08/03/2020

Is a Section 8 notice on rent arrears a demand for rent?

I kindly been sent a couple of county court Circuit Judge decisions on the issue of whether section 8 notices (where the ground is rent arrears) have to comply with the requirements of section 47 Landlord and Tenant Act 1987 by the inclusion of the landlord’s name and address. They reach contradictory conclusions, leaving open an issue to be resolved by a higher court, and a further issue for first instance courts.

First C Y Property Mangement Ltd v Babalola. County Court at Central London, 24 January 2019. HHJ Saunders. (Unreported. Copy of judgment here).

This was a final hearing of a possession claim which had been to appeal. The issue was that the Section 8 Notice contained the name of the landlord, C Y Properties, but the address given was not the company’s registered office. The Defendant argued that, as per Beitov Properties Ltd v Elliston Martin [2012] UKUT 133 (LC) (our report), it was necessary under section 47 Landlord and Tenant Act 1987 for the address given – for a company – to be ‘the place from which it carries out business’, and that the evidence that C Y Properties carried out business from that address was inadequate.

It was common ground, it appears, that a section 8 notice for rent arrears, as in this case, constituted a ‘demand for rent’ for the purposes of s.47 L&TA 1987:

47 Landlord’s name and address to be contained in demands for rent etc.

(1) Where any written demand is given to a tenant of premises to which this Part applies, the demand must contain the following information, namely—

(a) the name and address of the landlord, and

(b) if that address is not in England and Wales, an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant.

(2) Where—

(a) a tenant of any such premises is given such a demand, but

(b) it does not contain any information required to be contained in it by virtue of subsection (1), then (subject to subsection (3)) any part of the amount demanded which consists of a service charge or an administration charge (“the relevant amount”) shall be treated for all purposes as not being due from the tenant to the landlord at any time before that information is furnished by the landlord by notice given to the tenant.

(3) ……

(4) In this section “demand” means a demand for rent or other sums payable to the landlord under the terms of the tenancy.

The judgment accepted that s.47 was engaged, but on the facts C Y Properties had just about established it was carrying out business from that address.

But then there is Lakhany v Prempeh, County Court at Central London, 16 December 2019. HHJ Lethem (Unreported. Copy of judgment here).

This was an appeal of a first instance possession judgment, that was eventually allowed on the basis that the issues raised at first instance had been such that the District Judge should not have dealt with them in limited time at a first PCOL hearing. However, the judgment also substantially addresses the issue of the application of s.47 L&TA 1987 to section 8 notices, which was argued in detail.

The court was taken to C Y Properties as persuasive on the point, but noted that it appeared to be by way of concession, rather than a reasoned decision following argument. So, the issue was whether a section 8 notice was a ‘demand for rent’.

The court held:

41. I consider that there are two reasons for holding that the Section 8 notice is not a demand. First, I cannot accept Mr Vanhegan’s approach, which is to say that the notice is designed to have the results that the tenant will either put right the default and challenge the factual basis, which of course is true. However that, it seems to me, muddles the reason for the notice and the intention of the notice on the one hand, and the effect of the notice on the other hand. By a demand the landlord is requiring the tenant to take steps. However in this particular case, as Mr Zaiwalla points out the landlord may not want the tenant to take the steps. The landlord may not want payment of rent because he wants the property back. Thus the purpose of the notice is to tell the tenant that the case is going to court. It is certainly not to demand of the tenant that the arrears are paid because that is not what the landlord wants. It seems to me some support is provided for Mr Zaiwalla’s approach by recognition that this is a statutory based procedure, as he pointed out. The landlord is required to serve the notice even when they do not want the rent back. Thus the effect that the rent may be paid does not convert a notice that a party wishes to go to court into a demand for rectification. I accept, of course, that the decision in Torridge is right in identifying that this is putting the tenant in a position where they know what they are alleged to have done wrong and giving them an opportunity to rectify it. However that is not authority for the proposition that that is what the landlord wants and that is what the landlord is demanding.

42. It seems to me secondly, that because the notice is the product of statutory procedure, it would produce a number of anomalies and traps if it were to be a demand.

43. First, as Mr Zaiwalla observed, if it were a demand under ground 11, it would have something of a chameleon quality. If there were no arrears at the time that the notice was served, it would be a valid rent based notice that would not and could not demand rent because there would be no arrears at service of the notice. Thus it cannot be a demand. Similarly, if a tenant paid off the arrears between the posting of the notice and the service, the notice would in fact change its quality during the time that it was in transit. I am concerned that if Mr Vanhegan is right in saying that this is demand, it would be a demand for the purposes of ground 8 and 10, possibly a demand for ground 11, depending on the factual circumstances and not a demand at all if grounds other than eight, 10 and 11 were relied upon. That, it seems to me, confers a degree of uncertainty upon the notice in question.

44. I also accept Mr Zaiwalla’s argument that if the notice is a demand then that would have a confusing effect upon the tenant. Consider the position where the notice is served and the arrears are paid off. Further arrears then accrue and the landlord, within a period of 12 months, relies upon their first notice and issues proceedings. It would, if Mr Vanhegan is right, have become a demand for rent that was not due at the time of service but subsequently became due. It seems to me therefore that there is a clear distinction between a demand and between a Section 8 notice.

In any event, it is not clear what the effect of a failure to comply with s.47 would be, as it is only service charges (not rent) that are not due until s.47 is complied with. A suggestion from the defendant that ‘rent’ should be implied into s.47 was not accepted, given its express inclusion in s.48 (address for service of notices).

The appeal failed on this ground. However, the judgment goes on to note that the prescribed form 3 for section 8 notices does have a section for the landlord’s name and address at section 6. The words in italics under paragraph 6 –

‘To be signed and dated by the landlord or licensor or the landlord’s or licensor’s agent, someone acting for the landlord or licensor. If there are joint landlords, each landlord or the agent must sign unless one signs on behalf of the rest with their agreement’

refer to signature, not the provision of the landlord’s name and address (in this case section 6 had simply been crossed out and the notice signed by the landlord’s solicitors).

The appeal had not been argued on this point, so no decision was reached, but the court left open the question of the validity of the notice on this basis:

49. I wish to add one caveat to this finding. The above argument and the decision relates to the issues that were before the Deputy District Judge concerning Section 47. It should not be interpreted as holding that the Section 8 notice in this case is a valid notice. I have already recorded that paragraph six of the notice was not completed. I noted also that the provision of the name of the actual landlord may have been critical in this particular case. I have construed the words in italics under paragraph six as relating to signature and not the provision of the landlord’s address. I thus leave open the question of whether this particular Section 8 notice is a valid notice.

Comment

I gather that the Lakhany judgment is being taken to a second appeal. It is perhaps a pity that the issue of whether completion of section 6 of the Section 8 Notice is required for validity regardless of any s.47 L&TA 987 point is unlikely to form part of any second appeal decision.

As it stands, Lakhany is clearly more persuasive than C Y Properties, where the issue was effectively conceded. And where a Section 8 notice may involve non-rent grounds, or indeed be served in a situation where there are no arrears, it is perhaps hard to cast it as a demand for rent per se.

But irrespective of the s.47 point – which may or may not to turn out to be the case on second appeal – the question of whether the prescribed statutory form requires inclusion of the landlord’s name and address in order to be valid is a very interesting one. This will no doubt be played out in the future.

 

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

6 Comments

  1. Paul

    This may be out of order but I’m not sure how to ask the question I wish to put, which is not related to this in anyway. Is there any news regarding the s21 Luba appeal gas issue which I was led to believe was in January and no end of googling gets me nowhere, hence my query being out here

    Reply
    • Giles Peaker

      We await the court of appeal judgment. Believe me, it will be on here as soon as it is out.

      Reply
  2. Ben Reeve-Lewis

    Back in November you reported on Baz v Steele, Croydon County Court (2019) where an old style, pre form 3 section 8 was used and accepted by the court as being substantially to the same effect and here the DJ commenting that para 6 had not been completed and was questionable. There also seems to be open question as to whether a section 8 signed by a limited company needs to be signed in accordance with s44 of the Companies Act

    It is worrying that courts seem to lack a consistent opinion about such a basic and essential court form and that success or failure in a hearing, for either side, relies on the peculiar views of the judge, rather than something fixed and reliable that litigants can rely on.

    Reply
    • Giles Peaker

      Agreed. Trouble is all this ‘formalities’ issues come up in a piecemeal way, so getting higher court authority is slow and happenstance.

      Reply
  3. Sam

    I confess to sharing HHJ Lethem’s quizzocal expression at paragraph 46, if a s.8 notice doesn’t comply with s.47, then so what? Can anyone point out why it prevents the court from making a possession order.when neither service nor administration charges are relied upon? Especially, where most ASTs provide that rent is payable without demand anyway.

    Reply
    • Giles Peaker

      Exactly – but I think the issue was not so much that the rent was not due, but that the notice was defective, though that seems to have got a bit confused at times.

      Reply

Leave a Reply (We can't offer advice on individual issues)

This site uses Akismet to reduce spam. Learn how your comment data is processed.