LANDLORD AND TENANT PROBLEMS

Kumer Ali is a partner and head of the firm’s Property Litigation Department.  The Department deals with all manner of property disputes including disputes between landlords and tenants of both commercial and residential premises, disputes arising out of property contracts and land disputes.  In this article, first published in the Asian Times, he outlines in a question and answer format advice to a landlord in relation to two common issues. 

Question

The tenant occupying my shop premises is in arrears of rent.  He keeps breaking promises to pay.  What action can I take?

Answer

There are a number of options available to you and the pro’s and con’s of each should be considered carefully before deciding which option to pursue.  The first decision you need to make is whether you wish to bring the tenancy to an end.  If you feel that there is no prospect of obtaining any payment at all from this particular tenant and that it would be relatively easy to re-let the premises then you are likely to decide to terminate the tenancy.  Your lease is likely to include an express right to re-enter the property and terminate the tenancy in the event of the tenant failing to pay rent within fourteen or twenty one days of it becoming due.

If it would be practically possible for you to re-enter the premises and change the locks then you can re-enter without having to obtain a court order.  An appropriate notice to the effect that the lease has been terminated should be left at the premises and a copy should also be sent to any other address you have for the tenant.  You cannot however re-enter the premises without a court order if part of the premises within the ambit of the lease are occupied for residential purposes.  In that case you must obtain a court order first. 

After you have obtained possession the tenant is entitled to make an application to the court for an order that upon his payment of the rent arrears and costs incurred by the landlord the lease should be reinstated.  The court will have discretion as to whether or not to grant this application.  The tenant must make the application within certain time limits.  It is important that you do not re-let the property immediately after obtaining possession until either the time limit has expired or it becomes clear that the tenant will not apply for the lease to be reinstated. 

If you do not wish to end the lease and would simply like to recover the rent arrears there are a number of  methods available to you.  If the tenant is likely to have sufficient items of value in the premises you could levy distress against such possessions.  This involves a certificated bailiff attending on your behalf at the premises to remove the goods.  Often the tenant will agree to make payment of all the sums due to the bailiff rather than suffer disruption to his business.  It is important that you take this action through a solicitor to ensure that the warrant authorising the bailiff is in a correct format.  All solicitors costs and bailiffs fees can usually be added to the warrant so you should not suffer any losses. Beware however that the availability of this remedy is being reviewed and you should consult a solicitor first prior to taking this course of action

If the tenant does not have goods of sufficient value at the premises then a number of other methods are available.  You could serve a Statutory Demand on the tenant with a view to issuing bankruptcy proceedings.  The tenant may settle the arrears in order to avoid being made bankrupt.  You could also issue court proceedings for a judgment for rent arrears which you could subsequently enforce by a number of methods including warrant of execution of goods which would then enable the bailiff to remove the tenants goods from any property (and not just the leasehold premises).  You may also apply for a Charging Order against any property owned by the tenant.  This can be a very important weapon as a Charging Order may subsequently enable you to obtain an order for sale of the property.  It will also secure your debt until the payment is made. 

Question

I am a landlord of a residential property.  I gave the tenant a written tenancy for a fixed term of six months which has now expired.  The tenant owes me three months rent arrears.  I would like to regain possession of my property, what can I do?

Answer

First of all it is important to appreciate that you cannot compel the tenant to vacate the property without a court order for possession.  If you do so you would be acting unlawfully and committing a criminal offence.  Your tenancy is likely to be an assured short hold tenancy.  Since 28 February 1997 all residential tenancies (with a few exceptions) are deemed to be assured short hold unless they are specifically and expressly created as assured tenancies.  An assured short hold tenancy gives only limited rights to the tenant and enables the landlord to obtain possession by serving an appropriate notice once the fixed term has expired.  As your fixed term has expired the tenant is deemed under the law to hold the property as a statutory periodic tenant.  In view of the fact that there are at least two months rent arrears you should serve a notice seeking possession under Section 8 of the Housing Act 1988 as amended.  The notice has to be for a minimum period of fourteen days after which you can apply for a possession order through the courts.  If at the date of the hearing the tenant is still in arrears by the equivalent of two months rent the court is required to make a possession order.  Once the court has made an order for possession if the tenant fails to vacate the property you can issue a warrant of possession which will enable the county court bailiff to physically remove the tenant. 

There is a possibility that by the date of the hearing the tenant will have reduced the arrears to less than two months equivalent.  If that happens the court is unlikely to make an order for possession.  There is however an alternative procedure which you could use to avoid this risk.  This is called the accelerated possession procedure.  A notice in the prescribed format for a minimum period of two months has to be served.  Great care has to be taken with the date of expiry of the notice.  Although it must be for a minimum period of two months it must expire on the precise date of the end of a period of the tenancy.  If it does not then the notice will be deemed invalid and the court will not make an Order for Possession.  After the notice has expired you would issue possession proceedings through the county court using the accelerated procedure.  Providing the notice is valid the court will make an order for possession.  Usually the court is able to make the order without a hearing and the proceedings would therefore be quicker and less costly.

If you wish to discuss any aspect arising out of the above, please contact Kumer on 0113 2258808.