Landlord and Tenant - Essay Example

Landlord and Tenant This requirement for notice to be given to the landlord before there would be any obligation placed upon him/her to carry out repairs, was also clearly stated by Lord Hanworth MR in the case of Morgan v Liverpool Corporation.1 He stated that it is a clearly established principle in law that “where there is a covenant on the part of a landlord to keep the premises in repair, the tenant must give notice to the landlord of what is out of repair…”2 In this case, it was also clearly established that such a notice is required from the tenant even in those instances where the landlord has the right to enter the property at any time to inspect the premises for damage. Atkin LJ reiterated the views of Lord Hanworth : “I think the power of access that is given, extensive though it may be, does not take the case away from the principle from which the courts have inferred the condition that the liability is not to arise except on notice. The position is quite a satisfactory one, because as soon as the tenant is aware of the defect he must then give notice, and if the landlord does not repair it, the landlord will be liable.”3 Such a position has been established in order to protect landlords from liabilities arising out of defects that they may not even be aware of. It may be noted that the purpose of regulation 3 of the Housing Act as mentioned above is also to ensure that landlords are made aware of existing defects before being expected to be liable for repairs. This principle was also upheld in the case of O’Brien v Robinson and Another4, where a tenant and his wife were injured when the roof of their flat caved in on them. The Plaintiffs claimed that the damage had arisen as a result of misuse by the tenants in the flats above and the landlord should have been aware of the defects since he had unlimited and unrestricted access to the property. But the Court in this case, held that the landlord’s liability to repair did not arise until such latent defects had become apparent and he had been made aware of their existence through the issue of a notice. Lord Diplock concluded that unless the tenants could prove that the landlord had information about a defect to the ceiling before it actually fell and caused the injuries. This shows that tenants must take pains to serve a notice to the landlord about possible structural or other defects in the property, so that the landlord can take action to carry out repairs. It is only when such notice has bene served and despite the landlord being aware of the defect, he fails to carry out the necessary repairs that he will be liable for any damages that may subsequently occur. One option a tenant has to force a landlord to carry out repairs is to deduct the repair amount from the rent that is due and payable to the landlord. This was a principle set out in the case of Taylor v Beale.5 This was an opinion that was expressed in dicta and was not necessarily the majority view, Yates and Hawkins offer a caution that because it is obiter dictum, it “must be regarded with circumspection”6. Despite this observation in the Taylor case being dicta, it nevertheless seems to be accepted in law as a right arising to the tenant under common law principles7. This right of the tenant arises especially in those instances where the landlord has agreed to carry out repairs but fails to do so. “Where the lessor covenants to repair and neglects to do so, and the repairs are thereupon executed by the lessee, a payment made by the lessee for the cost of such repairs is not (it is submitted) equivalent to payment of rent so as to reduce the amount for which the landlord may distrain.”8 In the case of Lee-Parker and Another v Izzet and Others9 the tenants carried out certain repairs and then withheld the rent, on the contention that the landlord should have carried out those repairs. They relied upon the provisions of section 32(1) of the Housing Act of 1961 which implied a covenant by the landlord to carry out repairs to the property, as well as the dicta of the Taylor v Beale case. The Court in this case held for the Plaintiffs, stating that the tenants had an ancient common law right to withhold rent because they had carried out the repairs which were needed at their own cost and had the right to recover such costs by way of withholding of such amounts from the rent. The Court also clarified that the validity of deduction of rent against repairs would depend upon the circumstances of individual cases, which would determine whether or not such repairs carried out by tenant can properly be treated as equivalent to the payment of rent. This decision that was rendered in the Lee-Parker10 case was further corroborated as a correct principle to apply by Forbes J in the case of British Anzani v International Marine Management.11 The precedents in this case do now however grant the tenant the arbitrary right to deduct the cost of repairs from rent in every instance. In the Lee-Parker case, there were some qualifications that were also laid out. The Court clarified that (a) the tenant may deduct only the cost of repairs and not of other services the landlord may be obliged to provide (b) the nature of repair the landlord has failed to provide must be such that it places him or her in breach of contractual duties (c) notice must be provided to the landlord of the tenant’s intent to carry out the repairs and deduct the costs from the rent (d) the tenant must first provide the landlord the opportunity to carry out the repair himself (e) the tenant must carry out the repairs in the most economical manner possible and (f) the tenant may opt to deduct the cost of such repairs from the rent only if the landlord is unwilling to pay the repair bills that are presented to him. On this basis, it may be noted that there are certain limitations in claims of repairs being made against rental payments. The Court in the case of British Anzani12, while certifying the accuracy of the earlier decision in Lee-Parker, extend the principle of the tenant being able to deduct cost of repairs from rent with further allowance of unliquidated damages that might be due from the landlord for breach of the contractual obligation to carry out repairs. But the judgment in the case of Lee-Parker suggests that the tenant has a duty of care to the landlord, so that if a deduction is being made from the rent against costs of repairs, then those repairs should have been carried out in the most economical manner possible. For example, in the case of British Westinghouse Electric Manufacturing Company v Underground Electric Railway Co of London13, the Court held that the plaintiff tenant has a contractual duty to mitigate his losses. This is also corroborated in James v Woodhall14 where it was held that the plaintiff would be entitled to recover damages subject to mitigation of losses. There is an important distinction that must be noted between tenants and licensees where the question of deductions made against rent for repairs carried out on the property are concerned. The licensee’s rights are governed by common law principles of contract and therefore allow him remedy against contractual breaches by the licensor. The rights of the tenant on the other hand, are spelt out by the Rent Act Legislation and the precedents established in case law, which have not generally been favorable more favorable to the tenant as compared to the landlord. From the perspective of general rights and obligations of landlords and tenants under rental regulations and statutory provisions, the rights of tenants may be better protected and this is the reason why the modern tendency of courts is to find tenancy rather than licensing, following the case of Street v Mountford.15 But from the specific perspective of forcing a landlord to carry our repairs and deducting amounts spent on repair by the tenant from rents due to the landlord, it is the licensee rather than the tenant who is in a stronger position to take action against the landlord on contractual breaches. The principle that the cost of carrying out repairs may be deducted from the rent because it is a common law right, does not apply to those individuals living in public housing, whether they are licensees or tenants. The distinction of application of common law principles to deduction of rent against cost of repairs in the case of licensees does not hold good in the case of licenses of public housing. Under statutory regulations, tenants and licensees are treated alike16. Rather than applying common law principles to the deduction of rent to force the landlord to carry out repairs, licensees can make deductions from the rent under the Secure Tenants (Rights to Repair Scheme) Regulations 1985, if they can be classified as secure tenants. Section 79 of the Housing Act of 1985 allows public sector tenants to carry out repairs to their dwellings and then to seek reimbursement for such repairs from their landlord. The contract between the landlord and tenant is generally regarded as indivisible, but this is only in those cases where it is only the costs of repairs that is at issue17. Other breaches of contractual obligations by the landlord may not be covered under the Rights to repair Scheme Regulations, since this statutory provision is meant to deal with the question of costs of repairs only. Regulation 3 under the Housing Act of 1985 however requires that the tenants should have submitted a notice to their landlords first, of their intent to carry out repairs; it is only if such a notice is issued that the landlords will be obligated to reimburse the cost of the repair work that has been done by the tenant. This is one way by which a tenant who is residing in property that is need of repairs, can force the landlord to carry out those repairs, i.e, by carrying out those repairs themselves and then seeking reimbursement from their landlords. However, in the case of licensees as well, recoveries against rent on the right to repair also require mitigation of loss. For example, the Statutory Right to Repair Scheme also include the provision whereby the landlord can refuse to pay for repairs carried out by the tenant if unsuitable materials are used, such that the defect in question may not be rectified, or alternatively, if an unsuitable contractor is used.18 The regulations specified under the Housing Act however suffer from certain limitations. In the first instance, they only apply to public sector tenants living in council housing rather than to private sector tenants who do not have the benefit of such a statutory right to require the landlord to carry out repairs. Secondly, Section 2 specifies certain kinds of repairs that would qualify for such reimbursement and one of the qualifications is that the repair amount must not exceed 200 pounds. It must be noted therefore, that the recoveries and rights of tenants is severely restricted where the question of repairs arises, and the landlord’s liability has been limited. Another important aspect to be considered in this context is that where licensees or tenants of public secured housing are concerned, there is a strong likelihood that such tenants/licensees may be unemployed. They may be living in Council accommodation and may never have possession of rent monies, because housing benefits that the tenant is entitled to will be paid directly to the Housing Council, so that the tenant will not have any money in hand to deduct from the rent as such. Since the Council itself is the landlord in this instance, it may opt to not deduct the rent at all, but can rather make the payment in “any matter it sees fit.”19 Therefore, in the case of such tenants, their rights to deduct the cost of repairs may be considerably reduced. In addition, both private tenants and tenants of public housing are required to first issue the notice to the landlord on the intention to carry out repairs and then wait for 21 days before instituting such repairs, The landlord may also raise objections to the notice and can ask for a 28 day time period during which he will carry out the necessary repairs20. These equate to further restrictions and waiting periods imposed upon the tenants, before repairs can be carried out. Additionally, there are only certain kinds of repairs that will be eligible to qualify under the repair scheme, so that tenants can recover the costs they may incur in carrying out repairs to the property.21 Where the question of the short term tenants carrying out repairs is concerned, the court held in the case of Warren v Keen22 that a tenant occupying premises on the payment of weekly rent was under no obligation to carry out any repairs to the structure of the premises being rented, neither is the tenant obliged to carry out repairs against wear and tear. In the case of Barrett v Lounova23, the tenant had undertaken to carry out all the internal repairs that were required on the premises. The dispute that arose in this case pertained to whether the landlord had an obligation to carry out external repairs to the property, because certain internal damages resulted as a result of failure to maintain the exterior. The Court held in favor of the tenant, holding that an implication of a repair covenant and obligation on the part of the landlord could be inferred in order to give business efficacy to the agreement. This decision was reached despite the rule that had been established on the letting of unfurnished houses, derived from the case of Hart v Windsor24that there was no obligation placed upon the landlord to carry out any repairs on such a property. The Court applied three questions to assess whether any obligation could be placed upon the tenant to carry out external repairs to the property. Firstly, the Court pointed out that since the tenant had already agreed to carry out repairs on the inside, expecting him to also carry out repairs on the outside as well would be unbusinesslike and unrealistic. On the basis of the agreement between the parties, the Court also concluded that no joint agreement could be implied between the parties to carry out repairs on the outside. Although the tenant had covenanted to carry out the repairs on the inside, this would be possible and feasible for him only if the landlord did his part and maintained the exterior, so that damages from the exterior did not spread to the interior. This left the only reasonable implication, i.e, outside repairs being the reasonability of the landlord. On this basis, the Court placed the obligation to repair on the landlord in this case. A similar outcome was also reached in the case of Holding & Barnes PLC v Hill House Hammond Ltd25 where the Court similarly found in favor of the tenants and placed the obligation to carry out repairs on the property on the landlord so that the tenant’s liability was restricted to those repairs he had specifically covenanted to perform under the lease agreement. In the case of Calabar Properties Ltd v Stitcher26 , Griffiths LJ stated: The object of awarding damages against a landlord for breach of his covenant to repair is not to punish the landlord but, so far as money can, to restore the tenant to the position he would have been in had there been no breach….. The facts of each case must be looked at carefully to see what damage the tenant has suffered and how he may be fairly compensated by a monetary award.”27 On the basis of the above, it may be noted that to some degree, case law has favored tenants and relief has been allowed based upon the individual circumstances of each case. But it must also be noted that in the case of long term leases at nominal rents, the general tendency of the Courts as revealed through case law has been to find in favor of the Lessors, especially because such judgments have been reached based upon the terms of the lease agreement and the obligations each party has covenanted to under them. In the case of Adami v Lincoln Grange Management Ltd28 the tenant was a long term lessee and his agreement set out his covenant to keep his leased property in good repair and also to insure against certain losses that had been specified by the Lessor. Later, when subsidence damage developed in the property due to structural defects, remedial work was commenced but the insurers defaulted. The Lessor then requested the lessees for indemnity against their shares so that the work could be completed. The lessee in this instance, chose to carry out the repairs himself and claimed from the landlord on the basis that he was under an obligation to repair. But the Court held that because these were long term leases and provisions in the agreement spelt out clauses on repair, added to which insurance cover was implemented to cover the entire block, it was not possible to hold the landlord liable for repairs and maintenance of each block. This decision was rendered in favor of the landlord, but the Court rendered its decision on the basis of the terms of the lease agreement and the obligations spelt out therein. In the case of Hafton Properties Ltd v Camp29 the lease was silent on the question of what action was to be taken if the landlord failed to carry out his obligations. In this case, the Court held that if an obligation is placed on a tenant under the provisions of the lease agreement, then it may also be necessary to impose a corresponding obligation upon the landlord as well, if it can be established that the landlord is benefiting from such an arrangement. The more comprehensive the code of repair which is spelt out in the provisions of the agreement, the less room there is to imply the existence of any terms and obligations of the respective parties. Since in the case of Hafton, the terms of repair were thus clearly spelt out, it was not possible to impute obligations on the landlord for the repairs to the whole property block. Thus, it may be noted that tenants in public housing or nominal housing schemes appear to have limited recourse under the statutory provisions, to force landlords to carry out repairs or to withhold payment of rents against such repairs. But in the case of private tenants, the Courts have sometimes found in their favor under the implied contractual obligation of the lessor to carry out repairs over and above the covenants specifically undertaken by the lessee in the lease contract. In these cases, the decisions rendered may be subject to how the leases can be interpreted. Woodfall has pointed out that where interpretation of covenants in leases are concerned, a literal interpretation that leads to an outcome that could not have been the intent of the parties, will rarely be adopted by the Courts For example, in the Holding and Barnes case which has been cited above, the literal interpretation of the covenant in the lease would have held the landlord liable for repairs only to the roof and foundation, while the tenant would have been liable for internal repairs and the question of obligation for the rest of the property would have been left indeterminate. Hence the Court drew upon implied obligations to hold the landlord liable for repairs to the indeterminate parts of the property not specifically covered under the lease. But despite the existence of such cases where Court shave found in favor of the tenants, statutory provisions in general protect the rights of landlords to a greater degree than those of the tenants. Assured shorthold tenancies further diminish the rights of tenants, especially low income, unemployed, sick and old tenants. As pointed out by Harvey30 the Tenant’s Choice that has been proffered under the 1988 Housing Act to advance the interests of council tenants, is in fact anything but an instrument to secure their interests. The purpose of the assured shorthold tenancy offered under the Housing Act of 1988 is to esure that the landlord is able to get his property back from the council tenants after the specified duration of the tenancy. The presence of tenants in the blocks of council flats only makes them more attractive to property companies that are not required to provide more than six months security of tenure, so that after this period, they can get the property back with very little delay from tenants who may not necessarily have violated the lease terms in any way. Harvey points out how such policies only reduce the security of tenure and result in more homeless families. Conclusions: On an overall basis, it must be stated that statutory provisions appear to restrict the rights of tenants where carrying out repairs is concerned. Although the tenant has a common law right to deduct costs of repairs from rents payable to the landlord or arrears of rent, this may not provide adequate levels of protection against the landlord’s breach of contractual obligations. Statutory regulations specify all manner of restrictions in the carrying out of repairs and despite the good intentions of the tenant, the landlord can refuse to pay for the repairs if the wrong materials or the wrong contractor is used. The requirement of notice by the tenant before the landlord will be liable for repairs has also been spelt out under statutory provisions as well as the precedents established in case law. Another important distinction that must be noted is that licensees and tenants have a different set of rights where the question of forcing the landlord to carry out repairs is concerned. Licensees may have better provision under common law principals against licensors who are in default, because they can force them to carry out repairs on grounds of contractual breaches. This option is however restricted in the case of tenants, who fall under the provisions of rent regulation rather than Common law principles. Although case law has favored in some instances and also granted damages, finding landlords liable for repairs, this has been possible only in those instances where the landlord’s obligation is clearly spelt out in the lease, or where such an obligation on the part of the landlord can be inferred from the implied terms of the contract. Based upon the discussions above, one aspect that becomes very clear is that tenants must take pains to clearly specify how and by which party repairs are to be carried out within the original agreement itself. If the lease agreement clearly places the obligation for repairs on the landlord, then it appears likely that the Courts will be able to find in favor of the tenants and force landlords to carry out repairs, on the basis of contractual terms which specify the agreement between the parties. In the absence of such detailed specification of obligations for repairs, the rights of tenants are limited because of all the restrictions in statutory provisions as pointed out earlier. It is also very important for tenants to provide notices to the landlord about the intent to repair and deduct the cost of repairs from the rent. The failure to provide such notices will reduce the rights of the tenant to enforce the landlord’s obligations to repair. Lastly, tenants in long term leases appear to have less scope for recoveries on repairs. Bibliography Books/Legislation: * Foa’s General law of Landlord and tenant (1957), 8th edn at pp 59, London: Thames Bank Publishing Co. * Harvey, Audrey, 1989. “The trap of Tenant’s choice”, New Law Journal, 139(6404):556 * Woodfall’s Landlord and Tenant (1968) 27th edn, Vol 1, page 655 at para 1490, Sweet and Maxwell * Yates, David and Hawkins, A.J. “Landlord and Tenant Law”, (2nd edn), at pp 68, London: Sweet and Maxwell * Housing Act of 1985 * Housing Act of 1988 * Secure Tenants (Rights to Repair Scheme) Regulations 1985 Cases cited: * Adami v Lincoln Grange Management Ltd [1998] 1 EGLR 58 (CA) * Barrett v Lounova (1982) Ltd (1990) 1 QB 348, CA * British Westinghouse Electric Manufacturing Co v Underground Electric Railway Co of London [1912] AC 673 * British Anzani v International Marine Management [1979] 2 All ER 1063. * Calabar Properties Ltd v Stitcher [1984] 1 WLR 287, [1983] 3 All ER 759, CA * O’Brien v Robinson and Another (1973) AC 912, HL * Hafton Properties Ltd v Camp [1994] 1 EGLR 67 * Hart v Windsor (1843) 12 M & W 68 * Holding & Barnes PLC v Hill House Hammond Ltd [2000] Landlord and Tenant Reports 428 * James v Woodhall [1969] 1 WLR 903 * Lee-Parker and Another v Izzet and Others (1971) 1 WLR 1688, Chancery Division * Taylor v Beale Cro Eliz 222 (1591) * Morgan v Liverpool Corporation (1927) 2 KB 131 * Street v Mountford (1985) 2 WLR 877 * Taylor v Webb [1937] 1 All ER 590 * Warren v Keen (1954) 1 QB 15 Read More