Topics to be covered include the following:

• Right to Rent and Immigration Act 2016;
• Deregulation Act 2015 one year on;
• Housing and Planning Act 2016: what the future holds;
• New case law and legislation. PainSmith Helpline subscribers will be able to attend the Seminar at a cost of £50 plus VAT (£60 including VAT) per person. Non-helpline subscribers will be able to attend the Seminar at a cost of £75 plus VAT (£90 including VAT) per person. Places are limited to sixty-five delegates so book your place today in order to avoid disappointment.

Places can be booked by completing the attached form and emailing it to alexandrar@painsmith.co.uk

The Bill will require local authorities to demonstrate that they are taking reasonable steps to prevent homelessness. The Bill details the types of housing advice and information local authorities must provide before people become homeless or are threatened with homelessness. The Bill will also include guidance for local authorities to intervene with landlords to prevent evictions. The duty placed on these authorities would apply to all eligible households irrespective of priority need and intentional homelessness.

Currently a person is threatened with homelessness if it is likely that he will become homeless within 28 days. The Bill proposes to extend that period to 56 days to enable local authorities to respond to the threat of homelessness at a much earlier point. It will further provide that local authorities will have to accept a valid notice to quit, such as a Section 21, as evidence that the tenant is threatened with homelessness.

Where a local authority is unable to prevent an applicant’s homelessness, they should help to secure alternative accommodation in the private rented sector. The Bill will also require authorities to provide emergency accommodation for those with nowhere safe to stay.

The second reading of the Bill is scheduled for Friday 28th October 2016.

Comment

The Bill has a huge amount of support from various housing charities and numerous MPs. Landlords have also welcomed the news because properties could be returned to them much sooner than at present. However, London local authorities have expressed concerns over their ability to cope with a sharp increase in homelessness cases which may have an impact on the Bill that is finally adopted.

Topics to be covered include the following:

• Right to Rent and Immigration Act 2016;
• Deregulation Act 2015 one year on;
• Housing and Planning Act 2016: what the future holds;
• New case law and legislation.

PainSmith Helpline subscribers will be able to attend the Seminar at a cost of £50 plus VAT (£60 including VAT) per person. Non-helpline subscribers will be able to attend the Seminar at a cost of £75 plus VAT (£90 including VAT) per person. Places are limited to sixty-five delegates so book your place today in order to avoid disappointment.

For further information please email  alexandrar@painsmith.co.uk.

We look forward to seeing you in Brentwood.

Released on 25 July 2016 and approved by a senior barrister the note clearly sets out the relevant law around the use of electronic signatures on commercial contracts. It does not limit itself to one specific type of electronic signature and covers signatures by adding a picture of a signature, use of e-signing software and other methods.

Generally, contracts do not need to be in writing and as such electronic signatures should not pose a problem. Agent’s terms of business are therefore perfectly suitable for signing by electronic means.

Tenancy agreements are not considered ordinary contracts because they involve the transfer of land or property so they are subject to limits imposed by statute. However, current legal views are that a contract executed using an electronic signature satisfies the statutory requirement to be in writing and signed for several reasons including:

1. “Writing: The Interpretation Act 1978 defines ‘writing’ to include ‘typing, printing, lithography, photography and other modes of representing or reproducing words in a visible form’. Where the contract is represented on a screen (including a desktop, laptop, tablet or smartphone) in a manner which enables a person to read its terms properly, it will be ‘in writing’ at that point.

1. Signature: Provided that the signatory inserts an electronic signature into the appropriate place in a document with the intention of authenticating the document, a statutory requirement for that document to be signed will be satisfied.”

The note also addresses Deeds and electronic signatures. In a nutshell Deeds can be signed in electronic form by a suitable signatory in the presence of another individual who must genuinely observe the signing. When the witness signs the witness section, in electronic form or writing, then that Deed will have been validly executed.

If the validity of an electronic signature is questioned, legal opinion is that an English court would accept the document bearing the electronic signature as prima facie evidence that the document was authentic and, unless the opponent adduced some evidence to the contrary, that would be sufficient to deal with the challenge. The burden of proof is thus on the party questioning the validity of the signature.

It should be noted, however that Tenancy Deposit Prescribed Information requires a signature by the landlord certifying that the information is true to the best of his knowledge and belief. It is not clear that an electronic signature would satisfy that requirement.

Comment

This practice note will encourage those agents who are, or are considering, using electronic signatures. There is a risk associated with tenancy deposit protection information but the Government is looking at confirming the status of electronic signatures in these cases as well.

Fees for possession claims have not changed. However, the fees for enforcement orders have been increased. A warrant of possession to instruct the County Court Bailiff has increased from £110 to £121. Where landlords wish to enforce through the Sheriff the fee to transfer enforcement up to the High Court has increased to £66.

These fee increases are again above inflation. With the current funding issues faced by our courts such increases should continue to be expected with little or no notice.

The lease required the rent to be paid on the usual quarter days in advance. Accordingly, the rent was paid in full on 25 December 2011, and on 24 January 2012 the break clause was activated.

Having validly exercised the break clause, M&S then demanded repayment of the basic rent that related to the period after the break period. Their lease did not have any clause within it which entitled M&S to any such reimbursement.

The Supreme Court found that, other than in very exceptional circumstances, a reimbursement of rent in advance would require a very clear clause in the lease to entitle a tenant to a refund. These would even apply to rent paid in advance relating to the period after the exercise of a conditional break clause. In giving its judgment the Supreme Court took the opportunity to clarify the law on implied terms generally and to confirm that the Apportionment Act 1870 does not apply to rent payable in advance.

Comment

Those drafting leases with a break clause should consider an apportionment clause for rent paid in advance where tenants are permitted to exercise a break clause if they wish to allow for rent to be paid back in this way. Anyone acting for a tenant should ensure that such a clause is in their lease.

A summary of the case and the Court of Appeal decision can be read here.

The Supreme Court held that there were three questions to consider and answer and the tenant would need to succeed on every one of them in order to win the case. The three questions were:

1. Was the path part of the exterior of the property?
2. Was there an implied easement over the path? and
3. Did the landlord need to be given notice of a want of repair of the path?

Question 1

The Court resolved this question in the landlord’s favour. The Court refused to agree that a path which was far removed from the property could form part of its exterior. It held that despite the fact that the path was a key approach to the property, there was a distinction between the actual outside surface of the property and a path which was removed from the property itself. The court preferred the plain English meaning of ‘exterior’ as opposed to the strained meaning adopted by the Court of Appeal.

Question 2

Once again the Supreme Court adopted a plain English meaning here and agreed that the there was an implied easement. However, in light of the answers to Question 1 and 3 the Supreme Court did not dwell on this question.

Question 3

The Supreme Court decided, by a majority, that the landlord should be given notice. The Court held that it is the tenant that had the easiest opportunity to view the state of repair of the common areas. Furthermore, that while the landlord retained a right of access as against the freeholder, he had no right to actually effect repair.

Comment

This decision will come as some relief to landlords of flats who were facing the need to inspect the common areas of these properties and were potentially liable for the failures of the freeholder. While the Supreme Court has simplified things a great deal the issue of notice is not closed and is likely to raise its head again.

North Ayrshire Council said the landmark ruling at Kilmarnock Sheriff Court could now have a “massive impact” for people renting properties across the UK

The deposit legislation primarily places the responsibility for securing deposits on landlords. However, the Consumer Protection From Unfair Trading Regulations (CPRs) were used in this instance to hold Colvin Houston Ltd responsible for the deposit they took on behalf of their client, the landlord.

In this prosecution, North Ayrshire Council’s Trading Standards team argued that landlords were consumers rather than professionals. Consequently, in failing to secure the deposit, the letting agent had committed the offence of unfair trading by “failing to meet the standard of skill and care that would reasonably be expected” of a trader in its field of activity, and hence their practice was deemed “unfair as it failed to meet the standard of professional diligence”.

Comment

It should be remembered that the CPRs apply equally in England as well as in Scotland and so a similar prosecution could be pursued South of the Border. Routine failure to protect deposits is something that agents should not be involved with and is likely to attract prosecution.

A summary of the case and the Court of Appeal decision can be read here.

The Supreme Court stated that any decision which required the Courts to consider proportionality “would involve the Convention effectively being directly enforceable as between private citizens so as to alter their contractual rights and obligations, whereas the purpose of the Convention is…to protect citizens from having their rights infringed by the state.”

The effect of this judgment in relation to private residential tenancies is that it is now not possible for a tenant who is being faced with Section 21 possession claim to invoke Article 8 of the Convention. As the Court said in relation to private residential possession proceedings:

“Once it [a court] concludes that the landlord is entitled to an order for possession, there is nothing further to investigate.”

Comment

This judgement largely puts to bed any ability to challenge a private landlord’s eviction of their tenant on human rights grounds. While the case is a sad one in which the tenant did and should attract sympathy it will be of considerable relief to landlords. The effect of human rights arguments entering the private rented sector were, as the Supreme Court held, too horrible to contemplate.

The Bank of England has raised concerns about the economic uncertainly following this result. Certainly, the pound and UK stock market has seen a significant drop in value after the result was announced. This may lead to landlords being hard hit because lending for the buy to let market may become more difficult to obtain.

Furthermore, legislative change will need to be implemented. A number of regulations rely on the European Communities Act 1972 which presumably will need to be repealed. There is some uncertainty about how the Government will deal with this. The Government may choose to re-implement some of the regulations individually or collectively re-implement them all. Either option is possible in principle. However, some regulations are popular and some are certainly not. Consequently, what and if any regulations deriving from EU matters are implemented will be dependent on who is in power at the time the decisions need to be made. The regulations which may be subject to repeal or implementation will include the EPC Regulations, Heat Network Regulation and most particularly the Consumer Protection from Unfair Trading Regulations which are of great importance as they cover property misdescriptions.

That said, the current government has not yet served the Article 50 notice to leave the EU and it seems that it will not occur until at least October, once a new Conservative leader has been chosen. In any event, upon service of the Article 50 notice there is a 2-year notice period, which could be increased further by negotiation. Consequently, any changes are likely to be delayed for some time.

Finally, the EU result calls into question the proposed legislation in the Queen’s speech and the implementation timetable for legislation already passed. This is particularly so for the Housing and Planning Act 2016 and the Immigration Act 2016, due to government departments now having other priorities!

We will keep readers updated if and when changes are made to the property sector.

At the date of commencement of the tenancy agreement there was no handrail or bannister fitted even though the stairs were steep. There were indications that a handrail had been removed at some point but this was prior to the commencement of this tenancy.

The tenancy agreement required the landlord ‘to keep in repair the structure and exterior of the premises’ and the tenant was under an obligation to permit the landlord to enter the premises for the purposes of inspection and repair.

The Court of Appeal recognised that whilst a staircase without a handrail was hazardous, it was not defective pursuant to the Defective Premises Act. A lack of a handrail, although potentially dangerous, did not amount to disrepair and to oblige the landlord to fit a handrail would amount to requiring him to improve the premises and/or make them safe which is beyond the scope of the Act.

This decision introduces more certainty on the interpretation of landlords’ duty to ‘repair’ even if it might be concerning to tenants. It also highlights the gap in current repair obligations which still focus more on fairly basic obligations rather than a more general requirement for a property to be reasonably safe.

The Supreme Court’s decision had not been released at the time of writing this blog.

The tenant, Mr Edwards tripped on an uneven paving slab between the front door of the building of flats and the communal bin area. The Landlord, Mr Kumarasamy claimed that he had no obligation to repair the path between the building and the bin area, since he did not own it. The Landlord was the leaseholder of the flat rented by Mr Edwards.

The Court of Appeal found that a landlord of a flat let under a tenancy was liable for disrepair of common parts of the building in which the flat was situated. This liability arose under section 11 even when Mr Edwards had not given notice of the disrepair.

The Court of Appeal found that the disrepair was not within the demised property, therefore the implied term that the tenant had to give notice of the disrepair was found not to apply. The disrepair was in a common area and knowledge of it would have been revealed had the landlord or his agents carried out inspections.

Many Landlords will be hoping that this decision is reversed by the Supreme Court. Until it is, Landlords are advised to carry out inspections or ensure that management companies are doing so and that they report any necessary repairs in common areas promptly in writing to the freeholder. Landlords of flats should also ensure that the freeholder’s insurance includes public liability cover.

The Act is expected to come into force in late 2017 however, the key aims of the Act include a simpler tenancy system, predictability regarding rent increases, and an enhanced security for tenants.

Simpler Tenancy System

The Act abolishes the short assured and assured tenancies. In its place will be the single type of private tenancy, the Private Rented Tenancy (PRT). There are exceptions to the PRT such as Student accommodation and Holiday lets.

Rent Increases

Landlords are only permitted to increase the rent once per year upon providing 3 months’ notice. Tenants may challenge such rent increases by referring the matter to a Rent Officer who can determine a ‘fair’ rent. The newly created Private Rented Sector Housing Tribunal will hear any appeal of the Rent Officer’s decision.

The Act also gives local authorities powers to create ‘rent pressure zones’. This enables authorities to apply rent caps in areas they determine have been subject to excessive rent increases.

Security for Tenants

The Act abolishes the short assured tenancy and consequently the ‘no-fault’ ground for possession will also disappear. The ‘no-fault’ ground permits Landlords to vacate a property on the the expiry of a lease upon the expiry of two months’ notice. In short, Scotland will no longer have the equivalent of a section 21 notice in England.

Under the new Act, Landlords seeking possession will need to give at least one ground to bring the tenancy to an end. The grounds include that the Landlord is looking to use the property for non-residential purposes, to sell/refurbish/move into the property, or rent arrears for three or more consecutive months. The Landlord’s notice will be either 28 days or 84 days depending on the circumstances and the Tenant will have the right to refer the matter to the newly created Tribunal. If the Tribunal finds for the Tenant, a wrongful termination order could require the Landlord to pay the Tenant a sum of not more than six months’ rent.

Comment

The response to the Act has been mixed amongst those in the Property Sector. The security of tenure and restrictions on rent increases will no doubt be welcomed by many Tenants across the board. However, Landlords and Landlord associations have warned that these restrictions may result in Landlords disposing of their investment properties or looking outside of Scotland for such properties. Time, will no doubt tell.