The Practical Lawyer

Landlord and tenant – residential

HMOs – Article 4 Direction

Earlier this year the planning laws were changed when a new Use Class (C4) was created for small HMOs (Houses in Multiple Occupation). What this meant was that any L who let to three to six unrelated people might find that the letting had moved into C4 Class – and thus required a new planning permission from the LA. However, that change was reversed as from 1 October (see our October issue, p26). 

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Tenancy deposits – late protection

The CA has favoured a very restrictive interpretation of the Tenancy Deposit legislation, insofar it relates to L’s failure to lodge T’s deposit within the required timescale. In the court’s view, there is no penalty for protection later than 14 days – merely a penalty if there is a complete failure to protect at all. What this means, therefore, is that L can protect T’s deposit at any stage right up to the steps of the court house, and serve T with the prescribed information at that late stage, and escape the relevant penalties.

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Lease – extension

A T with a residential lease for a fixed term of at least 21 years, and who has been the registered proprietor for at least two years, has the right for the lease to be extended (Leasehold Reform Housing and Urban Development Act 1993). The extension will be for 90 years (plus the existing residue of the term) at a peppercorn rent, but with a premium being paid.

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Leasehold reform – ‘house’

LRA 1967 allows long lessees to acquire the freehold, or to be granted a lease extension, provided they occupy a ‘house’ – which is defined as ‘any building designed or adapted for living in and reasonably so called’.

The other requirements of LRA 1967 have been significantly relaxed over the years. The biggest change came with Commonhold and Leasehold Reform Act 2002 which effectively removed the residence condition and replaced it with a two-year test of ownership. The end result is that commercial Ts can now seek to enfranchise, provided they do not have business tenancies protection under LTA 1954 (although that is easily got around by decoupling the lease from the business use via a separate legal entity).

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Proceedings – issued by agent?

Can an agent sign a claim form on behalf of an L? The answer to this is ‘yes’, but not for a fee (since s22 of the Solicitors Act 1974 makes it an offence for any unqualified person to prepare legal proceedings for a fee, gain or reward).

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Section 21 notice – expiry?

An assured (or assured shorthold) tenancy does not end when the s21 notice expires. It is only when the court bailiff executes an order for possession that the tenancy comes to an end, and the service of the s21 notice does not, of itself, bring the tenancy to an end. Indeed, s21 notices have no finite lifetime (ie they do not expire, or become out of date – the oldest reported case involves an s21 notice that expired six years before possession action began!).

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Assured tenancy – £100,000

A reminder that a tenancy with a rent of up to £100,000 can be an assured (or assured shorthold) tenancy as from 1 October. This is an increase from the previous figure of £25,000.

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HMOs – new planning rules

In April, the planning rules were changed when a new Use Class (C4) was created for small HMOs (Houses in Multiple Occupation). This covered uses of dwelling houses by between three and six unrelated people, who formed two or more households and shared basic amenities such as bathroom and kitchen.

What this change in planning law meant was that any L who let to three to six unrelated people might well find that the letting had moved into a C4 Class – and thus required separate planning permission from the LA. Now, however, we have a policy reversal with that rule having been scrapped as from1 October. Accordingly, any change to C4 use is now a ‘permitted development’ and does not need planning permission.

Two points to note:

this does not apply to large HMOs (ie where more than six unrelated people live together);

one of the ways in which LAs can control small HMOs is by making an Article 4 direction withdrawing the usual rules on ‘permitted development’ rights. Thus, the LA can make a direction that a change to C4 use is no longer a ‘permitted development’ (and so planning permission is needed). However, the LA can be liable to pay compensation. But, from 1 October, the amount of compensation payable on a change to C4 use has been significantly reduced – so as to give LAs more flexibility in intervening to control troublesome small HMOs.


Service charges – summary

The onerous consultation requirements imposed on Ls under the service charge provisions of LTA 1985 are well known. But, those are only part of the overall picture.

For instance, suppose a roof is in need of repair. All of these are arguments that T could raise:

the roof did not need to be repaired at all (T can object to ‘unnecessary’ works being carried out);

if it did need repair, a patch repair would have sufficed (ie a full repair was ‘unnecessary’);

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Insulation – leaseholders

These days there is a greater emphasis on home energy conservation, and the driving down of CO2 emissions. In practical terms, many long lessees may want to introduce energy-saving measures, only to find that their leases make this impractical.

The typical long-leasehold agreement will say that the foundations, main structure, exterior and roof are the responsibility of ground L, with T being responsible only for internal repairs and decorations. But, that conventional structure creates difficulties for a T (or L) who wants to install additional loft insulation, double-glazing, or cavity wall insulation.

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