Coventry View

A litigation lawyer's perspective

No Human Rights Here – McDonald v McDonald in the Supreme Court

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McDonald v McDonald [2016] UKSC 28

The European Convention on Human Rights, and the Human Rights Act 1998 are basically intended to regulate the relationship between individuals and the State, not between individuals themselves, which is generally left to domestic law. The HRA provides this expressly:

s 6.1 It is unlawful for a public authority to act in a way which is incompatible with a Convention right.

So what happens when one individual, or private organisation, while exercising their own rights, normally as to the ownership of property, infringes the Human Rights of another individual?

In the housing field the easiest way for this to happen is when a landlord seeks possession of a house or flat belonging to him, but occupied by somebody as their home, and so the occupier’s rights would normally be protected under Article 8 of the Convention:

Art 8.1 Everyone has the right to respect for his private and fimily life, his home and his correspondence.

Art 8.2 There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

This clashes with the landlord’s rights under Article 1 of the First Protocol to the Convention:

A1P1. Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

If the occupant is evicted they lose their home. If not the landlord is deprived of his property. Which takes priority? It is easy enough if you are asking the judge to exercise his discretion and make an order, because he can take all these factors into consideration. But how do you decide if the landlord is seeking possession under a mandatory ground, such as ground 8  or s21 HA, when the judge has no discretion in the matter?

Well, the matter was decided in respect of property belonging to public bodies long ago, in the well known cases of Manchester CC v Pinnock (2010), and Hounslow v Powell etc (2011) I wrote about them at the time (here and here) and the SC decided that in an appropriate (ie very strong) case the court should decide whether the order sought was “proportionate” in all the cirdumstances. In practice the courts rarely exercise this discretion, but it is there and cannot be ignored, with public bodies generally adapting ther procedure to take it into account. And in this context “public bodies” includes most social landlords, following the CA case of Weaver v London & Quadrant (2009).

This was all based on the wording “a public authority” and so at first glance couldn’t affect relationships between private individuals, or private bodies. However, these are all cases where there is a mandatory ground of possession, with no discretion to the judge, and a strong feeling of unfairness, or lack of proportionateness, so the occupants’ advocates were inventive, and argued that although Joseph Soap, the landlord, wasn’t a public body, the local county court was, and so the court was bound by the HRA even if the landlord wasn’t. The court would therefore have to consider and deal with the human rights points, and if that affected the landlord’s rights then this was covered by the proviso in A1P1. If the argument succeeded than it would in fact apply to all areas of law, and not just housing claims, so it was a matter of great importance.

McDonald v McDonald

This was an undoubtedly hard case. The defendant, an adult with psychiatric and behavioural problems, was living in a house bought for her by her parents with the aid of a short-term interest-only mortgage from CHL. She had an AST of the property, paid from her benefits. Unfortunately her parents’ financial circumstances deteriorated and they could no longer pay the morgage payments in full. CHL appointed receivers under the LPA who exercised their power to serve a s21 notice on the defendant, and brought possession proceedings.

At Oxford County Court the defendant’s representatives argued that the court ought to consider the proportionality of making an order for possession, given that there was medical evidence that having to move would have a severe adverse affect upon her. HHJ Corrie held that he had no power to do this as the claimants were not a public body. However, if he did have the power the Judge would have exercised it and dismissed the possession claim, there being no other way to protect the defendant’s interests.

The CA dismissed the appeal and the case got to the SC and judgment was given on 15.6.16. They identified three questions:

  • should a court consider proportionality in a claim to evict a residential occupier by a private sector owner;
  • if so, is can s21 HA be read in a Convention compliant way; and
  • if so, would the Judge have been entitled to dismiss the claim as he said he would?

Proportionality

The defendant’s counsel argued strongly that the court was clearly a part of the state, and so was bound to consider proportionality in making any possession order, and if there was a private sector claimant would have to balance their A1P1 rights against the occupant’s Art 8 rights when coming to a decision.

The court said that things were not as simple as that. Parliament has regulated the position between private landlords and tenants for many years and although the tenant with an AST has restricted rights, they are significant and show where parliament has democratically decided to strike the balance between them. There are no circumstances where a judge should use Article 8 to make a different order from that determined by the contractual position, as regulated by the legislation. And as Lord Millett explained in Harrow LBC v Qazi (2004) the court:

 is merely the forum for the determination of the civil rights in dispute between the parties… once it concludes that the landord is entitled to an order for possession, there is nothing further to investigate. [paras 108-109]

Having looked at the cases from the ECHR the court decided that although there was some support for the view that Art 8 was engaged, there was none that said that a judge had to consider proprotionality when making a possession order, so the appeal was dismissed.

Can s21 be made compliant?

The court said that it is one thing to imply words into legislation which are consistent with the scheme of the legislation, but are needed to make it comply with the Convention. It is quite another to insert words that are wholly inconsistent this its scheme. That is not interpretation, but amendment, and is something for parliament and not for the courts to do. If the section was incompatible then there would have to be a declaration of incompatibilty. But in the circumstances this did not arise.

Should the Judge have dismissed the claim?

The judge could only postpone any order for possession bu up to six weeks, and then only if there was exceptional hardship. It was difficult to see how it would ever be proportionate to dismiss the posession claim altogether, and prevent the mortgagees getting repaid at all. The mortgage term expired only three weeks after the County Court judgment, and the only way to recover the loan was by selling the property with vacant possession. On the facts possession should have been postponed by six weeks at the most.

And this means?

The court has banged the argument that all law is subject to the Convention because all laws are enfirced by courts very firmly on the head. And also indicated that s21 and other mandatory possession grounds have been decided by parliament and that the courts must accept the balance between the parties that parliament has struck.

There may be a few small points on introductory tenancies still to be considered, but these are granted by public sector landlords, and this case, hard as it is to the parties concerned, really draws all this argument to a close, some 18 years after the Human Rights Act came into force.

Sighs of relief from private sector landlords. And at least the rest of us know where we are.

More details as ever with the Nearly Legal blog.

Written by Coventry Man

25/07/2016 at 13:49

Why All Businesses are Risky

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This isn’t my normal legal/land-law sort of piece. However, in another life I attend networking breakfasts in Leamington Spa, and this piece is based on a talk that I gave there.

I’ve spent over 35 years as a litigation solicitor. This gives you a very jaundiced view of things. People only come to see me when things have gone wrong. So I’m very used to risk – a major part of my work is managing risk. What can I pass on?

All businesses have risk

If you’re an employee you get paid a salary which doesn’t normally depend too precisely on how much money you are making for your employer. But if you are in business you charge your clients/customers/patients fees and you incur expenses such as salaries, rent, and the cost of materials, and the two sides of the equation are only distantly related to each other. If your income is larger than your expenses you make a profit, and if they aren’t you make a loss, and in many businesses the difference is a very thin line. So there is a risk.

It is part of being a business. You can’t eliminate it. You have to recognise it, and then live with it. And do remember there is the world of difference between being good at an activity  – say photography – and being able to trade successfully as a photographer. You need many extra skills. Risk management is one of them.

Going into business is risky – but then so is living. We could all avoid the risk of being knocked down by a bus by staying at home all day. But we don’t – we just remember to look both ways for the large red (or blue) things. And the budding photographer can manage his risk by getting his staging checked, having the children chaperoned, and taking lots of pictures so that some of them are what the clients want.

Risk isn’t bad in itself. It’s unmanaged, unrecognised risk that is the problem. You have to have a sense of proportion. You walk a lot closer to the edge of a kerb than you do to the edge of  a cliff because the consequences of getting things wrong are so much more serious. So you factor the chances of failure against the consequences of failure and act accordingly.

Of course you don’t always have to take the risks offered. If you don’t like what you see

  • avoid the activity. I don’t know much about conveyancing. So I don’t do it, and any that comes my way is sent on to others who know better;
  • protect by taking precautions, or undertaking training, or by limiting your potential liabilty by contract, or whatever;
  • protect things by insurance, or laying off liability on sub contractors, so you aren’t in the line of fire if things do go wrong.

And remember, risk can be a reason for you to charge a premium price for a tricky job. And if you do enough of something you ought to get pretty good at it, so you have a niche, and are doing things that are well within your comfort-zone. Taming lions doesn’t bother a lion-tamer, although it would certainly bother me.

Risk is good.

Types of risk

It’s essential to recognise & evaluate risk when you see it. At any rate you have to know when there is a problem. As a partner said when I was a trainee in London:

You don’t need to know where the mines are. We have people to tell you that. But you’ve got to know that you’re in a b****y minefield!

A major reason for business failure is not providing for risks properly. If you’re a buy-to-let landlord you have to factor the risk of voids, or the 6-9 months it takes to get an eviction, or changes in the tax on interest, or changes in the law (eg on s21 or the definition of Houses in Multiple Occupation) into your business plan or you will make a lot less than you were expecting, possibly fatally so.

Or say that you are an IT company and allow one customer to account for say 40% of your turnover. You are very vulnerable if their business fails, or is taken over by somebody who doesn’t continue the relationship. We all know to our cost that big and apparently healthy companies can fail – BhS or Austin Reed are only the latest examples. And if they ask you to cut your charges, or give them freebies, you may be unable to resist. Think of farmers, supermarkets, and the price of milk. You have to have your wits about you all the time.

There are two main types of risk – risks of trading, and personal risks – and here are a few examples.

Risks of Trading

  • bad debts/insolvent debtors.
  • changes in the market -new competitors, changes in fashion, technological breakthroughs.
  • changes in cost of fuel, or changes in law or tax.
  • unexpected costs of repairs or research, or a court case.
  • supply problems.
  • employee problems.
  • landlord or tenant problems.
  • black swans – totally unexpected developments that you could not foresee (like the discovery of black swans in Australia when all the rest of the world’s swans are basically white.)

Do remember that most businesses fail because of cashflow problems, not lack of profits as such.

Personal Risks

  • illness/death of owner or family, or key workers
  • divorce of owner(s) or key workers.
  • internal disputes inside company.
  • age and succession.

What to do

Before you start research the business thoroughly. The internet is a wonderful tool, as are books, but they are not enough in themselves. Not everything they say is right, and your particular type of work, or location, or skills, may be different. There is no substitute to practical hands-on working as close to your proposed business as possible. But do remember that if you are working with the vendors of the business that they might not be entirely balanced in their view of things. They are unlikely to undervalue their business or its prospects.

Once you have started take as much advice as you can. You don’t need to follow all of it, indeed you’d be a fool if you did. But you ought to consider it. There are a lot a potential places to get advice – colleagues (if you can), contacts in your trade, networking contacts, friends and relations (although they may not know much about your business), formal mentors, formal training courses and qualifications, and professionals – accountants (the key advisor for most small businesses), lawyers, surveyors, IT techies. And pick the right one – ask around, don’t just read their blurb or go for price.

And then take precautions:

  • set up your organisation properly. Register with HMRC. Get a partnership agreement, or shareholders’ agreement to avoid internal disagreements. Get employment contracts.
  • get terms of business and contracts – either from your trade body or from a lawyer – and use them.
  • set up systems, and follow them.
  • keep records, and back them up regularly.
  • insure against risks that you don’t want to cover yourself.
  • talk to banks before you’re in trouble rather than afterwards.
  • take up credit references for customers and suppliers – accounts at Companies House can be 2-3 years out of date.
  • keep your life/work balance under control.
  • don’t fall out with your wife, or business partner. That will really mess things up.
  • and don’t fall out with suppliers, or competitors unless completely unavoidable. A bit of good will goes a long way.

If you are in trouble seek help early. All professionals find it so much easier to help you if they are called in before matters are going terminal. They may be able to stop you making things worse.

And manage risk. Do what you are good at, and comfortable with. Get others to do the rest. These can be employees, or sub-contractors, or suppliers, or agents. There will be a cost, but it may be worth it. Alternatively, don’t do it at all – like me and conveyancing. And if you are doing something new, start in a small way and work up with time.

What not to do

Don’t ignore problems, or only address them at the last minute.

But don’t get over-protective either. Don’t lose a good oppertunity by refusing to raise modest amounts of finance for it. Or get wildly over-insured against all possible risks, or spend a disproprtionate amount of time and money on seeking advice (I never said that business choices were easy to make.)

Obviously don’t take wild, unassessed risks. But more importantly don’t let your staff or colleagues do so either – often without realising the nature of the risks they are taking, if they have less experience or expertise than you. Or if you haven’t filled them in about the potential problem.

And don’t get too worried either. If you are sick with worry all the time you ought to be doing something else.

Legal dangers – the realities

There is a lot more to taking people to court than just getting the law right, although that undoubtedly helps. Courts are slow and expensive. Opponents go bust and are unable to pay judgments, or the winner’s costs. A lot of management time has to be put into fighting a case which could more productively be used earning money for your business. Big opponents can be very difficult to deal with, as they can throw vast resources both in cash and in manpower at a problem that you can’t match.

You need to be almost certain to win sometimes for it to be all worthwhile. Because if you are certain to win the other side is certain to lose, and can usually be persuaded to do a deal. The courts are really only just a method of getting the parties round a table to settle things, so the sooner you can convince them of this the easier it will be. And if you have good documentary evidence, created at the same time as the events, then any judge is almost certain to find in your favour, so this is the thing to do. Record, get receipts, take photos, confirm things in writing. Don’t just rely on your memory, and an impressive witness-box manner, because that rarely wins these days.

Further information

There is a lot of training out there which can give you useful skills and some of it is essential – if you want to drive an HGV lorry you have to have a licence. And there is genuine expertise and proven techniques in marketing, sales and management, which can be learned, as well as the more classical skills like book-keeping. Look around and pick what suits you.

Obviously keep your technical knowledge up to date. This is what your customer expects and might give you a competitive edge. Things can change very quickly – don’t get left behind.

Books, the internet, trade periodicals and so on can be excellent in showing you the way into a problem, or in keeping an overview on an aspect that you don’t come to very often, or in showing the current trends and interests in your field.

If you need detailed help in a technical area you can go to a professional, for a price. For most small businesses the accountant is the first port of call, and they should be able to direct you to appropriate lawyers or surveyors or whatever if it isn’t their sort of problem.

However, do beware that a lot of “training” is really just a way for the trainer to make a living, rather than being a lot of practical use to you. And some professionals aren’t worth much either.

Finally

So, as I said before

Risk is Good.

Or more accurately

Managed, understood, recognised, prepared risk can be good in appropriate circumstances.

But even then, beware of black swans. Such as the referendum leading to Brexit, which nobody expected when my own business was set up a few years ago, and and the long-term result of which is impossible to predict. A definite risk – but perhaps one for another day.

Written by Coventry Man

22/07/2016 at 00:02

Where am I? – Edwards v Kurasamy in the Supreme Court

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Sometimes the most interesting cases arise from pretty ordinary events. In this case Mr Edwards fell over on his way to the dustbins in his block of flats, because of uneven paving. He can’t have been too badly hurt because the DDJ awarded him £3,750 in damages, but it started a chain of appeals all the way up to the SC, where the decision came out on 13th July. So it was obviously thought very important by a number of insurers, landlords and others. A link to the full report is here [2016] UKSC 40.

Before I tell you about the decision you will need some background. Mr K had a long lease of a flat in a block of flats in Runcorn. Access was over a paved courtyard leading to the entrance into the communal hallway, and then on into the individual flats. Mr K sub-let his flat to Mr E in 2009, and one day in 2010 Mr E was crossing the courtyard to put out the rubbish in the dustbins when he tripped over an uneven paving slab and suffered the injuries from which he has no doubt long recovered.

Under s11 Landlord & Tenant Act 1985 a landlord of a residential lease for less than 7 years is liable for structual and exterior repairs. The obligation is extended in the case of flats etc to include other parts of the the building in which the landlord has an estate or interest. The wording is of some importance:

s 11 Repairing obligations in short leases

(1)In a lease to which this section applies (as to which, see sections 13 and 14) there is implied a covenant by the lessor—

(a)to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes),

(b)to keep in repair and proper working order the installations in the dwelling-house for the supply of water, gas and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences, but not other fixtures, fittings and appliances for making use of the supply of water, gas or electricity), and

(c)to keep in repair and proper working order the installations in the dwelling-house for space heating and heating water.

(1A)If a lease to which this section applies is a lease of a dwelling-house which forms part only of a building, then, subject to subsection (1B), the covenant implied by subsection (1) shall have effect as if—

(a)the reference in paragraph (a) of that subsection to the dwelling-house included a reference to any part of the building in which the lessor has an estate or interest; and

(b)any reference in paragraphs (b) and (c) of that subsection to an installation in the dwelling-house included a reference to an installation which, directly or indirectly, serves the dwelling-house and which either—

(i)forms part of any part of a building in which the lessor has an estate or interest; or

(ii)is owned by the lessor or under his control.

(1B)Nothing in subsection (1A) shall be construed as requiring the lessor to carry out any works or repairs unless the disrepair (or failure to maintain in working order) is such as to affect the lessee’s enjoyment of the dwelling-house or of any common parts, as defined in section 60(1) of the Landlord and Tenant Act 1987, which the lessee, as such, is entitled to use.

So what mattered here was whether the paving was:

  • part of the exterior of the building, or of the hallway;
  • an area over which Mr K had an estate or interest;  and
  • whether it mattered that Mr K hadn’t been given notice of the defect in the paving before the accident, given the long-standing rule that a  landlord is not liable to repair the let property unless the tenant has given him notice of the defect.

The DDJ found for the tenant. This was reversed by the Circuit Judge on appeal, but her decision was reversed again by the CA, and so we get to the SC.

The Supreme Court Decision

You might wonder why things got so far, given the comparatively minor injuries. The answer is that landlords, and their insurers, got seriously worried about the idea of being held liable for defects about which they had received no prior ntice, and could see a whole army of trip-and-slip cases coming their way, and were determined to do something about it if at all possible.

Lord Neuberger gave the judgment in the SC, with a very short comment by Lord Carnwath.

He dealt with the first point robustly: – external paving is not part of a building, being outside the walls and roof, especially as it was felt necessessary to include “drains, gutters and external pipes” in the definition, and you can’t interpret the section so as to get round this. The CA decision of Brown v Liverpool Corporation (1969) (on earlier legislation) to the contrary was wrong, and the CA decision in Campden Hill v Gardner (1977) (on different earlier legislation) was to be preferred.

That disposed of the appeal, but the court gave its views on the other points as well.

The second point looks impossible to dispute – Mr K had a right of way over the paving and this is an “interest” for conveyancing purposes, even if it doesn’t amount to an “estate”. Attempts by Mr E’s counsel to argue that he had lost the interest while the sub-tenancy was in existence got nowhere. It was also pointed out that s3A of the Act protects landlords from limitations in their powers:

(3A)In any case where—

(a)the lessor’s repairing covenant has effect as mentioned in subsection (1A), and

(b)in order to comply with the covenant the lessor needs to carry out works or repairs otherwise than in, or to an installation in, the dwelling-house, and

(c)the lessor does not have a sufficient right in the part of the building or the installation concerned to enable him to carry out the required works or repairs,

then, in any proceedings relating to a failure to comply with the lessor’s repairing covenant, so far as it requires the lessor to carry out the works or repairs in question, it shall be a defence for the lessor to prove that he used all reasonable endeavours to obtain, but was unable to obtain, such rights as would be adequate to enable him to carry out the works or repairs.

The third point was the one which raised the greatest amount of heat. The SC started off by going through the cases starting in Moore v Clark (1813) and decided that it was clear that notice was required for the parts of the premises let to the tenant – especially the interior – but not for the parts that the landlord retained – eg the roof and external walls. The argument was that a landlord can’t go barging in to the tenant’s property on the off-chance that there is a defect, but is liable for his own parts, and this is a fair division of responsibilities given that the landlord has rights to inspect under s11(6):

(6) In a lease in which the lessor’s repairing covenant is implied there is also implied a covenant by the lessee that the lessor, or any person authorised by him in writing, may at reasonable times of the day and on giving 24 hours’ notice in writing to the occupier, enter the premises comprised in the lease for the purpose of viewing their condition and state of repair.

The position if the landlord had let other parts of the building to other tenants isn’t so clear, but on balance the landlord will be liable without notice.

It was argued that all s11 liability claims needed notice, but this was rejected: the general law would apply.

Finally Mr E’s counsel argued that as the paving was outside the flat the general rule meant that no notice was needed in this case. However, the court ruled that in the particular case the rights on the paving were the limited rights of a right of way and that Mr K would have no rights as against the freeholder to carry our repairs. And he had lost the right to exercise these for the duration of the tenancy. Hence Mr E, who was there every day, should have given him notice of the defect.

The consequences

Mr K the landlord won the battle but the wider implications are not entirely clear. Landlords will be pleased that they aren’t liable for defects in outside paving, in these slightly unusual circumstances. And that notice of defects has to be given if they are going to be liable. In most cases. Some tenants may have to rely upon the more limited rights under the Defective Premises Act 1972. I suppose the lesson to all is to mind how you go.

.

 

Written by Coventry Man

18/07/2016 at 17:52

More Changes for s8 Notices

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It seems to be traditional to change the form of the notices that a Landlord has to give an Assured, or Assured Shorthold, Tenant if they want to recover possession for any reason other than service of a s21 Notice every so often, usually at short notice, and with little publicity. The powers that be did so in April 2015 (see my piece) and are now doing so again, with effect from 6th April 2016.

This matters, because although the actual changes are trivial – correcting of some cross-references to the new form of notice needed for s21 Notices – the form is a prescribed form, and if you don’t use the right one then the notice is invalid, and you might have to start the possession claim again. And you will have to start again if you are using the most popular Ground 8 (2 months’ or 8 weeks’ arrears of rent) because the court isn’t allowed to dispense with service of a valid notice in that case.

The new form of notice is in the regulations here  along with some similar minor amendments to the notices for increasing rent etc. The layout is as awful as ever, and printed in ridiculaously small print – why can’t they produce these forms in a usable version (can’t really call it a form) rather than getting everybody to type the things out afresh? The people who produce the court forms have now made pretty good, amendable pdf versions, so perhaps they can pass on a few tips to their colleagues in housing.

Still, there it is. Don’t forget it if you advise landlords. Or indeed if you advise tenants either, as you may be able to give your client much longer to find somewhere else to live than you had expected.

 

Written by Coventry Man

04/04/2016 at 18:36

Ilott v Mitson – off to the Supreme Court

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I have reported before on the case of Ilott v Mitson (here and here) but it is an unusual case and won’t go away.

Melita Jackson died in 2004 leaving some £486,000. She was a widow and had an only daughter, Heather Ilott, then aged in her 40s, who had 5 children, a husband who only worked part-time, and who relied very largely on state support. Even a small part of her mother’s estate would have been very useful to her. But Melita left all her money to three animal charities, and cut out her daughter entirely.

After several hearings up and down the system the CA allowed the daughter £163,000 odd, and the charities were presumably left with a large legal bill, so we all thought that was that.

Well, we were wrong. The Supreme Court has just (2.3.16) given leave to the charities to appeal from the CA order. The hearing might be 12 months away, but this is clearly not the end of the road, yet. Watch this space.

Written by Coventry Man

02/03/2016 at 18:03

Letting to Illegal Immigrants – the New Restrictions

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In 2014 the government brought in restrictions on letting residential property to illegal immigrants, but only applied them to a pilot area, made up of Birmingham, Dudley, Sandwell , Wolverhampton and Walsall. I wrote about it at the time, but as the restrictions are now being rolled out across the whole of England (but not Wales, Scotland or Northern Ireland) with effect from 1st February 2016 I need to do so again. I’ve cut and pasted a lot from my earlier piece, so don’t be too surprised if it looks familiar. However, the government has taken the opportunity of tweaking things here and there, so there are some changes too.

The Law

Immigration Act 2014 sets thing out in ss 20-37. It defines:

  • persons disqualified by immigration status –  who are, not terribly surprisingly, people who have no right to remain in the UK; and
  • persons with limited right to rent – who are people with time-limited rights to be in the UK, plus people exercising EU rights to be in the UK, but are not EU citizens.

and make a landlord liable to a penalty if they allow them to occupy residential property, either as tenants, or licensees, or indeed lodgers.

There are a number of exceptions for the people

  • only adults count;
  • and UK, EU, EEA and Swiss nationals are exempt.

and for the lettings

  • only residential lettings – ie which the adult will occupy as their only or main residence (even if the premises are also used for other purposes.)
  • leases of 7 years or more don’t count;
  • nor does social housing, hostels, care homes, student accommodation and a variety of other things that are set out in Sch3,

However, lettings include leases, licences, sub-leases and licences and agreements for them  (s20(3)). And the prohibition can be broken by the tenant, or any other adult authorised to live there, or any adult not named in the tenancy agreement who actually lives there unless reasonable enquiries were made and they were not disclosed.

All this starts on 1st December 2014 for the Midlands, and 1st February 2016 elsewhere, and relates to lettings (etc) starting on or after then. Existing tenancies and renewals aren’t affected.

The Code of Practice

Immigration law is notoriously complex, and so the Government, rather than giving all landlords a 3 year training course, and free legal assistance afterwards, has prescribed a Code of Conduct  and some Guidance for Landlords which landlords are meant to follow. If they carry out the procedure in the Code they won’t have to pay the penalties. All landlords really need to have access to the Code. And as it gets changed from time to time you need to check the on-line version each time.

Some of the procedure is obvious. The landlord or agent should interview all the prospective occupants and see if they are intending to live there. If there is any doubt about the age of a child then documentary evidence should be seen and a copy kept. And all the adults should produce appropriate original documents which should be checked in their presence and a copy taken.

And for some people the documents are easy too – UK, EU or EEA or Swiss passport, or EU/EEA/Swiss identity card. They don’t even need to be current.

However, it rapidly gets a lot harder – do you know what a biometric immigration document issued by the Home Office looks like? Me neither. Fortunately the Home Office has produced a guide with some illustrations, although as the tenant can produce identity cards (current or expired) from any of the EU or EEA  countries or Switzerland it would have been helpful if they had shown a more comprehensive selection.

And once you get onto the “acceptable document combinations” or the “Documents where a time-limited statutory excuse is established” – there is a long list of things that most landlords have never heard of, and will have no idea if they are genuine or not.

Finally, if there is an application in train at the Home Office for permission to remain the landlord has to contact the Home Office online (or by phone) quoting the reference number supplied by the applicant.

For time-limited occupants the landlord has to follow their cases up to make sure they don’t overstay their leave. And the document combinations need to be repeated every 12 months.

If a landlord finds that an occupant is there illegally they should report them to the Home Office right away. Provided of course that they have already followed the Code to the letter, or they are just going to bring down hefty penalties on themselves. And then evict them (using the existing legal framework – s22(9) of the Act says that the tenancy isn’t void because of the immigration illegality), or they may have more penalties to pay.

What’s going to happen?

There is a serious risk that a lot of landlords are going to avoid anybody who looks even slightly foreign. So there is another Code of Practice on Avoiding Discrimination which says in effect that landlords have to document-check everybody, and keep copies for inspection, or they can be accused of racial discrimination. So the revised expectation is that they will avoid anybody who can’t produce a UK passport, or possibly an EU one. How do you know if the other documents are real?

This is wrong, and very unfair on a lot of people who are having a hard enough time living in a strange land but are on the right side of the immigration line. But a family of four may cost a landlord £12,000 in penalties, so why take the risk? Mind you the £3,000/head level only kicks in if the landlord has already had one breach, and the occupant isn’t just a lodger.

And the future?

More restrictions are set out in the forthcoming Immigration Bill 2015-16. This is working its way through Parliament at the moment so the wording isn’t yet been set in stone. This is the present version, but it may change. However the key points are:

  • Landlords (or agents) who let to tenants (etc) in breach of the restrictions, and know, or have reasonable cause to believe that this is the case will be guilty of an offence and can be sent to prison for up to 5 years.
  • The Home Secretary can serve a notice on a landlord informing them that the occupiers of their premises, or all of them, are disqualified as a result of immigration status from occupying premises under a residential tenancy agreement. The landlord can then serve at least 28 days written notice on the occupants and the tenancy thereby comes to an end. The section goes on to say, rather cryptically

The Notice is enforceable as if it were an order of the High Court.

Presumably this means they can send in the HCEOs, without having to bother the courts themselves at all. Such tenancies are excluded from the protection of the Protection from Eviction Act 1977.

  • There are provisions to insert implied terms into ASTs allowing them to be terminated if the tenants are disqualified as a result of immigration status from occupying premises under a residential tenancy agreement, and to give new mandatory grounds for possession for assured and secure tenancies.

Comment

This is controversial stuff. Although the government said that the pilot scheme doesn’t show there was any increase in the difficulty non-white applicants had over white applicants when seeking accommodation, this seems to have been a very small sample, and a short time-period, and other surveys produced different results. Rolling it out over the whole country, including London, is bound to make things a lot more difficult.

In the meantime, if you are a landlord, check the paperwork carefully, keep good copies, and if you are in any doubt it may be prudent to say no. And if you are a tenant make sure that your paperwork is spotless, or you are going to find things a lot harder.

The provisions in the Immigration Bill are very doubtful. The ability to serve a notice that is enforceable as if it were an order of the High Court is going back to Victorian times, and the ability of a Secretary of State to issue a notice to trigger this, bypassing the courts altogether, is a serious attack on the rule of law, which the courts will not necesarrily take lying down. Watch this space.

As ever, there are more detailed commentaries on the Nearly Legal blog (this is a link to several posts on this subject)  and on Tessa Sanderson’s Landlord Law blog, and elsewhere.

Written by Coventry Man

31/01/2016 at 19:32

Pensions and bankruptcy – a longer wait

with 7 comments

If you go bankrupt can the Trustee get at your pension? Well if you are over 55 (or even 52) then they might be able to. Or on the other hand they might not. An unsatisfactory state of affairs, brought about by two contradictory decisions of High Court judges – Raithatha v Williamson or Horton v Henry.

Fortunately Horton v Henry is going to the Court of Appeal. Unfortunately the date originally given  – 25/25 Jan 2016 – has not been effective, and the case has been relisted for 21/22 April 2016. So a bit longer to wait.

For more details of the cases see my earlier posts here and here.

Written by Coventry Man

27/01/2016 at 14:43