The housing white paper – not worth the wait?
The government recently released the long-anticipated housing white paper, supposedly its answer to fixing the “broken housing market”. The whole document was over 100 pages and contained many policy announcements and ideas for further consultation. Among these, the white paper sought to provide further assistance to local authorities while at the same time strongly urging them to get their housing supply numbers in shape. The government is promising to make the planning process quicker and less onerous for developers, but continues to penalise them for allegedly failing to develop land.
The effects of the policies will not be felt for quite some time in the future and professionals from across the sector are currently working out whether the white paper should be welcomed or criticised and whether it will aid the government in reaching their ambitious housing targets.
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Landlords’ new role as border guards
Following the obligations introduced in February 2016 on landlords to carry out ‘right to rent’ checks, the government has now introduced (from 1 December 2016) new statutory provisions to make it easier for landlords to evict illegal immigrant tenants and criminal sanctions if landlords fail to take sufficient steps to do so.
There are two new key methods of eviction relating to Assured Shorthold Tenancies (the most common form of tenancy in the private sector) in England:
- Where all the occupiers of a property are disqualified from renting due to their immigration status, and the Secretary of State has notified the landlord of this, the landlord may terminate the tenancy agreement by giving notice in a prescribed form and giving at least 28 days’ notice. This notice to quit is enforceable as if it were an order of the High Court.
- Where one or more of the tenants of a property are illegal immigrants (but not necessarily all of them), and the Secretary of State has given notice to the landlord, the landlord may serve a section 8 notice specifying a new ground 7B, and giving the occupier two weeks’ notice to leave. The ground 7B notice is a mandatory notice, meaning the court must grant an order for possession if the landlord has served the notice correctly. It is an implied term of the tenancy that the tenancy may be brought to an end on the basis of ground 7B.
Landlords now face possible criminal sanctions for failing to carry out right to rent checks and/or for knowing, or having reasonable cause to know, that their property is occupied by an illegal immigrant tenant. Landlords do, however, have a possible defence if they can show that they have taken reasonable steps to terminate the tenancy, within a reasonable time. All in all, there are a lot of pitfalls for residential landlords to look out for in 2017!
Almshouse occupants: tenants or beneficiaries?
Just before Christmas the Court of Appeal handed down judgment which provides clarification on the status of almshouse occupants. Almshouses provide accommodation for the elderly and/or poor and are almost always operated by almshouse charities. The case of Watts v Stewart & Others considered whether the occupant of an almshouse was a licensee or a tenant. If a tenant, it would be more challenging for an almshouse charity to recover possession.
Ms Watts’s occupation had many of the hallmarks of a tenancy. She enjoyed exclusive occupation, paid money for that occupation (which was described in a written agreement as rent) and the written agreement under which she occupied referred to itself as a tenancy. However, the County Court and the Court of Appeal both confirmed she was not a tenant but a licensee. The Court of Appeal dealt with the reference to a tenancy and rent swiftly. The trustees were lay people and as such should not be criticised for using these terms without appreciating their precise legal meaning. No weight was therefore placed on the use of these terms in determining her status.
As to exclusive occupation, the Court of Appeal drew a distinction between a legal right to exclusive possession, meaning the legal right to exclude any third party from the property including the owners, and a personal right to enjoy exclusive occupation while the personal permission continued. The former would be a hallmark of a tenancy. However, the latter would necessarily be, and it was the latter which Ms Watts enjoyed. The way in which almshouses work is that a person given shelter becomes a beneficiary under the trusts of the charity. As a beneficiary, that person enjoys the privilege of exclusive occupation for so long as the charity allows. The charity sets down the terms on which that occupation is enjoyed and if those terms are not met (for example the occupant ceases to be of need), then the permission will cease. It would be contrary to the charitable objects of an almshouse charity if the occupation provided to beneficiaries ran beyond the point at which those conditions ceased. Therefore, the Court of Appeal concluded an almshouse charity could not give to a beneficiary a legal right to exclusive possession and therefore could not grant a tenancy. That position should be contrasted with that of a registered social landlord. While such entities may have charitable status, their objects include the grant of tenancies and so the findings of the court in this case should not be seen as being of application to RSLs but it does provide reassurance to those involved in the provision of almshouse accommodation.
The decision in Watts followed a previous Court of Appeal decision concerning the rights of occupants of almshouses. That earlier decision pre-dated the coming into force of the Human Rights Act and the incorporation of the ECHR into our law. The Court of Appeal confirmed that the ECHR made no difference to their decision on status. Convention rights were not infringed by her classification as a licensee.
Mind the (registration) gap!
In a recent case ((1) Stodday Land Ltd and (2) Ripway Properties Ltd v William Pye  EWHC 2454 (Ch)) the perils of the registration gap led to the purchaser of some agricultural land being prevented from obtaining possession of its newly acquired land from its tenant on the basis of a notice to quit that was served before the purchaser became the legal owner of the land.
Due to the time it takes to enter a transaction on the register of title at Land Registry, there is a gap between (a) the date of the deed of transfer (ie when the transaction between the seller and the purchaser is completed) and (b) the date that the legal estate vests in the purchaser following the transaction being entered on the register of title at Land Registry. This gap is known as the “registration gap”.
The facts of this case were that, during the registration gap, the purchaser gave its tenant notice that it was the new landlord, and then a few days later served on the tenant a notice to quit seeking possession of the land as it was required for other uses.
The tenant argued that the notice to quit was not valid as it had not been given by the legal owner of the land as the legal estate was still vested in the seller during the registration gap. The purchaser argued that the case law that supported the tenant would not apply to agricultural land as the definition of who is a landlord was wider in an agricultural context and/or that the purchaser had been given the procedural right to enforce the legal owner’s ability to seek possession by serving a notice to quit. The High Court agreed with the tenant, with the outcome being that, as the purchaser could not terminate the tenancy by notice to quit during the registration gap, the tenant could remain on the land (for now at least).
There are ways to enable the purchaser, as an agent of the seller (who is still the legal owner until the registration of the transfer is completed), to serve a notice to quit and these issues should be addressed during the transfer process otherwise the registration gap period can delay a purchaser from dealing with its land.
A new look for plog
You may have noticed some changes to plog, which is now open to contributions from our entire Real Estate division. We hope you will enjoy reading our content about anything and everything property related.
You can find out more about our Real Estate teams by clicking the links under Related Services on the right: please do get in touch if we can help you.