UK Land & Housing Law Issues - Essay Example

U.Ks Land & Housing Law Answer to Question Under U.K laws, a license offers a tenant the necessary permission to reside in a house or premise. Under license agreement, a tenant has the permission from the landlord to occupy his premise for some period of time, and the tenant has no legal privilege either in the property or land. Further, under the provision of license agreement, a landlord has a right to enter into the licensed premise for carrying out any repairs or cleaning provided some reasonable notice is given to the tenant. Further, license agreement is applicable only to those accommodations where a tenant occupies only part of a premise or home. For instance, a block of self-sufficient retirement flats would be let on tenancies, whereas individual rooms or flats in a house or premise with shared bathroom and kitchen would be let on licences. As compared to the tenants under the rental agreement, a licensee has less protection as he can be asked to vacate the premise at any time provided by service of four weeks written notice on them by the landlord. For evicting the tenant, in some cases, a landlord can approach the court for getting a possession order. The licensing system for houses in multiple occupations (HMOs) was introduced by the Housing Act 2004 and came into full force on 6 April 2006, and the Act offers an exhaustive definition of HMOs and stipulates norms of management for this class of property. A property or premise will be known as a house in multiple occupations (HMO) provided: If atleast three tenants reside there , thereby constituting more than one household If the tenant has to share the kitchen, bathroom and toilet with the other tenants. A HMO is basically different from a household, as in household either members of the same family reside in a house or by a single person. It also includes persons who are living together or married couples and people in same-sex relationships. There are licensing requirements for some HMOs.1 In case of HMOs, the landlord should obtain a licence from the local council to rent out his premise as a house in multiple occupations (HMO). Thus, a HMO is a premise which is rented out to atleast three persons who are not hailing from a same family or from one “house hold” and should be prepared to share the facilities like common kitchen and bathroom. The landlord should have a licence to let his house as HMO provided: It should be rented out to five or more persons who are from more than one household The premise should be at least three storeys high Even a landlord who has a property with less than three storeys and who has rented it out to less than five people, then such landlord can let that premise as HMO, but he has to obtain a licence which foots upon area and differs from council to council. A HMO licence issued by a council will be valid for a period of five years, and a landlord of a HMO has the obligation to renew the licence well before it expires. If the landlord has more than one premise and he has let them as HMO, then, he should have separate licences for each such HMO. The landlord of a HMO should make sure that the premise is appropriate for the number of occupants like it is having adequate size and facilities, and the landlord is under obligation to forward to the respective council an updated gas safety certificate on annual basis, to establish and maintain smoke alarms and to offer when demanded safety certificates for all electrical appliances. If a landlord rents out his property as HMOs without having any licence from his council, then he can be fined up to £20,000 for the offence of renting out as an unlicensed HMO. Section 14 of the Housing Act 2004 offers exemption from licensing as HMO, which is as follows: If the premise is occupied by the resident landlord and a maximum of two other individuals who are parts of landlord’s household; and If the premise is occupied by no more than two persons. Thus, if maximum number two persons are residing in a premise along with a resident landlord, and then it will not be regarded as HMO. If the HMO consists of three storeys and if is occupied by four or more persons, then, the landlord has to obtain a license for that premise mandatorily2. “Licence to Occupy” Under license to occupy, a resident landlord is having greater freedom to end a rental arrangement since it is generally accepted that if the relationship comes to a halt between the tenant and the landlord, as the landlord is most susceptible in his own home. There are two kinds of right to occupy a home and they are a) whether the landlord or any member of his family lives in the premise with the person to whom it is being let out and b) whether the tenant has sole possession of at least one room. This is significant as in the case of tenant is safeguarded by law in terms of notice to eviction and leave. Thus, a non-sharing license to occupy a house arrangement will normally offer the occupier a greater legal safeguard than where accommodation is shared by the owner. Hence for this reason, licence to occupy with sharing by owners which fall outside the protection of eviction and this is known as “excluded licence” or “excluded licences”3. “Difference between tenancy and licence” Any letting arrangement will be normally a tenancy arrangement but there may be some elements present that will make it just a licence to occupy. The most common one is a lack of exclusive possession; The tenant does not have a privilege to use specific room or rooms or If tenant is not liable to pay any rent for the occupation of the room If the tenancy is not having any analogues’ length of time , for instance , by a month or a week Then such arrangements are known as a licence. Some illustrations of licences are renting a room in a hotel or sharing a friend’s house for some days. Tenants have some privileges which the licensees do not possess such rights. “Difference between a tenancy and a licence to occupy” A tenancy arrangement is one where the tenant is awarded sole use of at least one room in the house. For instance, if you have one room and if the landlord does not have any privilege to enter into that room without tenant’s permission under the agreement, then letting would be known as tenancy arrangement. If a landlord agrees to offer some form of assistance or service which needs his unhindered access to the tenant’s room, then such letting would be known as a licence to occupy. If a tenant is being asked to share his room with some strangers, then such letting would be known as a licence. To call an arrangement as tenancy, the letting should be for a specific room with exclusive possession, which means without the interference from the landlord to enter the room. On a shared basis, if a room is let where one occupier and the other occupier made an arrangement separately or a landlord has made such letting on behalf of them, then letting will be known as licence to occupy. If a previous letting is on the basis of a licence to occupy and if a landlord moves out of his home, then such letting would not become as tenancy as the nature of the occupation would still not meet all the needs for a tenancy arrangement like the absence of exclusive right to use the house. In case where the house is sold, then the new owner must: 28-days notice should be given by the new owner that he proposes to take up the residence Within six months of sale , he should move into that property 4 Findings In taking into consideration the above points, Alf has used his house as multiple occupations (HMOs). There is no evidence available whether Alf has got a license from his council to change his house as HMO. If not, he has to apply for the same else he will be levied a fine of £20,000. Both Bella and Charles are having two –year period for the completion of their licence to occupy the flat. David has one year for the completion of his license to occupy with Alf. No detail has been given as regard to whether the above licenses have a clause that both the parties are having the right to terminate the contract by giving four week’s notice. Assuming that Alf has provided such a condition in the contract , he can ask the tenants to vacate the house as he wants to handover the freehold of the property to George. In case where the house is sold, then the new owner George must: 28-days notice should be given by the new owner that he proposes to take up the residence Within six months of sale , he should move into that property If Bella, Charles, David and Fiona want more time to vacate, or if they want to continue their license up to two years or one year as the case may be, they may approach their local council for an intervention. Answer to Question 2 Some contractual limitations or restrictions on the usage of a particular land are said to be run with the land. In other words , a restrictive covenant will be part and parcel of the land to which it is attached to and are implementable between the assignees of the original landlord and tenant or original vender and purchaser irrespective of the fact that whether they are aware about the existence of restriction or not. Thus, a land owner may sell a part of his land to a buyer on stipulation that the buyer will not use the land for industrial or commercial purposes. The landowner or his successor could then implement that covenant against that buyer or any subsequent buyer from him as held in Tulk v Moxhay5. Restrictive covenant for use of land may specify that: Restrict the possible usage of land , for instance, to educational or residential purposes only To prohibit the specific businesses or trades or probable nuisances or meant for undesirable activities Limit the type or number of buildings that can be constructed on a land A restrictive covenant may be imposed for any of a number of intents. For instance To safeguard the character or amenity of a neighbourhood To protect interests of commercial nature To institute a building scheme To safeguard the value of reserved land Where land is burdened by such a covenant, without some guise of legal mediation, a landowner cannot be able to dispose his land for any use, which falls beyond the purposes mentioned in the original covenant. As per s.79 (1) of the Law of Property Act, 1925 (LPA), a covenant pertaining to a land of the covenantor shall be construed to have been made by the covenantor himself, unless contrary intention is articulated, binding his successors in title, which connotes that the onus being attached to the land so as the onus or burden may run with the land. While registering the land during the course of a sale, the buyer against whom the negative promise is registered under the Land Registration Act (LRA) and hence the promise or covenant will also be registered as a minor interest against the said land so as to make it binding. If a covenant attached to a land is unregistered, then, it will be not implementable and void. In Tophams Ltd v Earl of Sefton (1967), it was held that the onus of a covenant is believed to be made by the original covenantor on behalf of him and on behalf of all the future owners of the land, thereby attaching the onus of the covenant to that land due to a statutory assumption of an intent that it shall prolong. Thus, such onus or burden may then become implementable against such successors. As held in Meldon v. Sinclair (1996), a successor owner is one with an equitable or legal right over the estate in the land. For the purpose of restrictive covenant, even an adverse possessor will be regarded as the owner who is in occupation without an estate as stipulated in the” s.79 (2) of the LPA, 1925. “ In “Morrels v. Oxford FC (2000)”, an opposing intent will be evident from the instrument establishing the covenant if there is any condition in it specifying that heirs in title or assigns of the original covenant would not be liable by such a covenant where s.79 was said to be exempted by the whole tenor of the arrangement between the parties6. Section 84 of the LPA, 1925 grants to the Lands Chamber an authority to change, modify, annul or cancel restrictive covenants that have become outdated. If the land tribunal is of the opinion that a covenant is obstructing some justifiable usage of land, if no damage or injury will be caused to the beneficiary of a covenant due to such discharge or modification of such a covenant or if there is an express agreement with all of the beneficiaries of the covenant to waive the covenant7. In Smith and Snipes Hall Farm (SHF) v River Douglas Catchment Board (RDCB), [1949], where the defendant RDCB covenanted with Mrs Smith that RDCB would make required improvements and to carry out the required repairs to the river banks to stop her land from flooding. Later, Mrs Smith disposed off her land to SHF and later, SHF tried to implement the covenant against RDCB. It was held by the Court that the covenant was having touch and concern the land and hence, the advantage had been automatically passed on to SHF, and they were having every right to implement it8. In Wilkes v Spooner9, it was held by the Court of Appeal that a restrictive covenant will stop to run with the land once if it had reached the possession of the landlord who was unaware of such a restrictive covenant10. In Austerberry v Corporation of Oldham [1885], it was held that the onus of a covenant cannot be implemented at common law against a successor in title of the original covenantor. When Lands Chamber or a Tribunal discharges a restriction or a covenant, the Tribunal can order the applicant to defray compensation. In recent Re Tate case, the new owners of a land applied to Tribunal to eliminate the covenant as they intend to construct residential properties there. The subject land is burdened with a covenant that buyer should not use the land for any purposes other than for agricultural use or Livery Stable or as a Riding school. The neighbour of the land which is a construction company which is actually enjoying the benefit of the covenant objected for the removal of the covenant. The company claimed a compensation of £250,000 if the Tribunal wants to discharge the covenant. The Upper Tribunal, in their verdict held that only advantage of the restrictive covenant to the company was that it facilitated it to demand money for permitting the site to be developed. The Upper Tribunal considered this as a benefit for these purposes. Hence, the Tribunal released the qualified promise. In this case, the Tribunal awarded just £3,000 only as compensation for the release of the covenant. The Tribunal was of the opinion that the restrictive covenant had no practical advantage to the company and hence, the matter of awarding monetary damage did not arise. In this case, the Tribunal was of the view that £3000 symbolised the impact the covenant had on minimising the price paid for the land when it was first originally inflicted as early as in 1980. Thus, in Re Tate case, the verdict of the Tribunal may offer some incentive to those looking for a covenant to be discharged from restrictive covenant. It is also a learning lesson to those landowners who wants to use the restrictive covenant for bringing advantageous to their land as a guise of the commercial lever as what the company did in this case11. Findings In 1995, Leonard sold a plot of 50 acres to Mary with a covenant that Mary would use the land for "environmentally friendly purposes only". Mary also covenanted to plant and maintains a line of trees along the boundary between her land and "lushland". In 1997, Leonard sold Ned a plot of 100 acres, with a covenant that he would not use the land for commercial purposes. In 2000, Mary granted a legal lease of her plot to Oliver for 50 years. Oliver constructed several large sheds in the leased land. In 2007, Ned sold his plot to Philip, who has built log cabins on the land, from which he is running a yoga and alternative-healing centre. Sarah as held in Tophams Ltd v Earl of Sefton (1967) is the successive owner of land with covenant and is having a right to see that Leonard’s covenant is implemented in all respects. Further, Sarah as held in Meldon v. Sinclair (1996) is the successor owner with an equitable or legal right over the estate in the land. It is not clear that whether Leonard original sale deed contained a covenant that Sarah will have the right to implement the covenant if there is any condition in it specifying that heirs in title or assigns of the original covenant would not be liable by such a covenant as held in “Morrels v. Oxford FC (2000)”. Assuming that there exist such conditions that Sarah does not have such right, then Mary, Ned, Oliver and Phillip can have the right to deviate from the covenant placed by original seller Leonard. There is no information in the lease deed entered with Oliver by Mary that original covenant has to be honoured by Oliver. In the absence of such condition, Oliver can claim relief as held in Wilkes v Spooner. However, Sarah wants to implement such a covenant , then Marry , Oliver and Philip can approach the Land Tribunal to waive the covenant under section 84 of the LPA ,1925 stating that covenant has become obsolete, and they can rely on the recent case Re Tate. Bibliography Books Dixon M, Modern Land Law (Routledge 2013) McQueen J, Landlord and Tenant Law (Straightforward Co Ltd 2013) Robson G & Roberts D, A Practical Approach to Housing Law. (Psychological Press 2005) Routledge, Land Law Lawcards 2012-2013(Taylor and Francis 2012) Sexton R, Barbara Bogusz. Complete Land Law: Text, Cases and Materials. (Oxford University Press 2013) Whincup M H, Contract Law and Practice: The English System with Scottish, Commonwealth (Wolters Kluwer 2006) Websites Gov.UK. (2013). Licensing of Houses in Multiple Occupations in England. accessed 31st March 2014 HowardKennedyfsi. ’Discharge or Modification of Restrictive Covenants’ accessed 31st March 2014 Kate, ‘Tribunal Holds Landowner Cannot Use Restrictive Covenant to Capture Value.’ http://www.hewitsons.com/content/tribunal-holds-landowner-cannot-use-restrictive-covenant-capture-value > accessed 31 March 2014 Solicitors Service UK, Licence to Occupy Read More