Let’s Unwind – Leases and Consumer Law

This blog was originally aimed at housing and landlord and tenant law. It has expanded, as the list of topics down the side will show, but I still tend to avoid consumer law because it is suprisingly complex for a field that is directed at the consumer and becase it is difficult to make a living doing it, so I don’t want a long line of readers beating a path to my door with your consumer problems. However, sometimes the areas overlap, and this is one of them.

The Consumer Rights Act 2015 has all the recent publicity, but I am looking at its less prominent cousin, the Consumer Protection (Amendment) Regulations 2014. These have their snappy title because they amend the now middle-aged Consumer Protection from Unfair Trading Regulations 2008, which do what they say on the tin – protect the consumer from various unfair commercial practices. To save my typing I’ll refer to this lot by their dates from now on.

Most of these don’t normally apply to land or leases, but the 2014 regs do apply to “a relevant lease” which is defined in Regl 27C.

Unpicking the legalese, it means that ordinary ASTs or holiday lettings are covered, but not ones provided by social housing organisations, or as part of shared ownership schemes, or equity release schemes, or provision by local councils for homeless people.

For those who need chapter and verse:

(2) In this regulation “relevant lease” in relation to England and Wales means—

(a)an assured tenancy within the meaning of Part 1 of the Housing Act 1988(1), or

(b)a lease under which accommodation is let as holiday accommodation.

(3) But none of the following are relevant leases for the purposes of paragraph (2)(a)—

(a)a lease granted by—

(i)a private registered provider of social housing(2), or

(ii)a registered social landlord within the meaning of Part 1 of the Housing Act 1996(3);

(b)a lease of a dwelling-house or part of a dwelling-house—

(i)granted on payment of a premium calculated by reference to a percentage of the value of the dwelling-house or part or of the cost of providing it, or

(ii)under which the lessee (or the lessee’s personal representatives) will or may be entitled to a sum calculated by reference, directly or indirectly, to the value of the dwelling-house or part;

(c)a lease granted to a person as a result of the exercise by a local housing authority within the meaning of the Housing Act 1996 of its functions under Part 7 (homelessness) of that Act.

There are similar provisions for Scotland and Northern Ireland, but I will leave you to follow them up yourselves if you wish. So far so good.

What is Prohibited?

The 2008 regs prohibit unfair commercial practices, which are defined as being

  • misleading actions (regl 5)
  • misleading omissions (regl 6)
  • agressive behaviour (regl 7) or
  • behaviour listed in sch 1.

The 2014 regs give consumers a right of redress (reg 27A) if, among other things,

  • a consumer enters into  a contract with a trader for the sale or supply of a product to the consumer; or
  • a consumer makes a payment to a trader for the supply of a product; and
  • the trader engages in a prohibited practice in relation to that product, ie
    • misleading actions (regl 5) or
    • agressive behaviour (regl 7); and
  • the prohibited practice is a significant factor in the consumer’s decision to enter into the contract.

It’s not clear why the misleading omissions or the sch 1 actions are excluded, but they are for these purposes. And note that the practice has just got to be “a significant factor”, not necessarily the crucial one.

And then there is aggressive behaviour. This also allows the same remedies if decisions have been caused by harassment, coercion or undue influence. See Regl 7 of the 2008 regs for more details.

How can this affect a Lease?

Surprisingly easily. Prospective tenant looks at flat and asks agent “is it noisy/damp/expensive to heat/secure?” and is told no (or yes) as applicable when this is untrue. Tenant signs lease and then finds out that it is noisy etc and complains. This is misleading and so a breach of regl 5. The definition of “misleading” in regl 5 means “contains false information” – there is nothing about whether the giver believed it, or indeed had reasonable cause to do so. The only test is whether it

causes or is likely to cause the average consumer to take a transaction decision he would not have taken otherwise, taking account of its factual context and of all its features and circumstances. (Regl 5(3))

There is a long list of features that may be covered and you can see them in the 2008 regs if you need to. They include “the main characteristics of the product.”

The point is that it is easy to imagine a claim arising over an AST, and even easier for a holiday letting.

A trader is defined as being  a person acting for purposes relation to that person’s business, whether in person or through an agent, and a consumer is somebody acting wholly or mainly outside their business. Virtually all landlords operate businesses, and most tenants are consumers.

What are the Consequences?

Well, they can be pretty dire form a landlord’s point of view. Because the principal remedy of the right of redress is the right to unwind (regl 27E and 27F) which is the right within 90 days of the start of the lease (or supply of goods etc) to bring the arrangement to an end by rejecting it, which in the case of a lease means, as far as I can see,

  • ending the lease,
  • repaying any deposit, and
  • repaying any rent paid, (although if the lease is rejected more than one month after the start date then the landlord can retain the appropriate part of the rent paid, less any deduction caused by the misleading action.)

If the tenant doesn’t reject the lease in the first 90 days (and the rejection does not have to be in writing but has to be “clear”) then they have a right to a discount (regl 27I) calculated according to the seriousness of the prohibited practice. There is a scale:

  • more than minor – 25%
  • significant – 50%
  • serious – 75%
  • very serious – 100%

This discount can apply to sums already paid or payable in the future. However it is expected that if the lease has not been rejected a court will take this into account in deciding how serious the practice was in misleading the tenant.

What is more, there is even a right to damages (regl 27J) if the tenant has suffered other financial loss, or even alarm, distress, or physical inconvenience or discomfort, although the landlord has a defence to these claims if they can prove that the matter was caused by a mistake etc and that they took all reasonable precautions and exercised all due diligence to avoid the occurrance.

All of this is enforcable in the County Court, which can grant injunctions etc to enforce the consumer’s rights. Or local councils can prosecute for various offences in the 2008 regs.

And the Moral is?

Well, I’m surprised how little effect this has had on things so far, which I must assume is due to consumer lawyers keeping away from landlord and tenant work, and vice versa. It must also be a reflection of the generally weak position that AST tenants have in disputes with their landlords, because of the ease of eviction under s21, and the need to give a reference for their next property. So this will only come to light when everything else has gone wrong already and there is no need to hold back. Perhaps a bit unlikely in the first 90 days of the lease.

Anyway, if you are a landlord or advising one, be very aware of what your agents are telling people, and if you are a tenant then there may be a way out if you respond early enough.

If you want more information there is a surprisingly good guide produced by BIZ  – link here. And there are the usual culprits of Landlord Law and Nearly Legal.

 

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And Another Thing….

I wrote a piece on the Pre-Action Protocol for Debt Claims yesterday – link here. I took the title at face value and assumed that it was about Debt Claims – by businesses against customers or possibly others for sums of money that were owed by individuals.

However, the definition of scope is surprisingly wide:

1.1 This Protocol applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including sole traders).

A number of people have pointed out to me that most claims for possession or forfeiture of leases include a claim for payment of  a debt – the rent or service charge arrears – and so the Protocol appears to apply to them.

Now the Protocol doesn’t apply when the debt is covered by another protocol (para 1.4) but the only possession claims that are covered by their own protocols are mortgage possession claims and possession claims by social landlords. The other claims  – for ASTs based on rent arrears (Grounds 8 or 10 or 11), for long residential leases based on arrears of rent or service charges, and even for business tenancies  where the tenant is a sole trader – are not, so the Protocol presumably applies. In all of these cases the Landlord invariably asks for a money judgment against the Tenant for the amount of the arrears, and this is clearly a “debt” in the normal meanong of the word.

I haven’t thought it all through, but I can’t think that this was entirely intended. The timescales in the Protocol don’t really fit in at all well to the normal commercial timescales in possession claims. Is the tenant really going to be given up to 90 days before possession proceedings can be brought against them, when the rent is normally payable monthly, or even weekly? Is the Landlord going to have to ask for possession but not a money judgment until a lot later, when the tenant has possibly moved out?

And what about the complicated procedure for claims for service charges, with all their applications to the FTT, or the rules on payment for maintenance, complete with the mechanism for consultation beforehand, payments of estimated sums on account, followed by balancing charges, and so on? This really doesn’t tie in with the Protocol procedure.

I just don’t know, because it was only drawn to my attention by James Attew of Brethertons today (here) and I had previously thought that as the Protocol has been around in draft form since late 2015 somebody would have thought of this by now.

Now it may be that there is going to be a new protocol covering all this, although I haven’t heard anything about it. Or the courts are going to say that “debt” doesn’t mean “debt” for these purposes, or something. I just hope that it isn’t another mess-up on the lines of the deposit protection fiasco, because that is rather what it looks like at present.

Any views would be most welcome.

More on Right to Rent – and Yet Another s8 Notice

You will remember that the Government decided that illegal immigrants would be deterred from coming to Britiain (or more specifically England) if they weren’t allowed to rent a place to live, or take lodgings, or indeed to stay in anybody else’s rented flat or house. They set up the Right to Rent provisions, which originally just covered the Midlands – see my piece here – and then extended them to the whole of England (but not Wales, Scotland or Northern Ireland) – see here.

The original penalty on landlords, and their agents, who didn’t carry out the necessary checks was a civil penalty of up to £3,000 per immigrant. However, somebody thought that this wasn’t severe enough, and as from 1st December 2016 landlords who knowingly let to people who don’t have a right to let can be prosecuted, along with their agents, and fined or imprisoned for up to 5 years. So it is vitally important to not only carry out the checks, but be able to prove that you have done so.

However, there is another way out of a criminal conviction. If the landlord takes steps to evict the offending tenant within a reasonable time – defined in the statutory guidelines as 3 months  from discovering that they had no right to rent – then no offence is comitted.

The landlord can of course take the normal steps to evict the tenant, such as serving a s21 notice, but he (or she) has been given two new weapons by the Immigration Act 2016:

  • Ground 7B  – inserted into the Housing Act 1996. This allows the landlord to end a tenancy, even during a fixed term, by serving an appropriate s8 notice, waiting 14 days and then bringing possession proceedings in the County Court in the normal way. If not all the tenants are prohibited from renting the Judge can either end the whole tenancy, or he can alter the tenancy so that it is transferred to the legal occupants only, provided the illegal occupants leave. It’s complicated to explain but here is the provision in the Act. There is an equivalent provision for the (very) few remaining Rent Act tenancies.
  • A 28 Day Notice – This is most unusual. If the Home Office send a formal notice to the landlord telling them that their tenant or all of their joint tenants in one property are renting illegally then the landlord can serve a prescribed notice unded s33D(3) on the tenants, giving them 28 days’ notice to end their tenancy. After the 28 days are up the tenancy comes to an end, the occupants lose their rights not to be evicted without an order of the court, and the landlord can either exclude them peacefully, or get them removed by a High Court Enforcement Officer, because the notice can be enforced “as if it were an order of the High Court” – see here.

We shall see how this all works, but I don’t think the courts are going to be very happy with the way in which the Minister can serve a notice, and the landlord can get it enforced as if it were an oreder of the High Court, all without involving the courts at all.

New s8 Notice

Because there is a new ground for possession under s8 Housing Act, there is a new prescribed form of s8 Notice, whoch must be used in all cases from 1st December 2016 onwards, which refers to s41 of the Immigration Act 2016 in the heading, and to ground 7B a few times in the text. It must be used in ALL CASES even if the claim is based on non-payment of rent or whatever, or it is invalid. So if you are a landlord or a tenant, or advise either of them, do check the notices that are used from now onwards, or the court won’t make a possession order. The new form of notice is here.

As usual these matters are covered in more detail elsewhere, and probably the easiest to follow is on the Landlord Law Blog. But at least you know there’s a problem here.

 

Can I Come In? – Enforcing Suspended Possession Orders

Now some of you may remember that in a previous life (when I really was Coventry Man) I worked for a firm who acted for some major social housing providers. They, unlike private landlords, usually let properties on assured tenancies (rather than assured shorthold tenancies) and played a much longer game. If a tenant was in arrears then they were quite prepared to let them pay off the arrears by instalments and sometimes they encouraged this by getting possession orders that were suspended on payment of say

“the current rent as it falls due plus the arrears of £800 at the rate of £100 a month, commencing on 1st November.

Now from time to time, indeed surprisingly often, the tenants would fall down on the payments and we would issue a warrant for possession and the tenant would be stirred up by a visit from the merry County Court bailiff who would give them an appointment for eviction in 4 weeks, and the form to apply to have the warrant suspended, so they could rush back to the court and explain to the cynical DJ why they had failed to keep the promises that they had made only a couple of months ago.

This might happen several times before either they got their priorities in order, or the DJ lost his remaining patience and the eviction went ahead.

Now it always surprised me that we could get the warrant issued just on our say-so. We signed the Request and cerified that they were in arrears and that was that. Indeed, if there were more complicated terms, such as the removal of a noisy dog, or the clearing of rubbish from the garden, we still just had to certify that they were in breach. No evidence was needed. Naturally our clients were fair about things, and my colleagues were decent honest and truthful, but I couldn’t help think that not everybody was like that, and that the courts were being very trusting, especially when more and more litigants were doing without lawyers and acting for themselves.

Anyway, things have changed now, and when the bits of the County Court Rules that governed enforcing judgments and warrants (rr25-26) were taken into the CPR in April 2014 (along with RSC 45-47) the powers that be took the opportunity of tigntening things up. I hadn’t noticed because I have moved on and don’t act for social housing providers any more, but it would seem that before you can apply for a warrant for possession after a suspended order you have to get permission by making an application supported with evidence.

The rules are in CPR 83.2 and spell things out pretty clearly:

(1)

This rule applies to—

(d)

warrants of possession.

(2)

A writ or warrant to which this rule applies is referred to in this rule as a “relevant writ or warrant”.

(3)

A relevant writ or warrant must not be issued without the permission of the court where—

(e)

under the judgment or order, any person is entitled to a remedy subject to the fulfilment of any condition, and it is alleged that the condition has been fulfilled; or

(4)

An application for permission may be made in accordance with Part 23 and must—

(a)

identify the judgment or order to which the application relates;

(b)

if the judgment or order is for the payment of money, state the amount originally due and, if different, the amount due at the date the application notice is filed;

(e)

where the case falls within paragraph (3)(c) or (d), state that a demand to satisfy the judgment or order was made on the person liable to satisfy it and that that person has refused or failed to do so;

(f)

give such other information as is necessary to satisfy the court that the applicant is entitled to proceed to execution on the judgment or order, and that the person against whom it is sought to issue execution is liable to execution on it.

(5)

An application for permission may be made without notice being served on any other party unless the court directs otherwise.

Now the problem is that there is no reference to any of this on the form of application for a warrant – N325 – which is the form needed under r83.26. Indeed there are several references in the order that make it look as if nothing has changed:

83.26 (1)

A judgment or order for the recovery of land will be enforceable by warrant of possession.

(2)

An application for a warrant of possession—

(a)

may be made without notice; and

(b)

must be made to—

(i)

the County Court hearing centre where the judgment or order which it is sought to enforce was made; or

(ii)

the County Court hearing centre to which the proceedings have since been transferred.

(4)

Without prejudice to paragraph (7), the person applying for a warrant of possession must file a certificate that the land which is subject of the judgment or order has not been vacated.

(5)

When applying for a warrant of possession of a dwelling-house subject to a mortgage, the claimant must certify that notice has been given in accordance with the Dwelling Houses (Execution of Possession Orders by Mortgagees) Regulations 2010.

(6)

Where a warrant of possession is issued, the creditor will be entitled, by the same or a separate warrant, to execution against the debtor’s goods for any money payable under the judgment or order which is to be enforced by the warrant of possession.

(7)

In a case to which paragraph (6) applies or where an order for possession has been suspended on terms as to payment of a sum of money by instalments, the creditor must in the request certify—

(a)

the amount of money remaining due under the judgment or order; and

(b)

that the whole or part of any instalment due remains unpaid.

You always had to certfy this sort of thing. The difference is that you shouldn’t apply for the warrant at all before you get permission under r83.2(3). Easily overlooked.

Well, what happens if you get it wrong, and haven’t got permission and the court doesn’t notice? Because the issue of a warrant is dealt with by the court office, not the DJ, and court offices are busy understaffed places. Is your warrant invalid, and can the tenant get it set aside? Or can you rely on good old r3.10 that allows the court to fix things when there has been a mess-up by somebody:

3.10 Where there has been an error of procedure such as a failure to comply with a rule or practice direction –

(a) the error does not invalidate any step taken in the proceedings unless the court so orders; and

(b) the court may make an order to remedy the error.

There has been some interest in this among the frantically overworked heroes who represent tenants expecting immenent eviction, as some courts and DDJs had one idea and some had another, and there has now been a decision by the CA in Cardiff CC v Lee [2016] EWCA Civ 1034 .

The CA decided, after some navel-gazing,  that if the failure to apply for permission was “an error of procedure” then an application under r3.10 could put things right. In the particular case the tenant had applied to set aside the warrant anyway without success so the facts had been examined and nothing would be gained by going into things again, so the court below had been right to allow the warrant to go ahead.

Had the failure to apply been intentional however they might have taken a different view. And given there has now been a case in the CA on this point, which is being reported and commented on in interested circles (like here), it is going to be much harder for any landlords who merrily sign the N325 without getting permission to enforce first.

Applications can be made without notice and dealt with on the papers, but it will mean another delay of several weeks in most courts before the order can be enforced in any event.

As usual this is covered in the Nearly Legal blog in a lot more detail that I do here. However, you all know this now, so there’s now one less thing to trip over.

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

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.

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

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.

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More Changes for s8 Notices

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.