Landlord definition
You would think that by now there would be a clear and simple definition of a landlord, given the job has been around for time immemorial and in modern housing law terms at least since 1925 but nope….this is housing law we are talking about.
The standard dictionary definition is:
The owner or possessor of an estate in land or a rental property, who, in an exchange for rent, leases it to another individual known as the tenant.
Fairly simple and easy to grasp there but when it comes to practice things can and do get messy, a mess that is exploited by criminal landlords and agents to their own advantage, who can be a landlord when it suits them and nothing to do with the property when it doesn’t.
So here’s an example
I was recently training a homelessness unit, where a group of the delegates ran the council’s temporary accommodation section.
They had, in the customary manner, procured properties from landlords and used their own stock, mixing and matching as needs arise. Obviously, when their own stock is used they are indeed the landlords but some of their properties were under a Private Sector Leasing Scheme, where the owners leased the property to the council for 5 years to use as they saw fit, on the basis that the council were responsible for all repairs.
You see this all over the place but sometimes the council draws up a licensing contract with the owner and sometimes the council is listed as a tenant themselves and not with a commercial contract.
The council cannot be residential tenant chiefly because to be a residential tenant you have to reside in the property, which they clearly can’t.
Are they even the landlord of the occupants?
If rent or HB is given to the council who then pass it on to the owner does that not make them a managing agent?
Section 7 of the Protection from Eviction Act 1977 defines an agent as:-
(a) any agent of the landlord named as such in the rent book or other similar document, or
(b) the person who receives the rent of the dwelling,”
Suggesting that in Private Sector Leasing arrangements the council could be the agent while the owner is the landlord, despite the council’s contracts stating that they are the landlord.
Equally common is for letting agents to give contracts to the occupants detailing themselves as the landlord. This often cuts both ways, in that they will claim to be the landlord when it comes to applying for possession orders but when being leaned on by enforcement teams over repairs will point the finger at the owner as the person with responsibility.
I have dealt several times with a ‘For-profit housing association’ who lease properties from private landlords and act as landlords in all matters relating to the occupants, except when it comes time to carry out repairs, then they refer to the owner and despite officially being a housing association never use the Rent Arrears Pre-Action Protocol required of all social landlords, preferring at such times to simply call themselves the owner’s agent.
The Civil Procedure Rules and the case of Chesters Accommodation Agency v. Abebrese (1997) tells us clearly that a managing agent cannot sign a Statement of Truth, which is required for all court paperwork in possession cases and I have successfully defeated possession claims brought by agents on several occasions using this as an argument. So identifying who the landlord is, becomes very important when dealing with possession orders.
Judges often don’t enquire whether the agent who has taken the action is actually the landlord. Sometimes they are because they also own the property but often they don’t and the court grants possession anyway. In such cases, we have to apply to have the possession order set aside after it has been granted.
HMO’s are just as challenging
HMO licensing throws up interesting challenges as well Section 72 of the Housing Act 2004 states:-
‘(1) A person commits an offence if he is a person having control of or managing an HMO which
is required to be licensed under this Part (see section 61(1)) but is not so licensed.
It doesn’t mention ‘Landlord’ but instead opts for “A person having control or managing’.
The predictable “Not me Guvnor” finger pointing always makes itself known when licensing enforcement comes around but as you can see from the wording, it offers no protection, thanks to the looser wording, although it doesn’t stop them trying.
Friday’s case for example
Owner of property lives in Pakistan, he uses Fred Smith Lettings based in the high street to source a tenant for this three-bed family home. Fred Smith Lettings also get property licensed with the local authority but under someone working for Red Rose Lettings, who have no other involvement other than to be the license holder.
Fred Smith source the ‘Tenant’, who advertises online and puts 5 families in the single-family home, under the management control of Bluehouse Estates, a company based in Bulgaria who advertise properties through a facebook page in Bulgarian and use some guy who the occupants only know as Boris, when they have a problem with the boiler and all you have for Boris, is a mobile number.
Bluehouse serve an invalid s21 on one of the 5 families, who go to the council for advice, at which point the property comes on the enforcement radar and the threats against the tenant’s start. Boris visits the property and introduces the occupants to Anya, who he tells them is their new landlord and so on.
Not made up and such setups account for 9 out of 10 cases I deal with these days, although real names withheld and this “Who is the landlord, who is the agent” game rolls on.
But there are options here
The first task is to revoke the license, then go against either the owner or the persons’ with “Control”. Whilst Bluehouse are playing silly buggers in Burgas, Fred Smith Lettings is based in the High Street and thanks to the recent case of LB Camden v. (1) Leycam Ltd, (2) Citydeal Estates (London) Ltd (2018) can still be in the frame as a managing agent, even though they didn’t take any rent other than the initial rent in advance.
The looser definition in the Housing Act 2004 is not so useful when it comes to doing the Rent Repayment Order, where the FTT want to clearly identify who should put their hand in their pocket and all these musical chairs can create serious problems.
I’m following closely the passage of the Sublet Property (Offences) Bill, up for a second reading to see how this might impact this nonsense.
Under agency law, where an agent contracts under his own name then he is an agent ‘acting for an undisclosed principal’
In those circumstances, the third party (ie the tenant) can sue the agent direct as so far as he is concerned, the agent IS the principal (or landlord where the agency relates to renting property).
When the true situation becomes known then the third party / tenant can elect whether he sues the agent or the actual principal / landlord.
This is why it is not a good idea for agents to name themselves as landlord and hide the true landlord’s details. They are by doing this making themselves personally liable under the contract.
Meanwhile, law abiding landlords* avoid licensing areas like the plague, leaving councils to sort out the Wild West they have helped to create.
*Or according to the new rogue landlord definition by Lord Bourne of Aberystwyth, landlords born of parents married to each other.
In a recent action an agent produced a business contract with the landlord absolving themselves of responsibilities and the landlord produced a different version. Case got tossed back to council by court. Judge not impressed with their behaviour but more headaches, time and resources for us. This is precisely why dodgy agents and landlords play these games.
In a Property Industry article you highlighted at the weekend Tessa it was reported that the agents leased properties under guaranteed rent, as the tenants but this is again nonsense. To be a tenant they must reside in the property and a company cannot hold a residential tenancy and yet we see ASTs between owner and agents regularly. The owners complaining when a sub let comes to light that their ‘Tenant’ wasn’t allowed to dub let. Trying to argue the sub tenants have no rights or status.
Complete bollocks of course but these are the games being played out in 9 out of 10 of my cases
“To be a tenant they must reside in the property”.
I believe that is not the case.
It is only for an AST that the tenant must occupy as their main or only residence, otherwise it is some other kind of tenancy.
So the agent, as an individual or a company, can be a tenant.
As mentioned in the other replies, this kind of tenancy isn’t an AST, but it IS a tenancy (usually informally referred to as a “company let”).
Agents that offer guaranteed rent in this way (Northwood being the biggest example) aren’t doing the sorts of things you’re talking about here. I don’t believe Northwood, for example, would ever claim that they are NOT the entity having control of the property should a licensing issue crop up.
Landlords who contract companies like Northwood are under no illusions about whether or not the property will be sub-let – it’ll be right there in the contract. They can’t plead ignorance as they have sought out a company like this for the specific reason that they sublet and guarantee the rent. If, for some reason, the landlord would want possession during the contract (which defeats the entire purpose of “guaranteed rent” in the first place), they would have to seek it from the agent, not the sub-tenant. I don’t believe they’d be able to succeed in that case (there would need to be a breach of contract from agent’s side – I don’t think you can just Section 21 them).
Having said that, I’ve heard that if a landlord wants to discontinue business with the agent at the end of the contractual term but wants to retain the sub-tenant, they would have to pay up. Otherwise the agent would “remove” the tenant. I’m very curious as about how this works in practice for a few reasons:
1. It would be incredibly unfair (and, in my opinion, unethical) for an agent to serve an eviction notice a tenant because the landlord has not paid their fees.
2. Does the agent in this case have the right and the ability to pursue under Section 21? My feeling is yes, but as this isn’t cut-and-dry…
3. What is to stop the landlord from just speaking to the sub-tenant directly and promising them a tenancy regardless of what the agent does?
Point 2 raises a further question in my mind. As you describe, managing agents usually do not have a right to pursue for eviction at the courts directly (unless there is some kind of sub-tenant thing going on I suppose), but they appear to be doing so anyway. During possession proceedings, a judge will ask to see an AST and details of the notice served at the very least. Should the judge not also be required to ask for proof that the person requesting possession is entitled to ask for it? Meaning, that the person requesting possession should provide an official copy of the title register, or contracts that make it clear that they are the immediate landlord of the tenant being evicted AND that they have a legal tenancy granted to them by the title holder (as evidenced by the register)?
It is perfectly possible for a tenancy to exist where the person granting the tenancy has no estate (= a type of interest) in the land. There is a tenancy where the relationship of landlord and tenant exists and the conditions for a tenancy (certainty of duration and exclusive occupation) are met. Whether there is a tenancy is a matter of tenure and not whether the landlord holds an estate in the land. So if A having no estate in land belonging to B and not B’s agent lets it to C, then as between A and C there is a tenancy which binds both A and C, but not B. The reason for this oddity is historical.
The basic way to grant a tenancy is by deed. The exception is “leases taking effect in possession for a term not exceeding three years [+ words not relevant to this blog]”. (Section 54(2) LPA 1925) “Possession” is defined by section 205 LPA 1925 to include “receipt of rents and profits or the right to receive the same”. That means that for the purpose of section 54(2) a tenant can be in possession if he grants a sub-tenancy. Accordingly possession in the sense of occupation is not required if the tenant is in possession in the sense of receiving or being entitled to receive rent.
After buying several properties in my own name I starting to buy using a company. My letting agent used my own name on the tenancy agreement rather than my company’s, Just a mistake with no prectical impact as I owned 100% of the company. What the law would make of it I don’t know.
To Peter Jackson
I think the law would make something like this of it:
Where there is a document which says it grants a tenancy and the tenant goes into occupation and has exclusive possession there is a tenancy. Where there is a tenancy there has to be a landlord. As Tessa says, until advised to the contrary the tenant is entitled to assume the individual and not the company is the tenant. Indeed, a tenant needs to be careful how he goes about querying whether the person he is told is the landlord is the landlord, because a tenant who denies his landlord’s title may render the tenancy liable to forfeiture.
Whether the individual actually is the landlord is a bit trickier to say. Clearly, if the agent erroneously put in the name of a different client that client would not be the landlord. Where however there is a connection it is not so clear. The company is going to get the rent and so in that respect at least has to be regarded as the landlord. The question is perhaps academic because when it becomes critical the tenant can be informed of the true position.
Where a mistake has been made, belt and braces is to put the record straight with a short deed which states a mistake was made, confirms the grant of the tenancy by the company, releases the individual from any liabiity and contains a provision that for all purposes the tenancy shall have been deemed to have been granted by the company on the day the tenancy started.
To Ikram
So far as i know – I was a never a litigator, Tessa can no doubt confirm the position – it is not necessary in proceedings for an applicant to prove he is the person entitled to posssession. Rather it is for the tenant to plead that the applicant is not entitled to possession. However, as indicated above, doing that is fraught with danger as denying a landlord’s title may render the tenancy liable to forfeiture.
Producing a copy of the register at the Land Registry is not necessarily evidence that the registered proprietor is entitled to possession as he may have granted a short term tenancy which does not need to be.registered and therefore get noted on the register.
Can a landlord be a landlord if they don’t have planning permission for the property?
e.g. a converted garage or an annex without change of use permission?
If the ‘landlord’ lets the premises under an AST and the occupiers are residential occupiers as normal, does this still create a tenancy and a landlord as normal? In that sense does planning permission even matter (for the purpose of tenancy-landlord creation putting planning enforcement matter to on side)…
They will still be a landlord and the tenancy will be a valid one.
However, if the tenancy is ended before the end of the fixed term – for example, if the property is demolished due to not having the proper planning permission, the landlord will be subject to a claim by the tenants for breach of the terms of their tenancy agreement! A pretty fundamental breach.
The landlord would probably be liable to pay the tenants costs of finding a new property and accommodation in the meantime plus removal costs and probably some general damages for distress and inconvenience.
The tenancy would probably end at that time under the doctrine of ‘frustration’ of the contract.
If the planning dept did nothing about enforcement and the tenant was able to continue living there – then there will be no change and the tenancy will continue as normal.
This would not be a reason for the tenant to claim that the tenancy is invalid. They can only do this if something actually happens which impacts on them.
Thanks Tessa.
Well I think, as these comments are further emphasising, the concept of landlord and tenant is indeed often a grey area and it is this very greyness that criminals exploit to the disadvantage of tenant and property owner alike.
I have written repeatedly about recent articles criticising councils for low take up rate on new enforcement powers. Every commentator including me, cites lack of staff but so far I seem to be the only commentator pointing to the other, equally large problem of those operators routinely using aliases, non existent companies, foreign based renting portals and these “Am I the landlord or not?” games in order to block enforcement action, the courts quite rightly needing to know who should be subject to the action before they will support the enforcement.
We could argue all day here about the definitions of landlord, tenant and agent but the point is how the criminals are using the ambiguity.