Defences to possession proceedings - spurious and otherwise

I have been having a bit of trouble recently with one of my section 21 repossession claims (using the accelerated procedure), which should have been an open and shut case. However, irritatingly, things have been held up due to the tenant putting in a defence claiming that he never received the notice. This is really annoying as we know he has received it (he rang up and told the managing agent so). But notwithstanding this, the Judge has set the case down for hearing (as he has to be sure). In the meantime the arrears continue to accrue (£8,000 plus and counting). It is particularly annoying as we suspect the tenant may have left anyway, but the landlord can't use his keys to go in and have a look as the tenant changed the locks. Another day in the life ..

Thinking about this case, led me to ponder on the sort of defences that get raised, in the cases I deal with (mostly possession claims based on the mandatory grounds).

The "I never received the section 21 notice" is of course a classic, along with (for rent arrears cases) claims that the rent has been paid (in cash of course) but not acknowledged by the landlord.

Another popular defence is the "I never got the paperwork" claim (although at least that has the virute of not being our fault!). And, although its not exactly a defence, I have known several tenants try to drag things out by endlessly saying that they are too ill to turn up to court.

For example, in one case a tenant turned up too late to the hearing (claiming illness), then applied to have the possession order set aside, failed to turn up to that saying that she had to go to hospital (an accident to her foot I think), then applied for a stay of execution, and once again 'fell ill' and didn't turn up. The only hearing she actually attended was yet another application for a stay of execution made on the day of the bailiffs appointment (which she attended on her own as there was not time for the court to tell us about it). However it did not do her any good as the Judge had no hesitation in rejecting her application. (She then turned up at the property after the bailiffs had given possession over to my clients agent and left, somehow managed to inveigle herself inside the property with the agent, refused to leave, and was eventually taken away by the police!)

There are increasingly greater numbers of defendants raising defences based on the tenancy deposit regulations (a large number of which have been reported on this blog), as the regulations gradually become better known. And tenants in shoddy properties can also defend and counterclaim rent arrears repossessions on the basis of the disrepair (on the grounds that compensation for this will offset the rent arrears). Although I have only had experience of one instance of this myself to date.

Perhaps the defences which have annoyed landlords most over the years though, are the defences based on technical errors in section 21 notices. In particular, as many landlords now know to their cost, if the notice is served after the fixed term ends, it has to give the correct expiry date, and even if this is just one day wrong, the claim will fail. It is a silly rule, and most unfair on landlords acting in person who have not read the legislation properly (and after all, who other than a lawyer is going to spend time nit picking over the legislation?). Other section 21 defences include: not mentioning section 21 in the notice, and not signing the notice (although that one got kicked out by the court).

Worries about defective section 21 notices in proceedings are, I am sure, responsible for many of my grey hairs (not that I am particularly grey you understand), and makes what was intended to be a straightforward process, into a nightmare. The same thing is happening with the tenancy deposit regulations.

Have you been involved in possession proceedings? What defences have you seen? If you have a tale to tell, please do leave a comment.

Shelter victory in sale and rent back case

Housing charity Shelter are jubilant after succeeding in saving the home of Paul Amanda Jackson of Shrewsbury, where they had lived for over 20 years.

According to the BBC report, Mr and Mrs Jackson entered a sale and rent back deal with a company, Repossessions Stopped, in 2005 after getting into mortgage arrears. However two years later they faced repossession from Repossessions Stopped's mortgage company after they fell into arrears with their mortgage payments. Apparently Repossessions Stopped (described by the Judge in this case as 'dishonest'), had paid only £63,000 for the property, despite it having a market value of £100,000, and had assured Mr and Mrs Jackson that they could live in it for the rest of their lives.

Thankfully for them, Shelter stepped in to assist and a judge at Birmingham County Court has ruled they can stay there and pay rent. The Shelter report states that His Honour Judge Worster has ruled that the family can either revert to being owner-occupiers, or rent the property for the rest of their lives, with their daughter inheriting the tenancy.

The news reports I have seen just state the order made and not the legal reasons for them, so it will be interesting to read the report of the Judgement when it comes out.

PS There is now an excellent analysis of the legal points on the Nearly Legal web-site here.

Time taken to get possession of a property through the courts – an example

One of my clients has a non paying tenant living in a property in the jurisdiction of the Luton County Court. Proceedings were issued on 19 March and an order for possession was obtained on mandatory grounds on 11 May, when the tenant was ordered to vacate on or before 25 May. She did not do so and I was instructed to apply for a bailiffs appointment. The papers were sent out on 29 May.

Today my client asked me to find out what was happening. It took some time before the bailiffs clerk answered the telephone. She informed me that all warrants are now issued in Basildon, so are sent there on receipt at Luton. Our warrant had been issued yesterday, on 10 June. When they get a batch back at Luton they will then fix the bailiffs appointments. They are currently listing for about 8 July, so my client can expect (if he is lucky) an appointment within about two weeks of that date.

So my client having issued proceedings in mid March will not get possession of his property until mid to late July, four months later.

Landlords should be aware that this is the sort of time delay you can expect when issuing proceedings for possession. My client was lucky in that the court made a 14 day order rather than a six week order (which can happen – if it had happened in this case the tenant would have been ordered to leave on or before 22 June). They should also be aware that it can take up to two months for a bailiffs appointment to be fixed in some courts, so it really is important to get on with things, and not delay.

Good news for tenants - receivers of rent now eight times more likley

Note - the Landlord Law Blog has now moved to www.landlordlawblog.co.uk.

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A report on the BBC site today regarding problems experienced by buy to let landlords indicates that mortgage companies now seem to be more willing to appoint a 'receiver of rent', as opposed to evicting the tenant so they can sell as mortgagee in possession. This is good for tenants, as it means that they can stay on in the property, paying their rent to the mortgage company rather than the landlord.

The report states:

"In the first three months of 2008, there were just 300 receivers of rent appointed, compared with 900 repossessions. In the first three months of this year 2,400 receivers of rent were appointed - an eight fold increase and far more than the number of buy-to-let repossessions."

If you are a tenant whose property is being repossessed by your landlord's mortgage company, it is always worth getting in touch with the mortgage company and suggesting that they should consider appointing a receiver of rent and allow you to stay in the property.

Four more cases on possession proceedings

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There are four interesting cases in the most recent edition of Legal Action Magazine on proceedings for possession under section 21 and the provisions of the Housing Act 2004, so I hasten to share them with you. They all cover different points. Although they are all County Court decisions and therefore not binding on other Judges, they show how Judges are thinking and interpreting the statute.

Universal Estates v. Tiensia
Croydon CC, 23 Feb 2009
In this case the deposit was paid in instalments. The tenant, Ms Tiensia, fell into arrears and the landlord served a s8 notice based on rent arrears. Ms Tiensia counterclaimed for the 3 x deposit award on the basis that the deposit was unprotected. The landlord then protected the deposit with MyDeposits and faxed the certificate to Ms T. However the Judge found that this was not enough. The landlord had failed to comply with the initial requirements of MyDeposits terms and conditions, and was thus in breach of s213(1) and (4) and s214(1)(a) of the Housing Act 2004. Order for £7K to Ms T.

I was particularly pleased (and perhaps a little smug) to see this decision, as the point about the failure to comply with the schemes own rules, is something I remember writing about some time ago, but has not so far as I am aware been mentioned by anyone else until now.

Seghier v. Rollings
Bow CC, 6 Mar 2009
Here the landlord, Ms Rollings, only protected the deposit shortly before the hearing and handed the certificate to the tenant at court. However she did not fully comply with the notice requirements, and for example had not handed over the MyDeposits leaflet. Here the Judge 'distinguished' (legal phraseology meaning the two cases are not the same) the Sheffield case of Harvey .v Bamforth (where the landlord won) because here the landlord had not fully complied with s214(6)(a). Order in favour of the tenant.

Beal v. McCartney
Plymouth CC, 12 Mar 2009
Poor old Mr Beal was evicted by his landlords mortgage company due to his landlords mortgage arrears. As he had not been given any information about his deposit by his landlord, he sued for the fine of 3 x the deposit sum. He succeeded and was also awarded £500 damages for the eviction (legal terminology is for 'breach of quiet enjoyment'). However the fact that he was evicted by his landlords mortgage company indicates that his landlord is in probably in dire financial problems, so this may be a bit of a phyrric victory.

Raco Ltd v. Roberts
Central London CC, 6 Mar 2009
Unlike the others in this post, this case is about failure to obtain an HMO license. A good sub heading for this case would be 'if at first you don't suceed, try, try and try again, and still fail'!

Here the landlord had served two section 21 notices and issued two separate sets of proceedings. Mr Roberts, the tenant, defended the first on the basis that the s21 notice had been served before the tenancy was signed and at a time when the property was unlicensed, and the second set of proceedings just on the basis that the property was unlicensed. The two cases were joined and dealt with together. The landlord then served a further section 21 notice (presumably by this time having obtained a license) and applied to the court to have the proceedings amended to rely on this notice rather than the earlier two. However the Judge refused the application as a 1996 Court of Appeal decision (Lower Street Properties v. Jones) has held that the s21 notice must expire before the issue of proceedings. (Presumably Raco Ltd have now changed their lawyers and started a new set of proceedings, but we are not told about this).

In conclusion
All of these cases were resolved in favour of the tenant. This just goes to show how careful landlords need to be to follow the rules properly. If you don’t, you risk not only losing your claim for possession, but also being made to pay your tenants legal costs. Which, if they were in receipt of legal aid, could be expensive.

Advice for landlords whose tenants are not paying rent

Note - the Landlord Law Blog has now moved to www.landlordlawblog.co.uk.

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A report on the BBC web-site today states that more tenants are in arrears of rent now than since the late 1980's. Which is not surprising given the almost daily announcements of redundancies.

Here is a bit of advice for landlords:

• Keep on top of things and contact tenants as soon as they fall into arrears
  
• Be sympathetic to tenants who respond to you, and consider reducing the rent if they are geninely in financial difficulties through no fault of their own
  
• If tenants are on housing benefit/Local Housing Allowance, tell the benefit office - they should make payment direct to you if the arrears reach 8 weeks
  
• However if tenants have not responded when the arrears reach 2 months worth, serve a section 8 notice and consider issuing proceedings for possession. Remember possession proceedings can take months.

For more information see my article 'Dealing with rent arrears - some different approaches' which you can download and read free of charge in this section of my LandlordLaw web-site.

Further guidance and help is available in my Rent Arrears Action Plan.

Tenants - the forgotten victims of repossession

Note - the Landlord Law Blog has now moved to www.landlordlawblog.co.uk.

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I was delighted to read a report that a campaign is being launched to help tenants who get evicted through no fault of their own, because their buy-to-let landlords have not kept up their mortgage payments. You can read more about it on the Citizens Advice Bureau site here.

Long term LandlordLaw Blog readers may remember several cases reported here in the past, in particular the distressing case of two tenants whose landlord rented their property to them after the possession order had been made, which you can read here.

Although in many cases the reason the landlord is unable to pay his mortgage is becuase the tenant has failed to pay his rent, there are many situations where this is not the case, and where the tenants are entirely innocent.

At present the court have limited powers to protect innocent tenants. The organisations are calling for a change in the law which would mean courts would have the power to defer the possession to allow the tenant to find other suitable accommodation. This is only fair.

If you agree with this, I would suggest you contact your MP and ask him/her to support the campaign. You can do this via the Write to Your MP web-site.

In the meantime here is some advice for tenants:

- Always open mail addressed 'To the Occupier'. This may include notice of any possession hearings.
- If you're thinking of moving into a new property, make sure the landlord has permission from the lender to rent it out. Otherwise, the lender does not have to recognise the tenancy at all.
- If you were already living in the premises at the time when the mortgage was taken out, the lender may take you on as a tenant and allow you to pay rent to them directly. If you think you may be in this position, contact a Citizens Advice Bureau or Shelter.
- Try to find out as much you can about your prospective landlord and his/her mortgage status before taking up a tenancy - although in practice this isn't always very easy.

Another mortgagee / tenant eviction case

I have another mortgagee evicting innocent tenant case for you. Here I was consulted by the letting agent who had been contacted by the distressed tenant. She had just found out she was being evicted, after having received the normal notice which is served on the occupier of the property in these cases. My client was furious as he felt that the landlord had deceived him, plus he was concerned that this situation would reflect badly on his agency business, although it was no fault of his. The property had apparently been owned by the landlord for some time, had been previously rented out by another agency, and there was nothing to alert him to the mortgage problems, otherwise (he told me) he would never have taken the property on.

His main concern was for the tenant however, and he attended Court where he spoke to the Judge about the case.

Apparently this was a second mortgage, and the mortgage company had not been paid since the tenancy started three months ago. The agent asked the Judge, on behalf of the tenant, if he would grant a stay or make a 56 day order, to allow the tenant to continue to live in the property until the end of her tenancy. The solicitor for the mortgagee asked for a 28 day possession order. After considering matters the Judge decided to make a 28 day order. However the tenant will have in the region of 2 months in the property before any bailiffs appointment, which will allow her time to find somewhere else to live (although apparently she had fallen in love with the property and will be sad to leave).

I suggested to the agent that he might want to review his agency terms and conditions and consider including a clause (assuming there is not one there already) specifically providing for the landlord to warrant that all mortgage payments for the property were fully paid up and would continue to be paid for the period of the tenancy. This would mean that if the landlord did default, he would be in breach of his agency agreement, which might give the agent more freedom of action. Agents might also want to consider calling for proof that the mortgage is paid up when taking on new instructions, so as to avoid a situation such as that in my previous post, where an order for possession had been made before the property was ever let to the tenant.

With the property crisis deepening, we will probably be seeing more and more of these sad cases.

Tesco Law in action

A few weeks ago, I was (initially) somewhat flattered to receive an invitation from a financial organisation (who will remain unnamed) regarding the delivery of a new possession proceedings service.

"I am aware of your expertise in the field of residential landlord and tenant law" ran the letter, "and am writing to you to explore whether we can work in partnership together". Happy to know that at least one person is aware of my expertise, I rang to find out more. However after speaking to the gentleman, my interest diminished considerably, in fact down to zero. The situation was this.

The company wants to offer a cheap and cheerful possession service to the public. However as they are not a firm of solicitors they cannot (as yet) issue the proceedings themselves. They therefore need a firm of solicitors to do this for them. "We will draft all the paperwork" said my correspondent, "all you have to do is issue the proceedings and then, if necessary, instruct the bailiffs".

Sounds good? Well not really. The claims would be issued under my firms name. So if there was anything wrong with them and a negligence claim followed, it would be my professional indemnity insurance which would be on the line. Therefore I would have to check all the paperwork before issue to make sure that it was correct. So there would really be the same amount of work as if I were drafting it up myself. And they were offering to pay me £50.

When I first heard him say £50 I found it difficult to believe that I had heard him correctly. For that I would have to receive the paperwork, open a file, check it was correct, send it off to court, log the details on receipt, instruct the agent to attend the hearing, and then deal with their report. That would be for the straightforward cases where there is no defence filed. As gently as I could, I told him that it was not something I was really interested in.

I don’t know if he will find a firm prepared to work for him. I suspect not. In fact I would hope that no solicitors firm will be prepared to issue proceedings which have not been drafted by a partner or member of staff. And although the company were offering to ‘work in partnership’ I feel pretty sure that if there were any Tesco law type rule changes which allowed them to issue the claims themselves, the 'partnership' would be fairly swiftly ended.

But is this the future I ask myself? Large financial organisations mopping up all the customers and using solicitors at knock down rates, to do the grunt work? Well hopefully not in my firm.

But it would be interesting to know if any other firms have had similar approaches.

More tenants evicted by landlords mortgagees

I have been contacted by another tenant today, who is being evicted by her landlords mortgage company. Her situation is not quite as bad as that of my clients in my previous post, as no order for possession has been made yet (the hearing is in July). However she was not at all happy to receive the notice of proceedings from the mortgagees solicitors two months into an eighteen month fixed term! Particularly as she had just paid to have broadband connected.

Once again I question the role of the letting agents here. In this case the tenant has found out that the landlord has probably been in arrears of rent for quite a long period, it could even be a year. As well as this it seems that the landlord failed to obtain consent for the letting from his head lessor. If a tenant can find these things out, why can’t the agent?

Is it right for a letting agent to be able to let a property which is obviously vulnerable to repossession, and after it is let (and their commission paid – taken from the tenants rent of course), not be liable in any way when the property is repossessed? Should they not be obliged to carry out at least some rudimentary checking?

The agents in this particular case are a large high profile London firm of estate and letting agents. When a tenant is renting a property from a professional agency such as this, they do tend to assume that they will at least be able to live in the property without being evicted two months into the term!

It is arguable that in such a situation, particularly as it is a business/consumer situation, there should be some sort of tortuous liability on the agent to ensure that the properties on their list are not vulnerable to repossession, at least during the initial fixed term.

Incidentally, the Civil Justice Council has recently carried out a consultation on a proposed new mortgage repossession pre action protocol (the consultation period finished on 23 May) but this does not appear to consider the situation of innocent tenants.

Credit crunch problems

There is a very interesting, if worrying, article on the Guardian site here about the credit crunch and the effect it is having on housing. I was shocked to read that mortgage repossessions are likely to go up to 45,000, from 8,000 in 2004.

The article also makes other telling points, such as for example the income of support charities is likely to go down as few people can afford to donate, and the value of their investments plummet.

Bad news for us all.

The Rent Arrears Action Plan

In view of the current financial situation, I have added a new members only service to my Landlord-Law site, a Rent Arrears Action Plan. This is in five parts (the first part being preliminary information) and contains detailed guidance to landlords on what they should do from the moment their tenant first falls into arrears, up to considering court action. It contains precedent letters which can be printed off and used, the possession notices, and checklists, so landlords can keep a record of what they have done.

It is important that rent arrears are dealt with promptly, not only for the landlord but also for the tenant. If rent arrears are allowed to build up (and I have seen some horrendous rent arrears in my time) then they will get to such a state that the tenant will never be able to pay them off. Whereas if the tenant starts dealing with them at an early stage, it may be possible for an installment plan to be arranged, which will allow the tenant to stay in the property. The landlord will then not be faced with the expensive of court proceedings, a large rent arrears bill, and all the bother of having to find a new tenant. Often when people fall into debt they will pay the person or company which is shouting the loudest. So if the landlord does not do anything, this will often result in the tenant giving other debts priority.

Even if the tenant cannot afford, long term, to stay in the property, if things are dealt with promptly then it may be possible for things to be kept under control until the landlord can evict the tenant under the cheaper section 21 procedure. This will allow the tenant to apply for local authority housing which, if the tenant has a family, they will be entitled to. However if the tenant is being evicted for serious rent arrears, the tenant may also have lost the right to be re-housed if the Local Authority consider he is responsible for the eviction himself (i.e. because he did not pay rent when he should have done).

Most landlords are reasonably humane people and will want to help their tenants if they can. However, many will not know what to do when tenants fall into arrears, or understand the situation their tenants are in vis a vis Local Authority re-housing. Hopefully this new service will be of assistance.

Bernstein and Floyd

Readers who were interested in my earlier post on the landlord whose disabled tenant appealed against a possession order obtained under s21, will be interested in this quote from the final paragraph in the report in the recent case of S -v- Floyd (with the Equality and Human Rights Commission joined in as an interested party):

one of the members of this court has dealt recently with an application for permission to appeal from a judgment of a Circuit Judge (Bernstein v Tate, December 21, 2007) in a case involving what would normally be a mandatory order for possession under section 21 of the 1988 Act. The tenant claimed that non-payment of rent was due to various health problems including depression, as a result of which she had to stop working, and her incapacity and housing benefit was used in paying off her overdraft instead of the rent. Prior to Malcolm the District Judge made a possession order on the basis that the tenant's disability had nothing to do with the landlord's decision to seek possession. But the Circuit Judge granted a stay, set aside the original possession order and re-listed the matter for evidence of the tenant's disability and further submissions. This appears to have been on the basis that the tenant had a reasonable prospect of success in showing that she was disabled for the purposes of the 1995 Act, and that she was entitled to a stay of the mandatory possession order.

The wording of this quotation seems to imply that the CA do not entirely agree with the Circuit Judge's assessment of the tenant's prospects of success.

The Floyd case itself will bring some comfort to landlords. Here the tenant had an order for possession made against him under the mandatory possession ground 8 as he was over £7,000/123 weeks in arrears of rent. The tenant admitted this but tried, via the appeal process, to prevent the landlord obtaining possession because he suffered a mental disability, citing the Disability Discrimination Act 1995. However the Court of Appeal made it clear that so far as they were concerned, the DDA did not entitle tenants to get out of their legal obligations just because they are disabled:

It is not immediately obvious (a) how the 1995 Act could provide a basis for resisting a claim for possession on a statutory mandatory ground or (b) how a landlord would be unlawfully discriminating against a disabled tenant by taking steps to enforce his statutory right to a possession order for admitted non-payment of rent for 132 weeks. The 1995 Act was enacted to provide remedies for disabled people at the receiving end of unlawful discrimination. It was not aimed at protecting them from lawful litigation or at supplying them with a defence to breach of a civil law obligation. Like other anti-discrimination legislation, the 1995 Act created statutory causes of action for unlawful discrimination in many areas, such as employment, the provision of goods, facilities and services and the disposal or management of premises, but it did not create any special disability defence to the lawful claims of others, such as a landlord's claim for possession of premises for arrears of rent. The legislation is not about disability per se: it is about unlawful acts of discrimination on a prohibited ground, ie., unjustified less favourable treatment for a reason which relates to the disabled person's disability.

However we are all waiting to hear what the House of Lords decide in the leading case of Malcolm, which has been discussed by me previously here. I am sure that all landlords will be hoping that this will make it clear that just because a tenant turns out to be disabled, this does not mean that the landlord will be effectively forced to house them rent free forever. Which would effectively be the case if any attempt to enforce their rights to possession (even where they are supposed to be mandatory) were blocked on the basis that they are discriminatory. Even if (as in the cases of Bernstein and Floyd) the landlord did not actually know that the tenants were disabled.

Note - if you want to read more about the technicalities of these cases, you will find detailed posts on the Nearly Legal blog. However unless you are a housing lawyer (and perhaps even then), you may find it makes your head hurt.

Tenancy agreement terms causing problems for local authority

A friend of mine who sits as a Deputy District Judge told me of an interesting case recently. Apparently a local authority tenant had moved out of his rented property, thereby losing his security of tenure and making his tenancy a common law one. The landlords had therefore served a notice to quit (as this is the appropriate notice for common law tenancies) and sought possession of the property.

However in the tenancy agreement there was a clause saying that the tenant could only be evicted after service of a notice of possession as provided under the provisions of the Housing Act 1985. This is the notice which is normally served for secure tenancies but which had not been served in this case as the tenancy was no longer secure. My friend concluded therefore that as no such notice had been served, he was not able to make an order for possession.

His view was that there is no reason why a landlord should not enlarge the tenants security of tenure under the terms of the tenancy agreement, and that if the landlord does this, it should be binding upon him.

In the same way, in the case of Welsh -v- Greenwich London Borough Council, wording in the tenancy agreement was held to enlarge the landlords repairing obligations.

The moral being that local authorities should be more careful about the clauses included in their tenancy agreements. And that they should comply properly with the provisions of their tenancy agreements once these have been issued. And perhaps most importantly of all, they should ensure that their tenancy agreements are drafted by experienced housing lawyers and reviewed regularly.

Tenant defending s21 claim under the DDA 1995

Readers may be interested to learn that I have been contacted by a landlord who tells me that his tenant is defending, or rather seeking to overturn, a possession order obtained via the accelerated procedure under section 21, under the provisions of the Disability Discrimination Act 1995. This is the very situation I was concerned about when I wrote my earlier posting on the Malcolm case.

The landlord brought the claim after it became apparent that the tenant was spending her housing benefit on other things, although this was not specified in the particulars of claim, which (as is usual) gave no reason for the claim other than that the notice had been properly drafted and served and that the tenant had not vacated. Her lawyers however are claiming that the reason why she has not paid her rent is because she is suffering from a mental disorder, and therefore the landlords action in evicting her is discriminatory and unlawful.

The landlord is aghast at this claim, as if it succeeds he is faced with the prospect of this tenant remaining in his property indefinitely, free of charge. How, he asks, is he expected to pay his mortgage and other expenses on the property? Is this really what the draftsmen of the DDA 1995 intended?

The tenant is in receipt of legal aid and the landlord has been told by her lawyers that they will fight the case all the way to the European Court if necessary. The poor landlord however has no legal assistance and is unable to afford expensive legal fees (particularly as he is not receiving rent!).

If this claim succeeds, bearing in mind that the landlord had no idea that the tenant was suffering any mental problems, it will have serious repercussions throughout the whole of the letting industry. The landlord has agreed to keep me informed of the outcome of the case.

More on Equality

Following on from my previous item on the Equality website, I was interested to see this item in the Times Law section today on John Wadham who is heading up the new Equality and Human Rights Commission.

This article makes the point that the new commission not only covers areas of law formerly dealt with by three separate commissions, it also has a budget to enforce the Human Rights Act. It will be really interesting to see how that works out.

How will it affect housing law? The main area that I can see at present is defending possession claims where the defendant is being evicted for some reason connected with their disability. It will be interesting to see if this will be largely confined to the social landlords or whether it will extend to the private sector (something discussed by myself and Nearly Legal in my previous post on the Malcolm case).

Can anyone see any other potential areas of conflict?

In two minds about Malcolm

Speaking to a solicitor friend of mine recently who does housing association repossession work, she said bitterly that it seemed to be impossible nowadays to evict tenants who have any sort of disability. She is not going to be pleased with the recent Court of Appeal decision in London Borough of Lewisham -v- Malcolm.

Mr Malcolm was a tenant of Lewisham LB. He suffered from schizophrenia which initially was controlled by medication. He applied to buy his flat under his statutory right to buy. However there were delays. At about this time he stopped taking his medication, and his behaviour became erratic. Before his sale had gone through he let his property to tenants. By doing this he lost his security of tenure, and with it many of his statutory rights. Lewisham therefore decided to serve him with a Notice to Quit, and then issued proceedings for possession.

Normally there would be no defence to such as claim, Malcolm having lost his security of tenure. However Malcolm defended on the basis of the Disability Discrimination Act 1995, section 22(3) of which makes it unlawful to discriminate against a disabled person by evicting them, claiming that he had only parted possession with the flat as a result of his disability which led him to make irrational decisions.

At first instance the Judge found that (1) Malcolm was not disabled within the meaning of the act, (2) that the section would not apply anyway in a claim where the Judge had no discretion to refuse an order for possession, (3) that the subletting was not caused by his disability and (4) that the LA could not have discriminated as they had no knowledge of his disability. However the Court of Appeal did not agree.

Rather worryingly for landlords, the Court of Appeal found for the tenant on all four of the issues in question. Malcolm was disabled with in the meaning of the act. The subletting had been connected to his disability as it had affected his day to day activities (and by implication the subletting, even though there was no direct evidence on this point). A landlord does not have to know about the disability to discriminate against the disabled, and finally s23(3)(c) is unqualified and does not limit the unlawfulness to cases where Judges have a discretion to grant possession. The Judge refers in paragraph 52 to two County Court decisions, one of being a case where a Judge refused to make an order under s21 where the tenant was disabled, as examples of courts happily adapting to the DDA 95 without difficulty.

The thought of landlords being unable to evict tenants under section 21 because of the DDA will send a shiver down the spine of all private landlords, and may well result in a private determination not to knowingly let to any disabled tenant in future. This will do nothing to help the prospects of the disabled (particularly those suffering from mental illness) obtaining accommodation in the private sector.

I have to say that although I do not like discrimination and approve broadly of protective legislation, I am worried by this case. For example, the status of Malcolm’s current occupation is now uncertain. He presumably is now unevictable, but it is probable that he does not have a tenancy (if the notice to quit served on him is still valid). Does this mean for example that the repairing obligations in s11 of the Landlord and Tenant Act 1985 do not apply? Or would this also be a breach of the DDA?

Also, it is one thing to use this type of legislation against social landlords, who to a certain extent have a duty to look after those in society who are disadvantaged. However this case opens up the prospect of the DDA being used against private landlords, even if claims for possession are brought under section 21. Is it right that a private landlord, who may only have a few properties, should be forced unwillingly to continue to rent to a tenant, simply because he is disabled, even if the landlord was unaware of his disability, when he would normally be entitled to possession as of right? Or would the private landlord be able to use justification in such a case?

This case opens up a vista of uncertainly which will no doubt make private landlords (particularly those who rent to tenants who are disabled) most uneasy.

The tenant's dilemma

The tenant’s dilemma, a new report from the Citizens Advice Bureau, states that tenants are put off complaining about their landlords failure to keep their property in proper repair because their landlord might retaliate by evicting them under the section 21 ‘loophole’. Government figures indicate, they say, that nearly one million private rented homes fail the Government’s decent homes standard and therefore need repair. It asks for a change in the law to prevent landlords being able to evict under section 21 where tenants are trying to enforce their repairing rights.

Although I do not agree with landlords being able to evict in retaliation to their tenants requests to make their homes meet basic standards, we do have to be careful about interfering with the landlords right to evict under section 21. This has been one of the main reasons for the buoyant private rented sector we have today. If landlords perceive that their right to recover their property is being interfered with, this may result in many selling up or discourage potential new landlords. It is important that there is a good supply of rented accommodation if only because local authorities need to have properties available in the private sector to place people in priority need (who they have a statutory duty to house), as much of their own housing stock has been sold under the right to buy.

As the report points out, the right to evict under section 21 has already been made unavailable to those who fail to get a license for a (mostly HMO) property subject to licensing, or who fail to protect damage deposits under the new statutory tenancy deposit scheme. This could be extended to properties in disrepair, but care must be taken so that ‘devious tenants’ cannot take advantage of it.

However, if the HMO licensing regime is extended to more, or even to all rented properties (as many suspect it may be), the problem may well be solved in that way. All licensed properties need to be inspected at some stage during the 5 year license period, and if it fails to meet the statutory standards, and landlords fail to carry out the necessary work to bring the property up to those standards, licenses in future should be refused. As this will have nothing to do with the tenant, landlords will not have any reason for (or obtain any benefit from) carrying out retaliatory section 21 evictions. Indeed if they are unable to obtain a license because of the condition of the property they won’t be able to use section 21 anyway!

I think that this or something similar, is probably the best way to go. To make the request for improvement work come from the local authority rather than the tenant, so the tenant cannot be blamed for it. Also, once a property has been identified as being in poor condition, this should be noted in the local authority files, and a check kept upon it until the repair work is done. So that if it is then let to another tenant, action will be taken without the tenant having to do anything about it.

The report suggests at the end that the right to use section 21 could also be limited to landlords who are members of an accreditation scheme or other similar organisation. However I think that this would probably be a step too far. There is no point in having a strong scheme to protect tenants, if because of it few people are prepared to be landlords any more. This will benefit no-one, tenants least of all, as there will be fewer properties available for them to rent.

Reflections on Riverside v. White

Note - the Landlord Law Blog has now moved to www.landlordlawblog.co.uk.

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Housing associations, in particular Riverside Housing Association, will have been popping champagne corks recently, to celebrate the result of the recent House of Lords decision in the case of Riverside Housing Association v. White.

In this case Mr and Mrs White, who were being evicted by their landlords, Riverside, sought to claim that they were not really in rent arrears because Riverside had not complied properly with the rent review clause in their tenancy agreement for the past four years or so. Worryingly for the housing association, the Court of Appeal agreed with them. This had very serious implications for Riverside, as the Whites were not the only tenants whose tenancies contained this clause and whose rent had been increased in this way. They had no option but to appeal.

The House of Lords have now found in their favour, finding a slightly different way of interpreting the wording of the review clause. However there were some interesting points in this decision:

• Their Lordships made it clear that this case was being treated slightly differently because it was not like the normal run of rent review clauses which appear before them. The appellant is "a charity and a registered social landlord and it is publicly funded. Its tenants will be relatively poorly off individuals, no doubt normally with limited, if any, experience of interpreting legal documents."
  
  
• They also commented that the whole structure and drafting of the rent review provisions (which was criticised in the decision) was quite different from that which one would expect to find in any commercial lease.

This seems to be signalling that slightly different considerations will apply in future when interpreting rent review clauses in residential leases (particularly for social tenancies) as opposed to commercial leases.

However this does not mean that landlords can now take a relaxed view of rent review clauses. Riverside had to wait several years and go all the way to the House of Lords to get this decision. Even though their opponent has been ordered to pay their legal costs (another drain on the legal aid fund), it is likely that they will have suffered financially as a result of this case.

It is far better to do your utmost to avoid the possibility of any dispute, to draft clear and unequivocal rent review clauses in the first place (which do not make the parties go through too many hoops - all of which can become points for dispute later), to and ensure that the clause is followed to the letter every time the rent is reviewed.

Rent arrears protocol justified

Figures from the DCA show that landlord possession claims were 20% down during the last quarter. Co-incidentally this was the first quarter after the rent arrears protocol came into force. That’s the protocol which requires social sector rent officers to try to sort things out before issuing proceedings for possession.

So maybe it was a good idea.