Rent and Rent Arrears

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Rent and Rent Arrears

Masish, R v Yousaf [2014]

Masih, R v Yousaf [2014] EWCA Civ 234

The tenant rented a property on an assured shorthold tenancy for £560 per month.  The landlord claimed he had not received rent for February, March or April 2012 but he had recieved the tenant's housing benefit direct from the council in May 2012 but this was in the sum of £392 leaving a shortfall in the rent.  The landlord therefore served a section 8 notice on the tenant seeking possession of the property on mandatory ground 8 and a possession order was granted. However, the tenant applied to set aside the possession order on the basis that the section notice was not in the proper form.  The tenant argued that the section 8 notice did not comply with section 8(2) of the Housing Act 1988 as it did not specify the ground that was being relied on.

Section 8(2) states: "The court shall not make an order for possession on any of the grounds in Schedule 2 to this Act unless that ground and particulars of it are specified in the notice under this section; but the grounds specified in such a notice may be altered or added to with the leave of the court."

The notice served on the tenant stated:

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Marks and Spencer PLC v BNP Paribas Securities Services Trust Company (Jersey) Limited & Anr [2014]

The tenant (Marks and Spencer) had the benefit of a break option within the lease which they exercised, it included paying a break premium to the landlord (BNP) equivalent to one year's rent.  The break clause was also conditional on there being no rent arrears so the tenant paid a full quarter's rent, part of which related to the period after the break date.  After the lease was terminated the tenant sought to recover the "overpayment."  There was no express right to a rent refund stated within the lease.

It was held

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Zafar v Goddard (2010)

Zafar v Goddard (2010) County Court

This case was one of a number of small claims cases for unpaid rent claimed by the landlord, Mrs Zafar, against a former tenant, Mr Goddard, who had left the property before the end of the fixed term.  In the first set of proceedings the tenant counterclaimed for disrepair and raised as a defence that he had never been served with a notice conplying with section 48 of the Landlord and Tenant Act 1987.  The Judge who dealt with those proceedings found as a fact that

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London District Properties Management Ltd. and others v Goolamy [2009]

London District Properties Management Ltd. and others v Goolamy [2009] EWHC 1367 

The tenancy agreement with Mr and Mrs Goolamy contained the following rent review clause: “It is hereby mutually agreed that with effect from each anniversary of the commencement of the term hereby created (whether during the said term or during the currency of any subsequent statutory periodic tenancy) the yearly rent payable hereunder (and accordingly the periodic payments of rent) shall increase by five per cent.”

The question posed by this case is: “Does section 13(1)(a) of the Housing Act 1988 have the effect of enabling a landlord to seek to increase the rent payable under a statutory periodic tenancy beyond the levels contemplated in a rent review clause in the assured tenancy that preceded it, even though that clause purports to govern the position during the currency of both the assured tenancy and any subsequent statutory periodic tenancy?”.

The answer here is

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Reichman and Dunn v Beveridge Gauntlett [2006]

Landlords are not under a duty to mitigate their loss (rent arrears) by finding a new tenant where the existing tenant has vacated the premises but has not surrendered the tenancy.

A firm of solicitors was the tenant of offices, with a term of five years from January 2000. In February 2003 the firm ceased to trade, so no longer had a need for the office premises. The firm did not pay the rent due in March 2003, or the water rates that were due after that date. In January 2004, the landlord brought proceedings against the firm’s partners for rent arrears. The partners argued that the landlords had not mitigated any loss that might arise from the tenants’ nonpayment of rent, which they could have done by finding a new tenant. It was contended that the landlords were fully aware of the plight of the firm which led to their ceasing to practise as solicitors, ‘but failed to forfeit the lease in order to mitigate their own loss’. The partners said that the landlords’ agent had indicated that they would accept the offer of someone who was their tenant of other premises to take a new lease of the firm’s premises, but had then said that they would not accept this. They argued that the landlords had failed to instruct agents to market the premises, to  accept the offer of a prospective tenant who wanted to take an assignment or a new lease and to accept an offer from one of the partners to negotiate payment in order for the firm to surrender its lease.

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North British HA v Matthews [2004]

The claimants were all tenants of housing associations under assured tenancies. They had fallen into arrears of rent, so possession proceedings were started. There was no dispute that both at the date of the service of the notice of proceedings under section 8 of the Housing Act 1988 and at the date of the hearing, the arrears exceeded the 8 weeks limit specified in ground 8. Therefore, it appeared that  in each case the court was obliged by section 7 of the Act to make an order for possession. 

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Taj v Ali [2000]

A landlord successfully appealed against the suspension of a possession order against his tenant, as it would mean that the tenant would be repaying the rent arrears for an almost indefinite period.

A county court judge made an order for possession of a property belonging to the claimant landlord, on the ground of rent arrears owed by the tenant. The order also provided, by consent, for the tenant to pay the landlord £14, 503 rent arrears plus interest, minus an agreed deduction in respect of the tenant’s counterclaim for breach of the landlord’s repairing obligations.
As the tenant was on income support, the judge suspended the possession order on terms that the tenant should pay the current rent of £49 per week, plus £5 per week towards the discharge of the rent arrears. It was known that this would mean that the debt would not be paid off for over 55 years.

The landlord appealed against the suspension of the possession order.  HELD:

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Tadema Holdings Ltd v Ferguson (1999)

Case Summary:

Tadema Holdings Ltd v Ferguson (1999), Court of Appeal, 18 November, 1999

SUMMARY: Tenant becoming assured tenant by succession on death of statutory tenant.  Landlord serving notice of increase of rent. (using 'c/o the agent' on the relevant statutory form),  Tenant lacking mental capacity to manage own affairs. Landlord obtaining possession order. Tenant held s.13 notice defective bacause out of date. & not validly served.

HELD:  Appeal dismissed

For purposes of s.13, a notice in the prescribed

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Marath and another v MacGillivray (1996)

Adequate notice of the landlords’ intention to commence possession proceedings was given, even though the s. 8 notice was not being compliant with statutory requirements.

The tenant of a flat in London had a shorthold tenancy of six months from January 1994. In March 1995 the landlords, who lived in Florida, obtained a possession order. The order was made on the grounds of more than three moths rent arrears and a breach of a clause of the tenancy agreement (failure to repair and/or to occupy in a careful and tenant-like manner). The tenant appealed, on three grounds:
-    whether a valid notice under s. 8 Housing Act 1988 had been served on the tenant, in the prescribed form, informing him of the landlords’ intention to take possession proceedings on the grounds of three months rent arrears;
-    whether the tenant had been served with a valid notice under s. 48 of the Landlord and Tenant Act 1987, providing him with the landlords’ address in England or Wales for the service of notices, and
-    whether the landlords were estopped from relying on  the rent arrears as a ground for the possession order.

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Regalgrand Ltd v Dickerson and another [1996]

Regalgrand Ltd v Dickerson and another [1996]

Damages awarded to tenants under the Protection from Eviction Act 1977 for unlawful eviction were significantly reduced due to rent arrears and the tenants’ conduct.

Two tenants were granted an assured shorthold tenancy of a flat in July 1990. Following the tenants’ dissatisfaction with living conditions in the flat, namely the lack of adequate heating and water and a damp problem, the tenants stopped paying rent in December 1990 and decided that they were going to leave at or near or at the end of February 1991.

The landlord then entered the flat when the tenants were not there and, believing that the tenants had vacated the flat, he changed the locks.  He also sent a letter to the tenants telling them that he considered the property to have been abandoned, and he informed them that he had changed the locks.

The landlord sued for rent arrears and the tenants counterclaimed for damages for breach of the tenancy agreement (due to failure to provide heating and to carry out repairs) and for wrongful eviction.

The landlord was awarded damages for the rent arrears, but the tenants’ counterclaim was also successful as the court found that the landlord had failed to show a reasonable cause for thinking that they had stopped living in the flat.

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Habinteg Housing Association v James [1994]

The landlord of property sued for possession on the grounds of rent arrears, but the tenant counterclaimed for breach of repairing covenants because the flat was infested with cockroaches. The court held [...]

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Central London Property Trust Ltd v High Trees House [1946]

A written agreement that rent was to be reduced while flats were in low occupancy during war time lasted only whilst the flats were in low occupancy.
In this case Lord Denning introduced the principle of promissory estoppel, whereby a party who leads another to believe that he will not enforce his strict legal rights should not be allowed to enforce this right at a later stage.

High Trees House Ltd leased a block of flats from Central London Property Trust Ltd in 1937, for a rate of
£2500 per year. Due to the heavy bombing of London during the war, rates of property occupancy were drastically lower than normal. As a result, the parties made a written agreement in January 1940 that the rent would be reduced by half. The agreement, however, did not stipulate the period for which this reduced rent was to apply. High Trees paid the reduced rate while the flats were not fully occupied, but the flats were back at full occupancy by 1945. Central London sued for payment of the full rental costs from this time (the last two quarters of 1945).

HELD:

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