Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

I predict a riot – Anti-social behaviour Crime and Policing Act 2014

The Anti-Social Behaviour Crime and Policing Act 2014 (the Act) was given royal assent in March 2014. It amends the Housing Act 1988 to include a new mandatory grounds for possession based on anti-social behaviour. Sections 97 to 100 ( in Part 5) of the Act deal with the new grounds for possession relating to Assured Tenancies ( of which Assured Shorthold Tenancy is a subset). These provisions are not yet in force, and will come in via a Commencement Order sometime in the future.

New ground 7A

In summary ground 7A of schedule 2 of the Housing Act 1988 will provide that the court must give possession if any one of 5 conditions are met:

1. the tenant and/or another occupier or visitor has been convicted of a serious offence and that offence took place in or near the property; or elsewhere but against a tenant/occupier of the property; or against the landlord or agent
2. the tenant/occupier or visitor has breached an injunction to prevent nuisance and annoyance( which is a new injunction to be introduced under this act)
3. the tenant/occupier or visitor has breached a criminal behaviour order ( also new order under this act) and that breach was in or near the property, or caused or was likely to cause harassment to a tenant/occupier or landlord/agent, wherever it took place.
4. the property has been closed down under s73 of the Act. The court has a power to prohibit entry to a property where the use of the premises has resulted in or likely to result in serious nuisance to members of the public.
5. the tenant is in breach of an abatement notice relating to statutory nuisance ( breach of Environmental Protection Act 1990 or noise nuisance

The grounds will not be made out if the conviction is in the process of appeal, or has been overturned.

There are time limits: for example for 1,3 and 5 the notice must be served within 12 months of the conviction; for 2 within 12 months of the court making its finding; and for 4 within 3 months of the closure order. The date that the notice expires and after which the landlord could bring proceedings will be one month from the date of service during a fixed term tenancy, or for periodic tenancies, the earliest date that the tenancy could be brought to an end by a notice to quit. Interestingly the reference to the common law principal of notice to quit suggests that in a periodic tenancy, where a landlord can give only two months’ notice at any time, a notice given under 7a will need to expire at the end of a period of the tenancy.

Why ground 7A? Because the mandatory grounds for possession go from 1-8 so this ground has been shoe-horned in at no 7A and is not related to ground 7.

Will it ever be used? In a fixed term then possibly, especially if the fixed term is for a relatively long period with no break clause. In a periodic tenancy arising after the end of a fixed term, unless and until the use of section 21 is limited, why use ground 7a, which would require a hearing and expire at the end of a period, when you could simply serve two months’ notice under the ruling in Spencer v Taylor and the accelerated procedure.

The discretionary ground 14 is also to be amended to make it a ground if the tenant or occupier “has been guilty of conduct causing or likely to cause a nuisance or annoyance to the landlord of the dwelling-house, or a person employed (whether or not by the landlord) in connection with the exercise of the landlord’s housing management functions, and that is directly or indirectly related to or affects those functions”. There is no need for the conduct to take place at the rented property.

Controversially, ground 14ZA is added to include that the tenant/occupier has been
convicted of an offence which took place during, and at the scene of,
a riot in the United Kingdom.

Filed under: England only, , , , , ,

Trips and slips with Section 21 Notices

The agent, landlord or lawyer must comply with the requirements of the deposit protection rules. To serve a valid section 21 notice the deposit must be protected and prescribed information served pursuant to section 213 of the Housing Act 2004 as amended by the Localism Act 2011 within thirty days of the tenancy starting or the deposit being taken whichever is earlier. If the deposit is not protected then a valid section 21 notice cannot be served until either the deposit is handed back to the tenant in full or with agreed deductions. If the Prescribed Information (“the Information”) has not been served then a valid section 21 notice cannot be served until the Information is served . (N.B. doing the above will not avoid any potential claim for failure to protect the deposit).

Notices need to be served in accordance with the terms of the notice provisions in the tenancy agreement; such as notices being served by first class post deemed served two working days later. Notices served pursuant to a “break clause” must comply with section 21 (1)(b) of the Housing Act 1988 AND the provisions of the clause itself. The courts will interpret the terms of a break clause strictly.
Another major hurdle relates to notices served pursuant to section 21(4)(a) Housing Act 1988. It is easy to get the date wrong, where the fixed term runs from different dates to the rent payment date. The courts have approved a “saving provision” whereby the notice can ask for possession “ after the end of the period of your tenancy which will next end after the expiration of 2 months from the service”. The believed end date is included within an accompanying letter.
If the property requires licensing under part 3 Housing Act 2004 for a House in Multiple Occupation (“HMO”) being selective licensing of residential properties. A licence will be required or an application in the pipeline before service of a section 21 notice.

Top Tips to serving a valid section 21 notice:
1. Check that the deposit is registered and Prescribed Information served BEFORE serving a section 21 notice.
2. If the deposit is not protected then hand the deposit back to the tenant either in full or with agreed deductions.
3. If the deposit is in a scheme but the Prescribed Information not served, serve the prescribed information BEFORE serving the section 21 notice.
4. Check the tenancy agreement for the service of notice clause. Does notice have to be served in a certain way? If so, do it.
5. Is notice being served pursuant to a “break clause”? Follow the requirements of the clause.
6. If the tenancy is periodic the 21(4)(a) notice use the “saving provision”.
7. Don’t cut dates too fine. A longer notice period might be quicker than re-serving a notice.
8. Check the HMO licensing requirements with the local authority.
9. Rent: Continue collecting the rent and passing it on to the landlord.
10. Make the landlord aware a section 21 is a notice seeking re-possession not forcing the tenant to move out without possession proceedings. The notice allows the judge to grant mandatory repossession in Court

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

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, , , , , , ,

Break Clause requirements go both ways.

As I am sure many of you who subscribe to the helpline will be aware, the advice for a Landlord or an agent invoking a break clause to bring about an end to the tenancy agreement is to follow the provisions of the break clause exactly. If this means serving the notice by hand whilst balancing a bowl of water on your head then that is what needs to be done.

The Avocet Industrial Estates case makes clear that this is not just the case for the Landlord and Agent but also the Tenant.

In this case the requirements of the break clause in a 10 year commercial lease, were that the break would be ineffective if “any payment” due under the lease remained unpaid and if a sum equivalent to 6 months rent was due. The day before the break date the tenant handed a cheque for 6 months rent which was due to the Landlord and handed back the keys. The Landlord challenged this claiming that simply handing a cheque does not constitute the amount being paid. This would mean that there were still monies owed at the break date and the break invoked by the Tenant should be ineffective.

The court agreed deeming that a cheque was not legal currency and therefore there was default interest amounting to £130 still owed. This meant that both requirements of the break clause were not satisfied and the Tenant could not rely on the break clause. The court accepted that the result was rather harsh but the decision was based on the legal principle of certainty.

This case simply demonstrates that parties continue to do things without reading the tenancy agreement. On the helpline we often have people that serve section 21s by hand and assume that its deemed served the same day if posted before 4.30pm. However the tenancy agreement states something different, which is that it is deemed served the next day. The section 21 is therefore invalid. This is common and should not be if people just took 10 minutes to read the agreement, assuming you are familiar with it is simply not good enough.

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

Breaking Out!

In MW Trustees Limited and Others v Telular Corporation, the landlords sought a declaration that the tenants had failed to effectively serve a notice to terminate pursuant to a break clause.

The break clause read as follows:

If the Tenant shall wish to terminate this Lease on the Break Date [i.e. 1st March 2010] and shall give to the Landlord not less than six months [notice] in writing to do so and up to the Break Date the Tenant has paid all the Rent and other sums due under this Lease, then on the Break Date this Lease shall cease and determine, but without prejudice to any claims which either party may have against the other for breaches of the covenants and conditions of this Lease occurring prior to the Break Date.

The service provisions in the lease were:

Any notice to be served by any party to this Lease must be given in writing and shall be valid only if:-
(a) It is sent by special delivery post or delivered by hand.
(b) It is sent:
(i) To a company, at the registered office of the company
(ii) Where the receiving party is not a company, at the address shown in this Lease or such other address as that party may notify to the other parties from time to time.
(iii) in the case to the Tenant only, to the premises.


Clause 8.7.2 provided that service of any notice will be deemed to be effected:-
(a) By hand, at the time of delivery, or if delivered after 4pm on a working day, on the next working day
(b) By special delivery post, on the expiry of 2 days from delivery into the custody of the postal service.

There had been a change in the landlord and notice of the change had been accordingly served. However despite the notice of change the tenants served the notice to terminate on the previous landlord. The notice, sent by special delivery, read

this letter is to inform that Telular Corporation wishes to exercise its right to terminate its lease according to section 8.8.1 of our lease for the [premises] …… on the Break Date of March 1, 2010. If Telular Corporation is required to submit any additional information to secure this Break Date lease termination, please do not hesitate to contact me…..

Following an exchange of emails the tenant discovered that the notice had been sent to the wrong party and emailed the managing agent informing them of the wish to terminate the lease. The managing agent on behalf of the landlord responded stating:

Dear Ms Voltz We accept the attached letter and can confirm we are happy for you to break the Lease, however please could you re-address this letter to the following address:- Posel Trust MW House 1 Penman Way Grove Park Enderby Leicester LE19 1SY. I look forward to hearing from you soon….

The court concluded that the landlords by their actions knew full well the tenants intended to terminate the Lease and that the managing agent on their behalf accepted the notice to terminate the lease. The court held that in sending the email in the form that the managing agent did, he represented that this was the Claimants’ position and accordingly they were prevented from subsequently challenging the validity of the Notice or alternatively they had waived the requirement for the Notice to be served in the way specified in the Lease.

The court therefore held that the tenants have plainly acted on the basis that there was no issue and that it had served an effective Notice. The landlord’s application was accordingly refused.

This case emphasises the importance of reading the lease and ensuring that you are familiar with the file before undertaking any work on behalf of a client. It also makes clear that agents should be very cautious before acknowledging break and option notices lest they prejudice their client’s position.

Filed under: England & Wales, FLW Article, ,

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