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Entries in Landlord & Tenant (7)

Friday
Feb102017

New Partner at Greene & Greene Solicitors

Tim Mendes da Costa, a member of the Commercial Property team has been promoted to Partner having joined Greene & Greene Solicitors who are based in Bury St. Edmunds in 2014.

Tim qualified as a solicitor in 2006 and was previously a Partner with a firm in London.  Clients have been impressed with Tim’s “diligence, thoroughness and sound advice”.  He specialises in both commercial and high-value residential property transactions and acts for a broad range of clients, from individual purchasers and sellers, to developers, landlords, lenders and investors.

Chris Thomson, Senior Partner at Greene & Greene, said:

When Tim Mendes da Costa joined us two years ago, we quickly realised that he would be a valuable member of the Commercial Property team.  Greene & Greene has a long standing reputation for delivering the service our clients expect and deserve and Tim’s new role as Partner will only strengthen that.”

For further information please telephone Jools Windermere on 01284 717430, visit www.greene-greene.com and follow @greenegreenelaw.

Thursday
Oct012015

New Rules for terminating Assured Shorthold Tenancies

Today (1st October 2015) a number of new rules come into force that govern how and when a Landlord may seek to end an Assured Shorthold Tenancy (AST,) by serving a notice on the Tenant under Section 21 of the Housing Act 1988.

The new rules apply to all “new” ASTs granted on or after 1st October 2015.  After 1st October 2018 the rules will apply to all AST’s.

The Landlord cannot now draft its own version of a Section 21 Notice.  There is now a specific form that must be used (Form 6A, an example of which is set out in the relevant regulations).

In a Section 21 Notice terminating a periodic AST (a rolling tenancy, e.g. one that renews itself from month to month) there is no longer a need for the Landlord to specify the last day of a period of the tenancy as the date on which the tenancy comes to an end.  The Landlord can choose any date it wishes, provided the minimum (usually 2 months’) notice is given.  The maximum notice that can be given is 6 months (in most cases - see below).

A Section 21 Notice is only valid for 6 months from the date it was given.  That is unless the AST is a contractual periodic tenancy, with a period of more than 2 months, in which case it is valid for 4 months’ from the date for ending the AST given in the Section 21 Notice.

A Section 21 Notice cannot be served within 4 months of the start of the AST (unless it the AST is a direct replacement for a previous AST, and the Tenant has been in occupation for more than 4 months).

Before a Landlord can serve a Section 21 Notice on the Tenant, the Landlord must:-

  1. Protect the Tenant’s deposit by registering it with an authorised Tenancy Deposit Scheme (TDS) provider, and send certain information (called the “prescribed information”) about the deposit and the TDS to the Tenant, within 30 days of receiving the deposit (this has been a requirement since 2007); and
  2. Provide the Tenant with copies of the following documents:
    1. An energy performance certificate for the premises,
    2. A gas safety certificate for the premises, and
    3. A copy of the Department for Communities and Local Government’s booklet entitled “How to Rent: the checklist for renting in England”.

The Landlord (or its agent) must ensure it retains proof that the above have been sent or provided to the Tenant at the start of the AST.  Best practice would be to retain copies which have been signed by the Tenant.

 The new rules also prevent so called “retaliatory evictions” by Landlords.  A Section 21 Notice is now invalid if:

  1. Before the Section 21 Notice is served the Tenant has made a written complaint to the Landlord regarding the condition of the premises or common parts; and
  2. The Landlord has not responded to the Tenant’s complaint, or its response is inadequate, or a Section 21 Notice was served following the complaint; and
  3. In addition the Tenant then complained to the Local Housing Authority about the same, or substantially the same, disrepair as the complaint to the Landlord; and
  4. The Local Housing Authority had then served a “relevant notice” on the Landlord in relation to the Tenant’s complaint.

If the Local Housing Authority serves a “relevant notice”, then the Landlord is also prevented from serving a Section 21 Notice on the Tenant for 6 months from the date that the “relevant notice” is served upon it.  A “relevant notice” is an improvement notice or notice requiring remedial action, sent to the Landlord under the Housing Act 2004.

Importantly, the “retaliatory eviction” restrictions do not apply if:

  1. The Tenant is in breach of its duty to use the premises in a tenant-like manner, or any express provision in the AST to the same effect;
  2. The premises are genuinely on the market for sale;
  3. The Landlord is a private registered provider of social housing; or
  4. Where a mortgagee requires vacant possession to exercise its power of sale under a charge that predates the AST.

It remains to be seen whether some Tenants will try to use these new provisions to delay being evicted from the premises, by making unsubstantiated and unjustified complaints about the premises or common parts.  The result may be that Landlords will serve a Section 21 Notice without giving any prior warning to the Tenant whatsoever. 

Assuming the Landlord has successfully managed to navigate all of the above, if the Tenant leaves of its own accord on or by the date given in the Section 21 Notice, the AST will come to an end on that date.  If Court proceedings are necessary, the AST will end when the Tenant has been evicted.  The Landlord must now reimburse the Tenant for any rent paid in advance that relates to any period falling after the end of the AST.

If you would like to discuss this further, please contact Sam Cook at Greene & Greene who specialises in tenancy disputes and all legal aspects of renting property.  Sam can be contacted at samcook@greene-greene.com or 01284 717434.  For more information about Greene & Greene please see www.greene-greene.com and follow @greenegreenelaw.

Monday
Aug032015

Tenancy Deposit Schemes – Agents Beware!

Agents should already be aware that it is necessary to register any deposit received from an Assured Shorthold Tenancy (AST) on a rented residential property with an authorised Tenancy Deposit Scheme (TDS) provider, sending the “Prescribed Information” to the tenants within 30 days of receiving the deposit (the TDS requirements).

However, changes have been made.  Until recently it was necessary to repeat the TDS requirements when the fixed term of an AST expired, or when a replacement tenancy (or extension) was granted to existing tenants.  Since the passing of the Deregulation Act 2015 that is not now necessary, provided that:

  1. the landlord, tenants and TDS provider remain the same;
  2. the property remains substantially the same; and
  3. no extra deposit is paid.

Landlords and agents can still find themselves in difficulty.  Here are four potential problem areas:

  1. When a new tenant is added or removed, or the ownership of the property changes (perhaps because someone has passed away, because a relationship ends or the freehold is sold) the TDS requirements must be repeated.  This is easily overlooked.
  2. Where the tenancy started before 6 April 2007 (when the TDS requirements first began) but the fixed term ended after that date (defaulting to a periodic tenancy), landlords and agents had 90 days from 26 March 2015 (until 24 June 2015) to comply with the TDS requirements (i.e. register the deposit and send the Prescribed Information), unless the tenancy had already ended or the deposit had been paid back.  Agents that did not conduct a review of their lettings in order to ensure they were not caught out should still do so, because late compliance is better than no compliance.
  3. Where the fixed term of the tenancy ended before 6 April 2007, the TDS requirements must be complied with before a Section 21 Notice (to end the tenancy) can be sent to the tenants (on which see below).
  4. Where there has been compliance with the TDS requirements, but a landlord or agent has not retained appropriate proof.  A common example is where an agent received the deposit, but an employee who has left the company dealt with the Prescribed Information, no copies have been kept, and there is no record of it having been sent to the tenants.  We have seen this scenario cause significant problems for landlords and agents.

The sanctions for failing to comply with the TDS requirements are that:

  1. any Section 21 Notice sent before the TDS requirements have been complied with is invalid, and cannot be used to evict the tenants.  This can be very costly for a landlord whose tenant has ceased paying rent, particularly if it is only discovered that the Section 21 Notice is invalid after Court proceedings have been issued to evict them; and
  2. a tenant can apply to Court for an order that a landlord, or an agent that dealt with the deposit, returns the deposit in full and pays a fine of between one and three times the value of the deposit.  This application is most readily made by tenants when Court proceedings are issued by the landlord to evict them and is therefore often made against the landlord rather than the agent.  However, it is not just the landlord's problem.  An agent that is to blame for non-compliance with the TDS requirements may be liable to the landlord for any loss the landlord suffers as a result.

While the recent changes to the law have made navigating the TDS requirements easier, agents still need to keep their wits about them.  If there is a potential problem with historic non-compliance, agents in particular will want to ensure that it is identified before any notice is served or Court proceedings issued.  Compliance is essential in order to minimise any potential financial loss or breakdown in the relationship with the landlord, not to mention the risk of bad publicity.

If you think you may have a problem with the TDS requirements and would like to discuss this further, please contact Sam Cook at Greene & Greene who specialises in tenancy disputes and all legal aspects of renting property.  Sam can be contacted at samcook@greene-greene.com or 01284 717434.  For more information about Greene & Greene please see www.greene-greene.com and follow @greenegreenelaw.

 

Friday
Oct112013

Commercial Tenancies: Guarantor inadvertently released by Landlord

 

The High Court has recently held, in Topland Portfolio No. 1 Ltd v Smiths News Trading Ltd (2013), that a tenant’s guarantor to a commercial property lease was released from his guarantee after the landlord granted a licence to alter the premises but failed to seek the guarantor’s signature.

The licence for alterations in question included provisions which varied the terms of the lease, therefore also changing the guarantor’s obligations.  As the guarantor’s agreement to those variations was not obtained, the guarantee was deemed to be released.

This case reiterates that landlords must be careful when carrying out any form of variation, approval or addendum.  If there is any risk, doubt or uncertainty about the guarantee being inadvertently released, the guarantor should either be asked to be a party to the document or formally consent to its terms. 

If you need any further advice about this subject, please contact Greene & Greene's commercial property team on 01284 762211.

Monday
Aug192013

Forthcoming ban on R22 gas in air-conditioning systems

Air-conditioning (“AC”) units are now a common sight in modern commercial premises.  R22 is a gas widely used in AC units, heat pump and refrigeration systems.  Since 1 January 2010, only recycled or reclaimed R22 gas can be used in AC systems.  However, from 1 January 2015, the Environmental Protection (Controls on Ozone-Depleting Substances) Regulations 2011 (the “Regulations”) will prevent any R22 being used in AC systems, other than for limited research purposes.

Existing R22 gas does not have to be removed but it cannot be topped up or any leakages replaced.  Failure to comply with the Regulations may result in enforcement action by either the Environment Agency or the Local Authority.  

Whether a landlord can recover the cost from his tenant of complying with the Regulations or whether a tenant can challenge the cost depends primarily on the wording of the service charge clause - whether it allows for repairs to common service installations, plant or machinery.  There may be a cap on repair costs that can be claimed from the tenant, or a reasonableness requirement.  

Advice may be required on whether any proposed work amounts to either “repair” or “replacement” as this is a fundamental and complicated area - for example; an obligation to repair can include replacement if an item is beyond sensible patching up.  

Landlords should be looking at when their current leases expire and should seek advice about whether the terms of these leases permit some, if not all, of the costs of compliance with the Regulations to be passed on to tenants.  Landlords should also ensure that the service charge provisions in any new leases allow the cost to be recouped.

Tenants should particularly think about whether there are works necessary to comply with the Regulations when:

  • considering leasing a property - questions should first be asked about whether the AC system contains R22 and whether it will be replaced before the start of the lease;
  • considering lease renewal/exercising a break option - an opportunity to negotiate and apportion these costs, or to look to avoid liability for major future expenditure by terminating the lease; and
  • dealing with dilapidations at the end of a lease. 

The content of this article is for general information only. If you require further advice on this issue, please contact Greene & Greene’s commercial property team, on 01284 762211.

Thursday
Aug082013

Recent changes to UK energy performance regulations

The Energy Performance of Buildings (England and Wales) Regulations 2012 (‘EPBR’) came into force in January 2013, replacing all previous regulations and bringing in a number of changes, including:

  • Extending categories of buildings exempt from requirement to have an Energy Performance Certificate (“EPC”);
  • Requiring non-residential buildings visited frequently by the public to now display an EPC where they are above a certain size;
  • Changing the date of validity of EPCs;
  • Requiring the asset rating of a building to be stated in adverts for sale/rent in commercial media;
  • Improving the defence to a penalty charge notice for failure to have an EPC; and
  • Removing “gold-plating” beyond what’s required by the EU Directive.   

Overall, the EPBR simplifies and clarifies the law concerning energy performance. It introduces some significant changes, the majority of which will positively affect landlords and sellers.  However, some may be administratively or financially burdensome.  Buyers and tenants will generally have more information available to them about the energy efficiency of a building as a result, but should be aware that landlords may look to pass on any associated costs via the service charge.  Please note that there are currently several areas of ambiguity in this legislation that await clarification. 

The content of this article is for general information only.  If you require further advice on the impact of these legislative changes on your business or on steps to ensure compliance, please contact Greene & Greene's commercial property team on 01284 762211.