Tag Archive for 'right-to-buy'

Outstanding and Relevant

Published
by
chief
on 10/08/2009
in FLW case note, Housing law - All and right-to-buy
. 1 Comment

Scinto v London Borough of Newham [2009] EWCA Civ 837 is an appeal from Bow County Court on whether the tenant was still entitled to exercise her right to buy on terms first set out in December 1999.

Miss Scinto initiated the right to buy process in September 1999.  In December 1999 Newham sent an offer notice addressed to both Miss Scinto and her son detailing the offer price and the statutory discount that had been applied.  The offer notice also identified some structural defects.

In September 2000 Miss Scinto’s solicitors sent a surveyor’s report, identifying some serious structural problems, to Newham.  They told Newham that without extensive repair works she would not be able to get a mortgage and therefore asked that the right to buy be held in abeyance pending investigations by Newham’s insurers and any repair work that was found to be necessary.

The following month Newham agreed to hold the application pending the outcome of investigations.

Miss Scinto attempted to chase things up in January 2001.  She received a response from Newham stating that they asked for estimates for the repair work.  Once a winner was identified they would contact her to arrange access.  Newham also apologised for the delay, but the delays continued.  in May 2002 Newham contacted Miss Scinto to say that somebody would carry out the works at the end of that month.  That did not happen.

On 26 February 2003, with the works still not carried out, Newham served a Housing Act 1985, s. 140 notice on Miss Scinto.  A s. 140 notice requires the tenant to complete their right to buy purchase within a set time.  Such a notice cannot be served when “any relevant matter stated to be outstanding in a written notice served on the landlord by the tenant has not been agreed in writing or determined” (s. 140(4)(c)) and “relevant matters means matters relating to the grant” (s. 140(5)).

Miss Scinto did not respond to this notice, so on 30 April 2003 Newham served a second notice under s. 141(1) (the judgment refers to 140(1) on this point, but that must be a typo, see [9]).  This notice required her to complete the purchase within 56 days.  S. 141(5) provides that a tenant who fails to complete within the time allowed by a s. 141 notice has their right to buy claim withdrawn at the end of that time period.

To complete the background in December 2004 Miss Scinto issued disrepair proceedings against Newham.  Some repair work was carried out.  On 26 June 2006 her solicitors wrote to Newham asking to proceed with the purchase on the terms of the 1999 offer.  In November 2006 the disrepair proceedings were compromised without liability being admitted.

Miss Scinto sought a declaration that she was entitled to complete the purchase on the terms of the 1999 offer.  HHJ Barnett QC in the Bow County Court granted this on the grounds that the outstanding repairs were a relevant matter meaning that Newham were not entitled to serve the first notice.  Furthermore, it was unconscionable for Newham to issue the notices when they did and it would be inequitable for them to rely on the notices.

On appeal Newham argued four grounds.  Taking them in the same order as they appear in the judgment:

  1. They could rely on their notices, as it was for Miss Scinto to respond to the first notice by saying that the repairs were outstanding and, following Ryan v Islington, the outstanding repairs were not relevant matters.
  2. HHJ Barnett QC failed to make sufficient findings of fact to support a promissory estoppel case.
  3. Miss Scinto had said in January 2003 that she wished to proceed with her right to buy claim and could not therefore rely on Newham’s representations about repairs
  4. The original offer was invalid as it was made to Miss Scinto and her son; he was not entitled to be joined to the claim

Sir Anthony May gave the only judgment, with which Arden and Jacob LLJ agreed.  He dealt with the first part of ground 1 shortly.  The repairs were outstanding, so it was not open to Newham to issue the first notice.  It was not up to Miss Scinto to respond and point out the outstanding matters, the notice was simply invalid.

However, this only applies if the repairs were a “relevant matter”.  On this point Newham relied on Ryan v Islington.  In that case the Court of Appeal had held that unrepaired structural defects were not a relevant matter for the purposes of s. 140.  However, Sir Anthony May said at [17]-[19] that this was:

a decision to the effect that the existence of contended-for disrepair by itself does not entitle the tenant to defer the completion of the purchase until the repair has been carried out and that, accordingly, it is not a matter relating to the grant…

However, it seems to me that the facts of the present case are crucially different.  In the present case … the parties had in essence agreed that the right-to-buy process would be held in abeyance until the outcome of investigations and that the outcome of investigations embraced such repair works as those investigations indicated Newham should carry out.

Accordingly, the parties had … embraced the matter of carrying out repairs as being a matter relating to the grant…  Newham were not able to serve their first notice under section 140 of the 1985 Act because they were forbidden from doing so by the terms of section 140(4)(c).

Turning to whether there were sufficient findings of fact to support a promissory estoppel case, Sir Anthony May said that the findings of fact that were essential to the whole case were plain and sustained the promissory estoppel claim, at [22]:

There was a clear and unequivocal representation by Newham that they would not proceed with the right-to-buy process until the repairs were effected.  Newham plainly intended that this should affect the parties’ legal relations and Miss Scinto has plainly relied on it by not taking steps to proceed with her claim.

Thirdly, Miss Scinto had said in January 2003 that she wished to proceed with her right-to-by claim, but she had not abandoned her contention that Newham should carry out the repairs first.  It had been clearly said that she could not get a mortgage until the repairs were completed.

Finally, while Miss Scinto’s son might not have been entitled to be joined in the claim as he had not occupied the property as his only or principal home it was far too late for Newham to try and say that the whole process was invalid because of the form of a notice more than a decade old, a notice that Newham failed to produce.  All parties had proceeded for ten years on the basis that the claim was valid, and it was open to Miss Scinto to have the conveyance in her name alone.

Newham’s appeal was therefore dismissed.

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Take it as is or not at all

Published
by
NL
on 22/06/2009
in Disrepair, FLW case note, Housing law - All, right-to-buy and secure-tenancy
. 0 Comments

Ryan v London Borough of Islington [2009] EWCA Civ 578 concerned Ms Ryan’s Right to Buy under Part V Housing Act 1985 and whether or not it had been deemed to be withdrawn.

Ms Ryan was the secure tenant of a an Islington property. In January 2003, she served notice of RTB and after two months Islington admitted the RTB, stating that valuation would be as of January 2003. In June 2003, Islington noted that specialist works were required – filling a crack in the rear wall, indicating subsidence. The valuer’s report of the same month noted sloping and springy floors, damp to a ceiling and walls, but did not mention subsidence. Value was given at £160,000 as at January 2003.

In August 2003, Islington served the s.125 notice, given a price of £122,000, with the £38,000 discount. It cited the floor and damp, but not the subsidence, as defects of which Islington was aware. The notice gave estimated charges (i.e the 5 year cap) on major works of £5,500 in total for Ms Ryan, £22,000 for the block. Ms Ryan was given 12 weeks to respond. The notice told Ms Ryan that she should request a revaluation by the district surveyor if there was any dispute over the defects identified (s.128).

In October 2003, Islington’s surveyor identified the subsidence and that underpinning works and subsequent structural works would be required. Ms Ryan’s case was that she was told at this time that the works would be carried out by March 2004. Islington insisted that the works had not been authorised at this time and that Ms Ryan had not formally told the works would be done.

Ms Ryan accepted the s.125 offer in November 2003 and IsIington proposed completion by July 2004. This didn’t happen and in September 2004 Islington served notice to complete under s.140. Ms Ryan’s solicitors raised the outstanding works and asked for a suspension. Islington served a further notice to complete within 56 days under s.141 in November 2004, warning that the claim to RTB would otherwise be deemed withdrawn under s.141(4). There was no completion. In May 2005, Ms Ryan began disrepair proceedings. Islington started works in November 2005, which were not fully completed by the time of the trial of the claim in July 2008.

Ms Ryan got an order for specific performance and damages for disrepair, but her claim for a declaration that her RTB application was not withdrawn and her claim for damages in the loss of the RTB claim were both dismissed. Ms Ryan appealed.

The main issue for the Court of Appeal was whether the structural defects were a ‘relevant matter’ for the purposes of s.141 Housing Act 1985 such that raising them stopped the effect of the notice to complete. Ms Ryan also disputed the Recorder’s dismissal of her claim for damages. There were a couple of disputed findings of fact, which the Court declined to interfere with.

Held:
1. Structural defects were not a matter relevant to the grant for the purposes of s.140. These were matters relating to the conveyance or to the proposed lease. Secondly, “relevant ‘outstanding’ matters in section 140(1)(b) means matters that have not been ‘agreed or determined’ within the meaning of section 140(1)(a), a phrase deriving from section 138(1), which refers to the landlord’s obligation to make a grant ‘as soon as all matters relating to the grant have been agreed or determined ….’ “. Thirdly, there is nothing in the RTB legislation that obliges a seller to put the property in repair before sale. Ms Ryan could pursue breach of s.11 L&T Act 1985 or tenancy agreement, but she could not make the repair effectively a condition of sale. (But see the discussion of the total destruction of the demise at para 60).

Assuming that the subsidence was a structural defect within the meaning of s.125(4A) – which Islington argued otherwise – then the proper point for it to be raised was at the time of the s.125 Notice, by request for a revaluation by the district surveyor.

2. The claim for damages on the basis of a lost right to purchase the flat was dismissed in the court below but without sufficient reasons being given. That said, Ms Ryan had failed to provide sufficient evidence to establish that the condition of the property prevented her from obtaining a mortgage. There was just one brief discussion with a mortgage advisor, which was not conclusive. Ms Ryan’s case that the damages were foreseeable by Islington as resulting from the failure to repair was not attractive. While Islington assumed the burden of the repairing obligations with the secure tenancy, it did not also assume an obligation to compensate her “in remote circumstances in which, because of its failure to perform its repairing covenants, Ms Ryan was unable to complete a purchase of the flat under the ‘right to buy’ provisions. Any such purchase was not in contemplation when the secure tenancy was granted, and so that could not have been the kind or type of loss for which Islington ought fairly to be taken to have accepted responsibility.” [para 73].

The appeal was dismissed.

So, apart from the familiar lesson that some local authories will not carry out repairs until disrepair proceedings have begun, if then, it is also clear that any dispute about the condition of the property and structural defects should be raised at the time of the .s125 notice, if they coudn’t be before. Disrepair is not a reason to delay the purchase process, if anything it counts only in the valuation. But also note Islington’s argument that disrepair, including subsidence, were not structural defects for the purposes of s.125(4A) as ’structural defect’ was something inherent in the design or construction of the property from the beginning, such that they would not fall under disrepair. The Court made no finding on this argument, but it will no doubt be run again.

In this position, assuming Ms Ryan could get a mortgage, her contributions to the works would have been capped under the s.125 notice, so that she would not have had to pay a contribution for them, which might be a consideration for others.

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Right to buy and Housing Benefit rebates in the Lords

Published
by
NL
on 10/06/2009
in Benefits, FLW case note, Housing law - All and right-to-buy
. 0 Comments

The House of Lords opinions in Hanoman (FC) (Respondent) v London Borough of Southwark (Appellants) [2009] UKHL 29 were handed down today. This was Southwark’s appeal of a Court of Appeal judgment we noted here.

Briefly, Mr Hanoman was a Southwark secure tenant. Southwark had failed to serve a counter notice to Mr Hanoman’s s.122 Notice of right to buy, served in 1999. In fact the counter notice wasn’t served until after a High Court hearing in 2004. S.153B Housing Act 1985 (as amended) kicks in where the tenant has served notice of delay, which Mr Hanoman had. The effect is that rent payable after the notice period in the notice of delay is set against the purchase price of the property – up a 12 months full rent, then 50% thereafter. In Mr Hanoman’s case this would have amounted to the full purchase price, after discount, of the property. Mr Hanoman had paid the purchase price in 2004, subject to this case going forward.

Mr Hanoman was in receipt of housing benefit. As a secure tenant of the housing authority, this was in the form of a rent rebate, rather than a payment of a rent allowance, section 134(1A) of the Social Security Administration Act 1992. Southwark’s contention was that a housing benefit rebate did not count as payment of rent for the purposes of s.153(B):

The purpose of section 153B(2) is, it is submitted, to compensate a tenant for having had to pay rent during the period of delay, not to provide the tenant with a windfall by restoring to him something he has never had. Mr Heather, who appeared for the Council, argued that in the context of section 153B the word “payment” contemplated the movement of money from the tenant to the landlord. He argued also that the payment had to be a payment of ‘rent’. Housing benefit is not ‘rent’ and the application of housing benefit in reduction of rent does not transform it into rent. [para 21]

Then Southwark went perhaps a little off piste, arguing that there were other credits to a rent account that would not count as payment of rent:

One such example was an award to a tenant of damages against a local authority landlord for breach of repairing obligations. It was, he said, often the case that such damages would be credited to the tenant’s rent account rather than paid to the tenant. Such credits, he said, would not amount to payments of rent for section 153B purposes. [para 22]

Heaven knows where Southwark thought they were going with that, but it didn’t get very far. Lord Scott, in the sole opinion, effectively told them not to be so silly.

First, the crediting of the damages to the tenant’s rent account could only be done with the tenant’s consent. Absent a successful set-off defence, a judge would have no power that I know of to impose such a thing on a successful claimant in a damages action. If and to the extent that the damages were then applied in discharge of rent due from the tenant the local authority would be acting as the tenant’s agent in so doing. The application of the damages in these circumstances would be no different from a payment of the damages to the tenant and the application of the money by the tenant in payment of rent due. And, although your Lordships do not need to decide the point, the same would, in my opinion, be so in the case of a successful set-off defence by the local authority. [para 22]

So the question was, given that both parties acknowledged that payment of a rent allowance would be payment of rent, whether the rebate could be payment of rent. Lord Scott finds that it can be.

To take it otherwise would be a) to fail to give effect to s.153A and B, such that the local authority would escape all or part of the penalty if the tenant received housing benefit; and b) would result in the anomalous situation where tenants of RSLs, Housing Action Trusts etc. would have the benefit of the penalty as they got rent allowance, whereas tenants of local authorities and new town corporations, getting HB as rebate wouldn’t:

This difference seems to me unprincipled, to be one that is not supported by any discernible policy and cannot be supposed to reflect any Parliamentary intention. [para 26].

Appeal dismissed and Mr Hanoman got his home for free after discount (and with interest on £17,000 since 2004).

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Southwark and the Lords

Published
by
J
on 20/03/2009
in Community care, Housing law - All and right-to-buy
. 2 Comments

Southwark LBC  are involved in two cases are being heard in the House of Lords next week. Hanoman v Southwark is a Right to Buy dispute and R (G) v Southwark is about whether there is a lawful distinction between a child who is “in need of accommodation”  or merely “in need of assistance with accommodation.”

The judgments will, of course, be noted here as soon as they come out.

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Help with service charges

Published
by
J
on 19/03/2009
in Housing law - All, Leasehold and shared ownership and right-to-buy
. 0 Comments

Leaseholders who purchased their properties from local housing authorities under the Right to Buy (and those persons who subsequently bought on from those original purchasers) are currently facing huge service charge bills (up to £40,000 in some London Boroughs) for their alleged share of the remedial works to their buildings which is being carried out as part of the Decent Homes Initiative.

Whilst the Government has resisted calls to cap those service charges, they have, from 6 April 2009, introduced two reforms which may be of some benefit to leaseholders in England.

The Housing (Service Charge Loans) (Amendment) (England) Regulations 2009 SI 2009/602 amends the Housing (Service Charge Loans) Regulations 1992 so as to permit housing authorities to make loans to their leaseholders on non-commercial terms. Specifically, on terms that do not require the payment of interest or only require interest to be paid on part of the loan.

Secondly, the Housing (Purchase of Equitable Interests) (England) Regulations 2009 SI 2009/601 give effect to s.450D Housing Act 1985, as inserted by the Housing and Regeneration Act 2008. In outline these regulations provide for the housing authority to purchase an equitable interest in the property in exchange for reducing or cancelling the outstanding service charge bills.

It remains to be seen how keen, if at all, housing authorities are to make use of these new provisions, especially the latter Regulations. I have my doubts.

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Knowsley v White etc. in more detail

Published
by
NL
on 15/12/2008
in FLW case note, Housing law - All, Tolerated trespasser, assured-tenancy, right-to-buy and secure-tenancy
. 2 Comments

Table of contents for Tolerated Trespassers

  1. Tolerated Trespassers – the aftermath
  2. Tolerated trespassers: A Luta Continua
  3. Postponing Possession. Are you now and have you always been a tenant?
  4. Assured trespassers?
  5. Assured tenant or trespasser? The waiting begins.
  6. Postponed assured trespassers verdict soon(ish).
  7. Permanent trespassers and enforceable possession orders.
  8. More on London & Quadrant v Ansell
  9. White v Knowsley – Court of Appeal Judgment
  10. Reincarnation of Tenancy?
  11. S.85 Application Randomness
  12. Permanent trespassers – a fan letter
  13. Payne-less
  14. Post mortem revival of tenancy
  15. When does enforceability end?

Knowsley HT v White, Honeyghan-Green v LB Islington & Porter v Shepherds Bush Housing Association [2008] UKHL 70 -  for anyone who hasn’t read it yet.

There is lots to unpick here, so I’ll go case by case. It is made easier by there being pretty much one judgment, that of Lord Neuberger. The other substantial judgment, that of Lord Manse, will only be dealt with at the points of dissent.

Knowsley HT v White

Lord Neuberger advances three reasons for an assured tenancy ending only with the execution of the order.

First, ‘it would not otherwise be entirely easy to characterise the status of a tenant in occupation under the shadow of an order for possession’. ‘Tolerated trespasser’ is oxymoronic as a concept and the potential retrospective revival of tenancy presents further conceptual problems. [paras 79-81]

Second, the sheer uncertainty of the tolerated trespasser’s rights and obligations as against the landlord, as found in the case law, and the arguments over the precise terms of a possession order (see Bristol City v Hassan) where orders which appear to have identical effect turn out not to (Thompson v Elmbridge [1987] 1 WLR 1425 as against Harlow v Hall [2006] 1 WLR 2116, for instance). [para 82-83]

In addition, there is the effect on the rights of third parties, e.g. of a a visitor against the landlord under the Defective Premises Act 1972 – which depends on the landlord being under an obligation to the tenant for repair. Here Lord Neuberger throws in the intriguing suggestions that:

It is fair to say that I would incline to the view that it would have such a duty. The suspended order will be on terms that the landlord is entitled to payment for the tenant’s current occupation at a rate which assumes it is liable for repair (either under the terms of the tenancy or pursuant to section 11 of the Landlord and Tenant Act 1985). [para 83]

This looks like a strong suggestion that payment of mesne profits at the same rate as the rent incurs a contractual obligation to repair in the same express and implied terms as the tenancy agreement. And no other judgment dissents from this. (Ooooh. I so want to try this out).

The third reason is that s.9 of the 1988 Act means that the Court retains wide powers to vary or discharge the order. This points to the fact that the tenancy does not end until those powers are at an end. S.9 of the 1988 Act mirrors very closely the wording of s.100 of the 1977 Act, rather than an assumed parity with s.85 of the 1985 Act. There is no equivalent in HA 1988 to s.82(2) of the HA 1985 [paras 85-88]

Logic means that the conclusion also applies to assured tenancies subject to outright possession orders, Artesian Residential Developments v Beck [2000] QB 541 overruled.

Of course, the first two reasons apply equally to the tolerated trespasser regime under Housing Act 1985. Given that Thompson and Hall relied on s.82(2) HA 1985, there is a logical distinction between the two acts. That said, had the point not been determined in Burrows, Lord Neuberger would have reached the same conclusion on the 1985 Act and take ‘the date on which the tenant is to give up possession in pursuance of the order’ in s.82(2) as being the date of execution. The question, it appears was open to consideration, but counsel for all parties apparently suggested that, in view of the Housing & Regeneration Act 2008, and the sheer number of cases involved, it was too late. [paras 90-92]

Proleptic discharge of possession orders (Honeygan-Green & also Porter)

Marshall [2002] HLR 428 held that a suspended possession order could not include a proleptic order such that the possession order was discharged when the arrears and costs were paid, on the basis that the power under s.85(4) HA 1985 could only be exercised in the light of the circumstances prevailing at the time. [para 94]

Lord Neuberger overturns this, based on Payne v Cooper [1958] 1 QB 174, which was not before the Court in Marshall. The analysis proposed by James Stark in Helena Housing v Molyneux is expressly adopted.  [para 98]. In any case CPR 3.1(2)(a) may well mean that  it would be open to the Court to make such an order in any event. [para 100]

The terms of the proleptic discharge and the suspension do not have to be the same (Lord Mance dissenting). To insist that a discharge can only be achieved via a s.85(4) complete compliance with the order is too take an overly technical view. If a proleptic order is possible and the Court can vary the terms of the order retrospectively, then it would be surprising if the court could not proleptically order discharge on different terms to the suspension [para 102]. Again, Payne v Cooper is cited in support.

While an application via s.85(2) is open to those who have breached the terms of the order, this involves expenditure and effort as well as uncertainty for the tenant, who is unlikely to even know how to approach this. [para 106]. The Court is to consider would be a fair proleptic condition of discharge [para 108] but Lord Mance’s suggestion of ’substantial compliance’ (see para 13 on)  is too uncertain – conditions for an SPO should be taken strictly (and the landlord can apply for a warrant on breach – but if the landlord’s application is unreasonable, costs consequences could follow).

Lord Mance’s dissent is based on a reading of Payne v Cooper (which involved an outright possession order converted to an SPO) pointing out that Payne did not involve a situation where the tenant had failed to meet the conditions of the order. Lord Mance saw nothing in Payne that gainsaid the Burrows analysis of s.85(4) and so argued that there was no power to make a proleptic discharge order on other terms than complete compliance with the conditions of the order [paras 21-24].

What isn’t at all clear is what form of words will count as a proleptic discharge. Those in Honeygan-Green’s order would – ‘upon payment of the arrears in full claim do stand dismissed’. Those in Porter’s order wouldn’t – ‘when you have paid the total amounts mentioned, the plaintiff will not be able to take any steps to evict you as a result of this order’. It is impliedly suggested that ‘this order will cease to be enforceable’ would not be sufficient for a proleptic discharge, and this is the form of most N28 and indeed N28A possession orders. So application under s.85(2) or (4) would still be required, unless the tenant waits for a replacement tenancy under H&RA 2008.

Porter v Shepherds Bush HA

The Swindon v Aston trap – paying off all arrears and costs on a breached SPO, or one that provides it is ‘unenforceable’ on such paying off, making it unvariable – falls for the reasons already given. Marshall is wrong on the limits of s.85(4) and Swindon v Aston is wrong on s.85(2).

There is nothing in s.85(2) which expressedly or impliedly prevents a tenant from making an application under s.85(2) after paying off the arrears and costs. If anything, the wide powers of s.85 indicate that the tenant should have such a right.

Honeygan-Green v Islington

While a person must be a secure (or assured) tenant throughout the period from service of the s.122 HA 1985 Notice through to completion, as approved in Bristol City Council v Lovell [1998] 1 WLR 446, the re-instatement of a tenancy on discharge of a possession order entitles the tenant to renew the right to reply on the notice. To argue that the right to buy pursuant to a s.122 notice is lost when the tenancy is determined by a possession order and that it cannot be retrospectively re-instated by the retrospective revival of the tenancy produces unacceptable results under s.122(2) and flys in the face of s.122(1) (‘obliged to give up possession’). It also offends against the  Lambeth LBC v Rogers (1999) 32 HLR 361 principle of retrospective  revival. [paras 114 -117]

So, an SPO suspends but does not end the right to buy, which is only extinguished on execution. Otherwise, even a tenant on the brink of completion who was subject to a vexatious bankruptcy petition would lose the right.

As Rogers means that the tenancy is revived retrospectively as if it had always been, and in view of the conclusion on assured tenancies, there is no reason to apply a considerably more penal regime on secure over assured tenants in this regard. [paras 121-122]

This may give the tenant a certain advantage – in both a rising and falling market, but there is no power to impose conditions on regaining the RTB under the possession order, s.85(3)(b) does not extend that far. [para 126]

However, the landlord can still serve notices under s.140 and s.141 during the period of trespasserhood, and if the tenant does not (as he cannot) complete in the time specified in the s.141 notice, the s.122 notice is treated as withdrawn.

And there we are. There is much else in there, of course, and the suggestion that their Lordships were prepared to sweep away the whole tolerated trespasser regime – assured and secure – is fascinating.  I am already wielding this judgment, both in headline and in nuance, and I’m sure the same is true of all of us. I can’t wait to see what the Court of Appeal make of this changed landscape in the remaining tolerated trespasser cases. I understand, for instance, that written submissions on this judgment were requested by the Court of Appeal in LB Southwark v Austin, in which we await the handing down of the CoA judgment.

Now if only we’d had this Lords decision about 10, or 20 years ago…

Credit to:

On White, solicitor Tony Fearnley of Keoghs and Nicholls, Lindsell and Harris, Counsel Adam Fullwood and Jan Luba QC

On Porter, solicitors Sharpe Pritchard/Olivr Fisher, Counsel Miles Croally and Richard Drabble QC

On Honeygan-Green, solicitors Wilson Barca, Counsel Adrian Jack and Richard Drabble QC again

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Tolerated trespassers in the House of Lords

Published
by
NL
on 10/12/2008
in FLW case note, Housing law - All, Possession, Tolerated trespasser, assured-tenancy, right-to-buy and secure-tenancy
. 17 Comments

Table of contents for Tolerated Trespassers

  1. Tolerated Trespassers – the aftermath
  2. Tolerated trespassers: A Luta Continua
  3. Postponing Possession. Are you now and have you always been a tenant?
  4. Assured trespassers?
  5. Assured tenant or trespasser? The waiting begins.
  6. Postponed assured trespassers verdict soon(ish).
  7. Permanent trespassers and enforceable possession orders.
  8. More on London & Quadrant v Ansell
  9. White v Knowsley – Court of Appeal Judgment
  10. Reincarnation of Tenancy?
  11. S.85 Application Randomness
  12. Permanent trespassers – a fan letter
  13. Payne-less
  14. Post mortem revival of tenancy
  15. When does enforceability end?

For once we were well and truly beaten to the line in publicly announcing a judgment, and in this instance most deservedly so. At about 11 am at the Housing Law Conference Jan Luba QC announced the result of Knowsley HT v White, Honeyghan-Green v LB Islington & Porter v Shepherds Bush Housing Association [2008] UKHL 70 and Garden Court had copies of the judgment available for the assembled multitudes of housing lawyers. I’m very grateful. I couldn’t get online to get a copy during the day.

So, after scanning the judgment during coffee breaks, and being defeated by my mobile dongle and lack of time in a very full day, here we finally are.

And what a result it is. Headlines tonight, arguments tomorrow:

1. Knowsley HT v White
Assured tenancies persist until enforcement of the order for possession – i.e. until eviction. Assured tenants under any form of suspended or outright possession order are not tolerated trespassers and never have been. (Obviously this doesn’t include summary possession where security of tenure has been lost).

2. Porter v Shepherds Bush HA
There is no such thing as an (ex-secure) entrenched trespasser anymore. Paying off the arrears and costs on a possession order does not mean that the tenant cannot apply to vary the possession order under s.85. Swindon v Aston was wrongly decided.

3.Honeygan-Green v LB Islington was rightly decided at the Court of Appeal. A tenant who served notice of right to buy before a suspended possession order was made has that original right to buy revive when the possession order is discharged.

There is a lot that is of interest in the judgment, including an intriguing apparently obiter suggestion of repairing duties to tolerated trespassers and a partial vindication of James Stark on Payne v Cooper (Hi James!). Expect a detailed post tomorrow evening.

Good conference, by the way, very good indeed, although I’m delighted to say there didn’t seem to be anything much raised that we haven’t at least mentioned here. But the thought and detail, my dears, the thought and detail.

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In passing…

Published
by
NL
on 30/09/2008
in Housing law - All and right-to-buy
. 0 Comments

There was an interesting article in today’s Guardian on the legacy of Right to Buy, not exactly an in-depth piece, but featuring a number of the issues familiar to anyone who practicises in housing – from dodgy short term letting to major works charges on leaseholders. And above all, the lack of available decent stock for renting.

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Hey! That's my window.

Published
by
Francis Davey
on 01/09/2008
in FLW case note, Housing law - All, Leasehold and shared ownership and right-to-buy
. 0 Comments

Sheffield City Council v Hazel St Clare Oliver LRX/146/2007 [links to PDF]

This is a case which touches on an issue familiar to those involved with right to buy leases: replacement of windows by the landlord.

The landlord council wished to replace metal framed windows with new uPVC in the leaseholder’s block. The terms of the demise in the lease were clear: the windows were part of the leaseholder’s property. Consistent with that, the leaseholder’s covenant to repair required her to keep the windows in repair. The covenant to repair looked like this:

“(3) To keep the demised premises and every part thereof (except those parts of the demised premises which the Council are by virtue of the covenant implied by paragraph 14(2)(a) of Schedule 6 to the 1985 [Act] liable to keep in repair) and all fixtures and fittings therein and all additions thereto and all (if any) sewer drains cables pipes wires ducts radiators tanks cisterns and valves and channels within and serving the demised premises and all doors and windows (including the glass and frames thereof) floors ceilings internal walls and surfaces and skirtings therein in good repair AND where necessary to renew or replace all worn or damaged parts of the demised premises which the lessee is liable as hereinbefore provided to repair”.

The council’s covenant to repair was complementary:

“(3) To keep in repair (the definition of repair where appropriate including decorative repair) and (if desirable in the opinion of the Council) to improve (a) the structure and exterior of the demised premises and of the Building (including drains gutters and external pipes) and to make good any defect affecting that structure …”

The LVT decided that, on a straightforward construction of these covenants, the “exterior of the demised premises” did not include the windows so that replacement of them could not be said to fall within the council’s covenant to repair and improve. As a result, the council could not include a charge for their replacement in the service charge bill.

On appeal to the Lands Tribunal, the President thought otherwise. The Lands Tribunal reached its conclusion based on its construction of Paragraph 14 of Schedule 6 to the Housing Act 1985 which is implied into every right to buy lease by s.139 of the same act. Paragraph 14(2)(a) reads:

“(2) There are implied covenants by the landlord— (a) to keep in repair the structure and exterior of the dwelling-house and of the building in which it is situated (including drains, gutters and external pipes) and to make good any defect affecting that structure;”

The Lands Tribunal found that for the purposes of paragraph 14(2)(a) the windows were within the meaning of “structure and exterior of the dwelling-house”, based on a long line of authorities starting with Irvine v Morgan [1991] 1 EGLR. The fact that the windows were part of the demised premises would be of no relevance.

As it happens this was not enough. The council’s reasons for doing the window replacement work (for instance to improve the thermal properties of the flats) indicated that the works were improvements not repairs — a suggestion not denied by the council. In that case the council would have to rely on their duty to improve (found in the council’s covenant) not on the statutory implied duty to repair.

The Lands Tribunal went on to find that the council’s covenant was to be construed in the same way as paragraph 14(2)(a), so that “structure and exterior of the demised premises” included the windows. The windows fell within the council’s duty to improve and hence the LVT had erred and the council would be able to recover the costs of replacing the windows via the service charge bill.

This part of the appeal had become academic because, as a result of the Respondent’s objection to the work being done, the Council had agreed not to replace her windows. For the leaseholder at least, the case had a happy ending.

The decision is not entirely satisfactory. The lease appears to have quite carefully specified that the responsibility for repair of the windows fell on the leaseholder. It would be reasonable to conclude that the corresponding freeholder covenant was meant to exclude the windows. Such a view is buttressed by the fact that the windows were a part of the demise. All the term implied by the Housing Act 1985 could do is override the tenant’s duty to repair. It should have no effect on the duty of the council to improve.

The Lands Tribunal appears to have moved dangerously close to using the meaning of a statutory implied term as a determinant for the meaning of a term in the lease, rather than constructing the lease itself.

Furthermore, the Tribunal’s conclusion is odd. The council were able to remove items of property that belonged to the leaseholder (the windows) and replace them with others as they saw fit. The lease in question could like many right to buy leases have reserved the windows to the council. The fact that it did not suggests that the lease was intended to preclude the council’s interference in just such a fashion.

The decision may have wider implications because the President expressed his surprise and unhappiness with a clause which both required and empowered the council to carry out arbitrary improvement works (in my experience invariably present in right to buy leases). At the end of the decision he said:

“I would hope that, as a matter of practice, the council would not without the lessee’s approval carry out improvement works to the demised premises for which the lessee is to be charged unless the works are no more than a limited extension of works of repair.”

The disapproval the Lands Tribunal have expressed may be useful in persuading councils against interfering with their leaseholder’s property when carrying out works of improvement.

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Constructive trust and dodgy RTB

Published
by
NL
on 12/07/2008
in FLW case note, Housing law - All, Trusts and Estoppel and right-to-buy
. 0 Comments

There is an all too common situation. A tenant with the right to buy is offered a capital sum and the mortgage payments for the (in this case) three years needed to avoid repaying the RTB discount on transfer. In the meantime, they either get to stay or hand over control of the property to the shadow. Recent RTBs have provisions in the lease to make this more difficult, as well as a much reduced discount, but there remain a lot of sharks circling.

McGuane v Welch [2008] EWCA Civ 785 was an appeal of a County Court judgment awarding an equitable interest of 100% in a lease of the property concerned to Mr Welch (W), against the title of Mr McGuane (M), the erstwhile tenant.

I’ve not got time to do a detailed report, but the appeal succeeded, largely on the basis that there was an express trust, not a constructive trust, and that the claimant did not come to equity with clean hands. In particular the Claimant had engaged a not entirely reliable solicitor, May & Co, supposedly to act for the Defendant in the arrangement. They never met their supposed client or advised him directly in person or in writing. One trusts the SRA have taken note.

The Defendant pleaded the whole arrangment being the act of “a poor and ignorant man”, (Creswell v Potter (1968) [1978] 1 WLR 255, Backhouse v Backhouse [1978] 1 WLR 243). But the judgment left the erstwhile tenant liable to repay all the monies that the Claimant had spent on the property in mortgage and refurb, so effectively meaning a plague on both your houses.

There are a number of issues in this judgment that I want to return to – in particular the requirement for ’stamped’ trust deed and transfer for admission as evidence, and the way in which express trust is dealt with. But that will have to wait for a fortnight or so. No time now, I’m afraid.

In the meantime, it is clear that the Court deeply disapproves of the ‘transaction’, but absent evidence or argument on breach of statute, can’t say much more.

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