Changes in the air
One thing about spending your working life with your nose in the PRS dirt is that you can spot things coming before many other people.
You see trends developing in their early stages by subtle changes in the nature of the complaints being referred over that let you know something is rotten in the state of Denmark Street.
Clauses in contracts
In the past year, I have seen an increase in lettings contracts containing clauses that the occupiers are not permitted to allow access to local authority officers without first consulting the agents. It started with the odd one and now they are quite common.
The reason is quite obvious, back in the day, when I started out, property licensing didn’t exist and a local authority’s powers weren’t as far-reaching as they are now, particularly post Housing and Planning Act 2016 and Housing Act 2004 and, mistakes are all too easy to make since the commencement of the Deregulation Act 2015.
A point I have been banging home at the several landlord’s forum events I’ve spoken at in 2018.
An enthusiastic amateur landlord can’t afford to bumble their way through anymore. Lack of knowledge can end up costing more than paying out for training.
Until a couple of years back, Rent Repayment Orders weren’t de-rigeur either and for those of a dodgy persuasion, the last thing you want is a council officer on your doorstep, digging into your finances and business dealings, that make Donald Trump’s business methods look ethical.
I was wondering how the rogue fraternity would respond to this new development, once the risk permeated their skulls. I I believe the reaction is starting.
For example
In two cases over the past two weeks, I have been shown lettings contracts by tenants, which when you drill down into the clauses that most of them don’t bother to read, you find entries that inform the tenant that in signing the agreement and taking on the letting, they sign away their rights to claim a Rent Repayment Order, should the opportunity arise.
These were contracts by two unrelated letting agents in two different London boroughs, so either two geniuses had the same idea at the same time or the little scamps are swapping notes. Two incidents do not a trend make, I grant you but my experienced old nose is definitely twitching.
Arguments at the ready
So I’m preparing my arguments in advance and pondering on a couple of things, firstly the notion of whether or not this would be an unenforceable clause and be considered unfair trading by both Trading Standards officers and the relevant property redress schemes.
Not a specialism of mine and happy to hear from experienced TS officers but I wouldn’t mind taking a bet on it. My understanding being that just as you can’t contract out of a statute, by, for instance, claiming that the landlord is not liable for repairs, I would imagine you can’t prevent someone from exercising statutory rights by simply putting it in a contract.
Or can you?
I raise this question being mindful of employment contracts that prohibit ex-employees from revealing business details or indeed contracts that prohibit council officers past a certain pay-grade from engaging in political campaign work but employment law is not housing law and two branches of law don’t always tally up.
Back on more familiar ground for me is the Protection from Eviction Act 1977. My main piece of legislation for nigh on three decades. The question front and centre for me is:-
Could such a clause be deemed harassment under that Act?
Sounds like a strange candidate but look at the wording of section 1 (3) (b):-
- (3) If any person with intent to cause the residential occupier of any premises—
- (a) to give up the occupation of the premises or any part thereof; or
- (b) to refrain from exercising any right or pursuing any remedy in respect of the premises or part thereof
Intrigued by this logic I grabbed the rather excellent guidebook on the subject, “Quiet Enjoyment” by Andrew Arden, Robert Brown and Sam Madge-Wyld to see what they make of this particular section and read this handy explanation:-
“The prosecution has to prove that the defendant had specific intent to achieve the stated effect
(give up accommodation or refrain from exercising any right/pursuing remedy) as distinct from
knowledge or belief of the likely consequences of his actions”.
Throwing in the useful case of Regina v. Hancock (1986) for good measure.
So where does that leave me?
With the couple of cases picked up recently where the contracts claim to sign away the tenant’s rights to claim an RRO?
It seems quite evident that the ‘Intention’ is to prevent the tenant from pursuing a remedy and that it isn’t simply that not claiming an RRO would just be the ‘likely consequence’ of having the clause inserted, so I think I’m on fairly safe ground arguing that the clause itself amounts to harassment, although I’ve never been presented with the opportunity before.
There is also the issue of how to approach it when the prospective tenant has merely been presented with the clause, because at that point they are not the residential occupier, required by the PFEA, whereas if they have signed it and taken up residence they are indeed the residential occupier that the PFEA was created to protect.
I’d be interested to hear other interpretations. I may well be missing an angle.
It is what I have advised the two letting agents concerned to be mindful of, I just have to see how far they want to push it and, if they dig their heels in, how I am going to advance the legal argument. I’m all up for a new approach but until we are past the stage of pushing each other in the chest while the first years are chanting “Fight, Fight”, I’ll proceed cautiously.
I’ve worked around law long enough to know not to jump in feet first without covering all angles, having been the subject of a Judge’s withering look on more than one occasion.
My view is that a clause prohibiting a tenant from applying for a Rent Repayment Order would be unfair under Part 2 of the Consumer Rights Act 2015 which deals with unfair terms. http://www.legislation.gov.uk/ukpga/2015/15/part/2/enacted
A clause is usually considered unfair if it attempts to remove a right which a tenant / consumer would otherwise have. Which is clearly the case here.
The problem is that many tenants will not be aware of the unfair terms rules and so will think it is valid when it is not.
Sounds right Tessa.
I’m going to follow the harassment argument as well, see how it pans out. I shall report back
A good test case might be with an existing tenant asked to sign a new contract with the clause added: this is more clearly an attempt to deprive them of their rights.
If you find one of these we’d be happy to try it at the FtT, tenant willing of course…
Please report back if you do this. We could use this as the basis for one of our posts (giving credit to you of course!).
“I have been shown lettings contracts by tenants, which when you drill down into the clauses that most of them don’t bother to read”
It seems bizarre a tenant claiming they were being harassed but didn’t know about it.
Perhaps if you quote the offending clause people can judge for themselves if they think it is harassment.
Would the existence of the clause itself amount to harassment, or would the right to pursuing a RRO have to have arisen for it to become harassment?
S1(3) [and S1(3A)] of the act includes “[a person] does acts calculated to interfere with the peace or comfort of the residential occupier or members of his household”.
That dos not seem to apply to these circumstances.
I’m not saying those sentences do apply Michael, I have cited 3 (b):-
“to refrain from exercising any right or pursuing any remedy in respect of the premises or part thereof”
On your previous point I am thinking that the clause itself was evidence of ‘Intent’ and to re-quote the article again, this time Andrew Arden’s view “The prosecution has to prove that the defendant had specific intent to achieve the stated effect (give up accommodation or refrain from exercising any right/pursuing remedy) as distinct from knowledge or belief of the likely consequences of his actions”
You cited S1(3)(b), but omitted to consider the subsequent requirements of S1(3).
S1(3) in its entirety reads:
If any person with intent to cause the residential occupier of any premises—
(a) to give up the occupation of the premises or any part thereof; or
(b )to refrain from exercising any right or pursuing any remedy in respect of the premises or part thereof;
does acts calculated to interfere with the peace or comfort of the residential occupier or members of his household, or persistently withdraws or withholds services reasonably required for the occupation of the premises as a residence, he shall be guilty of an offence.
That means (for this discussion) the person has to do an act calculated to interfere with the peace or comfort of the occupier (or others) AND that person must intend that act to cause the occupier (or others)to (b) refrain from exercising a right or pursue a remedy.
i.e it is not sufficient to show that the person intended that (b) applies, but also that in so doing it interfered with the peace or comfort of the occupier.(or others).
I am afraid (sorry Ben) I have to agree with people who question this interpretation.
My view is that this will be an unfair clause and challenging the clause under the Consumer Rights Act 2015 is the correct course of action for tenants. I don’t think it constitutes harassment and even if it did – I still think the unfair clause route is the best one for tenants.
I think that Ben is seeking something criminal with which he can pursue the LL, rather than something civil.
Oh I agree the unfair term would be the easiest route but if a clause prohibiting someone from applying for an RRO is not “causing them to refrain from exercising any right/pursuing remedy” then what on earth could be an example of a breach of that part of the Act?
Re-Reading the relevant part and having never dealt with such a provision before it is causing me a bit of an episode. If you reverse the section and put the last bit first it reads differently
“does acts calculated to interfere with the peace or comfort of the residential occupier or members of his household, or persistently withdraws or withholds services reasonably required for the occupation of the premises as a residence, he shall be guilty of an offence.
(3)If any person with intent to cause the residential occupier of any premises—
(a) to give up the occupation of the premises or any part thereof; or
(b) to refrain from exercising any right or pursuing any remedy in respect of the premises or part thereof;”
Suggesting then that ‘Acts’ are done, that cause a person from exercising any right etc is what is meant, In which case it seems unlikely that inserting a clause in a contract would be considered an ‘Act’, or to put another way causing someone to refrain from exercising a right/remedy would be the logical result of whatever the ‘Act’ was, not that causing someone to refrain from exercising a right/remedy is the ‘Act’ in and of itself, it must be the result.
Whatever way you look at S1(3), you also have to show that the act is “calculated to interfere with the peace or comfort of the residential occupier or members of his household” for an offence to have occurred.
Thats right Michael, I’ve come to that conclusion in my comment above
Can someone even contract out a legal right to a remedy that they will only have if the other party (in the future) failed to comply with the law?
Interesting idea in theory, but in practice one would never succeed in getting the Police to prosecute for criminal harassment (and not just cos you need two instances – they are simply not interested unless violence is involved) and many councils have extremely poor records on pursuing even the worst landlords.
So your question perhaps ought to be “what level of civil remedy might be awarded if the tenant attempted the RRO and was declined because of the clause?” Or is the argument saying the tenant has suffered the distress of believing they have no right to a remedy in a situation where they now feel it necessary to seek one? Tricky because if they are clued-up enough to apply for redress in the civil court wouldn’t they also be assumed to first be willing to try to use the cheaper route via the tribunal, which would not be more distressing than normal, unless the clause actually did cause the RRO attempt to fail?
John you’ve completely misread the article. You are looking at the Harassment Act, I am talking about the Protection from Eviction Act which the council prosecutes, not the police.
In any event, if you read my last substantive comment, having mused on the possibility that such a clause might be a breach of s3a PFEA I came to the conclusion that it probably isnt a breach:-
“it seems unlikely that inserting a clause in a contract would be considered an ‘Act’, or to put another way causing someone to refrain from exercising a right/remedy would be the logical result of whatever the ‘Act’ was, not that causing someone to refrain from exercising a right/remedy is the ‘Act’ in and of itself, it must be the result.”
I haven’t mis-read it – my argument was based on the plural requirement – harassment in both Acts requires a course of conduct – the PfE specifies “if any person does acts..”, so a single action of inserting one clause might fail simply for that reason. Which is a pity cos I rather liked your idea.
As for who prosecutes, my understanding is that local councils have the power to prosecute under PfE (but very few actually exercise this power as it is not necessarily considered a “duty” and some councils even state having a policy against prosecution). What’s not clear from the Act is whether that power is intended to be to the exclusion of the Police rather than in addition. I’ve always assumed the Police, or rather the CPS, can prosecute ANY crime but generally choose to leave harassment by LLs to the council, unless violence or threats are involved. In fact I do recall reading on the CPS site something about consideration being made to prosecute under the act and a reference to the CPS is also made in the guidance notes for Police issued by East Riding council:-
https://www.eastriding.gov.uk/EasySiteWeb/GatewayLink.aspx?alId=653837
The main weakness of the Act seems to be the ability to routinely pass responsibility to cash-strapped councils (but that’s another gripe). I’m fairly sure there have actually been cases prosecuted under PfE by the Police, they just seem to be extremely rare.