The Duties and Obligations That Relate to Relationships between Landlords in the UK - Essay Example

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Signature: (Enter the title of the coursework here or, if you have been set a long problem question which does not fit within this space, simply attach a copy of the question at this point) The duties and obligations and other matters that relate to relationships between landlords and tenants in the UK is primarily governed by the Landlord and Tenant (Covenants) Act 1995. This law became effective on 1 January 1995, which means that leasehold contracts entered into before it, are governed by common laws and other statutes in effect at that time. There are significant amendments introduced by the law, among which, is the release of a lessee from the contract once the contract is assigned to another. An author calls this a “mortal blow to the principle of privity contract” in leasehold contracts.1 The problems discussed in the preceding pages are based on a leasehold contract entered prior to 1996 act but involves a freehold purchase after 1996. A couple of problems involved easements, which calls for the application of the relatively new Land Registration Act 2002. The last one tackles adverse possession, also governed by LRA 2002 and the Limitation Act 1980. 1.0 Richard A. Repairs The leasehold covenant between Meryl, the original landlord and Richard, the original leaseholder, was entered into prior to 1996, which was before the effectivity of the Landlord and Tenant (Covenants) Act 1995. Thus, Meryl and Richard’s leasehold covenant is governed by the old common law/statutory rules. The obligations and duties of landlord and tenant in leasehold covenants entered into pre-1996 revolve, in sum, around the following legal principles: privity of contract, and; privity of estate.2 These principles will be discussed in the following paragraphs for their applicability to Richard’s case. Privity of contract simply means that parties that directly participated in a contract are legally bound by its terms alone to the exclusion of others. This principle is also closely tied to the pre-1996 principle of continuing responsibility, which has been abolished under the present law,3 where the duties and obligations owed by the parties extend even to subsequent assignees. Meryl and Richard, being the parties to the original leasehold agreement, have the right to demand that the terms of the contract be adhered to by the other, whether the term is proprietary or not, all throughout the life of that contract whether remedy may be had from another.4 Both also have a right to demand their compliance from subsequent assignees. This principle was illustrated in the cases of Arlesford Trading Co. Ltd v Servansingh5 and Allied London Investments Ltd v Hambro Life Assurance Ltd (No 2).6 In the Arlesford case, a landlord and tenant agreed for the lease of a property for 99 years. The original tenant subsequently assigned the remainder of the lease to another, who eventually failed to pay the rent and charges as agreed in the original contract. The reversion was also subsequently assigned by the original landlord to another. The present landlord brought an action for the recovery of the unpaid rent and charges not against the present tenant but against the original lessee. He succeeded notwithstanding that the reversion was assigned after the original lessee assigned the leasehold. The Court of Appeal based its ruling on s 141 of the Law of Property Act (which was the governing statute to leasehold covenants executed prior to 1996) and the continuing liability principle.7 In the Allied London case, the principle of continuing responsibility against the original lessee was upheld by the Court although the licence to assign and a third party guarantee that rent would be paid by the assignee was subsequently released by the lessor. This is because an obligation founded on a leasehold contract, prior to 1996, is enforceable by any party who is benefited by their performance. Continuing liability is, however, subject to the following: assignment of a perpetually renewable lease; an express stipulation that the liability of the original tenant is to end upon assignment of lease; statutory extension of lease period under the LTA 1954, and; a surrender of the old lease and subsequent “regrant” of a new one.8 Continuing liability under a leasehold contract does not pertain to the original tenant only but also to the original landlord. In Stuart v Joy,9 the Court held that the original landlord is bound by his obligations and duties under the leasehold contract notwithstanding a subsequent sale of the right in reversion. The concept of privity of estate likewise applies to leasehold contracts entered into before the applicability of the LTA 1995. It presupposes a legal and binding relationship between parties as landlord and tenant, even if they are not original parties to the contract, where both are subject to the benefits and obligations under the contract. Privity of estate is vital in the determination as to whether third parties are bound by the contract. Closely intertwined with this principle is the requirement that a covenant must concern itself of and touch the land.10 One of the requirements of privity of estate is that the claimant and the defendant stand in the shoes of tenant and landlord, respectively. A sub-lessee, for example, does not meet this requirement because the sublease only binds him and the original lessor. Moreover, the lease must be of legal character and this requirement extends to assignments of either lease or reversion. This is an essential requirement to pre-1996 leases, which has been omitted in the present law. For legality, the lease must be contained in a deed as required under s. 52 of the LPA 1925. This was affirmed in the Court ruling of Crago v Julian,11 where a husband and wife rented a flat under the name of the husband alone for a period of more than three years. Subsequently, the spouses separated and during the divorce proceedings the husband pledged to transfer the tenancy to the wife 14 days after the grant of the divorce. This, however, did not materialise. Subsequently, the landlord move to end the tenancy and retake possession of the flat. The Court sustained the landlord on the ground that a lease for a period of more than three years has to be reduced in a deed.12 Before a contract can run to bind subsequent assignees it must meet the further requirement of “touch and concern the land” as was held in Spencer’s Case.13 There, a lessee pledged, in the contract, to construct a brick wall upon the land. Before achieving that, he assigned the lease to another, who also subsequently assigned it to another. On the issue as to whether the landlord can impose the construction of the brick wall on the second assignee, the Court answered affirmatively for the reason that, amongst others, the covenant to build a wall is of a proprietary character rather than a personal one. A proprietary covenant covers those which affect and attach to the land and its use, whilst a personal covenant is one that profits only the tenant as an individual. The test to distinguish between the two concepts was laid down in Swift Investments v Combined English Stores:14 it benefits the estate owner in general rather than a specific original party; it affects the land and its value, and; it is expressed as personal. From the aforesaid discussion, it can be said that although Nigel was not an original party to the lease contract between Richard and Meryl, he is, nevertheless, bound by it. This is because of the continuing liability of the privity of contract between Richard and Nigel, who became the holder of the reversion in interest of the leasehold property. Moreover, under the privity of estate principle, Nigel stands in the shoes of landlord to Richard’s role as tenant by virtue of being the freehold owner of Harpenden Common. He has substituted Meryl as the rightful owner of the estate of land and therefore landlord to Richard. Intertwined with this is the fact that the external repairs pertain to and touch the land and has significance to its nature and value. Under s 142 of the Law of Property Act 1925, the obligations of the lessor under the lease covenants run with the reversionary estate and the person to whom such is subsequently conveyed or vested shall be entitled or be obliged by it as a matter of course. B. Noise Nigel may opt to formally notify Richard of his objection to the improper use of the leased property in accordance with the provisions of s. 146(1) of the Law Property Act 1925, which states to the effect that any action for remedy in a breach of leasehold contract provided under it will not be enforceable unless the landlord serves a notice thereof to the tenant. The notice should expressly state the breach being complained of and a demand of the tenant to remedy the breach, if applicable. Thus, in this case, Nigel has to serve Richard a notice to remind him of the restrictive covenant and to refrain from using the leased premises for purposes other than as residential. In the event Richard does not desist and continues using the leased premises for commercial purpose,15 Nigel may proceed by bringing an action for forfeiture under s. 146(2) of the aforesaid law. In Williams v Kiley (t/a C.K. Supermarkets Ltd),16 the Court sustained a lessee against a co-lessee for breach of covenant in the use of the premises. This is a particularly interesting case because of the obvious lack of privity of contract between the parties. The contract of one tenant expressly confines the use of the leased place to specific enterprise and excludes those of which the next door tenant is engaged in. The next-door tenant also had a similar contract. Evidently, the rationale for allowing the action is that the lease contracts did not only protect the landlord but also the tenants from each other.17 Alternatively, Nigel may also bring an action for injunction or specific performance, which are usual remedies in breach of contracts and are not entirely unheard of in leasehold cases. In Rainbow Estates Ltd v Tokenhold Ltd,18 for example, the Court granted a landlord’s petition for specific performance against his tenant to abide by the repairing covenant although it was considered an exceptional case because of the lack of remedies incorporated in the contract. 2.0 Kate and Paul A. Parking in the forecourt The use by Kate and Paul of Harpenden Common’s forecourt for parking is in the nature of an easement. Easement is defined as “an interest in land owned by another person (or entity) consisting in the right to use or control the land, or an area above or below it, for a specified or limited purpose.”19 In London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd,20 the Court ruled that the right to park cannot be an easement if it deprives the owner of the servient estate from the reasonable use of his land. In Batchelor v Marlow,21 the Court declined a claim for prescriptive easement by a party who used a property to park six cars for more than 9 hours during the entire weekdays holding that it rendered ownership thereto illusory. In Moncrieff v Jamieson,22 a Scottish case appealed to the House of Lords, the Court held that the situation justifies servitude of parking (parallel to the English easement) as it is vital to enjoyment of the dominant owner of his estate. The implication of the aforecited cases is that a right to park may be considered an easement depending on its effect on the use of the owner of the servient estate. In the present case, the forecourt of Nigel’s estate is big as not to unnecessarily burden him of its use by the spouses and therefore, a claim for easement may prosper. However, the Land Registration Act 2002 had made changes in the law regarding easements by requiring the registration of easements under s. 27(2) in conjunction with s. 1(2)(a) of the Law of Property Act 1925. Unregistered easements and easements that are not created by statute or by deed, or are made such because of prescription are only equitable and not legal.23 Since Kate and Paul’s use of the estate’s forecourt is not registered and not created by either statute or deed or had long been in use as to be created by prescription, then, it can only be classified as equitable. Equitable easements under the LRA 2002 cannot override registered dispositions, according to Schedule 3 thereof, which omitted it as an overriding interest in registered dispositions. As LRA 2002 became effective in 2003, prior to the commencement of the couple’s use of the forecourt, the law is applicable as to their use of the property for parking. In practical application to the case at hand, Nigel is not bound to honour the couple’s use of his forecourt for parking. There is a snag, however, to this clear provision of the law. In Thatcher v Douglas,24 the Court held that equitable interests that are exercised and enjoyed openly qualify as overriding interests under s 70(1)(a) of the Land Registration Rules 1925. Section 12 of Schedule 10 of the LRA 2002, on the other hand, provides that easements that qualified under the aforecited statute continue to enjoy status as overriding interest under it. B. Use of Shortcut through the Common The long use of the couple of the Common grounds as shortcut to a back gate to walk their dogs could fall within the ambit of easement by prescription, which is considered a form of legal easement. In Dalton v Angus,25 the Court held that prescriptive easement can only be granted upon showing true acquiescence by the owner of the servient estate, which can be proved by the following: the servient owner’s knowledge of the use of his property by the owner of the dominant estate; the ability to put a stop to the dominant owner’s use of the servient estate, and; restraint of the use of such power by the owner of the dominant estate. According to s. 2(3) of Schedule 3 of the LRA 2002, legal easements are overriding interests in registered disposition but only if they are registered in accordance to the Commons Registration Act 1965. Legal easements not so registered may still be overriding interests if at the time of the disposition, the purchaser did not know of their existence and are not obvious upon ocular inspection of the land to the purchaser. Kate and Paul’s use of the Common grounds falls squarely under the aforesaid provision. The implication is that Nigel is obliged to observe the spouses’ use of the Common grounds as such. 3.0 The Local Council’s Claim Nigel’s claim of right as against that of the Council is in the nature of adverse possession. Adverse possession, sometimes called squatting or limitation of rights, is a claim against the land of another by a person who is in actual possession of it for a considerable period of time. The claim for adverse possession has three underlying elements: duration of actual possession by claimant; the beginning of the prescriptive period against owner of the land, and; the effect of the expiration period upon claimant and owner.26 In Buckinghamshire CC v Moran,27 the local authority purchased a piece of land to be developed into a roadway but neglected it for 40 years. The defendant in this case whose house abuts the council’s property cultivated it into a garden although he knew its owner. After forty years, the council moved to dispossess the defendant from its property but the Court denied the Council on the ground that it has neglected the land for so long and the defendant had clearly established adverse possession. In Seldon v Smith,28 the Court ruled that enclosing or fencing the property is the strongest evidence of adverse possession. Under the s. 15(1) of the Limitation Act 1980, an owner cannot reclaim his property upon the expiration of 12 years, the period of which starts from the time a party has accrued a right of action against him or to the person to which it first accrued. The implication of this provision is that the aggregation principle is applicable in counting the number of years within which the right of action to reclaim by the owner expires. This is affirmed in the case of Mount Carmel Investment Ltd v Peter Thurlow29 where the aggregation principle was used to determine the expiration of the prescription period. The implication is that Nigel can make use of the aggregation principle to include Meryl’s actual adverse possession of the Council’s property to qualify for an application for adverse possession. However, under the new law, viz. s 96(1) LRA 2002, the prescription period ceases to run against registered lands. Thus, in the present case, the Council is not barred from bringing an action to recover its property notwithstanding that adverse possession, which began in 1994 with Meryl, has already ripened into a possible registration under the LRA 2002 for possession. The Council in this case may still bring an action for recovery, although Nigel may present evidence to prove adverse possession to defeat its claim. This is so because the 12-year period expired only after the LRA 2002 became effective. Conclusion: As can be seen, the application of such laws as the LRA 2002 and the TLA 1996 depend upon the date the related contracts are entered into. In the case of the leasehold contract between Meryl and Richard, which was entered into prior to 1996, the TLA 1996 has no application. Thus, Richard is bound to abide by the terms of the contract under the principle of continuing liability and privity of estate. In the easement case of the spouses Kate and Paul, LRA 2002 applies because the use of the forecourt began after the effectivity of the said law. Thus, the registration requirement under the said law applies to the easement of parking by the spouses. However, since the easement on the use of the shortcut is made legal by its long use, which under the LRA 2002 is an overriding interest in registered lands, Nigel should respect it although it is not registered. The LRA 2002 has also made a significant change in the law of adverse possession by taking the prescriptive period out of the laps of registered owners, a move that was made in compliance with a previous European court ruling. BIBLIOGRAPHY Books Abbey, R. & Richards. M., 2007. A Practical Approach to Conveyancing, 9th Edn. Oxford University Press. Balchin, P. & Rhoden, M.,1998. Housing: The Essential Foundations. Routledge. Dixon, M., 2002. Land Law, 4th Edn. Oxon: Routledge. Dixon, M. 2010. Modern Land Law, 7th Edn. Taylor & Francis. Goo. S.H. 2002. Sourcebook on Land Law, 3rd Edn. Routledge. ICON Group International 2008. Enjoying: Webster's Quotations, Facts and Phrases. ICON Group International. Articles (Include details of Author/Title/Publisher/Date of Publication for each article) Legislation Commons Registration Act 1965. Landlord and Tenant (Covenants) Act 1995. Land Registration Act 2002. Law of Property Act 1925. Limitation Act 1980. Cases Allied London Investments Ltd v Hambro Life Assurance Ltd (No 2) [1984] 1 EGLR 16. Arlesford Trading Co. Ltd v Servansingh [1971] 3 All ER 113, CA. Batchelor v Marlow [2003] 1 WLR 764. Buckinghamshire CC v Moran [1990] Ch 623 (CA). Crago v Julian [1992] 1 All ER 744. Dalton v Angus [1881] 6 App Cas 740. London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1993] 1 All ER 307. Moncrieff v Jamieson [2007] UKHL 42. Mount Carmel Investment Ltd v Peter Thurlow [1988] 1 WLR 1078. Rainbow Estates Ltd v Tokenhold Ltd. [1998] EWCA Civ 1412. Seldon v Smith [1877] 36 LT 168. Spencer’s Case [1583] 5 Co Rep 16a. Stuart v Joy [1904] 1 KB 362. Swift Investments v Combined English Stores [1989] AC 632 HL. Thatcher v Douglas [1996] 146 NLJ 282 CA. Williams v Kiley (t/a C.K. Supermarkets Ltd) [1998] EWCA Civ 1412. Other Written Sources (e.g. Newspaper publications, government publications) Other Sources (e.g. details of websites used) Read More