Pilakoutas v. Schofield, Sheffield County Court, 22 May 2009

 Here Professor Pitakoutas was a landlord by purchase of a house in multiple occupation.  The tenant, Ms Schofield, had originally  a tenancy of flat 5, which she had rented in 1993.  The landlord had, very properly served a section 20 notice on her, which was required at that time.  However some time before February 1997 (when the requirement for s20 notices ceased) Ms Schofield moved to flat 8, because it was a nicer flat.  No section 20 notice was served on her before she did this. 

Professor Pitakoutas assumed that she was an assured shorthold tenant, served a s21 notice, and issued proceedings for eviction.  His case was that after she moved flats she had entered into a new tenancy of ‘the same or substantially the same premises’.  And that her tenancy therefore remained an AST.

The Judge however disagreed.  He found that flat 8 was a distinct and separate dwelling.  As no s20 notice had been served it could not be an AST and therefore section 21 could not be used.  The claim for possession was dismissed.

One of my cases – involving a room change in a shared house

This fits in with a case I ran a few years ago.  Like Professor Pitakoutas, my clients were landlords of a shared house where tenants rented individual rooms.  One of the tenants had moved from a small room to a large room without my clients consent.  They reluctantly agreed to sign a monthly periodic tenancy and then (as he was a bit of a troublemaker) immediately served a section 21 notice on him.  I was then instructed to issue proceedings.

Happily this all took place after 1997 so we did not have the problem of the section 20 notice.  However due to the efficiency of yours truly in getting the case to court quickly, we came unexpectedly across the problem of  the rule against making an order for possession under s21 within the first six months of the tenancy (s21 (5)).

Because the tenant was living in the same house, somehow this point had passed us by.  However it did not escape the eagle eye of the Judge who set the case down for hearing.

Fortunately however the six month period  expired just within the six week period a Judge is allowed to suspend an order for possession, so we were able to evict the tenant.  But it was a good thing we did not have an earlier hearing date. 

So if you have a tenant do the same thing to you – remember that the effect of the tenant changing rooms is that it is a completely new tenancy.  So the Judge cannot order possession until after the tenant has been in possesison of the new flat/room for six months.  And if it is an old tenancy, you will have problems if no section 20 notice was served on the tenant before he moved into his new room. 

Have you had any cases involving tenants moving to another room in a shared house.  What problems did you encounter?  Was an order for possession made?

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• Tenants not paying rent is probably the top complaint. This is pretty fundamental as most landlords have fairly hefty expenses to pay, which are dependent on getting the rent in.

• Tenants trashing the property happens far less often, but is a nightmare when it does. Less dramatic is the problem of tenants simply not looking after the place properly.

• Tenants contacting landlords at anti social hours, for example at midnight when they get home from the pub and find they have lost their keys, can be a problem for landlords who manage their own properties

• Tenants not moving out when asked is very annoying, as the landlord is then forced to go through all the rigmarole of going to court for a possession order.

• Tenants changing the utility suppliers is also one that I hear complaints about

Then there are problems with agents! (Not all agents I hasten to add):

• Agents refusing to give details of the referencing done on tenants

• Agents letting the property to unsuitable tenants

• Agents acting in their own interests rather than in those of the landlord, and worst of all

• Agents going bust and running off with all the landlords rent and the deposit money.

Phew! Who would be a landlord? What would you say are your three worst problems?

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• Mr Henley should give up possession of the flat on or before 1st June 2007,
• Mrs Bloom should pay Mr Henley’s solicitors £16,000 in specified instalments;
• This money was not to be paid to Mr Henley until he had vacated the flat;
• Mrs Bloom should pay Mr Henley’s costs in the sum of £4,000.

The order also said that it was

in full and final settlement of any claim that [Mr Henley] might have arising from work improvements or enhancements undertaken by him or on his behalf to the [flat]“; [and] that Mr Henley would give up possession of the flat pursuant to the agreement “in good tenantable repair and condition”.

My Henley duly left the flat on 1st May 2007, and Mrs Bloom, no doubt with sighs of relief, carried out ‘substantial’ redevelopment work to the property.

However unbeknown to her, Mr Henley had, before he left, commissioned a report on the extent of dampness and disrepair in the flat from Mr Sennett, an experienced Environmental Health Officer. On 28 November (a year and a half after he had vacated the property) he issued proceedings against Mrs Bloom claiming compensation from breach of her statutory repairing obligations.

Surely though this was abuse of process and could be struck out? There had already been one case about the property which had referred to its condition (Henley had after all agreed to give the property up in good tenantable repair and condition), and anyway it was now impossible, claimed Mrs Bloom, for her to counter the report as she had had the property renovated. It would therefore be impossible to have a fair trial.

The District Judge agreed with her. So did the Circuit Judge who said that Mrs Bloom “would be fighting the case with one hand behind her back” and that the unfairness “had been caused entirely” by Mr Henley. Henley was refused leave to appeal and it looked as if Mrs Bloom was safe. But then, after a further oral hearing, he was granted permission to appeal.

Most unfortunately for Mrs Bloom the Court of Appeal then found for Henley. Here, in essence, are their main reasons:

• At the time of the possession claim, Henley could not have brought his disrepair claim as he had not at that stage commissioned the report

• There is a general principle that every person with an arguable claim should be able to pursue it in court, which is enshrined in Article 6 of the European Convention

• The Appeal Judge considered that the two cases (ie the possession claim, and Henleys claim for compensation) were about different issues. The provision in the consent order which referred to the state of the flat was concerned with Henley’s obligation in relation to the state of the flat at the end of the tenancy, and had nothing to do with the extent of any failure to repair by Mrs Bloom during the currency of the tenancy, let alone the extent of any damage suffered by Mr Henley

• If the possession claim had proceeded to trial, and had failed, so that Mr Henley remained in possession of the flat, it would have been impossible for Mrs Bloom to establish that the disrepair claim was an abuse.

• Although the order was expressly stated to be “in full and final satisfaction” of any claim Mr Henley might have in respect of improvements which he had carried out to the flat, there was no mention of any other claim

• Mrs Bloom knew that there had been issues regarding the repair of the flat (she had after all been served with notices by the Local Authority regarding the disrepair) and had failed to raise them at the time the earlier case had been settled.

• The possession claim had been brought by Mrs Bloom and Henley had not raised any counterclaim.

• A fair trial was still possible, even though the flat had been refurbished, as Mrs Bloom had access to reports done before the works, and evidence from the builders as to its condition.

So the appeal was allowed and Henley can bring his claim for disrepair. However the Judges seem to think that there is a strong possibility that he deliberately refrained from taking action any earlier (“there are grounds for thinking that Mr Henley has acted in a rather unattractive way by keeping the disrepair claim up his sleeve“), and the case leaves rather a nasty taste in the mouth. Indeed the Judges  made the following suggestion regarding the forthcoming case:

Further, if the court hearing the disrepair claim took the view that Mr Henley had deliberately refrained from informing Mrs Bloom of his intended claim, knowing that she would refurbish the flat and be disadvantaged in defending the disrepair claim, it might well be appropriate to draw some adverse inferences against Mr Henley’s case.

It is possible that he may also be penalised in costs, in which case Mrs Bloom may not come out of it too badly. But I am very glad that I am not the lawyer who approved the terms of the consent order on her behalf.

For those interested, the case Henley v. Bloom is reported online.

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In October it seems she obtained an eviction order but this was cancelled “when the tenant complained of missing the hearing because she was sent to the wrong room”. She then failed to turn up for the next hearing, where an eviction order was made, but this was set aside again at the tenants request. At the third hearing the tenant was ordered to pay the back rent but needless to say Randall has not received it yet:

“The process has cost her more than $13,000 in lost rent and legal bills and Randall is fed up with the lack of enforcement. Despite three hearings, two eviction notices and the payment order, nothing has happened. “She [the tenant] knows the system. She takes advantage of the system and the system allows [it],” said Randall. The Landlord and Tenant Board says issues like this are usually dealt with within four-to-six weeks but admits if there is a review there is no telling how long the process could take.”

Although landlords here complain about delays in the system, I have not heard of a case where the tenant managed to get a extra time because she went to the wrong room. I wrote in my post here about a tenant who managed to delay things by claiming she was ill all the time.

Do you have any stories about how tenants have managed to string the system along?

Well according to an interesting post on the PainSmith blog, an answer to the problem may lie in section 18 of the Distress for Rent Act 1737.

Eighteenth century landlords obviously experienced similar problems.  To quote the act:

“whereas great inconveniences have happened and may happen to landlords whose tenants have power to determine their leases, by giving notice to quit the premisses by them holden, and yet refusing to deliver up the possession when the landlord hath agreed with another tenant for the same”

The act goes on to provide that if a tenant gives notice and then fails to leave, a landlord can charge double rent “and such double rent or sum shall continue to be paid during all the time such tenant or tenants shall continue in possession as aforesaid“.  However note the following:

• The tenant must have served a proper valid notice to quit, which has been accepted by the landlord
• The double rent can  only be charged on a daily basis for the period of time the tenant overstays
• It cannot be used if the tenant just fails to return the keys
• It cannot be used if the tenant just stays on after the end of the fixed term (in which case his tenancy will be treated by law as continuing)

Arguably the money can be deducted from the tenants deposit in the normal way, but the PainSmith blog warns that few judges or adjuticators are aware of this law, so it may be hard to enforce (although landlords could just print out the extract from the online statute linked above). 

I would be very interested to know if any landlords have actually used this rule, and if so, whether (if it was challenged)  they were able to uphold the claim at court or arbitration.

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