Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Fire Safety revisited

We have had a few queries regarding the Fire Safety (Protection of Tenants) Bill on which we have previously blogged, and so here is our update: the Bill failed to complete its passage through Parliament before the end of the session. This means the Bill will make no further progress and will not become law.

To recap, this was “a bill to require landlords to provide smoke alarms in rented accommodation; and connected purposes”. All landlords were to be required to install a mains operated battery backed smoke alarm before the tenancy agreement is signed.

The tenant would have been required to test the smoke alarm at least once a month and notify the landlord of any defects, who would then be required to carry out the repairs. There was to be a criminal penalty of up to 2 years in prison and/or a fine of up to £5000.00.

Filed under: England & Wales, , , ,

Pay as you go…….

A solicitor is entitled to refuse to do further work for a client until outstanding bills are settled and funds placed on account ( for anticipated costs not yet incurred) the Court of Appeal recently ruled . By doing so, the solicitor was merely suspending, not terminating the retainer and the client was liable to pay for the work done. The client in this case was unhappy with the size of the bill as it had exceeded initial estimates. The reason for the higher bill was that the matter had got more complicated, there being protracted possession proceedings.

All solicitors will have written terms of business which should set out on what basis the parties can terminate the agreement.

Inevitably there will be instances where costs are more than initially anticipated, and litigation ( in particular possession proceedings) are a minefield full of potential unwelcome developments that push your costs up. But if you are not happy with the costs and handling of the case there are channels available to resolve the matter ( for example the firm’s internal complaints procedure, the Legal Ombudsman and the Solicitors Regulation Authority amongst others).
But if your solicitors say no more work until you pay up ignore the message at your peril or you could find yourself liable for fees on the basis that you terminated the agreement.

Filed under: England & Wales

Beginners guide to Long Residential Leases

For many people the first property they buy is a long leasehold flat. This is, of course, the most complicated form of home ownership yet many people get little or no explanation of the realities of what is involved.

As a long leaseholder you are a type of tenant. Fundamentally you are bound by the terms of that tenancy which are are set out in the lease subject to the various statutory rules and regulations. Whilst very few leases are identical in form (even within the same development often) they will have various common elements and it is these that we intend to cover. There is however no substitute to obtaining proper comprehensive advice on your lease terms when you purchase and a good lawyer will do this.

The basics are how long is left on the lease and the rent. The first element is important since this can have a bearing on the cost of obtaining an extension ( see our blog post on this topic) and also how saleable the lease is. Generally in our experience a lease with less than 80 years remaining can now be difficult to sell. It is then important to know the rent. You should also check if there are any rent review provisions and make sure you understand these. It is important to bear in mind that the amount of ground rent will have a significant effect on the price of any extension.

The next important sections to understand relate to repairs: who is responsible for repairing in leases. Often you will be responsible for all internal repairs and redecorations and the landlord for all external. It is important to make sure these clauses are comprehensive and clear to prevent dispute later. Elements that are often worth checking are things such as who is responsible for repair and replacement of windows particularly if you are on a raised floor of a block.

Insurance: this will usually be the landlords responsibility subject to you repaying the costs. Again best to check although if you are getting a mortgage your lawyer should have checked this.

Service charges: often in practice for people living in a flat cause the most problems. It is important that you fully understand the clauses relating to these. Normally there will be a mechanism for determining the total service charge and then how this will be divided up and when you will be notified. Often theses clauses are detailed and require the landlord to jump through various hoops before the service charge is payable. Understanding these and what sums may be charged such as reserve funds will help you better understand one of the major liabilities of living in a flat and one which many leaseholders have no control over. Remember it is often for the freeholder to plan the schedule of works with little regard for the leaseholders personal circumstances.

Can I sublet and alter the flat? Again most leases will have specific provisions as to what is required. Many leases require you to obtain the consent of the freeholder in advance and you are likely to have to pay the freeholders costs. Again if this is an issue make sure you check and make enquiries of your freeholders.

The other thing that people often make assumptions about is what they are buying and rights they have over communal areas and grounds. Again it is best to check to make sure you are getting what you thought such as parking spaces and garages. Just because there is for example a garden does not automatically mean you will have right of access. Things like this should be explained to the lawyer who can check. Remember if you do not ask you may not get an answer!

This article provides an overview of what practically can be the important points for someone buying. Leases are often complex even for lawyers and so do not be afraid to ask. It is vital that you do understand this document since even in blocks where leaseholders own a share of the freehold you are required to comply with your lease.

Filed under: England & Wales, ,

Come and work for us

PainSmith solicitors seeks a 2-3 years qualified Landlord and Tenant solicitor to run own caseload and supervise up to 3 members of staff.

You will need to have strong civil litigation experience and be familiar with the principles of landlord and tenant law. A willingness to expand on landlord and tenant law is essential as well as a willingness to write articles and provide training in this area. The firm has a strong ethos for training young lawyers therefore you will need to be patient, confident and willing to help and assist when necessary.

Please send CV and covering letter to marveen@painsmith.co.uk

Filed under: England & Wales

Phone problems

For those of you who use our telephone helpline we apologise but we are experiencing technical problems with our lines. We are doing our best to get the problem fixed. Meanwhile we ask you to bear with us.

Filed under: England & Wales

Attention all Landlords!

We draw your attention to this recent decision of the Upper Tribunal which has caused a stir amongst leasehold lawyers in relation to service charges.

Section 47 of the Landlord and Tenant Act 1987 (LTA1987) provides that where any written demand is given to a tenant of residential leasehold property, then that demand must contain:

a) the name and address of the landlord and
b) if that address is not in England and Wales, an address for service.

Section 47 goes on to provide in subsection 2 that any part of the amount demanded that consists of a service charge will not be treated as being due until such information is furnished by notice given by the landlord to the tenant.

In Beitov Properties Ltd v Elliston Martin it has been decided that the wording of section 47 LTA 1987 means that where any written demand is given to the tenant the Landlord must put his or her actual address on the demand, not a care of address or agent’s address. A demand for service charges will be invalid without.

According to the Tribunal “The purpose of the requirement in section 47 to include in any demand the name and address of the landlord, in my judgment, is to enable a tenant to know who his landlord is, and a name alone may not be sufficient for this purpose. To provide an address at which the landlord can be found assists in the process of identification”.

It is noted however that the sanction for failing to give the actual landlords address in section 47 of the LTA 1987 is that service charges are not due. Nothing is said about rent and as such we are of the opinion that where you have an AST landlords and agents can continue to use care of addresses. If the position changes we will of course let you know.

Most people are aware also aware of section 48 LTA 1987. Therefore to complete this article we should mention subsection (1) which requires a landlord to furnish the tenant with an address for service, which can be a care of address or agent’s address but must be an address in England and Wales. Unless and until the landlord gives an address for service in England and Wales then rent will not be treated as falling due.

Filed under: England & Wales, FLW Article, ,

Why do I need a tenancy agreement?

The simple answer to this question is that for most circumstances you do not strictly need a written agreement however if you don’t this can have unintended consequences!

As regular followers of the blog will know the starting point for determining the terms and what you should do in a particular instance is the tenancy agreement. If no written agreement exists it will be a question of trying to recollect what was discussed and possibly looking at any letters or emails about the negotiations to determine the parties intentions. This can result in the terms being unclear particularly if a dispute has arisen.

Assuming we are discussing Assured shorthold tenancies, which are the majority of private letting agreements, as many of you will know this is now the default tenancy in most cases ( for exactly what is an assured shorthold tenancy see the Housing Act 1988 as amended). If you are taking a deposit you are now required to register such a deposit with an approved scheme of which there are three. As part of this process you are required to give certain prescribed information. If you do not do you will not have complied with the rules. Most standard agreements which can be purchased ( such as those we produce and are for sale in our shop on our website) incorporate this information. For this reason giving an agreement, practically, can be easier to ensure the information is given and nothing is missed.

If then you have a written agreement you can specify the exact terms. Whilst you cannot contract out of rules laid down by Parliament, such as the landlords responsibility to keep the property in repair, you can make sure everything is clear. This can be things as diverse as the length of term and break clauses through to restrictions on smoking or loud music (although you might want to have a look at the Office of Fair Trading (OFT) guidelines to check the likely enforceability of your clause). Such comprehensive agreements allow you to effectively manage your investment and to make sure that both sides are clear as to what to expect from the other. Having an effective list of rules of occupation can assist in helping any potential disputes being seen off as having a clear reference to point to.

Whilst sorting out the paperwork can sometimes appear to be a chore if and when you are faced with a dispute it is vital. As we have repeatedly blogged the courts will take the agreement as the starting point. If you have no agreement in writing often the courts will find it difficult to impose onerous terms on one or other party unless it can be shown unequivocally that this was agreed. Whilst relying on terms other than rent or operation of a break clause to evict can be difficult in our experience without a rewritten agreement it is almost impossible.

So take 5 minutes and make sure you have an agreement which is up to date and covers what you want and require.

Filed under: England & Wales, , , , , , ,

Wheel Clamping: Protection of Freedoms Act 2012

The 1st May 2012 saw the Protection of Freedoms Act being given Royal Assent. Whilst covering many areas this also introduced further regulation of wheel clamping and has, in effect, outlawed wheel clamping of vehicles on private land. The actual offence is set out in section 54 of the Act and provides that anyone found guilty of an offence under this Act would be liable for a fine.

For many Private Estates wheel clamping has been used as an effective tool to prevent unauthorized third parties parking without authority. Clearly they will need to look again at what steps are taken. The Act does make clear that the use of a fixed barrier would not be a an offence if the barrier was in place when the vehicle was parked whether in use or not. For many estates this is not a desirable option but other options are limited.

Clearly for any estates currently using wheel clamping they will need to liaise with their provider and see what if any alternative services they may offer such as imposition of fines etc. Sadly it seems that the actions of “cowboy” clampers have meant that this method of protecting rights has now been removed.

Filed under: England & Wales,

Strikes!

Any readers currently dealing with the courts ( e.g. possession hearings, bailiff appointments etc), be aware of proposed industrial action by court staff. A “work to rule” may be in operation and you may find the courts are slower than usual in dealing with matters between tomorrow and August with urgent cases being prioritised. You can read about it in the Law Gazette here and on the BBC news here. The land registry also anticipates that tomorrow ( 10th May 2012) “Waiting times may be longer than normal; however, we will of course endeavour to ensure that any disruption is kept to a minimum”.

Filed under: England & Wales

Recovery of Leaseholder’s Legal Costs

Most commercial and long residential leases contain provisions which enable the landlord to recover any legal costs that may be incurred, however due to the vast amount of case law surrounding this issue there is considerable uncertainty as to whether or not the landlord can recover these costs if they proceed through the Leasehold Valuation Tribunal (LVT).

In the case of Freeholders of 69 Marina v Oram & Ghoorun the freeholders of a block of flats undertook work on the common parts and sought to recover the service charges from the tenants. However two tenants disputed the amount and the freeholder applied to the LVT to recover the service charges and the costs of taking the matter before the LVT. No monies were received from the two tenants despite the LVT decision so the freeholders served notice under section 146 of the Law Property Act 1925 demanding payment and issued a claim at the county court. The tenants then made payment. The issue to then be decided was whether the tenants should be equally liable for the costs of enforcement of the legal costs or whether the costs should be applied to all the tenants collectively. The Court of Appeal interpreted the terms of the lease and it was held that the costs were to be recovered from the two tenants only.

The above decision of the Court of Appeal is one that courts will have to consider in future cases. It should be noted that this decision was made because the costs clause in the lease was unambiguous. The decision clearly indicates that each particular lease needs to be carefully considered and whilst many leases contain covenants with the wider wording such as Freeholders of 69 Marina, many other leases contain the narrower wording.

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

Insurance: how to challenge

Most long leases require the Freeholder to insure and then to recover the premiums from the Leaseholders. In respect of residential leases Leaseholders have various rights.

The starting point as always are the terms of the lease and what these allow the Freeholder to do and recover. It is important to consider but usually the lease terms will be drawn allowing the Freeholder to insure with whom ever they wish and for what risks they consider appropriate. Often this results in a premium which the Leaseholders feel is unreasonably high.

As with all such matters we would in the first instance suggest that the concerns are bought to the attention of the Managing Agent or Freeholder. They ought to be prepared to engage with you to show how the premium was achieved and that it is reasonable. Sadly not all do so. If not the Leaseholder is entitled under the Landlord and Tenant Act 1985 to request a right to inspect the policy and take copies. This means not only the premium receipt but copies of the policy and all the relevant schedules which should include details of claims history etc.

Armed with details of the policy it is then possible to obtain alternative quotes. We pause at this moment to remind Leaseholders that they need to obtain alternative quotes which are on similar terms unless there are good reasons to depart from the terms of the existing policy. Before departing from those terms we would always suggest that you obtain advice from an experienced insurance broker so you can support any argument that the terms on which the Freeholder had been insuring were unreasonable.

Once you have an alternative quote, if lower, we would again suggest you submit it to the Freeholder for comment. Remember the Freeholder does not have to go with the cheapest quote but he needs to be able to show the quote he has obtained is reasonable in all the circumstances ( see section 19 of the Landlord and Tenant Act 1985). Assuming still you get nowhere then you can look to make an application to the Leasehold Valuation Tribunal (LVT) under section 27A of the Landlord and Tenant Act 1985. The application should attach a copy of the Freeholders demands and your evidence. This should include your quote, the proposal form and any other information such as letters etc with your broker and or the Freehold. Remember you will need to show to the LVT that your quote is on similar terms to those originally obtained by the Freeholder (or other reasonable terms) and is at a significantly lower price.

Often these disputes are dealt with on the papers. This means it is vital your case is clear. The Freeholder will be invited to comment upon your case and to explain why the premium which they claim is reasonable. Usually then the Leaseholder will have an application to respond. Remember this will be your last chance to have a say and it is worth commenting on what the Landlord says. Landlords will often say they used an independent broker who tested the market. If there is no proof as to how the market was tested you should point this out. If the Freeholder does not comment on whether they have received a commission this is a point worth raising as more often than not they will!

Remember just because the Premium seems high will not necessarily make it unreasonable. It is important to consider the terms. Things such as the claims history and if many of the properties are sublet with the lease not allowing the Freeholder control over this can affect the terms companies quote on. We have also seen Leaseholders obtaining quotes where the cover is split between 2 or more insurance companies with each having a percentage share of the cover. In the writers opinion it would be reasonable for a Freeholder to refuse such a quote. Dealing with 2 or more insurers could be difficult.

It is important to do your homework but if having done this the premium still seems high and the Freeholder will not budge the LVT can assist.

If you need help on this or any other long residential lease issue please do contact us.

Filed under: England & Wales

Insurance: how to challenge

Most long leases require the Freeholder to insure and then to recover the premiums from the Leaseholders. In respect of residential leases Leaseholders have various rights.

The starting point as always are the terms of the lease and what these allow the Freeholder to do and recover. It is important to consider but usually the lease terms will be drawn allowing the Freeholder to insure with whom ever they wish and for what risks they consider appropriate. Often this results in a premium which the Leaseholders feel is unreasonably high.

As with all such matters we would in the first instance suggest that the concerns are bought to the attention of the Managing Agent or Freeholder. They ought to be prepared to engage with you to show how the premium was achieved and that it is reasonable. Sadly not all do so. If not the Leaseholder is entitled under the Landlord and Tenant Act 1985 to request a right to inspect the policy and take copies. This means not only the premium receipt but copies of the policy and all the relevant schedules which should include details of claims history etc.

Armed with details of the policy it is then possible to obtain alternative quotes. We pause at this moment to remind Leaseholders that they need to obtain alternative quotes which are on similar terms unless there are good reasons to depart from the terms of the existing policy. Before departing from those terms we would always suggest that you obtain advice from an experienced insurance broker so you can support any argument that the terms on which the Freeholder had been insuring were unreasonable.

Once you have an alternative quote, if lower, we would again suggest you submit it to the Freeholder for comment. Remember the Freeholder does not have to go with the cheapest quote but he needs to be able to show the quote he has obtained is reasonable in all the circumstances ( see section 19 of the Landlord and Tenant Act 1985). Assuming still you get nowhere then you can look to make an application to the Leasehold Valuation Tribunal (LVT) under section 27A of the Landlord and Tenant Act 1985. The application should attach a copy of the Freeholders demands and your evidence. This should include your quote, the proposal form and any other information such as letters etc with your broker and or the Freehold. Remember you will need to show to the LVT that your quote is on similar terms to those originally obtained by the Freeholder (or other reasonable terms) and is at a significantly lower price.

Often these disputes are dealt with on the papers. This means it is vital your case is clear. The Freeholder will be invited to comment upon your case and to explain why the premium which they claim is reasonable. Usually then the Leaseholder will have an application to respond. Remember this will be your last chance to have a say and it is worth commenting on what the Landlord says. Landlords will often say they used an independent broker who tested the market. If there is no proof as to how the market was tested you should point this out. If the Freeholder does not comment on whether they have received a commission this is a point worth raising as more often than not they will!

Remember just because the Premium seems high will not necessarily make it unreasonable. It is important to consider the terms. Things such as the claims history and if many of the properties are sublet with the lease not allowing the Freeholder control over this can affect the terms companies quote on. We have also seen Leaseholders obtaining quotes where the cover is split between 2 or more insurance companies with each having a percentage share of the cover. In the writers opinion it would be reasonable for a Freeholder to refuse such a quote. Dealing with 2 or more insurers could be difficult.

It is important to do your homework but if having done this the premium still seems high and the Freeholder will not budge the LVT can assist.

If you need help on this or any other long residential lease issue please do contact us.

Filed under: England & Wales

First Picture of the PROPERTYdrum conference.

Hope to see you there!

Filed under: England & Wales, FLW Article,

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