no Court hearing was required would take about 2 to 3 months from issue of proceedings until bailiff appointment. For traditional proceedings normally we would have the first hearing date within 3 to 4 weeks of issue.

Sadly we are finding that these dates are taking much longer with dates for hearings under traditional hearings taking up to 4 months! Unbelievable but true in a recent case we issued in a London Court. Despite representations to the Court they said pressure of work meant nothing could be done.

With regards to accelerated possession claims where hearings have been listed by the Court or the Defendant has lodged a Defence form we have found that these may not be listed for up to 5 months! Again a recent example we faced where an Order had been made but the Defendant immediately made application to set aside and Defend.

Whilst some Courts are still sticking to the more usual times generally the hands of Landlords are tied as to which Court to issue in. The rules provide that generally such possession claims must be issued in the County Court and in particular the Court with jurisdiction for the area in which the rental property is situated.

Certainly a worrying development that all practitioners need to be aware of and the implications of the same!

Filed under: England & Wales, FLW Article, ,

Enfranchisement: can you bring multiple claims?

Recently the High Court has ruled on the case of Westbrook Dolphin Square Limited v. Friends Provident Life and Pensions Limited.

The Leasehold Reform Housing and Urban Development Act 1993 expressly considers the position which may arise when a Notice (whether for enfranchisement or a lease extension) has been validly served but is not proceeded with whether by way of an express withdrawal or a deemed withdrawal when a party does not comply with the time limits under the Act. In those circumstances the Leaseholders are then barred from issuing a fresh Notice for a period of 12 months from the date of withdrawal. The participants will also be liable to pay the Freeholders costs. Thus the Act envisages that multiple Notices may be served.

In The Westbrook case a Notice was originally served and a negative counter notice was served and proceedings issued which had reached the stage of being a couple of weeks form the date fixed for hearing when Westbrook withdrew the Notice and the claim supposedly due to the fall in property values. Westbrook made clear when serving Notice that they would take further steps to acquire the freehold on what they felt would be more advantageous terms. Friends Provident indicated at this stage that they felt if Westbrook did this under the Civil Procedure Rules they would need the Courts permission. Westbrook duly paid Friends Provident the costs of the Court proceedings.

A new Notice was duly served (after the 12 month moratorium period had expired). This Notice contained a different purchase price, date and manner of signature of the participating tenants. Friends Prov served a counter notice and proceedings were issued by Westbrook without permission of the Court being sought in advance. Five out of the six grounds raised by Friends were the same as the earlier proceedings. Friends submitted that the second claim was an abuse of process in that there was a public interest in the finality of litigation and that no party should be vexed by the same cause of action twice. Westbrook submitted that it did not require permission and if they did they should be granted permission as the possibility of successive claims was a feature of the Act.

Mr. Justice Arnold struck out the claim. He decided that the principle of finality of litigation and that a person should not be vexed twice should inform the courts approach. The claim amounted to an abuse of process. The facts were substantially the same. Whilst withdrawing the Notice was acceptable they should not have discontinued the claim and then looked to in effect bring a second claim on substantially the same facts. They should have pursued the Court claim and had that adjudicated upon and at that stage, if they had been successful, they could have withdrawn the Notice.

It seems that if you receive a negative Counter Notice before issuing proceedings you need to consider whether you wish to go through with them. Once proceedings are started if you then withdraw serving a Notice again on the same basis will be difficult without permission of the Court which it seems may not be given. If therefore you have a block where there may be issues over the right to enfranchise tenants need to be committed to going all the way through with proceedings and if in doubt need to be prepared to withdraw the Notice at an early stage. In practice this probably applies to a minority of claims and seems to be the Court expressing annoyance at corporate participating tenants looking to exploit the system as the judge saw it. Yet more case law deriving form LRHUDA 1993!

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

Its all in the Drafting!

The recent case of Estafnous v London and Leeds Business Centres Ltd (LLBC) showed what can happen where an agreement is drafted which does not cover the way the sale is finally concluded. In this case, LLBC wished to sell a property known as Regent House. In this regard, Mr Estafnous, an agent, introduced an interested purchaser, Mr Kapoor, to LLBC.

An agreement was drafted between Mr Estafnous and LLBC which set out that in consideration for introducing the buyer and seller and on completion of the purchase of the Property, the agent would be entitled to £2 million commission.

Following negotiations it was decided that Mr Kapoor would purchase the company that owned the leasehold interest in the property, rather than the property itself, in order to save on stamp duty. The purchase proceeded on a Share Sale Agreement between the purchaser and the seller.

When Mr Estafnous claimed his commission payment from LLBC it refused on the grounds that the property itself had not been sold and therefore the agreement did not apply. Unfortunately for Mr Estafnous, the Court of Appeal held in favour of LLBC.

The lesson to be learned from this is that agents should ensure commission agreements are drafted to cover all possible outcomes if they don’t want to be paid for the work undertaken.

Filed under: England & Wales, FLW Article, ,

Back to basics 3: Voluntary Surrender and Abandonment

It can be tricky to know the correct procedure to take when you believe that the tenant has vacated the property. The main issue you want to avoid like the plague is a claim for unlawful eviction. Claims of this nature can be troublesome to deal with, costly and will hinder your attempts for possession a great deal. It is therefore crucial to follow the relevant steps to make sure that vacant possession can be gained without undue delay.

Surrender is one of the more amicable ways to formally bring an end to a tenancy. The Landlord and tenant mutually agree that it is best for all concerned to end the tenancy. Signing a deed of surrender ties up all loose ends and ensures that parties are not unwittingly still involved in the tenancy. This is a situation that is best avoided to mitigate chances of a nasty surprise somewhere down the line.

All circumstances are easier to deal with when you have mutual agreement between the parties. As I am sure a number of you attest to, sometimes not all the boxes can be ticked off, and it is situations like these that you need to be careful about. This is where abandonment notices can be worth their weight in gold.

Abandonment notices are very simple concepts. It is simply a note on the door saying that if they are still in occupation can they let you know within 14 days. This time limit can be altered but in past experience, we as a firm believe that 14 days both allows sufficient time for the tenant to inform the landlord or agent of his presence, whilst at the same time ensures that the Landlord does not need to keep their property off the market for too long and therefore does not lose out on potential future rental payments.

I will add a cautionary note here. Although the notice needs to be visible i.e. not hidden in a bush, it should not be brought to the attention of everyone and their dog who is going to pass the property. Those that call the helpline have stressed that they are concerned about third parties noticing that properties are empty when they get sight of these notices and therefore it is advised that you simply use your common sense.

Back to the notice itself, if no contact has been made by the tenant in the time frame stipulated, then the day after it has expired that is the fifteenth day, the locks can be changed and the property put back on the market. There is obviously the issue of dealing with the tenant’s possessions if any have been left behind but that is a topic for another day.

For those on the helpline there is a draft Deed of Surrender and Abandonment Notice in the document vault.

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

Is it reasonable to expect tenants to pay large service charges?

The Upper Chamber Lands Tribunal recently considered whether in determining if costs have been reasonably incurred account should be taken of the financial impact on tenants and whether major works should be phased (Garside and others v. RYFC Ltd and others [2011] UKUT 367). The case involved an estate of 5 blocks with 54 flats which as a result of historical neglect had a manager appointed by the LVT after an application by some of the leaseholders.

The Manager appointed set about arranging for outstanding works to be carried out. However a number of the leaseholders became concerned as to their ability to pay due to the significant increase in service charges these works would cause.

The leaseholders agreed that the scope of works was acceptable but queried whether it was necessary to carry out the bulk of the works at once. They suggested that the works should be phased to spread the costs over a longer period. The costs were likely to be in the year 2010 £7,600 or more and it was said that some Leaseholders would be forced to sell their flats.

The LVT rejected the argument that consideration should be given to the individual leaseholders ability to pay in determining the reasonableness of the costs. The LVT determined given there was no argument over the reasonableness of the costs, the specification or the ability of the Manager to recover the costs in advance and therefore in the LVTs opinion section 19 of the Landlord and Tenant Act 1985 only related to the reasonableness of the works and costs and not the ability of the leaseholders to pay.

The leaseholders appealed to the Upper Chamber Lands Tribunal. HHJ Robinson determined that the 1985 Act did not limit what is reasonable. In her opinion “reasonable” should be given a broad meaning in accordance with Ashworth Frazer v. Gloucester City Council [2001] 1 WLR 2180. Thus in her opinion the financial impact and whether works could and should be phased was a material consideration in determining whether costs have been reasonably incurred under section 19 of the 1985 Act.

The Judge said that a wide consideration had to be given of all the issues including the urgency of the works. These were all matters of fact and judgment for the LVT to determine. She did emphasis that the LVT could not alter a tenants contractual liability to pay whatever the hardship.

The lesson here is that if Leaseholders are faced with consultation over major works and they are concerned over the ability to pay they must raise this. This would be a legitimate matter to raise and for the person undertaking the works to have regard to and whether the works can be phased. Certainly something all property managers should be alive to particularly when drawing up specifications of works.

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

Happily ever after………

As shown in the previous blog, many issues can arise when couples purchase a property together. With this in mind, the Supreme Court’s recent decision in Jones v Kernott provides some clarification to the law where an unmarried couple purchase a house together in both names but later separate and claim different shares.

The facts of this case were as follows. Ms Jones and Mr Kernott bought 39 Badger Hall Avenue in joint names in 1985 with the proceeds of Ms Jones’ sale of her mobile home and an endowment mortgage. The two parties contributed fairly equally to the household expenses and lived there with their two children together until October 1993 when Mr Kernott moved out of the property. From this point onwards he made no further contributions either to the mortgage or upkeep of the property, or as maintenance and support for the children.

In 1995 they put 39 Badger Hall Avenue on the market for £69,995 but did not find a purchaser. They then cashed in a joint life insurance policy and Mr Kermott used his share as deposit on a property which he purchased in May 1996.

In 2006, Mr Kernott contacted Ms Jones to claim a share of 39 Badger Hall Avenue and subsequently proceedings were brought to determine their respective shares. As they had made no agreement as to what shares each should have in the property the courts were left to look at the parties’ conduct to see what conclusions could be made. It was agreed that when they purchased the property they intended it to belong to each of them in equal shares. The deliberations hinged on the question of whether the parties’ intentions in respect of the property had changed when Mr Kernott moved out after eight years. The court found that their intentions had changed and based this on the fact that from the point that Mr Kermott moved out, Ms Jones covered all payments relating to 39 Badger Hall Avenue. They also noted that this had enabled Mr Kermott to purchase his own property which it was agreed Ms Jones had no interest in. The court found that Ms Jones was entitled to 90% of the beneficial interest and Mr Kermott to 10%, which was calculated on the basis of each being entitled to half until 1995 and Ms Jones being entitled to the full benefit from that point onwards.

Following this case, in the absence of any agreement by the parties, the court will begin on the presumption that if they are joint owners of the property then they would be entitled to equal shares of the property. The next step will be to see what their intention was when they purchased the property and then to see whether this intention changed at any point subsequently. This will be done by looking objectively at their conduct and if their intentions cannot be inferred from their conduct the court will look to what would be considered fair in relation to their dealings with the property.

While in this case this seems to have led to a fair outcome by far the best course of action for couples buying a property together is to have a declaration of trust setting out what share each of them should have and to change this if their circumstances change. Whilst it has to be said that this is not the most romantic option, it could save a lot of expensive litigation in the future if the couple separate.

Filed under: England & Wales, FLW Article,

Joint Tenants: what does this mean?

Many of you will have read in the press about the case recently brought by Geoffrey Boycott for professional negligence against his advisers concerning the way in which he owned a property with his former partner and which made us think about the issues involved.

For many people embarking on property ownership is a huge step and often undertaken at a time when all is rosy in a relationship and often too little thought is given to the type of ownership. Generally under English law if you are looking to buy a property jointly there are two methods of ownership: joint tenancy or tenants in common. What do these mean? It is vital that people purchasing understand the differences and the effects each can have.

Joint tenancy is still the most common method and can often be described as the default position. If you purchase in this way you each own the property and generally are presumed to own the property in equal shares. This also means that on the death of one of the joint owners the share which they owned automatically passes to the other joint owner. This process is known as succeeding to the tenancy. Whilst initially a tenancy can be registered in this fashion one or other of the parties can sever the joint tenancy. To do this is straight forward and simply involves notice being given to all parties and ideally this being noted at the Land Registry. The property will then be owned as tenants in common and it will be presumed that each owns an equal share.

Tenants in common is where joint owners each own a defined share of the property. This method is often recommended to unmarried owners and those who are making unequal contributions and wish for these to be recognised in the ownership. When registered the transfer document will specify what percentage is owned by each party. On death of one party their share of the property then goes on to form part of their estate and does not automatically pass by the rule of survivorship described above in respect of joint tenancies. Often parties owning as tenants in common will also enter into a Deed specifying the particular contributions they have made and also dealing with how on sale the proceeds will be split etc. Generally a tenancy in common cannot become a joint tenancy without all the joint owners agreeing (different form the position relating to joint tenants).

As was discovered by Mr. Boycott a failure to have the correct method of ownership can lead to consequences which one or other party did not intend. For Mr. Boycott he believed that the property was registered as Joint Owners. However at some point before his partner passed away she acted to sever the joint tenancy thereby creating a tenancy in common. On her death rather than her share passing to Mr. Boycott it formed part of her estate and Mr. Boycott did not inherit! According to the reporting this case gave rise as one would expect from Mr. Boycott to some forthright views being expressed!

It is important that all home owners understand these principles and the consequences to make sure that the arrangements they have in place do fit their own circumstances and that they can and should review these when circumstances change. Sadly an area which all too often people in that first rush of ownership do not give sufficient thought to often leading to expensive litigation and dispute down the line.

Please note the purpose of this article is simply to give a broad outline and it is always vital that you look to take specific advice on individual circumstances

Filed under: England & Wales, FLW Article,

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