Sunday, 12 May 2019

Big New Tenancy Laws : Tenants Rejoice, Landlords Weep

01 June 2019 it's happening. The Tenant Fees Act 2019 then comes into force. For all assured shorthold flat and house lettings in England on or after that date, brand new laws will strengthen tenant rights and will make landlords wonder whether they would better off investing in coffee shops or public conveniences. Student lettings and licences are covered too: not social landlord lettings so local authority and housing association lets are out. And as from 01 June 2020, what's banned under new lettings will become banned under lettings before 01 June 2019.

What is banned then?
  • A security deposit (to cover damage to the property or any default in the payment of rent, for example) for more than five weeks' rent or six weeks' rent if you are a Premier  Division footballer and will be paying an annual rent of £50,000 or more. These deposits for assured shorthand tenancies must still be protected with an approved scheme, as at present.
  • A reservation deposit ('We'll hold the place for you but it has attracted an enormous amount of interest and, in fact, I have an appointment with 12 couples this evening, all of whom are bursting to take it.') for more than one week's rent.  But in certain situations the deposit must be returned to the tenant. They generally include where a tenancy agreement is entered into; where no agreement is reached within 14 days; or where the landlord  has asked for a banned fee or wants the tenant to agree to an unreasonable condition.
  • A fee so that you can have the privilege of viewing the property.
  • A tenancy set up fee.
  • An inventory check fee at the start or end of the tenancy.
  • A fee for having to replace a lost key unless it was reasonably incurred and you are shown the relevant invoice.
  • An interest or other charge for the late payment of rent where the rent is less than   a fortnight overdue and, where a fortnight overdue, any interest payment exceeding 3% over base rate is prohibited.
  • A charge for transferring the tenancy at the  tenant's request which is higher than  a reasonable amount but, in any event, no more than £50.
  • Charging the tenant any more than the landlord's actual loss where the tenant wants to go before the end of a fixed tenancy or without giving notice.
  • A fee for professional cleaning of the property at the end of the tenancy (but the tenant can be charged for cleaning which was necessary for breach of a tenancy agreement not to turn the place into rubbish tip).
If an amount over a maximum figure is required then it is the excess that is treated as banned and irrecoverable. So long as the charge is not banned by the new law, a clause in the tenancy agreement which entitles the landlord to be compensated for breach of the tenancy is ok ( for example, having to pay up for damaging the property).

A landlord who breaks the new law can be prosecuted by trading standards or fined up to £30,000. The landlord can appeal against a fine to the first tier tribunal. A tenant whose banned fee or holding deposit has not been returned will be able to get it back either through a trading standards demand of the landlord or the county court, depending on whether or not there has been a prosecution. Trading standards should help.

So long as the landlord has not returned a banned fee or a holding deposit which broke the law, they cannot give the tenant notice they want them out under section 21 of the Housing Act 1988 which is the two month job for assured shorthold agreements.

As for pre-1 June 2019 tenancy agreements, from 01 June 2020, a fee which would be banned for new agreements will then be banned for the old agreements (but not before then) and that means the tenant will then be entitled to repayment. So the landlord can collect up to 1 June 2020. If they collect after then, the payment is a banned payment and unless the landlord returns it within 28 days they can be dealt with in the same way as post-01 June 2019 landlords. Excessive security deposits and holding deposits are not affected. 

For usch more on landlord and tenant law, indulge yourself in my book Breaking Law.

Wednesday, 17 April 2019

Landlord Traps and Tenant Delights on Forfeiture: 2 New Cases

Landlord forfeits a long lease because of rent or service charge arrears and claims a possession order. The court makes the order but either fails to give the date by which possession must be granted and/or fails to give the tenant the option of paying the arrears and costs before the date expires and thereby earning relief from forfeiture. The order is deficient and an application for it to be set aside should succeed. The form of the order the court has to make is governed by section 13 of the County Courts Act 1984. The order cannot take effect in less than four weeks and it cannot be unconditional. That's the case of Golding v Martin [2019] EWCA Civ 446.

And here's another one a bit like the other one. Until any contractual right to a landlord to re-enter premises under a long lease has arisen the landlord cannot validly serve a notice under section 146 of the Law of Property Act 1925. In Toms v Rubbery [2019] EWCA Civ 128, the lease provided for a default notice to be served by the landlord and 14 days for the breach to be remedied. The landlord had pounced under section 146 before the expiration of a contractual notice. He pounced too soon and so his section 146 notice was invalid and the landlord was not entitled to possession on the strength of that notice.

These cases will not impact on the majority of cases which come before the courts where forfeiture is not involved. If you are a tenant and have been the recipient of an order which you may think is deficient, obtain professional advice before launching a court challenge to the order. 

Tuesday, 16 April 2019

MasterCard Claim by Walter Merricks: Appeal Result

For the best champagne, see your off-licence manager.

Walter Merricks has won  - which could mean you have won - and MasterCard has lost. The Court of Appeal today upheld the appeal against the refusal by the Competition Appeal Tribunal to allow a collective claim to be brought against MasterCard. It recognised that the Tribunal's decision would have frustrated the will of Parliament that there should be and effective route for consumers to be compensated when businesses broke competition law. 

The case now goes back to the Tribunal which will allow the claim to proceed.  We haven't arrived at an award of many millions yet - actually, £14n is being sought -  but we could be on our way.

Oh, just one thing. MasterCard's lawyers asked the Court of Appeal for permission to appeal to the Supreme Court but permission was refused. MasterCard can still seek permission from the Supreme Court and any request for permission is likely to be determined within the next few months. I'll keep you posted.

Wednesday, 10 April 2019

New Divorce Laws Explained: Pounce or Wait?

The government has just announced its divorce law reforms. If you are hoping to take advantage of them, you will need to be patient. Parliamentary time has to be found for the bill when it is ready. The bill is likely to sail through Parliament (yes, I know they said that about Brexit) but could not be implemented until procedural rules had been drawn up which will be complicated. It could be two years (or more or less!) before the changes are in force. So, don't book the priest (incidentally, the Fleabag cleric is not available) for your remarriage quite yet. Of course, you could always take advantage of the present laws if you can establish one of the five factors which would lead to your freedom - your spouse's adultery, unreasonable behaviour, or desertion which has lasted for at least two years, or a period of separation which has lasted for at least two years if your spouse agrees to  divorce or at least five years if your spouse does not agree or you cannot find them. Divorce on the basis of five years apart will hardly ever be denied whatever the stance of the other party.

Over to the reforms, then. No divorce or civil partnership dissolution until at least one year has elapsed since the ceremony. Then you will be able to go for freedom by lodging a statement with the court confirming that the relationship has irretrievably broken down. You won't have to rely on any of the existing grounds. Just irretrievable breakdown. The statement can come in from you alone or jointly from you and your spouse. Once at least 20 weeks have elapsed from lodging the statement, you will be able to apply for the first decree (it's called the decree nisi in divorce now but its name will change) and then, after at least a further six weeks, you will be able to apply for the second and final decree (it's called the decree absolute now but, again, its name will change). Don't imagine that it will all be over and done with at the end of the 26 weeks. These will be minimum periods and documentation will have to be processed by the court. Nothing will be automatic. It will be down to you to ask for each of those two decrees.

The court will have power to expedite the second decree. It may also be given power to expedite the first decree. It could be given the power to hold up the second decree where financial matters have not yet been resolved.

Cases will almost invariably be dealt with 'on paper' without any personal attendance at court except in respect of any financial applications or child welfare disputes. The present scheme for online divorce etc which is not yet in full flow will have to be adapted to cater for the new procedure. Don't hold your breath!

The nullity law is untouched. It will continue to be possible to ask for a separation decree instead of a divorce  - even within the first year -but, in that event, it would not be necessary to show that the relationship had irretrievably broken down. The court can make lots of financial orders where just separation has been granted.

You will find a great deal of material on the present divorce and other matrimonial law and on how to bring and counter financial applications in my book Breaking Law. Have a read but I'm afraid you will have to buy a copy. Well, not too afraid!

Happy times.

Wednesday, 27 March 2019

Minimum Wage Up

From next Monday 01 April 2019, the UK national living or minimum wage increases, so put on your helmet for cranial protection and tell the boss. Blame it on the National Minimum Wage (Amendment) Regulations 2019 SI/2019/603.

These are the hourly rises -
national living wage for those aged 25 and over: from £7.83 to £8.21
adult rate for those over 21 but under 25: from £7.38 to £7.70
development rate for those 18 or over but under 21: £5.90 to £6.15
youth rate for 16 and 17 year olds: from £4.20 to £4.35 
apprentice rate for those under 19 or in the first year of apprenticeship: from £3.70 to £3.90

The maximum daily amount for living accommodation which is allowed to count towards pay for national minimum wage or national living wage purposes increases from £7.00 to £7.55. 

Tuesday, 12 March 2019

Estate Agents' Commission Slashed by One-Third. It could be you!

In a poll I conducted in a dream as to who the public would least like to be trapped in a lift with, an estate agent came top. This is a shame because some estate agents are almost human and help old ladies across the road without asking for any commission at all. 

In a second poll I conducted in a dream the following evening, I asked whether the public would avoid paying an estate agent commission for negotiating the sale of their property if they possibly could, and 123% answered in the affirmative. Which takes me to the Estate Agents Act 1979. What the Act says along with regulations made under it - the Estate Agents (Provision of Information) Regulations 1991 (SI 1991/859) - is that if you go to an agent with a view to possibly instructing them to offer your property for sale then they must provide you with various prescribed information in writing  which includes the amount of their commission  and when you would become liable to pay it. The information must be given at the time when you and the estate agent commence communication or as soon as reasonably practicable afterwards. But, in any event, the information must be given before you sign up with the agent and become committed to any liability to them.

If the agent fails to give you the necessary written information at all or gives it late then   they cannot recover one new pence of commission from you unless the court gives them permission to do so. The court must dismiss their application for this permission if it considers this is just taking into account the prejudice caused to you by their breach and the degree of culpability for their failure. Even if the court gives the agent permission to sue you it can reduce  the commission or say no commission at all, so as to compensate you for any prejudice you have suffered. If, for example, the agent was acting dishonestly, the delay in giving you the written information was considerable or you reasonably thought the commission rate was less than it turned out to be, then there would be a chance that the agent would end up with no commission or a cut in their commission.

In  a case just before the Supreme Court - Wells v Devani [2019] UKSC 4 - the client and estate agent had agreed over the phone that the client's seven flats should be marketed by the agent and just one week later the agent secured an offer of £2.1 m. The sale went ahead. But it was not until the offer had been accepted that the agent sent the client the necessary information so one week late. The Supreme Court upheld rulings that because of the failure to comply with the law, the agent's commission should be reduced by one-third (£32,900 inclusive of VAT) having regard to the prejudice suffered by the client. The Supreme Court made it clear that there could be cases where the degree of the agent's culpability was so great that the agent would get nothing even if the client had suffered no prejudice. The importance of the 1979 Act should not be under-rated.

Time for some more dreaming by me. I'm off to bed with my copy of Breaking Law. Got yours?

Sunday, 10 March 2019

New Civil Procedural Rules: MORE!

I've provided you with the first dose of the new civil procedural rules coming into force next month. Please digest with a glass of cold water but not on an empty stomach. Here's some more to be taken with your evening meal.

Summary assessment of costs This is only likely to interest you if you are a lawyer,  professional litigant. or slightly eccentric. On 01 April 2019 a pilot scheme for the summary assessment of costs is introduced. It doesn't matter when the claim was started. If the assessment is to take place on or after that date then the party who will be asking for costs can use a new form instead of the current N260 and can utilise an electronic spreadsheet. For an interim application, use new form N260A: for an assessment which is going up to and including trial, use new form N260B. You''ll find the new forms with CPR update 104. With that update, you will also find a new budget discussion report form for multi-track cases which must be used as from 25 April 2019.

What did the judge say? The court hearing will have been recorded and you can request a transcript of what was said. If the judge raised their eyebrows during the hearing or your jaw dropped a few feet when you heard the judge's decision then that, of course, will not show up on the transcript! The cost of the transcript has to be borne by whoever asked for it. It can be high. The longer the hearing, the longer the transcript and the costlier it will be. If you want the transcript for an appeal then the likelihood is that only the judgment - the judge's announcement of their decision and why they have reached it - will be needed. However, judgments can be lengthy and, for a variety of reasons, there can be delays in the transcript being produced for you. This can hold up the appeal. A new provision in the procedural rules which will come into force on 01 April 2019 encourages the judge to assist a party, and particularly a litigant in person, to give directions for the compilation and sharing of any note or other informal record of the hearing which has been made by another party or their lawyer or, indeed, by the judge. This is to be welcomed and should accelerate the determination of any appeal.